##### Table of Contents









UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549




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FORM 10-Q

|           |  |                                                                                                                                                              |  | 
|---------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | 
|(Mark One) |  |                                                                                                                                                              |  | 
|x          |  | QUARTERLY REPORT PURSUANT TO SECTION 13
    OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934
    For the quarterly period ended September 30, 2002
    or |  | 
|          
|o          |  | TRANSITION REPORT PURSUANT TO SECTION 13
    OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
    For the transition period
    from            to            |  | 

Commission File Number: 1-13625

EOP OPERATING LIMITED PARTNERSHIP

(Exact name of registrant as specified in its
charter)


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

(312) 466-3300

(Registrants telephone number, including
area code)


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

APPLICABLE ONLY TO CORPORATE
ISSUERS:

On October 31, 2002, 462,166,220 Units were
outstanding.



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TABLE OF CONTENTS



|                                                                                         |                                                                                                |  |  |  |  |  |  | 
|---------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION                                                           
|                                                                                         | ITEM 1. Financial Statements.                                                                 
|EOP OPERATING LIMITED PARTNERSHIP CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)     
|EOP OPERATING LIMITED PARTNERSHIP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
|                                                                                         | NOTE 12 -- SEGMENT INFORMATION                                                                
|                                                                                         | ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
|                                                                                         | Comparison of the three months ended September 30, 2002 to September 30, 2001                 
|                                                                                         | Property Dispositions                                                                         
|                                                                                         | Unsecured Notes                                                                               
|                                                                                         | Restrictions and Covenants under Unsecured Indebtedness                                       
|                                                                                         | Cash Flows                                                                                    
|                                                                                         | Nine Months Ended September 30, 2002                                                          
|                                                                                         | Additional Items                                                                              
|                                                                                         | Tenant and Other Receivables                                                                  
|                                                                                         | Deferred Rent Receivables                                                                     
|                                                                                         | Escrow Deposits and Restricted Cash                                                           
|                                                                                         | Market Risk                                                                                   
|                                                                                         | Quantitative Information About Market Risk                                                    
|                                                                                         | Interest Rate Risk -- Debt                                                                    
|                                                                                         | Interest Rate Risk -- Derivatives                                                             
|                                                                                         | Capital Improvements, Tenant Improvements and Leasing Commissions                             
|                                                                                         | Capital Improvements                                                                          
|                                                                                         | Tenant Improvements and Leasing Commissions                                                   
|                                                                                         | Impact of New Accounting Standards                                                            
|                                                                                         | Inflation                                                                                     
|                                                                                         | Funds From Operations (FFO)                                                                 
|                                                                                         | ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.                           
|                                                                                         | ITEM 4. Controls and Procedures.                                                              
|PART II. OTHER INFORMATION                                                              
|                                                                                         | ITEM 2. Changes in Securities and Use of Proceeds.                                            
|                                                                                         | ITEM 6. Exhibits and Reports on Form 8-K.                                                     
|SIGNATURES                                                                              
|EXHIBIT INDEX                                                                           
|1st Amend to 3rd Amend & Rstd Agmt of Ltd Prtnshp                                       
|Statement of Earnings to Combined Fixed Charges                                         



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##### Table of Contents






PART I.

FINANCIAL INFORMATION






ITEM 1. Financial
Statements.


EOP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED BALANCE SHEETS

|                                                           |                                                                                                               |                                                                                                                                                            |                                                                 |            |              |            |   |            |            |            | 
|---------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------- | ---------- | ------------ | ---------- | - | ---------- | ---------- | ---------- | 
|                                                           |                                                                                                               | September 30,                                                                                                                                              |                                                                 |            | December 31, |           
|(Dollars in thousands, except per unit amounts)            |                                                                                                               | 2002                                                                                                                                                       |                                                                 |            | 2001         |           
|                                                           |                                                                                                               |                                                                                                                                                            |                                                                 |            |              |           
|                                                           |                                                                                                               | (Unaudited)                                                                                                                                                |                                                                 |            |             
|Assets:                                                    |                                                                                                               |                                                                                                                                                            |                                                                 |            |              |            |   |           
|                                                           | Investment in real estate                                                                                     |                                                                                                                                                            | $                                                               | 24,512,514 |              |            | $ | 24,399,658 |           
|                                                           | Developments in process                                                                                       |                                                                                                                                                            |                                                                 | 171,983    |              |            |   | 164,997    |           
|                                                           | Land available for development                                                                                |                                                                                                                                                            |                                                                 | 243,110    |              |            |   | 251,696    |           
|                                                           | Accumulated depreciation                                                                                      |                                                                                                                                                            |                                                                 | (1,939,147 | )            |            |   | (1,494,301 | )         
|                                                           |                                                                                                               |                                                                                                                                                            |                                                                 |            |              |           
|                                                           |                                                                                                               | Investment in real estate, net of accumulated
    depreciation                                                                                             |                                                                 |            | 22,988,460   |            |   |            | 23,322,050 |           
|                                                           | Cash and cash equivalents                                                                                     |                                                                                                                                                            |                                                                 | 455,534    |              |            |   | 61,121     |           
|                                                           | Tenant and other receivables (net of allowance
    for doubtful accounts of $13,436 and $7,794, respectively) |                                                                                                                                                            |                                                                 | 73,043     |              |            |   | 120,425    |           
|                                                           | Deferred rent receivable                                                                                      |                                                                                                                                                            |                                                                 | 319,542    |              |            |   | 269,796    |           
|                                                           | Escrow deposits and restricted cash                                                                           |                                                                                                                                                            |                                                                 | 37,062     |              |            |   | 196,289    |           
|                                                           | Investment in unconsolidated joint ventures                                                                   |                                                                                                                                                            |                                                                 | 1,269,512  |              |            |   | 1,321,127  |           
|                                                           | Deferred financing costs (net of accumulated
    amortization of $45,078 and $36,198, respectively)           |                                                                                                                                                            |                                                                 | 70,738     |              |            |   | 77,880     |           
|                                                           | Deferred leasing costs (net of accumulated
    amortization of $106,095 and $78,600, respectively)            |                                                                                                                                                            |                                                                 | 215,107    |              |            |   | 187,336    |           
|                                                           | Prepaid expenses and other assets (net of
    discounts of $66,646 and $67,413, respectively)                 |                                                                                                                                                            |                                                                 | 277,957    |              |            |   | 252,398    |           
|                                                           |                                                                                                               |                                                                                                                                                            |                                                                 |            |              |           
|                                                           |                                                                                                               |                                                                                                                                                            | Total Assets                                                    |            | $            | 25,706,955 |   |            | $          | 25,808,422 | 
|                                                           |                                                                                                               |                                                                                                                                                            |                                                                 |            |              |           
|Liabilities, Minority Interests and
    Partners Capital: |                                                                                                               |                                                                                                                                                            |                                                                 |            |              |            |   |           
|                                                           | Mortgage debt (including a net discount of
    $(12,377) and $(11,761), respectively)                         |                                                                                                                                                            | $                                                               | 2,626,835  |              |            | $ | 2,650,338  |           
|                                                           | Unsecured notes (including a net premium of
    $48,282 and $17,487, respectively)                            |                                                                                                                                                            |                                                                 | 9,174,782  |              |            |   | 9,093,987  |           
|                                                           | Line of credit                                                                                                |                                                                                                                                                            |                                                                 |           |              |            |   | 244,300    |           
|                                                           | Accounts payable and accrued expenses                                                                         |                                                                                                                                                            |                                                                 | 542,704    |              |            |   | 570,744    |           
|                                                           | Distribution payable                                                                                          |                                                                                                                                                            |                                                                 | 239,613    |              |            |   | 6,060      |           
|                                                           | Other liabilities                                                                                             |                                                                                                                                                            |                                                                 | 362,545    |              |            |   | 330,277    |           
|                                                           |                                                                                                               |                                                                                                                                                            |                                                                 |            |              |           
|                                                           |                                                                                                               |                                                                                                                                                            | Total Liabilities                                               |            |              | 12,946,479 |   |            |            | 12,895,706 | 
|                                                           |                                                                                                               |                                                                                                                                                            |                                                                 |            |              |           
|                                                           | Commitments and contingencies                                                                                 |                                                                                                                                                            |                                                                 |           |              |            |   |           |           
|                                                           | Minority interest  partially owned
    properties                                                            |                                                                                                                                                            |                                                                 | 180,748    |              |            |   | 181,017    |           
|                                                           |                                                                                                               |                                                                                                                                                            |                                                                 |            |              |           
|                                                           | Preferred Units, 100,000,000 authorized:                                                                      |                                                                                                                                                            |                                                                 |            |              |            |   |            |           
|                                                           |                                                                                                               | 8.98% Series A Cumulative Redeemable
    Preferred Units, liquidation preference $25.00 per unit, 0 and
    7,994,000 issued and outstanding, respectively |                                                                 |            |             |            |   |            | 199,850    |           
|                                                           |                                                                                                               | 5.25% Series B Convertible, Cumulative
    Redeemable Preferred Units, liquidation preference $50.00 per
    unit, 5,990,000 issued and outstanding        |                                                                 |            | 299,500      |            |   |            | 299,500    |           
|                                                           |                                                                                                               | 8.625% Series C Cumulative Redeemable
    Preferred Units, liquidation preference $25.00 per unit,
    4,562,900 issued and outstanding                    |                                                                 |            | 114,073      |            |   |            | 114,073    |           
|                                                           |                                                                                                               | 7.875% Series E Cumulative Redeemable
    Preferred Units, liquidation preference $25.00 per unit,
    6,000,000 issued and outstanding                    |                                                                 |            | 150,000      |            |   |            | 150,000    |           
|                                                           |                                                                                                               | 8.0% Series F Cumulative Redeemable
    Preferred Units, liquidation preference $25.00 per unit,
    4,000,000 issued and outstanding                      |                                                                 |            | 100,000      |            |   |            | 100,000    |           
|                                                           |                                                                                                               | 7.75% Series G Cumulative Redeemable
    Preferred Units, liquidation preference $25.00 per unit,
    8,500,000 and 0 issued and outstanding, respectively |                                                                 |            | 212,500      |            |   |            |           |           
|                                                           | General Partners Capital                                                                                      |                                                                                                                                                            |                                                                 | 91,550     |              |            |   | 93,010     |           
|                                                           | Limited Partners Capital                                                                                      |                                                                                                                                                            |                                                                 | 11,630,194 |              |            |   | 11,795,204 |           
|                                                           | Deferred compensation                                                                                         |                                                                                                                                                            |                                                                 | (18,402    | )            |            |   | (19,822    | )         
|                                                           | Accumulated other comprehensive income (loss)                                                                 |                                                                                                                                                            |                                                                 | 313        |              |            |   | (116       | )         
|                                                           |                                                                                                               |                                                                                                                                                            |                                                                 |            |              |           
|                                                           |                                                                                                               |                                                                                                                                                            | Total Partners Capital                                          |            |              | 12,579,728 |   |            |            | 12,731,699 | 
|                                                           |                                                                                                               |                                                                                                                                                            |                                                                 |            |              |           
|                                                           |                                                                                                               |                                                                                                                                                            | Total Liabilities, Minority Interests and
    Partners Capital |            | $            | 25,706,955 |   |            | $          | 25,808,422 | 
|                                                           |                                                                                                               |                                                                                                                                                            |                                                                 |            |              |           

See accompanying notes.

2



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF
OPERATIONS

(Unaudited)


|                                                                                                                                                                   |                            |                                          |                |         |         |         |             |         |         |         | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------- | ---------------------------------------- | -------------- | ------- | ------- | ------- | ----------- | ------- | ------- | ------- | 
|                                                                                                                                                                   |                            |                                         
|                                                                                                                                                                   |                            | For the three months ended               |               
|                                                                                                                                                                   |                            | September 30,                            |               
|                                                                                                                                                                   |                            |                                          |               
|(Dollars in thousands, except per unit amounts)                                                                                                                    |                            | 2002                                     |                |         | 2001    |        
|                                                                                                                                                                   |                            |                                          |                |         |         |        
|Revenues:                                                                                                                                                          |                            |                                          |                |         |         |         |             |        
|                                                                                                                                                                   | Rental                     |                                          | $              | 682,900 |         |         | $           | 695,180 |        
|                                                                                                                                                                   | Tenant reimbursements      |                                          |                | 127,717 |         |         |             | 124,468 |        
|                                                                                                                                                                   | Parking                    |                                          |                | 28,689  |         |         |             | 33,108  |        
|                                                                                                                                                                   | Other                      |                                          |                | 35,653  |         |         |             | 14,817  |        
|                                                                                                                                                                   | Fee income                 |                                          |                | 3,699   |         |         |             | 3,768   |        
|                                                                                                                                                                   | Interest/dividends         |                                          |                | 2,792   |         |         |             | 12,382  |        
|                                                                                                                                                                   |                            |                                          |                |         |         |        
|                                                                                                                                                                   |                            |                                          | Total revenues |         |         | 881,450 |             |         |         | 883,723 | 
|                                                                                                                                                                   |                            |                                          |                |         |         |        
|Expenses:                                                                                                                                                          |                            |                                          |                |         |         |         |             |        
|                                                                                                                                                                   | Interest:                  |                                          |                |         |         |         |             |         |        
|                                                                                                                                                                   |                            | Expense incurred                         |                |         | 199,259 |         |             |         | 205,970 |        
|                                                                                                                                                                   |                            | Amortization of deferred financing costs |                |         | 1,271   |         |             |         | 2,761   |        
|                                                                                                                                                                   | Depreciation               |                                          |                | 158,319 |         |         |             | 144,331 |        
|                                                                                                                                                                   | Amortization               |                                          |                | 13,914  |         |         |             | 9,844   |        
|                                                                                                                                                                   | Real estate taxes          |                                          |                | 99,910  |         |         |             | 93,589  |        
|                                                                                                                                                                   | Insurance                  |                                          |                | 12,032  |         |         |             | 6,306   |        
|                                                                                                                                                                   | Repairs and maintenance    |                                          |                | 83,178  |         |         |             | 81,671  |        
|                                                                                                                                                                   | Property operating         |                                          |                | 91,508  |         |         |             | 91,975  |        
|                                                                                                                                                                   | Ground rent                |                                          |                | 4,986   |         |         |             | 5,082   |        
|                                                                                                                                                                   | General and administrative |                                          |                | 30,950  |         |         |             | 30,328  |        
|                                                                                                                                                                   |                            |                                          |                |         |         |        
|                                                                                                                                                                   |                            |                                          | Total expenses |         |         | 695,327 |             |         |         | 671,857 | 
|                                                                                                                                                                   |                            |                                          |                |         |         |        
|Income before income taxes, allocation to
    minority interests, income from investment in unconsolidated
    joint ventures and net gain on sales of real estate |                            |                                          | 186,123        |         |         |         | 211,866     |        
|Income taxes                                                                                                                                                       |                            |                                          | (155           | )       |         |         | (1,286      | )      
|Minority interests  partially owned
    properties                                                                                                                |                            |                                          | (2,736         | )       |         |         | (2,006      | )      
|Income from investment in unconsolidated joint
    ventures                                                                                                        |                            |                                          | 12,218         |         |         |         | 16,434      |        
|Net gain on sales of real estate                                                                                                                                   |                            |                                          |               |         |         |         | 14,854      |        
|                                                                                                                                                                   |                            |                                          |                |         |         |        
|Income from continuing operations                                                                                                                                  |                            |                                          | 195,450        |         |         |         | 239,862     |        
|Discontinued operations (including net gain on
    disposal of $6,382 and $0, respectively)                                                                        |                            |                                          | 8,445          |         |         |         | 5,216       |        
|                                                                                                                                                                   |                            |                                          |                |         |         |        
|Net income                                                                                                                                                         |                            |                                          | 203,895        |         |         |         | 245,078     |        
|Put option settlement                                                                                                                                              |                            |                                          |               |         |         |         | 2,655       |        
|Preferred distributions                                                                                                                                            |                            |                                          | (15,451        | )       |         |         | (18,250     | )      
|                                                                                                                                                                   |                            |                                          |                |         |         |        
|Net income available for Units                                                                                                                                     |                            | $                                        | 188,444        |         |         | $       | 229,483     |        
|                                                                                                                                                                   |                            |                                          |                |         |         |        
|Net income available per weighted average Unit
    outstanding  basic                                                                                             |                            | $                                        | 0.40           |         |         | $       | 0.49        |        
|                                                                                                                                                                   |                            |                                          |                |         |         |        
|Weighted average Units outstanding 
    basic                                                                                                                     |                            |                                          | 468,263,813    |         |         |         | 467,350,655 |        
|                                                                                                                                                                   |                            |                                          |                |         |         |        
|Net income available per weighted average Unit
    and unit equivalent outstanding  diluted                                                                       |                            | $                                        | 0.40           |         |         | $       | 0.49        |        
|                                                                                                                                                                   |                            |                                          |                |         |         |        
|Weighted average Units and unit equivalents
    outstanding  diluted                                                                                              |                            |                                          | 469,764,728    |         |         |         | 471,009,101 |        
|                                                                                                                                                                   |                            |                                          |                |         |         |        
|Distributions declared per Unit outstanding                                                                                                                        |                            | $                                        | 0.50           |         |         | $       | 0.50        |        
|                                                                                                                                                                   |                            |                                          |                |         |         |        

See accompanying notes.

3



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##### Table of Contents








EOP OPERATING LIMITED PARTNERSHIP


CONSOLIDATED STATEMENTS OF
OPERATIONS

(Unaudited)


|                                                                                                                                                                  |                                                |                                          |                |           |         |           |             |           |         |           | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------- | ---------------------------------------- | -------------- | --------- | ------- | --------- | ----------- | --------- | ------- | --------- | 
|                                                                                                                                                                  |                                                |                                         
|                                                                                                                                                                  |                                                | For the nine months ended                |               
|                                                                                                                                                                  |                                                | September 30,                            |               
|                                                                                                                                                                  |                                                |                                          |               
|(Dollars in thousands, except per unit amounts)                                                                                                                   |                                                | 2002                                     |                |           | 2001    |          
|                                                                                                                                                                  |                                                |                                          |                |           |         |          
|Revenues:                                                                                                                                                         |                                                |                                          |                |           |         |           |             |          
|                                                                                                                                                                  | Rental                                         |                                          | $              | 2,065,615 |         |           | $           | 1,710,550 |        
|                                                                                                                                                                  | Tenant reimbursements                          |                                          |                | 379,202   |         |           |             | 320,681   |        
|                                                                                                                                                                  | Parking                                        |                                          |                | 87,366    |         |           |             | 94,139    |        
|                                                                                                                                                                  | Other                                          |                                          |                | 79,000    |         |           |             | 39,322    |        
|                                                                                                                                                                  | Fee income                                     |                                          |                | 11,754    |         |           |             | 10,305    |        
|                                                                                                                                                                  | Interest/dividends                             |                                          |                | 17,148    |         |           |             | 33,036    |        
|                                                                                                                                                                  |                                                |                                          |                |           |         |          
|                                                                                                                                                                  |                                                |                                          | Total revenues |           |         | 2,640,085 |             |           |         | 2,208,033 | 
|                                                                                                                                                                  |                                                |                                          |                |           |         |          
|Expenses:                                                                                                                                                         |                                                |                                          |                |           |         |           |             |          
|                                                                                                                                                                  | Interest:                                      |                                          |                |           |         |           |             |           |        
|                                                                                                                                                                  |                                                | Expense incurred                         |                |           | 606,788 |           |             |           | 520,684 |          
|                                                                                                                                                                  |                                                | Amortization of deferred financing costs |                |           | 3,650   |           |             |           | 6,790   |          
|                                                                                                                                                                  | Depreciation                                   |                                          |                | 476,022   |         |           |             | 372,130   |        
|                                                                                                                                                                  | Amortization                                   |                                          |                | 38,519    |         |           |             | 27,733    |        
|                                                                                                                                                                  | Real estate taxes                              |                                          |                | 293,732   |         |           |             | 249,042   |        
|                                                                                                                                                                  | Insurance                                      |                                          |                | 32,026    |         |           |             | 13,899    |        
|                                                                                                                                                                  | Repairs and maintenance                        |                                          |                | 253,166   |         |           |             | 212,452   |        
|                                                                                                                                                                  | Property operating                             |                                          |                | 262,226   |         |           |             | 224,536   |        
|                                                                                                                                                                  | Ground rent                                    |                                          |                | 15,844    |         |           |             | 11,481    |        
|                                                                                                                                                                  | General and administrative                     |                                          |                | 102,067   |         |           |             | 78,151    |        
|                                                                                                                                                                  | Impairment on securities and other investments |                                          |                |          |         |           |             | 8,499     |        
|                                                                                                                                                                  |                                                |                                          |                |           |         |          
|                                                                                                                                                                  |                                                |                                          | Total expenses |           |         | 2,084,040 |             |           |         | 1,725,397 | 
|                                                                                                                                                                  |                                                |                                          |                |           |         |          
|Income before income taxes, allocation to
    minority interests, income from investment in unconsolidated
    joint ventures and net gain on sale of real estate |                                                |                                          | 556,045        |           |         |           | 482,636     |          
|Income taxes                                                                                                                                                      |                                                |                                          | (8,986         | )         |         |           | (5,849      | )        
|Minority interests  partially owned
    properties                                                                                                               |                                                |                                          | (5,137         | )         |         |           | (6,612      | )        
|Income from investment in unconsolidated joint
    ventures                                                                                                       |                                                |                                          | 92,143         |           |         |           | 49,724      |          
|Net gain on sales of real estate                                                                                                                                  |                                                |                                          |               |           |         |           | 14,854      |          
|                                                                                                                                                                  |                                                |                                          |                |           |         |          
|Income from continuing operations                                                                                                                                 |                                                |                                          | 634,065        |           |         |           | 534,753     |          
|Discontinued operations (including net gain on
    disposal of $8,872 and $0, respectively)                                                                       |                                                |                                          | 17,777         |           |         |           | 9,749       |          
|                                                                                                                                                                  |                                                |                                          |                |           |         |          
|Income before cumulative effect of a change in
    accounting principle                                                                                           |                                                |                                          | 651,842        |           |         |           | 544,502     |          
|Cumulative effect of change in accounting
    principle                                                                                                           |                                                |                                          |               |           |         |           | (1,142      | )        
|                                                                                                                                                                  |                                                |                                          |                |           |         |          
|Net income                                                                                                                                                        |                                                |                                          | 651,842        |           |         |           | 543,360     |          
|Put option settlement                                                                                                                                             |                                                |                                          |               |           |         |           | 2,655       |          
|Preferred distributions                                                                                                                                           |                                                |                                          | (47,112        | )         |         |           | (40,011     | )        
|                                                                                                                                                                  |                                                |                                          |                |           |         |          
|Net income available for Units                                                                                                                                    |                                                | $                                        | 604,730        |           |         | $         | 506,004     |          
|                                                                                                                                                                  |                                                |                                          |                |           |         |          
|Net income available per weighted average Unit
    outstanding  basic                                                                                            |                                                | $                                        | 1.29           |           |         | $         | 1.30        |          
|                                                                                                                                                                  |                                                |                                          |                |           |         |          
|Weighted average Units outstanding 
    basic                                                                                                                    |                                                |                                          | 469,485,606    |           |         |           | 388,543,114 |          
|                                                                                                                                                                  |                                                |                                          |                |           |         |          
|Net income available per weighted average Unit
    and unit equivalent outstanding  diluted                                                                      |                                                | $                                        | 1.28           |           |         | $         | 1.29        |          
|                                                                                                                                                                  |                                                |                                          |                |           |         |          
|Weighted average Units and unit equivalents
    outstanding  diluted                                                                                             |                                                |                                          | 471,703,728    |           |         |           | 391,620,822 |          
|                                                                                                                                                                  |                                                |                                          |                |           |         |          
|Distributions declared per Unit outstanding                                                                                                                       |                                                | $                                        | 1.50           |           |         | $         | 1.40        |          
|                                                                                                                                                                  |                                                |                                          |                |           |         |          

See accompanying notes.

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EOP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF NET COMPREHENSIVE
INCOME

(Unaudited)


|                                   |                                                                           |                      |         |     |                     |   |         |        |   |   |         |     |  |   |         |        |  
|---------------------------------- | ------------------------------------------------------------------------- | -------------------- | ------- | --- | ------------------- | - | ------- | ------ | - | - | ------- | --- |  | - | ------- | ------ | -
|                                   |                                                                           |                      |         |    
|                                   |                                                                           | For the three months |         |     | For the nine months |  
|                                   |                                                                           | ended September 30,  |         |     | ended September 30, |  
|                                   |                                                                           |                      |         |     |                     |  
|(Dollars in thousands)             |                                                                           | 2002                 |         |     | 2001                |   |         | 2002   |   |   | 2001    |    
|                                   |                                                                           |                      |         |     |                     |   |         |        |   |   |         |    
|Net income                         |                                                                           | $                    | 203,895 |     |                     | $ | 245,078 |        |   | $ | 651,842 |     |  | $ | 543,360 |       
|Other comprehensive income (loss): |                                                                           |                      |         |     |                     |   |         |        |   |   |         |     |  |   |         |       
|                                   | Unrealized holding gains/losses arising during
    the period             |                      |         | 204 |                     |   |         | (1,268 | ) |   |         | 313 |  |   |         | (2,684 | )
|                                   | Reclassification adjustment for realized gains
    included in net income |                      |         |    |                     |   |         |       |   |   |         | 116 |  |   |         |       |  
|                                   | Recognition of permanent impairment on marketable
    securities          |                      |         |    |                     |   |         |       |   |   |         |    |  |   |         | 29,671 |  
|                                   |                                                                           |                      |         |     |                     |   |         |        |   |   |         |    
|Net comprehensive income           |                                                                           | $                    | 204,099 |     |                     | $ | 243,810 |        |   | $ | 652,271 |     |  | $ | 570,347 |       
|                                   |                                                                           |                      |         |     |                     |   |         |        |   |   |         |    

See accompanying notes.

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EOP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CASH
FLOWS

(Unaudited)


|                       |                                                                                       |                                                                                                                                               |                                                                  |                                           |         |         |           |            |            |         |         | 
|---------------------- | ------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------- | ----------------------------------------- | ------- | ------- | --------- | ---------- | ---------- | ------- | ------- | 
|                       |                                                                                       |                                                                                                                                              
|                       |                                                                                       | For the nine months                                                                                                                           |                                                                 
|                       |                                                                                       | ended September 30,                                                                                                                           |                                                                 
|                       |                                                                                       |                                                                                                                                               |                                                                 
|(Dollars in thousands) |                                                                                       | 2002                                                                                                                                          |                                                                  |                                           | 2001    |        
|                       |                                                                                       |                                                                                                                                               |                                                                  |                                           |         |        
|Operating Activities:  |                                                                                       |                                                                                                                                               |                                                                  |                                           |         |         |           |           
|                       | Net income                                                                            |                                                                                                                                               | $                                                                | 651,842                                   |         |         | $         | 543,360    |           
|                       | Adjustments to reconcile net income to net cash
    provided by operating activities: |                                                                                                                                               |                                                                  |                                           |         |         |           |            |           
|                       |                                                                                       | Interest/dividend income accrued but not received                                                                                             |                                                                  |                                           |        |         |           |            | (9,852     | )      
|                       |                                                                                       | Amortization of discounts included in
    interest/dividend income                                                                            |                                                                  |                                           | (767    | )       |           |            | (2,665     | )      
|                       |                                                                                       | Amortization of deferred revenue included in
    other income                                                                                 |                                                                  |                                           |        |         |           |            | (3,073     | )      
|                       |                                                                                       | Depreciation and amortization (including
    discontinued operations)                                                                         |                                                                  |                                           | 520,874 |         |           |            | 410,148    |        
|                       |                                                                                       | Amortization of premiums/discounts on unsecured
    notes and terminated interest rate protection agreements
    included in interest expense |                                                                  |                                           | (2,331  | )       |           |            | 3,648      |        
|                       |                                                                                       | Impairment on securities and other investments                                                                                                |                                                                  |                                           |        |         |           |            | 8,499      |        
|                       |                                                                                       | Compensation related to restricted shares issued
    to employees by Equity Office                                                            |                                                                  |                                           | 12,060  |         |           |            | 7,803      |        
|                       |                                                                                       | Income from unconsolidated joint ventures                                                                                                     |                                                                  |                                           | (92,143 | )       |           |            | (49,724    | )      
|                       |                                                                                       | Net gain on sales of real estate                                                                                                              |                                                                  |                                           | (8,872  | )       |           |            | (14,854    | )      
|                       |                                                                                       | Cumulative effect of a change in accounting
    principle                                                                                     |                                                                  |                                           |        |         |           |            | 1,142      |        
|                       |                                                                                       | Provision for doubtful accounts                                                                                                               |                                                                  |                                           | 19,578  |         |           |            | 13,036     |        
|                       |                                                                                       | Income allocation to minority interests                                                                                                       |                                                                  |                                           | 5,137   |         |           |            | 6,612      |        
|                       |                                                                                       | Changes in assets and liabilities:                                                                                                            |                                                                  |                                           |         |         |           |            |            |        
|                       |                                                                                       |                                                                                                                                               | Decrease/(increase) in rents receivable                          |                                           |         | 38,084  |           |            |            | (5,500  | )      
|                       |                                                                                       |                                                                                                                                               | (Increase) in deferred rent receivable                           |                                           |         | (59,738 | )         |            |            | (59,865 | )      
|                       |                                                                                       |                                                                                                                                               | (Increase) in prepaid expenses and other assets                  |                                           |         | (12,153 | )         |            |            | (11,109 | )      
|                       |                                                                                       |                                                                                                                                               | (Decrease)/increase in accounts payable and
    accrued expenses |                                           |         | (27,637 | )         |            |            | 191     |        
|                       |                                                                                       |                                                                                                                                               | Increase/(decrease) in other liabilities                         |                                           |         | 4,774   |           |            |            | (35,561 | )      
|                       |                                                                                       |                                                                                                                                               |                                                                  |                                           |         |        
|                       |                                                                                       |                                                                                                                                               |                                                                  | Net cash provided by operating activities |         |         | 1,048,708 |            |            |         | 802,236 | 
|                       |                                                                                       |                                                                                                                                               |                                                                  |                                           |         |        
|Investing Activities:  |                                                                                       |                                                                                                                                               |                                                                  |                                           |         |         |           |           
|                       | Property acquisitions                                                                 |                                                                                                                                               |                                                                  | (23,947                                   | )       |         |           | (35,885    | )         
|                       | Acquisition of Spieker Properties LP                                                  |                                                                                                                                               |                                                                  |                                          |         |         |           | (1,048,585 | )         
|                       | Property dispositions                                                                 |                                                                                                                                               |                                                                  | 218,239                                   |         |         |           | 255,146    |           
|                       | Capital and tenant improvements                                                       |                                                                                                                                               |                                                                  | (223,299                                  | )       |         |           | (242,473   | )         
|                       | Lease acquisition costs                                                               |                                                                                                                                               |                                                                  | (69,188                                   | )       |         |           | (49,617    | )         
|                       | Decrease in escrow deposits and restricted cash                                       |                                                                                                                                               |                                                                  | 159,222                                   |         |         |           | 140        |           
|                       | Distributions from unconsolidated joint ventures                                      |                                                                                                                                               |                                                                  | 163,470                                   |         |         |           | 96,970     |           
|                       | Investments in unconsolidated joint ventures                                          |                                                                                                                                               |                                                                  | (123,897                                  | )       |         |           | (214,281   | )         
|                       | Redemption of CT Convertible Trust I
    preferred stock                              |                                                                                                                                               |                                                                  | 20,086                                    |         |         |           |           |           
|                       | Investment in securities                                                              |                                                                                                                                               |                                                                  |                                          |         |         |           | (683       | )         
|                       | Repayments of note receivables                                                        |                                                                                                                                               |                                                                  | 1,886                                     |         |         |           | 382        |           
|                       |                                                                                       |                                                                                                                                               |                                                                  |                                           |         |        
|                       |                                                                                       | Net cash provided by (used for) investing
    activities                                                                                      |                                                                  |                                           | 122,572 |         |           |            | (1,238,886 | )      
|                       |                                                                                       |                                                                                                                                               |                                                                  |                                           |         |        

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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


CONSOLIDATED STATEMENTS OF CASH
FLOWS  (Continued)

|                                                 |                                                                                                                                     |                                                                                                                                                                                 |                                                          |            |         |          |   |            |   |         | 
|------------------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------- | ---------- | ------- | -------- | - | ---------- | - | ------- | 
|                                                 |                                                                                                                                     |                                                                                                                                                                                
|                                                 |                                                                                                                                     | For the nine months                                                                                                                                                             |                                                         
|                                                 |                                                                                                                                     | ended September 30,                                                                                                                                                             |                                                         
|                                                 |                                                                                                                                     |                                                                                                                                                                                 |                                                         
|(Dollars in thousands)                           |                                                                                                                                     | 2002                                                                                                                                                                            |                                                          |            | 2001    |         
|                                                 |                                                                                                                                     |                                                                                                                                                                                 |                                                          |            |         |         
|Financing Activities:                            |                                                                                                                                     |                                                                                                                                                                                 |                                                          |            |         |          |   |           
|                                                 | Proceeds from mortgage debt                                                                                                         |                                                                                                                                                                                 |                                                          | 13,342     |         |          |   | 140,000    |  
|                                                 | Principal payments on mortgage debt                                                                                                 |                                                                                                                                                                                 |                                                          | (36,229    | )       |          |   | (219,876   | )
|                                                 | Proceeds from unsecured notes                                                                                                       |                                                                                                                                                                                 |                                                          | 239,127    |         |          |   | 1,386,598  |  
|                                                 | Repayment of unsecured notes                                                                                                        |                                                                                                                                                                                 |                                                          | (200,000   | )       |          |   |           |  
|                                                 | Proceeds from lines of credit                                                                                                       |                                                                                                                                                                                 |                                                          | 805,050    |         |          |   | 2,945,050  |  
|                                                 | Principal payments on lines of credit                                                                                               |                                                                                                                                                                                 |                                                          | (1,049,350 | )       |          |   | (3,135,336 | )
|                                                 | Payment of offering costs                                                                                                           |                                                                                                                                                                                 |                                                          | (29        | )       |          |   | (44        | )
|                                                 | Payments of loan costs                                                                                                              |                                                                                                                                                                                 |                                                          | (4,047     | )       |          |   | (10,482    | )
|                                                 | Settlement of interest rate swap agreements                                                                                         |                                                                                                                                                                                 |                                                          | 42,810     |         |          |   |           |  
|                                                 | Distributions to minority interests in partially
    owned properties                                                               |                                                                                                                                                                                 |                                                          | (5,406     | )       |          |   | (4,552     | )
|                                                 | Redemption of Series A Preferred Units                                                                                              |                                                                                                                                                                                 |                                                          | (199,850   | )       |          |   |           |  
|                                                 | Issuance of Series G Preferred Units                                                                                                |                                                                                                                                                                                 |                                                          | 205,645    |         |          |   |           |  
|                                                 | Repurchase of Units                                                                                                                 |                                                                                                                                                                                 |                                                          | (4,947     | )       |          |   |           |  
|                                                 | Proceeds from exercise of share options                                                                                             |                                                                                                                                                                                 |                                                          | 38,882     |         |          |   | 67,818     |  
|                                                 | Redemption of Units                                                                                                                 |                                                                                                                                                                                 |                                                          | (104,165   | )       |          |   | (1,245     | )
|                                                 | Distributions to unitholders                                                                                                        |                                                                                                                                                                                 |                                                          | (470,406   | )       |          |   | (371,822   | )
|                                                 | Put option settlement                                                                                                               |                                                                                                                                                                                 |                                                          |           |         |          |   | (1,467     | )
|                                                 | Payment of preferred distributions                                                                                                  |                                                                                                                                                                                 |                                                          | (47,294    | )       |          |   | (33,698    | )
|                                                 |                                                                                                                                     |                                                                                                                                                                                 |                                                          |            |         |         
|                                                 |                                                                                                                                     |                                                                                                                                                                                 | Net cash (used for) provided by financing
    activities |            |         | (776,867 | ) |            |   | 760,944 | 
|                                                 |                                                                                                                                     |                                                                                                                                                                                 |                                                          |            |         |         
|                                                 | Net increase in cash and cash equivalents                                                                                           |                                                                                                                                                                                 |                                                          | 394,413    |         |          |   | 324,294    |  
|                                                 | Cash and cash equivalents at the beginning of the
    period                                                                        |                                                                                                                                                                                 |                                                          | 61,121     |         |          |   | 53,256     |  
|                                                 |                                                                                                                                     |                                                                                                                                                                                 |                                                          |            |         |         
|                                                 | Cash and cash equivalents at the end of the period                                                                                  |                                                                                                                                                                                 | $                                                        | 455,534    |         |          | $ | 377,550    |  
|                                                 |                                                                                                                                     |                                                                                                                                                                                 |                                                          |            |         |         
|Supplemental Information:                        |                                                                                                                                     |                                                                                                                                                                                 |                                                          |            |         |          |   |           
|                                                 | Interest paid during the period, including
    capitalized interest of $16,467 and $17,607, respectively                            |                                                                                                                                                                                 | $                                                        | 658,841    |         |          | $ | 489,486    |  
|                                                 |                                                                                                                                     |                                                                                                                                                                                 |                                                          |            |         |         
|Non-Cash Investing and Financing
    Activities: |                                                                                                                                     |                                                                                                                                                                                 |                                                          |            |         |          |   |           
|                                                 | Escrow deposits used for property acquisitions                                                                                      |                                                                                                                                                                                 | $                                                        | 70,030     |         |          |   |           |  
|                                                 |                                                                                                                                     |                                                                                                                                                                                 |                                                          |            |         |         
|                                                 | Escrow deposits provided by property dispositions                                                                                   |                                                                                                                                                                                 | $                                                        | (70,025    | )       |          | $ | (23,241    | )
|                                                 |                                                                                                                                     |                                                                                                                                                                                 |                                                          |            |         |         
|                                                 | Issuance of unsecured notes at a discount of
    $10,048 in exchange for $250 million MandatOry Par Put
    Remarketed SecuritiesSM |                                                                                                                                                                                 | $                                                        | (254,631   | )       |          |   |           |  
|                                                 |                                                                                                                                     |                                                                                                                                                                                 |                                                          |            |         |         
|                                                 |                                                                                                                                     | Exchange of $250 million MandatOry Par Put
    Remarketed SecuritiesSM, including an unamortized
    premium of $4,631, for $264,679 notes due 2012 issued in
    February 2002 |                                                          | $          | 254,631 |          |   |            |  |        
|                                                 |                                                                                                                                     |                                                                                                                                                                                 |                                                          |            |         |         
|                                                 | Mortgage loans, unsecured notes and line of
    credit assumed in the Spieker merger                                                |                                                                                                                                                                                 |                                                          |           |         |          | $ | 2,125,686  |  
|                                                 |                                                                                                                                     |                                                                                                                                                                                 |                                                          |            |         |         
|                                                 | Net liabilities assumed in the Spieker merger                                                                                       |                                                                                                                                                                                 |                                                          |           |         |          | $ | 109,699    |  
|                                                 |                                                                                                                                     |                                                                                                                                                                                 |                                                          |            |         |         
|                                                 | Preferred units issued in the Spieker merger                                                                                        |                                                                                                                                                                                 |                                                          |           |         |          | $ | 356,250    |  
|                                                 |                                                                                                                                     |                                                                                                                                                                                 |                                                          |            |         |         
|                                                 | Common Shares, options and Units issued in the
    Spieker merger                                                                   |                                                                                                                                                                                 |                                                          |           |         |          | $ | 3,483,236  |  
|                                                 |                                                                                                                                     |                                                                                                                                                                                 |                                                          |            |         |         

See accompanying notes.

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EOP OPERATING LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(Unaudited)


The consolidated financial statements of EOP
Partnership have been prepared pursuant to the Securities and
Exchange Commission (SEC) rules and regulations. The
following notes, which present interim disclosures as required
by the SEC, highlight significant changes to the notes to the
December 31, 2001 audited consolidated financial statements
of EOP Partnership and should be read together with the
financial statements and notes thereto included in the
Form 10-K.

NOTE 1  BUSINESS AND FORMATION OF
EOP PARTNERSHIP

As used herein, EOP Partnership means
EOP Operating Limited Partnership, a Delaware limited
partnership, together with its subsidiaries, and the
predecessors thereof (EOP Partnership Predecessors).
EOP Partnership is a subsidiary of Equity Office Properties
Trust (Equity Office), a Maryland real estate
investment trust. EOP Partnership was organized in 1996 to
continue and expand the national office property business
organized by Mr. Samuel Zell, President, Chief Executive
Officer and Chairman of the Board of Trustees of Equity Office,
and to complete the consolidation of the EOP Partnership
Predecessors. Equity Office completed its initial public
offering (the IPO) on July 11, 1997, having
sold its common shares of beneficial interest, $0.01 par value
per share (Common Shares). The net proceeds from the
IPO were contributed to EOP Partnership in exchange for units of
partnership interest (Units). EOP Partnership is a
fully integrated, self-administered and self-managed real estate
company principally engaged in acquiring, owning, managing,
developing and leasing office properties. Equity Office has
elected to be taxed as a real estate investment trust
(REIT) for federal income tax purposes and generally
will not be subject to federal income tax if it distributes 100%
of its taxable income and complies with a number of
organizational and operational requirements. At
September 30, 2002, EOP Partnership owned or had an
interest in 744 office properties (the Office
Properties) comprising approximately 126.8 million
rentable square feet of office space and 79 industrial
properties (the Industrial Properties) comprising
approximately 6.0 million rentable square feet of
industrial space (together with the Office Properties, the
Properties). The Office Properties were, on a
weighted average basis, 89.2% occupied at September 30,
2002, and are located in 142 submarkets in 34 markets
in 21 states and the District of Columbia. The Office
Properties, by rentable square feet, are located approximately
40.7% in central business districts and approximately 59.3% in
suburban markets.

NOTE 2  SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES



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

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



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

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



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

The consolidated financial statements as of and
for the three and nine months ended September 30, 2002 and
2001 and related footnote disclosures are unaudited. In the
opinion of management, such financial statements reflect all
adjustments necessary for a fair presentation of the results of
the interim periods. All such adjustments are of a normal,
recurring nature.

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EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(Unaudited)




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

Certain reclassifications have been made to the
previously reported 2001 statements in order to provide
comparability with the 2002 statements reported herein. These
reclassifications have not changed the 2001 results or
partners capital.

NOTE 3  ACQUISITION

In September, EOP Partnership acquired Liberty
Place, a 157,550 square foot office building in Washington,
D.C., for approximately $54.9 million.

NOTE 4  DISPOSITIONS

During the three months ended September 30,
2002, EOP Partnership sold 23 office properties and one
vacant land parcel in separate transactions to various
unaffiliated parties for approximately $148.2 million. The
total gain on the sale of the wholly owned properties was
approximately $6.4 million. The 23 office properties and
one vacant land parcel sold were:

|                                            |  |          |                   |          |       |  |              |         |  |  |         | 
|------------------------------------------- |  | -------- | ----------------- | -------- | ----- |  | ------------ | ------- |  |  | ------- | 
|                                            |  |          |                   | Building |       |  | Total Square |        
|Property                                    |  | Location |                   |          | Count |  |              | Footage | 
|                                            |  |          |                   |          |       |  |              |         | 
|Governor Executive Center                   |  |          | San Diego, CA     |          |       |  | 1            |         |  |  | 52,195  | 
|Crossroads                                  |  |          | San Diego, CA     |          |       |  | 1            |         |  |  | 137,120 | 
|Dubuque Business Center                     |  |          | San Francisco, CA |          |       |  | 3            |         |  |  | 112,384 | 
|Lot 3 Phase II Tri-State International Land |  |          | Chicago, IL       |          |       |  |             |         |  |  |        | 
|Carmel Valley Centre I & II                 |  |          | San Diego, CA     |          |       |  | 2            |         |  |  | 107,184 | 
|Carmel View Office Plaza                    |  |          | San Diego, CA     |          |       |  | 1            |         |  |  | 77,460  | 
|Centerpark Plaza I                          |  |          | San Diego, CA     |          |       |  | 4            |         |  |  | 85,051  | 
|Centerpark Plaza II                         |  |          | San Diego, CA     |          |       |  | 5            |         |  |  | 115,347 | 
|Pacific Point                               |  |          | San Diego, CA     |          |       |  | 3            |         |  |  | 140,921 | 
|Sorrento Tech I, II & III                   |  |          | San Diego, CA     |          |       |  | 3            |         |  |  | 93,460  | 
|                                            |  |          |                   |          |       |  |              |         | 
|                                            |  |          | Total             |          |       |  | 23           |         |  |  | 921,122 | 
|                                            |  |          |                   |          |       |  |              |         | 

In accordance with SFAS 144 Accounting for
the Impairment or Disposal of Long Lived Assets, effective
for financial statements issued for fiscal years beginning after
December 15, 2001, net income and gain/(loss) on sales of
real estate for properties sold subsequent to December 31,
2001 are reflected in the

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EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(Unaudited)


consolidated statements of operations as
discontinued operations for both periods presented.
Below is a summary of the results of operations of these
properties through their respective disposition dates:

|                                                                    |                |               |       |       |               |   |       |       |  |   |        |        |  |   |        |        | 
|------------------------------------------------------------------- | -------------- | ------------- | ----- | ----- | ------------- | - | ----- | ----- |  | - | ------ | ------ |  | - | ------ | ------ | 
|                                                                    |                |               |       |      
|                                                                    |                | For the three |       |       | For the nine  |  
|                                                                    |                | months ended  |       |       | months ended  |  
|                                                                    |                | September 30, |       |       | September 30, |  
|                                                                    |                |               |       |       |               |  
|(Dollars in thousands)                                              |                | 2002          |       |       | 2001          |   |       | 2002  |  |   | 2001   |       
|                                                                    |                |               |       |       |               |   |       |       |  |   |        |       
|Property revenues                                                   |                | $             | 3,629 |       |               | $ | 9,930 |       |  | $ | 16,908 |        |  | $ | 20,730 |       
|Interest income                                                     |                |               |      |       |               |   | 2     |       |  |   |       |        |  |   | 5      |       
|                                                                    |                |               |       |       |               |   |       |       |  |   |        |       
|                                                                    | Total revenues |               |       | 3,629 |               |   |       | 9,932 |  |   |        | 16,908 |  |   |        | 20,735 | 
|                                                                    |                |               |       |       |               |   |       |       |  |   |        |       
|Interest expense                                                    |                |               | 1     |       |               |   | 72    |       |  |   | (24    | )      |  |   | 219    |       
|Depreciation and amortization                                       |                |               | 546   |       |               |   | 1,629 |       |  |   | 2,683  |        |  |   | 3,495  |       
|Property operating expenses                                         |                |               | 1,019 |       |               |   | 2,986 |       |  |   | 5,225  |        |  |   | 7,175  |       
|Ground rent                                                         |                |               |      |       |               |   | 29    |       |  |   | 43     |        |  |   | 87     |       
|                                                                    |                |               |       |       |               |   |       |       |  |   |        |       
|                                                                    | Total expenses |               |       | 1,566 |               |   |       | 4,716 |  |   |        | 7,927  |  |   |        | 10,976 | 
|                                                                    |                |               |       |       |               |   |       |       |  |   |        |       
|Income before income taxes and net gain on sales
    of real estate |                |               | 2,063 |       |               |   | 5,216 |       |  |   | 8,981  |        |  |   | 9,759  |       
|Income taxes                                                        |                |               |      |       |               |   |      |       |  |   | (76    | )      |  |   | (10    | )     
|Net gain on sales of real estate                                    |                |               | 6,382 |       |               |   |      |       |  |   | 8,872  |        |  |   |       |       
|                                                                    |                |               |       |       |               |   |       |       |  |   |        |       
|Net income                                                          |                | $             | 8,445 |       |               | $ | 5,216 |       |  | $ | 17,777 |        |  | $ | 9,749  |       
|                                                                    |                |               |       |       |               |   |       |       |  |   |        |       

NOTE 5  INVESTMENT IN
UNCONSOLIDATED JOINT VENTURES

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

|                                                                                                                                                                 |                                              |                                                              |           |           |                   |   |           |           |           | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------- | ------------------------------------------------------------ | --------- | --------- | ----------------- | - | --------- | --------- | --------- | 
|(Dollars in thousands)                                                                                                                                           |                                              | September 30, 2002                                           |           |           | December 31, 2001 |  
|                                                                                                                                                                 |                                              |                                                              |           |           |                   |  
|Balance Sheets:                                                                                                                                                  |                                              |                                                              |           |           |                   |   |           |          
|                                                                                                                                                                 | Real estate, net of accumulated depreciation |                                                              | $         | 3,047,834 |                   |   | $         | 3,135,250 |          
|                                                                                                                                                                 | Other assets                                 |                                                              |           | 244,066   |                   |   |           | 276,322   |          
|                                                                                                                                                                 |                                              |                                                              |           |           |                   |  
|                                                                                                                                                                 |                                              | Total Assets                                                 |           | $         | 3,291,900         |   |           | $         | 3,411,572 | 
|                                                                                                                                                                 |                                              |                                                              |           |           |                   |  
|                                                                                                                                                                 | Mortgage debt                                |                                                              | $         | 1,306,928 |                   |   | $         | 1,370,025 |          
|                                                                                                                                                                 | Other liabilities                            |                                                              |           | 152,444   |                   |   |           | 169,987   |          
|                                                                                                                                                                 | Partners and shareholders equity           |                                                              |           | 1,832,528 |                   |   |           | 1,871,560 |          
|                                                                                                                                                                 |                                              |                                                              |           |           |                   |  
|                                                                                                                                                                 |                                              | Total Liabilities and Partners and
    Shareholders Equity |           | $         | 3,291,900         |   |           | $         | 3,411,572 | 
|                                                                                                                                                                 |                                              |                                                              |           |           |                   |  
|EOP Partnerships share of equity                                                                                                                                |                                              | $                                                            | 1,137,829 |           |                   | $ | 1,194,441 |          
|Net excess of cost of investments over the net
    book value of underlying net assets, net of accumulated
    depreciation of $19,808 and $17,517, respectively |                                              |                                                              | 131,683   |           |                   |   | 126,686   |          
|                                                                                                                                                                 |                                              |                                                              |           |           |                   |  
|Carrying value of investments in unconsolidated
    joint ventures                                                                                               |                                              | $                                                            | 1,269,512 |           |                   | $ | 1,321,127 |          
|                                                                                                                                                                 |                                              |                                                              |           |           |                   |  
|EOP Partnerships share of unconsolidated
    non-recourse mortgage debt                                                                                         |                                              | $                                                            | 816,118   |           |                   | $ | 848,944   |          
|                                                                                                                                                                 |                                              |                                                              |           |           |                   |  

10



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(Unaudited)


|                            |                                                                                                             |                               |                |         |                           |        |   |         |        |         |      |         |         |         |   |         |         |         | 
|--------------------------- | ----------------------------------------------------------------------------------------------------------- | ----------------------------- | -------------- | ------- | ------------------------- | ------ | - | ------- | ------ | ------- | ---- | ------- | ------- | ------- | - | ------- | ------- | ------- | 
|                            |                                                                                                             |                               |                |        
|                            |                                                                                                             | For the three months ended    |                |         | For the nine months ended |       
|                            |                                                                                                             | September 30,                 |                |         | September 30,             |       
|                            |                                                                                                             |                               |                |         |                           |       
|(Dollars in thousands)      |                                                                                                             | 2002                          |                |         | 2001                      |        |   | 2002    |        |         | 2001 |        
|                            |                                                                                                             |                               |                |         |                           |        |   |         |        |         |      |        
|Statements of Operations:   |                                                                                                             |                               |                |         |                           |        |   |         |        |         |      |         |         |         |   |        
|                            | Revenues                                                                                                    |                               | $              | 114,358 |                           |        | $ | 127,503 |        |         | $    | 450,930 |         |         | $ | 378,158 |        
|                            |                                                                                                             |                               |                |         |                           |        |   |         |        |         |      |        
|                            | Expenses:                                                                                                   |                               |                |         |                           |        |   |         |        |         |      |         |         |         |   |         |        
|                            |                                                                                                             | Interest expense              |                |         | 19,404                    |        |   |         | 24,384 |         |      |         | 58,311  |         |   |         | 74,600  |        
|                            |                                                                                                             | Depreciation and amortization |                |         | 20,919                    |        |   |         | 22,991 |         |      |         | 62,720  |         |   |         | 64,179  |        
|                            |                                                                                                             | Operating expenses            |                |         | 47,236                    |        |   |         | 53,473 |         |      |         | 148,413 |         |   |         | 157,289 |        
|                            |                                                                                                             |                               |                |         |                           |        |   |         |        |         |      |        
|                            |                                                                                                             |                               | Total expenses |         |                           | 87,559 |   |         |        | 100,848 |      |         |         | 269,444 |   |         |         | 296,068 | 
|                            |                                                                                                             |                               |                |         |                           |        |   |         |        |         |      |        
|                            | Net income before gain on sale of real estate and
    cumulative effect of a change in accounting principle |                               |                | 26,799  |                           |        |   | 26,655  |        |         |      | 181,486 |         |         |   | 82,090  |        
|                            | Gain on sale of real estate                                                                                 |                               |                | 10      |                           |        |   |        |        |         |      | 3,703   |         |         |   |        |        
|                            | Cumulative effect of a change in accounting
    principle                                                   |                               |                |        |                           |        |   |        |        |         |      |        |         |         |   | (2,279  | )      
|                            |                                                                                                             |                               |                |         |                           |        |   |         |        |         |      |        
|                            | Net income                                                                                                  |                               | $              | 26,809  |                           |        | $ | 26,655  |        |         | $    | 185,189 |         |         | $ | 79,811  |        
|                            |                                                                                                             |                               |                |         |                           |        |   |         |        |         |      |        
|EOP Partnerships share of: |                                                                                                             |                               |                |         |                           |        |   |         |        |         |      |         |         |         |   |        
|                            | Net income                                                                                                  |                               | $              | 12,218  |                           |        | $ | 16,434  |        |         | $    | 92,143  |         |         | $ | 49,724  |        
|                            |                                                                                                             |                               |                |         |                           |        |   |         |        |         |      |        
|                            | Interest expense and loan cost amortization                                                                 |                               | $              | 13,458  |                           |        | $ | 16,273  |        |         | $    | 40,119  |         |         | $ | 48,794  |        
|                            |                                                                                                             |                               |                |         |                           |        |   |         |        |         |      |        
|                            | Depreciation and amortization (real estate
    related)                                                     |                               | $              | 11,551  |                           |        | $ | 12,756  |        |         | $    | 36,499  |         |         | $ | 38,026  |        
|                            |                                                                                                             |                               |                |         |                           |        |   |         |        |         |      |        

NOTE 6  INVESTMENT IN PREFERRED
SECURITIES

On September 30, 2002, CT Convertible Trust
I, an investment management and real estate finance company,
redeemed the non-convertible amount of its preferred securities
at par, including accrued dividends. EOP Partnership received
approximately $20.1 million upon the redemption. EOP
Partnership still has an approximate $29.2 million
investment in the convertible portion of the preferred
securities of CT Convertible Trust I which is included in
prepaid expenses and other assets on the consolidated balance
sheets.

NOTE 7  MORTGAGE DEBT

In July 2002, the existing $26.8 million
8.04% mortgage note secured by Wilshire Palisades matured. The
note was refinanced with a $40 million mortgage note that
has an interest rate of 6.45% and a maturity date of
July 1, 2008.

In September 2002, the mortgage loans secured by
Fremont Bayside and Industrial Drive Warehouse matured and were
extended for one year under the same terms. The mortgage
balances were approximately $5.6 million and
$2.1 million, respectively, with an interest rate of 7.6%.

NOTE 8  UNSECURED
NOTES

In September 2002, EOP Partnership terminated
several interest rate swap agreements that had effectively
converted $1.2 billion of fixed-rate debt to a variable
rate. Total proceeds resulting from the termination of
approximately $39.6 million will be amortized ratably over
the remaining term of the respective unsecured notes as a
reduction to interest expense. The remaining terms range from 16
to 42 months.

11



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(Unaudited)


NOTE 9  PARTNERS
CAPITAL

Units

The following table presents the changes in the
issued and outstanding Units since June 30, 2002:

|                                      |                                                                                                                 |  |             |          |  
|------------------------------------- | --------------------------------------------------------------------------------------------------------------- |  | ----------- | -------- | -
|Outstanding at June 30, 2002          |                                                                                                                 |  | 470,209,258 |         
|                                      | Issued to Equity Office related to Common Shares
    issued for share option exercises                          |  |             | 102,633  |  
|                                      | Units retired upon repurchase and retirement of a
    corresponding number of Common Shares by Equity Office(a) |  |             | (216,854 | )
|                                      | Restricted shares issued/cancelled, net                                                                         |  |             | (268,339 | )
|                                      | Units redeemed for cash(b)                                                                                      |  |             | (677,216 | )
|                                      | Units issued to Equity Office for Common Shares
    issued through dividend reinvestments                       |  |             | 16,641   |  
|                                      |                                                                                                                 |  |            
|Outstanding at September 30,
    2002 |                                                                                                                 |  | 469,166,123 |         
|                                      |                                                                                                                 |  |            

(a) In July, Equity Office announced a
Common Share repurchase program allowing for the repurchase of
up to $200 million of Common Shares over the next
12 months, at the discretion of management. The Common
Shares may be repurchased in the open market or privately
negotiated transactions. During the third quarter 2002,
197,900 Common Shares were repurchased and retired at an
average share price of $25.06 for approximately
$5.0 million in the aggregate. As of October 28, 2002,
7,200,600 Common Shares were repurchased and retired at an
average price of $24.98 for approximately $179.9 million in
the aggregate. In connection with the repurchases, EOP
Partnership purchased from Equity Office and retired a
corresponding number of Units for an aggregate purchase price
equal to the aggregate purchase price for all Common Share
repurchases.

(b) During the three months ended
September 30, 2002, EOP Partnership redeemed
677,216 Units for cash at an average price of $28.52 for a
total of approximately $19.3 million.

Distributions

|                         |  |              |             |  |           |  |                    |                        |  |  |                    | 
|------------------------ |  | ------------ | ----------- |  | --------- |  | ------------------ | ---------------------- |  |  | ------------------ | 
|                         |  | Quarterly    |             |  |           |  |                   
|                         |  | Distribution |             |  |           |  |                   
|                         |  | Amount       |             |  |           |  |                   
|                         |  | Per Unit     |             |  | Date Paid |  |                    | Unitholder Record Date | 
|                         |  |              |             |  |           |  |                    |                        | 
|Units                    |  |              | $.50        |  |           |  | October 15, 2002   |                        |  |  | September 30, 2002 | 
|Series A Preferred Units |  |              | .2619167(a) |  |           |  | July 29, 2002      |                        |  |  | June 28, 2002      | 
|Series B Preferred Units |  |              | .65625      |  |           |  | August 15, 2002    |                        |  |  | August 1, 2002     | 
|Series C Preferred Units |  |              | .5390625    |  |           |  | September 16, 2002 |                        |  |  | September 3, 2002  | 
|Series E Preferred Units |  |              | .4921875    |  |           |  | July 31, 2002      |                        |  |  | July 17, 2002      | 
|Series F Preferred Units |  |              | .50         |  |           |  | September 30, 2002 |                        |  |  | September 16, 2002 | 
|Series G Preferred Units |  |              | .2583333(b) |  |           |  | September 16, 2002 |                        |  |  | September 3, 2002  | 



---



|    |                                                                                                                                                                                                      
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | The distribution amount represents a prorated
    distribution from and including June 17, 2002 to, but
    excluding, July 29, 2002, the Series A redemption
    date. See Preferred Units below. 
|   
|(b) | The distribution amount represents a prorated
    distribution from and including July 29, 2002, the date of
    issuance of the Series G Preferred Units, to, but
    excluding, September 16, 2002.

Preferred
Units

On July 29, 2002, EOP Partnership issued
8,500,000 7.75% Series G Cumulative Redeemable Preferred
Units to Equity Office in exchange for Equity Offices
contribution of the proceeds of its issuance and sale of
8,500,000 7.75% Series G Cumulative Redeemable Preferred
Shares in an offering that closed July 29, 2002.

12



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(Unaudited)


On the same date, substantially all of the net
proceeds from the issuance of the Series G Preferred Units,
totaling approximately $206.1 million were used to redeem
the Series A Preferred Units from Equity Office and, in
turn, Equity Office used the proceeds to redeem its 7,994,000
outstanding 8.98% Series A Cumulative Redeemable Preferred
Shares.

NOTE 10  LEASE TERMINATION
FEE

In September 2002, a single tenant at Parkside
Towers that leased the entire Property terminated its lease
agreement. The total lease termination fee was approximately
$49.8 million, of which approximately $3.8 million was
applied to a deferred rent receivable due from the tenant.
Approximately $14.2 million of the total lease termination
fee was recognized in the third quarter 2002. The remaining
amount of approximately $31.8 million is anticipated to be
recognized in the fourth quarter 2002.

The $31.8 million anticipated to be
recognized in the fourth quarter 2002 consists of a cash payment
of approximately $10.3 million and a $21.5 million
promissory note, of which $5.0 million was repaid in
October 2002. The remaining $16.5 million due under the
promissory note is payable on the earlier of January 21,
2003 or the sale by the tenant of its interest in an office
building that secures the note. As part of the transaction, EOP
Partnership agreed, at the tenants election if made
between November 1, 2002 and January 21, 2003, to
purchase the office building for $37.5 million. The
$16.5 million still owed to EOP Partnership would be
applied to the purchase price. EOP Partnership has been advised
that the tenant has received bids for this property that exceed
$37.5 million.

13



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(Unaudited)


NOTE 11  EARNINGS PER
UNIT

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

|                                                                                              |                                                                                                                                                                   |                                                                                                    |   |             |                           |  |   |             |           |  |      |             |           |  |   |             |           | 
|--------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------- | - | ----------- | ------------------------- |  | - | ----------- | --------- |  | ---- | ----------- | --------- |  | - | ----------- | --------- | 
|                                                                                              |                                                                                                                                                                   |                                                                                                    |   |            
|                                                                                              |                                                                                                                                                                   | For the three months ended                                                                         |   |             | For the nine months ended | 
|                                                                                              |                                                                                                                                                                   | September 30,                                                                                      |   |             | September 30,             | 
|                                                                                              |                                                                                                                                                                   |                                                                                                    |   |             |                           | 
|(Dollars in thousands, except per unit data)                                                  |                                                                                                                                                                   | 2002                                                                                               |   |             | 2001                      |  |   | 2002        |           |  | 2001 |            
|                                                                                              |                                                                                                                                                                   |                                                                                                    |   |             |                           |  |   |             |           |  |      |            
|Numerator:                                                                                    |                                                                                                                                                                   |                                                                                                    |   |             |                           |  |   |             |           |  |      |             |           |  |   |            
|                                                                                              | Net income available for Units before net gain on
    sales of real estate, discontinued operations and cumulative
    effect of a change in accounting principle |                                                                                                    | $ | 179,999     |                           |  | $ | 209,413     |           |  | $    | 586,953     |           |  | $ | 482,543     |          
|                                                                                              | Net gain on sales of real estate                                                                                                                                  |                                                                                                    |   |            |                           |  |   | 14,854      |           |  |      |            |           |  |   | 14,854      |          
|                                                                                              | Discontinued operations                                                                                                                                           |                                                                                                    |   | 8,445       |                           |  |   | 5,216       |           |  |      | 17,777      |           |  |   | 9,749       |          
|                                                                                              | Cumulative effect of a change in accounting
    principle                                                                                                         |                                                                                                    |   |            |                           |  |   |            |           |  |      |            |           |  |   | (1,142      | )        
|                                                                                              |                                                                                                                                                                   |                                                                                                    |   |             |                           |  |   |             |           |  |      |            
|                                                                                              | Numerator for basic and diluted earnings per
    Unit  net income available for Units and unit
    equivalents                                                   |                                                                                                    | $ | 188,444     |                           |  | $ | 229,483     |           |  | $    | 604,730     |           |  | $ | 506,004     |          
|                                                                                              |                                                                                                                                                                   |                                                                                                    |   |             |                           |  |   |             |           |  |      |            
|Denominator:                                                                                  |                                                                                                                                                                   |                                                                                                    |   |             |                           |  |   |             |           |  |      |             |           |  |   |            
|                                                                                              | Denominator for net income available per weighted
    average Unit outstanding  basic                                                                            |                                                                                                    |   | 468,263,813 |                           |  |   | 467,350,655 |           |  |      | 469,485,606 |           |  |   | 388,543,114 |          
|                                                                                              | Effect of dilutive securities:                                                                                                                                    |                                                                                                    |   |             |                           |  |   |             |           |  |      |             |           |  |   |             |          
|                                                                                              |                                                                                                                                                                   | Units issuable upon exercise of Equity Office
    share options, put options and restricted shares |   |             | 1,500,915                 |  |   |             | 3,658,446 |  |      |             | 2,218,122 |  |   |             | 3,077,708 | 
|                                                                                              |                                                                                                                                                                   |                                                                                                    |   |             |                           |  |   |             |           |  |      |            
|                                                                                              | Denominator for net income available per weighted
    average Unit and unit equivalent outstanding  diluted                                                      |                                                                                                    |   | 469,764,728 |                           |  |   | 471,009,101 |           |  |      | 471,703,728 |           |  |   | 391,620,822 |          
|                                                                                              |                                                                                                                                                                   |                                                                                                    |   |             |                           |  |   |             |           |  |      |            
|Net income available per weighted average Unit
    outstanding  basic:                       |                                                                                                                                                                   |                                                                                                    |   |             |                           |  |   |             |           |  |      |             |           |  |   |            
|                                                                                              | Net income before net gain on sales of real
    estate, discontinued operations and cumulative effect of a
    change in accounting principle                     |                                                                                                    | $ | 0.38        |                           |  | $ | 0.45        |           |  | $    | 1.25        |           |  | $ | 1.24        |          
|                                                                                              | Net gain on sales or real estate                                                                                                                                  |                                                                                                    |   |            |                           |  |   | 0.03        |           |  |      |            |           |  |   | 0.04        |          
|                                                                                              | Discontinued operations                                                                                                                                           |                                                                                                    |   | 0.02        |                           |  |   | 0.01        |           |  |      | 0.04        |           |  |   | 0.03        |          
|                                                                                              | Cumulative effect of a change in accounting
    principle                                                                                                         |                                                                                                    |   |            |                           |  |   |            |           |  |      |            |           |  |   | (0.01       | )        
|                                                                                              |                                                                                                                                                                   |                                                                                                    |   |             |                           |  |   |             |           |  |      |            
|                                                                                              | Net income available per weighted average Unit
    outstanding  basic                                                                                            |                                                                                                    | $ | 0.40        |                           |  | $ | 0.49        |           |  | $    | 1.29        |           |  | $ | 1.30        |          
|                                                                                              |                                                                                                                                                                   |                                                                                                    |   |             |                           |  |   |             |           |  |      |            
|Net income available per weighted average Unit
    and unit equivalent outstanding  diluted: |                                                                                                                                                                   |                                                                                                    |   |             |                           |  |   |             |           |  |      |             |           |  |   |            
|                                                                                              | Net income before net gain on sales of real
    estate, discontinued operations and cumulative effect of a
    change in accounting principle                     |                                                                                                    | $ | 0.38        |                           |  | $ | 0.45        |           |  | $    | 1.24        |           |  | $ | 1.23        |          
|                                                                                              | Net gain on sales of real estate                                                                                                                                  |                                                                                                    |   |            |                           |  |   | 0.03        |           |  |      |            |           |  |   | 0.04        |          
|                                                                                              | Discontinued operations                                                                                                                                           |                                                                                                    |   | 0.02        |                           |  |   | 0.01        |           |  |      | 0.04        |           |  |   | 0.02        |          
|                                                                                              | Cumulative effect of a change in accounting
    principle                                                                                                         |                                                                                                    |   |            |                           |  |   |            |           |  |      |            |           |  |   |            |          
|                                                                                              |                                                                                                                                                                   |                                                                                                    |   |             |                           |  |   |             |           |  |      |            
|                                                                                              | Net income available per weighted average Unit
    and unit equivalent outstanding  diluted                                                                      |                                                                                                    | $ | 0.40        |                           |  | $ | 0.49        |           |  | $    | 1.28        |           |  | $ | 1.29        |          
|                                                                                              |                                                                                                                                                                   |                                                                                                    |   |             |                           |  |   |             |           |  |      |            

14



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(Unaudited)


The following securities on a weighted average
basis were not included in the computation of net income
available per weighted average Unit and unit equivalent
outstanding because they would have an antidilutive effect:

|                         |       |                  |        |                            |      |  |                           |            |  |  |           |            |  |      |           |            |  |  |           |            | 
|------------------------ | ----- | ---------------- | ------ | -------------------------- | ---- |  | ------------------------- | ---------- |  |  | --------- | ---------- |  | ---- | --------- | ---------- |  |  | --------- | ---------- | 
|                         |       |                  |        |                            |      | 
|                         |       |                  |        | For the three months ended |      |  | For the nine months ended |           
|                         |       |                  |        | September 30,              |      |  | September 30,             |           
|                         |       | Weighted Average |        |                            |      |  |                           |            | 
|Antidilutive Securities  |       | Exercise Price   |        |                            | 2002 |  |                           | 2001       |  |  | 2002      |            |  | 2001 |          
|                         |       |                  |        |                            |      |  |                           |            |  |  |           |            |  |      |          
|Share options            |       | $                | 29.230 |                            |      |  | 14,004,138                |            |  |  |          |            |  |      |          |            |  |  |          |           
|Share options            |       | $                | 30.060 |                            |      |  |                          |            |  |  |          |            |  |      | 7,293,181 |            |  |  |          |           
|Share options            |       | $                | 32.930 |                            |      |  |                          |            |  |  | 660,000   |            |  |      |          |            |  |  |          |           
|Share options            |       | $                | 30.350 |                            |      |  |                          |            |  |  |          |            |  |      |          |            |  |  | 4,657,781 |           
|Series B Preferred Units |       | $                | 35.700 |                            |      |  | 5,990,000                 |            |  |  | 5,990,000 |            |  |      | 5,990,000 |            |  |  | 5,993,187 |           
|Warrants                 |       | $                | 39.375 |                            |      |  | 5,000,000                 |            |  |  | 5,000,000 |            |  |      | 5,000,000 |            |  |  | 5,000,000 |           
|                         |       |                  |        |                            |      |  |                           |            |  |  |           |            |  |      |          
|                         | Total |                  |        |                            |      |  |                           | 24,994,138 |  |  |           | 11,650,000 |  |      |           | 18,283,181 |  |  |           | 15,650,968 | 
|                         |       |                  |        |                            |      |  |                           |            |  |  |           |            |  |      |          




NOTE 12  SEGMENT
INFORMATION

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

15



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(Unaudited)


|                                                                                                                                                                                                |                                           |                                          |            |          |           |   |           |              |   |        |            |          |           |           |          |          |              |   |          |          |   |   |          |          |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------- | ---------------------------------------- | ---------- | -------- | --------- | - | --------- | ------------ | - | ------ | ---------- | -------- | --------- | --------- | -------- | -------- | ------------ | - | -------- | -------- | - | - | -------- | -------- | -
|                                                                                                                                                                                                |                                           |                                         
|                                                                                                                                                                                                |                                           | For the three months ended September 30, |           
|                                                                                                                                                                                                |                                           |                                          |           
|                                                                                                                                                                                                |                                           |                                          |            |         
|                                                                                                                                                                                                |                                           | 2002                                     |            |          | 2001      |  
|                                                                                                                                                                                                |                                           |                                          |            |          |           |  
|                                                                                                                                                                                                |                                           | Office                                   |            |          | Corporate |   |           |              |   | Office |            |          | Corporate |           |          |         
|(Dollars in thousands)                                                                                                                                                                          |                                           | Properties                               |            |          | and Other |   |           | Consolidated |   |        | Properties |          |           | and Other |          |          | Consolidated |  
|                                                                                                                                                                                                |                                           |                                          |            |          |           |   |           |              |   |        |            |          |           |           |          |          |              |  
|Property operating revenues                                                                                                                                                                     |                                           | $                                        | 861,663    |          |           | $ | 13,296    |              |   | $      | 874,959    |          |           | $         | 846,203  |          |              | $ | 21,370   |          |   | $ | 867,573  |         
|Property operating expenses                                                                                                                                                                     |                                           |                                          | (284,071   | )        |           |   | (2,557    | )            |   |        | (286,628   | )        |           |           | (270,371 | )        |              |   | (3,170   | )        |   |   | (273,541 | )       
|                                                                                                                                                                                                |                                           |                                          |            |          |           |   |           |              |   |        |            |          |           |           |          |          |              |  
|                                                                                                                                                                                                | Net operating income                      |                                          |            | 577,592  |           |   |           | 10,739       |   |        |            | 588,331  |           |           |          | 575,832  |              |   |          | 18,200   |   |   |          | 594,032  |  
|                                                                                                                                                                                                |                                           |                                          |            |          |           |   |           |              |   |        |            |          |           |           |          |          |              |  
|Adjustments to arrive at net income:                                                                                                                                                            |                                           |                                          |            |          |           |   |           |              |   |        |            |          |           |           |          |          |              |   |          |          |   |   |          |         
|                                                                                                                                                                                                | Other revenues                            |                                          |            | 756      |           |   |           | 5,735        |   |        |            | 6,491    |           |           |          | 863      |              |   |          | 15,287   |   |   |          | 16,150   |  
|                                                                                                                                                                                                | Interest expense (a)                      |                                          |            | (48,447  | )         |   |           | (150,812     | ) |        |            | (199,259 | )         |           |          | (48,524  | )            |   |          | (157,446 | ) |   |          | (205,970 | )
|                                                                                                                                                                                                | Depreciation and amortization             |                                          |            | (167,078 | )         |   |           | (6,426       | ) |        |            | (173,504 | )         |           |          | (149,594 | )            |   |          | (7,342   | ) |   |          | (156,936 | )
|                                                                                                                                                                                                | Ground rent                               |                                          |            | (4,986   | )         |   |           |             |   |        |            | (4,986   | )         |           |          | (5,103   | )            |   |          | 21       |   |   |          | (5,082   | )
|                                                                                                                                                                                                | General and administrative                |                                          |            | (831     | )         |   |           | (30,119      | ) |        |            | (30,950  | )         |           |          |         |              |   |          | (30,328  | ) |   |          | (30,328  | )
|                                                                                                                                                                                                |                                           |                                          |            |          |           |   |           |              |   |        |            |          |           |           |          |          |              |  
|                                                                                                                                                                                                | Total adjustments to arrive at net income |                                          |            | (220,586 | )         |   |           | (181,622     | ) |        |            | (402,208 | )         |           |          | (202,358 | )            |   |          | (179,808 | ) |   |          | (382,166 | )
|                                                                                                                                                                                                |                                           |                                          |            |          |           |   |           |              |   |        |            |          |           |           |          |          |              |  
|Income before income taxes, allocation to
    minority interests, income from investment in unconsolidated
    joint ventures, net gain on sales of real estate and
    discontinued operations |                                           |                                          | 357,006    |          |           |   | (170,883  | )            |   |        | 186,123    |          |           |           | 373,474  |          |              |   | (161,608 | )        |   |   | 211,866  |         
|Income taxes                                                                                                                                                                                    |                                           |                                          | 32         |          |           |   | (187      | )            |   |        | (155       | )        |           |           | (257     | )        |              |   | (1,029   | )        |   |   | (1,286   | )       
|Minority interests                                                                                                                                                                              |                                           |                                          | (2,716     | )        |           |   | (20       | )            |   |        | (2,736     | )        |           |           | (2,006   | )        |              |   |         |          |   |   | (2,006   | )       
|Income from investment in unconsolidated joint
    ventures                                                                                                                                     |                                           |                                          | 14,135     |          |           |   | (1,917    | )            |   |        | 12,218     |          |           |           | 16,745   |          |              |   | (311     | )        |   |   | 16,434   |         
|Net gain on sales of real estate                                                                                                                                                                |                                           |                                          |           |          |           |   |          |              |   |        |           |          |           |           | 14,854   |          |              |   |         |          |   |   | 14,854   |         
|Discontinued operations (including net gain on
    disposal of $6,382 and $0, respectively)                                                                                                     |                                           |                                          | 8,445      |          |           |   |          |              |   |        | 8,445      |          |           |           | 5,216    |          |              |   |         |          |   |   | 5,216    |         
|                                                                                                                                                                                                |                                           |                                          |            |          |           |   |           |              |   |        |            |          |           |           |          |          |              |  
|Net income                                                                                                                                                                                      |                                           | $                                        | 376,902    |          |           | $ | (173,007  | )            |   | $      | 203,895    |          |           | $         | 408,026  |          |              | $ | (162,948 | )        |   | $ | 245,078  |         
|                                                                                                                                                                                                |                                           |                                          |            |          |           |   |           |              |   |        |            |          |           |           |          |          |              |  
|Capital and tenant improvements                                                                                                                                                                 |                                           | $                                        | 90,913     |          |           | $ | 1,945     |              |   | $      | 92,858     |          |           | $         | 108,901  |          |              | $ | 4,827    |          |   | $ | 113,728  |         
|                                                                                                                                                                                                |                                           |                                          |            |          |           |   |           |              |   |        |            |          |           |           |          |          |              |  
|Investment in unconsolidated joint ventures                                                                                                                                                     |                                           | $                                        | 1,241,192  |          |           | $ | 28,320    |              |   | $      | 1,269,512  |          |           |           |          |          |              |   |          |          |   |   |          |         
|                                                                                                                                                                                                |                                           |                                          |            |          |           |   |           |              |   |        |            |          |           |           |          |          |              |  
|Total Assets                                                                                                                                                                                    |                                           | $                                        | 24,297,681 |          |           | $ | 1,409,274 |              |   | $      | 25,706,955 |          |           |           |          |          |              |   |          |          |   |   |          |         
|                                                                                                                                                                                                |                                           |                                          |            |          |           |   |           |              |   |        |            |          |           |           |          |          |              |  




|    |                                                                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Interest expense for the Office Properties does
    not include an allocation of interest expense on the unsecured
    notes or the line of credit.

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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(Unaudited)


|                                                                                                                                                                                                                                                           |                                                |                                         |            |           |           |   |           |              |   |        |            |            |           |           |           |           |              |   |          |          |   |   |           |           |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------- | --------------------------------------- | ---------- | --------- | --------- | - | --------- | ------------ | - | ------ | ---------- | ---------- | --------- | --------- | --------- | --------- | ------------ | - | -------- | -------- | - | - | --------- | --------- | -
|                                                                                                                                                                                                                                                           |                                                |                                        
|                                                                                                                                                                                                                                                           |                                                | For the nine months ended September 30, |           
|                                                                                                                                                                                                                                                           |                                                |                                         |           
|                                                                                                                                                                                                                                                           |                                                |                                         |            |          
|                                                                                                                                                                                                                                                           |                                                | 2002                                    |            |           | 2001      |  
|                                                                                                                                                                                                                                                           |                                                |                                         |            |           |           |  
|                                                                                                                                                                                                                                                           |                                                | Office                                  |            |           | Corporate |   |           |              |   | Office |            |            | Corporate |           |           |          
|(Dollars in thousands)                                                                                                                                                                                                                                     |                                                | Properties                              |            |           | and Other |   |           | Consolidated |   |        | Properties |            |           | and Other |           |           | Consolidated |  
|                                                                                                                                                                                                                                                           |                                                |                                         |            |           |           |   |           |              |   |        |            |            |           |           |           |           |              |  
|Property operating revenues                                                                                                                                                                                                                                |                                                | $                                       | 2,569,427  |           |           | $ | 41,756    |              |   | $      | 2,611,183  |            |           | $         | 2,134,640 |           |              | $ | 30,052   |          |   | $ | 2,164,692 |          
|Property operating expenses                                                                                                                                                                                                                                |                                                |                                         | (833,029   | )         |           |   | (8,121    | )            |   |        | (841,150   | )          |           |           | (694,320  | )         |              |   | (5,609   | )        |   |   | (699,929  | )        
|                                                                                                                                                                                                                                                           |                                                |                                         |            |           |           |   |           |              |   |        |            |            |           |           |           |           |              |  
|                                                                                                                                                                                                                                                           | Net operating income                           |                                         |            | 1,736,398 |           |   |           | 33,635       |   |        |            | 1,770,033  |           |           |           | 1,440,320 |              |   |          | 24,443   |   |   |           | 1,464,763 |  
|                                                                                                                                                                                                                                                           |                                                |                                         |            |           |           |   |           |              |   |        |            |            |           |           |           |           |              |  
|Adjustments to arrive at net income:                                                                                                                                                                                                                       |                                                |                                         |            |           |           |   |           |              |   |        |            |            |           |           |           |           |              |   |          |          |   |   |           |          
|                                                                                                                                                                                                                                                           | Other revenues                                 |                                         |            | 2,093     |           |   |           | 26,809       |   |        |            | 28,902     |           |           |           | 3,022     |              |   |          | 40,319   |   |   |           | 43,341    |  
|                                                                                                                                                                                                                                                           | Interest expense (a)                           |                                         |            | (145,613  | )         |   |           | (461,175     | ) |        |            | (606,788   | )         |           |           | (152,308  | )            |   |          | (368,376 | ) |   |           | (520,684  | )
|                                                                                                                                                                                                                                                           | Depreciation and amortization                  |                                         |            | (499,002  | )         |   |           | (19,189      | ) |        |            | (518,191   | )         |           |           | (389,867  | )            |   |          | (16,786  | ) |   |           | (406,653  | )
|                                                                                                                                                                                                                                                           | Ground rent                                    |                                         |            | (15,844   | )         |   |           |             |   |        |            | (15,844    | )         |           |           | (11,481   | )            |   |          |         |   |   |           | (11,481   | )
|                                                                                                                                                                                                                                                           | General and administrative                     |                                         |            | (832      | )         |   |           | (101,235     | ) |        |            | (102,067   | )         |           |           |          |              |   |          | (78,151  | ) |   |           | (78,151   | )
|                                                                                                                                                                                                                                                           | Impairment on securities and other investments |                                         |            |          |           |   |           |             |   |        |            |           |           |           |           |          |              |   |          | (8,499   | ) |   |           | (8,499    | )
|                                                                                                                                                                                                                                                           |                                                |                                         |            |           |           |   |           |              |   |        |            |            |           |           |           |           |              |  
|                                                                                                                                                                                                                                                           | Total adjustments to arrive at net income      |                                         |            | (659,198  | )         |   |           | (554,790     | ) |        |            | (1,213,988 | )         |           |           | (550,634  | )            |   |          | (431,493 | ) |   |           | (982,127  | )
|                                                                                                                                                                                                                                                           |                                                |                                         |            |           |           |   |           |              |   |        |            |            |           |           |           |           |              |  
|Income before income taxes, allocation to
    minority interests, income from investment in unconsolidated
    joint ventures, net gain on sales of real estate, discontinued
    operations and cumulative effect of a change in accounting
    principle |                                                |                                         | 1,077,200  |           |           |   | (521,155  | )            |   |        | 556,045    |            |           |           | 889,686   |           |              |   | (407,050 | )        |   |   | 482,636   |          
|Income taxes                                                                                                                                                                                                                                               |                                                |                                         | (2,064     | )         |           |   | (6,922    | )            |   |        | (8,986     | )          |           |           | (1,472    | )         |              |   | (4,377   | )        |   |   | (5,849    | )        
|Minority interests                                                                                                                                                                                                                                         |                                                |                                         | (5,078     | )         |           |   | (59       | )            |   |        | (5,137     | )          |           |           | (6,612    | )         |              |   |         |          |   |   | (6,612    | )        
|Income from investment in unconsolidated joint
    ventures                                                                                                                                                                                                |                                                |                                         | 94,307     |           |           |   | (2,164    | )            |   |        | 92,143     |            |           |           | 48,169    |           |              |   | 1,555    |          |   |   | 49,724    |          
|Net gain on sales of real estate                                                                                                                                                                                                                           |                                                |                                         |           |           |           |   |          |              |   |        |           |            |           |           | 14,854    |           |              |   |         |          |   |   | 14,854    |          
|Discontinued operations (including net gain on
    disposal of $8,872 and $0, respectively)                                                                                                                                                                |                                                |                                         | 17,777     |           |           |   |          |              |   |        | 17,777     |            |           |           | 9,749     |           |              |   |         |          |   |   | 9,749     |          
|Cumulative effect of a change in accounting
    principle                                                                                                                                                                                                  |                                                |                                         |           |           |           |   |          |              |   |        |           |            |           |           | (1,142    | )         |              |   |         |          |   |   | (1,142    | )        
|                                                                                                                                                                                                                                                           |                                                |                                         |            |           |           |   |           |              |   |        |            |            |           |           |           |           |              |  
|Net income                                                                                                                                                                                                                                                 |                                                | $                                       | 1,182,142  |           |           | $ | (530,300  | )            |   | $      | 651,842    |            |           | $         | 953,232   |           |              | $ | (409,872 | )        |   | $ | 543,360   |          
|                                                                                                                                                                                                                                                           |                                                |                                         |            |           |           |   |           |              |   |        |            |            |           |           |           |           |              |  
|Capital and tenant improvements                                                                                                                                                                                                                            |                                                | $                                       | 218,670    |           |           | $ | 4,629     |              |   | $      | 223,299    |            |           | $         | 215,762   |           |              | $ | 26,711   |          |   | $ | 242,473   |          
|                                                                                                                                                                                                                                                           |                                                |                                         |            |           |           |   |           |              |   |        |            |            |           |           |           |           |              |  
|Investment in unconsolidated joint ventures                                                                                                                                                                                                                |                                                | $                                       | 1,241,192  |           |           | $ | 28,320    |              |   | $      | 1,269,512  |            |           |           |           |           |              |   |          |          |   |   |           |          
|                                                                                                                                                                                                                                                           |                                                |                                         |            |           |           |   |           |              |   |        |            |            |           |           |           |           |              |  
|Total Assets                                                                                                                                                                                                                                               |                                                | $                                       | 24,297,681 |           |           | $ | 1,409,274 |              |   | $      | 25,706,955 |            |           |           |           |           |              |   |          |          |   |   |           |          
|                                                                                                                                                                                                                                                           |                                                |                                         |            |           |           |   |           |              |   |        |            |            |           |           |           |           |              |  




|    |                                                                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Interest expense for the Office Properties does
    not include an allocation of interest expense on the unsecured
    notes or the line of credit.

17



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(Unaudited)


NOTE 13  COMMITMENTS AND
CONTINGENCIES



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

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



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

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



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

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



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

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

In connection with the acquisition of certain
Properties, EOP Partnership has agreed not to sell such
Properties in a taxable transaction for a period of time as
defined in their respective agreements or EOP Partnership may be
obligated to make additional payments to the respective sellers.



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

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

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EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(Unaudited)


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

|                                             |  |                                                                                                                                                                                       |  |                                          
|-------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------
|Type of Insurance                            |  | EOP Partnership                                                                                                                                                                       |  | Third-Party                              
|Coverage                                     |  | Loss Exposure/ Deductible                                                                                                                                                             |  | Coverage Limitation                      
|                                             |  |                                                                                                                                                                                       |  |                                          
|Property damage and business interruption(a) |  | $75 million in the aggregate (inclusive of
    retention amounts paid for earthquake loss), plus
    $1 million per occurrence deductible                                             |  | $1.0 billion per occurrence(c)           
|Earthquake(a)(b)                             |  | $75 million in the aggregate (inclusive of
    retention amounts paid for property damage and business
    interruption loss) per year, plus $1 million per occurrence
    deductible |  | $325 million in the aggregate per year(c)
|Acts of terrorism(d)                         |  | $1 million or 2% of total insurable value,
    whichever is greater, per occurrence deductible; and 30 day
    waiting period for loss of rent                                        |  | $270 million in the aggregate per year(e)






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | In September 2002, EOP Partnership began
    retaining up to $75 million of such loss calculated
    throughout the EOP Partnership portfolio. In the event of a loss
    in excess of these retention limits, the third-party insurance
    carriers would be obligated to cover the losses up to the stated
    coverage amounts in the above table.                                                                                                                                                                                                                                                                                                                                                   
|   
|(b) | The amount of the third-party insurance relating
    to earthquakes is based on maximum probable loss studies
    performed by independent third parties. The maximum annual
    aggregate payment amount for earthquake loss is
    $325 million, inclusive of EOP Partnerships loss
    exposure/deductible amount of $76 million. There can be no
    assurance that these actuarial studies have correctly estimated
    any losses that may occur.                                                                                                                                                                                                                                                 
|   
|(c) | These amounts include EOP Partnerships loss
    exposure/deductible amount.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   
|(d) | The third-party insurance coverage excludes
    nuclear, chemical or biological acts of terrorism. There can be
    no assurance that insurance coverage for acts of terrorism will
    be available in the future. It is also possible that the lenders
    under our unsecured credit facility and our secured mortgage
    indebtedness could seek to declare a default based on the
    absence of insurance coverage for terrorist acts for the type
    and amount in place before September 11, 2001. If one or
    more of our lenders were to declare such a default, we would
    challenge such conclusion as not being commercially reasonable
    in the context of the current marketplace.
|   
|(e) | This amount is in excess of EOP Partnerships
    deductible amounts.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

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



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

In accordance with the agreement governing the
investment in Wright Runstad Associates Limited Partnership
(WRALP), EOP Partnership agreed, for a period
generally continuing until December 31, 2007, to make
available to WRALP up to $20.0 million in additional
financing or credit support for future development. As of
September 30, 2002, no amounts have been funded pursuant to
this agreement. However,

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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(Unaudited)


EOP Partnership has guaranteed WRALPs line
of credit, which has an outstanding balance of approximately
$12.9 million as of September 30, 2002. WRALPs
current line of credit matures in July 2003.

EOP Partnership has agreed to loan up to
$25 million to Wilson Investors (WI) for its
required contribution to Wilson / Equity Office
(W/EO) at a 15% interest rate per annum. W/ EO is
owned 49.9% by EOP Partnership and 50.1% by WI. William Wilson
III, a trustee of Equity Office, through his ownership of WI,
owns approximately 22% of W/ EO and approximately 30% of any
promote to which WI is entitled under the joint venture
agreement. As of September 30, 2002, no amounts were
outstanding on the loan and the remaining commitment amount is
$13 million. As a result of the recently enacted
Sarbanes-Oxley Act of 2002, it is possible (depending on the
scope of the regulations to be adopted by the SEC) that EOP
Partnership could be prohibited from lending further amounts to
WI under this arrangement or from modifying or renewing this
arrangement.

NOTE 14  SUBSEQUENT
EVENTS

1.     In October 2002,
EOP Partnership entered into $1.1 billion of
forward-starting interest rate swaps to effectively fix the
10-year Treasury rate at approximately 3.7% for future note
offerings anticipated to occur in 2003 and 2004. The
forward-starting interest rate swaps were entered into at
current market rates and, therefore, had no initial cost. The
terms of the forward-starting interest rate swaps require EOP
Partnership to pay a fixed-interest rate to the counterparties
and to receive a variable rate from the counterparties. The
swaps settle at six-month intervals beginning in 2003 and 2004.
EOP Partnership anticipates settling the swap agreements prior
to the anticipated issuance of additional unsecured notes. Upon
settlement of the swaps, EOP Partnership may be obligated to pay
the counterparties a settlement payment, or alternatively to
receive settlement proceeds from the counterparties. Any monies
paid or received will be amortized to interest expense over the
term of the respective note offering.

2.     In October 2002,
the mortgage note encumbering 75-101 Federal Street was
refinanced upon its maturity. The new mortgage note is for
$125 million, bears interest at 5.05% and matures in
November 2012. EOP Partnership has a 51.61% equity interest in
75-101 Federal Street and reflects its interest under the equity
method.

3.     In October 2002,
EOP Partnership prepaid the mortgage note secured by Wellesley
Office Park for approximately $52.6 million, including
accrued interest. The mortgage note was scheduled to mature in
February 2003 and had an interest rate of 7.23%.

4.     In November 2002,
EOP Partnership prepaid the mortgage note secured by Center
Plaza for approximately $57.4 million, including accrued
interest. The mortgage note was scheduled to mature in March
2003 and had an interest rate of 7.23%.

5.     The maturity date
of the mortgage note secured by Key Center was extended for one
year to November 2003. EOP Partnership has an 80% equity
interest in Key Center and reflects its interest under the
equity method.

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|        |                                                                                           
|------- | ------------------------------------------------------------------------------------------
|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 consolidated results of
operations should be read together with the consolidated
financial statements of EOP Partnership and notes thereto
contained in this Form 10-Q. Terms employed herein as
defined terms, but without definition, shall have the meaning
set forth in the notes to the financial statements. Statements
contained in this Managements Discussion and
Analysis of Financial Condition and Results of Operations,including, without limitation, the Market
Riskand Developmentsdisclosures,
and elsewhere in this Form 10-Q, which are not historical
fact may be forward-looking statements. Such statements (none of
which is intended as a guarantee of performance) are subject to
certain risks and uncertainties, which could cause actual
results to differ materially from those projected or
anticipated. A number of important factors could cause actual
results to differ materially from those indicated by the
forward-looking statements, including, but not limited to, the
risks described in our Current Reports on Form 8-K filed
with the Securities and Exchange Commission on February 12,
2002 and June 27, 2002. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak
only as of the date this Form 10-Q is filed with the SEC.
Among the factors about which EOP Partnership has made
assumptions are the following:



| |   |                                                                                                                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | future economic conditions which may impact the
    demand for office space as well as current or prospective
    tenants ability or willingness to pay rent, either at
    current or increased levels;
|
| |  | the extent of any tenant bankruptcies or defaults
    that may occur;                                                                                                                                    
|
| |  | the availability of new competitive supply,
    including competitive supply which may be available by way of
    sublease;                                                                              
|
| |  | the extent of future demand for high-rise and
    other office space in the markets in which EOP Partnership has a
    presence;                                                                         
|
| |  | the costs to complete and lease-up pending
    developments at anticipated rents;                                                                                                                        
|
| |  | future demand for EOP Partnerships debt and
    equity securities;                                                                                                                                      
|
| |  | EOP Partnerships access to adequate credit
    facilities or other debt financing on acceptable terms;                                                                                                  
|
| |  | EOP Partnerships ability to achieve
    economies of scale over time;                                                                                                                                   
|
| |  | EOP Partnerships ability to attract and
    retain high quality personnel at a reasonable cost;                                                                                                         
|
| |  | changes in interest rates;                                                                                                                                                                               
|
| |  | changes in operating expenses, including utility,
    insurance and security costs;                                                                                                                      
|
| |  | EOP Partnerships ability to pay amounts due
    to its noteholders and preferred shareholders before any
    distribution to holders of Units; and                                                      
|
| |  | EOP Partnerships ability to secure adequate
    insurance for occurrences such as terrorist acts and earthquakes.                                                                                       

During the nine months ended September 30,
2002, we completed the following key transactions:



| |   |                                                                                                                                                                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | issued $500 million of unsecured notes due
    February 2012 at an all-in cost of 7.0% and exchanged
    approximately $260.0 million of these notes for the
    previously outstanding $250.0 million Mandatory Par Put
    Remarketed SecuritiesSM which were subject to
    mandatory redemption;
|
| |  | sold 33 office properties, three vacant land
    parcels and a 50% interest in four parking facilities for
    approximately $341.7 million;                                                                                                                                                        
|
| |  | received a lease termination fee of approximately
    $40 million in connection with a previously proposed office
    building development which was recorded as income from
    unconsolidated joint ventures during the first quarter 2002;                                                       

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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | received approximately $50 million from a
    tenant for terminating their lease at Parkside Towers.
    Approximately $14.2 million of the lease termination fee
    was recognized in the third quarter and approximately
    $31.8 million is anticipated to be recognized in the fourth
    quarter of 2002. Approximately $3.8 million of the lease
    termination fee was applied to a deferred rent receivable
    balance;
|
| |  | acquired two office buildings for approximately
    $92.3 million. The properties are located in Washington,
    D.C., and consist of approximately 327,550 square feet of which
    260,372 square feet is office space;                                                                                                                                                                                                          
|
| |  | redeemed the 7,994,000 outstanding 8.98%
    Series A Cumulative Redeemable Preferred Shares at an
    aggregate redemption price of approximately $201.9 million
    including accrued distributions;                                                                                                                                                                                                                             
|
| |  | issued 8,500,000 7.75% Series G Cumulative
    Redeemable Preferred Units for approximately $206.1 million;                                                                                                                                                                                                                                                                                                                        
|
| |  | Equity Office initiated a Common Share repurchase
    program allowing for the repurchase of up to $200 million
    of Common Shares over the next 12 months and repurchased
    197,900 Common Shares at an average price of $25.06 per share
    for a total of approximately $5.0 million in the aggregate;                                                                                                                     
|
| |  | redeemed 677,216 Units for cash at an average
    price of $28.52 per Unit for a total of approximately
    $19.3 million; and                                                                                                                                                                                                                                                                                                     
|
| |  | received approximately $20.1 million from CT
    Convertible Trust I in connection with its redemption of the
    non-convertible preferred securities.                                                                                                                                                                                                                                                                            

Critical Accounting Policies and
Estimates

Refer to our 2001 Annual Report on Form 10-K
for a discussion of our critical accounting policies, which
include revenue recognition, allowance for doubtful accounts,
impairment of long-lived assets, depreciation and fair value of
financial instruments. During 2002, there were no material
changes to these policies.

Results of Operations

General

The following discussion is based primarily on
the consolidated financial statements as of September 30,
2002 and for the three and nine months ended September 30,
2002 and 2001.

Income is received primarily from rental revenue
from the Office Properties, including reimbursements from
tenants for certain operating costs and from parking revenue
from Office Properties. As a result of the current slowdown in
economic activity, there has been a decrease in our occupancy
rates and a general decline in overall market rental rates for
the Office Properties in most major markets. Below is a summary
of our leasing activity (excluding lease expirations) in our top
5 markets, top 10 markets and our total portfolio for
our Office Properties. Our top 10 markets in terms of square
footage in order from greatest to least are Boston,

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##### Table of Contents



Chicago, San Francisco, Seattle, San Jose,
Atlanta, Los Angeles, Orange County, Washington, D.C. and New
York.


|                                                  |                                                                              |               |  |           |                |  |  |                 |   |  |  |            |  
|------------------------------------------------- | ---------------------------------------------------------------------------- | ------------- |  | --------- | -------------- |  |  | --------------- | - |  |  | ---------- | -
|Office Property Data:                             |                                                                              | Top 5 Markets |  |           | Top 10 Markets |  |  | Total Portfolio |  
|                                                  |                                                                              |               |  |           |                |  |  |                 |  
|For the nine months ended September 30,
    2002: |                                                                              |               |  |           |                |  |  |                 |   |  |  |           
|                                                  | Portion of total portfolio based on square feet
    at end of period         |               |  | 42.4      | %              |  |  | 67.8            | % |  |  | 100.0      | %
|                                                  | Weighted average occupancy at end of period                                  |               |  | 87.9      | %              |  |  | 89.3            | % |  |  | 89.2       | %
|                                                  | Gross square footage leased during the period                                |               |  | 6,367,393 |                |  |  | 10,387,311      |   |  |  | 15,733,706 |  
|                                                  | Weighted average annual rent per square foot
    leased during the period(a) |               |  | $34.77    |                |  |  | $32.35          |   |  |  | $29.21     |  
|For the nine months ended September 30,
    2001: |                                                                              |               |  |           |                |  |  |                 |   |  |  |           
|                                                  | Portion of total portfolio based on square feet
    at end of period         |               |  | 40.7      | %              |  |  | 66.1            | % |  |  | 100.0      | %
|                                                  | Weighted average occupancy at end of period                                  |               |  | 94.9      | %              |  |  | 94.4            | % |  |  | 93.7       | %
|                                                  | Gross square footage leased during the period                                |               |  | 3,813,457 |                |  |  | 6,270,276       |   |  |  | 10,187,997 |  
|                                                  | Weighted average annual rent per square foot
    leased during the period(a) |               |  | $49.23    |                |  |  | $43.49          |   |  |  | $35.52     |  
|For the year ended December 31,
    2001:         |                                                                              |               |  |           |                |  |  |                 |   |  |  |           
|                                                  | Portion of total portfolio based on square feet
    at end of year           |               |  | 42.0      | %              |  |  | 66.9            | % |  |  | 100.0      | %
|                                                  | Weighted average occupancy at end of year                                    |               |  | 92.5      | %              |  |  | 92.7            | % |  |  | 91.8       | %
|                                                  | Gross square footage leased during the year                                  |               |  | 5,288,539 |                |  |  | 8,944,907       |   |  |  | 14,711,018 |  
|                                                  | Weighted average annual rent per square foot
    leased during the year(a)   |               |  | $46.36    |                |  |  | $41.48          |   |  |  | $34.17     |  




|    |  |                                                                                                                                                                                                                                                                                                    
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Average annual rent per square foot for new
    office leases for which the tenants have occupied the space
    during the relevant period may lag behind market rents because
    leasing decisions typically are made anywhere from one month to
    12 or more months prior to taking occupancy.

As of September 30, 2002, approximately
63,865,688 occupied square feet (approximately 50.4% of the
total portfolio) is expiring through 2006. The average annual
rent per square foot for these leases is presented in the table
below. Upon expiration, we may be unable to release this space
at rents at or above the current rent or be able to re-lease all
of this space within a reasonable time period.

|      |  |                 |            |  |                     |   |       | 
|----- |  | --------------- | ---------- |  | ------------------- | - | ----- | 
|      |  | Square Feet of  |            |  | Average Annual Rent |  
|Year  |  | Expiring Leases |            |  | per Square Foot     |  
|      |  |                 |            |  |                     |  
|2002  |  |                 | 5,283,384  |  |                     | $ | 25.96 | 
|2003  |  |                 | 14,971,354 |  |                     |   | 28.17 | 
|2004  |  |                 | 13,689,055 |  |                     |   | 27.81 | 
|2005  |  |                 | 15,413,400 |  |                     |   | 29.33 | 
|2006  |  |                 | 14,508,495 |  |                     |   | 29.79 | 
|      |  |                 |            |  |                     |  
|Total |  |                 | 63,865,688 |  |                     | $ | 28.56 | 
|      |  |                 |            |  |                     |  

We believe that it is not currently possible to
draw any conclusions about where occupancy levels or market
rents ultimately will stabilize. Further decreases in occupancy
rates and/or declines in rents could adversely affect our
revenues and results of operations in subsequent periods.

In addition to the downward trend in occupancy
and market rents, we have experienced an increase in the amount
of uncollectible receivables relating to tenants in bankruptcy
and tenants that are having financial difficulties. For the
three and nine months ended September 30, 2002, bad debt
expense was approximately $6.0 million and
$19.6 million, respectively, as compared to
$5.0 million and $13.0 million for the same periods in
2001. Although we have substantial collateral from many of our
tenants, additional write-offs may occur in subsequent periods.
Future rental income may also be affected by early lease
terminations. In either of these circumstances, we may not be
able to collect the full amount that was due under the leases
and would incur additional cost in re-leasing the space.

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As a result of the terrorist acts on
September 11, 2001, we have realized increased costs for
property insurance and safety and security. We believe that
these increased costs will remain higher than similar costs
incurred in previous periods for the foreseeable future.
Substantially all of the office leases require the tenant to
pay, as additional rent, a portion of any increases in these
operating expenses over a base amount. We believe a significant
portion of any increase in these operating expenses will be
offset by expense reimbursements from tenants.

Below is a summary of our acquisition and
disposition activity since January 1, 2001. The buildings
and total square feet shown include properties we own in joint
ventures with other partners and reflect the total square feet
of the properties. Excluding the joint venture partners
share of the square feet of these properties, we effectively
owned 120.6 million square feet of office space as of
September 30, 2002.

|                                           |                                   |                   |     |       |                       |  |             |                    |       |  |             |     |   |         |           |            |        |  |   |    |   |  |        |        |  
|------------------------------------------ | --------------------------------- | ----------------- | --- | ----- | --------------------- |  | ----------- | ------------------ | ----- |  | ----------- | --- | - | ------- | --------- | ---------- | ------ |  | - | -- | - |  | ------ | ------ | -
|                                           |                                   |                   |     |       |                       | 
|                                           |                                   | Office Properties |     |       | Industrial Properties |  |             | Parking Facilities |      
|                                           |                                   |                   |     |       |                       |  |             |                    |      
|                                           |                                   |                   |     | Total |                       |  |             |                    | Total |  |             |    
|                                           |                                   | Buildings         |     |       | Square Feet           |  |             | Buildings          |       |  | Square Feet |     |   | Garages |           |            | Spaces | 
|                                           |                                   |                   |     |       |                       |  |             |                    |       |  |             |     |   |         |           |            |        | 
|Properties owned as of:                    |                                   |                   |     |       |                       |  |             |                    |       |  |             |     |   |         |           |            |        |  |   |    |   |  |        |       
|January 1, 2001                            |                                   |                   | 381 |       |                       |  | 98,995,994  |                    |       |  |            |     |   |         |          |            |        |  | 9 |    |   |  | 14,244 |       
|                                           | Spieker Merger                    |                   |     | 293   |                       |  |             | 26,080,670         |       |  |             | 100 |   |         |           | 12,306,053 |        |  |   |   |   |  |        |       |  
|                                           | Acquisitions                      |                   |     | 1     |                       |  |             | 259,441            |       |  |             |    |   |         |           |           |        |  |   |   |   |  |        |       |  
|                                           | Developments placed in service    |                   |     | 9     |                       |  |             | 1,497,014          |       |  |             |    |   |         |           |           |        |  |   |   |   |  |        |       |  
|                                           | Dispositions                      |                   |     | (8    | )                     |  |             | (879,388           | )     |  |             | (19 | ) |         |           | (4,052,476 | )      |  |   | (4 | ) |  |        | (3,721 | )
|                                           | Reclass from industrial to office |                   |     | 44    |                       |  |             | 2,208,837          |       |  |             | (44 | ) |         |           | (2,208,837 | )      |  |   |   |   |  |        |       |  
|                                           | Building remeasurements (a)       |                   |     | 54    |                       |  |             | 71,419             |       |  |             | 42  |   |         |           | 91         |        |  |   |   |   |  |        | 242    |  
|                                           |                                   |                   |     |       |                       |  |             |                    |       |  |             |     |   |         |           |            |        | 
|December 31, 2001                          |                                   |                   | 774 |       |                       |  | 128,233,987 |                    |       |  | 79          |     |   |         | 6,044,831 |            |        |  | 5 |    |   |  | 10,765 |       
|                                           | Dispositions                      |                   |     | (7    | )                     |  |             | (804,590           | )     |  |             |    |   |         |           |           |        |  |   | (4 | ) |  |        | (7,464 | )
|                                           | Building remeasurements           |                   |     |      |                       |  |             | 47,216             |       |  |             |    |   |         |           |           |        |  |   |   |   |  |        |       |  
|                                           |                                   |                   |     |       |                       |  |             |                    |       |  |             |     |   |         |           |            |        | 
|March 31, 2002                             |                                   |                   | 767 |       |                       |  | 127,476,613 |                    |       |  | 79          |     |   |         | 6,044,831 |            |        |  | 1 |    |   |  | 3,301  |       
|                                           | Acquisitions                      |                   |     | 1     |                       |  |             | 102,822            |       |  |             |    |   |         |           |           |        |  |   |   |   |  |        |       |  
|                                           | Developments placed in service    |                   |     | 1     |                       |  |             | 125,646            |       |  |             |    |   |         |           |           |        |  |   |   |   |  |        |       |  
|                                           | Dispositions                      |                   |     | (3    | )                     |  |             | (226,909           | )     |  |             |    |   |         |           |           |        |  |   |   |   |  |        |       |  
|                                           | Building remeasurements           |                   |     |      |                       |  |             | 42,100             |       |  |             |    |   |         |           |           |        |  |   |   |   |  |        |       |  
|                                           |                                   |                   |     |       |                       |  |             |                    |       |  |             |     |   |         |           |            |        | 
|June 30, 2002                              |                                   |                   | 766 |       |                       |  | 127,520,272 |                    |       |  | 79          |     |   |         | 6,044,831 |            |        |  | 1 |    |   |  | 3,301  |       
|                                           | Acquisitions                      |                   |     | 1     |                       |  |             | 157,550            |       |  |             |    |   |         |           |           |        |  |   |   |   |  |        |       |  
|                                           | Dispositions                      |                   |     | (23   | )                     |  |             | (921,122           | )     |  |             |    |   |         |           |           |        |  |   |   |   |  |        |       |  
|                                           | Building remeasurements           |                   |     |      |                       |  |             | 41,057             |       |  |             |    |   |         |           |           |        |  |   |   |   |  |        |       |  
|                                           |                                   |                   |     |       |                       |  |             |                    |       |  |             |     |   |         |           |            |        | 
|September 30, 2002 (Total
    Portfolio) |                                   |                   | 744 |       |                       |  | 126,797,757 |                    |       |  | 79          |     |   |         | 6,044,831 |            |        |  | 1 |    |   |  | 3,301  |       
|                                           |                                   |                   |     |       |                       |  |             |                    |       |  |             |     |   |         |           |            |        | 




|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Building remeasurements during 2001 relate to the
    Office Properties and Industrial Properties acquired in the
    Spieker merger. The initial property count was based on a count
    prepared prior to the Spieker merger by the former management of
    Spieker. We count our properties based on the actual number of
    buildings at the property, which is different than the method
    used by the former management of Spieker.

Primarily as a result of the acquisition and
disposition of certain properties, the financial data presented
show significant changes in revenues and expenses from
period-to-period. In addition, the results of the Spieker merger
on July 2, 2001 are reflected for only the last three
months of the nine month period ended September 30, 2001.
Therefore, we do not believe our period-to-period financial data
are necessarily comparable. The following analysis shows changes
attributable to the Properties that were held during the entire
period for the period being compared (the Core
Portfolio) and the changes in our aggregate total
portfolio of Properties (the Total Portfolio).

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

24



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##### Table of Contents






Comparison of
the three months ended September 30, 2002 to
September 30, 2001

The table below represents selected operating
information for the Total Portfolio and for the Core Portfolio
consisting of 731 Office Properties acquired or placed in
service on or prior to July 1, 2001. The Core Portfolio
analysis for the three months ended September 30, 2002
compared to the three months ended September 30, 2001
includes the properties acquired in the Spieker merger on
July 2, 2001, that are still owned as of September 30,
2002.

|                                                                                                                                                                   |                |                 |         |           |                |   |         |            |  |   |         |           |   |      |        |      |      |   |         |            |  |   |         |         |  |   |         |         |   |  |           |      |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------- | --------------- | ------- | --------- | -------------- | - | ------- | ---------- |  | - | ------- | --------- | - | ---- | ------ | ---- | ---- | - | ------- | ---------- |  | - | ------- | ------- |  | - | ------- | ------- | - |  | --------- | ---- | -
|                                                                                                                                                                   |                |                 |         |          
|                                                                                                                                                                   |                | Total Portfolio |         |           | Core Portfolio |  
|                                                                                                                                                                   |                |                 |         |           |                |  
|                                                                                                                                                                   |                |                 |         | Increase/ |                |   | %       |            |  |   |         | Increase/ |   |      | %      |     
|(Dollars in thousands)                                                                                                                                             |                | 2002            |         |           | 2001           |   |         | (Decrease) |  |   | Change  |           |   | 2002 |        |      | 2001 |   |         | (Decrease) |  |   | Change  |        
|                                                                                                                                                                   |                |                 |         |           |                |   |         |            |  |   |         |           |   |      |        |      |      |   |         |            |  |   |         |        
|Property revenues                                                                                                                                                  |                | $               | 874,959 |           |                | $ | 867,573 |            |  | $ | 7,386   |           |   |      | 0.9    | %    |      | $ | 834,061 |            |  | $ | 853,805 |         |  | $ | (19,744 | )       |   |  | (2.3      | )%  
|Fee income                                                                                                                                                         |                |                 | 3,699   |           |                |   | 3,768   |            |  |   | (69     | )         |   |      | (1.8   | )    |      |   |        |            |  |   |        |         |  |   |        |         |   |  |          |     
|Interest/dividend income                                                                                                                                           |                |                 | 2,792   |           |                |   | 12,382  |            |  |   | (9,590  | )         |   |      | (77.5  | )    |      |   | 898     |            |  |   | 997     |         |  |   | (99     | )       |   |  | (9.9      | )   
|                                                                                                                                                                   |                |                 |         |           |                |   |         |            |  |   |         |           |   |      |        |      |      |   |         |            |  |   |         |        
|                                                                                                                                                                   | Total revenues |                 |         | 881,450   |                |   |         | 883,723    |  |   |         | (2,273    | ) |      |        | (0.3 | )    |   |         | 834,959    |  |   |         | 854,802 |  |   |         | (19,843 | ) |  |           | (2.3 | )
|                                                                                                                                                                   |                |                 |         |           |                |   |         |            |  |   |         |           |   |      |        |      |      |   |         |            |  |   |         |        
|Interest expense (a)                                                                                                                                               |                |                 | 199,259 |           |                |   | 205,970 |            |  |   | (6,711  | )         |   |      | (3.3   | )    |      |   | 49,636  |            |  |   | 54,229  |         |  |   | (4,593  | )       |   |  | (8.5      | )   
|Depreciation and amortization                                                                                                                                      |                |                 | 173,504 |           |                |   | 156,936 |            |  |   | 16,568  |           |   |      | 10.6   |      |      |   | 162,732 |            |  |   | 150,992 |         |  |   | 11,740  |         |   |  | 7.8       |     
|Property operating expenses                                                                                                                                        |                |                 | 286,628 |           |                |   | 273,541 |            |  |   | 13,087  |           |   |      | 4.8    |      |      |   | 279,472 |            |  |   | 267,557 |         |  |   | 11,915  |         |   |  | 4.5       |     
|Ground rent                                                                                                                                                        |                |                 | 4,986   |           |                |   | 5,082   |            |  |   | (96     | )         |   |      | (1.9   | )    |      |   | 5,160   |            |  |   | 5,040   |         |  |   | 120     |         |   |  | 2.4       |     
|General and administrative                                                                                                                                         |                |                 | 30,950  |           |                |   | 30,328  |            |  |   | 622     |           |   |      | 2.1    |      |      |   | 831     |            |  |   | (2      | )       |  |   | 833     |         |   |  | (41,650.0 | )   
|                                                                                                                                                                   |                |                 |         |           |                |   |         |            |  |   |         |           |   |      |        |      |      |   |         |            |  |   |         |        
|                                                                                                                                                                   | Total expenses |                 |         | 695,327   |                |   |         | 671,857    |  |   |         | 23,470    |   |      |        | 3.5  |      |   |         | 497,831    |  |   |         | 477,816 |  |   |         | 20,015  |   |  |           | 4.2  |  
|                                                                                                                                                                   |                |                 |         |           |                |   |         |            |  |   |         |           |   |      |        |      |      |   |         |            |  |   |         |        
|Income before income taxes, allocation to
    minority interests, income from investment in unconsolidated
    joint ventures and net gain on sales of real estate |                |                 | 186,123 |           |                |   | 211,866 |            |  |   | (25,743 | )         |   |      | (12.2  | )    |      |   | 337,128 |            |  |   | 376,986 |         |  |   | (39,858 | )       |   |  | (10.6     | )   
|Income taxes                                                                                                                                                       |                |                 | (155    | )         |                |   | (1,286  | )          |  |   | 1,131   |           |   |      | (87.9  | )    |      |   | (3      | )          |  |   | (257    | )       |  |   | 254     |         |   |  | (98.8     | )   
|Minority interests                                                                                                                                                 |                |                 | (2,736  | )         |                |   | (2,006  | )          |  |   | (730    | )         |   |      | 36.4   |      |      |   | (2,736  | )          |  |   | (2,006  | )       |  |   | (730    | )       |   |  | 36.4      |     
|Income from investment in unconsolidated joint
    ventures                                                                                                        |                |                 | 12,218  |           |                |   | 16,434  |            |  |   | (4,216  | )         |   |      | (25.7  | )    |      |   | 17,242  |            |  |   | 15,522  |         |  |   | 1,720   |         |   |  | 11.1      |     
|Net gain on sales of real estate                                                                                                                                   |                |                 |        |           |                |   | 14,854  |            |  |   | (14,854 | )         |   |      | (100.0 | )    |      |   |        |            |  |   |        |         |  |   |        |         |   |  |          |     
|                                                                                                                                                                   |                |                 |         |           |                |   |         |            |  |   |         |           |   |      |        |      |      |   |         |            |  |   |         |        
|Income from continuing operations                                                                                                                                  |                |                 | 195,450 |           |                |   | 239,862 |            |  |   | (44,412 | )         |   |      | (18.5  | )    |      |   | 351,631 |            |  |   | 390,245 |         |  |   | (38,614 | )       |   |  | (9.9      | )   
|Discontinued operations                                                                                                                                            |                |                 | 8,445   |           |                |   | 5,216   |            |  |   | 3,229   |           |   |      | 61.9   |      |      |   |        |            |  |   |        |         |  |   |        |         |   |  |          |     
|                                                                                                                                                                   |                |                 |         |           |                |   |         |            |  |   |         |           |   |      |        |      |      |   |         |            |  |   |         |        
|Net income                                                                                                                                                         |                | $               | 203,895 |           |                | $ | 245,078 |            |  | $ | (41,183 | )         |   |      | (16.8  | )%   |      | $ | 351,631 |            |  | $ | 390,245 |         |  | $ | (38,614 | )       |   |  | (9.9      | )%  
|                                                                                                                                                                   |                |                 |         |           |                |   |         |            |  |   |         |           |   |      |        |      |      |   |         |            |  |   |         |        
|Property revenues less property operating
    expenses before interest, depreciation and amortization, ground
    rent and general and administrative expense (b)  |                | $               | 590,941 |           |                | $ | 600,976 |            |  | $ | (10,035 | )         |   |      | (1.7   | )%   |      | $ | 554,589 |            |  | $ | 586,248 |         |  | $ | (31,659 | )       |   |  | (5.4      | )%  
|                                                                                                                                                                   |                |                 |         |           |                |   |         |            |  |   |         |           |   |      |        |      |      |   |         |            |  |   |         |        
|Deferred rental revenue (b)                                                                                                                                        |                | $               | 18,482  |           |                | $ | 21,827  |            |  | $ | (3,345  | )         |   |      | (15.3  | )%   |      | $ | 15,608  |            |  | $ | 21,349  |         |  | $ | (5,741  | )       |   |  | (26.9     | )%  
|                                                                                                                                                                   |                |                 |         |           |                |   |         |            |  |   |         |           |   |      |        |      |      |   |         |            |  |   |         |        
|Lease termination fees (b)                                                                                                                                         |                | $               | 30,640  |           |                | $ | 7,390   |            |  | $ | 23,250  |           |   |      | 314.6  | %    |      | $ | 16,368  |            |  | $ | 7,372   |         |  | $ | 8,996   |         |   |  | 122.0     | %   
|                                                                                                                                                                   |                |                 |         |           |                |   |         |            |  |   |         |           |   |      |        |      |      |   |         |            |  |   |         |        




|    |  |                                                                                                        
|--- |  | -------------------------------------------------------------------------------------------------------
|(a) |  | Interest expense on unsecured notes and the line
    of credit are not allocated to the Core Portfolio.
|   
|(b) |  | These amounts include the properties sold in 2002.                                                     

Property
Revenues

The increase in property revenues in the Total
Portfolio is primarily due to a $20.8 million increase in
other property revenues and a $3.2 million increase in
tenant reimbursements offset, in part, by a $12.3 million
decrease in rental revenue and a $4.4 million decrease in
parking revenues. As a result of the current slowdown in
economic activity, we have experienced an increase in the amount
of lease termination fees and uncollectible receivables relating
to tenants in bankruptcy and tenants that are having financial
difficulties. Included in other property revenues are
approximately $30.6 million of lease termination fees
representing an increase of approximately $23.3 million
from the prior period. These fees relate to specific tenants,
each of whom has paid a fee to terminate its lease obligations
before the end of the contractual term of the lease. Although
there is no way of predicting the precise timing or amounts of
future lease termination fees, we

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currently anticipate that lease termination fees
will be significantly lower in 2003. Approximately
$14.2 million of the lease termination fees recognized in
the third quarter relate to a lease termination at Parkside
Towers from a single tenant that leased the entire Property. An
additional $31.8 million relating to the lease termination
at Parkside Towers is anticipated to be recognized in the fourth
quarter of 2002. Rental revenues in the Total Portfolio
decreased primarily due to a decrease in occupancy in the Core
Portfolio as discussed below and an increase in bad debt
expense. The amount of bad debts written off in the Total
Portfolio for the three months ended September 30, 2002 was
approximately $6.0 million as compared to $5.0 million
for the prior period. Although we have substantial collateral
from many of our tenants, additional write-offs may occur in
subsequent periods. Parking revenues decreased primarily as a
result of the disposition of parking garages in prior periods.


The decrease in property revenues in the Core
Portfolio resulted primarily from a decrease in occupancy from
94.9% at July 1, 2001 to 89.7% at September 30, 2002
partially offset by an increase in lease termination fees of
approximately $9.0 million. The weighted average occupancy
decreased mainly due to tenant rollover and early lease
terminations at various properties where the space was not
re-leased due to the current slowdown in economic activity.

Interest/Dividend
Income

Interest/dividend income decreased for the Total
Portfolio as a result of the write-off in 2001 of the
$90.6 million investment in HQ Global Workplaces, Inc.
(HQ Global) Series A Convertible Cumulative
Preferred Stock and a reduction in interest income on notes
receivable. In addition, in September 2002, CT Convertible
Trust I redeemed the non-convertible amount of its
preferred securities at par including accrued dividends of
approximately $20.1 million. EOP Partnership still has an
approximate $29.2 million investment in the convertible
portion of the preferred securities of CT Convertible Trust I.

Interest
Expense

Total Portfolio interest expense decreased from
the prior period primarily due to interest rate swap agreements
which converted the fixed interest rate to a variable rate for a
portion of the unsecured notes effective through
September 6, 2002, when the swap agreements were
terminated. Total proceeds resulting from the termination of
approximately $39.6 million will be amortized ratably over
the remaining terms of the respective unsecured notes as a
reduction to interest expense. The remaining terms range from 16
to 42 months. Core Portfolio interest expense decreased
from the prior period as a result of the repayment of certain
mortgage notes.

Depreciation
and Amortization

Total Portfolio and Core Portfolio depreciation
and amortization expense increased from the prior period
primarily as a result of capital and tenant improvements made
during the periods.

Property
Operating Expenses

Property operating expenses increased mainly as a
result of increases in real estate taxes of approximately
$6.3 million for the Total Portfolio and $8.3 million
for the Core Portfolio primarily due to increased assessed
valuations, increases in insurance expense of approximately
$5.7 million for the Total Portfolio and $5.3 million
for the Core Portfolio due to higher premiums, an increase in
safety and security costs of approximately $2.1 million for
the Total Portfolio and $1.9 million for the Core
Portfolio, partially offset by a decrease in utility expense of
approximately $2.3 million for the Total Portfolio and
$2.0 million for the Core Portfolio, respectively.
Substantially all of the office leases require the tenant to
pay, as additional rent, a portion of any increases in operating
expenses over a base amount. We believe a substantial portion of
any future increase in operating expenses will be offset by
expense reimbursements from tenants, which are included in
property revenues.

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##### Table of Contents



Net
Gain on Sales of Real Estate and Discontinued
Operations

Net gain on sales of real estate for the Total
Portfolio decreased from the prior period as a result of a
presentation change for sold properties. Financial Accounting
Standards No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets,which became effective for
financial statements issued for fiscal years beginning after
December 15, 2001, requires the net income and gain / loss
on sales of real estate for properties sold subsequent to
December 31, 2001 to be reflected in the consolidated
statements of operations as discontinued operations.
Therefore, gains and losses from properties sold prior to 2002
are reflected as net gain on sales of real estate
and gains and losses from properties sold in 2002 are reflected
in discontinued operations. The increase in
discontinued operations is primarily due to the gain on the sale
of the properties sold in 2002.

Income
from Investment in Unconsolidated Joint Ventures

Income from investment in unconsolidated joint
ventures decreased for the Total Portfolio due to a partial
write-off of an investment in a vacant land purchase option.
Income from investment in unconsolidated joint ventures
increased for the Core Portfolio primarily due to a decrease in
interest expense of approximately $1.6 million. Interest
expense decreased primarily as a result of lower interest rates
on variable rate mortgage notes during the current period.

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##### Table of Contents



Comparison of
the nine months ended September 30, 2002 to
September 30, 2001

The table below represents selected operating
information for the Total Portfolio and for the Core Portfolio
consisting of 380 Office Properties acquired or placed in
service on or prior to January 1, 2001.

|                                                                                                                                                                    |                |                 |           |           |                |   |           |            |  |   |         |           |  |      |        |      |      |   |           |            |  |   |           |           |  |   |         |         |   |  |        |      |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------- | --------------- | --------- | --------- | -------------- | - | --------- | ---------- |  | - | ------- | --------- |  | ---- | ------ | ---- | ---- | - | --------- | ---------- |  | - | --------- | --------- |  | - | ------- | ------- | - |  | ------ | ---- | -
|                                                                                                                                                                    |                |                 |           |          
|                                                                                                                                                                    |                | Total Portfolio |           |           | Core Portfolio |  
|                                                                                                                                                                    |                |                 |           |           |                |  
|                                                                                                                                                                    |                |                 |           | Increase/ |                |   | %         |            |  |   |         | Increase/ |  |      | %      |     
|(Dollars in thousands)                                                                                                                                              |                | 2002            |           |           | 2001           |   |           | (Decrease) |  |   | Change  |           |  | 2002 |        |      | 2001 |   |           | (Decrease) |  |   | Change    |          
|                                                                                                                                                                    |                |                 |           |           |                |   |           |            |  |   |         |           |  |      |        |      |      |   |           |            |  |   |           |          
|Property revenues                                                                                                                                                   |                | $               | 2,611,183 |           |                | $ | 2,164,692 |            |  | $ | 446,491 |           |  |      | 20.6   | %    |      | $ | 1,897,551 |            |  | $ | 1,928,287 |           |  | $ | (30,736 | )       |   |  | (1.6   | )%  
|Fee income                                                                                                                                                          |                |                 | 11,754    |           |                |   | 10,305    |            |  |   | 1,449   |           |  |      | 14.1   |      |      |   |          |            |  |   |          |           |  |   |        |         |   |  |       |     
|Interest/dividend income                                                                                                                                            |                |                 | 17,148    |           |                |   | 33,036    |            |  |   | (15,888 | )         |  |      | (48.1  | )    |      |   | 2,820     |            |  |   | 3,863     |           |  |   | (1,043  | )       |   |  | (27.0  | )   
|                                                                                                                                                                    |                |                 |           |           |                |   |           |            |  |   |         |           |  |      |        |      |      |   |           |            |  |   |           |          
|                                                                                                                                                                    | Total revenues |                 |           | 2,640,085 |                |   |           | 2,208,033  |  |   |         | 432,052   |  |      |        | 19.6 |      |   |           | 1,900,371  |  |   |           | 1,932,150 |  |   |         | (31,779 | ) |  |        | (1.6 | )
|                                                                                                                                                                    |                |                 |           |           |                |   |           |            |  |   |         |           |  |      |        |      |      |   |           |            |  |   |           |          
|Interest expense (a)                                                                                                                                                |                |                 | 606,788   |           |                |   | 520,684   |            |  |   | 86,104  |           |  |      | 16.5   |      |      |   | 147,713   |            |  |   | 160,256   |           |  |   | (12,543 | )       |   |  | (7.8   | )   
|Depreciation and amortization                                                                                                                                       |                |                 | 518,191   |           |                |   | 406,653   |            |  |   | 111,538 |           |  |      | 27.4   |      |      |   | 382,597   |            |  |   | 361,671   |           |  |   | 20,926  |         |   |  | 5.8    |     
|Property operating expenses                                                                                                                                         |                |                 | 841,150   |           |                |   | 699,929   |            |  |   | 141,221 |           |  |      | 20.2   |      |      |   | 648,106   |            |  |   | 636,414   |           |  |   | 11,692  |         |   |  | 1.8    |     
|Ground rent                                                                                                                                                         |                |                 | 15,844    |           |                |   | 11,481    |            |  |   | 4,363   |           |  |      | 38.0   |      |      |   | 9,188     |            |  |   | 9,565     |           |  |   | (377    | )       |   |  | (3.9   | )   
|General and administrative                                                                                                                                          |                |                 | 102,067   |           |                |   | 78,151    |            |  |   | 23,916  |           |  |      | 30.6   |      |      |   | 831       |            |  |   |          |           |  |   | 831     |         |   |  | 100.0  |     
|Impairment on securities and other investments                                                                                                                      |                |                 |          |           |                |   | 8,499     |            |  |   | (8,499  | )         |  |      | (100.0 | )    |      |   |          |            |  |   |          |           |  |   |        |         |   |  |       |     
|                                                                                                                                                                    |                |                 |           |           |                |   |           |            |  |   |         |           |  |      |        |      |      |   |           |            |  |   |           |          
|                                                                                                                                                                    | Total expenses |                 |           | 2,084,040 |                |   |           | 1,725,397  |  |   |         | 358,643   |  |      |        | 20.8 |      |   |           | 1,188,435  |  |   |           | 1,167,906 |  |   |         | 20,529  |   |  |        | 1.8  |  
|                                                                                                                                                                    |                |                 |           |           |                |   |           |            |  |   |         |           |  |      |        |      |      |   |           |            |  |   |           |          
|Income before income taxes, allocation to
    minority interests, income from investment in unconsolidated
    joint ventures, and net gain on sales of real estate |                |                 | 556,045   |           |                |   | 482,636   |            |  |   | 73,409  |           |  |      | 15.2   |      |      |   | 711,936   |            |  |   | 764,244   |           |  |   | (52,308 | )       |   |  | (6.8   | )   
|Income taxes                                                                                                                                                        |                |                 | (8,986    | )         |                |   | (5,849    | )          |  |   | (3,137  | )         |  |      | 53.6   |      |      |   | (796      | )          |  |   | (1,323    | )         |  |   | 527     |         |   |  | (39.8  | )   
|Minority interests                                                                                                                                                  |                |                 | (5,137    | )         |                |   | (6,612    | )          |  |   | 1,475   |           |  |      | (22.3  | )    |      |   | (5,057    | )          |  |   | (6,612    | )         |  |   | 1,555   |         |   |  | (23.5  | )   
|Income from investment in unconsolidated joint
    ventures                                                                                                         |                |                 | 92,143    |           |                |   | 49,724    |            |  |   | 42,419  |           |  |      | 85.3   |      |      |   | 56,941    |            |  |   | 46,946    |           |  |   | 9,995   |         |   |  | 21.3   |     
|Net gain on sales of real estate                                                                                                                                    |                |                 |          |           |                |   | 14,854    |            |  |   | (14,854 | )         |  |      | (100.0 | )    |      |   |          |            |  |   |          |           |  |   |        |         |   |  |       |     
|                                                                                                                                                                    |                |                 |           |           |                |   |           |            |  |   |         |           |  |      |        |      |      |   |           |            |  |   |           |          
|Income from continuing operations                                                                                                                                   |                |                 | 634,065   |           |                |   | 534,753   |            |  |   | 99,312  |           |  |      | 18.6   |      |      |   | 763,024   |            |  |   | 803,255   |           |  |   | (40,231 | )       |   |  | (5.0   | )   
|Discontinued operations                                                                                                                                             |                |                 | 17,777    |           |                |   | 9,749     |            |  |   | 8,028   |           |  |      | 82.3   |      |      |   |          |            |  |   |          |           |  |   |        |         |   |  |       |     
|                                                                                                                                                                    |                |                 |           |           |                |   |           |            |  |   |         |           |  |      |        |      |      |   |           |            |  |   |           |          
|Income before cumulative effect of a change in
    accounting principle                                                                                             |                |                 | 651,842   |           |                |   | 544,502   |            |  |   | 107,340 |           |  |      | 19.7   |      |      |   | 763,024   |            |  |   | 803,255   |           |  |   | (40,231 | )       |   |  | (4.9   | )   
|Cumulative effect of a change in accounting
    principle                                                                                                           |                |                 |          |           |                |   | (1,142    | )          |  |   | 1,142   |           |  |      | (100.0 | )    |      |   |          |            |  |   | (1,142    | )         |  |   | 1,142   |         |   |  | (100.0 | )   
|                                                                                                                                                                    |                |                 |           |           |                |   |           |            |  |   |         |           |  |      |        |      |      |   |           |            |  |   |           |          
|Net income                                                                                                                                                          |                | $               | 651,842   |           |                | $ | 543,360   |            |  | $ | 108,482 |           |  |      | 20.0   | %    |      | $ | 763,024   |            |  | $ | 802,113   |           |  | $ | (39,089 | )       |   |  | (4.9   | )%  
|                                                                                                                                                                    |                |                 |           |           |                |   |           |            |  |   |         |           |  |      |        |      |      |   |           |            |  |   |           |          
|Property revenues less property operating
    expenses before interest, depreciation and amortization, ground
    rent and general and administrative expense (b)   |                | $               | 1,781,716 |           |                | $ | 1,469,819 |            |  | $ | 311,897 |           |  |      | 21.2   | %    |      | $ | 1,249,445 |            |  | $ | 1,291,873 |           |  | $ | (42,428 | )       |   |  | (3.3   | )%  
|                                                                                                                                                                    |                |                 |           |           |                |   |           |            |  |   |         |           |  |      |        |      |      |   |           |            |  |   |           |          
|Deferred rental revenue (b)                                                                                                                                         |                | $               | 58,323    |           |                | $ | 48,857    |            |  | $ | 9,466   |           |  |      | 19.4   | %    |      | $ | 24,601    |            |  | $ | 39,107    |           |  | $ | (14,506 | )       |   |  | (37.1  | )%  
|                                                                                                                                                                    |                |                 |           |           |                |   |           |            |  |   |         |           |  |      |        |      |      |   |           |            |  |   |           |          
|Lease termination fees (b)                                                                                                                                          |                | $               | 61,125    |           |                | $ | 15,954    |            |  | $ | 45,171  |           |  |      | 283.1  | %    |      | $ | 39,513    |            |  | $ | 14,384    |           |  | $ | 25,129  |         |   |  | 174.7  | %   
|                                                                                                                                                                    |                |                 |           |           |                |   |           |            |  |   |         |           |  |      |        |      |      |   |           |            |  |   |           |          




|    |  |                                                                                                        
|--- |  | -------------------------------------------------------------------------------------------------------
|(a) |  | Interest expense on unsecured notes and the line
    of credit are not allocated to the Core Portfolio.
|   
|(b) |  | These amounts include the properties sold in 2002.                                                     

Property
Revenues

The increase in property revenues in the Total
Portfolio is primarily due to the fact that property revenues
from the Spieker merger are reflected in the entire nine month
period ended September 30, 2002 but only in the last three
months of the period ended September 30, 2001 as Spieker
was acquired on July 2, 2001. As a result of the current
slowdown in economic activity, we have experienced an increase
in the amount of lease

28



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##### Table of Contents



termination fees and uncollectible receivables
relating to tenants in bankruptcy and tenants that are having
financial difficulties. Included in other property revenues are
approximately $61.1 million of lease termination fees
representing an increase of approximately $45.2 million
from the prior period. These fees relate to specific tenants,
each of whom has paid a fee to terminate its lease obligations
before the end of the contractual term of the lease. Although
there is no way of predicting the precise timing or amounts of
future lease termination fees, we currently anticipate that
lease termination fees will be significantly lower in 2003.
Approximately $14.2 million of the lease termination fees
recognized in the third quarter relate to a lease termination at
Parkside Towers from a single tenant that leased the entire
Property. An additional $31.8 million relating to the lease
termination at Parkside Towers is anticipated to be recognized
in the fourth quarter of 2002. The amount of bad debts written
off in the Total Portfolio for the nine months ended
September 30, 2002 was approximately $19.6 million as
compared to $13.0 million for the prior period. Although we
have substantial collateral from many of our tenants, additional
write-offs may occur in subsequent periods.


The decrease in property revenues in the Core
Portfolio resulted primarily from a decrease in occupancy from
94.7% at January 1, 2001 to 90.5% at September 30,
2002 partially offset by $25.1 million increase in lease
termination fees. The weighted average occupancy of the Core
Portfolio decreased primarily due to tenant rollover and early
lease terminations at various properties where the space was not
re-leased due to the current slowdown in economic activity.

Interest/Dividend
Income

Interest/ dividend income decreased for the Total
Portfolio as a result of the write-off in 2001 of the investment
in HQ Global Series A Convertible Cumulative Preferred
Stock and a reduction in interest income on notes receivable. In
addition, in September 2002, CT Convertible Trust I
redeemed the non-convertible amount of its preferred securities
at par including accrued dividends of approximately
$20.1 million. EOP Partnership still has an approximate
$29.2 million investment in the convertible portion of the
preferred securities of CT Convertible Trust I.

Interest
Expense

Total Portfolio interest expense increased from
the prior period as a result of having a higher average
outstanding debt balance as compared to the prior period, mainly
as a result of the Spieker merger. This increase was partially
offset by interest rate swap agreements which converted the
fixed interest rate to a variable rate for a portion of the
unsecured notes. The swap agreements were terminated on
September 6, 2002. Total proceeds resulting from the
termination of approximately $39.6 million will be
amortized ratably over the remaining terms of the respective
unsecured notes as a reduction to interest expense. The
remaining terms range from 16 to 42 months. Core Portfolio
interest expense decreased from the prior period as a result of
the repayment of certain mortgage notes.

Depreciation
and Amortization

Total Portfolio depreciation and amortization
expense increased from the prior period primarily as a result of
the Spieker merger and capital and tenant improvements made
during the periods. Core Portfolio depreciation and amortization
expense increased as a result of capital and tenant improvements
made during the periods.

Property
Operating Expenses

Total Portfolio property operating expenses
increased mainly as a result of the Spieker merger in 2001. Core
Portfolio property operating expenses increased primarily due to
an increase of approximately $4.2 million for safety and
security expense, increases in insurance expense of
approximately $4.6 million due to higher premiums and an
increase in real estate taxes of approximately $4.7 million
partially offset by a decrease in utilities of approximately
$5.2 million. Substantially all of the office leases
require the tenant to pay, as additional rent, a portion of any
increases in operating expenses over a base amount. We believe a
substantial

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portion of any future increase in operating
expenses will be offset by expense reimbursements from tenants,
which are included in property revenues.


Ground
Rent

Ground rent for the Total Portfolio increased
from the prior period as a result of the Spieker merger. Several
properties acquired in the Spieker merger are subject to ground
leases.

General
and Administrative Expenses

General and administrative expenses increased by
approximately $23.9 million primarily due to an increase in
professional and consulting fees of approximately
$13.0 million and severance expense of approximately
$7.3 million for two executive vice presidents and the
former president and chief executive officer. The total
severance consists of the vesting acceleration of share options,
restricted shares and severance payments.

Income
Taxes

A corporate subsidiary of ours had an indirect
interest in the Foundry Square I joint venture and will
incur income taxes as a result of this transaction of
approximately $5.1 million. (See Income from
Investment in Unconsolidated Joint Ventures below).

Net
Gain on Sales of Real Estate and Discontinued
Operations

Net gain on sales of real estate for the Total
Portfolio decreased from the prior period as a result of a
presentation change for sold properties. Financial Accounting
Standards No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets, which became effective for
financial statements issued for fiscal years beginning after
December 15, 2001, requires the net income and gain/loss on
sales of real estate for properties sold subsequent to
December 31, 2001 to be reflected in the consolidated
statements of operations as discontinued operations.
Therefore, gains and losses from properties sold prior to 2002
are reflected as net gain on sales of real estate
and gains and losses from properties sold in 2002 are reflected
in discontinued operations. The increase in
discontinued operations is primarily due to the gain on the sale
of the properties sold in 2002.

Income
from Investment in Unconsolidated Joint Ventures

Income from investment in unconsolidated joint
ventures increased for the Total Portfolio primarily due to an
increase in lease termination fees of approximately
$45.2 million. Approximately $40 million of this
amount was from the Foundry Square I project where a single
tenant terminated their lease in March 2002. The development
site is now classified as land available for development. Income
from investment in unconsolidated joint ventures increased for
the Core Portfolio primarily due to an increase in lease
termination fees of approximately $5.1 million and a
$6.8 million decrease in interest expense. Interest expense
decreased primarily as a result of lower interest rates on
variable rate mortgage notes during the current period.

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Property Dispositions

EOP Partnership has disposed or partially
disposed of the following 41 office properties consisting of
approximately 2.8 million square feet, 19 industrial
properties consisting of approximately 4.1 million square
feet and eight parking facilities since January 1, 2001:

|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                        |  |                                                                                                                                                                                                                                                                                                                                                      |  |                                                                                   
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------
|Year |  | Office Properties                                                                                                                                                                                                                                                                                                                                                                                                      |  | Industrial Properties(1)                                                                                                                                                                                                                                                                                                                             |  | Parking Facilities                                                                
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                        |  |                                                                                                                                                                                                                                                                                                                                                      |  |                                                                                   
|2002 |  | Park Place Shopping Center
    Dominion Tower
    One Park Square(3)
    Santa Monica Gateway
    Calais Office Center I and   II(4)
    Airport Service Center
    Governor Executive Centre
    Crossroads
    Dubuque Business Center(5)
    Carmel Valley Centre  I & II(4)
    Carmel View Office Plaza
    Centerpark Plaza One(3)
    Centerpark Plaza Two(6)
    Pacific Point(5)
    Sorrento Tech I, II, III |  |                                                                                                                                                                                                                                                                                                                                                      |  | St. Louis parking garages(2)                                                      
|2001 |  | Warner Park Center
    Transpotomac  Plaza 5(4)
    11 Canal Center Plaza
    Port Plaza
    99 Canal Center Plaza
    Biltmore Apartments(7)
    1600 Duke Street
    Bank of America Plaza                                                                                                                                                                                                                           |  | Nelson Business Center
    Vasco Business Center
    Marine Drive Distribution  Center I, II and III
    Kelley Point I & II
    Wilsonville Business  Center I-IV
    158th Commerce Park
    Columbia Commerce  Park I and IV
    Striker Avenue
    Airway Business Center
    360 Industrial Court
    363 Industrial Way
    437 Industrial Way |  | Theatre District Parking
    203 N. LaSalle
    Adams Wabash
    Rand Tower Garage




|    |                                                                                                         
|--- | --------------------------------------------------------------------------------------------------------
|(1) | The industrial properties were all acquired in
    the Spieker merger.                                  
|   
|(2) | Sold our remaining interest in these four garages.                                                      
|   
|(3) | Consists of four office properties.                                                                     
|   
|(4) | Consists of two office properties.                                                                      
|   
|(5) | Consists of three office properties.                                                                    
|   
|(6) | Consists of five office properties.                                                                     
|   
|(7) | Biltmore Apartments is a residential property
    which is part of the 177 Broad Street Office Property.

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In accordance with SFAS 144 Accounting for
the Impairment or Disposal of Long Lived Assets, effective
for financial statements issued for fiscal years beginning after
December 15, 2001, net income and gain/(loss) on sales of
real estate for properties sold subsequent to December 31,
2001 are reflected in the consolidated statements of operations
as Discontinued operations for both periods
presented. Below is a summary of the results of operations of
these properties along with those properties sold prior to 2002
through their respective disposition dates:

|                                                                                                                                 |                |                            |       |       |                           |   |       |            |  |   |         |        |  |         |        |        |            |   |        |        |  |   |        |        | 
|-------------------------------------------------------------------------------------------------------------------------------- | -------------- | -------------------------- | ----- | ----- | ------------------------- | - | ----- | ---------- |  | - | ------- | ------ |  | ------- | ------ | ------ | ---------- | - | ------ | ------ |  | - | ------ | ------ | 
|                                                                                                                                 |                |                            |       |      
|                                                                                                                                 |                | For the three months ended |       |       | For the nine months ended |  
|                                                                                                                                 |                | September 30,              |       |       | September 30,             |  
|                                                                                                                                 |                |                            |       |       |                           |  
|                                                                                                                                 |                |                            |       |       |                           |   |       |           
|                                                                                                                                 |                | 2002                       |       |       | 2001                      |   |       | 2002       |  |   | 2001    |       
|                                                                                                                                 |                |                            |       |       |                           |   |       |            |  |   |         |       
|                                                                                                                                 |                | Sold in                    |       |       | Sold in                   |   |       | Sold prior |  |   | Sold in |        |  | Sold in |        |        | Sold prior |  
|(Dollars in thousands)                                                                                                           |                | 2002                       |       |       | 2002                      |   |       | to 2002    |  |   | 2002    |        |  | 2002    |        |        | to 2002    |  
|                                                                                                                                 |                |                            |       |       |                           |   |       |            |  |   |         |        |  |         |        |        |            |  
|Property revenues                                                                                                                |                | $                          | 3,629 |       |                           | $ | 9,930 |            |  | $ | 10,575  |        |  | $       | 16,908 |        |            | $ | 20,730 |        |  | $ | 30,254 |       
|Interest income                                                                                                                  |                |                            |      |       |                           |   | 2     |            |  |   | 10      |        |  |         |       |        |            |   | 5      |        |  |   | 25     |       
|                                                                                                                                 |                |                            |       |       |                           |   |       |            |  |   |         |        |  |         |        |        |            |  
|                                                                                                                                 | Total revenues |                            |       | 3,629 |                           |   |       | 9,932      |  |   |         | 10,585 |  |         |        | 16,908 |            |   |        | 20,735 |  |   |        | 30,279 | 
|                                                                                                                                 |                |                            |       |       |                           |   |       |            |  |   |         |        |  |         |        |        |            |  
|Interest expense                                                                                                                 |                |                            | 1     |       |                           |   | 72    |            |  |   | 537     |        |  |         | (24    | )      |            |   | 219    |        |  |   | 1,595  |       
|Depreciation and amortization                                                                                                    |                |                            | 546   |       |                           |   | 1,629 |            |  |   | 1,042   |        |  |         | 2,683  |        |            |   | 3,495  |        |  |   | 3,915  |       
|Property operating expenses                                                                                                      |                |                            | 1,019 |       |                           |   | 2,986 |            |  |   | 2,633   |        |  |         | 5,225  |        |            |   | 7,175  |        |  |   | 8,585  |       
|Ground rent                                                                                                                      |                |                            |      |       |                           |   | 29    |            |  |   |        |        |  |         | 43     |        |            |   | 87     |        |  |   |       |       
|                                                                                                                                 |                |                            |       |       |                           |   |       |            |  |   |         |        |  |         |        |        |            |  
|                                                                                                                                 | Total expenses |                            |       | 1,566 |                           |   |       | 4,716      |  |   |         | 4,212  |  |         |        | 7,927  |            |   |        | 10,976 |  |   |        | 14,095 | 
|                                                                                                                                 |                |                            |       |       |                           |   |       |            |  |   |         |        |  |         |        |        |            |  
|Income before income taxes, income from
    investment in unconsolidated joint ventures and net gain on
    sales of real estate |                |                            | 2,063 |       |                           |   | 5,216 |            |  |   | 6,373   |        |  |         | 8,981  |        |            |   | 9,759  |        |  |   | 16,184 |       
|Income taxes                                                                                                                     |                |                            |      |       |                           |   |      |            |  |   |        |        |  |         | (76    | )      |            |   | (10    | )      |  |   | (353   | )     
|Income from investment in unconsolidated joint
    ventures                                                                      |                |                            |      |       |                           |   |      |            |  |   | 475     |        |  |         |       |        |            |   |       |        |  |   | 1,218  |       
|Net gain on sales of real estate                                                                                                 |                |                            | 6,382 |       |                           |   |      |            |  |   | 14,854  |        |  |         | 8,872  |        |            |   |       |        |  |   | 14,854 |       
|                                                                                                                                 |                |                            |       |       |                           |   |       |            |  |   |         |        |  |         |        |        |            |  
|Net income                                                                                                                       |                | $                          | 8,445 |       |                           | $ | 5,216 |            |  | $ | 21,702  |        |  | $       | 17,777 |        |            | $ | 9,749  |        |  | $ | 31,903 |       
|                                                                                                                                 |                |                            |       |       |                           |   |       |            |  |   |         |        |  |         |        |        |            |  
|Property revenues less property operating
    expenses before interest, depreciation and amortization and
    ground rent        |                | $                          | 2,610 |       |                           | $ | 6,944 |            |  | $ | 7,942   |        |  | $       | 11,683 |        |            | $ | 13,555 |        |  | $ | 21,669 |       
|                                                                                                                                 |                |                            |       |       |                           |   |       |            |  |   |         |        |  |         |        |        |            |  

Liquidity and Capital Resources

Liquidity

Net cash flow from operations represents the
primary source of liquidity to fund distributions, debt service,
capital improvements and non-revenue enhancing tenant
improvements. We expect that our $1.0 billion line of
credit will provide for funding of working capital and revenue
enhancing tenant improvements, unanticipated cash needs as well
as acquisitions and development costs. Our net cash flow from
operations is dependent upon the occupancy level of our
properties, the collectibility of rent from our tenants, the
level of operating and other expenses, and other factors.
Material changes in these factors may adversely affect our net
cash flow from operations. Such changes, in turn, would
adversely affect our ability to fund distributions, debt
service, capital improvements and non-revenue enhancing tenant
improvements. In addition, a material adverse change in our net
cash flow from operations may affect the financial performance
covenants under our line of credit and unsecured notes. If we
fail to meet any of our financial performance covenants our line
of credit may become unavailable to us, or the interest charged
on the line of credit may increase. Either of these
circumstances could adversely affect our ability to fund working
capital and revenue enhancing tenant improvements, unanticipated
cash needs, acquisitions and development costs. In order to
qualify as a REIT for federal income tax purposes, Equity Office
must distribute at least 90% of its REIT taxable income
(excluding capital gains). Our partnership agreement generally
requires us to distribute substantially all of the net cash from
operations each quarter and to make reasonable efforts to
distribute to

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Equity Office enough cash for it to meet the 90%
distribution requirement. Accordingly, we currently intend to
continue to make regular quarterly distributions to holders of
Units and preferred units. Subject to the foregoing, we have
established quarterly distribution rates which, if annualized,
would be as follows:


|                        |   |                         |      |         |    
|----------------------- | - | ----------------------- | ---- | ------- | ---
|                        |   | Annualized Distribution |     
|Security                |   | Per Unit                |     
|                        |   |                         |     
|Common Units            |   | $                       | 2.00 |        
|Preferred Units Series: |   |                         |      |        
|                        | A |                         | $    | 2.245   | (a)
|                        | B |                         | $    | 2.625   |    
|                        | C |                         | $    | 2.15625 |    
|                        | E |                         | $    | 1.96875 |    
|                        | F |                         | $    | 2.00    |    
|                        | G |                         | $    | 1.9375  | (a)




|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | On July 29, 2002, EOP Partnership issued
    8,500,000 7.75% Series G Cumulative Redeemable Preferred
    Units to Equity Office in exchange for Equity Offices
    contribution of the proceeds of its issuance and sale of
    8,500,000 7.75% Series G Cumulative Redeemable Preferred
    Shares in an offering that closed July 29, 2002. On the
    same date, substantially all of the net proceeds from the
    issuance of the Series G Preferred Units, totaling
    approximately $206.1 million were used to redeem the
    Series A Preferred Units from Equity Office and, in turn,
    Equity Office used the proceeds to redeem its 7,994,000
    outstanding 8.98% Series A Cumulative Redeemable Preferred
    Shares.

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

Contractual
Obligations

As of September 30, 2002, we were subject to
the following contractual payment obligations:

|                                                            |                     |                                       |           |           |            |   |         |         |         |   |        |         |         |      |         |         |           |   |         |            |           |   |        |         |           |   |         |           |           |  
|----------------------------------------------------------- | ------------------- | ------------------------------------- | --------- | --------- | ---------- | - | ------- | ------- | ------- | - | ------ | ------- | ------- | ---- | ------- | ------- | --------- | - | ------- | ---------- | --------- | - | ------ | ------- | --------- | - | ------- | --------- | --------- | -
|                                                            |                     |                                      
|                                                            |                     | Payments Due by Period                |          
|                                                            |                     |                                       |          
|Contractual Obligations:                                    |                     |                                       |           | Through   |            |   |        
|(Dollars in thousands)                                      |                     | Total                                 |           |           | 2002       |   |         | 2003    |         |   | 2004   |         |         | 2005 |         |         | 2006      |   |         | Thereafter |          
|                                                            |                     |                                       |           |           |            |   |         |         |         |   |        |         |         |      |         |         |           |   |         |            |          
|Long-term debt:                                             |                     |                                       |           |           |            |   |         |         |         |   |        |         |         |      |         |         |           |   |         |            |           |   |        |         |           |   |         |          
|                                                            | Mortgage debt (1)   |                                       | $         | 2,639,212 |            |   | $       | 59,222  |         |   | $      | 210,569 |         |      | $       | 448,008 |           |   | $       | 583,883    |           |   | $      | 343,188 |           |   | $       | 994,342   |          
|                                                            | Unsecured notes (2) |                                       |           | 9,126,500 |            |   |         | 110,000 |         |   |        | 700,000 |         |      |         | 880,000 |           |   |         | 675,000    |           |   |        | 650,000 |           |   |         | 6,111,500 |          
|Line of credit                                              |                     |                                       |          |           |            |   |        |         |         |   |       |         |         |      |        |         |           |   |        |            |           |   |       |         |           |   |        |          
|Share of mortgage debt of unconsolidated joint
    ventures |                     |                                       | 816,118   |           |            |   | 109,213 |         |         |   | 5,345  |         |         |      | 116,022 |         |           |   | 520,357 |            |           |   | 50,074 |         |           |   | 15,107  |          
|Operating leases (ground leases)                            |                     |                                       | 1,070,402 |           |            |   | 4,711   |         |         |   | 18,853 |         |         |      | 16,353  |         |           |   | 15,996  |            |           |   | 15,793 |         |           |   | 998,696 |          
|                                                            |                     |                                       |           |           |            |   |         |         |         |   |        |         |         |      |         |         |           |   |         |            |          
|                                                            |                     | Total Contractual Obligations         |           | $         | 13,652,232 |   |         | $       | 283,146 |   |        | $       | 934,767 |      |         | $       | 1,460,383 |   |         | $          | 1,795,236 |   |        | $       | 1,059,055 |   |         | $         | 8,119,645 |  
|                                                            |                     |                                       |           |           |            |   |         |         |         |   |        |         |         |      |         |         |           |   |         |            |          
|                                                           
|Weighted Average Interest Rates
    on Maturing Debt:       |                     |                                       |           |           |            |   |         |         |         |   |        |         |         |      |         |         |           |   |         |            |           |   |        |         |           |   |         |          
|                                                            |                     |                                       |           |           |            |   |         |         |         |   |        |         |         |      |         |         |           |   |         |            |          
|Mortgage debt                                               |                     |                                       | 7.65      | %         |            |   | 7.88    | %       |         |   | 7.41   | %       |         |      | 7.18    | %       |           |   | 7.88    | %          |           |   | 7.15   | %       |           |   | 7.90    | %        
|Unsecured notes (2)                                         |                     |                                       | 7.01      | %         |            |   | 5.37    | %       |         |   | 7.21   | %       |         |      | 5.42    | %       |           |   | 5.67    | %          |           |   | 7.52   | %       |           |   | 7.33    | %        
|Line of credit                                              |                     |                                       |          |           |            |   |        |         |         |   |       |         |         |      |        |         |           |   |        |            |           |   |       |         |           |   |        |          
|Share of mortgage debt of unconsolidated joint
    ventures |                     |                                       | 6.26      | %         |            |   | 5.70    | %       |         |   |       |         |         |      | 2.94    | %       |           |   | 6.91    | %          |           |   | 7.67   | %       |           |   | 6.92    | %        
|                                                            |                     |                                       |           |           |            |   |         |         |         |   |        |         |         |      |         |         |           |   |         |            |          
|                                                            |                     | Total Weighted Average Interest Rates |           |           | 7.09       | % |         |         | 5.96    | % |        |         | 7.25    | %    |         |         | 5.76      | % |         |            | 6.75      | % |        |         | 7.40      | % |         |           | 7.42      | %
|                                                            |                     |                                       |           |           |            |   |         |         |         |   |        |         |         |      |         |         |           |   |         |            |          

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---



|    |                                                                                                                           
|--- | --------------------------------------------------------------------------------------------------------------------------
|(1) | Balance excludes net discount of
    $(12.4) million, net of accumulated amortization of
    approximately $(5.9) million.
|   
|(2) | Balance excludes net premium of
    $48.3 million, net of accumulated amortization of
    approximately $(10.7) million.  

In October 2002, EOP Partnership entered into
$1.1 billion of forward-starting interest rate swaps to
effectively fix the 10-year Treasury rate at approximately 3.7%
for future note offerings anticipated to occur in 2003 and 2004.
The forward-starting interest rate swaps were entered into at
current market rates and, therefore, had no initial cost. The
terms of the forward-starting interest rate swaps require EOP
Partnership to pay a fixed-interest rate to the counterparties
and to receive a variable rate from the counterparties. The
swaps settle at six-month intervals beginning in 2003 and 2004.
EOP Partnership anticipates settling the swap agreements prior
to the anticipated issuance of additional unsecured notes. Upon
settlement of the swaps, EOP Partnership may be obligated to pay
the counterparties a settlement payment, or alternatively to
receive settlement proceeds from the counterparties. Any monies
paid or received will be amortized to interest expense over the
term of the respective note offering.

Commitments

In accordance with the agreement governing the
investment in Wright Runstad Associates Limited Partnership
(WRALP), we agreed, for a period generally
continuing until December 31, 2007, to make available to
WRALP up to $20.0 million in additional financing or credit
support for future development. As of September 30, 2002,
no amounts have been funded pursuant to this agreement. However,
we have guaranteed WRALPs current line of credit, which
has an outstanding balance of approximately $12.9 million
as of September 30, 2002.

We have agreed to loan amounts in connection with
certain development projects as described in
Developments subfootnote (b) later in this
section.

Debt
Financing

The table below summarizes our consolidated
mortgage debt, unsecured notes and line of credit indebtedness
at September 30, 2002 and December 31, 2001, including
a net unamortized discount on mortgage debt of
$(12.4) million and $(11.8) million, respectively, and
a net unamortized premium on unsecured notes of
$48.3 million and $17.5 million, respectively,
recorded in connection with property acquisitions, mergers,
issuance of unsecured notes and interest rate swap terminations.

|                                          |                      |                         |   |            |                   |  |   |            |            | 
|----------------------------------------- | -------------------- | ----------------------- | - | ---------- | ----------------- |  | - | ---------- | ---------- | 
|(Dollars in thousands)                    |                      | June 30, 2002           |   |            | December 31, 2001 | 
|                                          |                      |                         |   |            |                   | 
|Balance                                   |                      |                         |   |            |                   |  |   |           
|                                          | Fixed rate           |                         | $ | 11,765,617 |                   |  | $ | 10,891,325 |           
|                                          | Variable rate (1)    |                         |   | 36,000     |                   |  |   | 1,097,300  |           
|                                          |                      |                         |   |            |                   | 
|                                          |                      | Total                   |   | $          | 11,801,617        |  |   | $          | 11,988,625 | 
|                                          |                      |                         |   |            |                   | 
|Percent of total debt:                    |                      |                         |   |            |                   |  |   |           
|                                          | Fixed rate           |                         |   | 99.7%      |                   |  |   | 90.8%      |           
|                                          | Variable rate (1)    |                         |   | 0.3%       |                   |  |   | 9.2%       |           
|                                          |                      |                         |   |            |                   | 
|                                          |                      | Total                   |   |            | 100.0%            |  |   |            | 100.0%     | 
|                                          |                      |                         |   |            |                   | 
|Effective interest rate at end of period: |                      |                         |   |            |                   |  |   |           
|                                          | Fixed rate           |                         |   | 7.17%      |                   |  |   | 7.37%      |           
|                                          | Variable rate (1)(2) |                         |   | 2.36%      |                   |  |   | 3.31%      |           
|                                          |                      |                         |   |            |                   | 
|                                          |                      | Effective interest rate |   |            | 7.15%             |  |   |            | 7.00%      | 
|                                          |                      |                         |   |            |                   | 




|    |                                                                                                                                                                                                                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The variable rate debt as of December 31,
    2001 includes $817 million of fixed rate unsecured notes
    that were converted to a variable rate based on various spreads
    over LIBOR through several interest rate swap agreements. During
    2002, the interest rate swap agreements were terminated.

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|    |                                                                               
|--- | ------------------------------------------------------------------------------
|(2) | The variable rate debt bears interest based on
    various spreads over LIBOR.

Mortgage
Debt

As of September 30, 2002, total mortgage
debt (excluding our share of unconsolidated debt of
approximately $816.1 million) consisted of approximately
$2.6 billion of fixed rate debt with a weighted average
interest rate of approximately 7.72% and $36.0 million of
variable rate debt based on LIBOR plus 55 basis points (as of
September 30, 2002 the variable rate was approximately
2.36%). See Liquidity and Capital Resources 
Contractual Obligations for annual payment of obligations
under our mortgage debt.

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

Line
of Credit

EOP Partnership has a $1.0 billion revolving
credit facility that was obtained in May 2000. The line of
credit bears interest at LIBOR plus 60 basis points and matures
on June 19, 2003. There is also an annual facility fee of
$2.0 million payable quarterly. In addition, a competitive
bid option, whereby the lenders participating in the credit
facility bid on the interest to be charged, is available for up
to $350 million of the borrowings under the credit
facility. Equity Office has guaranteed the outstanding
obligation under the line of credit. At September 30, 2002,
no amounts were outstanding under the revolving credit facility.






Unsecured
Notes


Unsecured notes increased by $50 million
from December 31, 2001 to September 30, 2002 as a
result of the issuance of $500 million notes in February
and the exchange of the $250 million MandatOry Par Put
Remarketed SecuritiesSM and repayment of
$200 million notes upon maturity. The table below
summarizes EOP Partnerships unsecured notes outstanding as
of September 30, 2002:

|                         |  |                        |      |   |           |  |      |        |  |   |          |  |  |  |          | 
|------------------------ |  | ---------------------- | ---- | - | --------- |  | ---- | ------ |  | - | -------- |  |  |  | -------- | 
|                         |  | Coupon/                |      |   | All-in    |  |      |        |  |  
|                         |  | Stated                 |      |   | Effective |  |      | Face   |  |   | Maturity | 
|Original Term (in years) |  | Rate                   |      |   | Rate(a)   |  |      | Amount |  |   | Date     | 
|                         |  |                        |      |   |           |  |      |        |  |   |          | 
|                         |  |                       
|                         |  | (Dollars in thousands) |     
|7                        |  |                        | 6.95 | % |           |  | 5.37 | %      |  | $ | 110,000  |  |  |  | 12/15/02 | 
|5                        |  |                        | 6.38 | % |           |  | 6.76 | %      |  |   | 300,000  |  |  |  | 2/15/03  | 
|3                        |  |                        | 7.38 | % |           |  | 7.55 | %      |  |   | 400,000  |  |  |  | 11/15/03 | 
|5                        |  |                        | 6.50 | % |           |  | 4.59 | %      |  |   | 300,000  |  |  |  | 1/15/04  | 
|9                        |  |                        | 6.90 | % |           |  | 6.27 | %      |  |   | 100,000  |  |  |  | 1/15/04  | 
|5                        |  |                        | 6.80 | % |           |  | 6.10 | %      |  |   | 200,000  |  |  |  | 5/01/04  | 
|6                        |  |                        | 6.50 | % |           |  | 5.31 | %      |  |   | 250,000  |  |  |  | 6/15/04  | 
|7                        |  |                        | 7.24 | % |           |  | 7.26 | %      |  |   | 30,000   |  |  |  | 9/01/04  | 
|8                        |  |                        | 6.88 | % |           |  | 6.40 | %      |  |   | 125,000  |  |  |  | 2/01/05  | 
|7                        |  |                        | 6.63 | % |           |  | 4.99 | %      |  |   | 400,000  |  |  |  | 2/15/05  | 
|7                        |  |                        | 8.00 | % |           |  | 6.49 | %      |  |   | 100,000  |  |  |  | 7/19/05  | 
|8                        |  |                        | 7.36 | % |           |  | 7.69 | %      |  |   | 50,000   |  |  |  | 9/1/05   | 
|6                        |  |                        | 8.38 | % |           |  | 7.65 | %      |  |   | 500,000  |  |  |  | 3/15/06  | 
|9                        |  |                        | 7.44 | % |           |  | 7.74 | %      |  |   | 50,000   |  |  |  | 9/1/06   | 
|10                       |  |                        | 7.13 | % |           |  | 6.74 | %      |  |   | 100,000  |  |  |  | 12/1/06  | 
|9                        |  |                        | 7.00 | % |           |  | 6.80 | %      |  |   | 1,500    |  |  |  | 2/02/07  | 
|9                        |  |                        | 6.88 | % |           |  | 6.83 | %      |  |   | 25,000   |  |  |  | 4/30/07  | 
|9                        |  |                        | 6.76 | % |           |  | 6.76 | %      |  |   | 300,000  |  |  |  | 6/15/07  | 
|10                       |  |                        | 7.41 | % |           |  | 7.70 | %      |  |   | 50,000   |  |  |  | 9/01/07  | 
|7                        |  |                        | 7.75 | % |           |  | 7.91 | %      |  |   | 600,000  |  |  |  | 11/15/07 | 
|10                       |  |                        | 6.75 | % |           |  | 6.97 | %      |  |   | 150,000  |  |  |  | 1/15/08  | 
|10                       |  |                        | 6.75 | % |           |  | 7.01 | %      |  |   | 300,000  |  |  |  | 2/15/08  | 
|8(b)                     |  |                        | 7.25 | % |           |  | 7.64 | %      |  |   | 325,000  |  |  |  | 11/15/08 | 
|10                       |  |                        | 6.80 | % |           |  | 6.94 | %      |  |   | 500,000  |  |  |  | 1/15/09  | 

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|                                                                             |    |                            |           |      |           |   |  |        |      |   |          |           |           |  |  |          |  | 
|---------------------------------------------------------------------------- | -- | -------------------------- | --------- | ---- | --------- | - |  | ------ | ---- | - | -------- | --------- | --------- |  |  | -------- |  | 
|                                                                             |    | Coupon/                    |           |      | All-in    |   |  |        |      |  
|                                                                             |    | Stated                     |           |      | Effective |   |  | Face   |      |   | Maturity |          
|Original Term (in years)                                                     |    | Rate                       |           |      | Rate(a)   |   |  | Amount |      |   | Date     |          
|                                                                             |    |                            |           |      |           |   |  |        |      |   |          |          
|                                                                             |    |                           
|                                                                             |    | (Dollars in thousands)     |          
|                                                                             | 10 |                            |           | 7.25 | %         |   |  | 7.14   | %    |   |          | 200,000   |           |  |  | 5/01/09  | 
|                                                                             | 11 |                            |           | 7.13 | %         |   |  | 6.97   | %    |   |          | 150,000   |           |  |  | 7/01/09  | 
|                                                                             | 10 |                            |           | 8.10 | %         |   |  | 8.22   | %    |   |          | 360,000   |           |  |  | 8/01/10  | 
|                                                                             | 10 |                            |           | 7.65 | %         |   |  | 7.20   | %    |   |          | 200,000   |           |  |  | 12/15/10 | 
|                                                                             | 10 |                            |           | 7.00 | %         |   |  | 6.83   | %    |   |          | 1,100,000 |           |  |  | 7/15/11  | 
|                                                                             | 10 |                            |           | 6.75 | %         |   |  | 7.02   | %    |   |          | 500,000   |           |  |  | 2/15/12  | 
|                                                                             | 20 |                            |           | 7.88 | %         |   |  | 8.08   | %    |   |          | 25,000    |           |  |  | 12/01/16 | 
|                                                                             | 20 |                            |           | 7.35 | %         |   |  | 8.08   | %    |   |          | 200,000   |           |  |  | 12/01/17 | 
|                                                                             | 20 |                            |           | 7.25 | %         |   |  | 7.54   | %    |   |          | 250,000   |           |  |  | 2/15/18  | 
|                                                                             | 30 |                            |           | 7.50 | %         |   |  | 8.24   | %    |   |          | 150,000   |           |  |  | 10/01/27 | 
|                                                                             | 30 |                            |           | 7.25 | %         |   |  | 7.31   | %    |   |          | 225,000   |           |  |  | 6/15/28  | 
|                                                                             | 30 |                            |           | 7.50 | %         |   |  | 7.55   | %    |   |          | 200,000   |           |  |  | 4/19/29  | 
|                                                                             | 30 |                            |           | 7.88 | %         |   |  | 7.94   | %    |   |          | 300,000   |           |  |  | 7/15/31  | 
|                                                                             |    |                            |           |      |           |   |  |        |      |   |          |          
|                                                                             |    | Weighted Average/ Subtotal |           |      | 7.19      | % |  |        | 7.01 | % |          |           | 9,126,500 |  |  |          |  | 
|                                                                             |    |                            |           |      |           |   |  |        |      |   |          |          
|Net premium (net of accumulated
    amortization of approximately $(10,680)) |    |                            | 48,282    |      |           |   |  |       
|                                                                             |    |                            |           |      |           |  
|Total                                                                        |    | $                          | 9,174,782 |      |           |   |  |       
|                                                                             |    |                            |           |      |           |  



---

|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Includes the cost of terminated interest rate
    protection and swap agreements, offering and transaction costs
    and premiums and discounts on certain unsecured notes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|(b) |  | The notes are exchangeable into Equity Office
    Common Shares at an exchange rate of $34.00 per share. If the
    closing price at the time a holder exercises its exchange right
    is less than the exchange price of $34.00, the holder will
    receive, in lieu of Common Shares, cash in an amount equal to
    97% of the product of the number of Common Shares into which the
    principal amount of notes subject to such exercise would
    otherwise be exchangeable and the current market price per
    Common Share. Upon exchange of a $1,000 note for Common Shares
    of Equity Office, EOP Partnership would issue a corresponding
    number of Units to Equity Office on a one-for-one basis.

As of September 30, 2002, $2.1 billion
of unsecured debt securities and related guarantees were
available for issuance under a shelf registration statement.




Restrictions
and Covenants under Unsecured Indebtedness

Agreements or instruments relating to the
unsecured notes and the line of credit contain certain financial
restrictions and requirements described below. As of
September 30, 2002, we were in compliance with each of
these financial restrictions and requirements.

Set forth below are the financial restrictions
and requirements to which we are subject under our line of
credit agreement:



| |   |                                                                                                                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | total liabilities to total asset value may not
    exceed 0.55:1 at any time;                                                                                                                      
|
| |  | earnings before interest, taxes, depreciation and
    amortization to interest expense may not be less than 2.00:1;                                                                                
|
| |  | cash flow to fixed charges may not be less than
    1.5:1;                                                                                                                                         
|
| |  | secured debt to total asset value may not exceed
    0.40:1;                                                                                                                                       
|
| |  | unsecured debt to unencumbered asset value may
    not exceed 0.55:1;                                                                                                                              
|
| |  | unencumbered net operating income to unsecured
    debt service may not be less than 2.0:1;                                                                                                        
|
| |  | consolidated tangible net worth may not be less
    than the sum of $7.8 billion and 70% of all net offering
    proceeds received by Equity Office or EOP Partnership after
    February 29, 2000;

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| |   |                                                                                                                                                                                                                               
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | we may not pay any distributions on Common Shares
    and Units in excess of 90% of annual FFO; and                                                                                                                           
|
| |  | our investments in unimproved assets, interest in
    taxable REIT subsidiaries, developments, unconsolidated joint
    ventures, mortgages and securities, in the aggregate, may not
    exceed 25% of our total asset value.

Set forth below are the financial restrictions
and requirements to which we are subject under our unsecured
note indentures:



| |   |                                                                                                                  
| | - | -----------------------------------------------------------------------------------------------------------------
| |  | debt to adjusted total assets may not exceed
    0.60:1;                                                         
|
| |  | secured debt to adjusted total assets may not
    exceed 0.40:1;                                                 
|
| |  | consolidated income available for debt service to
    annual debt service charge may not be less than 1.50:1; and
|
| |  | total unencumbered assets to unsecured debt may
    not be less than 1.50:1.                                     

Equity
Securities

A summary of the activity of Equity Offices
Common Shares and EOP Partnerships Units (exclusive of
Units owned by Equity Office) during the three months ended
September 30, 2002 is as follows:

|                                  |                                         |               |             |          |       |  |            |          |   |  |             |          |  
|--------------------------------- | --------------------------------------- | ------------- | ----------- | -------- | ----- |  | ---------- | -------- | - |  | ----------- | -------- | -
|                                  |                                         | Common Shares |             |          | Units |  |            | Total    |  
|                                  |                                         |               |             |          |       |  |            |          |  
|Outstanding at June 30, 2002      |                                         |               | 419,035,954 |          |       |  | 51,173,304 |          |   |  | 470,209,258 |         
|                                  | Share options exercised                 |               |             | 102,633  |       |  |            |         |   |  |             | 102,633  |  
|                                  | Common Shares repurchased/retired(a)    |               |             | (216,854 | )     |  |            |         |   |  |             | (216,854 | )
|                                  | Units redeemed for cash (b)             |               |             |         |       |  |            | (677,216 | ) |  |             | (677,216 | )
|                                  | Restricted shares issued/cancelled, net |               |             | (268,339 | )     |  |            |         |   |  |             | (268,339 | )
|                                  | Issued through dividend reinvestments   |               |             | 16,641   |       |  |            |         |   |  |             | 16,641   |  
|                                  |                                         |               |             |          |       |  |            |          |  
|Outstanding at September 30, 2002 |                                         |               | 418,670,035 |          |       |  | 50,496,088 |          |   |  | 469,166,123 |         
|                                  |                                         |               |             |          |       |  |            |          |  



---

|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | In July 2002, Equity Office announced a Common
    Share repurchase program allowing for the repurchase of up to
    $200 million of Common Shares over the next 12 months at
    the discretion of management. The Common Shares may be
    repurchased in the open market or privately negotiated
    transactions. During the third quarter 2002, 197,900 Common
    Shares were repurchased at an average price of $25.06 for
    approximately $5.0 million in the aggregate. As of
    October 28, 2002, 7,200,600 Common Shares were repurchased
    at an average price of $24.98 for approximately $179.9 million
    in the aggregate. In connection with the repurchases, EOP
    Partnership purchased from Equity Office and retired a
    corresponding number of units for an aggregate purchase price
    equal to the aggregate purchase price for all Common Shares
    repurchases.
|   
|(b) |  | During the three months ended September 30,
    2002, EOP Partnership redeemed 677,216 Units for cash at an
    average price of $28.52 for a total of approximately
    $19.3 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               




Cash Flows

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

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Nine Months
Ended September 30, 2002

Cash and cash equivalents increased by
approximately $394.4 million to approximately
$455.5 million at September 30, 2002, compared to
$61.1 million at December 31, 2001. This increase was
the net result of the receipt of:



| |   |                                                                                                                                                                                                   
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | approximately $1,048.7 million from
    operating activities;                                                                                                                                     
|
| |  | approximately $122.6 million from investing
    activities, which consisted primarily of approximately
    $218.2 million from property dispositions and
    $159.2 million released from escrows;
|
| |  | less approximately $292.5 million used for
    capital and tenant improvements and lease acquisition costs and
    approximately $776.9 million used for financing activities.                    

Subsequent to September 30, 2002,
approximately $234.0 million was used to pay distributions
on Units and approximately $174.9 million was used to
purchase Units from Equity Office to enable Equity Office to
repurchase Common Shares as part of the Common Share repurchase
plan.




Additional Items






Tenant and
Other Receivables


Tenant and other receivables decreased from
approximately $120.4 million at December 31, 2001 to
approximately $73.0 million at September 30, 2002
primarily due to the collection of receivables from tenants
during 2002 relating to reimbursable expenses. In the fourth
quarter 2001, receivables from tenants for reimbursable expenses
were increased based on an analysis of actual reimbursable
expenses compared to the amount billed to the tenants during
2001.




Deferred Rent
Receivables

Certain leases provide for tenant occupancy
during periods for which no rent is due or where minimum rent
payments increase during the term of the lease. We record rental
income for the full term of each lease on a straight-line basis.
Accordingly, a receivable is recorded from tenants for the
current difference between the straight-line rent and the rent
that is actually due from the tenant. This receivable amount is
included in the consolidated balance sheets as deferred
rent receivable. The deferred rent receivable increased
approximately $49.7 million to $319.5 million at
September 30, 2002, from $269.8 million at
December 31, 2001. The increase was due to a net increase
in the difference between the straight-line rent and the rent
that is actually due from tenants primarily from the acquisition
of the Properties acquired in the Spieker merger on July 2,
2001 and certain development properties that were placed in
service.




Escrow
Deposits and Restricted Cash

Escrow deposits primarily consist of amounts held
by lenders to provide for future real estate tax expenditures
and tenant improvements, earnest money deposits on acquisitions
and net proceeds from tax-deferred dispositions. Restricted cash
represents amounts committed for various utility deposits and
security deposits. Certain of these amounts may be reduced upon
the fulfillment of certain obligations. The escrow deposits and
restricted cash decreased approximately $159.2 million to
$37.1 million at September 30, 2002, from
$196.3 million at December 31, 2001. The decrease was
primarily due to the disbursement of approximately
$162.0 million of proceeds from the sale of certain parking
facilities in 2001 that were deposited into a tax-deferred
escrow account.




Market Risk

Since December 31, 2001 there were no
material changes in the information regarding market risk that
was provided in the Form 10-K for the year ended
December 31, 2001, except as noted below.

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##### Table of Contents






Quantitative Information About Market
Risk




Interest Rate
Risk  Debt

As of September 30, 2002, total outstanding
debt was approximately $11,801.6 million, of which
$36.0 million, or less than 1% is variable rate debt. Since
December 31, 2001, the fair value of our debt has increased
approximately $900 million primarily due to the general
decrease in market interest rates on secured and unsecured debt.
A hypothetical increase or decrease in interest rates of 10%
would change the fair value of our debt by approximately
$200 million.

Interest risk amounts were determined by
considering the impact of hypothetical interest rates on our
debt. This analysis does not reflect the impact that a changing
interest rate environment could have on the overall level of
economic activity. Further, in the event of a changing interest
rate environment, 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, this analysis assumes no change in our
financial structure.




Interest Rate
Risk  Derivatives

In September 2002, EOP Partnership terminated
several interest rate swap agreements that effectively converted
$1.2 billion of fixed rate debt to a variable rate. Total
proceeds resulting from the termination of approximately
$39.6 million will be amortized ratably over the remaining
term of the respective unsecured notes as a reduction to
interest expense. The remaining terms range from 16 to
42 months.

In October 2002, EOP Partnership entered into
$1.1 billion of forward-starting interest rate swaps to
effectively fix the 10-year Treasury rate at approximately 3.7%
for future note offerings anticipated to occur in 2003 and 2004.
The forward-starting interest rate swaps were entered into at
current market rates and, therefore, had no initial cost. The
terms of the forward-starting interest rate swaps require EOP
Partnership to pay a fixed-interest rate to the counterparties
and to receive a variable rate from the counterparties. The
swaps settle at six-month intervals beginning in 2003 and 2004.
EOP Partnership anticipates settling the swap agreements prior
to the anticipated issuance of additional unsecured notes. Upon
settlement of the swaps, EOP Partnership may be obligated to pay
the counterparties a settlement payment, or alternatively to
receive settlement proceeds from the counterparties. Any monies
paid or received will be amortized to interest expense over the
term of the respective note offering.




Capital Improvements, Tenant Improvements and
Leasing Commissions






Capital
Improvements


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



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

39



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##### Table of Contents



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

|                       |                            |                            |        |                |                           |   |        |              |                |   |                      |         |  |   |         |         | 
|---------------------- | -------------------------- | -------------------------- | ------ | -------------- | ------------------------- | - | ------ | ------------ | -------------- | - | -------------------- | ------- |  | - | ------- | ------- | 
|                       |                            |                            |        |               
|                       |                            | For the three months ended |        |                | For the nine months ended |  
|                       |                            | September 30, 2002         |        |                | September 30, 2002        |  
|                       |                            |                            |        |                |                           |  
|                       |                            |                            |        | Unconsolidated |                           |   |        |              | Unconsolidated |  
|                       |                            | Consolidated               |        |                | Properties (EOP           |   |        | Consolidated |                |   | Properties (EOP      |        
|                       |                            | Properties                 |        |                | Partnerships share)      |   |        | Properties   |                |   | Partnerships share) |        
|(Dollars in thousands) |                            |                            |        |                |                           |   |        |              |                |   |                      |        
|Capital Improvements   |                            |                            |        |                |                           |   |        |              |                |   |                      |         |  |   |         |        
|Capital improvements   |                            | $                          | 11,418 |                |                           | $ | 1,729  |              |                | $ | 26,395               |         |  | $ | 2,372   |        
|Development costs      |                            |                            | 30,668 |                |                           |   | 36,438 |              |                |   | 85,929               |         |  |   | 101,891 |        
|Redevelopment costs(a) |                            |                            | 8,198  |                |                           |   |       |              |                |   | 26,688               |         |  |   |        |        
|                       |                            |                            |        |                |                           |   |        |              |                |   |                      |        
|                       | Total capital improvements |                            | $      | 50,284         |                           |   | $      | 38,167       |                |   | $                    | 139,012 |  |   | $       | 104,263 | 
|                       |                            |                            |        |                |                           |   |        |              |                |   |                      |        




|    |  |                                                                                                                                          
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Properties included in redevelopment costs are
    Tabor Center, Polk and Taylor Buildings, Worldwide Plaza and
    500-600 City Parkway.




Tenant
Improvements and Leasing Commissions

Costs related to the renovation, alteration or
build-out of existing second-generation space, as well as
related leasing commissions, are capitalized. These tenant
improvements may include, but are not limited to, floor
coverings, ceilings, walls, HVAC, mechanical, electrical,
plumbing and fire protection systems. We categorize tenant
improvements and leasing commissions as follows:



| |   |                                                                                                                                                                                     
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Revenue
    enhancing costs incurred
    on space which is vacant at the time of acquisition or has been
    vacant for nine months or more.                                       
|
| |  | Non-revenue
    enhancing costs incurred
    in connection with the renewal or retenanting of currently
    leased space to maintain the revenue being generated by such
    space.

40



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##### Table of Contents



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

|                                                      |            |                            |        |                |                           |   |       |             |                |   |         |        |  |   |       |       | 
|----------------------------------------------------- | ---------- | -------------------------- | ------ | -------------- | ------------------------- | - | ----- | ----------- | -------------- | - | ------- | ------ |  | - | ----- | ----- | 
|                                                      |            |                            |        |               
|                                                      |            | For the three months ended |        |                | For the nine months ended |  
|                                                      |            | September 30, 2002         |        |                | September 30, 2002        |  
|                                                      |            |                            |        |                |                           |  
|                                                      |            |                            |        | Total Cost per |                           |   |       |             | Total Cost per |  
|                                                      |            |                            |        | Square Foot    |                           |   |       |             | Square Foot    |  
|(Dollars in thousands except per square foot amounts) |            | Total Costs                |        |                | Leased                    |   |       | Total Costs |                |   | Leased  |       
|                                                      |            |                            |        |                |                           |   |       |             |                |   |         |       
|Consolidated Properties:                              |            |                            |        |                |                           |   |       |             |                |   |         |        |  |   |       |      
|Office Properties:                                    |            |                            |        |                |                           |   |       |             |                |   |         |        |  |   |       |      
|Revenue enhancing                                     |            | $                          | 15,299 |                |                           | $ | 23.52 |             |                | $ | 37,339  |        |  | $ | 23.25 |      
|                                                      |            |                            |        |                |                           |   |       |             |                |   |         |       
|Non-revenue enhancing:                                |            |                            |        |                |                           |   |       |             |                |   |         |        |  |   |       |      
|                                                      | Renewals   |                            | $      | 16,189         |                           |   | $     | 7.17        |                |   | $       | 46,402 |  |   | $     | 6.86  | 
|                                                      | Retenanted |                            |        | 42,206         |                           |   |       | 19.48       |                |   |         | 91,381 |  |   |       | 16.74 | 
|                                                      |            |                            |        |                |                           |   |       |             |                |   |         |       
|Total/ Weighted Average Non-revenue enhancing         |            | $                          | 58,395 |                |                           | $ | 13.20 |             |                | $ | 137,783 |        |  | $ | 11.27 |      
|                                                      |            |                            |        |                |                           |   |       |             |                |   |         |       
|Industrial Properties:                                |            |                            |        |                |                           |   |       |             |                |   |         |        |  |   |       |      
|Revenue enhancing                                     |            | $                          | 159    |                |                           | $ | 8.54  |             |                | $ | 159     |        |  | $ | 8.54  |      
|                                                      |            |                            |        |                |                           |   |       |             |                |   |         |       
|Non-revenue enhancing:                                |            |                            |        |                |                           |   |       |             |                |   |         |        |  |   |       |      
|                                                      | Renewals   |                            | $      | 845            |                           |   | $     | 4.06        |                |   | $       | 1,116  |  |   | $     | 1.29  | 
|                                                      | Retenanted |                            |        | 68             |                           |   |       | 0.66        |                |   |         | 308    |  |   |       | 1.85  | 
|                                                      |            |                            |        |                |                           |   |       |             |                |   |         |       
|Total/ Weighted Average Non-revenue enhancing         |            | $                          | 913    |                |                           | $ | 2.94  |             |                | $ | 1,424   |        |  | $ | 1.38  |      
|                                                      |            |                            |        |                |                           |   |       |             |                |   |         |       
|Unconsolidated Properties(a):                         |            |                            |        |                |                           |   |       |             |                |   |         |        |  |   |       |      
|Revenue enhancing                                     |            | $                          | 857    |                |                           | $ | 32.16 |             |                | $ | 1,488   |        |  | $ | 21.97 |      
|                                                      |            |                            |        |                |                           |   |       |             |                |   |         |       
|Non-revenue enhancing:                                |            |                            |        |                |                           |   |       |             |                |   |         |        |  |   |       |      
|                                                      | Renewals   |                            | $      | 754            |                           |   | $     | 15.77       |                |   | $       | 1,677  |  |   | $     | 6.82  | 
|                                                      | Retenanted |                            |        | 839            |                           |   |       | 11.92       |                |   |         | 1,869  |  |   |       | 10.48 | 
|                                                      |            |                            |        |                |                           |   |       |             |                |   |         |       
|Total/ Weighted Average Non-revenue enhancing         |            | $                          | 1,593  |                |                           | $ | 13.48 |             |                | $ | 3,546   |        |  | $ | 8.36  |      
|                                                      |            |                            |        |                |                           |   |       |             |                |   |         |       




|    |  |                                                                                                                                    
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Represents EOP Partnerships share of
    unconsolidated joint venture leasing costs. All joint ventures
    are Office Properties.

The above information includes actual capital
improvements incurred and tenant improvements and leasing
commissions for leases which commenced during the periods shown.
The amounts included in the consolidated statements of cash
flows represent the cash expenditures made during the nine
months ended September 30, 2002. The differences between
these amounts represent timing differences between the lease
commencement dates and the actual cash expenditures as well as
expenditures for corporate furniture, fixtures and equipment,
software, leasehold improvements and other. The reconciliation
between the amounts above for the consolidated properties and
the amounts disclosed in the consolidated statements of cash
flows is as follows:

|                                                                                                                             |  |                          |         |  
|---------------------------------------------------------------------------------------------------------------------------- |  | ------------------------ | ------- | -
|                                                                                                                             |  | For the nine months      |        
|(Dollars in thousands)                                                                                                       |  | ended September 30, 2002 |        
|                                                                                                                             |  |                          |        
|Total capital improvements, tenant improvements
    and leasing commissions                                                  |  | $                        | 315,717 |  
|Timing differences                                                                                                           |  |                          | (27,074 | )
|Expenditures for corporate furniture, fixtures
    and equipment, software, leasehold improvements and other                 |  |                          | 3,844   |  
|                                                                                                                             |  |                          |        
|Total capital improvements, tenant improvements
    and leasing commissions on the consolidated statements of cash
    flows |  | $                        | 292,487 |  
|                                                                                                                             |  |                          |        

41



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##### Table of Contents



Developments

We currently own directly and through joint
ventures several properties in various stages of development or
pre-development. These developments are funded with proceeds
from working capital and the line of credit. Specifically
identifiable direct acquisition, development and construction
costs are capitalized, including, where applicable, salaries and
related costs, real estate taxes and interest essential to the
development of a property. The properties under development and
all figures stated below are as of September 30, 2002.

Consolidated
Developments:

|                                     |  |                               |  |                    |    |           |   |  |           |                        |           |            |       |  |          |       |         |           |         |   |           |         |         |            |         |   |         |  |    |   |    |  
|------------------------------------ |  | ----------------------------- |  | ------------------ | -- | --------- | - |  | --------- | ---------------------- | --------- | ---------- | ----- |  | -------- | ----- | ------- | --------- | ------- | - | --------- | ------- | ------- | ---------- | ------- | - | ------- |  | -- | - | -- | -
|                                     |  |                               |  |                    |    |           |   |  |           |                        |           |            |       | 
|                                     |  |                               |  |                    |    |           |   |  |           | EOP Partnerships      |           |            |       |  |         
|                                     |  |                               |  |                    |    |           |   |  |           |                        |           |            |       |  |         
|                                     |  | Estimated                     |  |                    |    |           |   |  |           | Effective              |           |            |       |  | Total    |       |         |          
|                                     |  | Placed in                     |  |                    |    |           |   |  |           | Ownership              |           |            | Costs |  |          | Total |         |           | Project |   |           | Current |        
|                                     |  | Service                       |  |                    |    | Number of |   |  | Square    |                        |           | Percentage |       |  | Incurred |       |         | Estimated |         |   | Estimated |         |         | Percentage |        
|Wholly-Owned                         |  | Date(a)                       |  | Location           |    | Buildings |   |  | Feet      |                        |           | (a)        |       |  | (a)      |       |         | Costs(a)  |         |   | Costs(a)  |         |         | Leased     |        
|                                     |  |                               |  |                    |    |           |   |  |           |                        |           |            |       |  |          |       |         |           |         |   |           |         |         |            |        
|                                     |  |                               |  |                    |    |           |   |  |           |                        |           |           
|                                     |  |                               |  |                    |    |           |   |  |           | (Dollars in thousands) |           |            |      
|Towers @ Shores Center               |  | 4Q/2001                       |  | Redwood Shores, CA |    |           | 2 |  |           |                        | 334,800   |            |       |  | 100      | %     |         | $         | 107,620 |   |           | $       | 116,500 |            |         | $ | 116,500 |  |    |   | 33 | %
|Kruse Woods V                        |  | 3Q/2003                       |  | Lake Oswego, OR    |    |           | 1 |  |           |                        | 184,000   |            |       |  | 100      | %     |         |           | 7,669   |   |           |         | 33,900  |            |         |   | 33,900  |  |    |   | 0  | %
|Douglas Corporate Center II          |  | 3Q/2003                       |  | Roseville, CA      |    |           | 1 |  |           |                        | 108,000   |            |       |  | 100      | %     |         |           | 1,717   |   |           |         | 16,800  |            |         |   | 16,800  |  |    |   | 0  | %
|                                     |  |                               |  |                    |    |           |   |  |           |                        |           |            |       |  |          |       |         |           |         |   |           |         |         |            |        
|                                     |  |                               |  |                    |    |           | 4 |  |           |                        | 626,800   |            |       |  |          |       |         |           | 117,006 |   |           |         | 167,200 |            |         |   | 167,200 |  |    |   | 18 | %
|                                     |  |                               |  |                    |    |           |   |  |           |                        |           |            |       |  |          |       |         |           |         |   |           |         |         |            |        
|                                    
|Joint Venture                        |  |                               |  |                    |    |           |   |  |           |                        |           |            |       |  |          |       |         |           |         |   |           |         |         |            |         |   |         |  |    |   |    |  
|                                     |  |                               |  |                    |    |           |   |  |           |                        |           |            |       |  |          |       |         |           |         |   |           |         |         |            |        
|Waters Edge Phase I                 |  | 3Q/2002                       |  | Los Angeles, CA    |    |           | 2 |  |           |                        | 240,000   |            |       |  | 87.5     | %     |         |           | 52,881  |   |           |         | 74,300  |            |         |   | 76,500  |  |    |   | 0  | %
|                                     |  |                               |  |                    |    |           |   |  |           |                        |           |            |       |  |          |       |         |           |         |   |           |         |         |            |        
|Unconsolidated Developments:         |  |                               |  |                    |    |           |   |  |           |                        |           |            |       |  |          |       |         |           |         |   |           |         |         |            |         |   |         | 
|                                    
|Wilson/Equity Office Developments(b) |  |                               |  |                    |    |           |   |  |           |                        |           |            |       |  |          |       |         |           |         |   |           |         |         |            |         |   |         |  |    |   |    |  
|                                     |  |                               |  |                    |    |           |   |  |           |                        |           |            |       |  |          |       |         |           |         |   |           |         |         |            |        
|San Rafael Corporate Center          |  | 4Q/2001                       |  | San Rafael, CA     |    |           | 2 |  |           |                        | 157,700   |            |       |  | 80       | %     |         |           | 39,555  |   |           |         | 48,100  |            |         |   | 60,100  |  |    |   | 16 | %
|Foundry Square II and IV(c)          |  | 3Q/2002- 1Q/2003              |  | San Francisco, CA  |    |           | 2 |  |           |                        | 734,800   |            |       |  | (c)      |       |         |           | 124,403 |   |           |         | 150,600 |            |         |   | 259,500 |  |    |   | 38 | %
|Ferry Building(d)                    |  | 3Q/2002                       |  | San Francisco, CA  |    |           | 1 |  |           |                        | 242,000   |            |       |  | (d)      |       |         |           | 52,444  |   |           |         | 66,700  |            |         |   | 107,100 |  |    |   | 0  | %
|Concar(e)                            |  | 4Q/2002                       |  | San Mateo, CA      |    |           | 2 |  |           |                        | 207,000   |            |       |  | 80       | %     |         |           | 36,818  |   |           |         | 55,200  |            |         |   | 68,500  |  |    |   | 99 | %
|                                     |  |                               |  |                    |    |           |   |  |           |                        |           |            |       |  |          |       |         |           |         |   |           |         |         |            |        
|                                     |  |                               |  |                    |    |           | 7 |  |           |                        | 1,341,500 |            |       |  |          |       |         |           | 253,220 |   |           |         | 320,600 |            |         |   | 495,200 |  |    |   | 38 | %
|                                     |  |                               |  |                    |    |           |   |  |           |                        |           |            |       |  |          |       |         |           |         |   |           |         |         |            |        
|                                     |  | Grand Total/ Weighted Average |  |                    | 13 |           |   |  | 2,208,300 |                        |           |            |       |  |          | $     | 423,107 |           |         | $ | 562,100   |         |         | $          | 738,900 |   |         |  | 28 | %
|                                     |  |                               |  |                    |    |           |   |  |           |                        |           |            |       |  |          |       |         |           |         |   |           |         |        

Balance Sheet Reconciliation of
Developments:

|                                                                   |               |                                                                     |       |         |         | 
|------------------------------------------------------------------ | ------------- | ------------------------------------------------------------------- | ----- | ------- | ------- | 
|Consolidated developments  costs
    incurred as reflected above: |               |                                                                     |       |        
|                                                                   | Wholly-owned  |                                                                     | $     | 117,006 |        
|                                                                   | Joint venture |                                                                     |       | 52,881  |        
|Minority interests portion of consolidated
    development         |               |                                                                     | 2,096 |        
|                                                                   |               |                                                                     |      
|                                                                   |               | Total developments in process on the consolidated
    balance sheet |       | $       | 171,983 | 
|                                                                   |               |                                                                     |      




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

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|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |  | For consolidated developments, EOP
    Partnerships Costs Incurred and the Total Estimated Costs
    are based on EOP Partnerships Effective Ownership
    Percentage. The Total Project Estimated Costs represent 100% of
    the estimated costs including any unaffiliated partys
    portion.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   
|    |  | For unconsolidated developments, the Effective
    Ownership Percentage represents EOP Partnerships direct
    interest in the development and its indirect interest through
    its 49.9% interest in Wilson/ Equity Office (W/ EO).
    EOP Partnerships Costs Incurred and Total Estimated Costs
    are based on EOP Partnerships Effective Ownership
    Percentage. The Total Project Estimated Costs represent 100% of
    the estimated costs including those of EOP Partnership, Wilson
    Investors (WI) and any unaffiliated partys
    portions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|    |  | The Total Estimated Costs and the Total Project
    Estimated Costs are subject to change upon, or prior to, the
    completion of the development and include amounts required to
    lease the property.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|(b) |  | EOP Partnership and WI entered into a joint
    venture agreement to form W/ EO for the purpose of developing,
    constructing, leasing and managing developments in northern
    California. W/ EO is owned 49.9% by EOP Partnership and 50.1% by
    WI. William Wilson III, a trustee of Equity Office, through his
    ownership of WI, owns approximately 22% of W/ EO (and
    approximately 30% of any promote to which WI is entitled under
    the joint venture agreement). EOP Partnership has agreed to loan
    up to $25 million to WI for its required contribution to W/
    EO at a 15% interest rate per annum. As of September 30,
    2002, no amounts were outstanding on the loan and the remaining
    commitment amount was $13 million. As a result of the
    recently enacted Sarbanes-Oxley Act of 2002, it is possible
    (depending on the scope of the regulations to be adopted by the
    SEC) that EOP Partnership could be prohibited from lending
    further amounts to WI under this arrangement or from modifying
    or renewing this arrangement.                                                                                                                                                                                                                                                                                                                        
|   
|    |  | EOP Partnership has created joint ventures with
    W/ EO and, in certain cases, unaffiliated parties for the
    development of various office properties. The costs for these
    developments are expected to be funded by EOP Partnership and W/
    EO in a 60%/40% ratio and in some cases by third parties as
    described within each developments operating agreement.
    EOP Partnership has agreed to provide first mortgage financing
    to the ownership entities of each of these developments
    (subject, in the case of Concar, to final agreed documentation)
    at the greater of 6.5% or LIBOR plus 3.25%, generally maturing
    36 months after initial funding or earlier at the option of
    EOP Partnership in the event alternative financing sources are
    available on terms reasonably acceptable to WI and any
    unaffiliated party. The aggregate amount of any such financing
    would generally be capped at 70% of budgeted construction costs
    (76% in the case of Concar). At September 30, 2002, EOP
    Partnership had committed to make mortgage loans totaling
    approximately $317 million, of which approximately
    $199 million was outstanding. In accordance with the W/ EO
    operating agreement, EOP Partnership is entitled, but not
    required, to purchase the W/ EO interest in each development
    subsequent to project stabilization.
|   
|(c) |  | Foundry Square is a project with two sites
    currently under development, each of which has a separate joint
    venture structure. EOP Partnerships Effective Ownership
    Percentages are approximately 70% and 40%, for Sites II and IV,
    respectively. Site I is currently held as land available for
    development and Site III is under option.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|(d) |  | In 2001, a joint venture between EOP Partnership,
    W/ EO, and other unaffiliated parties leased the Ferry Building
    from the City and County of San Francisco, through its Port
    Commission (the Port). Under this lease, the Port is
    paid a stated base rent. In addition, once the lessee has
    received from the project a cumulative preferred return of 8%
    (prior to stabilization) and 11% (after stabilization), then 50%
    of the proceeds from the operation and ownership of the project
    are paid to the Port as percentage rent.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   
|    |  | The joint venture is redeveloping the Ferry
    Building in a manner to permit the use of federal rehabilitation
    tax credits (Historic Tax Credits). Since the
    original members of the joint venture could not take full
    advantage of the Historic Tax Credits, the joint venture
    admitted a new member who could do so. This investor member will
    contribute approximately $23.5 million in equity to fund a
    portion of the Total Project Estimated Costs for the project,
    and will receive a preferred return with an effective annual
    rate of approximately 3% on its capital investment. The investor
    members interest in the joint venture is subject to
    put/call rights during the sixth and seventh years after the
    Ferry Building is placed in service. Upon the purchase of the
    investor members interest pursuant to the put/call, it is
    estimated that the joint                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

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##### Table of Contents



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |  | venture will retain approximately
    $11 million of the capital contributed by the investor
    member, based on a formula to determine the purchase price for
    the investor members interest and after taking into
    account the preferred return that will have been paid to the
    investor member by such time. Through the creation of a master
    lease, EOP Partnerships Effective Ownership Percentage in
    the net cash flow of the Ferry Building project is approximately
    80%, after the distribution of preferred returns.
|   
|(e) |  | Under the terms of the ground lease, the ground
    lessor is entitled to share, in addition to ground rent, in
    proceeds from the operation and ownership of this development
    after a 10% return to the lessee.                                                                                                                                                                                                                                                                                                                               

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




Impact of New Accounting Standards

In accordance with Statement of Financial
Accounting Standards No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets, effective for
financial statements issued for fiscal years beginning after
December 15, 2001, the net income and gain/ (loss) on sales
of real estate for properties sold subsequent to
December 31, 2001 is reflected in the consolidated
statements of operations as Discontinued operations
for both periods presented.

In accordance with Statement of Financial
Accounting Standards No. 145, Rescission of FASB
Statements No. 4, 44, and 62, Amendment of FASB Statement
No. 13, and Technical Corrections, effective for
financial statements issued for fiscal years beginning after
May 15, 2002, gains and losses on extinguishments of debt
are classified as income from continuing operations rather than
as extraordinary items as previously required under
Statement 4.




Inflation

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




Funds From Operations
(FFO)

We believe FFO, as defined by NAREIT, to be an
appropriate measure of performance for a real estate company.
While FFO is a relevant and widely used measure of operating
performance of a real estate company, it does not represent cash
flow from operations or net income as defined by GAAP, and it
should not be considered as an alternative to these indicators
in evaluating liquidity or operating performance.

44



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##### Table of Contents



The following table reflects the calculation of
FFO for the three and nine months ended September 30, 2002
and 2001, respectively:

|                                                                                                                                                                                                |                                                                                                                                 |                            |         |          |      |   |         |            |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | ------- | -------- | ---- | - | ------- | ---------- | -
|                                                                                                                                                                                                |                                                                                                                                 |                           
|                                                                                                                                                                                                |                                                                                                                                 | For the three months ended |        
|                                                                                                                                                                                                |                                                                                                                                 | September 30,              |        
|                                                                                                                                                                                                |                                                                                                                                 |                            |        
|(Dollars in thousands)                                                                                                                                                                          |                                                                                                                                 | 2002                       |         |          | 2001 |  
|                                                                                                                                                                                                |                                                                                                                                 |                            |         |          |      |  
|Income before income taxes, allocation to
    minority interests, income from investment in unconsolidated
    joint ventures, net gain on sales of real estate and
    discontinued operations |                                                                                                                                 | $                          | 186,123 |          |      | $ | 211,866 |           
|Add (deduct):                                                                                                                                                                                   |                                                                                                                                 |                            |         |          |      |   |         |           
|                                                                                                                                                                                                | Income taxes                                                                                                                    |                            |         | (155     | )    |   |         | (1,286     | )
|                                                                                                                                                                                                | Income allocated to minority interests for
    partially owned properties                                                       |                            |         | (2,736   | )    |   |         | (2,006     | )
|                                                                                                                                                                                                | Income from investment in unconsolidated joint
    ventures                                                                     |                            |         | 12,218   |      |   |         | 16,434     |  
|                                                                                                                                                                                                | Depreciation and amortization (real estate
    related)(including EOP Partnerships share of
    unconsolidated joint ventures) |                            |         | 179,692  |      |   |         | 163,479    |  
|                                                                                                                                                                                                | Discontinued operations (excluding depreciation,
    amortization and net gains on sale)                                        |                            |         | 2,609    |      |   |         | 6,845      |  
|                                                                                                                                                                                                | Put option settlement                                                                                                           |                            |         |         |      |   |         | 2,655      |  
|                                                                                                                                                                                                | Preferred distributions                                                                                                         |                            |         | (15,451  | )    |   |         | (18,250    | )
|                                                                                                                                                                                                |                                                                                                                                 |                            |         |          |      |  
|Funds from Operations                                                                                                                                                                           |                                                                                                                                 | $                          | 362,300 |          |      | $ | 379,737 |           
|                                                                                                                                                                                                |                                                                                                                                 |                            |         |          |      |  
|Cash flow provided by (used for):                                                                                                                                                               |                                                                                                                                 |                            |         |          |      |   |         |           
|                                                                                                                                                                                                | Operating Activities                                                                                                            |                            | $       | 406,488  |      |   | $       | 345,784    |  
|                                                                                                                                                                                                | Investing Activities                                                                                                            |                            | $       | (22,408  | )    |   | $       | (1,062,857 | )
|                                                                                                                                                                                                | Financing Activities                                                                                                            |                            | $       | (228,786 | )    |   | $       | 1,014,544  |  
|Ratio of earnings to combined fixed charges and
    preferred share distributions                                                                                                               |                                                                                                                                 |                            | 1.9     |          |      |   | 1.8     |           

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|                                                                                                                                                                                                                                                           |                                                                                                                                               |                           |           |           |      |   |         |            |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------- | --------- | --------- | ---- | - | ------- | ---------- | -
|                                                                                                                                                                                                                                                           |                                                                                                                                               |                          
|                                                                                                                                                                                                                                                           |                                                                                                                                               | For the nine months ended |          
|                                                                                                                                                                                                                                                           |                                                                                                                                               | September 30,             |          
|                                                                                                                                                                                                                                                           |                                                                                                                                               |                           |          
|(Dollars in thousands)                                                                                                                                                                                                                                     |                                                                                                                                               | 2002                      |           |           | 2001 |  
|                                                                                                                                                                                                                                                           |                                                                                                                                               |                           |           |           |      |  
|Income before income taxes, allocation to
    minority interests, income from investment in unconsolidated
    joint ventures, net gain on sales of real estate, discontinued
    operations and cumulative effect of a change in accounting
    principle |                                                                                                                                               | $                         | 556,045   |           |      | $ | 482,636 |           
|Add (deduct):                                                                                                                                                                                                                                              |                                                                                                                                               |                           |           |           |      |   |         |           
|                                                                                                                                                                                                                                                           | Income taxes                                                                                                                                  |                           |           | (8,986    | )    |   |         | (5,849     | )
|                                                                                                                                                                                                                                                           | Income allocated to minority interests for
    partially owned properties                                                                     |                           |           | (5,137    | )    |   |         | (6,612     | )
|                                                                                                                                                                                                                                                           | Income from investment in unconsolidated joint
    ventures (excluding gain on sale of $429 for the nine months
    ended September 30, 2002) |                           |           | 91,714    |      |   |         | 49,724     |  
|                                                                                                                                                                                                                                                           | Depreciation and amortization (real estate
    related)(including EOP Partnerships share of
    unconsolidated joint ventures)               |                           |           | 541,146   |      |   |         | 429,225    |  
|                                                                                                                                                                                                                                                           | Discontinued operations (excluding depreciation,
    amortization and net gains on sale)                                                      |                           |           | 11,588    |      |   |         | 13,244     |  
|                                                                                                                                                                                                                                                           | Put option settlement                                                                                                                         |                           |           |           |      |   |         | 2,655      |  
|                                                                                                                                                                                                                                                           | Preferred distributions                                                                                                                       |                           |           | (47,112   | )    |   |         | (40,011    | )
|                                                                                                                                                                                                                                                           |                                                                                                                                               |                           |           |           |      |  
|Funds from Operations                                                                                                                                                                                                                                      |                                                                                                                                               | $                         | 1,139,258 |           |      | $ | 925,012 |           
|                                                                                                                                                                                                                                                           |                                                                                                                                               |                           |           |           |      |  
|Cash flow provided by (used for):                                                                                                                                                                                                                          |                                                                                                                                               |                           |           |           |      |   |         |           
|                                                                                                                                                                                                                                                           | Operating Activities                                                                                                                          |                           | $         | 1,048,708 |      |   | $       | 802,236    |  
|                                                                                                                                                                                                                                                           | Investing Activities                                                                                                                          |                           | $         | 122,572   |      |   | $       | (1,238,886 | )
|                                                                                                                                                                                                                                                           | Financing Activities                                                                                                                          |                           | $         | (776,867  | )    |   | $       | 760,944    |  
|Ratio of earnings to combined fixed charges and
    preferred share distributions                                                                                                                                                                          |                                                                                                                                               |                           | 1.9       |           |      |   | 1.8     |           

The White Paper on FFO approved by NAREIT in
March 1995 defines FFO as net income, computed in accordance
with GAAP, excluding gains (or losses) from debt restructuring
and sales of properties (which EOP Partnership believes includes
impairments on properties held for sale), plus real estate
related depreciation and amortization and after adjustments for
unconsolidated partnerships and joint ventures. In November
1999, NAREIT issued a National Policy Bulletin effective
January 1, 2000 clarifying the definition of FFO to include
all operating results, both recurring and non-recurring, except
those defined as extraordinary under GAAP. We believe that FFO
is helpful to investors as a measure of the performance of a
real estate company because, along with cash flow from operating
activities, investing activities and financing activities, it
provides investors with an indication of the ability of a
company to incur and service debt, to make capital expenditures
and to fund other cash needs. We compute FFO in accordance with
standards established by NAREIT, which may not be comparable to
FFO reported by other real estate companies that do not define
the term in accordance with the current NAREIT definition or
that interpret the current NAREIT definition differently than
us. FFO does not represent cash generated from operating
activities in accordance with GAAP, nor does it represent cash
available to pay distributions and should not be considered as
an alternative to net income, determined in accordance with
GAAP, as an indication of our financial performance or to cash
flow from operating activities determined in accordance with
GAAP, as a measure of our liquidity, nor is it indicative of
funds available to fund our cash needs, including our ability to
make cash distributions.

46



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##### Table of Contents








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

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






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

Evaluation of Disclosure Controls and
Procedures

Within 90 days prior to the filing of this
Form 10-Q, Samuel Zell, the principal executive officer of
Equity Office, our general partner, and Marsha C. Williams,
the principal financial officer of Equity Office, evaluated the
effectiveness of the design and operation of our controls and
other procedures that are designed to ensure that information
required to be disclosed by us in the reports that we file or
submit under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported within the time periods
specified in the SECs rules and forms. As a result of this
evaluation, these executive officers have concluded that, as of
such date, the design and operation of our disclosure controls
and procedures were effective.

Changes in Internal Controls

Since the date of the evaluation of our
disclosure controls and procedures by Mr. Zell and
Ms. Williams described above, there have been no
significant changes in our internal controls or in other factors
that could significantly affect our disclosure controls and
procedures.




PART II. OTHER INFORMATION






|        |                                               
|------- | ----------------------------------------------
|ITEM 2. | Changes in Securities and Use of
    Proceeds.

On July 29, 2002, EOP Partnership issued
8,500,000 7.75% Series G Cumulative Redeemable Preferred
Units to Equity Office in exchange for Equity Offices
contribution of the proceeds of its issuance and sale of
8,500,000 7.75% Series G Cumulative Redeemable Preferred
Shares in an offering that closed July 29, 2002. On the
same date, substantially all of the net proceeds from the
issuance of the Series G Preferred Units, totaling
approximately $206.1 million were used to redeem the
Series A Preferred Units from Equity Office and, in turn,
Equity Office used the proceeds to redeem its 7,994,000
outstanding 8.98% Series A Cumulative Redeemable Preferred
Shares.

The Series G Preferred Units rank equal to
our other outstanding series of preferred units and prior to our
Units as to distributions and amounts payable upon liquidation,
dissolution or winding up. The liquidation preference of the
Series G Preferred Units is $25.00 per unit, plus any
accumulated but unpaid distributions. In connection with any
redemption by Equity Office of any or all of the Equity Office
Series G Preferred Shares, we would be required to provide
cash to Equity Office for such purpose equal to the redemption
price of the Series G Preferred Shares to be redeemed and
one Series G Preferred Unit would be canceled with respect
to each Series G Preferred Share so redeemed.






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

(a) Exhibits

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

(b) Reports on Form 8-K

Two reports on Form 8-K were filed during
the quarter ended September 30, 2002, as follows:

|                |  |                                          
|--------------- |  | -----------------------------------------
|Date of Event   |  | Items Reported/Financial Statements Filed
|                |  |                                          
|July 8, 2002    |  | Item 5, Other Events                     
|August 14, 2002 |  | Item 9, Regulation FD Disclosure         

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##### Table of Contents






SIGNATURES

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



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



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

| |                    
| | -------------------
| | Its general partner

Date: November 14, 2002

| |     |                
| | --- | ---------------
| | By: | /s/ SAMUEL ZELL

| |                                          
| | -----------------------------------------
| |                                          
| | Samuel Zell                              
| | President and Chief Executive
    Officer

Date: November 14, 2002

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

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

48



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##### Table of Contents



CERTIFICATIONS

I, Samuel Zell, certify that:

1.     I have reviewed
this quarterly report on Form 10-Q of EOP Operating Limited
Partnership;

2.     Based on my
knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the
circumstances under which such statements were made, not
misleading with respect to the period covered by this quarterly
report;

3.     Based on my
knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in
all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this quarterly report;

4.     The
registrants other certifying officers and I are
responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-14 and
15d-14) for the registrant and we have:



| |                                                                                                                                                                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) designed such disclosure controls and
    procedures to ensure that material information relating to the
    registrant, including its consolidated subsidiaries, is made
    known to us by others within those entities, particularly during
    the period in which this quarterly report is being prepared;
|
| | b) evaluated the effectiveness of the
    registrants disclosure controls and procedures as of a
    date within 90 days prior to the filing date of this
    quarterly report (the Evaluation Date); and                                                                                                      
|
| | c) presented in this quarterly report our
    conclusions about the effectiveness of the disclosure controls
    and procedures based on our evaluation as of the Evaluation Date;                                                                                                                                

5.     The
registrants other certifying officers and I have
disclosed, based on our most recent evaluation, to the
registrants auditors and the audit committee of
registrants board of directors (or persons performing the
equivalent function):



| |                                                                                                                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) all significant deficiencies in the
    design or operation of internal controls which could adversely
    affect the registrants ability to record, process,
    summarize and report financial data and have identified for the
    registrants auditors any material weaknesses in internal
    controls; and
|
| | b) any fraud, whether or not material, that
    involves management or other employees who have a significant
    role in the registrants internal controls; and                                                                                                                                                    

6.     The
registrants other certifying officers and I have indicated
in this quarterly report whether or not there were significant
changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of
our most recent evaluation, including any corrective actions
with regard to significant deficiencies and material weaknesses.

Date: November 14, 2002

| |     |                
| | --- | ---------------
| | By: | /s/ SAMUEL ZELL

| |                                                           
| | ----------------------------------------------------------
| |                                                           
| | Samuel Zell                                               
| | President and Chief Executive Officer
    of              
| | Equity Office Properties Trust, the general
    partner of
| | of EOP Operating Limited Partnership                      

49



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##### Table of Contents



I, Marsha C. Williams, certify that:

1.     I have reviewed
this quarterly report on Form 10-Q of EOP Operating Limited
Partnership;

2.     Based on my
knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the
circumstances under which such statements were made, not
misleading with respect to the period covered by this quarterly
report;

3.     Based on my
knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in
all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this quarterly report;

4.     The
registrants other certifying officers and I are
responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-14 and
15d-14) for the registrant and we have:



| |                                                                                                                                                                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) designed such disclosure controls and
    procedures to ensure that material information relating to the
    registrant, including its consolidated subsidiaries, is made
    known to us by others within those entities, particularly during
    the period in which this quarterly report is being prepared;
|
| | b) evaluated the effectiveness of the
    registrants disclosure controls and procedures as of a
    date within 90 days prior to the filing date of this
    quarterly report (the Evaluation Date); and                                                                                                      
|
| | c) presented in this quarterly report our
    conclusions about the effectiveness of the disclosure controls
    and procedures based on our evaluation as of the Evaluation Date;                                                                                                                                

5.     The
registrants other certifying officers and I have
disclosed, based on our most recent evaluation, to the
registrants auditors and the audit committee of
registrants board of directors (or persons performing the
equivalent function):



| |                                                                                                                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) all significant deficiencies in the
    design or operation of internal controls which could adversely
    affect the registrants ability to record, process,
    summarize and report financial data and have identified for the
    registrants auditors any material weaknesses in internal
    controls; and
|
| | b) any fraud, whether or not material, that
    involves management or other employees who have a significant
    role in the registrants internal controls; and                                                                                                                                                    

6.     The
registrants other certifying officers and I have indicated
in this quarterly report whether or not there were significant
changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of
our most recent evaluation, including any corrective actions
with regard to significant deficiencies and material weaknesses.

Date: November 14, 2002

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

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

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##### Table of Contents






EXHIBIT INDEX

|            |  |                                                                                                                                                                                                                                                                                                                                                                                        |  |          |  | 
|----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------- |  | 
|Exhibit No. |  | Description                                                                                                                                                                                                                                                                                                                                                                            |  | Page No. | 
|            |  |                                                                                                                                                                                                                                                                                                                                                                                        |  |          | 
|4.1         |  | First Amendment to Third Amended and Restated
    Agreement of Limited Partnership of EOP Operating Limited
    Partnership                                                                                                                                                                                                                                                            |  |          |  | 
|10.1       |  | Assumption and Amendment to Change in Control
    Agreement entered into effective as of May 22, 2002 by and
    between Equity Office Properties Management Corp., Equity
    Office, EOP Partnership and Richard D. Kincaid (incorporated
    herein by reference to Exhibit 10.1 to Equity Offices
    Quarterly Report on Form 10-Q for the quarter ended
    September 30, 2002) |  |          |  | 
|10.2       |  | Assumption and Amendment to Change in Control
    Agreement entered into effective as of May 22, 2002 by and
    between Equity Office Properties Management Corp., Equity
    Office, EOP Partnership and Peter H. Adams (incorporated herein
    by reference to Exhibit 10.2 to Equity Offices
    Quarterly Report on Form 10-Q for the quarter ended
    September 30, 2002)     |  |          |  | 
|10.3       |  | Assumption and Amendment to Change in Control
    Agreement entered into effective as of May 22, 2002 by and
    between Equity Office Properties Management Corp., Equity
    Office, EOP Partnership and David A. Helfand (incorporated
    herein by reference to Exhibit 10.3 to Equity Offices
    Quarterly Report on Form 10-Q for the quarter ended
    September 30, 2002)   |  |          |  | 
|10.4       |  | Assumption and Amendment to Change in Control
    Agreement entered into effective as of May 22, 2002 by and
    between Equity Office Properties Management Corp., Equity
    Office, EOP Partnership and Stanley M. Stevens (incorporated
    herein by reference to Exhibit 10.4 to Equity Offices
    Quarterly Report on Form 10-Q for the quarter ended
    September 30, 2002) |  |          |  | 
|12.1        |  | Statement of Earnings to Combined Fixed Charges
    and Preferred Distributions                                                                                                                                                                                                                                                                                                        |  |          |  | 



---



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

51