##### Table of Contents









UNITED STATES

SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549




---

FORM 10-Q

|           |  |                                                                                                 
|---------- |  | ------------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                                 
|þ          |  | QUARTERLY REPORT PURSUANT TO SECTION 13
    OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934     
|           |  | For the quarterly period ended September 30,
    2004                                           
|           |  | or                                                                                              
|o          |  | TRANSITION REPORT PURSUANT TO SECTION 13
    OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934
|           |  | For the transition period
    from          to                                                  

Commission File Number: 1-13625

EOP OPERATING LIMITED PARTNERSHIP

(Exact name of registrant as specified in its
charter)


|                                                                                                          |  |                                         
|--------------------------------------------------------------------------------------------------------- |  | ----------------------------------------
|Delaware                                                                                                  |  | 36-4156801                              
|(State or other jurisdiction of
    incorporation or organization)                                        |  | (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     þ     No     o

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

On October 29, 2004, 450,849,770 Units were
outstanding.



---






---

TABLE OF CONTENTS



|                                                                                         |  |  |  |  |  |  |  | 
|---------------------------------------------------------------------------------------- |  |  |  |  |  |  |  | 
|PART I -- FINANCIAL INFORMATION                                                         
|EOP OPERATING LIMITED PARTNERSHIP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
|PART II -- OTHER INFORMATION                                                            
|SIGNATURES                                                                              
|EXHIBIT INDEX                                                                           
|Schedule of Medium-Term InterNotes                                                      
|Revolving Credit Agreement                                                              
|Certifications                                                                          
|Section 1350 Certifications                                                             



---



##### 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)                                                    |                                                                                                                                       | 2004                                                                                                                                                |                                                                                                                                               |                                                                                                         | 2003         |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                               |                                                                                                         |              |           
|                                                                                                   |                                                                                                                                       | (Unaudited)                                                                                                                                         |                                                                                                                                               |                                                                                                         |             
|Assets:                                                                                            |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                               |                                                                                                         |              |            |            |           
|                                                                                                   | Investments in real estate                                                                                                            |                                                                                                                                                     | $                                                                                                                                             | 24,961,031                                                                                              |              |            | $          | 23,985,839 |           
|                                                                                                   | Developments in process                                                                                                               |                                                                                                                                                     |                                                                                                                                               | 68,352                                                                                                  |              |            |            | 75,232     |           
|                                                                                                   | Land available for development                                                                                                        |                                                                                                                                                     |                                                                                                                                               | 256,560                                                                                                 |              |            |            | 251,151    |           
|                                                                                                   | Accumulated depreciation                                                                                                              |                                                                                                                                                     |                                                                                                                                               | (3,063,673                                                                                              | )            |            |            | (2,578,082 | )         
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                               |                                                                                                         |              |           
|                                                                                                   |                                                                                                                                       | Investments in real estate, net of accumulated
    depreciation                                                                                     |                                                                                                                                               |                                                                                                         | 22,222,270   |            |            |            | 21,734,140 |           
|                                                                                                   | Cash and cash equivalents                                                                                                             |                                                                                                                                                     |                                                                                                                                               | 122,760                                                                                                 |              |            |            | 69,398     |           
|                                                                                                   | Tenant and other receivables (net of allowance
    for doubtful accounts of $9,983 and $6,490, respectively)                          |                                                                                                                                                     |                                                                                                                                               | 67,077                                                                                                  |              |            |            | 79,880     |           
|                                                                                                   | Deferred rent receivable                                                                                                              |                                                                                                                                                     |                                                                                                                                               | 462,810                                                                                                 |              |            |            | 379,329    |           
|                                                                                                   | Escrow deposits and restricted cash                                                                                                   |                                                                                                                                                     |                                                                                                                                               | 75,543                                                                                                  |              |            |            | 75,186     |           
|                                                                                                   | Investments in unconsolidated joint ventures                                                                                          |                                                                                                                                                     |                                                                                                                                               | 1,178,965                                                                                               |              |            |            | 1,127,232  |           
|                                                                                                   | Deferred financing costs (net of accumulated
    amortization of $61,335 and $48,176, respectively)                                   |                                                                                                                                                     |                                                                                                                                               | 63,463                                                                                                  |              |            |            | 64,337     |           
|                                                                                                   | Deferred leasing costs and other related
    intangibles (net of accumulated amortization of $201,531 and
    $157,445, respectively) |                                                                                                                                                     |                                                                                                                                               | 412,352                                                                                                 |              |            |            | 314,568    |           
|                                                                                                   | Prepaid expenses and other assets (net of
    discounts of $2,382 and $66,200, respectively)                                          |                                                                                                                                                     |                                                                                                                                               | 171,252                                                                                                 |              |            |            | 344,940    |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                               |                                                                                                         |              |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                               | Total Assets                                                                                            |              | $          | 24,776,492 |            |            | $          | 24,189,010 | 
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                               |                                                                                                         |              |           
|Liabilities, Minority Interests, Mandatorily
    Redeemable Preferred Units and Partners Capital: |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                               |                                                                                                        
|                                                                                                   | Liabilities:                                                                                                                          |                                                                                                                                                     |                                                                                                                                               |                                                                                                         |              |            |            |            |           
|                                                                                                   |                                                                                                                                       | Mortgage debt (including a net (discount) of
    $(13,820) and $(13,663), respectively)                                                             |                                                                                                                                               | $                                                                                                       | 2,619,387    |            |            | $          | 2,315,889  |           
|                                                                                                   |                                                                                                                                       | Unsecured notes (including a net
    (discount) premium of $(34,661) and $12,412, respectively)                                                     |                                                                                                                                               |                                                                                                         | 8,968,751    |            |            |            | 8,828,912  |           
|                                                                                                   |                                                                                                                                       | Lines of credit                                                                                                                                     |                                                                                                                                               |                                                                                                         | 1,086,400    |            |            |            | 334,000    |           
|                                                                                                   |                                                                                                                                       | Accounts payable and accrued expenses                                                                                                               |                                                                                                                                               |                                                                                                         | 458,926      |            |            |            | 573,069    |           
|                                                                                                   |                                                                                                                                       | Distribution payable                                                                                                                                |                                                                                                                                               |                                                                                                         | 230,828      |            |            |            | 3,899      |           
|                                                                                                   |                                                                                                                                       | Other liabilities (including a net
    (discount) of $(29,271) and $0, respectively)                                                                |                                                                                                                                               |                                                                                                         | 455,226      |            |            |            | 398,273    |           
|                                                                                                   |                                                                                                                                       | Commitments and contingencies                                                                                                                       |                                                                                                                                               |                                                                                                         |             |            |            |            |           |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                               |                                                                                                         |              |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                               | Total Liabilities                                                                                       |              |            | 13,819,518 |            |            |            | 12,454,042 | 
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                               |                                                                                                         |              |           
|                                                                                                   | Minority interests  partially owned
    properties                                                                                   |                                                                                                                                                     |                                                                                                                                               | 183,548                                                                                                 |              |            |            | 183,863    |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                               |                                                                                                         |              |           
|                                                                                                   | Mandatorily Redeemable Preferred Units:                                                                                               |                                                                                                                                                     |                                                                                                                                               |                                                                                                         |              |            |            |            |           
|                                                                                                   |                                                                                                                                       | 5.25% Series B Convertible, Cumulative
    Redeemable Preferred Units, liquidation preference
    $50.00 per unit, 5,990,000 issued and outstanding |                                                                                                                                               |                                                                                                         | 299,500      |            |            |            | 299,500    |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                               |                                                                                                         |              |           
|                                                                                                   | Partners Capital:                                                                                                                    |                                                                                                                                                     |                                                                                                                                               |                                                                                                         |              |            |            |            |           
|                                                                                                   |                                                                                                                                       | Preferred Units, 100,000,000 authorized:                                                                                                            |                                                                                                                                               |                                                                                                         |              |            |            |            |            |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     | 8.625% Series C Cumulative Redeemable
    Preferred Units, liquidation preference $25.00 per unit, 0
    and 4,562,900 issued and outstanding |                                                                                                         |              |           |            |            |            | 114,073    |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     | 7.75% Series G Cumulative Redeemable
    Preferred Units, liquidation preference $25.00 per unit,
    8,500,000 issued and outstanding        |                                                                                                         |              | 212,500    |            |            |            | 212,500    |           
|                                                                                                   |                                                                                                                                       | Other Partners Capital:                                                                                                                            |                                                                                                                                               |                                                                                                         |              |            |            |            |            |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     | General Partners Capital                                                                                                                      |                                                                                                         |              | 78,280     |            |            |            | 85,086     |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     | Limited Partners Capital                                                                                                                      |                                                                                                         |              | 10,251,085 |            |            |            | 10,855,488 |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     | Deferred compensation                                                                                                                         |                                                                                                         |              | (3,247     | )          |            |            | (5,889     | )         
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     | Accumulated other comprehensive loss (net of
    accumulated amortization of $3,430 and $(73), respectively)                                  |                                                                                                         |              | (64,692    | )          |            |            | (9,653     | )         
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                               |                                                                                                         |              |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                               | Total Partners Capital                                                                                 |              |            | 10,473,926 |            |            |            | 11,251,605 | 
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                               |                                                                                                         |              |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                               | Total Liabilities, Minority Interests,
    Mandatorily Redeemable Preferred Units and Partners Capital |              | $          | 24,776,492 |            |            | $          | 24,189,010 | 
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                               |                                                                                                         |              |           

See accompanying notes.

2



---



##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF
OPERATIONS

(Unaudited)


|                                                                                                                                                                      |                                                                                  |                                                                      |                              |             |                           |          |         |             |          |          |         |             |           |          |         |             |           |          |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------- | -------------------------------------------------------------------- | ---------------------------- | ----------- | ------------------------- | -------- | ------- | ----------- | -------- | -------- | ------- | ----------- | --------- | -------- | ------- | ----------- | --------- | -------- | -
|                                                                                                                                                                      |                                                                                  |                                                                      |                              |            
|                                                                                                                                                                      |                                                                                  | For the three months ended                                           |                              |             | For the nine months ended |         
|                                                                                                                                                                      |                                                                                  | September 30,                                                        |                              |             | September 30,             |         
|                                                                                                                                                                      |                                                                                  |                                                                      |                              |             |                           |         
|(Dollars in thousands, except per unit amounts)                                                                                                                       |                                                                                  | 2004                                                                 |                              |             | 2003                      |          |         | 2004        |          |          | 2003    |            
|                                                                                                                                                                      |                                                                                  |                                                                      |                              |             |                           |          |         |             |          |          |         |            
|Revenues:                                                                                                                                                             |                                                                                  |                                                                      |                              |             |                           |          |         |             |          |          |         |             |           |          |         |            
|                                                                                                                                                                      | Rental                                                                           |                                                                      | $                            | 634,008     |                           |          | $       | 621,467     |          |          | $       | 1,895,218   |           |          | $       | 1,868,783   |          
|                                                                                                                                                                      | Tenant reimbursements                                                            |                                                                      |                              | 108,747     |                           |          |         | 104,841     |          |          |         | 319,018     |           |          |         | 312,597     |          
|                                                                                                                                                                      | Parking                                                                          |                                                                      |                              | 29,316      |                           |          |         | 27,866      |          |          |         | 87,451      |           |          |         | 82,393      |          
|                                                                                                                                                                      | Other                                                                            |                                                                      |                              | 15,427      |                           |          |         | 21,917      |          |          |         | 54,855      |           |          |         | 55,529      |          
|                                                                                                                                                                      | Fee income                                                                       |                                                                      |                              | 3,220       |                           |          |         | 1,969       |          |          |         | 10,129      |           |          |         | 10,431      |          
|                                                                                                                                                                      |                                                                                  |                                                                      |                              |             |                           |          |         |             |          |          |         |            
|                                                                                                                                                                      |                                                                                  | Total revenues                                                       |                              |             | 790,718                   |          |         |             | 778,060  |          |         |             | 2,366,671 |          |         |             | 2,329,733 |         
|                                                                                                                                                                      |                                                                                  |                                                                      |                              |             |                           |          |         |             |          |          |         |            
|Expenses:                                                                                                                                                             |                                                                                  |                                                                      |                              |             |                           |          |         |             |          |          |         |             |           |          |         |            
|                                                                                                                                                                      | Depreciation                                                                     |                                                                      |                              | 170,725     |                           |          |         | 157,388     |          |          |         | 507,736     |           |          |         | 464,406     |          
|                                                                                                                                                                      | Amortization                                                                     |                                                                      |                              | 19,137      |                           |          |         | 15,488      |          |          |         | 55,232      |           |          |         | 44,410      |          
|                                                                                                                                                                      | Real estate taxes                                                                |                                                                      |                              | 94,275      |                           |          |         | 83,670      |          |          |         | 277,923     |           |          |         | 260,898     |          
|                                                                                                                                                                      | Insurance                                                                        |                                                                      |                              | 8,853       |                           |          |         | 7,651       |          |          |         | 27,417      |           |          |         | 19,654      |          
|                                                                                                                                                                      | Repairs and maintenance                                                          |                                                                      |                              | 87,255      |                           |          |         | 78,717      |          |          |         | 249,773     |           |          |         | 235,036     |          
|                                                                                                                                                                      | Property operating                                                               |                                                                      |                              | 111,482     |                           |          |         | 107,909     |          |          |         | 319,247     |           |          |         | 305,279     |          
|                                                                                                                                                                      | Ground rent                                                                      |                                                                      |                              | 5,531       |                           |          |         | 5,534       |          |          |         | 15,927      |           |          |         | 15,000      |          
|                                                                                                                                                                      | Corporate general and administrative                                             |                                                                      |                              | 13,190      |                           |          |         | 13,515      |          |          |         | 38,208      |           |          |         | 44,672      |          
|                                                                                                                                                                      | Impairment                                                                       |                                                                      |                              | 229,170     |                           |          |         |            |          |          |         | 229,170     |           |          |         |            |          
|                                                                                                                                                                      |                                                                                  |                                                                      |                              |             |                           |          |         |             |          |          |         |            
|                                                                                                                                                                      |                                                                                  | Total expenses                                                       |                              |             | 739,618                   |          |         |             | 469,872  |          |         |             | 1,720,633 |          |         |             | 1,389,355 |         
|                                                                                                                                                                      |                                                                                  |                                                                      |                              |             |                           |          |         |             |          |          |         |            
|                                                                                                                                                                      |                                                                                  | Operating income                                                     |                              |             | 51,100                    |          |         |             | 308,188  |          |         |             | 646,038   |          |         |             | 940,378   |         
|                                                                                                                                                                      |                                                                                  |                                                                      |                              |             |                           |          |         |             |          |          |         |            
|Other income (expense):                                                                                                                                               |                                                                                  |                                                                      |                              |             |                           |          |         |             |          |          |         |             |           |          |         |            
|                                                                                                                                                                      | Interest and dividend income                                                     |                                                                      |                              | 1,811       |                           |          |         | 3,380       |          |          |         | 5,540       |           |          |         | 10,273      |          
|                                                                                                                                                                      | Realized gain on settlement of derivatives and
    sale of marketable securities |                                                                      |                              | 4,737       |                           |          |         | 307         |          |          |         | 28,753      |           |          |         | 8,450       |          
|                                                                                                                                                                      | Interest:                                                                        |                                                                      |                              |             |                           |          |         |             |          |          |         |             |           |          |         |             |          
|                                                                                                                                                                      |                                                                                  | Expense incurred                                                     |                              |             | (207,710                  | )        |         |             | (206,253 | )        |         |             | (622,025  | )        |         |             | (617,864  | )       
|                                                                                                                                                                      |                                                                                  | Amortization of deferred financing costs and
    prepayment expenses |                              |             | (2,751                    | )        |         |             | (1,652   | )        |         |             | (7,099    | )        |         |             | (5,435    | )       
|                                                                                                                                                                      |                                                                                  |                                                                      |                              |             |                           |          |         |             |          |          |         |            
|                                                                                                                                                                      |                                                                                  |                                                                      | Total other income (expense) |             |                           | (203,913 | )       |             |          | (204,218 | )       |             |           | (594,831 | )       |             |           | (604,576 | )
|                                                                                                                                                                      |                                                                                  |                                                                      |                              |             |                           |          |         |             |          |          |         |            
|(Loss) income before income taxes, allocation to
    minority interests, income from investments in unconsolidated
    joint ventures and gain on sale of real estate |                                                                                  |                                                                      | (152,813                     | )           |                           |          | 103,970 |             |          |          | 51,207  |             |           |          | 335,802 |            
|Income taxes                                                                                                                                                          |                                                                                  |                                                                      | (1,135                       | )           |                           |          | 289     |             |          |          | (2,227  | )           |           |          | (2,281  | )          
|Minority interests  partially owned
    properties                                                                                                                   |                                                                                  |                                                                      | (2,219                       | )           |                           |          | (1,816  | )           |          |          | (7,126  | )           |           |          | (6,163  | )          
|Income from investments in unconsolidated joint
    ventures                                                                                                          |                                                                                  |                                                                      | 15,145                       |             |                           |          | 21,208  |             |          |          | 45,602  |             |           |          | 62,918  |            
|Gain on sale of real estate                                                                                                                                           |                                                                                  |                                                                      | 216                          |             |                           |          |        |             |          |          | 216     |             |           |          |        |            
|                                                                                                                                                                      |                                                                                  |                                                                      |                              |             |                           |          |         |             |          |          |         |            
|(Loss) income from continuing operations                                                                                                                              |                                                                                  |                                                                      | (140,806                     | )           |                           |          | 123,651 |             |          |          | 87,672  |             |           |          | 390,276 |            
|Discontinued operations (including net gain
    (loss) on sales of real estate of $3,016, ($6,326), $7,138, and
    $45,399, respectively)                            |                                                                                  |                                                                      | 4,899                        |             |                           |          | 10,672  |             |          |          | 17,724  |             |           |          | 102,322 |            
|                                                                                                                                                                      |                                                                                  |                                                                      |                              |             |                           |          |         |             |          |          |         |            
|(Loss) income before cumulative effect of a
    change in accounting principle                                                                                        |                                                                                  |                                                                      | (135,907                     | )           |                           |          | 134,323 |             |          |          | 105,396 |             |           |          | 492,598 |            
|Cumulative effect of a change in accounting
    principle                                                                                                             |                                                                                  |                                                                      |                             |             |                           |          |        |             |          |          | (33,697 | )           |           |          |        |            
|                                                                                                                                                                      |                                                                                  |                                                                      |                              |             |                           |          |         |             |          |          |         |            
|Net (loss) income                                                                                                                                                     |                                                                                  |                                                                      | (135,907                     | )           |                           |          | 134,323 |             |          |          | 71,699  |             |           |          | 492,598 |            
|Preferred distributions                                                                                                                                               |                                                                                  |                                                                      | (8,701                       | )           |                           |          | (10,508 | )           |          |          | (30,393 | )           |           |          | (41,364 | )          
|                                                                                                                                                                      |                                                                                  |                                                                      |                              |             |                           |          |         |             |          |          |         |            
|Net (loss) income available to unitholders                                                                                                                            |                                                                                  | $                                                                    | (144,608                     | )           |                           | $        | 123,815 |             |          | $        | 41,306  |             |           | $        | 451,234 |            
|                                                                                                                                                                      |                                                                                  |                                                                      |                              |             |                           |          |         |             |          |          |         |            
|(Loss) earnings per unit 
    basic:                                                                                                                                 |                                                                                  |                                                                      |                              |             |                           |          |         |             |          |          |         |             |           |          |         |            
|                                                                                                                                                                      | (Loss) income from continuing operations per unit                                |                                                                      | $                            | (0.33       | )                         |          | $       | 0.25        |          |          | $       | 0.13        |           |          | $       | 0.77        |          
|                                                                                                                                                                      |                                                                                  |                                                                      |                              |             |                           |          |         |             |          |          |         |            
|                                                                                                                                                                      | Net (loss) income available to unitholders per
    unit                          |                                                                      | $                            | (0.32       | )                         |          | $       | 0.28        |          |          | $       | 0.09        |           |          | $       | 1.00        |          
|                                                                                                                                                                      |                                                                                  |                                                                      |                              |             |                           |          |         |             |          |          |         |            
|                                                                                                                                                                      | Weighted average Units outstanding                                               |                                                                      |                              | 448,766,905 |                           |          |         | 446,750,227 |          |          |         | 448,900,112 |           |          |         | 451,731,474 |          
|                                                                                                                                                                      |                                                                                  |                                                                      |                              |             |                           |          |         |             |          |          |         |            
|(Loss) earnings per unit 
    diluted:                                                                                                                               |                                                                                  |                                                                      |                              |             |                           |          |         |             |          |          |         |             |           |          |         |            
|                                                                                                                                                                      | (Loss) income from continuing operations per unit                                |                                                                      | $                            | (0.33       | )                         |          | $       | 0.25        |          |          | $       | 0.13        |           |          | $       | 0.77        |          
|                                                                                                                                                                      |                                                                                  |                                                                      |                              |             |                           |          |         |             |          |          |         |            
|                                                                                                                                                                      | Net (loss) income available to unitholders per
    unit                          |                                                                      | $                            | (0.32       | )                         |          | $       | 0.28        |          |          | $       | 0.09        |           |          | $       | 1.00        |          
|                                                                                                                                                                      |                                                                                  |                                                                      |                              |             |                           |          |         |             |          |          |         |            
|                                                                                                                                                                      | Weighted average Units outstanding and dilutive
    potential units              |                                                                      |                              | 448,766,905 |                           |          |         | 448,805,388 |          |          |         | 450,801,177 |           |          |         | 453,451,913 |          
|                                                                                                                                                                      |                                                                                  |                                                                      |                              |             |                           |          |         |             |          |          |         |            
|Distributions declared per Unit
    outstanding                                                                                                                       |                                                                                  | $                                                                    | 0.50                         |             |                           | $        | 0.50    |             |          | $        | 1.50    |             |           | $        | 1.50    |            
|                                                                                                                                                                      |                                                                                  |                                                                      |                              |             |                           |          |         |             |          |          |         |            

See accompanying notes.

3



---



##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF NET COMPREHENSIVE
INCOME

(Unaudited)


|                                   |                                                                                                 |                    |          |       |                   |   |         |        |   |   |        |         |   |   |         |         |  
|---------------------------------- | ----------------------------------------------------------------------------------------------- | ------------------ | -------- | ----- | ----------------- | - | ------- | ------ | - | - | ------ | ------- | - | - | ------- | ------- | -
|                                   |                                                                                                 |                    |          |      
|                                   |                                                                                                 | For the            |          |       | For the           |  
|                                   |                                                                                                 | three months ended |          |       | nine months ended |  
|                                   |                                                                                                 | September 30,      |          |       | September 30,     |  
|                                   |                                                                                                 |                    |          |       |                   |  
|(Dollars in thousands)             |                                                                                                 | 2004               |          |       | 2003              |   |         | 2004   |   |   | 2003   |        
|                                   |                                                                                                 |                    |          |       |                   |   |         |        |   |   |        |        
|Net (loss) income                  |                                                                                                 | $                  | (135,907 | )     |                   | $ | 134,323 |        |   | $ | 71,699 |         |   | $ | 492,598 |        
|Other comprehensive income (loss): |                                                                                                 |                    |          |       |                   |   |         |        |   |   |        |         |   |   |         |        
|                                   | Unrealized holding gains (losses) on forward
    starting interest rate swaps                   |                    |          |      |                   |   |         | 41,747 |   |   |        | (22,569 | ) |   |         | (14,156 | )
|                                   | Reversal of unrealized holding loss on settlement
    of forward starting interest rate swap    |                    |          |      |                   |   |         |       |   |   |        | 33,017  |   |   |         | 5,942   |  
|                                   | (Payments) proceeds from settlement of forward
    starting interest rate swaps                 |                    |          |      |                   |   |         |       |   |   |        | (68,918 | ) |   |         | 768     |  
|                                   | Amortization of payments/(proceeds) from
    settlement of forward starting interest rate swaps |                    |          | 1,704 |                   |   |         | (19    | ) |   |        | 3,503   |   |   |         | (54     | )
|                                   | Unrealized holding (losses) gains from
    investments arising during the period                |                    |          | (18   | )                 |   |         | 680    |   |   |        | (42     | ) |   |         | 892     |  
|                                   | Reclassification adjustment for realized gains
    included in net (loss) income                |                    |          | (31   | )                 |   |         | (307   | ) |   |        | (31     | ) |   |         | (307    | )
|                                   |                                                                                                 |                    |          |       |                   |   |         |        |   |   |        |        
|Net comprehensive (loss) income    |                                                                                                 | $                  | (134,252 | )     |                   | $ | 176,424 |        |   | $ | 16,659 |         |   | $ | 485,683 |        
|                                   |                                                                                                 |                    |          |       |                   |   |         |        |   |   |        |        

See accompanying notes.

4



---



##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CASH
FLOWS

(Unaudited)


|                       |                                                                                              |                                                                                                                                              |                                                         |                                           |                     |         |         |            |          |         |         |            |          |         |         |            |          |         |         | 
|---------------------- | -------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------- | ----------------------------------------- | ------------------- | ------- | ------- | ---------- | -------- | ------- | ------- | ---------- | -------- | ------- | ------- | ---------- | -------- | ------- | ------- | 
|                       |                                                                                              |                                                                                                                                              |                                                         |                                          
|                       |                                                                                              | For the three months                                                                                                                         |                                                         |                                           | For the nine months |        
|                       |                                                                                              | ended September 30,                                                                                                                          |                                                         |                                           | ended September 30, |        
|                       |                                                                                              |                                                                                                                                              |                                                         |                                           |                     |        
|(Dollars in thousands) |                                                                                              | 2004                                                                                                                                         |                                                         |                                           | 2003                |         |         | 2004       |          |         | 2003    |           
|                       |                                                                                              |                                                                                                                                              |                                                         |                                           |                     |         |         |            |          |         |         |           
|Operating Activities:  |                                                                                              |                                                                                                                                              |                                                         |                                           |                     |         |         |            |          |         |         |            |          |         |         |           
|                       | Net (loss) income                                                                            |                                                                                                                                              | $                                                       | (135,907                                  | )                   |         | $       | 134,323    |          |         | $       | 71,699     |          |         | $       | 492,598    |         
|                       | Adjustments to reconcile net (loss) income to net
    cash provided by operating activities: |                                                                                                                                              |                                                         |                                           |                     |         |         |            |          |         |         |            |          |         |         |            |         
|                       |                                                                                              | Expense (revenue) recognized related to
    acquired lease obligations, net                                                                  |                                                         |                                           | 506                 |         |         |            | 105      |         |         |            | 1,263    |         |         |            | 105      |        
|                       |                                                                                              | Amortization of discounts included in interest
    and dividend income                                                                       |                                                         |                                           | (81                 | )       |         |            | (89      | )       |         |            | (259     | )       |         |            | (268     | )      
|                       |                                                                                              | Depreciation and amortization (including
    discontinued operations)                                                                        |                                                         |                                           | 193,844             |         |         |            | 180,962  |         |         |            | 576,901  |         |         |            | 535,459  |        
|                       |                                                                                              | Ineffective portion of swap settlement payment
    included in interest expense                                                              |                                                         |                                           |                    |         |         |            |         |         |         |            | 212      |         |         |            |         |        
|                       |                                                                                              | Amortization of (premiums) discounts on
    unsecured notes and settled interest rate protection agreements
    included in interest expense |                                                         |                                           | (140                | )       |         |            | (4,600   | )       |         |            | (3,576   | )       |         |            | (14,898  | )      
|                       |                                                                                              | Compensation expense related to restricted shares
    and stock options issued to employees by Equity Office                                 |                                                         |                                           | 3,840               |         |         |            | 3,404    |         |         |            | 14,085   |         |         |            | 12,840   |        
|                       |                                                                                              | Income from investments in unconsolidated joint
    ventures                                                                                 |                                                         |                                           | (15,145             | )       |         |            | (21,208  | )       |         |            | (45,602  | )       |         |            | (62,918  | )      
|                       |                                                                                              | Net distributions from unconsolidated
    joint ventures                                                                                     |                                                         |                                           | 24,689              |         |         |            | 22,942   |         |         |            | 53,695   |         |         |            | 62,567   |        
|                       |                                                                                              | Net (gain) loss on sales of real estate
    (including discontinued operations)                                                              |                                                         |                                           | (3,232              | )       |         |            | 6,326    |         |         |            | (7,354   | )       |         |            | (45,399  | )      
|                       |                                                                                              | Gain on sale of investment in CT Convertible
    Trust I preferred shares                                                                    |                                                         |                                           | (2,302              | )       |         |            |         |         |         |            | (2,302   | )       |         |            |         |        
|                       |                                                                                              | Impairment                                                                                                                                   |                                                         |                                           | 229,170             |         |         |            |         |         |         |            | 229,170  |         |         |            |         |        
|                       |                                                                                              | Cumulative effect of a change in
    accounting principle                                                                                    |                                                         |                                           |                    |         |         |            |         |         |         |            | 33,697   |         |         |            |         |        
|                       |                                                                                              | Provision for doubtful accounts                                                                                                              |                                                         |                                           | 2,608               |         |         |            | (356     | )       |         |            | 3,347    |         |         |            | 11,082   |        
|                       |                                                                                              | Income allocated to minority interests                                                                                                       |                                                         |                                           | 2,219               |         |         |            | 1,821    |         |         |            | 7,346    |         |         |            | 6,188    |        
|                       |                                                                                              | Changes in assets and liabilities:                                                                                                           |                                                         |                                           |                     |         |         |            |          |         |         |            |          |         |         |            |          |        
|                       |                                                                                              |                                                                                                                                              | Decrease (increase) in rents receivables                |                                           |                     | 5,634   |         |            |          | 836     |         |            |          | 16,714  |         |            |          | (7,503  | )      
|                       |                                                                                              |                                                                                                                                              | (Increase) in deferred rent receivables                 |                                           |                     | (18,514 | )       |            |          | (26,243 | )       |            |          | (69,420 | )       |            |          | (55,855 | )      
|                       |                                                                                              |                                                                                                                                              | Decrease in prepaid expenses and other assets           |                                           |                     | 21,655  |         |            |          | 34,629  |         |            |          | 71,568  |         |            |          | 42,310  |        
|                       |                                                                                              |                                                                                                                                              | (Decrease) in accounts payable and accrued
    expenses |                                           |                     | (9,480  | )       |            |          | (33,294 | )       |            |          | (67,395 | )       |            |          | (40,064 | )      
|                       |                                                                                              |                                                                                                                                              | Increase (decrease) in other liabilities                |                                           |                     | 1,042   |         |            |          | 9,869   |         |            |          | (18,972 | )       |            |          | (6,339  | )      
|                       |                                                                                              |                                                                                                                                              |                                                         |                                           |                     |         |         |            |          |         |         |           
|                       |                                                                                              |                                                                                                                                              |                                                         | Net cash provided by operating activities |                     |         | 300,406 |            |          |         | 309,427 |            |          |         | 864,817 |            |          |         | 929,905 | 
|                       |                                                                                              |                                                                                                                                              |                                                         |                                           |                     |         |         |            |          |         |         |           
|Investing Activities:  |                                                                                              |                                                                                                                                              |                                                         |                                           |                     |         |         |            |          |         |         |            |          |         |         |           
|                       | Property acquisitions                                                                        |                                                                                                                                              |                                                         | (219,110                                  | )                   |         |         | (87,411    | )        |         |         | (338,591   | )        |         |         | (87,411    | )       
|                       | Property dispositions                                                                        |                                                                                                                                              |                                                         | (1,578                                    | )                   |         |         | 133,382    |          |         |         | 231,891    |          |         |         | 398,979    |         
|                       | Capital and tenant improvements                                                              |                                                                                                                                              |                                                         | (91,969                                   | )                   |         |         | (127,160   | )        |         |         | (335,322   | )        |         |         | (302,080   | )       
|                       | Lease commissions and other costs                                                            |                                                                                                                                              |                                                         | (33,127                                   | )                   |         |         | (36,020    | )        |         |         | (94,002    | )        |         |         | (110,069   | )       
|                       | Sale of investment in CT Convertible Trust I
    preferred shares                            |                                                                                                                                              |                                                         | 32,089                                    |                     |         |         |           |          |         |         | 32,089     |          |         |         |           |         
|                       | Decrease (increase) in escrow deposits and
    restricted cash                               |                                                                                                                                              |                                                         | 36,212                                    |                     |         |         | (10,123    | )        |         |         | 83,423     |          |         |         | 4,709      |         
|                       | (Investments in) distributions from
    unconsolidated joint ventures                        |                                                                                                                                              |                                                         | (220,833                                  | )                   |         |         | 57,981     |          |         |         | (220,833   | )        |         |         | 25,963     |         
|                       | Investments in notes receivable                                                              |                                                                                                                                              |                                                         |                                          |                     |         |         |           |          |         |         |           |          |         |         | (96        | )       
|                       | Repayments of notes receivable                                                               |                                                                                                                                              |                                                         |                                          |                     |         |         |           |          |         |         |           |          |         |         | 1,395      |         
|                       |                                                                                              |                                                                                                                                              |                                                         |                                           |                     |         |         |            |          |         |         |           
|                       |                                                                                              | Net cash (used for) investing activities                                                                                                     |                                                         |                                           | (498,316            | )       |         |            | (69,351  | )       |         |            | (641,345 | )       |         |            | (68,610  | )      
|                       |                                                                                              |                                                                                                                                              |                                                         |                                           |                     |         |         |            |          |         |         |           
|Financing Activities:  |                                                                                              |                                                                                                                                              |                                                         |                                           |                     |         |         |            |          |         |         |            |          |         |         |           
|                       | Principal payments on mortgage debt                                                          |                                                                                                                                              |                                                         | (219,132                                  | )                   |         |         | (121,876   | )        |         |         | (428,371   | )        |         |         | (142,821   | )       
|                       | Proceeds from unsecured notes                                                                |                                                                                                                                              |                                                         | 17,386                                    |                     |         |         |           |          |         |         | 1,057,661  |          |         |         | 494,810    |         
|                       | Repayment of unsecured notes                                                                 |                                                                                                                                              |                                                         | (30,000                                   | )                   |         |         |           |          |         |         | (880,000   | )        |         |         | (300,000   | )       
|                       | Proceeds from lines of credit                                                                |                                                                                                                                              |                                                         | 2,061,500                                 |                     |         |         | 1,861,200  |          |         |         | 4,947,500  |          |         |         | 3,577,600  |         
|                       | Repayment of lines of credit                                                                 |                                                                                                                                              |                                                         | (1,351,400                                | )                   |         |         | (1,723,100 | )        |         |         | (4,195,100 | )        |         |         | (3,362,300 | )       
|                       | Payments of loan costs                                                                       |                                                                                                                                              |                                                         |                                          |                     |         |         |           |          |         |         | (1,506     | )        |         |         | (8,548     | )       
|                       | Settlement of interest rate swap agreements                                                  |                                                                                                                                              |                                                         |                                          |                     |         |         |           |          |         |         | (69,130    | )        |         |         | 768        |         
|                       | Distributions to minority interests in partially
    owned properties                        |                                                                                                                                              |                                                         | (2,180                                    | )                   |         |         | (2,265     | )        |         |         | (17,671    | )        |         |         | (7,948     | )       
|                       | Payment of offering costs                                                                    |                                                                                                                                              |                                                         | (13                                       | )                   |         |         | (31        | )        |         |         | (55        | )        |         |         | (194       | )       
|                       | Proceeds from exercise of stock options                                                      |                                                                                                                                              |                                                         | 4,307                                     |                     |         |         | 13,022     |          |         |         | 44,110     |          |         |         | 20,649     |         
|                       | Distributions to unitholders                                                                 |                                                                                                                                              |                                                         | (224,035                                  | )                   |         |         | (224,377   | )        |         |         | (449,279   | )        |         |         | (453,060   | )       
|                       | Distributions from unconsolidated joint ventures
    related to a debt refinancing           |                                                                                                                                              |                                                         |                                          |                     |         |         | 29,512     |          |         |         |           |          |         |         | 29,512     |         
|                       | Cancellation of Units through Equity
    Offices repurchase of Common Shares                |                                                                                                                                              |                                                         | (360                                      | )                   |         |         | (10,042    | )        |         |         | (36,943    | )        |         |         | (363,486   | )       
|                       | Redemption of Units                                                                          |                                                                                                                                              |                                                         | (668                                      | )                   |         |         | (3,421     | )        |         |         | (2,534     | )        |         |         | (5,630     | )       
|                       | Redemption of preferred units                                                                |                                                                                                                                              |                                                         |                                          |                     |         |         |           |          |         |         | (114,073   | )        |         |         | (250,000   | )       
|                       | Payment of preferred distributions                                                           |                                                                                                                                              |                                                         | (8,048                                    | )                   |         |         | (10,508    | )        |         |         | (24,719    | )        |         |         | (43,333    | )       
|                       |                                                                                              |                                                                                                                                              |                                                         |                                           |                     |         |         |            |          |         |         |           
|                       |                                                                                              | Net cash provided by (used for) financing
    activities                                                                                     |                                                         |                                           | 247,357             |         |         |            | (191,886 | )       |         |            | (170,110 | )       |         |            | (813,981 | )      
|                       |                                                                                              |                                                                                                                                              |                                                         |                                           |                     |         |         |            |          |         |         |           
|                       | Net increase in cash and cash equivalents                                                    |                                                                                                                                              |                                                         | 49,447                                    |                     |         |         | 48,190     |          |         |         | 53,362     |          |         |         | 47,314     |         
|                       | Cash and cash equivalents at the beginning of the
    period                                 |                                                                                                                                              |                                                         | 73,313                                    |                     |         |         | 57,595     |          |         |         | 69,398     |          |         |         | 58,471     |         
|                       |                                                                                              |                                                                                                                                              |                                                         |                                           |                     |         |         |            |          |         |         |           
|                       | Cash and cash equivalents at the end of the period                                           |                                                                                                                                              | $                                                       | 122,760                                   |                     |         | $       | 105,785    |          |         | $       | 122,760    |          |         | $       | 105,785    |         
|                       |                                                                                              |                                                                                                                                              |                                                         |                                           |                     |         |         |            |          |         |         |           



See accompanying notes.


5



---



##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


CONSOLIDATED STATEMENTS OF CASH
FLOWS  (Continued)

(Unaudited)


|                                                                                                                                                             |                       |                                                                                                                                                          |                                                                       |   |                     |          |         |      |         |   |         |   |          |          |         |   |         |   | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------ | --------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------- | - | ------------------- | -------- | ------- | ---- | ------- | - | ------- | - | -------- | -------- | ------- | - | ------- | - | 
|                                                                                                                                                             |                       |                                                                                                                                                          |                                                                       |  
|                                                                                                                                                             |                       | For the three months                                                                                                                                     |                                                                       |   | For the nine months |         
|                                                                                                                                                             |                       | ended September 30,                                                                                                                                      |                                                                       |   | ended September 30, |         
|                                                                                                                                                             |                       |                                                                                                                                                          |                                                                       |   |                     |         
|(Dollars in thousands)                                                                                                                                       |                       | 2004                                                                                                                                                     |                                                                       |   | 2003                |          |         | 2004 |         |   | 2003    |  
|                                                                                                                                                             |                       |                                                                                                                                                          |                                                                       |   |                     |          |         |      |         |   |         |  
|Supplemental Information:                                                                                                                                    |                       |                                                                                                                                                          |                                                                       |   |                     |          |         |      |         |   |         |   |          |          |         |  
|Interest paid during the period, including a
    reduction of interest expense for capitalized interest of $767,
    $2,218, $4,429 and $7,017, respectively |                       | $                                                                                                                                                        | 261,512                                                               |   |                     | $        | 254,687 |      |         | $ | 676,483 |   |          | $        | 675,424 |  
|                                                                                                                                                             |                       |                                                                                                                                                          |                                                                       |   |                     |          |         |      |         |   |         |  
|Non-Cash Investing and Financing
    Activities:                                                                                                             |                       |                                                                                                                                                          |                                                                       |   |                     |          |         |      |         |   |         |   |          |          |         |  
|                                                                                                                                                             | Investing Activities: |                                                                                                                                                          |                                                                       |   |                     |          |         |      |         |   |         |   |          |          |         |   |        
|                                                                                                                                                             |                       | Escrow deposits used for property acquisitions                                                                                                           |                                                                       | $ | 35,891              |          |         | $    |        |   |         | $ | 35,891   |          |         | $ |        |  
|                                                                                                                                                             |                       |                                                                                                                                                          |                                                                       |   |                     |          |         |      |         |   |         |  
|                                                                                                                                                             |                       | Escrow deposits related to property dispositions                                                                                                         |                                                                       | $ | (71,893             | )        |         | $    |        |   |         | $ | (102,509 | )        |         | $ | (19,339 | )
|                                                                                                                                                             |                       |                                                                                                                                                          |                                                                       |   |                     |          |         |      |         |   |         |  
|                                                                                                                                                             |                       | Mortgage loan repayment as a result of a property
    disposition (including prepayment expense of $375 in the nine
    months ended September 30, 2004) |                                                                       | $ |                    |          |         | $    |        |   |         | $ | (5,830   | )        |         | $ | (16,279 | )
|                                                                                                                                                             |                       |                                                                                                                                                          |                                                                       |   |                     |          |         |      |         |   |         |  
|                                                                                                                                                             |                       | Mortgage loan assumed upon acquisition of property                                                                                                       |                                                                       | $ |                    |          |         | $    |        |   |         | $ | 82,970   |          |         | $ |        |  
|                                                                                                                                                             |                       |                                                                                                                                                          |                                                                       |   |                     |          |         |      |         |   |         |  
|                                                                                                                                                             |                       | Mortgage loan assumed upon consolidation of
    property                                                                                                 |                                                                       | $ |                    |          |         | $    | 59,166  |   |         | $ |         |          |         | $ | 59,166  |  
|                                                                                                                                                             |                       |                                                                                                                                                          |                                                                       |   |                     |          |         |      |         |   |         |  
|                                                                                                                                                             |                       | Units issued in connection with property
    acquisition                                                                                                 |                                                                       | $ |                    |          |         | $    |        |   |         | $ | 50       |          |         | $ |        |  
|                                                                                                                                                             |                       |                                                                                                                                                          |                                                                       |   |                     |          |         |      |         |   |         |  
|                                                                                                                                                             |                       | Changes in accounts due to a like-kind exchange:                                                                                                         |                                                                       |   |                     |          |         |      |         |   |         |   |          |          |         |   |         |  
|                                                                                                                                                             |                       |                                                                                                                                                          | Increase in investment in real estate due to
    property acquisition |   | $                   | 130,203  |         |      | $       |  |         |   | $        | 130,203  |         |   | $       |  | 
|                                                                                                                                                             |                       |                                                                                                                                                          |                                                                       |   |                     |          |         |      |         |   |         |  
|                                                                                                                                                             |                       |                                                                                                                                                          | Decrease in investment in real estate due to
    property disposition |   | $                   | (130,865 | )       |      | $       |  |         |   | $        | (130,865 | )       |   | $       |  | 
|                                                                                                                                                             |                       |                                                                                                                                                          |                                                                       |   |                     |          |         |      |         |   |         |  
|                                                                                                                                                             |                       |                                                                                                                                                          | Decrease in accumulated depreciation                                  |   | $                   | 9,137    |         |      | $       |  |         |   | $        | 9,137    |         |   | $       |  | 
|                                                                                                                                                             |                       |                                                                                                                                                          |                                                                       |   |                     |          |         |      |         |   |         |  
|                                                                                                                                                             |                       |                                                                                                                                                          | Decrease in other assets and liabilities                              |   | $                   | (1,770   | )       |      | $       |  |         |   | $        | (1,770   | )       |   | $       |  | 
|                                                                                                                                                             |                       |                                                                                                                                                          |                                                                       |   |                     |          |         |      |         |   |         |  
|                                                                                                                                                             |                       | Changes in accounts due to consolidation of
    existing interest in a property as a result of acquiring the
    remaining economic interest:            |                                                                       |   |                     |          |         |      |         |   |         |   |          |          |         |   |         |  
|                                                                                                                                                             |                       |                                                                                                                                                          | Decrease in investment in unconsolidated joint
    ventures           |   | $                   |         |         |      | $       |  |         |   | $        | (157,659 | )       |   | $       |  | 
|                                                                                                                                                             |                       |                                                                                                                                                          |                                                                       |   |                     |          |         |      |         |   |         |  
|                                                                                                                                                             |                       |                                                                                                                                                          | Increase in investment in real estate                                 |   | $                   |         |         |      | $       |  |         |   | $        | 612,411  |         |   | $       |  | 
|                                                                                                                                                             |                       |                                                                                                                                                          |                                                                       |   |                     |          |         |      |         |   |         |  
|                                                                                                                                                             |                       |                                                                                                                                                          | Increase in accumulated depreciation                                  |   | $                   |         |         |      | $       |  |         |   | $        | (44,440  | )       |   | $       |  | 
|                                                                                                                                                             |                       |                                                                                                                                                          |                                                                       |   |                     |          |         |      |         |   |         |  
|                                                                                                                                                             |                       |                                                                                                                                                          | Increase in mortgage debt                                             |   | $                   |         |         |      | $       |  |         |   | $        | (451,285 | )       |   | $       |  | 
|                                                                                                                                                             |                       |                                                                                                                                                          |                                                                       |   |                     |          |         |      |         |   |         |  
|                                                                                                                                                             |                       |                                                                                                                                                          | Increase in other assets and liabilities                              |   | $                   |         |         |      | $       |  |         |   | $        | 40,973   |         |   | $       |  | 
|                                                                                                                                                             |                       |                                                                                                                                                          |                                                                       |   |                     |          |         |      |         |   |         |  
|Financing Activities:                                                                                                                                        |                       |                                                                                                                                                          |                                                                       |   |                     |          |         |      |         |   |         |   |          |          |         |  
|                                                                                                                                                             |                       | Mortgage loan repayment as a result of a property
    disposition (including prepayment expense of $375 in the nine
    months ended September 30, 2004) |                                                                       | $ |                    |          |         | $    |        |   |         | $ | 5,830    |          |         | $ | 16,279  |  
|                                                                                                                                                             |                       |                                                                                                                                                          |                                                                       |   |                     |          |         |      |         |   |         |  
|                                                                                                                                                             |                       | Mortgage loan assumed upon consolidation of
    property                                                                                                 |                                                                       | $ |                    |          |         | $    | (59,166 | ) |         | $ |         |          |         | $ | (59,166 | )
|                                                                                                                                                             |                       |                                                                                                                                                          |                                                                       |   |                     |          |         |      |         |   |         |  



See accompanying notes.


6



---



##### Table of Contents






EOP OPERATING LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(Unaudited)


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



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

EOP Operating Limited Partnership (EOP
Partnership) is a Delaware limited partnership. Our
general partner is Equity Office Properties Trust (Equity
Office), a Maryland real estate investment trust
(REIT). The use of the word we,
us, or our refers to EOP Partnership,
its subsidiaries and Equity Office, except where the context
otherwise requires. Equity Office has elected to be taxed as a
REIT for federal income tax purposes and generally will not be
subject to federal income tax if it distributes 100% of its
taxable income and complies with a number of organizational
requirements.

We are a fully integrated, self-administered and
self-managed real estate company principally engaged, through
our subsidiaries, in owning, managing, leasing, acquiring and
developing office properties. At September 30, 2004, we
owned or had an interest in 701 office properties comprising
approximately 125.5 million rentable square feet of office
space in 18 states and the District of Columbia and were
located in 27 markets and 124 submarkets (the Office
Properties). On a weighted average basis, the Office
Properties were 86.7% occupied at September 30, 2004.
Approximately 41.5% of the rentable square feet is located in
central business districts and approximately 58.5% of the
rentable square feet is located in suburban markets. At
September 30, 2004, we also owned eight industrial
properties comprising approximately 0.9 million square feet
of industrial space (the Industrial Properties and
together with the Office Properties, the Properties)
and approximately 0.3 million rentable square feet of
office properties under development. On a weighted average
basis, the Industrial Properties were 85.8% occupied at
September 30, 2004.



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



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

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

In May 2003, the Financial Accounting Standards
Board (FASB) issued Statement No. 150
Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity(FAS 150). FAS 150 establishes
standards for classifying and measuring as liabilities certain
financial instruments that embody obligations of the issuer and
have characteristics of both liabilities and equity.
FAS 150 is effective for all financial instruments created
or modified after May 31, 2003, and otherwise is effective
at the beginning of the first interim period beginning after
June 15, 2003 (July 1, 2003 for calendar quarter
companies). On November 7, 2003, the FASB issued FSP
No. FAS 150-3, which deferred for an indefinite period
the classification and measurement provisions, but not the
disclosure provisions, of FAS 150 as it relates to
noncontrolling interests that are classified as equity in the
financial statements of a subsidiary but would be classified as
a liability in the parents financial statements under
FAS 150 (e.g., minority interests in consolidated
limited-life subsidiaries).

7



---



##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Unaudited)


We are presently the controlling partner in
various consolidated entities having a minority interest book
value of approximately $100.5 million at September 30,
2004. The organizational documents of these entities contain
provisions that require the entities to be liquidated through
the sales of their assets upon reaching the future date
specified in each respective agreement. As controlling partner,
we have an obligation to cause these property owning entities to
distribute proceeds of liquidation to the minority interests in
these partially owned properties only if the net proceeds
received by the entities from the sale of its assets warrant a
distribution based on the agreements. As of September 30,
2004, we estimate the value of minority interest distributions
would have been approximately $150 million
(Settlement Value) had the entities been liquidated
as of that date. This Settlement Value is based on the estimated
third party consideration realizable by the entities upon a
hypothetical disposition of the partially owned properties and
is net of all other assets and liabilities, including yield
maintenance on any mortgages encumbering the properties, that
would have been due on September 30, 2004 had those
mortgages been prepaid. The amount of any potential distribution
to minority interest holders in our partially owned properties
is very difficult to predict due to many factors, including the
inherent uncertainty of real estate sales. If the entities
underlying assets are worth less than the underlying
liabilities, we have no obligation to remit any consideration to
the minority interest holders in partially owned properties.



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

The preparation of the consolidated financial
statements in conformity with U.S. generally accepted
accounting principles (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, 2004 and
2003 and related footnote disclosures are unaudited. In the
opinion of management, such financial statements reflect all
adjustments necessary for a fair presentation of the results of
the interim periods. All such adjustments are of a normal and
recurring nature.



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

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



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

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

8



---



##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Unaudited)


The following table illustrates the unaudited
effect on net (loss) income available to unitholders and (loss)
earnings per unit for the three and nine months ended
September 30, 2004 and 2003 if the fair value based method
had been applied to all share options that have been issued.
Compensation expense related to restricted share awards is not
presented in the table below because the expense amount is the
same under APB 25 and FAS 123 and therefore, is
already reflected in net (loss) income.

|                                                                                                                      |                                                                    |                    |          |       |                   |   |         |      |  |   |        |      |  |   |         |      | 
|--------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------ | ------------------ | -------- | ----- | ----------------- | - | ------- | ---- |  | - | ------ | ---- |  | - | ------- | ---- | 
|                                                                                                                      |                                                                    |                    |          |      
|                                                                                                                      |                                                                    | For the            |          |       | For the           |  
|                                                                                                                      |                                                                    | three months ended |          |       | nine months ended |  
|                                                                                                                      |                                                                    | September 30,      |          |       | September 30,     |  
|                                                                                                                      |                                                                    |                    |          |       |                   |  
|(Dollars in thousands, except per unit data)                                                                          |                                                                    | 2004               |          |       | 2003              |   |         | 2004 |  |   | 2003   |     
|                                                                                                                      |                                                                    |                    |          |       |                   |   |         |      |  |   |        |     
|Historical net (loss) income available to
    unitholders                                                             |                                                                    | $                  | (144,608 | )     |                   | $ | 123,815 |      |  | $ | 41,306 |      |  | $ | 451,234 |     
|Add back compensation expense for share options
    included in historical net (loss) income available to unitholders |                                                                    |                    | 1,208    |       |                   |   | 626     |      |  |   | 4,069  |      |  |   | 2,001   |     
|Deduct compensation expense for share options
    determined under fair value based method                            |                                                                    |                    | (2,226   | )     |                   |   | (2,595  | )    |  |   | (7,403 | )    |  |   | (8,040  | )   
|                                                                                                                      |                                                                    |                    |          |       |                   |   |         |      |  |   |        |     
|Pro forma net (loss) income available to
    unitholders                                                              |                                                                    | $                  | (145,626 | )     |                   | $ | 121,846 |      |  | $ | 37,972 |      |  | $ | 445,195 |     
|                                                                                                                      |                                                                    |                    |          |       |                   |   |         |      |  |   |        |     
|(Loss) earnings per unit  basic:                                                                                     |                                                                    |                    |          |       |                   |   |         |      |  |   |        |      |  |   |         |     
|                                                                                                                      | Historical net (loss) income available to
    unitholders per unit |                    | $        | (0.32 | )                 |   | $       | 0.28 |  |   | $      | 0.09 |  |   | $       | 1.00 | 
|                                                                                                                      |                                                                    |                    |          |       |                   |   |         |      |  |   |        |     
|                                                                                                                      | Pro forma net (loss) income available to
    unitholders per unit  |                    | $        | (0.32 | )                 |   | $       | 0.27 |  |   | $      | 0.08 |  |   | $       | 0.99 | 
|                                                                                                                      |                                                                    |                    |          |       |                   |   |         |      |  |   |        |     
|(Loss) earnings per unit  diluted:                                                                                   |                                                                    |                    |          |       |                   |   |         |      |  |   |        |      |  |   |         |     
|                                                                                                                      | Historical net (loss) income available to
    unitholders per unit |                    | $        | (0.32 | )                 |   | $       | 0.28 |  |   | $      | 0.09 |  |   | $       | 1.00 | 
|                                                                                                                      |                                                                    |                    |          |       |                   |   |         |      |  |   |        |     
|                                                                                                                      | Pro forma net (loss) income available to
    unitholders per unit  |                    | $        | (0.32 | )                 |   | $       | 0.27 |  |   | $      | 0.08 |  |   | $       | 0.98 | 
|                                                                                                                      |                                                                    |                    |          |       |                   |   |         |      |  |   |        |     



|         |             
|-------- | ------------
|NOTE 3  | ACQUISITIONS

In September 2004, we acquired Commerce Plaza in
Oak Brook, Illinois and Redstone Plaza in Newport Beach,
California, in a like-kind exchange transaction in which we
disposed of certain industrial properties (see
Note 4  Discontinued Operations). Commerce Plaza
consists of three office buildings comprising approximately
510,757 square feet and Redstone Plaza consists of two
office buildings comprising approximately 166,562 square
feet.

In September 2004, we acquired 5800 &
6000 Meadows, which consists of two office buildings comprising
approximately 198,347 square feet in Lake Oswego, Oregon,
for a purchase price of approximately $49.0 million.

In September 2004, we acquired Olympus Corporate
Centre, which consists of four office buildings comprising
approximately 191,494 square feet in Roseville, California,
for a purchase price of approximately $37.9 million.

In September 2004, we, together with an
unaffiliated party, acquired 717 Fifth Avenue located in
New York, New York for a purchase price of approximately
$353.0 million. This property consists of both office and
retail space. We acquired all of the office space, except for
the fourth floor, for approximately $160.5 million. An
unaffiliated party acquired all of the retail space and the
fourth floor office space. The office space we acquired
comprises approximately 323,984 square feet.

In September 2004, we, together with a joint
venture partner, acquired a vacant land parcel in Herndon,
Virginia for a purchase price of approximately
$10.9 million. The purchase price was paid with cash and a
$2.7 million note that is

9



---



##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Unaudited)


payable on the date that construction commences
on the land. We are a 70% partner in the joint venture and have
control over major decisions. Accordingly, we consolidate the
joint venture.

In May 2004, we acquired a partners
interest in the 500 Orange office property by issuing 1,930
Units which were valued at approximately $50,000.

In May 2004, we acquired American Center, which
consists of two office buildings, for approximately
$60.5 million. The office property is located in Tysons
Corner, Virginia and consists of approximately
328,741 square feet.

In February 2004, we acquired one of our joint
venture partners 15.53% economic interest in the 1301
Avenue of the Americas office building for approximately
$60.7 million and we assumed our partners share of
the mortgage notes of approximately $83.0 million. Our
economic interest in the joint venture is now 100%, and we
control all major decisions. Accordingly, we have consolidated
the property. The consolidated mortgage debt encumbering this
property upon consolidation was approximately
$534.3 million. In addition, we acquired another joint
venture partners interest for approximately
$7.5 million.

The allocations of the purchase price and other
costs related to the acquisitions to tangible and intangible
assets are based on managements current best estimate, and
are subject to adjustment within one year of the closing date of
each respective acquisition.



|         |                        
|-------- | -----------------------
|NOTE 4  | DISCONTINUED OPERATIONS

In September 2004, we disposed of 29 industrial
properties for approximately $73.3 million in cash (before
closing costs) and two office properties valued at approximately
$137.0 million for total consideration of approximately
$210.3 million (35% monetary/ 65% nonmonetary). The net
book value of the industrial properties sold was approximately
$198.0 million. This transaction was accounted for as a
like-kind exchange transaction involving boot. Because the
transaction included a monetary and nonmonetary component, we
recognized a gain on sale of approximately $3.6 million on
the monetary portion of the transaction. The nonmonetary portion
of this transaction yielded no gain or loss. The remaining book
value of the industrial properties, or approximately
$130.0 million, represents the book value of the two office
properties acquired in the transaction. The two office
properties acquired are Commerce Plaza and Redstone Plaza, as
further described in Note 3  Acquisitions.

During the second quarter 2004, we sold four
office properties, 38 industrial properties and a vacant land
parcel in various transactions to unaffiliated parties for
approximately $255.5 million. The total gain on the sale of
these properties was approximately $1.9 million and is
included in discontinued operations. The sold office properties
consisted of approximately 449,593 square feet, and the
industrial properties consisted of approximately
2,275,550 square feet. In connection with the sale of one
of the office properties, we repaid approximately
$5.8 million of mortgage debt which encumbered the property.

During the first quarter 2004, we sold one office
property consisting of approximately 118,172 square feet to
an unaffiliated party for approximately $18.5 million. The
total gain on the sale of this property was approximately
$2.2 million and is included in discontinued operations.

The net income for properties sold is reflected
in the consolidated statements of operations as discontinued
operations for the periods presented. The office properties in
which we sold 75% and 80% of our interests during December 2003
are not required to be reflected as discontinued operations in
accordance with FAS 144 because we retained an equity
interest

10



---



##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Unaudited)


in these Properties. Below is a summary of the
results of operations through their respective sale dates for
the properties sold, which are classified as discontinued
operations:

|                                                                           |                                                                                           |                              |                |                  |                   |       |        |       |      |        |        |       |      |        |         |        |      |        |        | 
|-------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------- | ---------------------------- | -------------- | ---------------- | ----------------- | ----- | ------ | ----- | ---- | ------ | ------ | ----- | ---- | ------ | ------- | ------ | ---- | ------ | ------ | 
|                                                                           |                                                                                           |                              |                |                 
|                                                                           |                                                                                           | For the                      |                |                  | For the           |      
|                                                                           |                                                                                           | three months ended           |                |                  | nine months ended |      
|                                                                           |                                                                                           | September 30,                |                |                  | September 30,     |      
|                                                                           |                                                                                           |                              |                |                  |                   |      
|(Dollars in thousands)                                                     |                                                                                           | 2004                         |                |                  | 2003              |       |        | 2004  |      |        | 2003   |      
|                                                                           |                                                                                           |                              |                |                  |                   |       |        |       |      |        |        |      
|Total revenues                                                             |                                                                                           | $                            | 4,702          |                  |                   | $     | 31,205 |       |      | $      | 25,787 |       |      | $      | 109,702 |       
|                                                                           |                                                                                           |                              |                |                  |                   |       |        |       |      |        |        |      
|Expenses:                                                                  |                                                                                           |                              |                |                  |                   |       |        |       |      |        |        |       |      |        |         |       
|                                                                           | Depreciation and amortization                                                             |                              |                | 1,231            |                   |       |        | 6,434 |      |        |        | 6,836 |      |        |         | 21,434 |     
|                                                                           | Property operating                                                                        |                              |                | 1,588            |                   |       |        | 7,639 |      |        |        | 7,470 |      |        |         | 30,912 |     
|                                                                           | Ground rent                                                                               |                              |                |                 |                   |       |        |      |      |        |        |      |      |        |         | 18     |     
|                                                                           |                                                                                           |                              |                |                  |                   |       |        |       |      |        |        |      
|                                                                           |                                                                                           |                              | Total expenses |                  |                   | 2,819 |        |       |      | 14,073 |        |       |      | 14,306 |         |        |      | 52,364 |       
|                                                                           |                                                                                           |                              |                |                  |                   |       |        |       |      |        |        |      
|                                                                           |                                                                                           |                              |                | Operating income |                   |       | 1,883  |       |      |        | 17,132 |       |      |        | 11,481  |        |      |        | 57,338 | 
|                                                                           |                                                                                           |                              |                |                  |                   |       |        |       |      |        |        |      
|Other income (expense):                                                    |                                                                                           |                              |                |                  |                   |       |        |       |      |        |        |       |      |        |         |       
|                                                                           | Interest and dividend income                                                              |                              |                |                 |                   |       |        | 41    |      |        |        | 2     |      |        |         | 109    |     
|                                                                           | Interest expense and amortization of deferred
    financing costs and prepayment expenses |                              |                |                 |                   |       |        | (157  | )    |        |        | (672  | )    |        |         | (483   | )   
|                                                                           |                                                                                           |                              |                |                  |                   |       |        |       |      |        |        |      
|                                                                           |                                                                                           | Total other income (expense) |                |                  |                  |       |        |       | (116 | )      |        |       | (670 | )      |         |        | (374 | )     
|                                                                           |                                                                                           |                              |                |                  |                   |       |        |       |      |        |        |      
|Income before income taxes and net gain (loss) on
    sales of real estate |                                                                                           |                              | 1,883          |                  |                   |       | 17,016 |       |      |        | 10,811 |       |      |        | 56,964  |       
|Income taxes                                                               |                                                                                           |                              |               |                  |                   |       | (13    | )     |      |        | (5     | )     |      |        | (16     | )     
|Income allocated to minority
    interests  partially owned properties    |                                                                                           |                              |               |                  |                   |       | (5     | )     |      |        | (220   | )     |      |        | (25     | )     
|Net gain (loss) on sales of real estate                                    |                                                                                           |                              | 3,016          |                  |                   |       | (6,326 | )     |      |        | 7,138  |       |      |        | 45,399  |       
|                                                                           |                                                                                           |                              |                |                  |                   |       |        |       |      |        |        |      
|Net income                                                                 |                                                                                           | $                            | 4,899          |                  |                   | $     | 10,672 |       |      | $      | 17,724 |       |      | $      | 102,322 |       
|                                                                           |                                                                                           |                              |                |                  |                   |       |        |       |      |        |        |      
|Property net operating income from discontinued
    operations             |                                                                                           | $                            | 3,114          |                  |                   | $     | 23,566 |       |      | $      | 18,317 |       |      | $      | 78,790  |       
|                                                                           |                                                                                           |                              |                |                  |                   |       |        |       |      |        |        |      



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

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



|         |           
|-------- | ----------
|NOTE 5  | IMPAIRMENT

During September 2004, after an in-depth review
of our portfolio on an asset-by-asset basis, we reduced our
intended holding period for 96 non-core assets comprising
approximately 17.7 million square feet. We currently intend
to sell these assets over the next five years, as market
conditions warrant. Based on our analysis of the future cash
flows of each asset over the next five years, we determined that
46 of the assets comprising approximately 2.8 million
square feet were permanently impaired. The difference between
the fair value (calculated either by discounting estimated
future cash flows and sales proceeds or utilizing market
comparables) and the net book value was approximately
$229.2 million which is reflected as a non-cash impairment
charge in the current quarter. All but one of the impaired
assets and their respective impairment charges are reported
under the Office Properties segment and the
remaining asset is reported under the Corporate and
Other segment for segment reporting purposes.

11



---



##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Unaudited)




|         |                                                           
|-------- | ----------------------------------------------------------
|NOTE 6  | REALIZED GAIN ON SETTLEMENT OF DERIVATIVES AND
    SALE OF

MARKETABLE SECURITIES


In July 2004, we disposed of the preferred shares
we owned of CT Convertible Trust I, of which Mr. Zell
(Equity Offices Chairman of the Board of Trustees) is
Chairman of the Board, for approximately $32.1 million and
recognized a gain of approximately $2.3 million. In
addition, we recognized a gain of approximately
$2.4 million from the sale of other securities.

In May 2004, we settled $500 million
notional amount of forward-starting interest rate swaps and
recognized a gain of approximately $24.0 million (see
Note 9).



|         |                                                 
|-------- | ------------------------------------------------
|NOTE 7  | INVESTMENTS IN UNCONSOLIDATED JOINT
    VENTURES

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

|                                                                                                                                                                 |                                              |                                                              |           |           |              |   |           |           |           | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------- | ------------------------------------------------------------ | --------- | --------- | ------------ | - | --------- | --------- | --------- | 
|                                                                                                                                                                 |                                              | September 30,                                                |           |           | December 31, |  
|(Dollars in thousands)                                                                                                                                           |                                              | 2004                                                         |           |           | 2003         |  
|                                                                                                                                                                 |                                              |                                                              |           |           |              |  
|Balance Sheets:                                                                                                                                                  |                                              |                                                              |           |           |              |   |           |          
|                                                                                                                                                                 | Real estate, net of accumulated depreciation |                                                              | $         | 2,944,300 |              |   | $         | 3,258,009 |          
|                                                                                                                                                                 | Other assets                                 |                                                              |           | 332,454   |              |   |           | 339,835   |          
|                                                                                                                                                                 |                                              |                                                              |           |           |              |  
|                                                                                                                                                                 |                                              | Total Assets                                                 |           | $         | 3,276,754    |   |           | $         | 3,597,844 | 
|                                                                                                                                                                 |                                              |                                                              |           |           |              |  
|                                                                                                                                                                 | Mortgage debt                                |                                                              | $         | 770,516   |              |   | $         | 1,308,782 |          
|                                                                                                                                                                 | Other liabilities                            |                                                              |           | 129,457   |              |   |           | 140,259   |          
|                                                                                                                                                                 | Partners and shareholders equity           |                                                              |           | 2,376,781 |              |   |           | 2,148,803 |          
|                                                                                                                                                                 |                                              |                                                              |           |           |              |  
|                                                                                                                                                                 |                                              | Total Liabilities and Partners and
    Shareholders Equity |           | $         | 3,276,754    |   |           | $         | 3,597,844 | 
|                                                                                                                                                                 |                                              |                                                              |           |           |              |  
|Our share of equity                                                                                                                                              |                                              | $                                                            | 1,092,838 |           |              | $ | 1,040,373 |          
|Net excess of cost of investments over the net
    book value of underlying net assets, net of accumulated
    depreciation of $24,280 and $24,456, respectively |                                              |                                                              | 86,127    |           |              |   | 86,859    |          
|                                                                                                                                                                 |                                              |                                                              |           |           |              |  
|Carrying value of investments in unconsolidated
    joint ventures                                                                                               |                                              | $                                                            | 1,178,965 |           |              | $ | 1,127,232 |          
|                                                                                                                                                                 |                                              |                                                              |           |           |              |  
|Our share including the excess of the cost of the
    investment over the historical net book value of:                                                          |                                              |                                                              |           |           |              |   |           |          
|Total assets                                                                                                                                                     |                                              | $                                                            | 1,563,998 |           |              | $ | 1,968,983 |          
|                                                                                                                                                                 |                                              |                                                              |           |           |              |  
|Unconsolidated non-recourse mortgage debt                                                                                                                        |                                              | $                                                            | 343,769   |           |              | $ | 797,268   |          
|                                                                                                                                                                 |                                              |                                                              |           |           |              |  

12



---



##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Unaudited)


|                          |                                                         |                                             |                |         |                   |        |   |         |        |        |      |         |         |         |   |         |         |         | 
|------------------------- | ------------------------------------------------------- | ------------------------------------------- | -------------- | ------- | ----------------- | ------ | - | ------- | ------ | ------ | ---- | ------- | ------- | ------- | - | ------- | ------- | ------- | 
|                          |                                                         |                                             |                |        
|                          |                                                         | For the                                     |                |         | For the           |       
|                          |                                                         | three months ended                          |                |         | nine months ended |       
|                          |                                                         | September 30,                               |                |         | September 30,     |       
|                          |                                                         |                                             |                |         |                   |       
|(Dollars in thousands)    |                                                         | 2004                                        |                |         | 2003              |        |   | 2004    |        |        | 2003 |        
|                          |                                                         |                                             |                |         |                   |        |   |         |        |        |      |        
|Statements of Operations: |                                                         |                                             |                |         |                   |        |   |         |        |        |      |         |         |         |   |        
|                          | Revenues                                                |                                             | $              | 117,458 |                   |        | $ | 114,126 |        |        | $    | 349,609 |         |         | $ | 356,161 |        
|                          |                                                         |                                             |                |         |                   |        |   |         |        |        |      |        
|                          | Expenses:                                               |                                             |                |         |                   |        |   |         |        |        |      |         |         |         |   |         |        
|                          |                                                         | Interest expense and loan cost amortization |                |         | 10,922            |        |   |         | 20,473 |        |      |         | 33,111  |         |   |         | 55,443  |        
|                          |                                                         | Depreciation and amortization               |                |         | 27,330            |        |   |         | 21,432 |        |      |         | 81,174  |         |   |         | 70,141  |        
|                          |                                                         | Operating expenses                          |                |         | 46,762            |        |   |         | 40,435 |        |      |         | 140,260 |         |   |         | 142,443 |        
|                          |                                                         |                                             |                |         |                   |        |   |         |        |        |      |        
|                          |                                                         |                                             | Total expenses |         |                   | 85,014 |   |         |        | 82,340 |      |         |         | 254,545 |   |         |         | 268,027 | 
|                          |                                                         |                                             |                |         |                   |        |   |         |        |        |      |        
|                          | Net income before gain on sale of real estate           |                                             |                | 32,444  |                   |        |   | 31,786  |        |        |      | 95,064  |         |         |   | 88,134  |        
|                          | Gain on sale of real estate                             |                                             |                |        |                   |        |   | 43,255  |        |        |      |        |         |         |   | 43,255  |        
|                          |                                                         |                                             |                |         |                   |        |   |         |        |        |      |        
|                          | Net income                                              |                                             | $              | 32,444  |                   |        | $ | 75,041  |        |        | $    | 95,064  |         |         | $ | 131,389 |        
|                          |                                                         |                                             |                |         |                   |        |   |         |        |        |      |        
|Our share of:             |                                                         |                                             |                |         |                   |        |   |         |        |        |      |         |         |         |   |        
|                          | Net income                                              |                                             | $              | 15,145  |                   |        | $ | 21,208  |        |        | $    | 45,602  |         |         | $ | 62,918  |        
|                          |                                                         |                                             |                |         |                   |        |   |         |        |        |      |        
|                          | Interest expense and loan cost amortization             |                                             | $              | 4,353   |                   |        | $ | 12,449  |        |        | $    | 16,647  |         |         | $ | 37,075  |        
|                          |                                                         |                                             |                |         |                   |        |   |         |        |        |      |        
|                          | Depreciation and amortization (real estate
    related) |                                             | $              | 11,722  |                   |        | $ | 14,058  |        |        | $    | 33,204  |         |         | $ | 40,992  |        
|                          |                                                         |                                             |                |         |                   |        |   |         |        |        |      |        



| |                        
| | -----------------------
| | Investment in Four Oaks

In September 2004, the Four Oaks office property
located in Houston, Texas, in which we owned an approximate 3%
interest, was sold. Our share of the net proceeds from the sale
was approximately $7.1 million and we recognized a gain
from the transaction of approximately $0.2 million. We
accounted for our investment under the cost method. As of
September 30, 2004, our share of the net proceeds is
reflected as a receivable and is included in prepaid expenses
and other assets. The receivable was collected in October.



| |                              
| | -----------------------------
| | Investment in Colorado Center

In July 2004, we, together with a joint venture
partner, acquired Colorado Center, a six building office complex
consisting of approximately 1,091,090 square feet in Santa
Monica, California, for a purchase price of approximately
$443.6 million. Our share of the purchase price was
approximately $221.8 million. We own 50% of the joint
venture asset, which we manage and lease, and otherwise, share
equally in making major decisions regarding the ownership and
operation of the asset. Our investment is accounted for under
the equity method.



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

In February 2004, we acquired the remaining
economic interest in the 1301 Avenue of the Americas office
building, which was previously accounted for under the equity
method. See Note 3  Acquisitions for more
information.

13



---



##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Unaudited)




|         |              
|-------- | -------------
|NOTE 8  | MORTGAGE DEBT

During the nine months ended September 30,
2004, the following transactions occurred:

|                                 |                                                                                                                                  |                        |           |          |  
|-------------------------------- | -------------------------------------------------------------------------------------------------------------------------------- | ---------------------- | --------- | -------- | -
|                                 |                                                                                                                                  | (Dollars in thousands) |          
|                                 |                                                                                                                                  |                        |          
|Balance at December 31, 2003(a)  |                                                                                                                                  | $                      | 2,329,552 |         
|                                 | Repayments and scheduled principal amortization(b)                                                                               |                        |           | (214,693 | )
|                                 | Assumed through acquisition and consolidation of
    1301 Avenue of the Americas (See Note 3 
    Acquisitions)                 |                        |           | 534,255  |  
|                                 | Assumed through consolidation of SunAmerica
    Center (See Note 11  Cumulative Effect of a
    Change in Accounting Principle) |                        |           | 203,225  |  
|                                 |                                                                                                                                  |                        |          
|Balance at June 30, 2004(a)      |                                                                                                                                  |                        | 2,852,339 |         
|                                 | Repayments and scheduled principal amortization(c)                                                                               |                        |           | (219,132 | )
|                                 |                                                                                                                                  |                        |          
|Balance at September 30, 2004(a) |                                                                                                                                  | $                      | 2,633,207 |         
|                                 |                                                                                                                                  |                        |          



---



|    |  |                                                                                                                                                                                                                                                               
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Excludes net discount on mortgage debt of
    approximately $13.8 million, $14.0 million, and
    $13.7 million at September 30, 2004, June 30,
    2004, and December 31, 2003, respectively.                                                                
|   
|(b) |  | Includes the repayment of approximately
    $189.7 million of mortgage debt encumbering the following
    properties: 580 California, BP Tower, 110 Atrium Place,
    Fremont Bayside, Industrial Drive Warehouse, John Marshall and
    125 Perimeter Center.
|   
|(c) |  | Includes the repayment of mortgage debt
    encumbering Worldwide Plaza in the amount of approximately
    $209.1 million.                                                                                                                                    



|         |                                                                           
|-------- | --------------------------------------------------------------------------
|NOTE 9  | UNSECURED NOTES, DERIVATIVE FINANCIAL
    INSTRUMENTS, AND LINES OF CREDIT



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

During the nine months ended September 30,
2004 we repaid the following unsecured notes upon maturity:

|             |  |                        |         |  |             |  |      |                |  |  |      |  
|------------ |  | ---------------------- | ------- |  | ----------- |  | ---- | -------------- |  |  | ---- | -
|Month Repaid |  | Amount                 |         |  | Coupon Rate |  |      | Effective Rate | 
|             |  |                        |         |  |             |  |      |                | 
|             |  | (Dollars in thousands) |         |  |             |  |     
|September    |  | $                      | 30,000  |  |             |  | 7.24 | %              |  |  | 7.26 | %
|June         |  |                        | 250,000 |  |             |  | 6.50 | %              |  |  | 5.31 | %
|May          |  |                        | 200,000 |  |             |  | 6.80 | %              |  |  | 6.10 | %
|January      |  |                        | 300,000 |  |             |  | 6.50 | %              |  |  | 4.59 | %
|January      |  |                        | 100,000 |  |             |  | 6.90 | %              |  |  | 6.27 | %
|             |  |                        |         |  |             |  |      |                | 
|             |  | $                      | 880,000 |  |             |  |      |                |  |  |      |  
|             |  |                        |         |  |             |  |      |                | 



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

In June 2004, we launched a new program allowing
for the issuance of up to $500 million of unsecured
medium-term notes for sale to retail investors through licensed
brokers (EOP InterNotes). During the three months
ended September 30, 2004, we issued approximately
$17.6 million of fixed interest rate EOP InterNotes with
coupon rates ranging from 3.70% to 5.15%. Including all offering
expenses, the effective rates of the notes issued in the third
quarter range from 3.97% to 5.36% and the maturity dates range
from three to six and a half years. Since the beginning of the
program, we have issued approximately $21.9 million of
fixed interest rate EOP InterNotes with coupons ranging from
3.70% to 5.25%. Including all offering expenses, the effective
rates of the InterNotes issued range from 3.97% to 5.46% and the
maturity dates range from three to six and a half years.

14



---



##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Unaudited)


In May 2004, we issued $45.0 million of
unsecured notes due May 2014. The notes bear interest at LIBOR
plus 77.5 basis points. The net cash proceeds from the
issuance were approximately $44.5 million which were used
to repay outstanding balances on the $1.0 billion revolving
credit facility.

In March 2004, we issued $1.0 billion of
4.75% unsecured notes due March 2014. The net cash proceeds from
the issuance were approximately $991.2 million which were
used to repay outstanding balances on the $1.0 billion
revolving credit facility. We also paid $69.1 million to
settle $800 million of forward-starting interest rate swaps
that were previously entered into to hedge the interest rate of
the $1.0 billion notes. Approximately $0.2 million of
the settlement amount was immediately recognized in interest
expense because the hedge was not perfectly effective and the
remaining $68.9 million was charged to other comprehensive
income. The amount charged to other comprehensive income is
being amortized to interest expense over the 10-year term of the
notes. Including all offering expenses and the settlement
payment of the forward-starting swap agreements, the all-in
effective rate of the unsecured notes is 5.54%.



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

In May 2004, we settled $500 million
notional amount of forward-starting interest rate swaps and
recognized a gain of approximately $24.0 million which is
included in realized gain on settlement of derivatives and
sale of marketable securities. The swaps were entered into
in 2003 to hedge an unsecured note offering that was expected to
occur in June 2004. The swaps were settled when the anticipated
unsecured note offering did not occur.

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



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

In July 2004, we obtained a $500 million
364-day bridge revolving credit facility. The credit facility
bore interest at LIBOR plus 65 basis points and had an
annual facility fee of 15 basis points. The agreement
relating to the bridge revolving credit facility contained
certain financial restrictions similar to those of our existing
line of credit facility. The bridge facility was terminated in
October 2004. See Note 15  Subsequent Events.

15



---



##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Unaudited)




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



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

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

|                                  |                                                                                                                          |  |             |            |  
|--------------------------------- | ------------------------------------------------------------------------------------------------------------------------ |  | ----------- | ---------- | -
|Outstanding at December 31, 2003  |                                                                                                                          |  | 449,492,618 |           
|                                  | Issued to Equity Office related to common shares
    issued for share options exercised                                  |  |             | 1,682,409  |  
|                                  | Repurchased/retired (at an average price of
    $26.17 per unit for approximately $36.6 million in the
    aggregate(a)) |  |             | (1,397,883 | )
|                                  | Units redeemed for cash                                                                                                  |  |             | (69,580    | )
|                                  | Issued to Equity Office related to restricted
    shares and share awards issued, net of cancellations                   |  |             | 970,658    |  
|                                  | Units issued in connection with property
    acquisition (see Note 3)                                                    |  |             | 1,930      |  
|                                  |                                                                                                                          |  |            
|Outstanding at June 30, 2004      |                                                                                                                          |  | 450,680,152 |           
|                                  | Issued to Equity Office related to common shares
    issued for share options exercised                                  |  |             | 191,970    |  
|                                  | Repurchased/retired (at an average price of
    $27.84 per unit for approximately $360,000 in the
    aggregate(a))      |  |             | (12,944    | )
|                                  | Units redeemed for cash                                                                                                  |  |             | (24,519    | )
|                                  | Issued to Equity Office related to restricted
    shares and share awards issued, net of cancellations                   |  |             | (14,123    | )
|                                  |                                                                                                                          |  |            
|Outstanding at September 30, 2004 |                                                                                                                          |  | 450,820,536 |           
|                                  |                                                                                                                          |  |            



---



|    |  |                                                                                                                                                                                                                                                                                                              
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Equity Office common shares of beneficial
    interest (Common Shares) were repurchased and
    retired. In connection with the repurchases, we retired a
    corresponding number of Units for an aggregate purchase price
    equal to the aggregate purchase price for all Common Share
    repurchases.



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

|                         |  |                 |          |  |           |                    |             |                   
|------------------------ |  | --------------- | -------- |  | --------- | ------------------ | ----------- | ------------------
|                         |  | Quarterly       |          |  |           |                    |            
|                         |  | Distribution    |          |  |           |                    | Unitholder 
|                         |  | Amount Per Unit |          |  | Date Paid |                    | Record Date
|                         |  |                 |          |  |           |                    |            
|Units                    |  | $               | .50      |  |           | October 15, 2004   |             | September 30, 2004
|Series B Preferred Units |  | $               | 0.65625  |  |           | August 16, 2004    |             | August 2, 2004    
|Series G Preferred Units |  | $               | 0.484375 |  |           | September 15, 2004 |             | September 1, 2004 



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

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



|          |                                                          
|--------- | ---------------------------------------------------------
|NOTE 11  | CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING
    PRINCIPLE

Under the provisions of FIN 46(R), which we
adopted on January 1, 2004, we consolidated the assets,
liabilities and results of operations of SunAmerica Center, an
office property located in Century City, California, which
comprises approximately 780,063 square feet. We own an
approximate 67% share of a $202.2 million mezzanine-level
debt position, for which we paid approximately
$73.9 million in 1999. As a result of this ownership
position, we determined we were the primary beneficiary of this
variable interest entity. As of December 31, 2003, this
investment was recorded as a note

16



---



##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Unaudited)


receivable and was included in other assets. The
note matures in August 2014 and prior to then interest is
payable based on available cash flow. Our maximum exposure to
loss as a result of the investment is equivalent to the
$73.9 million we invested in 1999 and an additional
$2.5 million which we may be required to loan the entity in
the event of a cash shortfall. Our payment recourse is limited
to the mezzanine borrowers equity in the property.

As a result of the consolidation of SunAmerica
Center, we recorded a cumulative effect of a change in
accounting principle loss of approximately $33.7 million in
the first quarter 2004. The effect on our assets and liabilities
as a result of the consolidation of SunAmerica Center as of
January 1, 2004 was:

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



---



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | As of January 1, 2004, our joint venture
    partners share of the mezzanine-level debt of
    approximately $49.7 million is recorded in other
    liabilities, which is net of a discount of approximately
    $31.5 million. Interest expense on the approximate
    $66 million face amount of the joint venture partners
    debt is accrued at 7.25% per annum and the discount is
    amortized to interest expense through the maturity of the
    mezzanine-level loan in 2014. The remaining debt of
    approximately $15 million does not accrue interest.

17



---



##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Unaudited)


NOTE 12  (LOSS) EARNINGS
PER UNIT

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

|                                             |                                                                                                                                          |                                                                                       |   |             |                   |  |   |             |           |  |      |             |           |  |   |             |           | 
|-------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------- | - | ----------- | ----------------- |  | - | ----------- | --------- |  | ---- | ----------- | --------- |  | - | ----------- | --------- | 
|                                             |                                                                                                                                          |                                                                                       |   |            
|                                             |                                                                                                                                          | For the                                                                               |   |             | For the           | 
|                                             |                                                                                                                                          | three months ended                                                                    |   |             | nine months ended | 
|                                             |                                                                                                                                          | September 30,                                                                         |   |             | September 30,     | 
|                                             |                                                                                                                                          |                                                                                       |   |             |                   | 
|(Dollars in thousands, except per unit data) |                                                                                                                                          | 2004                                                                                  |   |             | 2003              |  |   | 2004        |           |  | 2003 |            
|                                             |                                                                                                                                          |                                                                                       |   |             |                   |  |   |             |           |  |      |            
|Numerator:                                   |                                                                                                                                          |                                                                                       |   |             |                   |  |   |             |           |  |      |             |           |  |   |            
|                                             | (Loss) income from continuing operations                                                                                                 |                                                                                       | $ | (140,806    | )                 |  | $ | 123,651     |           |  | $    | 87,672      |           |  | $ | 390,276     |          
|                                             | Preferred distributions                                                                                                                  |                                                                                       |   | (8,701      | )                 |  |   | (10,508     | )         |  |      | (30,393     | )         |  |   | (41,364     | )        
|                                             |                                                                                                                                          |                                                                                       |   |             |                   |  |   |             |           |  |      |            
|                                             | (Loss) income from continuing operations
    available to unitholders                                                                    |                                                                                       |   | (149,507    | )                 |  |   | 113,143     |           |  |      | 57,279      |           |  |   | 348,912     |          
|                                             | Discontinued operations (including net gain
    (loss) on sales of real estate of $3,016, $(6,326), $7,138 and
    $45,399 respectively) |                                                                                       |   | 4,899       |                   |  |   | 10,672      |           |  |      | 17,724      |           |  |   | 102,322     |          
|                                             | Cumulative effect of a change in accounting
    principle                                                                                |                                                                                       |   |            |                   |  |   |            |           |  |      | (33,697     | )         |  |   |            |          
|                                             |                                                                                                                                          |                                                                                       |   |             |                   |  |   |             |           |  |      |            
|                                             | Numerator for basic and diluted (loss) earnings
    per unit  net (loss) income available to unitholders                                |                                                                                       | $ | (144,608    | )                 |  | $ | 123,815     |           |  | $    | 41,306      |           |  | $ | 451,234     |          
|                                             |                                                                                                                                          |                                                                                       |   |             |                   |  |   |             |           |  |      |            
|Denominator:                                 |                                                                                                                                          |                                                                                       |   |             |                   |  |   |             |           |  |      |             |           |  |   |            
|                                             | Denominator for basic (loss) earnings per
    unit  weighted average Units outstanding                                                  |                                                                                       |   | 448,766,905 |                   |  |   | 446,750,227 |           |  |      | 448,900,112 |           |  |   | 451,731,474 |          
|                                             | Effect of dilutive potential units:                                                                                                      |                                                                                       |   |             |                   |  |   |             |           |  |      |             |           |  |   |             |          
|                                             |                                                                                                                                          | Units issuable upon exercise of Equity Office
    share options and restricted shares |   |             |                  |  |   |             | 2,055,161 |  |      |             | 1,901,065 |  |   |             | 1,720,439 | 
|                                             |                                                                                                                                          |                                                                                       |   |             |                   |  |   |             |           |  |      |            
|                                             | Denominator for diluted (loss) earnings per
    unit  weighted average Units outstanding and dilutive
    potential units               |                                                                                       |   | 448,766,905 |                   |  |   | 448,805,388 |           |  |      | 450,801,177 |           |  |   | 453,451,913 |          
|                                             |                                                                                                                                          |                                                                                       |   |             |                   |  |   |             |           |  |      |            
|(Loss) earnings per unit 
    basic:        |                                                                                                                                          |                                                                                       |   |             |                   |  |   |             |           |  |      |             |           |  |   |            
|                                             | (Loss) income from continuing operations
    available to unitholders                                                                    |                                                                                       | $ | (0.33       | )                 |  | $ | 0.25        |           |  | $    | 0.13        |           |  | $ | 0.77        |          
|                                             | Discontinued operations                                                                                                                  |                                                                                       |   | 0.01        |                   |  |   | 0.02        |           |  |      | 0.04        |           |  |   | 0.23        |          
|                                             | Cumulative effect of a change in accounting
    principle                                                                                |                                                                                       |   |            |                   |  |   |            |           |  |      | (0.08       | )         |  |   |            |          
|                                             |                                                                                                                                          |                                                                                       |   |             |                   |  |   |             |           |  |      |            
|                                             | Net (loss) income available to unitholders(a)                                                                                            |                                                                                       | $ | (0.32       | )                 |  | $ | 0.28        |           |  | $    | 0.09        |           |  | $ | 1.00        |          
|                                             |                                                                                                                                          |                                                                                       |   |             |                   |  |   |             |           |  |      |            
|(Loss) earnings per unit 
    diluted:      |                                                                                                                                          |                                                                                       |   |             |                   |  |   |             |           |  |      |             |           |  |   |            
|                                             | (Loss) income from continuing operations
    available to unitholders                                                                    |                                                                                       | $ | (0.33       | )                 |  | $ | 0.25        |           |  | $    | 0.13        |           |  | $ | 0.77        |          
|                                             | Discontinued operations                                                                                                                  |                                                                                       |   | 0.01        |                   |  |   | 0.02        |           |  |      | 0.04        |           |  |   | 0.23        |          
|                                             | Cumulative effect of a change in accounting
    principle                                                                                |                                                                                       |   |            |                   |  |   |            |           |  |      | (0.07       | )         |  |   |            |          
|                                             |                                                                                                                                          |                                                                                       |   |             |                   |  |   |             |           |  |      |            
|                                             | Net (loss) income available to unitholders(a)                                                                                            |                                                                                       | $ | (0.32       | )                 |  | $ | 0.28        |           |  | $    | 0.09        |           |  | $ | 1.00        |          
|                                             |                                                                                                                                          |                                                                                       |   |             |                   |  |   |             |           |  |      |            






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

18



---



##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Unaudited)


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

|                         |       |                  |       |                            |      |  |                           |            |  |  |            |            |  |      |            |            |  |  |            |            | 
|------------------------ | ----- | ---------------- | ----- | -------------------------- | ---- |  | ------------------------- | ---------- |  |  | ---------- | ---------- |  | ---- | ---------- | ---------- |  |  | ---------- | ---------- | 
|                         |       |                  |       |                            |      | 
|                         |       |                  |       | For the three months ended |      |  | For the nine months ended |           
|                         |       |                  |       | September 30,              |      |  | September 30,             |           
|                         |       | Weighted Average |       |                            |      |  |                           |            | 
|Antidilutive Securities  |       | Exercise Price   |       |                            | 2004 |  |                           | 2003       |  |  | 2004       |            |  | 2003 |           
|                         |       |                  |       |                            |      |  |                           |            |  |  |            |            |  |      |           
|Share options            |       | $                | 27.57 |                            |      |  | 22,359,571                |            |  |  |           |            |  |      |           |            |  |  |           |           
|Share options            |       | $                | 29.25 |                            |      |  |                          |            |  |  | 13,140,521 |            |  |      |           |            |  |  |           |           
|Share options            |       | $                | 29.14 |                            |      |  |                          |            |  |  |           |            |  |      | 15,115,409 |            |  |  |           |           
|Share options            |       | $                | 29.26 |                            |      |  |                          |            |  |  |           |            |  |      |           |            |  |  | 13,466,685 |           
|Series B Preferred Units |       | $                | 35.70 |                            |      |  | 8,389,354                 |            |  |  | 8,389,354  |            |  |      | 8,389,354  |            |  |  | 8,389,354  |           
|Restricted shares        |       | $                | 27.22 |                            |      |  | 1,968,060                 |            |  |  |           |            |  |      |           |            |  |  |           |           
|                         |       |                  |       |                            |      |  |                           |            |  |  |            |            |  |      |           
|                         | Total |                  |       |                            |      |  |                           | 32,716,985 |  |  |            | 21,529,875 |  |      |            | 23,504,763 |  |  |            | 21,856,039 | 
|                         |       |                  |       |                            |      |  |                           |            |  |  |            |            |  |      |           



|          |                    
|--------- | -------------------
|NOTE 13  | SEGMENT INFORMATION

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

19



---



##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Unaudited)


|                                                                                                                                                                      |                                                              |                                     |            |          |                            |          |          |              |       |          |            |          |           |           |          |          |              |          |          |          |       |          |          |          |         |          |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------ | ----------------------------------- | ---------- | -------- | -------------------------- | -------- | -------- | ------------ | ----- | -------- | ---------- | -------- | --------- | --------- | -------- | -------- | ------------ | -------- | -------- | -------- | ----- | -------- | -------- | -------- | ------- | -------- | -
|                                                                                                                                                                      |                                                              |                                     |            |         
|                                                                                                                                                                      |                                                              | For the three months ended          |            |          | For the three months ended |         
|                                                                                                                                                                      |                                                              | September 30, 2004                  |            |          | September 30, 2003         |         
|                                                                                                                                                                      |                                                              |                                     |            |          |                            |         
|                                                                                                                                                                      |                                                              | Office                              |            |          | Corporate                  |          |          |              |       | Office   |            |          | Corporate |           |          |         
|(Dollars in thousands)                                                                                                                                                |                                                              | Properties                          |            |          | and Other                  |          |          | Consolidated |       |          | Properties |          |           | and Other |          |          | Consolidated |         
|                                                                                                                                                                      |                                                              |                                     |            |          |                            |          |          |              |       |          |            |          |           |           |          |          |              |         
|Property operating revenues(1)                                                                                                                                        |                                                              | $                                   | 786,500    |          |                            | $        | 998      |              |       | $        | 787,498    |          |           | $         | 774,902  |          |              | $        | 1,189    |          |       | $        | 776,091  |         
|Property operating expenses(2)                                                                                                                                        |                                                              |                                     | (301,554   | )        |                            |          | (311     | )            |       |          | (301,865   | )        |           |           | (277,679 | )        |              |          | (268     | )        |       |          | (277,947 | )       
|                                                                                                                                                                      |                                                              |                                     |            |          |                            |          |          |              |       |          |            |          |           |           |          |          |              |         
|                                                                                                                                                                      | Property net operating income from continuing
    operations |                                     |            | 484,946  |                            |          |          | 687          |       |          |            | 485,633  |           |           |          | 497,223  |              |          |          | 921      |       |          |          | 498,144  |        
|                                                                                                                                                                      |                                                              |                                     |            |          |                            |          |          |              |       |          |            |          |           |           |          |          |              |         
|Adjustments to arrive at net income:                                                                                                                                  |                                                              |                                     |            |          |                            |          |          |              |       |          |            |          |           |           |          |          |              |          |          |          |       |          |          |         
|                                                                                                                                                                      | Other revenues                                               |                                     |            | 1,315    |                            |          |          | 8,453        |       |          |            | 9,768    |           |           |          | 2,086    |              |          |          | 3,570    |       |          |          | 5,656    |        
|                                                                                                                                                                      | Interest expense(3)                                          |                                     |            | (53,106  | )                          |          |          | (157,355     | )     |          |            | (210,461 | )         |           |          | (44,265  | )            |          |          | (163,640 | )     |          |          | (207,905 | )      
|                                                                                                                                                                      | Depreciation and amortization                                |                                     |            | (185,584 | )                          |          |          | (4,278       | )     |          |            | (189,862 | )         |           |          | (169,555 | )            |          |          | (3,321   | )     |          |          | (172,876 | )      
|                                                                                                                                                                      | Ground rent                                                  |                                     |            | (5,531   | )                          |          |          |             |       |          |            | (5,531   | )         |           |          | (5,534   | )            |          |          |         |       |          |          | (5,534   | )      
|                                                                                                                                                                      | General and administrative                                   |                                     |            |         |                            |          |          | (13,190      | )     |          |            | (13,190  | )         |           |          |         |              |          |          | (13,515  | )     |          |          | (13,515  | )      
|                                                                                                                                                                      | Impairment                                                   |                                     |            | (228,272 | )                          |          |          | (898         | )     |          |            | (229,170 | )         |           |          |         |              |          |          |         |       |          |          |         |        
|                                                                                                                                                                      |                                                              |                                     |            |          |                            |          |          |              |       |          |            |          |           |           |          |          |              |         
|                                                                                                                                                                      |                                                              |                                     | Total      |          |                            | (471,178 | )        |              |       | (167,268 | )          |          |           | (638,446  | )        |          |              | (217,268 | )        |          |       | (176,906 | )        |          |         | (394,174 | )
|                                                                                                                                                                      |                                                              |                                     |            |          |                            |          |          |              |       |          |            |          |           |           |          |          |              |         
|(Loss) income before income taxes, allocation to
    minority interests, income from investments in unconsolidated
    joint ventures and gain on sale of real estate |                                                              |                                     | 13,768     |          |                            |          | (166,581 | )            |       |          | (152,813   | )        |           |           | 279,955  |          |              |          | (175,985 | )        |       |          | 103,970  |         
|Income taxes                                                                                                                                                          |                                                              |                                     | (12        | )        |                            |          | (1,123   | )            |       |          | (1,135     | )        |           |           | (585     | )        |              |          | 874      |          |       |          | 289      |         
|Minority interests                                                                                                                                                    |                                                              |                                     | (2,219     | )        |                            |          |         |              |       |          | (2,219     | )        |           |           | (1,821   | )        |              |          | 5        |          |       |          | (1,816   | )       
|Income from investments in unconsolidated joint
    ventures                                                                                                          |                                                              |                                     | 14,847     |          |                            |          | 298      |              |       |          | 15,145     |          |           |           | 19,550   |          |              |          | 1,658    |          |       |          | 21,208   |         
|Gain on sale of real estate                                                                                                                                           |                                                              |                                     |           |          |                            |          | 216      |              |       |          | 216        |          |           |           |         |          |              |          |         |          |       |          |         |         
|                                                                                                                                                                      |                                                              |                                     |            |          |                            |          |          |              |       |          |            |          |           |           |          |          |              |         
|(Loss) income from continuing operations                                                                                                                              |                                                              |                                     | 26,384     |          |                            |          | (167,190 | )            |       |          | (140,806   | )        |           |           | 297,099  |          |              |          | (173,448 | )        |       |          | 123,651  |         
|Discontinued operations (including net gain
    (loss) on sales of real estate of $3,016 and ($6,326),
    respectively)                                              |                                                              |                                     | (908       | )        |                            |          | 5,807    |              |       |          | 4,899      |          |           |           | 1,731    |          |              |          | 8,941    |          |       |          | 10,672   |         
|                                                                                                                                                                      |                                                              |                                     |            |          |                            |          |          |              |       |          |            |          |           |           |          |          |              |         
|Net (loss) income                                                                                                                                                     |                                                              | $                                   | 25,476     |          |                            | $        | (161,383 | )            |       | $        | (135,907   | )        |           | $         | 298,830  |          |              | $        | (164,507 | )        |       | $        | 134,323  |         
|                                                                                                                                                                      |                                                              |                                     |            |          |                            |          |          |              |       |          |            |          |           |           |          |          |              |         
|Property net operating income:                                                                                                                                        |                                                              |                                     |            |          |                            |          |          |              |       |          |            |          |           |           |          |          |              |          |          |          |       |          |          |         
|                                                                                                                                                                      | Continuing operations                                        |                                     | $          | 484,946  |                            |          | $        | 687          |       |          | $          | 485,633  |           |           | $        | 497,223  |              |          | $        | 921      |       |          | $        | 498,144  |        
|                                                                                                                                                                      | Discontinued operations                                      |                                     |            | (599     | )                          |          |          | 3,713        |       |          |            | 3,114    |           |           |          | 15,445   |              |          |          | 8,121    |       |          |          | 23,566   |        
|                                                                                                                                                                      |                                                              |                                     |            |          |                            |          |          |              |       |          |            |          |           |           |          |          |              |         
|                                                                                                                                                                      |                                                              | Total property net operating income |            | $        | 484,347                    |          |          | $            | 4,400 |          |            | $        | 488,747   |           |          | $        | 512,668      |          |          | $        | 9,042 |          |          | $        | 521,710 |         
|                                                                                                                                                                      |                                                              |                                     |            |          |                            |          |          |              |       |          |            |          |           |           |          |          |              |         
|Property operating margin from continuing and
    discontinued operations(4)                                                                                          |                                                              |                                     |            |          |                            |          |          |              |       |          | 61.7%      |          |           |           |          |          |              |          |          |          |       |          | 64.6%    |         
|                                                                                                                                                                      |                                                              |                                     |            |          |                            |          |          |              |       |          |            |          |           |           |          |          |              |         
|Property operating margin from continuing
    operations(4)                                                                                                           |                                                              |                                     |            |          |                            |          |          |              |       |          | 61.7%      |          |           |           |          |          |              |          |          |          |       |          | 64.2%    |         
|                                                                                                                                                                      |                                                              |                                     |            |          |                            |          |          |              |       |          |            |          |           |           |          |          |              |         
|Total assets                                                                                                                                                          |                                                              | $                                   | 24,304,190 |          |                            | $        | 472,302  |              |       | $        | 24,776,492 |          |           |           |          |          |              |          |          |          |       |          |          |         
|                                                                                                                                                                      |                                                              |                                     |            |          |                            |          |          |              |       |          |            |          |           |           |          |          |              |         

20



---



##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Unaudited)


|                                                                                                                                                               |                                                                              |                                     |            |           |                           |   |          |              |          |        |            |           |            |           |           |           |              |   |          |          |          |   |           |           |            |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------- | ----------------------------------- | ---------- | --------- | ------------------------- | - | -------- | ------------ | -------- | ------ | ---------- | --------- | ---------- | --------- | --------- | --------- | ------------ | - | -------- | -------- | -------- | - | --------- | --------- | ---------- | -
|                                                                                                                                                               |                                                                              |                                     |            |          
|                                                                                                                                                               |                                                                              | For the nine months ended           |            |           | For the nine months ended |  
|                                                                                                                                                               |                                                                              | September 30, 2004                  |            |           | September 30, 2003        |  
|                                                                                                                                                               |                                                                              |                                     |            |           |                           |  
|                                                                                                                                                               |                                                                              | Office                              |            |           | Corporate                 |   |          |              |          | Office |            |           | Corporate  |           |           |          
|(Dollars in thousands)                                                                                                                                         |                                                                              | Properties                          |            |           | and Other                 |   |          | Consolidated |          |        | Properties |           |            | and Other |           |           | Consolidated |  
|                                                                                                                                                               |                                                                              |                                     |            |           |                           |   |          |              |          |        |            |           |            |           |           |           |              |  
|Property operating revenues(1)                                                                                                                                 |                                                                              | $                                   | 2,353,643  |           |                           | $ | 2,899    |              |          | $      | 2,356,542  |           |            | $         | 2,316,106 |           |              | $ | 3,196    |          |          | $ | 2,319,302 |          
|Property operating expenses(2)                                                                                                                                 |                                                                              |                                     | (873,344   | )         |                           |   | (1,016   | )            |          |        | (874,360   | )         |            |           | (819,891  | )         |              |   | (976     | )        |          |   | (820,867  | )        
|                                                                                                                                                               |                                                                              |                                     |            |           |                           |   |          |              |          |        |            |           |            |           |           |           |              |  
|                                                                                                                                                               | Property net operating income from continuing
    operations                 |                                     |            | 1,480,299 |                           |   |          | 1,883        |          |        |            | 1,482,182 |            |           |           | 1,496,215 |              |   |          | 2,220    |          |   |           | 1,498,435 |           
|                                                                                                                                                               |                                                                              |                                     |            |           |                           |   |          |              |          |        |            |           |            |           |           |           |              |  
|Adjustments to arrive at net income:                                                                                                                           |                                                                              |                                     |            |           |                           |   |          |              |          |        |            |           |            |           |           |           |              |   |          |          |          |   |           |          
|                                                                                                                                                               | Other revenues                                                               |                                     |            | 3,667     |                           |   |          | 40,755       |          |        |            | 44,422    |            |           |           | 3,219     |              |   |          | 25,935   |          |   |           | 29,154    |           
|                                                                                                                                                               | Interest expense(3)                                                          |                                     |            | (161,254  | )                         |   |          | (467,870     | )        |        |            | (629,124  | )          |           |           | (133,800  | )            |   |          | (489,499 | )        |   |           | (623,299  | )         
|                                                                                                                                                               | Depreciation and amortization                                                |                                     |            | (549,002  | )                         |   |          | (13,966      | )        |        |            | (562,968  | )          |           |           | (498,848  | )            |   |          | (9,968   | )        |   |           | (508,816  | )         
|                                                                                                                                                               | Ground rent                                                                  |                                     |            | (15,927   | )                         |   |          |             |          |        |            | (15,927   | )          |           |           | (15,000   | )            |   |          |         |          |   |           | (15,000   | )         
|                                                                                                                                                               | General and administrative                                                   |                                     |            |          |                           |   |          | (38,208      | )        |        |            | (38,208   | )          |           |           |          |              |   |          | (44,672  | )        |   |           | (44,672   | )         
|                                                                                                                                                               | Impairment                                                                   |                                     |            | (228,272  | )                         |   |          | (898         | )        |        |            | (229,170  | )          |           |           |          |              |   |          |         |          |   |           |          |           
|                                                                                                                                                               |                                                                              |                                     |            |           |                           |   |          |              |          |        |            |           |            |           |           |           |              |  
|                                                                                                                                                               |                                                                              | Total                               |            |           | (950,788                  | ) |          |              | (480,187 | )      |            |           | (1,430,975 | )         |           |           | (644,429     | ) |          |          | (518,204 | ) |           |           | (1,162,633 | )
|                                                                                                                                                               |                                                                              |                                     |            |           |                           |   |          |              |          |        |            |           |            |           |           |           |              |  
|Income before income taxes, allocation to
    minority interests, income from investments in unconsolidated
    joint ventures and gain on sale of real estate |                                                                              |                                     | 529,511    |           |                           |   | (478,304 | )            |          |        | 51,207     |           |            |           | 851,786   |           |              |   | (515,984 | )        |          |   | 335,802   |          
|Income taxes                                                                                                                                                   |                                                                              |                                     | (429       | )         |                           |   | (1,798   | )            |          |        | (2,227     | )         |            |           | (969      | )         |              |   | (1,312   | )        |          |   | (2,281    | )        
|Minority interests                                                                                                                                             |                                                                              |                                     | (7,126     | )         |                           |   |         |              |          |        | (7,126     | )         |            |           | (6,168    | )         |              |   | 5        |          |          |   | (6,163    | )        
|Income from investments in unconsolidated joint
    ventures                                                                                                   |                                                                              |                                     | 43,145     |           |                           |   | 2,457    |              |          |        | 45,602     |           |            |           | 60,041    |           |              |   | 2,877    |          |          |   | 62,918    |          
|Gain on sale of real estate                                                                                                                                    |                                                                              |                                     |           |           |                           |   | 216      |              |          |        | 216        |           |            |           |          |           |              |   |         |          |          |   |          |          
|                                                                                                                                                               |                                                                              |                                     |            |           |                           |   |          |              |          |        |            |           |            |           |           |           |              |  
|Income from continuing operations                                                                                                                              |                                                                              |                                     | 565,101    |           |                           |   | (477,429 | )            |          |        | 87,672     |           |            |           | 904,690   |           |              |   | (514,414 | )        |          |   | 390,276   |          
|Discontinued operations (including net gain on
    sales of real estate of $7,138 and $45,339, respectively)                                                   |                                                                              |                                     | 9,898      |           |                           |   | 7,826    |              |          |        | 17,724     |           |            |           | 81,010    |           |              |   | 21,312   |          |          |   | 102,322   |          
|                                                                                                                                                               |                                                                              |                                     |            |           |                           |   |          |              |          |        |            |           |            |           |           |           |              |  
|Income before cumulative effect of a change in
    accounting principle                                                                                        |                                                                              |                                     | 574,999    |           |                           |   | (469,603 | )            |          |        | 105,396    |           |            |           | 985,700   |           |              |   | (493,102 | )        |          |   | 492,598   |          
|Cumulative effect of a change in accounting
    principle                                                                                                      |                                                                              |                                     | (33,697    | )         |                           |   |         |              |          |        | (33,697    | )         |            |           |          |           |              |   |         |          |          |   |          |          
|                                                                                                                                                               |                                                                              |                                     |            |           |                           |   |          |              |          |        |            |           |            |           |           |           |              |  
|Net income                                                                                                                                                     |                                                                              | $                                   | 541,302    |           |                           | $ | (469,603 | )            |          | $      | 71,699     |           |            | $         | 985,700   |           |              | $ | (493,102 | )        |          | $ | 492,598   |          
|                                                                                                                                                               |                                                                              |                                     |            |           |                           |   |          |              |          |        |            |           |            |           |           |           |              |  
|Property net operating income:                                                                                                                                 |                                                                              |                                     |            |           |                           |   |          |              |          |        |            |           |            |           |           |           |              |   |          |          |          |   |           |          
|                                                                                                                                                               | Continuing operations                                                        |                                     | $          | 1,480,299 |                           |   | $        | 1,883        |          |        | $          | 1,482,182 |            |           | $         | 1,496,215 |              |   | $        | 2,220    |          |   | $         | 1,498,435 |           
|                                                                                                                                                               | Discontinued operations                                                      |                                     |            | (372      | )                         |   |          | 18,689       |          |        |            | 18,317    |            |           |           | 52,902    |              |   |          | 25,888   |          |   |           | 78,790    |           
|                                                                                                                                                               |                                                                              |                                     |            |           |                           |   |          |              |          |        |            |           |            |           |           |           |              |  
|                                                                                                                                                               |                                                                              | Total property net operating income |            | $         | 1,479,927                 |   |          | $            | 20,572   |        |            | $         | 1,500,499  |           |           | $         | 1,549,117    |   |          | $        | 28,108   |   |           | $         | 1,577,225  |  
|                                                                                                                                                               |                                                                              |                                     |            |           |                           |   |          |              |          |        |            |           |            |           |           |           |              |  
|                                                                                                                                                               | Property operating margin from continuing and
    discontinued operations(4) |                                     |            |           |                           |   |          |              |          |        |            | 63.0%     |            |           |           |           |              |   |          |          |          |   |           | 64.9%     |           
|                                                                                                                                                               |                                                                              |                                     |            |           |                           |   |          |              |          |        |            |           |            |           |           |           |              |  
|                                                                                                                                                               | Property operating margin from continuing
    operations(4)                  |                                     |            |           |                           |   |          |              |          |        |            | 62.9%     |            |           |           |           |              |   |          |          |          |   |           | 64.6%     |           
|                                                                                                                                                               |                                                                              |                                     |            |           |                           |   |          |              |          |        |            |           |            |           |           |           |              |  
|Total assets                                                                                                                                                   |                                                                              | $                                   | 24,304,190 |           |                           | $ | 472,302  |              |          | $      | 24,776,492 |           |            |           |           |           |              |   |          |          |          |   |           |          
|                                                                                                                                                               |                                                                              |                                     |            |           |                           |   |          |              |          |        |            |           |            |           |           |           |              |  






|    |                                                                                                                                                                                                          
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Included in property operating revenues are
    rental revenues, tenant reimbursements, parking income and other
    income.                                                                             
|   
|(2) | Included in property operating expenses are real
    estate taxes, insurance, repairs and maintenance and property
    operating expenses.                                                               
|   
|(3) | Interest expense for the Office Properties
    represents interest expense on property secured mortgage debt
    and does not include interest expense on the unsecured notes or
    the lines of credit.
|   
|(4) | Property operating margin is calculated by
    dividing property net operating income by property operating
    revenues.                                                                                

21



---



##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Unaudited)




|          |                              
|--------- | -----------------------------
|NOTE 14  | COMMITMENTS AND CONTINGENCIES



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

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



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

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



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

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

On May 8, 2003, Broadband Office, Inc. and
the official committee of unsecured creditors of Broadband
Office Inc. filed a complaint in the United States Bankruptcy
Court for the District of Delaware against one private and seven
public real estate companies, various affiliated entities and
certain individuals, including us, David Helfand (a former
executive vice president of ours), Spieker Properties, Inc. and
Spieker Properties, L.P. (which we acquired in 2001) and
Craig Vought (formerly co-chief executive officer of Spieker
Properties, Inc. and a former trustee of ours). On
October 1, 2004, the Court entered its order dismissing the
litigation with prejudice pursuant to a settlement among all of
the parties. As part of the settlement, we paid the plaintiffs
$351,429, which is an amount equal to our share of the total
settlement consideration paid by all of the defendant real
estate companies. In exchange, we received full payment on our
administrative rent claims in the sum of $316,327 resulting in a
net out-of-pocket expenditure of approximately $35,000.

We received three Notices of Violation (the
NOVs) from the California South Coast Air Quality
Management District (the District) with regard to
certain equipment located at three of our Properties in the
Pasadena, California area. The District is a regulatory body
that is responsible for, among other things, permitting sources
of certain air pollutants. Each of the subject Properties has
a number of such sources located on it (standard equipment
such as boilers, generators, and emergency fire pumps). The NOVs
indicated that, among the Properties, two boilers, three
generators, and a diesel-powered fire pump were not properly
permitted as required by the Districts regulations. The
equipment has now been properly permitted. Although we cannot
determine the amount of any eventual monetary fine that the
District will seek to impose, the District advised us in August
2004 that it may seek some level of monetary fine. We believe
there to be significant mitigating factors which we have asked
the District to consider in determining the amount of the fine.
However, we do not believe that such monetary fine will have a
material adverse effect on our financial condition, results of
operation, or liquidity.



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

As of December 31, 2003, we had
$1.3 billion of forward-starting interest rate swaps
outstanding, of which $800 million were settled in March
2004 and $500 million were settled in May 2004 (see
Note 9  Unsecured Notes, Derivative Financial
Instruments, and Lines of Credit). The market value of the swaps
at December 31, 2003 represented a net liability to us of
approximately $10.4 million (approximately
$11.1 million is recorded in other assets and

22



---



##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Unaudited)


$21.5 million is recorded in other
liabilities). The corresponding net market value of the swaps
was included in accumulated other comprehensive income as of
December 31, 2003.



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

In March 2004, we entered into fixed-to-floating
interest rate swap agreements in the notional amount of
$1.0 billion to hedge the $1.0 billion of unsecured
notes also issued in March 2004. We are the variable interest
rate payer and the counterparty is the fixed rate payer. The
swaps effectively converted the unsecured notes to a variable
interest rate based on LIBOR plus 43 basis points plus an
additional 79 basis points for loan costs. The swaps are
considered perfectly effective fair value hedges because the
periodic settlement dates and other key terms correspond to the
dates and other key terms of the hedged unsecured notes.

The fixed-to-floating interest rate swaps and the
hedged unsecured notes are reflected on the consolidated balance
sheet at market value. The market value of the swaps is
reflected in other assets or other liabilities, and the
corresponding market value of the unsecured notes is reflected
as either a premium or discount on the unsecured notes. The
market value of the swaps at September 30, 2004 represented
a liability to us of approximately $31.4 million.



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

Certain joint venture agreements contain buy/
sell options in which each party has the option to acquire the
interest of the other party. Except for certain agreements in
which our partners in two of our Office Properties can require
us to buy their interests, such agreements do not generally
require that we buy our partners interest. The exceptions
allow our unaffiliated partners, at their election, to require
that we buy their interests during specified future time
periods, commencing in 2009 and at amounts that represent the
fair market value of their interest at that time or at amounts
based on formulas contained in the respective agreements. In
addition, we have granted options to each of three tenants to
purchase the Office Property it occupies.

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

Approximately 230 of our Properties, consisting
of approximately 30.9 million square feet, are subject to
restrictions on taxable dispositions under tax protection
agreements entered into with some of the contributors of the
properties. The carrying value of these properties was
approximately $6.6 billion at September 30, 2004. The
restrictions on taxable dispositions are effective for periods
expiring at different times through 2021. The terms of these tax
protection agreements generally prevent us from selling the
properties in taxable transactions unless we indemnify the
contributing partners for their income tax liability on the
portion of the gain on sale allocated to them as a result of the
Propertys value at the time of its contribution to us or,
in some cases, to our predecessor. We do not believe that the
tax protection agreements materially affect the conduct of our
business or our decisions whether to dispose of restricted
properties during the restriction period because we generally
hold these and our other properties for investment purposes,
rather than for sale. Historically, however, where we have
deemed it to be in our unitholders best interests to
dispose of restricted Properties, we have done so through
transactions structured as tax-deferred transactions under
section 1031 of the Internal Revenue Code. We anticipate
structuring most future dispositions of restricted Properties as
transactions intended to qualify for tax-deferred treatment. We
therefore view the likelihood of incurring any such material
indemnification obligations to be remote. Were we to dispose of
a restricted Property in a taxable transaction, we generally
would be required to pay to a partner that is a beneficiary of
one of the tax protection agreements an amount based on the
amount of income tax the partner would be required to pay on the
incremental gain allocated to such partner as a result of the
built-in gain that existed with respect to such Property at the
time of its contribution to us, or in some cases, to our
predecessor. In some cases there is a further requirement to
reimburse any additional tax liability arising from the
indemnification payment itself. The exact amount that would be
payable with respect to any particular taxable sale of a

23



---



##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Unaudited)


restricted Property would depend on a number of
factors, many of which can only be calculated at the time of any
future sale, including the sale price of the Property at the
time of the sale, the partnerships basis in the Property
at the time of the sale, the partners basis in the assets
at the time of the contribution, the partners applicable
rate of federal, state and local taxation at the time of the
sale, and the timing of the sale itself.



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

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

|                                             |  |                                                                                                                                                                                                  |  |                                          
|-------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -----------------------------------------
|                                             |  | EOP Partnership                                                                                                                                                                                  |  | Third-Party                              
|Type of Insurance Coverage                   |  | Loss Exposure/ Deductible                                                                                                                                                                        |  | Coverage Limitation                      
|                                             |  |                                                                                                                                                                                                  |  |                                          
|Property damage and business interruption(a) |  | $50 million per occurrence and
    $75 million annual aggregate exposure (which includes
    amounts paid for earthquake loss), plus $1 million per
    occurrence deductible                    |  | $1.0 billion per occurrence(c)           
|Earthquake(a)(b)                             |  | $75 million per occurrence and annual
    aggregate exposure (which includes amounts paid for property
    damage and business interruption loss), plus $1 million per
    occurrence deductible |  | $325 million in the aggregate per year(c)
|Acts of terrorism(d)                         |  | $2.8 million per occurrence deductible (plus
    10% of each and every loss with a maximum per occurrence
    exposure of $35.3 million which includes the
    $2.8 million deductible)          |  | $825 million per occurrence(e)           



---



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

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

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

24



---



##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Unaudited)




|          |                  
|--------- | -----------------
|NOTE 15  | SUBSEQUENT EVENTS

The following transactions occurred subsequent to
September 30, 2004, through October 29, 2004:

1. We issued $800 million of 4.65%
fixed rate unsecured notes and $200 million variable rate
unsecured notes at LIBOR plus 60 basis points plus an
additional 13 basis points for loan costs. The notes mature
in October 2010. The effective rate of the fixed rate notes is
4.81%. The net proceeds were used to repay $125 million
outstanding under our bridge facility, which then terminated in
accordance with its terms. The remaining portion of the net
proceeds were used to repay outstanding balances under our
$1 billion line of credit.

2. We announced the redemption of our
7.25% Senior Exchangeable Notes which are due
November 15, 2008. We have elected to exercise our right to
redeem the Notes on November 22, 2004. In accordance with
the terms of the Notes, the regular semi-annual interest payment
will be paid on November 15, 2004 to holders of record on
November 1, 2004. The total redemption price to be paid on
the redemption date will be 100% of the principal amount of
$325 million plus interest accrued from and including
November 15, 2004 to the redemption date. In connection
with the redemption, approximately $5.3 million of
unamortized loan costs will be expensed in the fourth quarter.

3. We sold the Port of Oakland industrial
property, which consisted of three buildings comprising
approximately 199,733 square feet in Oakland, California,
for approximately $15.1 million.

4. We issued approximately $3.8 million
of fixed interest rate EOP InterNotes with coupon interest rates
ranging from 3.8% to 4.0%. The notes mature in October 2008.

25



---



##### Table of Contents





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

Forward-Looking Statements

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



| |   |                                                                                                                                                                                                                
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | changes in general economic conditions and the
    effect of any such changes on white-collar job growth and the
    demand for office space in markets in which we have a presence;                           
|
| |  | the availability of new competitive supply;                                                                                                                                                                    
|
| |  | our ability to maintain and increase occupancy;                                                                                                                                                                
|
| |  | our ability to timely lease or re-lease space at
    anticipated net effective rents, calculated after giving effect
    to any required tenant improvements and leasing costs as well as
    rent concessions;
|
| |  | the amount of lease termination fees, if any;                                                                                                                                                                  
|
| |  | the extent of any tenant bankruptcies and
    insolvencies;                                                                                                                                                    
|
| |  | the cost and availability of debt and equity
    financing;                                                                                                                                                    
|
| |  | our ability to acquire and dispose of certain
    assets from time to time on acceptable terms;                                                                                                                
|
| |  | the effect of any impairment charges associated
    with asset dispositions or changes in market conditions;                                                                                                   
|
| |  | our ability to realize anticipated cost savings
    and to otherwise create and realize economic benefits of scale;                                                                                            
|
| |  | our ability to obtain, at a reasonable cost,
    adequate insurance coverage for catastrophic events, such as
    earthquakes and terrorist acts; and                                                          
|
| |  | other risks and uncertainties detailed from time
    to time in our filings with the SEC.                                                                                                                      

Overview

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

Executive Summary

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



| |   |                                                                                                                                     
| | - | ------------------------------------------------------------------------------------------------------------------------------------
| |  | the prevailing economic environment, including
    its effect on white-collar job growth in markets in which we
    have a presence;
|
| |  | occupancy rates;                                                                                                                    
|
| |  | rental rates on new leases;                                                                                                         
|
| |  | tenant improvements and leasing costs incurred to
    retain and obtain tenants;                                                    
|
| |  | the extent of any early lease terminations and
    any lease termination fees;                                                      

26



---



##### Table of Contents





| |   |                                                 
| | - | ------------------------------------------------
| |  | operating expenses; and                         
|
| |  | the extent of any dispositions and acquisitions.



| |                             
| | ----------------------------
| | Current Economic Environment

Over the past few years, we have faced an
economic slowdown marked by slow employment growth and increased
office vacancy in the United States. The poor economic
environment and weak office markets adversely impacted our
financial results. Although the economy appears to be
recovering, this has not yet significantly impacted our
financial results. Our overall office occupancy declined from
88.6% at December 31, 2002 to 86.7% at September 30,
2004. This was due to early lease terminations, which totaled
approximately 8.4 million square feet, or approximately
6.7% of occupancy lost in our office portfolio since the
beginning of 2003. Since the beginning of the fourth quarter
2003, our occupancy has remained relatively stable at slightly
in excess of 86%, with an increase to 86.7% at
September 30, 2004. We expect our occupancy to be
approximately 88% by December 31, 2004.

The decline in market rental rates from their
peak levels in 2000 and 2001 has also adversely impacted our
financial results. Although market rental rates seem to have
stabilized in many of our markets, the roll down of rents on our
expiring leases to current market levels will continue to
adversely impact our rental revenues, net income and funds from
operations for the foreseeable future, assuming market rental
rates do not materially increase from their existing levels. In
addition, tenant improvements and leasing costs have increased
significantly over the last 15 months due to the
competitive market conditions for new and renewal leases. In
2004, we expect the cost to obtain and keep tenants, such as
tenant improvements, leasing costs, rent concessions and other
concessions, to approximate 2003 levels.

On a macroeconomic level, we believe office
markets are beginning to recover and there will only be a
minimal supply of new office space in most of our core markets
in 2005. In 2003, net absorption was approximately
12.8 million square feet in our top 20 markets. In
2004, we expect net absorption of approximately 35 to
40 million square feet in the same markets. We anticipate
annual growth in the gross domestic product in the range of 3.5%
to 4% and modest office job growth in our top 20 markets.
Although we believe this will lead to an increase in our
occupancy level, any changes in these assumptions could impact
our financial results.



| |                     
| | --------------------
| | Capital Transactions

As part of our capital allocation strategy, we
are concentrating our new investments in core markets and expect
to sell non-core assets and exit non-core markets provided that
market conditions for real estate assets remain favorable. We
may incur gains or losses on property sales and may also incur
impairment charges, some of which could be material, as a result
of either sales or changes in market conditions.

During 2003 through September 30, 2004, we
took advantage of favorable market conditions for property sales
by disposing of approximately $1.4 billion in assets. In
addition, we entered into joint ventures and sold a 75% to 80%
interest in 13 Office Properties for approximately
$596.5 million. We used the proceeds from these asset sales
to repay debt, redeem preferred shares, acquire strategic assets
in core markets, fund distributions to unitholders and
repurchase Units. During this same period we acquired
approximately $1.1 billion in assets.

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



| |   |                                                                                               
| | - | ----------------------------------------------------------------------------------------------
| |  | the key transactions that we completed during the
    nine months ended September 30, 2004;   
|
| |  | our critical accounting policies and estimates;                                               
|
| |  | our results of operations for the three and nine
    months ended September 30, 2004 and 2003;
|
| |  | our liquidity and capital resources; and                                                      
|
| |  | our funds from operations.                                                                    

27



---



##### Table of Contents



Key Transactions in 2004

During the nine months ended September 30,
2004, we completed the following key transactions:



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



| |   |                                                                                                                                                                                                                                                                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | acquired $828.8 million in assets,
    consisting of 20 Office Properties comprising approximately
    2,810,975 square feet (including a 50% interest in Colorado
    Center), our partners interests in 1301 Avenue of the
    Americas and two vacant land parcels;                                                                                                                             
|
| |  | disposed of five office properties, 67 industrial
    properties, a 3% interest in an office property and one
    vacant land parcel in various transactions to unaffiliated
    parties for approximately $491.9 million. The sold office
    properties consisted of approximately 567,765 square feet
    and the industrial properties consisted of approximately
    4,862,281 square feet; and
|
| |  | disposed of our investment in preferred shares of
    CT Convertible Trust I for approximately $32.1 million.                                                                                                                                                                                                                                                                                       



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



| |     
| | ----
| | Debt



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | issued $1.0 billion of unsecured notes due
    March 2014 with a coupon interest rate of 4.75% and an effective
    rate of 5.54%. In connection with this issuance, we settled
    $800 million of forward-starting interest rate swaps for a
    payment of approximately $69.1 million. Approximately
    $0.2 million of this payment was considered an ineffective
    hedge and was expensed during the first quarter. The remaining
    $68.9 million was considered an effective hedge and is
    being amortized to interest expense over the 10-year term of the
    $1.0 billion notes;
|
| |  | launched a new program allowing for the issuance
    of up to $500 million of unsecured medium-term notes for
    sale to retail investors through licensed brokers (EOP
    InterNotes). Since the beginning of the program, we have
    issued approximately $21.9 million of fixed interest rate
    EOP InterNotes with coupons ranging from 3.70% to 5.25%.
    Including all offering expenses, the effective rates of the
    InterNotes issued range from 3.97% to 5.46% and the maturity
    dates range from three to six and a half years.                                           
|
| |  | issued $45 million of unsecured notes due
    May 2014 at a variable rate of LIBOR plus 77.5 basis points;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| |  | repaid approximately $880 million unsecured
    notes;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| |  | repaid approximately $398.8 million of
    mortgage debt;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| |  | obtained a $500 million bridge revolving
    credit facility that matured in July 2005; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| |  | cancelled a $1.0 billion standby 364-day
    line of credit.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      



| |      
| | -----
| | Swaps



| |   |                                                                                                                                                                                                                                                                                                                                                                         
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | entered into several fixed-to-floating interest
    rate swap agreements, total notional amount of
    $1.0 billion, that effectively converted the interest rate
    on the $1.0 billion unsecured notes issued in March 2004
    from a fixed effective rate of 5.54% to a floating rate of LIBOR
    plus 43 basis points plus 79 basis points of loan
    costs; and
|
| |  | settled $500 million notional amount of
    forward-starting interest rate swaps and recognized a gain of
    approximately $24.0 million. The swaps were entered into in
    2003 to hedge an unsecured note offering that was expected to
    take place in June 2004, but did not occur.                                                                             



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



| |   |                                                                                                                                    
| | - | -----------------------------------------------------------------------------------------------------------------------------------
| |  | redeemed the 8 5/8% Series C Cumulative
    Redeemable Preferred Units of Beneficial Interest for
    approximately $114.1 million.

28



---



##### Table of Contents





| |      
| | -----
| | Other



| |   |                                                                                                                                                                                                                                                                                           
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | consolidated the assets, liabilities and results
    of operations of the SunAmerica Center Office Property as of
    January 1, 2004 in accordance with FIN 46(R) and
    recognized a cumulative effect of a change in accounting
    principle loss of approximately $33.7 million; and
|
| |  | during September 2004, we recorded a non-cash
    impairment charge of approximately $229.2 million on
    46 non-core assets.                                                                                                                                                            

Critical Accounting Policies and
Estimates

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

29



---



##### Table of Contents



Results of Operations



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

Below is a summary of leasing activity for
tenants taking occupancy for the periods presented in our Office
Properties. Our 10 largest markets in terms of property net
operating income from continuing operations in order from
greatest to least are Boston, San Francisco, San Jose,
New York, Seattle, Los Angeles, Chicago,
Washington D.C., Atlanta and Orange County. These markets
accounted for approximately 78.6% of our property net operating
income from continuing operations in the third quarter of 2004.

|                        |                                                                                                            |                      |  |           |                           |  |  |              |       |  |      |            |       |      |  |            |       |  |  |            |       | 
|----------------------- | ---------------------------------------------------------------------------------------------------------- | -------------------- |  | --------- | ------------------------- |  |  | ------------ | ----- |  | ---- | ---------- | ----- | ---- |  | ---------- | ----- |  |  | ---------- | ----- | 
|                        |                                                                                                            |                      |  |           |                           | 
|                        |                                                                                                            | For the three months |  |           | For the nine months ended |  |  | For the year |      
|                        |                                                                                                            | ended September 30,  |  |           | September 30,             |  |  | ended        |      
|                        |                                                                                                            |                      |  |           |                           |  |  | December 31, |      
|Office Property Data:   |                                                                                                            | 2004                 |  |           | 2003                      |  |  | 2004         |       |  | 2003 |            |       | 2003 | 
|                        |                                                                                                            |                      |  |           |                           |  |  |              |       |  |      |            |       |      | 
|10 Largest Markets:     |                                                                                                            |                      |  |           |                           |  |  |              |       |  |      |            |       |      |  |            |       |  |  |           
|                        | Portion of total office portfolio based on square
    feet at end of period                                |                      |  | 70.1      | %                         |  |  | 68.6         | %     |  |      | 70.1       | %     |      |  | 68.6       | %     |  |  | 69.4       | %    
|                        | Occupancy at end of period                                                                                 |                      |  | 86.4      | %                         |  |  | 86.0         | %     |  |      | 86.4       | %     |      |  | 86.0       | %     |  |  | 86.1       | %    
|                        | Gross square footage for tenants whose lease term
    commenced during the period                          |                      |  | 3,457,834 |                           |  |  | 3,966,380    |       |  |      | 10,778,239 |       |      |  | 11,153,993 |       |  |  | 15,218,840 |      
|                        | Weighted average annual rent per square foot for
    tenants whose lease term commenced during the period: |                      |  |           |                           |  |  |              |       |  |      |            |       |      |  |            |       |  |  |            |      
|                        |                                                                                                            | GAAP basis(a)(b)     |  | $         | 25.54                     |  |  | $            | 26.54 |  |      | $          | 26.36 |      |  | $          | 28.53 |  |  | $          | 27.93 | 
|                        |                                                                                                            | Cash basis(b)(c)     |  | $         | 24.86                     |  |  | $            | 25.62 |  |      | $          | 25.55 |      |  | $          | 27.67 |  |  | $          | 26.99 | 
|                        | Gross square footage for expiring and terminated
    leases during the period                              |                      |  | 2,984,694 |                           |  |  | 3,935,474    |       |  |      | 10,412,385 |       |      |  | 12,230,812 |       |  |  | 15,932,288 |      
|                        | Weighted average annual rent per square foot for
    expiring and terminated leases during the period:     |                      |  |           |                           |  |  |              |       |  |      |            |       |      |  |            |       |  |  |            |      
|                        |                                                                                                            | GAAP basis(a)        |  | $         | 29.93                     |  |  | $            | 29.02 |  |      | $          | 30.24 |      |  | $          | 30.71 |  |  | $          | 31.12 | 
|                        |                                                                                                            | Cash basis(c)        |  | $         | 30.89                     |  |  | $            | 29.63 |  |      | $          | 31.28 |      |  | $          | 31.34 |  |  | $          | 31.50 | 
|Total Office Portfolio: |                                                                                                            |                      |  |           |                           |  |  |              |       |  |      |            |       |      |  |            |       |  |  |           
|                        | Occupancy at end of period                                                                                 |                      |  | 86.7      | %                         |  |  | 86.3         | %     |  |      | 86.7       | %     |      |  | 86.3       | %     |  |  | 86.3       | %    
|                        | Gross square footage for tenants whose lease term
    commenced during the period                          |                      |  | 5,028,416 |                           |  |  | 6,046,484    |       |  |      | 16,685,427 |       |      |  | 16,564,918 |       |  |  | 22,684,488 |      
|                        | Weighted average annual rent per square foot for
    tenants whose lease term commenced during the period: |                      |  |           |                           |  |  |              |       |  |      |            |       |      |  |            |       |  |  |            |      
|                        |                                                                                                            | GAAP basis(a)(b)     |  | $         | 24.28                     |  |  | $            | 24.24 |  |      | $          | 23.97 |      |  | $          | 25.96 |  |  | $          | 25.68 | 
|                        |                                                                                                            | Cash basis(b)(c)     |  | $         | 23.41                     |  |  | $            | 23.31 |  |      | $          | 23.42 |      |  | $          | 25.20 |  |  | $          | 24.86 | 
|                        | Gross square footage for expiring and terminated
    leases during the period                              |                      |  | 4,295,973 |                           |  |  | 6,159,294    |       |  |      | 16,054,528 |       |      |  | 18,003,915 |       |  |  | 23,976,592 |      
|                        | Weighted average annual rent per square foot for
    expiring and terminated leases during the period:     |                      |  |           |                           |  |  |              |       |  |      |            |       |      |  |            |       |  |  |            |      
|                        |                                                                                                            | GAAP basis(a)        |  | $         | 27.79                     |  |  | $            | 26.07 |  |      | $          | 27.19 |      |  | $          | 27.82 |  |  | $          | 28.14 | 
|                        |                                                                                                            | Cash basis(c)        |  | $         | 28.61                     |  |  | $            | 26.61 |  |      | $          | 28.04 |      |  | $          | 28.40 |  |  | $          | 28.55 | 



---



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | These weighted average GAAP rental rates are
    based on the average annual base rent per square foot over the
    term of each lease and the current estimated tenant
    reimbursements, if any.                                                                                                                                                                                                                                                                     
|   
|(b) |  | Weighted average annual rent per square foot for
    new office leases for tenants whose lease term commenced during
    the period may lag behind market because leasing decisions
    typically are made anywhere from one month to 12 or more months
    prior to taking occupancy.                                                                                                                                                                                  
|   
|(c) |  | These weighted average annual cash rental rates
    are based on the monthly contractual rent when the lease
    commenced, expired or terminated. For new and renewal leases, if
    the monthly contractual rent when the lease commenced is $0 then
    the rental rate represents the first monthly rent payment due
    multiplied by 12 months (Annualized Cash Rent).
    This amount reflects total base rent and estimated expense
    reimbursements without

30



---



##### Table of Contents



| |  |                                                                                                                                                                                                                                                                                                      
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | regard to any rent concessions and contractual
    increases or decreases in rent after the lease commences. We
    believe Annualized Cash Rent is a useful measure because this
    information can be used for comparison to current market rents
    as published by various third party sources.

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

We estimate the average annual total contractual
rent of approximately $30.25 per square foot as of
September 30, 2004 for all of our Office Properties,
calculated on a cash basis, is approximately $3.50 to
$4.00 per square foot above current market rent, which
represents a potential rent roll down. However, the rent roll
down for leases expiring in 2005 to market will be in the $5.00
to $6.00 range due to leases expiring five years after the rent
peaked in many of our markets. This roll down in rents adversely
affects our rental revenues and until market rental rates
increase substantially from their current levels, we expect it
to adversely affect our rental revenues in subsequent periods as
we enter into new leases. The square footage of leases scheduled
to expire and the Annualized Cash Rent per occupied square foot
for these leases is presented below.

|                    |  |                 |             |            |              |   |       | 
|------------------- |  | --------------- | ----------- | ---------- | ------------ | - | ----- | 
|                    |  |                 |             | Annualized |             
|                    |  |                 |             | Cash Rent  |             
|                    |  | Square Feet of  |             |            | per Occupied |  
|Year(a)             |  | Expiring Leases |             |            | Square Foot  |  
|                    |  |                 |             |            |              |  
|2004 (remainder)    |  |                 | 3,104,693   |            |              | $ | 25.13 | 
|2005                |  |                 | 13,040,530  |            |              |   | 29.62 | 
|2006                |  |                 | 13,783,587  |            |              |   | 30.12 | 
|2007                |  |                 | 13,495,875  |            |              |   | 28.94 | 
|2008                |  |                 | 14,199,465  |            |              |   | 28.04 | 
|2009 and Thereafter |  |                 | 51,197,478  |            |              |   | 31.72 | 
|                    |  |                 |             |            |              |  
|Total/ Average      |  |                 | 108,821,628 |            |              | $ | 30.25 | 
|                    |  |                 |             |            |              |  



---



|    |  |                                                                                                                                     
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Based on the contractual termination date of the
    lease without regard to any early lease termination and/or
    renewal options.

During 2003 and continuing in 2004, we
experienced increases in tenant improvements and leasing costs
as compared to historical levels as a result of competitive
market conditions for new and renewal leases. The weighted
average tenant improvement costs and leasing costs per square
foot incurred for office leases which commenced during the nine
months ended September 30, 2004 was approximately $18.56
compared to the cost of $18.07 per square foot incurred in
the same respective period in 2003. The increase in tenant
improvements and leasing costs resulted in a decrease in net
effective rents (contract rents reduced by tenant improvements
costs, leasing commissions and any rent concessions) for lease
renewals and retenanted properties. We expect tenant
improvements and leasing costs to average approximately $18 to
$20 per square foot in 2004.

31



---



##### Table of Contents



Period-to-Period Comparisons



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

Below is a summary of our acquisition and
disposition activity since January 1, 2003. The buildings
and total square feet shown include properties we own in joint
ventures with other partners that we either consolidate or
account for under the equity method. The total square feet of
these unconsolidated properties is included in the table.
Excluding the joint venture partners share of the square
feet of the office properties, we effectively owned
116,250,533 square feet of office space as of
September 30, 2004.

|                        |                                    |                   |     |     |                       |  |             |            |   |  |             |     |   |  |           |            |  
|----------------------- | ---------------------------------- | ----------------- | --- | --- | --------------------- |  | ----------- | ---------- | - |  | ----------- | --- | - |  | --------- | ---------- | -
|                        |                                    |                   |     |    
|                        |                                    | Office Properties |     |     | Industrial Properties | 
|                        |                                    |                   |     |     |                       | 
|                        |                                    | Buildings         |     |     | Square Feet           |  |             | Buildings  |   |  | Square Feet |    
|                        |                                    |                   |     |     |                       |  |             |            |   |  |             |    
|Properties owned as of: |                                    |                   |     |     |                       |  |             |            |   |  |             |     |   |  |           |           
|December 31, 2002       |                                    |                   | 734 |     |                       |  | 125,725,399 |            |   |  | 77          |     |   |  | 5,967,759 |           
|                        | Acquisitions                       |                   |     | 2   |                       |  |             | 829,293    |   |  |             |    |   |  |           |           |  
|                        | Developments placed in service     |                   |     | 5   |                       |  |             | 1,218,215  |   |  |             |    |   |  |           |           |  
|                        | Dispositions(a)                    |                   |     | (53 | )                     |  |             | (5,182,707 | ) |  |             | (2  | ) |  |           | (216,900   | )
|                        | Properties taken out of service(b) |                   |     | (4  | )                     |  |             | (450,548   | ) |  |             |    |   |  |           |           |  
|                        | Building remeasurements            |                   |     |    |                       |  |             | 115,273    |   |  |             |    |   |  |           |           |  
|                        |                                    |                   |     |     |                       |  |             |            |   |  |             |    
|December 31, 2003       |                                    |                   | 684 |     |                       |  | 122,254,925 |            |   |  | 75          |     |   |  | 5,750,859 |           
|                        | Consolidation of SunAmerica Center |                   |     | 1   |                       |  |             | 780,063    |   |  |             |    |   |  |           |           |  
|                        | Developments placed in service(c)  |                   |     | 1   |                       |  |             | 114,955    |   |  |             |    |   |  |           |           |  
|                        | Dispositions                       |                   |     | (1  | )                     |  |             | (118,172   | ) |  |             |    |   |  |           |           |  
|                        | Building remeasurements            |                   |     |    |                       |  |             | 1,501      |   |  |             |    |   |  |           | 1,875      |  
|                        |                                    |                   |     |     |                       |  |             |            |   |  |             |    
|March 31, 2004          |                                    |                   | 685 |     |                       |  | 123,033,272 |            |   |  | 75          |     |   |  | 5,752,734 |           
|                        | Acquisitions                       |                   |     | 2   |                       |  |             | 328,741    |   |  |             |    |   |  |           |           |  
|                        | Dispositions                       |                   |     | (4  | )                     |  |             | (449,593   | ) |  |             | (38 | ) |  |           | (2,275,550 | )
|                        | Building remeasurements            |                   |     |    |                       |  |             | 23,979     |   |  |             |    |   |  |           |           |  
|                        |                                    |                   |     |     |                       |  |             |            |   |  |             |    
|June 30, 2004           |                                    |                   | 683 |     |                       |  | 122,936,399 |            |   |  | 37          |     |   |  | 3,477,184 |           
|                        | Acquisitions                       |                   |     | 18  |                       |  |             | 2,482,234  |   |  |             |    |   |  |           |           |  
|                        | Dispositions                       |                   |     |    |                       |  |             |           |   |  |             | (29 | ) |  |           | (2,586,731 | )
|                        | Building remeasurements            |                   |     |    |                       |  |             | 32,818     |   |  |             |    |   |  |           |           |  
|                        |                                    |                   |     |     |                       |  |             |            |   |  |             |    
|September 30, 2004      |                                    |                   | 701 |     |                       |  | 125,451,451 |            |   |  | 8           |     |   |  | 890,453   |           
|                        |                                    |                   |     |     |                       |  |             |            |   |  |             |    



---



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



| |                      
| | ---------------------
| | Results of Operations

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



| |   |                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------
| |  | revenues recorded and expenses incurred at the
    corporate level;                                      
|
| |  | the consolidations of 1301 Avenue of the
    Americas and SunAmerica Center in the first quarter of 2004;

32



---



##### Table of Contents





| |   |                                                                                                                                                                                                  
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the consolidation of Key Center in the third
    quarter of 2003;                                                                                                                                
|
| |  | the acquisition of two office buildings in 2003
    comprising approximately 829,293 square feet and
    20 office buildings acquired in 2004 comprising
    approximately 2,810,975 square feet;
|
| |  | certain developments placed in service;                                                                                                                                                          
|
| |  | the disposition of 55 properties in 2003
    comprising approximately 5,399,607 square feet;                                                                                                     
|
| |  | the sale in December 2003 of 75% and 80% of
    our interests in 13 Office Properties (which are now
    accounted for under the equity method); and                                             



| |                                                                                             | 
| | ------------------------------------------------------------------------------------------- | 
| |   the disposition of 72 properties comprising approximately 5,430,046 square feet in 2004. | 

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

33



---



##### Table of Contents





| |                                                                                                             
| | ------------------------------------------------------------------------------------------------------------
| | Comparison of the three months ended
    September 30, 2004 to the three months ended
    September 30, 2003

The table below represents selected operating
information for the Total Portfolio and for the Same Store
Portfolio consisting of 635 consolidated Office Properties,
eight Industrial Properties and 23 unconsolidated joint venture
Properties acquired or placed in service on or prior to
July 1, 2003.

|                                                                                                                                                               |                                     |                              |                  |          |                      |        |         |          |          |         |          |         |         |          |        |         |      |       |         |         |         |        |         |         |         |         |          |         |         |          |       |       |       |       |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------- | ---------------------------- | ---------------- | -------- | -------------------- | ------ | ------- | -------- | -------- | ------- | -------- | ------- | ------- | -------- | ------ | ------- | ---- | ----- | ------- | ------- | ------- | ------ | ------- | ------- | ------- | ------- | -------- | ------- | ------- | -------- | ----- | ----- | ----- | ----- | -
|                                                                                                                                                               |                                     |                              |                  |         
|                                                                                                                                                               |                                     | Total Portfolio              |                  |          | Same Store Portfolio |       
|                                                                                                                                                               |                                     |                              |                  |          |                      |       
|                                                                                                                                                               |                                     |                              |                  |          |                      |        |         |         
|                                                                                                                                                               |                                     |                              |                  | Change   |                      |        |         |          | Change   |        
|                                                                                                                                                               |                                     |                              |                  |          |                      |        |         |          |          |        
|(Dollars in thousands)                                                                                                                                         |                                     | 2004                         |                  |          | 2003                 |        |         | $        |          |         | %        |         |         | 2004     |        |         | 2003 |       |         | $       |         |        | %       |        
|                                                                                                                                                               |                                     |                              |                  |          |                      |        |         |          |          |         |          |         |         |          |        |         |      |       |         |         |         |        |         |        
|Revenues:                                                                                                                                                      |                                     |                              |                  |          |                      |        |         |          |          |         |          |         |         |          |        |         |      |       |         |         |         |        |         |         |         |         |          |         |         |          |       |      
|                                                                                                                                                               | Property operating revenues         |                              | $                | 787,498  |                      |        | $       | 776,091  |          |         | $        | 11,407  |         |          |        | 1.5     | %    |       | $       | 727,419 |         |        | $       | 745,605 |         |         | $        | (18,186 | )       |          |       | (2.4  | )%   
|                                                                                                                                                               | Fee income                          |                              |                  | 3,220    |                      |        |         | 1,969    |          |         |          | 1,251   |         |          |        | 63.5    |      |       |         |        |         |        |         |        |         |         |          |        |         |          |       |      |      
|                                                                                                                                                               |                                     |                              |                  |          |                      |        |         |          |          |         |          |         |         |          |        |         |      |       |         |         |         |        |         |        
|                                                                                                                                                               |                                     | Total revenues               |                  |          | 790,718              |        |         |          | 778,060  |         |          |         | 12,658  |          |        |         | 1.6  |       |         |         | 727,419 |        |         |         | 745,605 |         |          |         | (18,186 | )        |       |       | (2.4  | )    
|                                                                                                                                                               |                                     |                              |                  |          |                      |        |         |          |          |         |          |         |         |          |        |         |      |       |         |         |         |        |         |        
|Expenses:                                                                                                                                                      |                                     |                              |                  |          |                      |        |         |          |          |         |          |         |         |          |        |         |      |       |         |         |         |        |         |         |         |         |          |         |         |          |       |      
|                                                                                                                                                               | Depreciation and amortization       |                              |                  | 189,862  |                      |        |         | 172,876  |          |         |          | 16,986  |         |          |        | 9.8     |      |       |         | 172,893 |         |        |         | 164,085 |         |         |          | 8,808   |         |          |       | 5.4   |      
|                                                                                                                                                               | Real estate taxes                   |                              |                  | 94,275   |                      |        |         | 83,670   |          |         |          | 10,605  |         |          |        | 12.7    |      |       |         | 84,742  |         |        |         | 78,128  |         |         |          | 6,614   |         |          |       | 8.5   |      
|                                                                                                                                                               | Property operating expenses         |                              |                  | 207,590  |                      |        |         | 194,277  |          |         |          | 13,313  |         |          |        | 6.9     |      |       |         | 193,485 |         |        |         | 187,421 |         |         |          | 6,064   |         |          |       | 3.2   |      
|                                                                                                                                                               | Ground rent                         |                              |                  | 5,531    |                      |        |         | 5,534    |          |         |          | (3      | )       |          |        | (0.1    | )    |       |         | 4,837   |         |        |         | 4,700   |         |         |          | 137     |         |          |       | 2.9   |      
|                                                                                                                                                               | General and administrative(a)       |                              |                  | 13,190   |                      |        |         | 13,515   |          |         |          | (325    | )       |          |        | (2.4    | )    |       |         |        |         |        |         |        |         |         |          |        |         |          |       |      |      
|                                                                                                                                                               | Impairment                          |                              |                  | 229,170  |                      |        |         |         |          |         |          | 229,170 |         |          |        |        |      |       |         | 229,170 |         |        |         |        |         |         |          | 229,170 |         |          |       |      |      
|                                                                                                                                                               |                                     |                              |                  |          |                      |        |         |          |          |         |          |         |         |          |        |         |      |       |         |         |         |        |         |        
|                                                                                                                                                               |                                     | Total expenses               |                  |          | 739,618              |        |         |          | 469,872  |         |          |         | 269,746 |          |        |         | 57.4 |       |         |         | 685,127 |        |         |         | 434,334 |         |          |         | 250,793 |          |       |       | 57.7  |      
|                                                                                                                                                               |                                     |                              |                  |          |                      |        |         |          |          |         |          |         |         |          |        |         |      |       |         |         |         |        |         |        
|                                                                                                                                                               |                                     |                              | Operating income |          |                      | 51,100 |         |          |          | 308,188 |          |         |         | (257,088 | )      |         |      | (83.4 | )       |         |         | 42,292 |         |         |         | 311,271 |          |         |         | (268,979 | )     |       |       | (86.4 | )
|                                                                                                                                                               |                                     |                              |                  |          |                      |        |         |          |          |         |          |         |         |          |        |         |      |       |         |         |         |        |         |        
|Other income (expense):                                                                                                                                        |                                     |                              |                  |          |                      |        |         |          |          |         |          |         |         |          |        |         |      |       |         |         |         |        |         |         |         |         |          |         |         |          |       |      
|                                                                                                                                                               | Interest and dividend income        |                              |                  | 1,811    |                      |        |         | 3,380    |          |         |          | (1,569  | )       |          |        | (46.4   | )    |       |         | 752     |         |        |         | 769     |         |         |          | (17     | )       |          |       | (2.2  | )    
|                                                                                                                                                               | Realized gain on sale of securities |                              |                  | 4,737    |                      |        |         | 307      |          |         |          | 4,430   |         |          |        | 1,443.0 |      |       |         |        |         |        |         |        |         |         |          |        |         |          |       |      |      
|                                                                                                                                                               | Interest expense(b)                 |                              |                  | (210,461 | )                    |        |         | (207,905 | )        |         |          | (2,556  | )       |          |        | 1.2     |      |       |         | (37,567 | )       |        |         | (46,385 | )       |         |          | 8,818   |         |          |       | (19.0 | )    
|                                                                                                                                                               |                                     |                              |                  |          |                      |        |         |          |          |         |          |         |         |          |        |         |      |       |         |         |         |        |         |        
|                                                                                                                                                               |                                     | Total other income (expense) |                  |          | (203,913             | )      |         |          | (204,218 | )       |          |         | 305     |          |        |         | (0.1 | )     |         |         | (36,815 | )      |         |         | (45,616 | )       |          |         | 8,801   |          |       |       | (19.3 | )    
|                                                                                                                                                               |                                     |                              |                  |          |                      |        |         |          |          |         |          |         |         |          |        |         |      |       |         |         |         |        |         |        
|Income before income taxes, allocation to
    minority interests, income from investments in unconsolidated
    joint ventures and gain on sale of real estate |                                     |                              | (152,813         | )        |                      |        | 103,970 |          |          |         | (256,783 | )       |         |          | (247.0 | )       |      |       | 5,477   |         |         |        | 265,655 |         |         |         | (260,178 | )       |         |          | (97.9 | )    
|Income taxes                                                                                                                                                   |                                     |                              | (1,135           | )        |                      |        | 289     |          |          |         | (1,424   | )       |         |          | (492.7 | )       |      |       | (11     | )       |         |        | (491    | )       |         |         | 480      |         |         |          | (97.8 | )    
|Minority interests                                                                                                                                             |                                     |                              | (2,219           | )        |                      |        | (1,816  | )        |          |         | (403     | )       |         |          | 22.2   |         |      |       | (2,517  | )       |         |        | (2,248  | )       |         |         | (269     | )       |         |          | 12.0  |      
|Income from investments in unconsolidated joint
    ventures                                                                                                   |                                     |                              | 15,145           |          |                      |        | 21,208  |          |          |         | (6,063   | )       |         |          | (28.6  | )       |      |       | 10,679  |         |         |        | 9,776   |         |         |         | 903      |         |         |          | 9.2   |      
|Gain on sale of real estate                                                                                                                                    |                                     |                              | 216              |          |                      |        |        |          |          |         | 216      |         |         |          |       |         |      |       |        |         |         |        |        |         |         |         |         |         |         |          |      |      
|                                                                                                                                                               |                                     |                              |                  |          |                      |        |         |          |          |         |          |         |         |          |        |         |      |       |         |         |         |        |         |        
|(Loss) income from continuing operations                                                                                                                       |                                     |                              | (140,806         | )        |                      |        | 123,651 |          |          |         | (264,457 | )       |         |          | (213.9 | )       |      |       | 13,628  |         |         |        | 272,692 |         |         |         | (259,064 | )       |         |          | (95.0 | )    
|Discontinued operations (including net gain
    (loss) on sales of real estate of $3,016 and ($6,326),
    respectively)                                       |                                     |                              | 4,899            |          |                      |        | 10,672  |          |          |         | (5,773   | )       |         |          | (54.1  | )       |      |       |        |         |         |        |        |         |         |         |         |         |         |          |      |      
|                                                                                                                                                               |                                     |                              |                  |          |                      |        |         |          |          |         |          |         |         |          |        |         |      |       |         |         |         |        |         |        
|Net (loss) income                                                                                                                                              |                                     | $                            | (135,907         | )        |                      | $      | 134,323 |          |          | $       | (270,230 | )       |         |          | (201.2 | )%      |      | $     | 13,628  |         |         | $      | 272,692 |         |         | $       | (259,064 | )       |         |          | (95.0 | )%   
|                                                                                                                                                               |                                     |                              |                  |          |                      |        |         |          |          |         |          |         |         |          |        |         |      |       |         |         |         |        |         |        
|Property net operating income from continuing
    operations(c)                                                                                                |                                     | $                            | 485,633          |          |                      | $      | 498,144 |          |          | $       | (12,511  | )       |         |          | (2.5   | )%      |      | $     | 449,192 |         |         | $      | 480,056 |         |         | $       | (30,864  | )       |         |          | (6.4  | )%   
|                                                                                                                                                               |                                     |                              |                  |          |                      |        |         |          |          |         |          |         |         |          |        |         |      |       |         |         |         |        |         |        
|Deferred rental revenue                                                                                                                                        |                                     | $                            | 16,421           |          |                      | $      | 19,699  |          |          | $       | (3,278   | )       |         |          | (16.6  | )%      |      | $     | 13,200  |         |         | $      | 18,624  |         |         | $       | (5,424   | )       |         |          | (29.1 | )%   
|                                                                                                                                                               |                                     |                              |                  |          |                      |        |         |          |          |         |          |         |         |          |        |         |      |       |         |         |         |        |         |        
|Lease termination fees                                                                                                                                         |                                     | $                            | 9,561            |          |                      | $      | 15,467  |          |          | $       | (5,906   | )       |         |          | (38.2  | )%      |      | $     | 8,050   |         |         | $      | 15,460  |         |         | $       | (7,410   | )       |         |          | (47.9 | )%   
|                                                                                                                                                               |                                     |                              |                  |          |                      |        |         |          |          |         |          |         |         |          |        |         |      |       |         |         |         |        |         |        



---



|    |  |                                                                                                                                                                                                                                                                                             
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Corporate general and administrative expense is
    not allocated to the Same Store Portfolio because these expenses
    are not directly incurred in connection with any specific
    Property.                                                                                            
|   
|(b) |  | Interest expense (including amortization of
    deferred financing costs and prepayment expenses) for the Same
    Store Portfolio represents interest expense on property secured
    mortgage debt and does not include interest expense on the
    unsecured notes or the line of credit.
|   
|(c) |  | Represents segment data. See Item 1.
    Financial Statements Note 13  Segment
    Information.                                                                                                                                                                                            



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

The decrease in property operating revenues in
the Same Store Portfolio was primarily attributable to lower
average rental rates on new leases as compared to average rental
rates on expiring leases and a decrease in lease termination
fees of approximately $7.4 million. This decrease was
partially offset by an increase in occupancy for the Same Store
Portfolio from 86.5% at June 30, 2003 to 86.6% at
September 30, 2004.

34



---



##### Table of Contents





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

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



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

Real estate taxes increased for the Same Store
Portfolio primarily due to an increase in estimated taxes at our
properties located in California of approximately
$7.6 million offset, in part, by savings at our properties
located in Boston of approximately $1.3 million.



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

Property operating expenses increased for the
Same Store Portfolio primarily as a result of increases in
repairs and maintenance expense of approximately
$5.8 million, insurance expense of approximately
$0.8 million and utilities of approximately
$2.6 million, partially offset by a decrease in other
property operating expenses of approximately $3.1 million.
During 2004, we expanded our preventive maintenance program in
an effort to reduce future emergency repairs. This resulted in
an increase in repairs and maintenance expense as compared to
the third quarter 2003. The increase in utility expense was
primarily due to general increases in rates charged by the
utility suppliers.



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

During September 2004, after an in-depth review
of our portfolio on an asset-by-asset basis, we reduced our
intended holding period for 96 non-core assets comprising
approximately 17.7 million square feet. We currently intend
to sell these assets over the next five years, as market
conditions warrant. Based on our analysis of the future cash
flows of each asset over the next five years, we determined that
46 of the assets comprising approximately 2.8 million
square feet were permanently impaired. The difference between
the fair value (calculated either by discounting estimated
future cash flows and sales proceeds or utilizing market
comparables) and the net book value was approximately
$229.2 million which was reflected as a non-cash impairment
charge in the current quarter.



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

Realized gain on sale of securities increased for
the Total Portfolio primarily due to the $2.3 million gain
recognized from the disposition of our investment in CT
Convertible Trust I preferred shares, of which
Mr. Zell (Equity Offices Chairman of the Board of
Trustees) is Chairman of the Board, and a gain of
$2.4 million on the sale of other securities during the
third quarter 2004.



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

Interest expense for the Same Store Portfolio
decreased primarily as a result of mortgage debt repayments
since July 1, 2003 totaling approximately
$520.0 million, which encumbered 11 properties.



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

We acquired the remaining economic interests in
1301 Avenue of the Americas and Key Center office buildings and
consolidated these Properties. The consolidation caused a
decrease in income from investments in unconsolidated joint
ventures for the Total Portfolio. In the three months ended
September 30, 2003, the net income from these Properties
that was included in income from investments in unconsolidated
joint ventures was approximately $3.4 million. This
decrease was partially offset by the 13 Office Properties
in which we sold 75% and 80% of our interests during December
2003 and are now accounted for under the equity method. These
Properties contributed approximately $3.2 million to income
from investments in unconsolidated joint ventures in the three
months ended September 30, 2004.

In addition, we sold our interest in Foundry
Square IV in the third quarter 2003 and recognized a gain
of approximately $7.1 million.

35



---



##### Table of Contents





| |                            
| | ---------------------------
| | Gain on Sale of Real Estate

In September 2004, the Four Oaks office property
located in Houston, Texas, in which we owned an approximate 3%
interest, was sold. Our share of the net proceeds from the sale
was approximately $7.1 million and we recognized a gain
from the transaction of approximately $0.2 million. We
accounted for our investment under the cost method. As of
September 30, 2004, our share of the net proceeds is
reflected as a receivable and is included in prepaid expenses
and other assets. The receivable was collected in October.



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

The decrease in discontinued operations was the
result of the loss of net income due to sales of properties,
partially offset by the net gain on the sale of properties
during the three months ended September 30, 2004 as
compared to the prior period. Discontinued operations for the
three months ended September 30, 2003 include the net
income of properties sold in 2003 and 2004 whereas the
discontinued operations in 2004 only include the net income of
properties sold during the three months ended September 30,
2004.

36



---



##### Table of Contents





| |                                                                                                           
| | ----------------------------------------------------------------------------------------------------------
| | Comparison of the nine months ended
    September 30, 2004 to the nine months ended
    September 30, 2003

The table below represents selected operating
information for the Total Portfolio and for the Same Store
Portfolio consisting of 635 consolidated Office Properties,
eight Industrial Properties and 23 unconsolidated joint venture
Properties acquired or placed in service on or prior to
January 1, 2003.

|                                                                                                                                                               |                                     |                              |                  |           |                      |         |           |           |           |         |          |         |         |          |       |       |      |       |           |           |           |         |           |           |           |         |          |         |         |          |       |       |       |       |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------- | ---------------------------- | ---------------- | --------- | -------------------- | ------- | --------- | --------- | --------- | ------- | -------- | ------- | ------- | -------- | ----- | ----- | ---- | ----- | --------- | --------- | --------- | ------- | --------- | --------- | --------- | ------- | -------- | ------- | ------- | -------- | ----- | ----- | ----- | ----- | -
|                                                                                                                                                               |                                     |                              |                  |          
|                                                                                                                                                               |                                     | Total Portfolio              |                  |           | Same Store Portfolio |        
|                                                                                                                                                               |                                     |                              |                  |           |                      |        
|                                                                                                                                                               |                                     |                              |                  |           |                      |         |           |          
|                                                                                                                                                               |                                     |                              |                  | Change    |                      |         |           |           | Change    |        
|                                                                                                                                                               |                                     |                              |                  |           |                      |         |           |           |           |        
|(Dollars in thousands)                                                                                                                                         |                                     | 2004                         |                  |           | 2003                 |         |           | $         |           |         | %        |         |         | 2004     |       |       | 2003 |       |           | $         |           |         | %         |          
|                                                                                                                                                               |                                     |                              |                  |           |                      |         |           |           |           |         |          |         |         |          |       |       |      |       |           |           |           |         |           |          
|Revenues:                                                                                                                                                      |                                     |                              |                  |           |                      |         |           |           |           |         |          |         |         |          |       |       |      |       |           |           |           |         |           |           |           |         |          |         |         |          |       |      
|                                                                                                                                                               | Property operating revenues         |                              | $                | 2,356,542 |                      |         | $         | 2,319,302 |           |         | $        | 37,240  |         |          |       | 1.6   | %    |       | $         | 2,192,009 |           |         | $         | 2,234,633 |           |         | $        | (42,624 | )       |          |       | (1.9  | )%   
|                                                                                                                                                               | Fee income                          |                              |                  | 10,129    |                      |         |           | 10,431    |           |         |          | (302    | )       |          |       | (2.9  | )    |       |           |          |           |         |           |          |           |         |          |        |         |          |       |      |      
|                                                                                                                                                               |                                     |                              |                  |           |                      |         |           |           |           |         |          |         |         |          |       |       |      |       |           |           |           |         |           |          
|                                                                                                                                                               |                                     | Total revenues               |                  |           | 2,366,671            |         |           |           | 2,329,733 |         |          |         | 36,938  |          |       |       | 1.6  |       |           |           | 2,192,009 |         |           |           | 2,234,633 |         |          |         | (42,624 | )        |       |       | (1.9  | )    
|                                                                                                                                                               |                                     |                              |                  |           |                      |         |           |           |           |         |          |         |         |          |       |       |      |       |           |           |           |         |           |          
|Expenses:                                                                                                                                                      |                                     |                              |                  |           |                      |         |           |           |           |         |          |         |         |          |       |       |      |       |           |           |           |         |           |           |           |         |          |         |         |          |       |      
|                                                                                                                                                               | Depreciation and amortization       |                              |                  | 562,968   |                      |         |           | 508,816   |           |         |          | 54,152  |         |          |       | 10.6  |      |       |           | 515,312   |           |         |           | 485,839   |           |         |          | 29,473  |         |          |       | 6.1   |      
|                                                                                                                                                               | Real estate taxes                   |                              |                  | 277,923   |                      |         |           | 260,898   |           |         |          | 17,025  |         |          |       | 6.5   |      |       |           | 254,895   |           |         |           | 246,367   |           |         |          | 8,528   |         |          |       | 3.5   |      
|                                                                                                                                                               | Property operating expenses         |                              |                  | 596,437   |                      |         |           | 559,969   |           |         |          | 36,468  |         |          |       | 6.5   |      |       |           | 561,482   |           |         |           | 542,510   |           |         |          | 18,972  |         |          |       | 3.5   |      
|                                                                                                                                                               | Ground rent                         |                              |                  | 15,927    |                      |         |           | 15,000    |           |         |          | 927     |         |          |       | 6.2   |      |       |           | 13,789    |           |         |           | 13,949    |           |         |          | (160    | )       |          |       | (1.1  | )    
|                                                                                                                                                               | General and administrative(a)       |                              |                  | 38,208    |                      |         |           | 44,672    |           |         |          | (6,464  | )       |          |       | (14.5 | )    |       |           |          |           |         |           |          |           |         |          |        |         |          |       |      |      
|                                                                                                                                                               | Impairment                          |                              |                  | 229,170   |                      |         |           |          |           |         |          | 229,170 |         |          |       |      |      |       |           | 229,170   |           |         |           |          |           |         |          | 229,170 |         |          |       |      |      
|                                                                                                                                                               |                                     |                              |                  |           |                      |         |           |           |           |         |          |         |         |          |       |       |      |       |           |           |           |         |           |          
|                                                                                                                                                               |                                     | Total expenses               |                  |           | 1,720,633            |         |           |           | 1,389,355 |         |          |         | 331,278 |          |       |       | 23.8 |       |           |           | 1,574,648 |         |           |           | 1,288,665 |         |          |         | 285,983 |          |       |       | 22.2  |      
|                                                                                                                                                               |                                     |                              |                  |           |                      |         |           |           |           |         |          |         |         |          |       |       |      |       |           |           |           |         |           |          
|                                                                                                                                                               |                                     |                              | Operating income |           |                      | 646,038 |           |           |           | 940,378 |          |         |         | (294,340 | )     |       |      | (31.3 | )         |           |           | 617,361 |           |           |           | 945,968 |          |         |         | (328,607 | )     |       |       | (34.7 | )
|                                                                                                                                                               |                                     |                              |                  |           |                      |         |           |           |           |         |          |         |         |          |       |       |      |       |           |           |           |         |           |          
|Other income (expense):                                                                                                                                        |                                     |                              |                  |           |                      |         |           |           |           |         |          |         |         |          |       |       |      |       |           |           |           |         |           |           |           |         |          |         |         |          |       |      
|                                                                                                                                                               | Interest and dividend income        |                              |                  | 5,540     |                      |         |           | 10,273    |           |         |          | (4,733  | )       |          |       | (46.1 | )    |       |           | 2,559     |           |         |           | 2,632     |           |         |          | (73     | )       |          |       | (2.8  | )    
|                                                                                                                                                               | Realized gain on sale of securities |                              |                  | 28,753    |                      |         |           | 8,450     |           |         |          | 20,303  |         |          |       | 240.3 |      |       |           |          |           |         |           |          |           |         |          |        |         |          |       |      |      
|                                                                                                                                                               | Interest expense(b)                 |                              |                  | (629,124  | )                    |         |           | (623,299  | )         |         |          | (5,825  | )       |          |       | 0.9   |      |       |           | (121,599  | )         |         |           | (140,718  | )         |         |          | 19,119  |         |          |       | (13.6 | )    
|                                                                                                                                                               |                                     |                              |                  |           |                      |         |           |           |           |         |          |         |         |          |       |       |      |       |           |           |           |         |           |          
|                                                                                                                                                               |                                     | Total other income (expense) |                  |           | (594,831             | )       |           |           | (604,576  | )       |          |         | 9,745   |          |       |       | (1.6 | )     |           |           | (119,040  | )       |           |           | (138,086  | )       |          |         | 19,046  |          |       |       | (13.8 | )    
|                                                                                                                                                               |                                     |                              |                  |           |                      |         |           |           |           |         |          |         |         |          |       |       |      |       |           |           |           |         |           |          
|Income before income taxes, allocation to
    minority interests, income from investments in unconsolidated
    joint ventures and gain on sale of real estate |                                     |                              | 51,207           |           |                      |         | 335,802   |           |           |         | (284,595 | )       |         |          | (84.8 | )     |      |       | 498,321   |           |           |         | 807,882   |           |           |         | (309,561 | )       |         |          | (38.3 | )    
|Income taxes                                                                                                                                                   |                                     |                              | (2,227           | )         |                      |         | (2,281    | )         |           |         | 54       |         |         |          | (2.4  | )     |      |       | (446      | )         |           |         | (863      | )         |           |         | 417      |         |         |          | (48.3 | )    
|Minority interests                                                                                                                                             |                                     |                              | (7,126           | )         |                      |         | (6,163    | )         |           |         | (963     | )       |         |          | 15.6  |       |      |       | (8,053    | )         |           |         | (7,004    | )         |           |         | (1,049   | )       |         |          | 15.0  |      
|Income from investments in unconsolidated joint
    ventures                                                                                                   |                                     |                              | 45,602           |           |                      |         | 62,918    |           |           |         | (17,316  | )       |         |          | (27.5 | )     |      |       | 32,071    |           |           |         | 40,104    |           |           |         | (8,033   | )       |         |          | (20.0 | )    
|Gain on sale of real estate                                                                                                                                    |                                     |                              | 216              |           |                      |         |          |           |           |         | 216      |         |         |          |      |       |      |       |          |           |           |         |          |           |           |         |         |         |         |          |      |      
|                                                                                                                                                               |                                     |                              |                  |           |                      |         |           |           |           |         |          |         |         |          |       |       |      |       |           |           |           |         |           |          
|Income from continuing operations                                                                                                                              |                                     |                              | 87,672           |           |                      |         | 390,276   |           |           |         | (302,604 | )       |         |          | (77.5 | )     |      |       | 521,893   |           |           |         | 840,119   |           |           |         | (318,226 | )       |         |          | (37.9 | )    
|Discontinued operations (including net gain on
    sales of real estate of $7,138 and $45,399, respectively)                                                   |                                     |                              | 17,724           |           |                      |         | 102,322   |           |           |         | (84,598  | )       |         |          | (82.7 | )     |      |       |          |           |           |         |          |           |           |         |         |         |         |          |      |      
|                                                                                                                                                               |                                     |                              |                  |           |                      |         |           |           |           |         |          |         |         |          |       |       |      |       |           |           |           |         |           |          
|Income before cumulative effect of a change in
    accounting principle                                                                                        |                                     |                              | 105,396          |           |                      |         | 492,598   |           |           |         | (387,202 | )       |         |          | (78.6 | )     |      |       | 521,893   |           |           |         | 840,119   |           |           |         | (318,226 | )       |         |          | (37.9 | )    
|Cumulative effect of a change in accounting
    principle                                                                                                      |                                     |                              | (33,697          | )         |                      |         |          |           |           |         | (33,697  | )       |         |          |      |       |      |       |          |           |           |         |          |           |           |         |         |         |         |          |      |      
|                                                                                                                                                               |                                     |                              |                  |           |                      |         |           |           |           |         |          |         |         |          |       |       |      |       |           |           |           |         |           |          
|Net income                                                                                                                                                     |                                     | $                            | 71,699           |           |                      | $       | 492,598   |           |           | $       | (420,899 | )       |         |          | (85.4 | )%    |      | $     | 521,893   |           |           | $       | 840,119   |           |           | $       | (318,226 | )       |         |          | (37.9 | )%   
|                                                                                                                                                               |                                     |                              |                  |           |                      |         |           |           |           |         |          |         |         |          |       |       |      |       |           |           |           |         |           |          
|Property net operating income from continuing
    operations(c)                                                                                                |                                     | $                            | 1,482,182        |           |                      | $       | 1,498,435 |           |           | $       | (16,253  | )       |         |          | (1.1  | )%    |      | $     | 1,375,632 |           |           | $       | 1,445,756 |           |           | $       | (70,124  | )       |         |          | (4.9  | )%   
|                                                                                                                                                               |                                     |                              |                  |           |                      |         |           |           |           |         |          |         |         |          |       |       |      |       |           |           |           |         |           |          
|Deferred rental revenue                                                                                                                                        |                                     | $                            | 60,790           |           |                      | $       | 49,961    |           |           | $       | 10,829   |         |         |          | 21.7  | %     |      | $     | 50,417    |           |           | $       | 47,680    |           |           | $       | 2,737    |         |         |          | 5.7   | %    
|                                                                                                                                                               |                                     |                              |                  |           |                      |         |           |           |           |         |          |         |         |          |       |       |      |       |           |           |           |         |           |          
|Lease termination fees                                                                                                                                         |                                     | $                            | 37,498           |           |                      | $       | 36,397    |           |           | $       | 1,101    |         |         |          | 3.0   | %     |      | $     | 30,683    |           |           | $       | 35,671    |           |           | $       | (4,988   | )       |         |          | (14.0 | )%   
|                                                                                                                                                               |                                     |                              |                  |           |                      |         |           |           |           |         |          |         |         |          |       |       |      |       |           |           |           |         |           |          



---



|    |  |                                                                                                                                                                                                                                                                                             
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Corporate general and administrative expense is
    not allocated to the Same Store Portfolio because these expenses
    are not directly incurred in connection with any specific
    Property.                                                                                            
|   
|(b) |  | Interest expense (including amortization of
    deferred financing costs and prepayment expenses) for the Same
    Store Portfolio represents interest expense on property secured
    mortgage debt and does not include interest expense on the
    unsecured notes or the line of credit.
|   
|(c) |  | Represents segment data. See Item 1.
    Financial Statements Note 13  Segment
    Information.                                                                                                                                                                                            

37



---



##### Table of Contents





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

The decrease in property operating revenues in
the Same Store Portfolio was primarily attributable to reduced
occupancy in the Same Store Portfolio from 88.1% at
December 31, 2002 to 86.6% at September 30, 2004. The
decrease in occupancy was due to early lease terminations. In
addition to the decline in occupancy, rental revenues declined
as a result of lower average rental rates on new leases as
compared to average rental rates on expiring leases.



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

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



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

Real estate taxes increased for the Same Store
Portfolio primarily due to an increase in estimated taxes at our
properties located in California of approximately
$13.9 million offset, in part, by savings at our properties
located in Boston of approximately $6.3 million.



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

Property operating expenses for the Same Store
Portfolio increased primarily as a result of increases in
repairs and maintenance expense of approximately
$8.1 million, insurance expense of approximately
$6.5 million and utilities of approximately
$7.3 million, partially offset by a decrease in other
property operating expenses of approximately $2.9 million.
During 2004, we expanded our preventive maintenance program in
an effort to reduce future emergency repairs. This resulted in
an increase in repairs and maintenance expense as compared to
the nine months ended September 30, 2003. The increase in
utility expense was primarily due to general increases in rates
charged by the utility suppliers.



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

General and administrative expense decreased
primarily as a result of approximately $7.9 million of
consulting expenses and greater corporate level severance
expense of approximately $2.8 million in 2003, partially
offset by approximately $4.2 million of increased salaries
and other general and administrative expense in 2004.



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

During September 2004, after an in-depth review
of our portfolio on an asset-by-asset basis, we reduced our
intended holding period for 96 non-core assets comprising
approximately 17.7 million square feet. We currently intend
to sell these assets over the next five years, as market
conditions warrant. Based on our analysis of the future cash
flows of each asset over the next five years, we determined that
46 of the assets comprising approximately 2.8 million
square feet were permanently impaired. The difference between
the fair value (calculated either by discounting estimated
future cash flows and sales proceeds or utilizing market
comparables) and the net book value was approximately
$229.2 million which was reflected as a non-cash impairment
charge in the current quarter.



| |                                                                                 
| | --------------------------------------------------------------------------------
| | Realized Gain on Settlement of Derivatives and
    Sale of Marketable Securities

Realized gain on settlement of derivatives and
sale of marketable securities increased for the Total Portfolio
due to the $2.3 million gain recognized from the
disposition of our investment in CT Convertible
Trust I preferred shares, of which Mr. Zell (Equity
Offices Chairman of the Board of Trustees) is Chairman of
the Board, and a gain of $2.4 million on the sale of other
securities during the third quarter 2004. In addition, we
settled $500 million notional amount of forward-starting
interest rate swaps and recognized a gain of approximately
$24.0 million in May 2004. The swaps were entered into in
2003 to hedge an unsecured note offering that was expected to
take place in June 2004, but did not occur.

38



---



##### Table of Contents



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



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

Interest expense for the Same Store Portfolio
decreased primarily as a result of mortgage debt repayments
since January 1, 2003 totaling approximately
$520.0 million, which encumbered 11 properties.



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

We acquired the remaining economic interests in
1301 Avenue of the Americas and Key Center office buildings
and consolidated these Properties. The consolidation caused a
decrease in income from investments in unconsolidated joint
ventures for the Total Portfolio. In the nine months ended
September 30, 2003, the net income from these Properties
that was included in income from investments in unconsolidated
joint ventures was approximately $12.3 million. This
decrease was partially offset by the 13 Office Properties
in which we sold 75% and 80% of our interests during December
2003 and are now accounted for under the equity method. These
Properties contributed approximately $10.6 million to
income from investments in unconsolidated joint ventures in the
nine months ended September 30, 2004. We also sold our
interest in Foundry Square IV in the third quarter 2003 and
recognized a gain of approximately $7.1 million. Foundry
Square IV also contributed approximately $2.0 million
to income from investments in unconsolidated joint ventures
during the nine months ended September 30, 2003.

In addition, income from investments in
unconsolidated joint ventures for the Total and Same Store
Portfolio also decreased because property operating revenues
declined due to reduced occupancy and lower average rental rates
on new leases as compared to average rental rates on expiring
leases.



| |                            
| | ---------------------------
| | Gain on Sale of Real Estate

In September 2004, the Four Oaks office property
located in Houston, Texas, in which we owned an approximate 3%
interest, was sold. Our share of the net proceeds from the sale
was approximately $7.1 million and we recognized a gain
from the transaction of approximately $0.2 million. We
accounted for our investment under the cost method. As of
September 30, 2004, our share of the net proceeds is
reflected as a receivable and is included in prepaid expenses
and other assets. The receivable was collected in October.



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

The decrease in discontinued operations was the
result of the loss of net income due to sales of properties and
a lower net gain on the sale of properties during the nine
months ended September 30, 2004 as compared to the prior
period. Discontinued operations for the nine months ended
September 30, 2003 includes the net income of properties
sold in 2003 and 2004 whereas the discontinued operations in
2004 only includes the net income of properties sold during the
nine months ended September 30, 2004.



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

Under the provisions of FIN 46(R), we
consolidated the assets, liabilities and results of operations
of SunAmerica Center effective January 1, 2004, and
recorded a cumulative effect of a change in accounting principle
resulting in a loss of approximately $33.7 million. See
Item 1. Financial Statements Note 11 
Cumulative Effect of a Change in Accounting Principle.

Discontinued Operations

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

39



---



##### Table of Contents



Liquidity and Capital Resources



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

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

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

Moodys, Standard & Poors and Fitch
provide credit ratings on our unsecured notes and preferred
stock. In July 2004, Moodys downgraded our credit ratings
from Baa1 to Baa2 with a stable outlook. Standard &
Poors and Fitch have retained our credit ratings at BBB+ with a
stable outlook. If Standard & Poors or Fitch downgrades
our credit ratings, the interest rate charged on our line of
credit will increase. In addition, the interest rate associated
with any future financings may be impacted if our credit ratings
decline. A security rating is not a recommendation to buy, sell
or hold securities and is subject to revision or withdrawal at
any time by the assigning rating organization. Each rating
should be evaluated independently of any other rating.

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

Lower occupancy levels, reduced rental rates, and
reduced revenues as a result of asset sales have had the effect
of reducing our net cash provided by operating activities. In
addition, our tenant improvements and leasing costs have
increased as compared to historical levels due to competitive
market conditions for new and renewal leases. During the three
months ended and nine months ended September 30, 2004 and
the year ended December 31, 2003, our net cash flow
provided by operating activities was insufficient to pay all of
our capital improvements, tenant improvements and leasing costs
as well as distributions to our unitholders. We funded this
shortfall primarily with a combination of proceeds from property
dispositions and borrowings under our line of credit.

If our net cash from operating activities and
tenant improvements and leasing costs continue at these levels,
and if Equity Offices Board of Trustees continues to
declare distributions on our Units at current levels, we expect
that such shortfall will continue in subsequent periods and that
we will cover it in a similar manner.

As of September 30, 2004, we had
approximately $2.0 billion of secured and unsecured debt
maturing through December 31, 2005, which excludes
scheduled principal payments prior to maturity. In addition, we
will redeem $325 million of notes in November 2004. Should
Equity Offices Board of Trustees continue to declare
distributions at current levels we will not be able to retain
sufficient cash to repay all of our debt as it comes due using
only cash from operating activities and we will be required to
repay most of our maturing debt with proceeds from asset sales
and debt offerings. Although there can be no assurance that such
funding at acceptable terms will be available to us, we believe
that net cash provided by operating activities, draws under our
line of credit, proceeds from other financing sources that we

40



---



##### Table of Contents



expect to be available to us and proceeds from
anticipated asset sales will together provide sufficient
liquidity to meet our cash needs during this period.




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

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

|                         |  |                 |          |  |              |                       |        |                        |  |   |       | 
|------------------------ |  | --------------- | -------- |  | ------------ | --------------------- | ------ | ---------------------- |  | - | ----- | 
|                         |  |                 |          |  |              | Distributions for the |       
|                         |  | Distribution    |          |  | Annualized   |                       |        | three months ended     | 
|                         |  | Declared for    |          |  | Distribution |                       |        | September 30, 2004     | 
|Security                 |  | Current Quarter |          |  | Per Unit     |                       |        | (Dollars in thousands) | 
|                         |  |                 |          |  |              |                       |        |                        | 
|Series B Preferred Units |  | $               | 0.65625  |  |              | $                     | 2.625  |                        |  | $ | 3,931 | 
|Series G Preferred Units |  | $               | 0.484375 |  |              | $                     | 1.9375 |                        |  | $ | 4,117 | 

The Board of Trustees also declared distributions
on the Units for the third quarter of 2004 at the rate of
$.50 per unit.



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

As of September 30, 2004, we were subject to
certain material contractual payment obligations as described in
the table below. We were not subject to any material capital
lease obligations or unconditional purchase obligations as of
September 30, 2004.

|                                                            |                    |                                       |            |           |         |   |         |         |      |   |           |           |      |      |           |         |      |   |           |            |      |   |         |         |      |   |           |           |      |  
|----------------------------------------------------------- | ------------------ | ------------------------------------- | ---------- | --------- | ------- | - | ------- | ------- | ---- | - | --------- | --------- | ---- | ---- | --------- | ------- | ---- | - | --------- | ---------- | ---- | - | ------- | ------- | ---- | - | --------- | --------- | ---- | -
|                                                            |                    |                                      
|                                                            |                    | Payments Due by Period                |           
|                                                            |                    |                                       |           
|                                                            |                    |                                       |            | Remainder |         |   |        
|(Dollars in thousands)                                      |                    | Total                                 |            |           | of 2004 |   |         | 2005    |      |   | 2006      |           |      | 2007 |           |         | 2008 |   |           | Thereafter |     
|                                                            |                    |                                       |            |           |         |   |         |         |      |   |           |           |      |      |           |         |      |   |           |            |     
|Contractual Obligations:                                    |                    |                                       |            |           |         |   |         |         |      |   |           |           |      |      |           |         |      |   |           |            |      |   |         |         |      |   |           |          
|Long-term debt:                                             |                    |                                       |            |           |         |   |         |         |      |   |           |           |      |      |           |         |      |   |           |            |      |   |         |         |      |   |           |          
|                                                            | Mortgage debt(a)   |                                       | $          | 2,633,207 |         |   | $       | 9,879   |      |   | $         | 1,099,555 |      |      | $         | 286,776 |      |   | $         | 239,745    |      |   | $       | 134,964 |      |   | $         | 862,288   |     
|                                                            | Unsecured notes(b) |                                       |            | 9,003,412 |         |   |         | 325,000 |      |   |           | 675,000   |      |      |           | 650,000 |      |   |           | 977,010    |      |   |         | 466,306 |      |   |           | 5,910,096 |     
|Line of Credit                                              |                    |                                       | 1,086,400  |           |         |   |        |         |      |   | 125,000   |           |      |      | 961,400   |         |      |   |          |            |      |   |        |         |      |   |          |          
|Series B Preferred Units                                    |                    |                                       | 299,500    |           |         |   |        |         |      |   |          |           |      |      |          |         |      |   |          |            |      |   | 299,500 |         |      |   |          |          
|Share of mortgage debt of unconsolidated joint
    ventures |                    |                                       | 343,769    |           |         |   | 110,840 |         |      |   | 19,270    |           |      |      | 52,283    |         |      |   | 2,622     |            |      |   | 16,989  |         |      |   | 141,765   |          
|Operating leases                                            |                    |                                       | 1,259,112  |           |         |   | 5,297   |         |      |   | 21,472    |           |      |      | 21,762    |         |      |   | 16,646    |            |      |   | 16,660  |         |      |   | 1,177,275 |          
|Share of ground leases of unconsolidated joint
    ventures |                    |                                       | 127,654    |           |         |   | 304     |         |      |   | 1,216     |           |      |      | 1,258     |         |      |   | 1,294     |            |      |   | 1,294   |         |      |   | 122,288   |          
|Construction contracts on developments                      |                    |                                       | 470        |           |         |   | 470     |         |      |   |          |           |      |      |          |         |      |   |          |            |      |   |        |         |      |   |          |          
|                                                            |                    |                                       |            |           |         |   |         |         |      |   |           |           |      |      |           |         |      |   |           |            |     
|Total Contractual Obligations                               |                    | $                                     | 14,753,524 |           |         | $ | 451,790 |         |      | $ | 1,941,513 |           |      | $    | 1,973,479 |         |      | $ | 1,237,317 |            |      | $ | 935,713 |         |      | $ | 8,213,712 |          
|                                                            |                    |                                       |            |           |         |   |         |         |      |   |           |           |      |      |           |         |      |   |           |            |     
|Weighted Average Interest Rates on Maturing
    Debt:       |                    |                                       |            |           |         |   |         |         |      |   |           |           |      |      |           |         |      |   |           |            |      |   |         |         |      |   |           |          
|Long-term debt:                                             |                    |                                       |            |           |         |   |         |         |      |   |           |           |      |      |           |         |      |   |           |            |      |   |         |         |      |   |           |          
|                                                            | Mortgage debt      |                                       |            | 7.68      | %       |   |         |        |      |   |           | 7.63      | %    |      |           | 7.21    | %    |   |           | 7.87       | %    |   |         | 7.48    | %    |   |           | 7.86      | %   
|                                                            | Unsecured notes    |                                       |            | 6.73      | %       |   |         | 7.64    | %    |   |           | 5.67      | %    |      |           | 7.52    | %    |   |           | 7.51       | %    |   |         | 6.92    | %    |   |           | 6.57      | %   
|Line of credit                                              |                    |                                       | 2.56       | %         |         |   |        |         |      |   | 2.63      | %         |      |      | 2.55      | %       |      |   |          |            |      |   |        |         |      |   |          |          
|Share of mortgage debt of unconsolidated joint
    ventures |                    |                                       | 4.86       | %         |         |   | 2.86    | %       |      |   | 2.32      | %         |      |      | 7.66      | %       |      |   |          |            |      |   | 6.92    | %       |      |   | 5.43      | %        
|                                                            |                    |                                       |            |           |         |   |         |         |      |   |           |           |      |      |           |         |      |   |           |            |     
|                                                            |                    | Total Weighted Average Interest Rates |            |           | 6.53    | % |         |         | 6.43 | % |           |           | 6.56 | %    |           |         | 5.01 | % |           |            | 7.58 | % |         |         | 7.03 | % |           |           | 6.72 | %
|                                                            |                    |                                       |            |           |         |   |         |         |      |   |           |           |      |      |           |         |      |   |           |            |     



---



|    |  |                                                                  
|--- |  | -----------------------------------------------------------------
|(a) |  | Balance excludes a net unamortized discount of
    $13.8 million.
|   
|(b) |  | Balance excludes a net unamortized discount of
    $34.7 million.

41



---



##### Table of Contents





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

See Item 1. Financial Statements
Note 14  Commitments and Contingencies for
information on our fixed-to-floating interest rate swaps.



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

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



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

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



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



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

The table below summarizes our consolidated
mortgage debt, unsecured notes and line of credit indebtedness
at September 30, 2004 and December 31, 2003.

|                                         |                  |                         |   |            |              |   |   |            |            |  
|---------------------------------------- | ---------------- | ----------------------- | - | ---------- | ------------ | - | - | ---------- | ---------- | -
|                                         |                  | September 30,           |   |            | December 31, |  
|(Dollars in thousands)                   |                  | 2004                    |   |            | 2003         |  
|                                         |                  |                         |   |            |              |  
|Balance                                  |                  |                         |   |            |              |   |   |           
|                                         | Fixed rate       |                         | $ | 10,436,680 |              |   | $ | 11,108,801 |           
|                                         | Variable rate(a) |                         |   | 2,237,858  |              |   |   | 370,000    |           
|                                         |                  |                         |   |            |              |  
|                                         |                  | Total                   |   | $          | 12,674,538   |   |   | $          | 11,478,801 |  
|                                         |                  |                         |   |            |              |  
|Percent of total debt                    |                  |                         |   |            |              |   |   |           
|                                         | Fixed rate       |                         |   | 82.3       | %            |   |   | 96.8       | %         
|                                         | Variable rate(a) |                         |   | 17.7       | %            |   |   | 3.2        | %         
|                                         |                  |                         |   |            |              |  
|                                         |                  | Total                   |   |            | 100.0        | % |   |            | 100.0      | %
|                                         |                  |                         |   |            |              |  
|Effective interest rate at end of period |                  |                         |   |            |              |   |   |           
|                                         | Fixed rate       |                         |   | 7.28       | %            |   |   | 7.11       | %         
|                                         | Variable rate(a) |                         |   | 3.26       | %            |   |   | 1.93       | %         
|                                         |                  |                         |   |            |              |  
|                                         |                  | Effective interest rate |   |            | 6.57         | % |   |            | 6.94       | %
|                                         |                  |                         |   |            |              |  



---



|    |  |                                                                                                                                                                                                                                                                                                                                                                                       
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | The variable rate debt as of September 30,
    2004 includes $1.0 billion of fixed rate unsecured notes
    that were converted to a variable rate based on LIBOR plus
    122 basis points through several interest rate swap
    agreements entered into on March 23, 2004. The interest
    rates for the remaining variable rate debt are based on various
    spreads over LIBOR.

The increase in total consolidated debt of
approximately $1,195.7 million from December 31, 2003
to September 30, 2004 was primarily due to the
consolidations of SunAmerica Center and 1301 Avenue of the
Americas, which were

42



---



##### Table of Contents



encumbered by approximately $737.5 million
of mortgage debt. Since December 31, 2003, the following
transactions affected our consolidated debt:


|                                                                        |  |   |           |  
|----------------------------------------------------------------------- |  | - | --------- | -
|(Dollars in thousands)                                                  |  |  
|                                                                        |  |  
|Consolidation of SunAmerica Center                                      |  | $ | 203,225   |  
|Consolidation of our share of 1301 Avenue of the
    Americas           |  |   | 451,285   |  
|Consolidation of our partners share of 1301
    Avenue of the Americas |  |   | 82,970    |  
|                                                                        |  |   |          
|Total consolidation of mortgage debt                                    |  |   | 737,480   |  
|Mortgage debt repayments                                                |  |   | (433,825  | )
|Issuance of unsecured notes                                             |  |   | 1,066,912 |  
|Repayment of unsecured notes                                            |  |   | (880,000  | )
|Net activity on the line of credit                                      |  |   | 752,400   |  
|Increase in net discount on mortgage debt and
    unsecured notes       |  |   | (47,230   | )
|                                                                        |  |   |          
|Total increase of consolidated debt                                     |  | $ | 1,195,737 |  
|                                                                        |  |   |          



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

Our share of unconsolidated debt was
approximately $343.8 million and $797.3 million at
September 30, 2004 and December 31, 2003,
respectively. The decrease of approximately $453.5 million
was primarily due to the consolidation of 1301 Avenue of the
Americas of which our share of the mortgage debt was
approximately $451.3 million.



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

As of September 30, 2004, total mortgage
debt (excluding our share of the mortgage debt encumbering
unconsolidated properties of approximately $343.8 million)
consisted of approximately $2,512.9 million of fixed rate
debt with a weighted average interest rate of approximately
7.80% and $106.5 million of variable rate debt based on
LIBOR plus 300 basis points (the effective rate on variable
rate debt was 4.90% as of September 30, 2004 which includes
the spread over LIBOR). See Liquidity and Capital
Resources  Contractual Obligations for annual
payment obligations under our mortgage debt.

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



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

We have a $1.0 billion revolving credit
facility that was obtained in May 2003 and matures in May 2006.
As of October 29, 2004 and September 30, 2004,
$176.0 million and $961.4 million was outstanding
under this facility, respectively. The line of credit bears
interest at LIBOR plus 60 basis points, but would increase
in the event of an adverse change in our credit ratings from
Standard & Poors or Fitch. The line of credit has an
annual facility fee of 20 basis points payable quarterly.
In addition, a competitive bid option, whereby the lenders
participating in the credit facility may bid on the interest to
be charged resulting in an interest rate lower than LIBOR plus
60 basis points, is available for up to $350 million
of the borrowings under the credit facility. The effective rate
on the line of credit at September 30, 2004 was
approximately 2.55%.



| |                                 
| | --------------------------------
| | Bridge Revolving Credit Facility

In July 2004, we obtained a $500 million
364-day bridge revolving credit facility. The credit facility
bore interest at LIBOR plus 65 basis points and had an
annual facility fee of 15 basis points. Amounts borrowed
under the facility are required to be repaid with certain cash
proceeds from property sales and any cash proceeds from debt and
equity offerings. This facility terminated in October 2004
following the issuance and sale by us of $1.0 billion of
notes maturing in October 2010.

43



---



##### Table of Contents





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

Unsecured notes increased to approximately
$8,968.8 million at September 30, 2004 compared to
approximately $8,828.9 million at December 31, 2003,
as a result of the issuance of $1,066.9 million of
unsecured notes, offset by the repayment of $880.0 million
of unsecured notes and the net change in the discount/ premium
of approximately $47.1 million relating to mark-to-market
adjustments for interest rate swaps. The table below summarizes
the unsecured notes outstanding as of September 30, 2004:

|                        |                            |                        |      |      |           |  |      |           |   |   |               |           |  |  |                   |  | 
|----------------------- | -------------------------- | ---------------------- | ---- | ---- | --------- |  | ---- | --------- | - | - | ------------- | --------- |  |  | ----------------- |  | 
|                        |                            | Coupon                 |      |      | Effective |  |      | Principal |   |   |              
|Original Term           |                            | Rate                   |      |      | Rate(a)   |  |      | Balance   |   |   | Maturity Date |          
|                        |                            |                        |      |      |           |  |      |           |   |   |               |          
|                        |                            |                       
|                        |                            | (Dollars in thousands) |     
|Fixed interest rate:    |                            |                        |      |      |           |  |      |           |   |   |               |           |  |  |                   | 
|8 Years                 |                            |                        | 6.88 | %    |           |  | 6.40 | %         |   | $ | 125,000       |           |  |  | 02/01/05          | 
|7 Years                 |                            |                        | 6.63 | %    |           |  | 4.99 | %         |   |   | 400,000       |           |  |  | 02/15/05          | 
|7 Years                 |                            |                        | 8.00 | %    |           |  | 6.49 | %         |   |   | 100,000       |           |  |  | 07/19/05          | 
|8 Years                 |                            |                        | 7.36 | %    |           |  | 7.69 | %         |   |   | 50,000        |           |  |  | 09/01/05          | 
|6 Years                 |                            |                        | 8.38 | %    |           |  | 7.65 | %         |   |   | 500,000       |           |  |  | 03/15/06          | 
|9 Years                 |                            |                        | 7.44 | %    |           |  | 7.74 | %         |   |   | 50,000        |           |  |  | 09/01/06          | 
|10 Years                |                            |                        | 7.13 | %    |           |  | 6.74 | %         |   |   | 100,000       |           |  |  | 12/01/06          | 
|9 Years                 |                            |                        | 7.00 | %    |           |  | 6.80 | %         |   |   | 1,500         |           |  |  | 02/02/07          | 
|9 Years                 |                            |                        | 6.88 | %    |           |  | 6.83 | %         |   |   | 25,000        |           |  |  | 04/30/07          | 
|9 Years                 |                            |                        | 6.76 | %    |           |  | 6.76 | %         |   |   | 300,000       |           |  |  | 06/15/07          | 
|10 Years                |                            |                        | 7.41 | %    |           |  | 7.70 | %         |   |   | 50,000        |           |  |  | 09/01/07          | 
|7 Years                 |                            |                        | 7.75 | %    |           |  | 7.91 | %         |   |   | 600,000       |           |  |  | 11/15/07          | 
|10 Years                |                            |                        | 6.75 | %    |           |  | 6.97 | %         |   |   | 150,000       |           |  |  | 01/15/08          | 
|10 Years                |                            |                        | 6.75 | %    |           |  | 7.01 | %         |   |   | 300,000       |           |  |  | 02/15/08          | 
|8 Years(b)              |                            |                        | 7.25 | %    |           |  | 7.64 | %         |   |   | 325,000       |           |  |  | 11/15/08          | 
|10 Years                |                            |                        | 6.80 | %    |           |  | 6.94 | %         |   |   | 500,000       |           |  |  | 01/15/09          | 
|10 Years                |                            |                        | 7.25 | %    |           |  | 7.14 | %         |   |   | 200,000       |           |  |  | 05/01/09          | 
|11 Years                |                            |                        | 7.13 | %    |           |  | 6.97 | %         |   |   | 150,000       |           |  |  | 07/01/09          | 
|10 Years                |                            |                        | 8.10 | %    |           |  | 8.22 | %         |   |   | 360,000       |           |  |  | 08/01/10          | 
|10 Years                |                            |                        | 7.65 | %    |           |  | 7.20 | %         |   |   | 200,000       |           |  |  | 12/15/10          | 
|10 Years                |                            |                        | 7.00 | %    |           |  | 6.83 | %         |   |   | 1,100,000     |           |  |  | 07/15/11          | 
|10 Years                |                            |                        | 6.75 | %    |           |  | 7.02 | %         |   |   | 500,000       |           |  |  | 02/15/12          | 
|10 Years                |                            |                        | 5.88 | %    |           |  | 5.98 | %         |   |   | 500,000       |           |  |  | 01/15/13          | 
|20 Years                |                            |                        | 7.88 | %    |           |  | 8.08 | %         |   |   | 25,000        |           |  |  | 12/01/16          | 
|20 Years                |                            |                        | 7.35 | %    |           |  | 8.08 | %         |   |   | 200,000       |           |  |  | 12/01/17          | 
|20 Years                |                            |                        | 7.25 | %    |           |  | 7.54 | %         |   |   | 250,000       |           |  |  | 02/15/18          | 
|30 Years                |                            |                        | 7.50 | %    |           |  | 8.24 | %         |   |   | 150,000       |           |  |  | 10/01/27          | 
|30 Years                |                            |                        | 7.25 | %    |           |  | 7.31 | %         |   |   | 225,000       |           |  |  | 06/15/28          | 
|30 Years                |                            |                        | 7.50 | %    |           |  | 7.55 | %         |   |   | 200,000       |           |  |  | 04/19/29          | 
|30 Years                |                            |                        | 7.88 | %    |           |  | 7.94 | %         |   |   | 300,000       |           |  |  | 07/15/31          | 
|EOP InterNotes(c)       |                            |                        | 4.58 | %    |           |  | 4.81 | %         |   |   | 21,912        |           |  |  | 07/15/07-01/15/11 | 
|                        |                            |                        |      |      |           |  |      |           |   |   |               |          
|                        | Weighted Average/ Subtotal |                        |      | 7.18 | %         |  |      | 7.11      | % |   |               | 7,958,412 |  |  |                   |  | 
|                        |                            |                        |      |      |           |  |      |           |   |   |               |          
|Variable-interest rate: |                            |                        |      |      |           |  |      |           |   |   |               |           |  |  |                   | 
|10 Years(d)             |                            |                        | 4.75 | %    |           |  | 3.88 | %         |   |   | 1,000,000     |           |  |  | 03/15/14          | 
|10 Years(e)             |                            |                        | 2.55 | %    |           |  | 2.65 | %         |   |   | 45,000        |           |  |  | 05/27/14          | 
|                        |                            |                        |      |      |           |  |      |           |   |   |               |          
|                        | Weighted Average/ Subtotal |                        |      | 4.66 | %         |  |      | 3.82      | % |   |               | 1,045,000 |  |  |                   |  | 
|                        |                            |                        |      |      |           |  |      |           |   |   |               |          
|Total Weighted Average  |                            |                        | 6.89 | %    |           |  | 6.73 | %         |   |   |               |           |  |  |                   | 
|                        |                            |                        |      |      |           |  |      |           |   |   |               |          
|Net discount            |                            |                        |      |      |           |  |      |           |   |   | (34,661       | )         |  |  |                   | 
|                        |                            |                        |      |      |           |  |      |           |   |   |               |          
|                        | Total                      |                        |      |      |           |  |      |           |   |   | $             | 8,968,751 |  |  |                   |  | 
|                        |                            |                        |      |      |           |  |      |           |   |   |               |          

44



---



##### Table of Contents





---



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Includes the effect of settled interest rate
    protection and interest rate swap agreements, offering and
    transaction costs and premiums and discounts on certain
    unsecured notes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|(b) |  | The notes are exchangeable into Equity Office
    Common Shares at an exchange rate of $34.00 per share. If
    the closing price of a Common Share at the time a holder
    exercises its exchange right is less than the exchange price of
    $34.00, the holder will receive, in lieu of Common Shares, cash
    in an amount equal to 97% of the product of the number of Common
    Shares into which the principal amount of notes subject to such
    exercise would otherwise be exchangeable and the current market
    price per Common Share. Upon exchange of a $1,000 note for
    Common Shares of Equity Office, we would issue a corresponding
    number of Units to Equity Office on a one-for-one basis. We have
    elected to exercise our right to redeem these notes which are
    due November 15, 2008 on November 22, 2004. In
    connection with the redemption, approximately $5.3 million
    of unamortized loan costs will be expensed in the fourth quarter.
|   
|(c) |  | The rates shown are weighted average rates. The
    coupon rate on the EOP InterNotes range from 3.70% to 5.25%.
    Including all offering expenses, the all-in effective rates of
    the EOP InterNotes range from 3.97% to 5.46%.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|(d) |  | In March 2004, we entered into several interest
    rate swap agreements that effectively converted these notes to a
    variable interest rate based on the 6-month LIBOR rate.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   
|(e) |  | The notes have an interest rate of LIBOR plus
    77.5 basis points.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

As of October 29, 2004, approximately
$2.1 billion was available for issuance under two
previously filed shelf registration statements totalling
$7.0 billion.



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

Agreements or instruments relating to our line of
credit and unsecured notes contain certain financial
restrictions and requirements regarding total debt-to-assets
ratios, debt service coverage ratios, minimum ratio of
unencumbered assets to unsecured debt and other limitations. As
of September 30, 2004, we believe we were in compliance
with each of these financial restrictions and requirements. If
we fail to comply with any of these restrictions and
requirements, then the indebtedness could become due and payable
before its stated due date.

Set forth below are the financial restrictions
and requirements to which we are subject under our unsecured
note indentures and our performance under each covenant as of
September 30, 2004:

|                                                                                                             |  |                    |      | 
|------------------------------------------------------------------------------------------------------------ |  | ------------------ | ---- | 
|Covenants(a) (in each case as defined in the respective indenture)                                           |  | Actual Performance |     
|                                                                                                             |  |                    |     
|Debt to Adjusted Total Assets may not be greater
    than 60%                                                |  |                    | 49%  | 
|Secured Debt to Adjusted Total Assets may not be
    greater than 40%                                        |  |                    | 11%  | 
|Consolidated Income Available for Debt Service to
    Annual Debt Service charge may not be less than 1.50:1 |  |                    | 2.40 | 
|Total Unencumbered Assets to Unsecured Debt may
    not be less than 150%(b)                                 |  |                    | 209% | 



---



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

45



---



##### Table of Contents





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

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

|                                  |                                                                     |               |             |            |       |  |            |          |   |  |             |            |  
|--------------------------------- | ------------------------------------------------------------------- | ------------- | ----------- | ---------- | ----- |  | ---------- | -------- | - |  | ----------- | ---------- | -
|                                  |                                                                     | Common Shares |             |            | Units |  |            | Total    |  
|                                  |                                                                     |               |             |            |       |  |            |          |  
|Outstanding at December 31, 2003  |                                                                     |               | 400,460,388 |            |       |  | 49,032,230 |          |   |  | 449,492,618 |           
|                                  | Share options exercised                                             |               |             | 1,682,409  |       |  |            |         |   |  |             | 1,682,409  |  
|                                  | Common Shares repurchased/ retired(a)                               |               |             | (1,397,883 | )     |  |            |         |   |  |             | (1,397,883 | )
|                                  | Units redeemed for Common Shares                                    |               |             | 695,989    |       |  |            | (695,989 | ) |  |             |           |  
|                                  | Units redeemed for cash                                             |               |             |           |       |  |            | (69,580  | ) |  |             | (69,580    | )
|                                  | Units issued(b)                                                     |               |             |           |       |  |            | 1,930    |   |  |             | 1,930      |  
|                                  | Restricted shares and share awards issued, net of
    cancellations |               |             | 970,658    |       |  |            |         |   |  |             | 970,658    |  
|                                  |                                                                     |               |             |            |       |  |            |          |  
|Outstanding at June 30, 2004      |                                                                     |               | 402,411,561 |            |       |  | 48,268,591 |          |   |  | 450,680,152 |           
|                                  | Share options exercised                                             |               |             | 191,970    |       |  |            |         |   |  |             | 191,970    |  
|                                  | Common Shares repurchased/retired(c)                                |               |             | (12,944    | )     |  |            |         |   |  |             | (12,944    | )
|                                  | Units redeemed for Common Shares                                    |               |             | 558,768    |       |  |            | (558,768 | ) |  |             |           |  
|                                  | Units redeemed for cash                                             |               |             |           |       |  |            | (24,519  | ) |  |             | (24,519    | )
|                                  | Restricted shares and share awards issued, net of
    cancellations |               |             | (14,123    | )     |  |            |         |   |  |             | (14,123    | )
|                                  |                                                                     |               |             |            |       |  |            |          |  
|Outstanding at September 30, 2004 |                                                                     |               | 403,135,232 |            |       |  | 47,685,304 |          |   |  | 450,820,536 |           
|                                  |                                                                     |               |             |            |       |  |            |          |  



---



|    |  |                                                                                                                                                                                                                                                                                                                                                            
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | These Common Shares were repurchased by Equity
    Office at an average price of $26.17 per share for
    approximately $36.6 million in the aggregate. In connection
    with the repurchases, we retired a corresponding number of Units
    for an aggregate purchase price equal to the aggregate purchase
    price for all Common Shares repurchases.
|(b) |  | During the second quarter 2004, we issued Units
    in connection with the buyout of a partners interest in
    the 500 Orange property. The total value of the Units was
    approximately $50,000.                                                                                                                                                      
|(c) |  | These Common Shares were repurchased by Equity
    Office at an average price of $27.84 per share for
    approximately $360,000 in the aggregate. In connection with the
    repurchases, we retired a corresponding number of Units for an
    aggregate purchase price equal to the aggregate purchase price
    for all Common Shares repurchases.     

Market Risk

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



| |                   
| | ------------------
| | Interest Rate Risk

As of September 30, 2004 and
December 31, 2003, the fair value of our fixed-rate debt
was approximately $1.1 billion and $1.3 billion higher
than the book value of approximately $10.4 billion and
$11.1 billion, respectively, due to the general decrease in
market interest rates on secured and unsecured debt.



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



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

As of December 31, 2003, we had
$1.3 billion of forward-starting interest rate swaps
outstanding, which were all settled during the six months ended
June 30, 2004. In the second quarter 2004 we settled
$500 million notional amount of the forward-starting
interest rate swaps and recognized a gain of approximately
$24.0 million. The swaps were entered into in 2003 to hedge
an unsecured note offering that was expected to take place in
June 2004, but did not occur.

In March 2004, in conjunction with a
$1.0 billion debt offering, we settled $800 million of
forward-starting interest rate swaps that were outstanding as of
December 31, 2003.

46



---



##### Table of Contents



In March 2004, we entered into $1.0 billion
of fixed-to-floating interest rate swap agreements to hedge the
$1.0 billion of unsecured notes also issued in March 2004.

See Item 1. Financial Statements
Note 14  Commitments and Contingencies for
information on our forward-starting and fixed-to-floating
interest rate swaps.

Capital Improvements, Tenant Improvements and
Leasing Costs



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

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



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

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

|                       |                      |                                          |   |                |             |  |   |              |                |  |             |        |        |  |   |       |       | 
|---------------------- | -------------------- | ---------------------------------------- | - | -------------- | ----------- |  | - | ------------ | -------------- |  | ----------- | ------ | ------ |  | - | ----- | ----- | 
|                       |                      |                                         
|                       |                      | For the three months ended September 30, |  
|                       |                      |                                          |  
|                       |                      |                                          |   |               
|                       |                      | 2004                                     |   |                | 2003        | 
|                       |                      |                                          |   |                |             | 
|                       |                      |                                          |   | Unconsolidated |             |  |   |              | Unconsolidated | 
|                       |                      | Consolidated                             |   |                | Properties  |  |   | Consolidated |                |  | Properties  |       
|(Dollars in thousands) |                      | Properties                               |   |                | (our share) |  |   | Properties   |                |  | (our share) |       
|                       |                      |                                          |   |                |             |  |   |              |                |  |             |       
|Capital Improvements:  |                      |                                          |   |                |             |  |   |              |                |  |             |        |        |  |   |      
|                       | Capital improvements |                                          | $ | 6,305          |             |  | $ | 1,034        |                |  | $           | 14,633 |        |  | $ | 1,881 |      
|                       | Development costs    |                                          |   | 1,595          |             |  |   | 19           |                |  |             | 23,500 |        |  |   | 1,336 |      
|                       | Redevelopment costs  |                                          |   | 901            |             |  |   |             |                |  |             | 1,668  |        |  |   |      |      
|                       |                      |                                          |   |                |             |  |   |              |                |  |             |       
|                       |                      | Total capital improvements               |   | $              | 8,801       |  |   | $            | 1,053          |  |             | $      | 39,801 |  |   | $     | 3,217 | 
|                       |                      |                                          |   |                |             |  |   |              |                |  |             |       

|                       |                      |                                         |   |                |             |  |   |              |                |  |             |        |         |  |   |       |       | 
|---------------------- | -------------------- | --------------------------------------- | - | -------------- | ----------- |  | - | ------------ | -------------- |  | ----------- | ------ | ------- |  | - | ----- | ----- | 
|                       |                      |                                        
|                       |                      | For the nine months ended September 30, |  
|                       |                      |                                         |  
|                       |                      |                                         |   |               
|                       |                      | 2004                                    |   |                | 2003        | 
|                       |                      |                                         |   |                |             | 
|                       |                      |                                         |   | Unconsolidated |             |  |   |              | Unconsolidated | 
|                       |                      | Consolidated                            |   |                | Properties  |  |   | Consolidated |                |  | Properties  |       
|(Dollars in thousands) |                      | Properties                              |   |                | (our share) |  |   | Properties   |                |  | (our share) |       
|                       |                      |                                         |   |                |             |  |   |              |                |  |             |       
|Capital Improvements:  |                      |                                         |   |                |             |  |   |              |                |  |             |        |         |  |   |      
|                       | Capital improvements |                                         | $ | 27,794         |             |  | $ | 2,811        |                |  | $           | 28,440 |         |  | $ | 3,557 |      
|                       | Development costs    |                                         |   | 44,123         |             |  |   | 182          |                |  |             | 69,267 |         |  |   | 5,667 |      
|                       | Redevelopment costs  |                                         |   | 1,257          |             |  |   |             |                |  |             | 7,213  |         |  |   |      |      
|                       |                      |                                         |   |                |             |  |   |              |                |  |             |       
|                       |                      | Total capital improvements              |   | $              | 73,174      |  |   | $            | 2,993          |  |             | $      | 104,920 |  |   | $     | 9,224 | 
|                       |                      |                                         |   |                |             |  |   |              |                |  |             |       



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

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

47



---



##### Table of Contents



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

|                                                         |                         |                                          |         |            |             |   |       |             |            |   |             |         |  |   |       |       | 
|-------------------------------------------------------- | ----------------------- | ---------------------------------------- | ------- | ---------- | ----------- | - | ----- | ----------- | ---------- | - | ----------- | ------- |  | - | ----- | ----- | 
|                                                         |                         |                                         
|                                                         |                         | For the three months ended September 30, |        
|                                                         |                         |                                          |        
|                                                         |                         |                                          |         |           
|                                                         |                         | 2004                                     |         |            | 2003        |  
|                                                         |                         |                                          |         |            |             |  
|                                                         |                         |                                          |         | Total Cost |             |   |       |             | Total Cost |  
|                                                         |                         |                                          |         | per Square |             |   |       |             | per Square |  
|(Dollars in thousands, except per square foot amounts)   |                         | Total Costs                              |         |            | Foot Leased |   |       | Total Costs |            |   | Foot Leased |        
|                                                         |                         |                                          |         |            |             |   |       |             |            |   |             |        
|Consolidated Properties:                                 |                         |                                          |         |            |             |   |       |             |            |   |             |         |  |   |       |      
|                                                         |                         |                                          |         |            |             |   |       |             |            |   |             |        
|Office Properties:                                       |                         |                                          |         |            |             |   |       |             |            |   |             |         |  |   |       |      
|Renewals                                                 |                         | $                                        | 26,304  |            |             | $ | 15.13 |             |            | $ | 32,912      |         |  | $ | 13.90 |      
|Retenanted                                               |                         |                                          | 73,702  |            |             |   | 27.04 |             |            |   | 97,650      |         |  |   | 29.39 |      
|                                                         |                         |                                          |         |            |             |   |       |             |            |   |             |        
|                                                         | Total/ Weighted Average |                                          | $       | 100,006    |             |   | $     | 22.40       |            |   | $           | 130,562 |  |   | $     | 22.94 | 
|                                                         |                         |                                          |         |            |             |   |       |             |            |   |             |        
|Industrial Properties:                                   |                         |                                          |         |            |             |   |       |             |            |   |             |         |  |   |       |      
|Renewals                                                 |                         | $                                        | 278     |            |             | $ | 2.08  |             |            | $ | 555         |         |  | $ | 3.85  |      
|Retenanted                                               |                         |                                          | 1,224   |            |             |   | 8.54  |             |            |   | 437         |         |  |   | 2.40  |      
|                                                         |                         |                                          |         |            |             |   |       |             |            |   |             |        
|                                                         | Total/ Weighted Average |                                          | $       | 1,502      |             |   | $     | 5.42        |            |   | $           | 992     |  |   | $     | 3.04  | 
|                                                         |                         |                                          |         |            |             |   |       |             |            |   |             |        
|Unconsolidated Joint
    Ventures(a):                    |                         |                                          |         |            |             |   |       |             |            |   |             |         |  |   |       |      
|                                                         |                         |                                          |         |            |             |   |       |             |            |   |             |        
|Renewals                                                 |                         | $                                        | 1,096   |            |             | $ | 16.49 |             |            | $ | 2,261       |         |  | $ | 20.10 |      
|Retenanted                                               |                         |                                          | 3,321   |            |             |   | 42.26 |             |            |   | 1,031       |         |  |   | 18.92 |      
|                                                         |                         |                                          |         |            |             |   |       |             |            |   |             |        
|                                                         | Total/ Weighted Average |                                          | $       | 4,417      |             |   | $     | 30.45       |            |   | $           | 3,292   |  |   | $     | 19.71 | 
|                                                         |                         |                                          |         |            |             |   |       |             |            |   |             |        
|Total Properties (renewals and retenanted
    combined): |                         |                                          |         |            |             |   |       |             |            |   |             |         |  |   |       |      
|                                                         |                         |                                          |         |            |             |   |       |             |            |   |             |        
|Office (consolidated and unconsolidated)                 |                         | $                                        | 104,423 |            |             | $ | 22.66 |             |            | $ | 133,854     |         |  | $ | 22.85 |      
|Industrial                                               |                         |                                          | 1,502   |            |             |   | 5.42  |             |            |   | 992         |         |  |   | 3.04  |      
|                                                         |                         |                                          |         |            |             |   |       |             |            |   |             |        
|                                                         | Total/ Weighted Average |                                          | $       | 105,925    |             |   | $     | 21.68       |            |   | $           | 134,846 |  |   | $     | 21.80 | 
|                                                         |                         |                                          |         |            |             |   |       |             |            |   |             |        

|                                                         |                         |                                         |         |            |             |   |       |             |            |   |             |         |  |   |       |       | 
|-------------------------------------------------------- | ----------------------- | --------------------------------------- | ------- | ---------- | ----------- | - | ----- | ----------- | ---------- | - | ----------- | ------- |  | - | ----- | ----- | 
|                                                         |                         |                                        
|                                                         |                         | For the nine months ended September 30, |        
|                                                         |                         |                                         |        
|                                                         |                         |                                         |         |           
|                                                         |                         | 2004                                    |         |            | 2003        |  
|                                                         |                         |                                         |         |            |             |  
|                                                         |                         |                                         |         | Total Cost |             |   |       |             | Total Cost |  
|                                                         |                         |                                         |         | per Square |             |   |       |             | per Square |  
|(Dollars in thousands, except per square foot amounts)   |                         | Total Costs                             |         |            | Foot Leased |   |       | Total Costs |            |   | Foot Leased |        
|                                                         |                         |                                         |         |            |             |   |       |             |            |   |             |        
|Consolidated Properties:                                 |                         |                                         |         |            |             |   |       |             |            |   |             |         |  |   |       |      
|                                                         |                         |                                         |         |            |             |   |       |             |            |   |             |        
|Office Properties:                                       |                         |                                         |         |            |             |   |       |             |            |   |             |         |  |   |       |      
|Renewals                                                 |                         | $                                       | 72,527  |            |             | $ | 11.10 |             |            | $ | 89,227      |         |  | $ | 11.72 |      
|Retenanted                                               |                         |                                         | 192,608 |            |             |   | 24.05 |             |            |   | 176,248     |         |  |   | 23.83 |      
|                                                         |                         |                                         |         |            |             |   |       |             |            |   |             |        
|                                                         | Total/ Weighted Average |                                         | $       | 265,135    |             |   | $     | 18.23       |            |   | $           | 265,475 |  |   | $     | 17.69 | 
|                                                         |                         |                                         |         |            |             |   |       |             |            |   |             |        
|Industrial Properties:                                   |                         |                                         |         |            |             |   |       |             |            |   |             |         |  |   |       |      
|Renewals                                                 |                         | $                                       | 1,623   |            |             | $ | 2.24  |             |            | $ | 1,036       |         |  | $ | 3.35  |      
|Retenanted                                               |                         |                                         | 2,817   |            |             |   | 6.17  |             |            |   | 1,030       |         |  |   | 3.07  |      
|                                                         |                         |                                         |         |            |             |   |       |             |            |   |             |        
|                                                         | Total/ Weighted Average |                                         | $       | 4,440      |             |   | $     | 3.76        |            |   | $           | 2,066   |  |   | $     | 3.20  | 
|                                                         |                         |                                         |         |            |             |   |       |             |            |   |             |        
|Unconsolidated Joint
    Ventures(a):                    |                         |                                         |         |            |             |   |       |             |            |   |             |         |  |   |       |      
|                                                         |                         |                                         |         |            |             |   |       |             |            |   |             |        
|Renewals                                                 |                         | $                                       | 9,794   |            |             | $ | 20.03 |             |            | $ | 12,150      |         |  | $ | 30.43 |      
|Retenanted                                               |                         |                                         | 9,827   |            |             |   | 31.25 |             |            |   | 3,861       |         |  |   | 27.49 |      
|                                                         |                         |                                         |         |            |             |   |       |             |            |   |             |        
|                                                         | Total/ Weighted Average |                                         | $       | 19,621     |             |   | $     | 24.42       |            |   | $           | 16,011  |  |   | $     | 27.87 | 
|                                                         |                         |                                         |         |            |             |   |       |             |            |   |             |        
|Total Properties (renewals and retenanted
    combined): |                         |                                         |         |            |             |   |       |             |            |   |             |         |  |   |       |      
|                                                         |                         |                                         |         |            |             |   |       |             |            |   |             |        
|Office (consolidated and unconsolidated)                 |                         | $                                       | 284,756 |            |             | $ | 18.56 |             |            | $ | 281,486     |         |  | $ | 18.07 |      
|Industrial                                               |                         |                                         | 4,440   |            |             |   | 3.76  |             |            |   | 2,066       |         |  |   | 3.20  |      
|                                                         |                         |                                         |         |            |             |   |       |             |            |   |             |        
|                                                         | Total/ Weighted Average |                                         | $       | 289,196    |             |   | $     | 17.50       |            |   | $           | 283,552 |  |   | $     | 17.47 | 
|                                                         |                         |                                         |         |            |             |   |       |             |            |   |             |        



---



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

48



---



##### Table of Contents



Tenant improvements and leasing costs have
increased over the last 15 months as compared to historical
levels due to competitive market conditions for new and renewal
leases. These increases in tenant improvements and leasing costs
contributed to a decrease in net effective rents (contract rents
reduced by tenant improvements costs, leasing commissions and
any rent concessions) for lease renewals and retenanted
properties.

The above information includes capital
improvements incurred during the periods shown. Tenant
improvements and leasing costs are reported for leases which
commenced during the periods shown which is consistent with how
we report our per square foot tenant improvements and leasing
costs. The amounts included in the consolidated statement of
cash flows represent the cash expenditures made during the
period regardless of when the leases commence. The differences
between these amounts represent timing differences between the
lease commencement dates and the actual cash expenditures. In
addition, the figures below include expenditures for corporate
furniture, fixtures and equipment, software, 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                                                                                                             |        |         | For the           |  
|                                                                                                             |                       | three months ended                                                                                                  |        |         | nine months ended |  
|                                                                                                             |                       | September 30,                                                                                                       |        |         | September 30,     |  
|                                                                                                             |                       |                                                                                                                     |        |         |                   |  
|(Dollars in thousands)                                                                                       |                       | 2004                                                                                                                |        |         | 2003              |   |         | 2004    |         |   | 2003    |        
|                                                                                                             |                       |                                                                                                                     |        |         |                   |   |         |         |         |   |         |        
|Capital improvements                                                                                         |                       | $                                                                                                                   | 6,305  |         |                   | $ | 14,633  |         |         | $ | 27,794  |         |         | $ | 28,440  |        
|Tenant improvements and leasing costs:                                                                       |                       |                                                                                                                     |        |         |                   |   |         |         |         |   |         |         |         |   |         |        
|                                                                                                             | Office Properties     |                                                                                                                     |        | 100,006 |                   |   |         | 130,562 |         |   |         | 265,135 |         |   |         | 265,475 |        
|                                                                                                             | Industrial Properties |                                                                                                                     |        | 1,502   |                   |   |         | 992     |         |   |         | 4,440   |         |   |         | 2,066   |        
|Expenditures for corporate furniture, fixtures
    and equipment, software, leasehold improvements and other |                       |                                                                                                                     | 1,477  |         |                   |   | 9,079   |         |         |   | 7,029   |         |         |   | 17,450  |        
|                                                                                                             |                       |                                                                                                                     |        |         |                   |   |         |         |         |   |         |        
|                                                                                                             |                       | Subtotal                                                                                                            |        |         | 109,290           |   |         |         | 155,266 |   |         |         | 304,398 |   |         |         | 313,431 | 
|Development costs                                                                                            |                       |                                                                                                                     | 1,595  |         |                   |   | 23,500  |         |         |   | 44,123  |         |         |   | 69,267  |        
|Redevelopment costs                                                                                          |                       |                                                                                                                     | 901    |         |                   |   | 1,668   |         |         |   | 1,257   |         |         |   | 7,213   |        
|Timing differences                                                                                           |                       |                                                                                                                     | 13,310 |         |                   |   | (17,254 | )       |         |   | 79,546  |         |         |   | 22,238  |        
|                                                                                                             |                       |                                                                                                                     |        |         |                   |   |         |         |         |   |         |        
|                                                                                                             |                       | Total capital improvements, tenant improvements
    and leasing costs                                               |        | $       | 125,096           |   |         | $       | 163,180 |   |         | $       | 429,324 |   |         | $       | 412,149 | 
|                                                                                                             |                       |                                                                                                                     |        |         |                   |   |         |         |         |   |         |        
|Capital and tenant improvements from the
    consolidated statement of cash flows                            |                       | $                                                                                                                   | 91,969 |         |                   | $ | 127,160 |         |         | $ | 335,322 |         |         | $ | 302,080 |        
|Lease commissions and other costs from the
    consolidated statement of cash flows                          |                       |                                                                                                                     | 33,127 |         |                   |   | 36,020  |         |         |   | 94,002  |         |         |   | 110,069 |        
|                                                                                                             |                       |                                                                                                                     |        |         |                   |   |         |         |         |   |         |        
|                                                                                                             |                       | Total capital improvements, tenant improvements
    and leasing costs from the consolidated statement of cash flows |        | $       | 125,096           |   |         | $       | 163,180 |   |         | $       | 429,324 |   |         | $       | 412,149 | 
|                                                                                                             |                       |                                                                                                                     |        |         |                   |   |         |         |         |   |         |        

Developments

We own directly several properties in various
stages of development or pre-development. These developments are
funded by working capital and our line of credit. Specifically
identifiable direct acquisition, development and construction
costs are capitalized, including, where applicable, salaries and
related costs, real estate taxes and interest incurred in
developing the property. The properties under development and
all figures stated below are as of September 30, 2004.

|                         |  |           |         |  |          |  |                 |           |  |        |       |  |          |         |         |           |          |   |            |        |  |   |        |  |  |  |    |  
|------------------------ |  | --------- | ------- |  | -------- |  | --------------- | --------- |  | ------ | ----- |  | -------- | ------- | ------- | --------- | -------- | - | ---------- | ------ |  | - | ------ |  |  |  | -- | -
|                         |  | Placed in |         |  |          |  |                 |           |  |        | Costs |  |          | Total   |         |           | Current  |  
|                         |  | Service   |         |  |          |  | Number of       |           |  | Square |       |  | Incurred |         |         | Estimated |          |   | Percentage |       
|(Dollars in thousands)   |  | Date(a)   |         |  | Location |  |                 | Buildings |  |        | Feet  |  |          | to Date |         |           | Costs(b) |   |            | Leased | 
|                         |  |           |         |  |          |  |                 |           |  |        |       |  |          |         |         |           |          |   |            |        | 
|Wholly-Owned             |  |           |         |  |          |  |                 |           |  |        |       |  |          |         |         |           |          |   |            |        |  |   |        |  |  |  |    |  
|Kruse Woods V            |  |           | 4Q/2003 |  |          |  | Lake Oswego, OR |           |  |        | 1     |  |          |         | 184,000 |           |          | $ | 29,947     |        |  | $ | 33,900 |  |  |  | 73 | %
|Cambridge Science Center |  |           | 2Q/2004 |  |          |  | Cambridge, MA   |           |  |        | 1     |  |          |         | 131,000 |           |          |   | 38,405     |        |  |   | 54,900 |  |  |  | 39 | %
|                         |  |           |         |  |          |  |                 |           |  |        |       |  |          |         |         |           |          |   |            |        | 
|Total/ Weighted Average  |  |           |         |  |          |  |                 |           |  |        | 2     |  |          |         | 315,000 |           |          | $ | 68,352     |        |  | $ | 88,800 |  |  |  | 59 | %
|                         |  |           |         |  |          |  |                 |           |  |        |       |  |          |         |         |           |          |   |            |        | 



---



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

49



---



##### Table of Contents





|    |  |                                                                                                                                                                                                                                                                                                                         
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) |  | The Total Estimated Costs represent 100% of the
    developments estimated costs, including the acquisition
    cost of the land and building, if any. The Total Estimated Costs
    are subject to change upon, or prior to, the completion of the
    development and include amounts required to lease the property.

In addition to the developments described above,
we own or have under option various land parcels available for
development. These sites represent possible future development
of up to approximately 13 million square feet of office
space. These developments will be impacted by the timing and
likelihood of success of the entitlement processes, both of
which are uncertain. These various sites include, among others:
Russia Wharf, Boston, MA; Reston Town Center, Reston, VA; Dulles
Station, Herndon, VA; Prominence in Buckhead, Atlanta, GA;
Perimeter Center, Atlanta, GA; Tabor Center, Denver, CO; Bridge
Pointe Corporate Centre, San Diego, CA; La Jolla
Centre, San Diego, CA; Orange Center, Orange, CA;
Waters Edge, Los Angeles, CA; Skyport Plaza,
San Jose, CA; Foundry Square, San Francisco, CA;
San Rafael Corporate Center, San Rafael, CA; Station
Landing, Walnut Creek, CA; Parkshore Plaza, Folsom, CA; City
Center Bellevue, Bellevue, WA; and 8th Street, Bellevue, WA.

There are no unconsolidated joint venture
properties under development as of September 30, 2004.

Inflation

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

Cash Flows

The table below summarizes the changes in our
cash and cash equivalents as a result of operating, investing
and financing activities for the nine months ended
September 30, 2004 as compared to the nine months ended
September 30, 2003:

|                                                             |                                           |                           |         |          |           |   |         |            |   |   |        |          |  
|------------------------------------------------------------ | ----------------------------------------- | ------------------------- | ------- | -------- | --------- | - | ------- | ---------- | - | - | ------ | -------- | -
|                                                             |                                           |                           |         |         
|                                                             |                                           | For the nine months ended |         |          |          
|                                                             |                                           | September 30,             |         |          |          
|                                                             |                                           |                           |         |          | Increase/ |  
|                                                             |                                           | 2004                      |         |          | 2003      |   |         | (Decrease) |  
|                                                             |                                           |                           |         |          |           |   |         |            |  
|                                                             |                                           |                          
|                                                             |                                           | (Dollars in thousands)    |        
|Cash and cash equivalents at the beginning of the
    period |                                           | $                         | 69,398  |          |           | $ | 58,471  |            |   | $ | 10,927 |         
|                                                             | Net cash provided by operating activities |                           |         | 864,817  |           |   |         | 929,905    |   |   |        | (65,088  | )
|                                                             | Net cash (used for) investing activities  |                           |         | (641,345 | )         |   |         | (68,610    | ) |   |        | (572,735 | )
|                                                             | Net cash (used for) financing activities  |                           |         | (170,110 | )         |   |         | (813,981   | ) |   |        | 643,871  |  
|                                                             |                                           |                           |         |          |           |   |         |            |  
|Cash and cash equivalents at the end of the period           |                                           | $                         | 122,760 |          |           | $ | 105,785 |            |   | $ | 16,975 |         
|                                                             |                                           |                           |         |          |           |   |         |            |  



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

Cash flows from operations depend primarily on
cash generated from lease payments from tenants in our Office
Properties. The decrease in net cash provided by operating
activities is primarily attributable to lower occupancy levels,
reduced rental rates and reduced revenues as a result of asset
sales.



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

Net cash used for investing activities reflects
the net impact of the acquisition and disposition of certain
properties, investments in and distributions from our
unconsolidated joint ventures (including our acquisition of a
50% interest in Colorado Center in 2004 for approximately
$220.8 million), and expenditures for capital improvements,
tenant improvements and lease costs. In addition, we received
approximately $32.1 million from the disposal of our
investment in preferred securities of CT Convertible
Trust I in 2004 and amounts released from escrow deposits.

50



---



##### Table of Contents





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

Net cash used for financing activities generally
includes cash provided by or used for debt transactions,
distributions to our common and preferred unitholders and
repurchases of our securities. Net cash used for financing
activities for the nine months ended September 30, 2004 as
compared to the nine months ended September 30, 2003
decreased primarily as a result of the following transactions:



| |   |                                                                                                                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | we had net proceeds from mortgages, unsecured
    notes and lines of credit of approximately $501.7 million
    in the current period compared to approximately
    $267.3 million in the prior period;
|
| |  | we repurchased or redeemed approximately
    $151.0 million of our common and preferred securities in
    the current period compared to approximately $613.5 million
    in the prior period; and     
|
| |  | we paid approximately $69.1 million to
    settle swaps in the current period compared to receiving
    approximately $.8 million in the prior period.                                                 

Additional Items for 2004



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

Developments in process decreased by
approximately $6.9 million to $68.4 million at
September 30, 2004 compared to $75.2 million at
December 31, 2003. This decrease was a result of one
development placed in service (Douglas Corporate Center II
of which total costs incurred at December 31, 2003 were
approximately $13.6 million), partially offset by
additional costs of approximately $6.7 million spent on
current developments.



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

Deferred rent receivable increased by
approximately $83.5 million to $462.8 million at
September 30, 2004, compared to $379.3 million at
December 31, 2003. This increase was primarily a result of
a $60.8 million increase in receivables recorded from
tenants for the current difference between the straight-line
rent and the rent that is contractually due from tenants, a
$5.4 million increase related to the consolidation of
SunAmerica Center and a $15.4 million increase related to
the consolidation of the 1301 Avenue of the Americas office
building after we acquired the remaining economic interest in
the joint venture.



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

Investments in unconsolidated joint ventures
increased by approximately $51.7 million to
$1,179.0 million at September 30, 2004, compared to
$1,127.2 million at December 31, 2003. This increase
was primarily a result of the acquisition of Colorado Center for
$220.8 million partially offset by a $157.7 million
investment at December 31, 2003 in the 1301 Avenue of
the Americas office building, which was consolidated in February
2004 after we acquired the remaining economic interest in the
joint venture.



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

Prepaid expenses and other assets decreased by
approximately $173.7 million to $171.3 million at
September 30, 2004 compared to $344.9 million at
December 31, 2003. This decrease was primarily a result of
an $82.2 million note receivable related to the SunAmerica
Center whose assets, liabilities, and results of operations were
consolidated in 2004, a $40.2 million decrease in prepaid
expenses, the sale of our investment in CT Convertible
Trust I preferred shares which had a book value of
$30.0 million and an $11.1 million decrease in the
market value of the forward-starting interest rate swaps.



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

Accounts payable and accrued expenses decreased
by approximately $114.1 million to $458.9 million at
September 30, 2004 compared to $573.1 million at
December 31, 2003. This decrease was a result of a
$45.8 million decrease in accrued interest expense and a
$94.3 million decrease in accounts payable offset by a
$25.9 million increase in accrued real estate taxes.

51



---



##### Table of Contents





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

Distribution payable increased by approximately
$226.9 million to approximately $230.8 million at
September 30, 2004 compared to $3.9 million at
December 31, 2003. This increase was primarily a result of
the Unit distribution declaration for the third quarter of 2004,
which was paid in October 2004. The fourth quarter 2003
distribution was declared and paid in the fourth quarter of 2003.



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

Other liabilities increased by approximately
$57.0 million to approximately $455.2 million at
September 30, 2004 compared to $398.3 million at
December 31, 2003. This increase was primarily due to the
consolidation of the SunAmerica property pursuant to
FIN 46(R) and the related mezzanine debt of approximately
$51.9 million, which is net of a discount of approximately
$29.3 million.



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

Preferred units decreased by approximately
$114.1 million due to the redemption of the Series C
Preferred Units in the first quarter 2004.

Subsequent Events

See Note 15  Subsequent Events
for transactions that occurred subsequent to September 30,
2004 through October 29, 2004.

52



---



##### Table of Contents



Funds from Operations
(FFO)

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

|                                                                                                                                                                                                                                         |  |                                          |          |          |                                         |   |       |         |          |   |         |   |  |          |       |   |         |   |          |         |  |   |         |   |  |   |         |   |  |   |       |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------- | -------- | -------- | --------------------------------------- | - | ----- | ------- | -------- | - | ------- | - |  | -------- | ----- | - | ------- | - | -------- | ------- |  | - | ------- | - |  | - | ------- | - |  | - | ----- | -
|                                                                                                                                                                                                                                         |  |                                          |          |         
|                                                                                                                                                                                                                                         |  | For the three months ended September 30, |          |          | For the nine months ended September 30, |  
|                                                                                                                                                                                                                                         |  |                                          |          |          |                                         |  
|                                                                                                                                                                                                                                         |  |                                          |          |          |                                         |   |       |        
|                                                                                                                                                                                                                                         |  | 2004                                     |          |          | 2003                                    |   |       | 2004    |          |   | 2003    |  
|                                                                                                                                                                                                                                         |  |                                          |          |          |                                         |   |       |         |          |   |         |  
|                                                                                                                                                                                                                                         |  |                                          |          | Per      |                                         |   |       |         | Per      |   |         |   |  | Per      |       |   |         |   | Per      |        
|                                                                                                                                                                                                                                         |  |                                          |          | Weighted |                                         |   |       |         | Weighted |   |         |   |  | Weighted |       |   |         |   | Weighted |        
|(Dollars in thousands,                                                                                                                                                                                                                   |  |                                          |          | Average  |                                         |   |       |         | Average  |   |         |   |  | Average  |       |   |         |   | Average  |        
|except per unit amounts)                                                                                                                                                                                                                 |  | Dollars                                  |          |          | Unit(b)                                 |   |       | Dollars |          |   | Unit(b) |   |  | Dollars  |       |   | Unit(b) |   |          | Dollars |  |   | Unit(b) |  
|                                                                                                                                                                                                                                         |  |                                          |          |          |                                         |   |       |         |          |   |         |   |  |          |       |   |         |   |          |         |  |   |         |  
|                                                                                                                                                                                                                                         |  |                                         
|Reconciliation of net (loss) income to
    FFO(a):                                                                                                                                                                                       |  |                                          |          |          |                                         |   |       |         |          |   |         |   |  |          |       |   |         |   |          |         |  |   |         |   |  |   |         |   |  |   |       |  
|Net (loss) income                                                                                                                                                                                                                        |  | $                                        | (135,907 | )        |                                         | $ | (0.30 | )       |          | $ | 134,323 |   |  | $        | 0.30  |   |         | $ | 71,699   |         |  | $ | 0.16    |   |  | $ | 492,598 |   |  | $ | 1.09  |  
|Real estate related depreciation and amortization
    and net gain (loss) on sales of real estate, including our share
    of unconsolidated joint ventures and adjusted for minority
    interests share in partially owned properties |  |                                          | 194,048  |          |                                         |   | 0.43  |         |          |   | 188,277 |   |  |          | 0.42  |   |         |   | 577,940  |         |  |   | 1.29    |   |  |   | 505,927 |   |  |   | 1.12  |  
|Cumulative effect of a change in accounting
    principle                                                                                                                                                                                |  |                                          |         |          |                                         |   |      |         |          |   |        |   |  |          |      |   |         |   | 33,697   |         |  |   | 0.08    |   |  |   |        |   |  |   |      |  
|                                                                                                                                                                                                                                         |  |                                          |          |          |                                         |   |       |         |          |   |         |   |  |          |       |   |         |   |          |         |  |   |         |  
|FFO                                                                                                                                                                                                                                      |  |                                          | 58,141   |          |                                         |   | 0.13  |         |          |   | 322,600 |   |  |          | 0.72  |   |         |   | 683,336  |         |  |   | 1.52    |   |  |   | 998,525 |   |  |   | 2.21  |  
|Preferred distributions                                                                                                                                                                                                                  |  |                                          | (8,701   | )        |                                         |   | (0.02 | )       |          |   | (10,508 | ) |  |          | (0.02 | ) |         |   | (30,393  | )       |  |   | (0.07   | ) |  |   | (41,364 | ) |  |   | (0.09 | )
|                                                                                                                                                                                                                                         |  |                                          |          |          |                                         |   |       |         |          |   |         |   |  |          |       |   |         |   |          |         |  |   |         |  
|FFO available to unitholders  basic                                                                                                                                                                                                     |  | $                                        | 49,440   |          |                                         | $ | 0.11  |         |          | $ | 312,092 |   |  | $        | 0.70  |   |         | $ | 652,943  |         |  | $ | 1.46    |   |  | $ | 957,161 |   |  | $ | 2.12  |  
|                                                                                                                                                                                                                                         |  |                                          |          |          |                                         |   |       |         |          |   |         |   |  |          |       |   |         |   |          |         |  |   |         |  

|                                                                                                                |  |            |             |   |     |   |             |            |  |   |             |   |  |            |             |   |     |   |             |            |  |   |             |   |  |   |             |   |  |   |             |  
|--------------------------------------------------------------------------------------------------------------- |  | ---------- | ----------- | - | --- | - | ----------- | ---------- |  | - | ----------- | - |  | ---------- | ----------- | - | --- | - | ----------- | ---------- |  | - | ----------- | - |  | - | ----------- | - |  | - | ----------- | -
|                                                                                                                |  | Net Income |             |   | FFO |   |             | Net Income |  |   | FFO         |   |  | Net Income |             |   | FFO |   |             | Net Income |  |   | FFO         |  
|                                                                                                                |  |            |             |   |     |   |             |            |  |   |             |   |  |            |             |   |     |   |             |            |  |   |             |  
|Adjustments to arrive at FFO available to
    unitholders plus assumed conversions:                             |  |            |             |   |     |   |             |            |  |   |             |   |  |            |             |   |     |   |             |            |  |   |             |   |  |   |             |   |  |   |             |  
|Net (loss) income and FFO                                                                                       |  | $          | (135,907    | ) |     | $ | 58,141      |            |  | $ | 134,323     |   |  | $          | 322,600     |   |     | $ | 71,699      |            |  | $ | 683,336     |   |  | $ | 492,598     |   |  | $ | 998,525     |  
|Preferred distributions                                                                                         |  |            | (8,701      | ) |     |   | (8,701      | )          |  |   | (10,508     | ) |  |            | (10,508     | ) |     |   | (30,393     | )          |  |   | (30,393     | ) |  |   | (41,364     | ) |  |   | (41,364     | )
|                                                                                                                |  |            |             |   |     |   |             |            |  |   |             |   |  |            |             |   |     |   |             |            |  |   |             |  
|Net (loss) income and FFO available to unitholders                                                              |  |            | (144,608    | ) |     |   | 49,440      |            |  |   | 123,815     |   |  |            | 312,092     |   |     |   | 41,306      |            |  |   | 652,943     |   |  |   | 451,234     |   |  |   | 957,161     |  
|Preferred distributions on Series B
    preferred shares, of which is assumed to be converted into
    Units(c) |  |            |            |   |     |   |            |            |  |   |            |   |  |            | 3,931       |   |     |   |            |            |  |   |            |   |  |   |            |   |  |   | 11,793      |  
|                                                                                                                |  |            |             |   |     |   |             |            |  |   |             |   |  |            |             |   |     |   |             |            |  |   |             |  
|Net (loss) income and FFO available to
    unitholders plus assumed conversions                                 |  | $          | (144,608    | ) |     | $ | 49,440      |            |  | $ | 123,815     |   |  | $          | 316,023     |   |     | $ | 41,306      |            |  | $ | 652,943     |   |  | $ | 451,234     |   |  | $ | 968,954     |  
|                                                                                                                |  |            |             |   |     |   |             |            |  |   |             |   |  |            |             |   |     |   |             |            |  |   |             |  
|Weighted average Units, dilutive potential units
    plus assumed conversions outstanding                       |  |            | 448,766,905 |   |     |   | 450,420,567 |            |  |   | 448,805,388 |   |  |            | 457,194,742 |   |     |   | 450,801,177 |            |  |   | 450,801,177 |   |  |   | 453,451,913 |   |  |   | 461,841,267 |  
|                                                                                                                |  |            |             |   |     |   |             |            |  |   |             |   |  |            |             |   |     |   |             |            |  |   |             |  
|Net (loss) income and FFO available to
    unitholders plus assumed conversions per unit                        |  | $          | (0.32       | ) |     | $ | 0.11        |            |  | $ | 0.28        |   |  | $          | 0.69        |   |     | $ | 0.09        |            |  | $ | 1.45        |   |  | $ | 1.00        |   |  | $ | 2.10        |  
|                                                                                                                |  |            |             |   |     |   |             |            |  |   |             |   |  |            |             |   |     |   |             |            |  |   |             |  

53



---



##### Table of Contents



|                                                                                                                                                                    |  |  |  |                            |  |  |             |  |  |  |  |  |  |  |             |  |  |  |  |  |  |  |             |  |  |  |  |  |  |  |             | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  |  | -------------------------- |  |  | ----------- |  |  |  |  |  |  |  | ----------- |  |  |  |  |  |  |  | ----------- |  |  |  |  |  |  |  | ----------- | 
|                                                                                                                                                                    |  |  |  |                           
|                                                                                                                                                                    |  |  |  | Units and unit equivalents | 
|                                                                                                                                                                    |  |  |  |                            | 
|Weighted average Units outstanding (used for both
    net (loss) income and FFO basic per Unit calculation)                                                         |  |  |  |                            |  |  | 448,766,905 |  |  |  |  |  |  |  | 446,750,227 |  |  |  |  |  |  |  | 448,900,112 |  |  |  |  |  |  |  | 451,731,474 | 
|Impact of share options and restricted units
    which are dilutive to both net income and FFO                                                                      |  |  |  |                            |  |  |            |  |  |  |  |  |  |  | 2,055,161   |  |  |  |  |  |  |  | 1,901,065   |  |  |  |  |  |  |  | 1,720,439   | 
|                                                                                                                                                                    |  |  |  |                            |  |  |             |  |  |  |  |  |  |  |             |  |  |  |  |  |  |  |             | 
|Weighted average Units and dilutive potential
    units used for net (loss) income available to unitholders                                                         |  |  |  |                            |  |  | 448,766,905 |  |  |  |  |  |  |  | 448,805,388 |  |  |  |  |  |  |  | 450,801,177 |  |  |  |  |  |  |  | 453,451,913 | 
|Impact of conversion of Series B preferred
    units(c)                                                                                                             |  |  |  |                            |  |  |            |  |  |  |  |  |  |  | 8,389,354   |  |  |  |  |  |  |  |            |  |  |  |  |  |  |  | 8,389,354   | 
|Impact of share options and restricted units
    which are dilutive to FFO but not dilutive to net (loss)                                                           |  |  |  |                            |  |  | 1,653,662   |  |  |  |  |  |  |  |            |  |  |  |  |  |  |  |            |  |  |  |  |  |  |  |            | 
|                                                                                                                                                                    |  |  |  |                            |  |  |             |  |  |  |  |  |  |  |             |  |  |  |  |  |  |  |             | 
|Weighted average Units, dilutive potential units
    plus assumed conversions used for the calculation of FFO
    available to unitholders plus assumed conversions |  |  |  |                            |  |  | 450,420,567 |  |  |  |  |  |  |  | 457,194,742 |  |  |  |  |  |  |  | 450,801,177 |  |  |  |  |  |  |  | 461,841,267 | 
|                                                                                                                                                                    |  |  |  |                            |  |  |             |  |  |  |  |  |  |  |             |  |  |  |  |  |  |  |             | 



---



|    |  |                                                                                                                                                                                                                                                                                                                                                     
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | FFO is a non-GAAP financial measure. The most
    directly comparable GAAP measure is net (loss) income, to which
    it is reconciled. See definition below.                                                                                                                                                                                       
|   
|(b) |  | FFO per unit may not total the sum of the per
    unit components in the reconciliation due to rounding.                                                                                                                                                                                                                                            
|   
|(c) |  | The Series B preferred units are not
    dilutive to EPS for each period presented and are not dilutive
    to FFO per unit for the three months ended and nine months ended
    September 30, 2004. However, the Series B preferred
    units are dilutive to FFO per unit for the three months ended
    and nine months ended September 30, 2003.

54



---



##### Table of Contents



FFO Definition:

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



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

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



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



| |                                                     
| | ----------------------------------------------------
| | Evaluation of Disclosure Controls and
    Procedures

Equity Offices principal executive officer,
Richard D. Kincaid, and Equity Offices principal
financial officer, Marsha C. Williams, evaluated as of
September 30, 2004 the effectiveness of the design and
operation of our disclosure controls and other procedures that
are designed to ensure that information required to be disclosed
by us in the reports that we file or submit under the Securities
Exchange Act of 1934 is recorded, processed, summarized and
reported within the time periods specified in the SECs
rules and forms. As a result of this evaluation, these executive
officers have concluded that, as of such date, the design and
operation of our disclosure controls and procedures were
effective.



| |                                                         
| | --------------------------------------------------------
| | Changes in Internal Control over Financial
    Reporting

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

55



---



##### Table of Contents






PART II  OTHER
INFORMATION



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

Legal proceedings are incorporated herein by
reference from Item 1.  Financial
Statements  Note 14  Commitments and
Contingencies.



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

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

56



---



##### Table of Contents



APPENDIX A


FINANCIAL COVENANT CALCULATIONS AS OF
SEPTEMBER 30, 2004

UNDER CERTAIN INDENTURE AGREEMENTS


EOP OPERATING LIMITED PARTNERSHIP

UNSECURED NOTES FINANCIAL COVENANT
COMPLIANCE AS OF SEPTEMBER 30, 2004


(Dollars in thousands)


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

This section presents such ratios as of
September 30, 2004 to show that EOP Partnership was in
compliance with the applicable financial covenants contained in
the unsecured note indentures, copies of which have been filed
as exhibits to the EOP Partnerships periodic reports filed
with the SEC. Management is not presenting these ratios and the
related calculations for any other purpose or for any other
period, and is not intending for these measures to otherwise
provide information about EOP Partnerships financial
condition or results of operations. Investors should not rely on
these measures other than for the purpose of testing EOP
Partnerships compliance with the financial covenants
contained in the unsecured note indentures as of
September 30, 2004.

Debt to Adjusted Total Assets

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



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

|                                                                                         |                       |   |            |            | 
|---------------------------------------------------------------------------------------- | --------------------- | - | ---------- | ---------- | 
|Mortgage debt (excluding a net discount of
    $(13,820))                                |                       | $ | 2,633,207  |           
|Unsecured notes (excluding a net discount of
    $(34,661))                              |                       |   | 9,003,412  |           
|Line of credit                                                                           |                       |   | 1,086,400  |           
|EOP Partnerships share of unconsolidated
    non-recourse mortgage debt                 |                       |   | 343,769    |           
|                                                                                         |                       |   |           
|                                                                                         | Debt                  |   | $          | 13,066,788 | 
|                                                                                         |                       |   |           
|Investments in real estate                                                               |                       | $ | 24,961,031 |           
|Developments in process                                                                  |                       |   | 68,352     |           
|Land available for development                                                           |                       |   | 256,560    |           
|Cash and cash equivalents                                                                |                       |   | 122,760    |           
|Escrow deposits and restricted cash                                                      |                       |   | 75,543     |           
|Investments in unconsolidated joint ventures                                             |                       |   | 1,178,965  |           
|Prepaid expenses and other assets (net of
    discount of $2,382)                        |                       |   | 171,252    |           
|Change in cash subsequent to September 30,
    2004 as a result of property dispositions |                       |   | 1,600      |           
|                                                                                         |                       |   |           
|                                                                                         | Adjusted Total Assets |   | $          | 26,836,063 | 
|                                                                                         |                       |   |           
|Ratio                                                                                    |                       |   | 49         | %         
|                                                                                         |                       |   |           
|Maximum Ratio                                                                            |                       |   | 60         | %         
|                                                                                         |                       |   |           

A-1



---



##### Table of Contents



Secured Debt to Adjusted Total
Assets

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

|                                                                         |                       |   |           |            | 
|------------------------------------------------------------------------ | --------------------- | - | --------- | ---------- | 
|Mortgage debt (excluding a net discount of
    $(13,820))                |                       | $ | 2,633,207 |           
|EOP Partnerships share of unconsolidated
    non-recourse mortgage debt |                       |   | 343,769   |           
|                                                                         |                       |   |          
|                                                                         | Secured Debt          |   | $         | 2,976,976  | 
|                                                                         |                       |   |          
|                                                                         | Adjusted Total Assets |   | $         | 26,836,063 | 
|                                                                         |                       |   |          
|Ratio                                                                    |                       |   | 11        | %         
|                                                                         |                       |   |          
|Maximum Ratio                                                            |                       |   | 40        | %         
|                                                                         |                       |   |          

Consolidated Income Available for Debt Service
to Annual Debt Service Charge

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



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

A-2



---



##### Table of Contents





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

|                                                                            |                                                |   |         |           | 
|--------------------------------------------------------------------------- | ---------------------------------------------- | - | ------- | --------- | 
|Pro forma net income                                                        |                                                | $ | 151,377 |          
|Pro forma interest expense                                                  |                                                |   | 820,279 |          
|Pro forma amortization of mark to market
    discounts/premiums             |                                                |   | (3,004  | )        
|Pro forma provision for taxes                                               |                                                |   | 5,328   |          
|Pro forma amortization and depreciation                                     |                                                |   | 779,066 |          
|Pro forma charge from a change in accounting
    principle                  |                                                |   | 33,697  |          
|Less pro forma income from investments in
    unconsolidated joint ventures |                                                |   | (60,842 | )        
|Other noncash items (impairment charges)                                    |                                                |   | 236,670 |          
|                                                                            |                                                |   |        
|                                                                            | Consolidated Income Available for Debt Service |   | $       | 1,962,572 | 
|                                                                            |                                                |   |        
|Pro forma interest expense                                                  |                                                | $ | 820,279 |          
|Pro forma amortization of mark to market
    discounts/premiums             |                                                |   | (3,004  | )        
|                                                                            |                                                |   |        
|                                                                            | Annual Debt Service Charge                     |   | $       | 817,275   | 
|                                                                            |                                                |   |        
|Ratio                                                                       |                                                |   | 2.40    |          
|                                                                            |                                                |   |        
|Minimum Ratio                                                               |                                                |   | 1.50    |          
|                                                                            |                                                |   |        

Total Unencumbered Assets to Unsecured
Debt

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

|                                                                        |                           |   |            |            | 
|----------------------------------------------------------------------- | ------------------------- | - | ---------- | ---------- | 
|Total undepreciated real estate assets                                  |                           | $ | 19,705,338 |           
|Cash and cash equivalents                                               |                           |   | 122,760    |           
|Escrow deposits and restricted cash                                     |                           |   | 75,543     |           
|Prepaid expenses and other assets (net of
    discount of $2,382)       |                           |   | 171,252    |           
|Unencumbered investments in unconsolidated joint
    venture properties |                           |   | 1,005,291  |           
|                                                                        |                           |   |           
|                                                                        | Total Unencumbered Assets |   | $          | 21,080,184 | 
|                                                                        |                           |   |           
|Unsecured notes (excluding a net discount of
    $(34,661))             |                           | $ | 9,003,412  |           
|Line of credit                                                          |                           |   | 1,086,400  |           
|                                                                        |                           |   |           
|                                                                        | Unsecured Debt            |   | $          | 10,089,812 | 
|                                                                        |                           |   |           
|Ratio                                                                   |                           |   | 209        | %         
|                                                                        |                           |   |           
|Minimum Ratio(a)                                                        |                           |   | 150        | %         
|                                                                        |                           |   |           






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

A-3



---



##### 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 9, 2004

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

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

Date: November 9, 2004

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

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



---



##### Table of Contents






EXHIBIT INDEX

|        |      |  |             |                                                                                                                                                                                                                                    |          |                                                                                                                                                                    
|------- | ---- |  | ----------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |      |  |             |                                                                                                                                                                                                                                    |         
|Number  |      |  | Description |                                                                                                                                                                                                                                    | Location
|        |      |  |             |                                                                                                                                                                                                                                    |         
|        | 4.1  |  |             | Indenture, dated August 29, 2000, by and
    between EOP Operating Limited Partnership and U.S. Bank
    National Association (formerly known as U.S. Bank Trust
    National Association)                                         |          | Incorporated by reference to Exhibit 4.1 to
    EOP Operating Limited Partnerships Registration Statement
    on Form S-3, as amended (SEC File No. 333-43530)    
|        | 4.2  |  |             | First Supplemental Indenture, dated June 18,
    2001, among EOP Operating Limited Partnership, Equity Office
    Properties Trust and U.S. Bank National Association
    (formerly known as U.S. Bank Trust National Association) |          | Incorporated by reference to Exhibit 4.2 to
    Equity Office Properties Trusts Registration Statement on
    Form S-3, as amended (SEC File No. 333-58976)       
|        | 4.3  |  |             | $500,000,000 Fixed Rate Note and related
    Guarantee (another $300,000,000 Fixed Rate Note and related
    Guarantee, identical in all material respects to the
    $500,000,000 Fixed Rate Note, is not being filed)            |          | Incorporated herein by reference to
    Exhibit 4.3 to EOP Operating Limited Partnerships
    Current Report on Form 8-K filed with the SEC on October 7,
    2004
|        | 4.4  |  |             | Floating Rate Note and related Guarantee                                                                                                                                                                                           |          | Incorporated herein by reference to
    Exhibit 4.4 to EOP Operating Limited Partnerships
    Current Report on Form 8-K filed with the SEC on October 7,
    2004
|        | 4.5  |  |             | Form of Medium-Term InterNote and related
    Guarantee (Fixed Rate)                                                                                                                                                               |          | Incorporated herein by reference to
    Exhibit 4.3 to EOP Operating Limited Partnerships
    Current Report on Form 8-K filed with the SEC on June 15,
    2004  
|        | 4.6  |  |             | Schedule of Medium-Term InterNotes (Fixed Rate)
    issued                                                                                                                                                                         |          | Filed herewith                                                                                                                                                     
|        | 10.1 |  |             | Revolving Credit Agreement for $500,000,000
    Bridge Revolving Credit Facility dated as of July 29, 2004,
    and related Guaranty of Payment                                                                                    |          | Filed herewith                                                                                                                                                     
|        | 31.1 |  |             | Rule 13a-14(a)/15d-14(a) Certifications                                                                                                                                                                                            |          | Filed herewith                                                                                                                                                     
|        | 32.1 |  |             | Section 1350 Certification                                                                                                                                                                                                         |          | Filed herewith