##### 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 June 30, 2006                                                
|           |  | or                                                                                          
|o          |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934
|           |  | For the transition period
    from           to                                             

Commission file number: 1-13625


EOP OPERATING LIMITED PARTNERSHIP


(Exact name of registrant as specified in its charter)


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

(312) 466-3300


Registrants telephone number, including area code


þ o


12b-2


þ o o


12b-2 o þ












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TABLE OF CONTENTS



|                                                                       |                                                                                                |  |  |  |  |  |  | 
|---------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I -- FINANCIAL INFORMATION                                       
|                                                                       | Item 1. Financial Statements.                                                                 
|CONSOLIDATED BALANCE SHEETS                                           
|CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)                     
|CONSOLIDATED STATEMENTS OF NET COMPREHENSIVE INCOME (LOSS) (Unaudited)
|CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)                     
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)                
|                                                                       | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
|                                                                       | Item 3. Quantitative and Qualitative Disclosures About Market Risk.                           
|                                                                       | Item 4. Controls and Procedures.                                                              
|PART II -- OTHER INFORMATION                                          
|                                                                       | Item 1. Legal Proceedings.                                                                    
|                                                                       | Item 1A. Risk Factors.                                                                        
|                                                                       | Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.                          
|                                                                       | Item 6. Exhibits.                                                                             
|SIGNATURES                                                            
|Statement of Computation of Ratio of Earnings to Fixed Charges        
|Certification of CEO                                                  
|Certification of CFO                                                  
|Section 906 Certifications                                            



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##### Table of Contents






PART I  FINANCIAL INFORMATION







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

EOP OPERATING LIMITED PARTNERSHIP





CONSOLIDATED BALANCE SHEETS


|                                                                                                   |                                                                                                                                   |                                                                                                                                                     |                                                                                                                                        |                                                                                                         |                   |         |            |            |            |         |            | 
|-------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------- | ----------------- | ------- | ---------- | ---------- | ---------- | ------- | ---------- | 
|(Dollars in thousands, except per unit amounts)                                                    |                                                                                                                                   | June 30, 2006                                                                                                                                       |                                                                                                                                        |                                                                                                         | December 31, 2005 |        
|                                                                                                   |                                                                                                                                   |                                                                                                                                                     |                                                                                                                                        |                                                                                                         |                   |        
|                                                                                                   |                                                                                                                                   | (Unaudited)                                                                                                                                         |                                                                                                                                        |                                                                                                         |                  
|Assets:                                                                                            |                                                                                                                                   |                                                                                                                                                     |                                                                                                                                        |                                                                                                         |                   |         |            |           
|                                                                                                   | Investments in real estate                                                                                                        |                                                                                                                                                     | $                                                                                                                                      | 25,846,400                                                                                              |                   |         | $          | 22,949,723 |           
|                                                                                                   | Developments in process                                                                                                           |                                                                                                                                                     |                                                                                                                                        | 611,173                                                                                                 |                   |         |            | 567,129    |           
|                                                                                                   | Land available for development                                                                                                    |                                                                                                                                                     |                                                                                                                                        | 174,078                                                                                                 |                   |         |            | 176,868    |           
|                                                                                                   | Investments in real estate held for sale, net of accumulated
    depreciation                                                     |                                                                                                                                                     |                                                                                                                                        |                                                                                                        |                   |         |            | 75,211     |           
|                                                                                                   | Accumulated depreciation                                                                                                          |                                                                                                                                                     |                                                                                                                                        | (3,970,681                                                                                              | )                 |         |            | (3,336,789 | )         
|                                                                                                   |                                                                                                                                   |                                                                                                                                                     |                                                                                                                                        |                                                                                                         |                   |        
|                                                                                                   |                                                                                                                                   | Investments in real estate, net of accumulated depreciation                                                                                         |                                                                                                                                        |                                                                                                         | 22,660,970        |         |            |            | 20,432,142 |        
|                                                                                                   | Cash and cash equivalents                                                                                                         |                                                                                                                                                     |                                                                                                                                        | 152,628                                                                                                 |                   |         |            | 78,164     |           
|                                                                                                   | Tenant and other receivables (net of allowance for doubtful
    accounts of $9,297 and $8,853, respectively)                      |                                                                                                                                                     |                                                                                                                                        | 76,454                                                                                                  |                   |         |            | 94,858     |           
|                                                                                                   | Deferred rent receivable                                                                                                          |                                                                                                                                                     |                                                                                                                                        | 565,188                                                                                                 |                   |         |            | 496,826    |           
|                                                                                                   | Escrow deposits and restricted cash                                                                                               |                                                                                                                                                     |                                                                                                                                        | 230,170                                                                                                 |                   |         |            | 38,658     |           
|                                                                                                   | Investments in unconsolidated joint ventures                                                                                      |                                                                                                                                                     |                                                                                                                                        | 120,678                                                                                                 |                   |         |            | 947,989    |           
|                                                                                                   | Deferred financing costs (net of accumulated amortization of
    $50,988 and $45,920, respectively)                               |                                                                                                                                                     |                                                                                                                                        | 88,237                                                                                                  |                   |         |            | 58,809     |           
|                                                                                                   | Deferred leasing costs and other related intangibles (net of
    accumulated amortization of $324,185 and $232,024, respectively) |                                                                                                                                                     |                                                                                                                                        | 665,429                                                                                                 |                   |         |            | 522,926    |           
|                                                                                                   | Prepaid expenses and other assets                                                                                                 |                                                                                                                                                     |                                                                                                                                        | 245,388                                                                                                 |                   |         |            | 303,181    |           
|                                                                                                   |                                                                                                                                   |                                                                                                                                                     |                                                                                                                                        |                                                                                                         |                   |        
|                                                                                                   |                                                                                                                                   |                                                                                                                                                     |                                                                                                                                        | Total Assets                                                                                            |                   | $       | 24,805,142 |            |            | $       | 22,973,553 | 
|                                                                                                   |                                                                                                                                   |                                                                                                                                                     |                                                                                                                                        |                                                                                                         |                   |        
|                                                                                                  
|Liabilities, Minority Interests, Mandatorily Redeemable
    Preferred Units and Partners Capital:
|Liabilities:                                                                                       |                                                                                                                                   |                                                                                                                                                     |                                                                                                                                        |                                                                                                         |                   |         |            |           
|                                                                                                   | Mortgage debt (net of (discounts) of $(4,977) and $(5,185),
    respectively)                                                     |                                                                                                                                                     | $                                                                                                                                      | 3,432,004                                                                                               |                   |         | $          | 2,164,198  |           
|                                                                                                   | Unsecured notes (net of (discounts) of $(24,389) and
    $(23,936), respectively)                                                 |                                                                                                                                                     |                                                                                                                                        | 10,032,104                                                                                              |                   |         |            | 9,032,620  |           
|                                                                                                   | Lines of credit                                                                                                                   |                                                                                                                                                     |                                                                                                                                        | 1,148,800                                                                                               |                   |         |            | 1,631,000  |           
|                                                                                                   | Accounts payable and accrued expenses                                                                                             |                                                                                                                                                     |                                                                                                                                        | 582,476                                                                                                 |                   |         |            | 574,225    |           
|                                                                                                   | Distribution payable                                                                                                              |                                                                                                                                                     |                                                                                                                                        | 131,298                                                                                                 |                   |         |            | 3,736      |           
|                                                                                                   | Other liabilities (net of (discounts) of $(24,127) and
    $(25,597), respectively)                                               |                                                                                                                                                     |                                                                                                                                        | 511,804                                                                                                 |                   |         |            | 483,468    |           
|                                                                                                   | Commitments and contingencies                                                                                                     |                                                                                                                                                     |                                                                                                                                        |                                                                                                        |                   |         |            |           |           
|                                                                                                   |                                                                                                                                   |                                                                                                                                                     |                                                                                                                                        |                                                                                                         |                   |        
|                                                                                                   |                                                                                                                                   |                                                                                                                                                     |                                                                                                                                        | Total Liabilities                                                                                       |                   |         | 15,838,486 |            |            |         | 13,889,247 | 
|                                                                                                   |                                                                                                                                   |                                                                                                                                                     |                                                                                                                                        |                                                                                                         |                   |        
|Minority interests  partially owned properties                                                    |                                                                                                                                   |                                                                                                                                                     | 1,370,979                                                                                                                              |                                                                                                         |                   |         | 172,278    |           
|                                                                                                   |                                                                                                                                   |                                                                                                                                                     |                                                                                                                                        |                                                                                                         |                   |        
|Mandatorily Redeemable Preferred Units:                                                            |                                                                                                                                   |                                                                                                                                                     |                                                                                                                                        |                                                                                                         |                   |         |            |           
|                                                                                                   |                                                                                                                                   | 5.25% Series B Convertible, Cumulative Redeemable Preferred
    Units, liquidation preference $50.00 per unit, 5,989,930 issued
    and outstanding |                                                                                                                                        |                                                                                                         | 299,497           |         |            |            | 299,497    |        
|                                                                                                   |                                                                                                                                   |                                                                                                                                                     |                                                                                                                                        |                                                                                                         |                   |        
|Partners Capital:                                                                                 |                                                                                                                                   |                                                                                                                                                     |                                                                                                                                        |                                                                                                         |                   |         |            |           
|                                                                                                   | Preferred Units, 100,000,000 authorized:                                                                                          |                                                                                                                                                     |                                                                                                                                        |                                                                                                         |                   |         |            |            |           
|                                                                                                   |                                                                                                                                   |                                                                                                                                                     | 7.75% Series G Cumulative Redeemable Preferred Units,
    liquidation preference $25.00 per unit, 8,500,000 issued and
    outstanding |                                                                                                         |                   | 212,500 |            |            |            | 212,500 |           
|                                                                                                   | Other Partners Capital:                                                                                                          |                                                                                                                                                     |                                                                                                                                        |                                                                                                         |                   |         |            |            |           
|                                                                                                   |                                                                                                                                   | General Partner Capital                                                                                                                             |                                                                                                                                        |                                                                                                         | 57,620            |         |            |            | 63,985     |        
|                                                                                                   |                                                                                                                                   | Limited Partners Capital                                                                                                                           |                                                                                                                                        |                                                                                                         | 7,078,754         |         |            |            | 8,392,937  |        
|                                                                                                   |                                                                                                                                   | Deferred compensation                                                                                                                               |                                                                                                                                        |                                                                                                         |                  |         |            |            | (533       | )      
|                                                                                                   |                                                                                                                                   | Accumulated other comprehensive loss (net of accumulated
    amortization of $15,356 and $11,948, respectively)                                     |                                                                                                                                        |                                                                                                         | (52,694           | )       |            |            | (56,358    | )      
|                                                                                                   |                                                                                                                                   |                                                                                                                                                     |                                                                                                                                        |                                                                                                         |                   |        
|                                                                                                   |                                                                                                                                   |                                                                                                                                                     |                                                                                                                                        | Total Partners Capital                                                                                 |                   |         | 7,296,180  |            |            |         | 8,612,531  | 
|                                                                                                   |                                                                                                                                   |                                                                                                                                                     |                                                                                                                                        |                                                                                                         |                   |        
|                                                                                                   |                                                                                                                                   |                                                                                                                                                     |                                                                                                                                        | Total Liabilities, Minority Interests, Mandatorily Redeemable
    Preferred Units and Partners Capital |                   | $       | 24,805,142 |            |            | $       | 22,973,553 | 
|                                                                                                   |                                                                                                                                   |                                                                                                                                                     |                                                                                                                                        |                                                                                                         |                   |        



2



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP





CONSOLIDATED STATEMENTS OF OPERATIONS


(Unaudited)


|                                                                                                                                                                                                         |                                                                 |                                                                  |                              |             |                    |          |          |             |          |          |         |             |           |          |          |             |           |          |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------- | ---------------------------------------------------------------- | ---------------------------- | ----------- | ------------------ | -------- | -------- | ----------- | -------- | -------- | ------- | ----------- | --------- | -------- | -------- | ----------- | --------- | -------- | -
|                                                                                                                                                                                                         |                                                                 | For the three months                                             |                              |             | For the six months |         
|                                                                                                                                                                                                         |                                                                 | ended June 30,                                                   |                              |             | ended June 30,     |         
|                                                                                                                                                                                                         |                                                                 |                                                                  |                              |             |                    |         
|(Dollars in thousands, except per unit amounts)                                                                                                                                                          |                                                                 | 2006                                                             |                              |             | 2005               |          |          | 2006        |          |          | 2005    |            
|                                                                                                                                                                                                         |                                                                 |                                                                  |                              |             |                    |          |          |             |          |          |         |            
|Revenues:                                                                                                                                                                                                |                                                                 |                                                                  |                              |             |                    |          |          |             |          |          |         |             |           |          |          |            
|                                                                                                                                                                                                         | Rental                                                          |                                                                  | $                            | 664,423     |                    |          | $        | 572,243     |          |          | $       | 1,328,497   |           |          | $        | 1,136,701   |          
|                                                                                                                                                                                                         | Tenant reimbursements                                           |                                                                  |                              | 120,318     |                    |          |          | 91,510      |          |          |         | 251,452     |           |          |          | 184,528     |          
|                                                                                                                                                                                                         | Parking                                                         |                                                                  |                              | 37,510      |                    |          |          | 28,447      |          |          |         | 73,471      |           |          |          | 55,943      |          
|                                                                                                                                                                                                         | Other                                                           |                                                                  |                              | 16,634      |                    |          |          | 17,791      |          |          |         | 33,421      |           |          |          | 75,889      |          
|                                                                                                                                                                                                         | Fee income                                                      |                                                                  |                              | 1,478       |                    |          |          | 3,697       |          |          |         | 2,394       |           |          |          | 8,474       |          
|                                                                                                                                                                                                         |                                                                 |                                                                  |                              |             |                    |          |          |             |          |          |         |            
|                                                                                                                                                                                                         |                                                                 | Total revenues                                                   |                              |             | 840,363            |          |          |             | 713,688  |          |         |             | 1,689,235 |          |          |             | 1,461,535 |         
|                                                                                                                                                                                                         |                                                                 |                                                                  |                              |             |                    |          |          |             |          |          |         |            
|Expenses:                                                                                                                                                                                                |                                                                 |                                                                  |                              |             |                    |          |          |             |          |          |         |             |           |          |          |            
|                                                                                                                                                                                                         | Depreciation                                                    |                                                                  |                              | 195,750     |                    |          |          | 160,269     |          |          |         | 386,473     |           |          |          | 315,588     |          
|                                                                                                                                                                                                         | Amortization                                                    |                                                                  |                              | 32,844      |                    |          |          | 21,475      |          |          |         | 69,244      |           |          |          | 42,612      |          
|                                                                                                                                                                                                         | Real estate taxes                                               |                                                                  |                              | 101,146     |                    |          |          | 83,304      |          |          |         | 209,101     |           |          |          | 165,764     |          
|                                                                                                                                                                                                         | Insurance                                                       |                                                                  |                              | 9,091       |                    |          |          | 7,034       |          |          |         | 17,490      |           |          |          | 12,736      |          
|                                                                                                                                                                                                         | Repairs and maintenance                                         |                                                                  |                              | 104,039     |                    |          |          | 76,646      |          |          |         | 196,861     |           |          |          | 147,045     |          
|                                                                                                                                                                                                         | Property operating                                              |                                                                  |                              | 120,103     |                    |          |          | 99,548      |          |          |         | 248,501     |           |          |          | 198,187     |          
|                                                                                                                                                                                                         | Ground rent                                                     |                                                                  |                              | 6,758       |                    |          |          | 5,074       |          |          |         | 12,616      |           |          |          | 10,193      |          
|                                                                                                                                                                                                         | Corporate general and administrative                            |                                                                  |                              | 16,056      |                    |          |          | 15,218      |          |          |         | 33,050      |           |          |          | 32,391      |          
|                                                                                                                                                                                                         | Impairment                                                      |                                                                  |                              |            |                    |          |          | 24,382      |          |          |         |            |           |          |          | 24,382      |          
|                                                                                                                                                                                                         |                                                                 |                                                                  |                              |             |                    |          |          |             |          |          |         |            
|                                                                                                                                                                                                         |                                                                 | Total expenses                                                   |                              |             | 585,787            |          |          |             | 492,950  |          |         |             | 1,173,336 |          |          |             | 948,898   |         
|                                                                                                                                                                                                         |                                                                 |                                                                  |                              |             |                    |          |          |             |          |          |         |            
|                                                                                                                                                                                                         |                                                                 | Operating income                                                 |                              |             | 254,576            |          |          |             | 220,738  |          |         |             | 515,899   |          |          |             | 512,637   |         
|                                                                                                                                                                                                         |                                                                 |                                                                  |                              |             |                    |          |          |             |          |          |         |            
|Other income (expense):                                                                                                                                                                                  |                                                                 |                                                                  |                              |             |                    |          |          |             |          |          |         |             |           |          |          |            
|                                                                                                                                                                                                         | Interest and dividend income                                    |                                                                  |                              | 5,963       |                    |          |          | 3,566       |          |          |         | 9,328       |           |          |          | 6,658       |          
|                                                                                                                                                                                                         | Interest:                                                       |                                                                  |                              |             |                    |          |          |             |          |          |         |             |           |          |          |             |          
|                                                                                                                                                                                                         |                                                                 | Expense incurred                                                 |                              |             | (223,392           | )        |          |             | (207,932 | )        |         |             | (447,619  | )        |          |             | (420,704  | )       
|                                                                                                                                                                                                         |                                                                 | Amortization of deferred financing costs and prepayment expenses |                              |             | (3,032             | )        |          |             | (2,594   | )        |         |             | (5,961    | )        |          |             | (5,389    | )       
|                                                                                                                                                                                                         |                                                                 |                                                                  |                              |             |                    |          |          |             |          |          |         |            
|                                                                                                                                                                                                         |                                                                 |                                                                  | Total other income (expense) |             |                    | (220,461 | )        |             |          | (206,960 | )       |             |           | (444,252 | )        |             |           | (419,435 | )
|                                                                                                                                                                                                         |                                                                 |                                                                  |                              |             |                    |          |          |             |          |          |         |            
|Income before income taxes, allocation to minority interests,
    income from investments in unconsolidated joint ventures and
    gain on sales of real estate                                          |                                                                 |                                                                  | 34,115                       |             |                    |          | 13,778   |             |          |          | 71,647  |             |           |          | 93,202   |            
|Income taxes                                                                                                                                                                                             |                                                                 |                                                                  | 147                          |             |                    |          | (437     | )           |          |          | (1,064  | )           |           |          | (891     | )          
|Minority interests  partially owned properties                                                                                                                                                          |                                                                 |                                                                  | (13,710                      | )           |                    |          | (2,499   | )           |          |          | (26,515 | )           |           |          | (5,527   | )          
|Income from investments in unconsolidated joint ventures
    (including (loss) gain on sales of real estate of $(91),
    $17,376, $(91) and $17,376, respectively)                                      |                                                                 |                                                                  | 34                           |             |                    |          | 28,681   |             |          |          | 90      |             |           |          | 38,199   |            
|Gain on sales of real estate                                                                                                                                                                             |                                                                 |                                                                  | 379                          |             |                    |          |         |             |          |          | 533     |             |           |          |         |            
|                                                                                                                                                                                                         |                                                                 |                                                                  |                              |             |                    |          |          |             |          |          |         |            
|Income from continuing operations                                                                                                                                                                        |                                                                 |                                                                  | 20,965                       |             |                    |          | 39,523   |             |          |          | 44,691  |             |           |          | 124,983  |            
|Discontinued operations (including net gain (loss) on sales
    of real estate and provision for (loss) on properties held
    for sale of $82,503, $(94,220), $116,943 and $(83,513),
    respectively) |                                                                 |                                                                  | 85,268                       |             |                    |          | (259,941 | )           |          |          | 120,979 |             |           |          | (224,076 | )          
|                                                                                                                                                                                                         |                                                                 |                                                                  |                              |             |                    |          |          |             |          |          |         |            
|Net income (loss)                                                                                                                                                                                        |                                                                 |                                                                  | 106,233                      |             |                    |          | (220,418 | )           |          |          | 165,670 |             |           |          | (99,093  | )          
|Preferred distributions                                                                                                                                                                                  |                                                                 |                                                                  | (8,701                       | )           |                    |          | (8,701   | )           |          |          | (17,402 | )           |           |          | (17,402  | )          
|                                                                                                                                                                                                         |                                                                 |                                                                  |                              |             |                    |          |          |             |          |          |         |            
|Net income (loss) available to unitholders                                                                                                                                                               |                                                                 | $                                                                | 97,532                       |             |                    | $        | (229,119 | )           |          | $        | 148,268 |             |           | $        | (116,495 | )          
|                                                                                                                                                                                                         |                                                                 |                                                                  |                              |             |                    |          |          |             |          |          |         |            
|Earnings (loss) per unit  basic:                                                                                                                                                                        |                                                                 |                                                                  |                              |             |                    |          |          |             |          |          |         |             |           |          |          |            
|                                                                                                                                                                                                         | Income from continuing operations per unit                      |                                                                  | $                            | 0.03        |                    |          | $        | 0.07        |          |          | $       | 0.07        |           |          | $        | 0.24        |          
|                                                                                                                                                                                                         |                                                                 |                                                                  |                              |             |                    |          |          |             |          |          |         |            
|                                                                                                                                                                                                         | Net income (loss) available to unitholders per unit             |                                                                  | $                            | 0.24        |                    |          | $        | (0.51       | )        |          | $       | 0.36        |           |          | $        | (0.26       | )        
|                                                                                                                                                                                                         |                                                                 |                                                                  |                              |             |                    |          |          |             |          |          |         |            
|                                                                                                                                                                                                         | Weighted average Units outstanding                              |                                                                  |                              | 404,009,631 |                    |          |          | 451,728,242 |          |          |         | 407,335,183 |           |          |          | 450,881,385 |          
|                                                                                                                                                                                                         |                                                                 |                                                                  |                              |             |                    |          |          |             |          |          |         |            
|Earnings (loss) per unit  diluted:                                                                                                                                                                      |                                                                 |                                                                  |                              |             |                    |          |          |             |          |          |         |             |           |          |          |            
|                                                                                                                                                                                                         | Income from continuing operations per unit                      |                                                                  | $                            | 0.03        |                    |          | $        | 0.07        |          |          | $       | 0.07        |           |          | $        | 0.24        |          
|                                                                                                                                                                                                         |                                                                 |                                                                  |                              |             |                    |          |          |             |          |          |         |            
|                                                                                                                                                                                                         | Net income (loss) available to unitholders per unit             |                                                                  | $                            | 0.24        |                    |          | $        | (0.50       | )        |          | $       | 0.36        |           |          | $        | (0.26       | )        
|                                                                                                                                                                                                         |                                                                 |                                                                  |                              |             |                    |          |          |             |          |          |         |            
|                                                                                                                                                                                                         | Weighted average Units outstanding and dilutive potential units |                                                                  |                              | 408,494,060 |                    |          |          | 455,609,570 |          |          |         | 411,497,236 |           |          |          | 454,101,167 |          
|                                                                                                                                                                                                         |                                                                 |                                                                  |                              |             |                    |          |          |             |          |          |         |            
|Distributions declared per Unit outstanding                                                                                                                                                              |                                                                 | $                                                                | 0.33                         |             |                    | $        | 0.50     |             |          | $        | 0.66    |             |           | $        | 1.00     |            
|                                                                                                                                                                                                         |                                                                 |                                                                  |                              |             |                    |          |          |             |          |          |         |            
|Allocation of net income (loss) available to
    unitholders:                                                                                                                                            |                                                                 |                                                                  |                              |             |                    |          |          |             |          |          |         |             |           |          |          |            
|                                                                                                                                                                                                         | General Partner                                                 |                                                                  | $                            | 975         |                    |          | $        | (2,291      | )        |          | $       | 1,483       |           |          | $        | (1,165      | )        
|                                                                                                                                                                                                         | Limited Partners                                                |                                                                  |                              | 96,557      |                    |          |          | (226,828    | )        |          |         | 146,785     |           |          |          | (115,330    | )        
|                                                                                                                                                                                                         |                                                                 |                                                                  |                              |             |                    |          |          |             |          |          |         |            
|                                                                                                                                                                                                         | Net income (loss) available to unitholders                      |                                                                  | $                            | 97,532      |                    |          | $        | (229,119    | )        |          | $       | 148,268     |           |          | $        | (116,495    | )        
|                                                                                                                                                                                                         |                                                                 |                                                                  |                              |             |                    |          |          |             |          |          |         |            



3



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP





CONSOLIDATED STATEMENTS OF NET COMPREHENSIVE INCOME (LOSS)


(Unaudited)


|                                |                                                                                        |                      |         |       |                          |   |          |       |   |   |         |       |  |   |         |       |  
|------------------------------- | -------------------------------------------------------------------------------------- | -------------------- | ------- | ----- | ------------------------ | - | -------- | ----- | - | - | ------- | ----- |  | - | ------- | ----- | -
|                                |                                                                                        | For the three months |         |       | For the six months ended |  
|                                |                                                                                        | ended June 30,       |         |       | June 30,                 |  
|                                |                                                                                        |                      |         |       |                          |  
|(Dollars in thousands)          |                                                                                        | 2006                 |         |       | 2005                     |   |          | 2006  |   |   | 2005    |      
|                                |                                                                                        |                      |         |       |                          |   |          |       |   |   |         |      
|Net income (loss)               |                                                                                        | $                    | 106,233 |       |                          | $ | (220,418 | )     |   | $ | 165,670 |       |  | $ | (99,093 | )    
|Other comprehensive income:     |                                                                                        |                      |         |       |                          |   |          |       |   |   |         |       |  |   |         |      
|                                | Amortization of net payments in settlement of forward starting
    interest rate swaps |                      |         | 1,704 |                          |   |          | 1,704 |   |   |         | 3,408 |  |   |         | 3,408 |  
|                                | Unrealized holding (losses) gains from investments                                     |                      |         | (14   | )                        |   |          | (26   | ) |   |         | 256   |  |   |         | (65   | )
|                                |                                                                                        |                      |         |       |                          |   |          |       |   |   |         |      
|Net comprehensive income (loss) |                                                                                        | $                    | 107,923 |       |                          | $ | (218,740 | )     |   | $ | 169,334 |       |  | $ | (95,750 | )    
|                                |                                                                                        |                      |         |       |                          |   |          |       |   |   |         |      



4



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP





CONSOLIDATED STATEMENTS OF CASH FLOWS


(Unaudited)


|                       |                                                                                              |                                                                                                              |                                                      |            |                          |          |   |            |         |          |      |             |          |          |   |            |         |          |  
|---------------------- | -------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------ | ---------------------------------------------------- | ---------- | ------------------------ | -------- | - | ---------- | ------- | -------- | ---- | ----------- | -------- | -------- | - | ---------- | ------- | -------- | -
|                       |                                                                                              | For the three months                                                                                         |                                                      |            | For the six months ended |         
|                       |                                                                                              | ended June 30,                                                                                               |                                                      |            | June 30,                 |         
|                       |                                                                                              |                                                                                                              |                                                      |            |                          |         
|(Dollars in thousands) |                                                                                              | 2006                                                                                                         |                                                      |            | 2005                     |          |   | 2006       |         |          | 2005 |            
|                       |                                                                                              |                                                                                                              |                                                      |            |                          |          |   |            |         |          |      |            
|Operating Activities:  |                                                                                              |                                                                                                              |                                                      |            |                          |          |   |            |         |          |      |             |          |          |   |           
|                       | Net income (loss)                                                                            |                                                                                                              | $                                                    | 106,233    |                          |          | $ | (220,418   | )       |          | $    | 165,670     |          |          | $ | (99,093    | )      
|                       | Adjustments to reconcile net income (loss) to net cash
    provided by operating activities: |                                                                                                              |                                                      |            |                          |          |   |            |         |          |      |             |          |          |   |            |        
|                       |                                                                                              | Depreciation and amortization                                                                                |                                                      |            | 236,629                  |          |   |            | 208,077 |          |      |             | 472,759  |          |   |            | 414,513 |         
|                       |                                                                                              | Compensation expense related to restricted shares and stock
    options issued to employees by Equity Office |                                                      |            | 6,697                    |          |   |            | 5,917   |          |      |             | 14,236   |          |   |            | 13,322  |         
|                       |                                                                                              | Income from investments in unconsolidated joint ventures                                                     |                                                      |            | (34                      | )        |   |            | (28,681 | )        |      |             | (90      | )        |   |            | (38,199 | )       
|                       |                                                                                              | Net (contributions to) distributions from unconsolidated joint
    ventures                                  |                                                      |            | (3,026                   | )        |   |            | 17,506  |          |      |             | (2,592   | )        |   |            | 23,610  |         
|                       |                                                                                              | Net (gain) loss on sales of real estate and provision for
    loss on properties held for sale               |                                                      |            | (82,882                  | )        |   |            | 94,220  |          |      |             | (117,476 | )        |   |            | 83,513  |         
|                       |                                                                                              | Impairment                                                                                                   |                                                      |            |                         |          |   |            | 180,856 |          |      |             |         |          |   |            | 180,856 |         
|                       |                                                                                              | Provision for doubtful accounts                                                                              |                                                      |            | 1,821                    |          |   |            | 1,114   |          |      |             | 3,839    |          |   |            | 3,529   |         
|                       |                                                                                              | Income allocated to minority interests                                                                       |                                                      |            | 13,710                   |          |   |            | 32,486  |          |      |             | 26,515   |          |   |            | 35,967  |         
|                       |                                                                                              | Other                                                                                                        |                                                      |            |                         |          |   |            |        |          |      |             |         |          |   |            | 448     |         
|                       |                                                                                              | Changes in assets and liabilities:                                                                           |                                                      |            |                          |          |   |            |         |          |      |             |          |          |   |            |         |         
|                       |                                                                                              | Decrease in rent receivable                                                                                  |                                                      |            | 32,030                   |          |   |            | 344     |          |      |             | 27,207   |          |   |            | 509     |         
|                       |                                                                                              | (Increase) in deferred rent receivable                                                                       |                                                      |            | (12,795                  | )        |   |            | (19,193 | )        |      |             | (26,791  | )        |   |            | (36,675 | )       
|                       |                                                                                              | Decrease (increase) in prepaid expenses and other assets                                                     |                                                      |            | 10,860                   |          |   |            | 17,202  |          |      |             | 44,147   |          |   |            | (23,502 | )       
|                       |                                                                                              | Increase (decrease) in accounts payable and accrued expenses                                                 |                                                      |            | 42,464                   |          |   |            | 33,254  |          |      |             | (58,622  | )        |   |            | (59,768 | )       
|                       |                                                                                              | (Decrease) in other liabilities                                                                              |                                                      |            | (6,609                   | )        |   |            | (23,531 | )        |      |             | (19,536  | )        |   |            | (30,702 | )       
|                       |                                                                                              |                                                                                                              |                                                      |            |                          |          |   |            |         |          |      |            
|                       |                                                                                              |                                                                                                              | Net cash provided by operating activities            |            |                          | 345,098  |   |            |         | 299,153  |      |             |          | 529,266  |   |            |         | 468,328  |  
|                       |                                                                                              |                                                                                                              |                                                      |            |                          |          |   |            |         |          |      |            
|Investing Activities:  |                                                                                              |                                                                                                              |                                                      |            |                          |          |   |            |         |          |      |             |          |          |   |           
|                       | Property acquisitions (including deposits made for property
    acquisitions)                |                                                                                                              |                                                      | (74,219    | )                        |          |   | (294,078   | )       |          |      | (164,623    | )        |          |   | (364,786   | )      
|                       | Property dispositions (including deposits received for property
    dispositions)            |                                                                                                              |                                                      | 103,714    |                          |          |   | 1,169,669  |         |          |      | 242,176     |          |          |   | 1,308,778  |        
|                       | Increase in cash upon consolidation of certain joint ventures                                |                                                                                                              |                                                      |           |                          |          |   |           |         |          |      | 51,357      |          |          |   |           |        
|                       | (Investments in) distributions from unconsolidated joint ventures                            |                                                                                                              |                                                      | (11,359    | )                        |          |   | 62,301     |         |          |      | (13,425     | )        |          |   | 62,301     |        
|                       | Capital and tenant improvements (including development costs)                                |                                                                                                              |                                                      | (141,822   | )                        |          |   | (74,557    | )       |          |      | (223,425    | )        |          |   | (150,963   | )      
|                       | Lease commissions and other costs                                                            |                                                                                                              |                                                      | (30,639    | )                        |          |   | (29,381    | )       |          |      | (64,585     | )        |          |   | (53,750    | )      
|                       | Decrease in escrow deposits and restricted cash                                              |                                                                                                              |                                                      | 40,866     |                          |          |   | 2,696      |         |          |      | 71,657      |          |          |   | 133,630    |        
|                       |                                                                                              |                                                                                                              |                                                      |            |                          |          |   |            |         |          |      |            
|                       |                                                                                              |                                                                                                              | Net cash (used for) provided by investing activities |            |                          | (113,459 | ) |            |         | 836,650  |      |             |          | (100,868 | ) |            |         | 935,210  |  
|                       |                                                                                              |                                                                                                              |                                                      |            |                          |          |   |            |         |          |      |            
|Financing Activities:  |                                                                                              |                                                                                                              |                                                      |            |                          |          |   |            |         |          |      |             |          |          |   |           
|                       | Proceeds from mortgage debt                                                                  |                                                                                                              |                                                      | 404,476    |                          |          |   | 150        |         |          |      | 584,107     |          |          |   | 150        |        
|                       | Principal payments on mortgage debt                                                          |                                                                                                              |                                                      | (7,071     | )                        |          |   | (251,764   | )       |          |      | (14,824     | )        |          |   | (355,521   | )      
|                       | Proceeds from unsecured notes                                                                |                                                                                                              |                                                      | 1,470,000  |                          |          |   | 14,025     |         |          |      | 1,470,000   |          |          |   | 28,369     |        
|                       | Repayment of unsecured notes                                                                 |                                                                                                              |                                                      | (20        | )                        |          |   |           |         |          |      | (500,063    | )        |          |   | (525,000   | )      
|                       | Proceeds from lines of credit                                                                |                                                                                                              |                                                      | 8,702,349  |                          |          |   | 1,877,600  |         |          |      | 14,876,999  |          |          |   | 4,000,600  |        
|                       | Repayment of lines of credit                                                                 |                                                                                                              |                                                      | (9,905,649 | )                        |          |   | (2,053,600 | )       |          |      | (15,359,199 | )        |          |   | (3,855,600 | )      
|                       | Payments of loan costs and offering costs                                                    |                                                                                                              |                                                      | (1,687     | )                        |          |   | 6          |         |          |      | (2,732      | )        |          |   | (59        | )      
|                       | (Distributions to) minority interests in partially owned
    properties                      |                                                                                                              |                                                      | (23,691    | )                        |          |   | (2,158     | )       |          |      | (38,800     | )        |          |   | (7,860     | )      
|                       | Proceeds from exercise of stock options                                                      |                                                                                                              |                                                      | 51,393     |                          |          |   | 78,282     |         |          |      | 85,178      |          |          |   | 121,542    |        
|                       | Distributions to unitholders                                                                 |                                                                                                              |                                                      | (134,789   | )                        |          |   | (226,758   | )       |          |      | (135,878    | )        |          |   | (226,758   | )      
|                       | Repurchase of Units through Equity Offices common share
    repurchase program              |                                                                                                              |                                                      | (724,744   | )                        |          |   | (5,029     | )       |          |      | (1,214,720  | )        |          |   | (7,758     | )      
|                       | Redemption of Units                                                                          |                                                                                                              |                                                      | (17,273    | )                        |          |   | (44,810    | )       |          |      | (87,906     | )        |          |   | (50,676    | )      
|                       | Payment of preferred distributions                                                           |                                                                                                              |                                                      | (8,048     | )                        |          |   | (8,048     | )       |          |      | (16,096     | )        |          |   | (16,096    | )      
|                       |                                                                                              |                                                                                                              |                                                      |            |                          |          |   |            |         |          |      |            
|                       |                                                                                              |                                                                                                              | Net cash (used for) financing activities             |            |                          | (194,754 | ) |            |         | (622,104 | )    |             |          | (353,934 | ) |            |         | (894,667 | )
|                       |                                                                                              |                                                                                                              |                                                      |            |                          |          |   |            |         |          |      |            
|                       | Net increase in cash and cash equivalents                                                    |                                                                                                              |                                                      | 36,885     |                          |          |   | 513,699    |         |          |      | 74,464      |          |          |   | 508,871    |        
|                       | Cash and cash equivalents at the beginning of the period                                     |                                                                                                              |                                                      | 115,743    |                          |          |   | 102,298    |         |          |      | 78,164      |          |          |   | 107,126    |        
|                       |                                                                                              |                                                                                                              |                                                      |            |                          |          |   |            |         |          |      |            
|                       | Cash and cash equivalents at the end of the period                                           |                                                                                                              | $                                                    | 152,628    |                          |          | $ | 615,997    |         |          | $    | 152,628     |          |          | $ | 615,997    |        
|                       |                                                                                              |                                                                                                              |                                                      |            |                          |          |   |            |         |          |      |            

5



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


CONSOLIDATED STATEMENTS OF CASH FLOWS 
(Continued)


(Unaudited)


|                                             |                                                                                                                 |                                                                         |                                                                 |         |                          |   |   |         |         |   |      |         |          |            |   |         |          |   | 
|-------------------------------------------- | --------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------- | --------------------------------------------------------------- | ------- | ------------------------ | - | - | ------- | ------- | - | ---- | ------- | -------- | ---------- | - | ------- | -------- | - | 
|                                             |                                                                                                                 | For the three months                                                    |                                                                 |         | For the six months ended |  
|                                             |                                                                                                                 | ended June 30,                                                          |                                                                 |         | June 30,                 |  
|                                             |                                                                                                                 |                                                                         |                                                                 |         |                          |  
|(Dollars in thousands)                       |                                                                                                                 | 2006                                                                    |                                                                 |         | 2005                     |   |   | 2006    |         |   | 2005 |        
|                                             |                                                                                                                 |                                                                         |                                                                 |         |                          |   |   |         |         |   |      |        
|Supplemental Information:                    |                                                                                                                 |                                                                         |                                                                 |         |                          |   |   |         |         |   |      |         |          |            |   |        
|                                             | Interest paid during the period (including capitalized interest
    of $6,566, $4, $7,040 and $4, respectively) |                                                                         | $                                                               | 192,247 |                          |   | $ | 158,689 |         |   | $    | 455,604 |          |            | $ | 429,109 |         
|                                             |                                                                                                                 |                                                                         |                                                                 |         |                          |   |   |         |         |   |      |        
|Non-Cash Investing and Financing Activities: |                                                                                                                 |                                                                         |                                                                 |         |                          |   |   |         |         |   |      |         |          |            |   |        
|                                             | Investing Activities:                                                                                           |                                                                         |                                                                 |         |                          |   |   |         |         |   |      |         |          |            |   |         |         
|                                             |                                                                                                                 | Escrow deposits related to property dispositions                        |                                                                 | $       | (190,389                 | ) |   | $       | (8,811  | ) |      | $       | (232,597 | )          |   | $       | (150,324 | )
|                                             |                                                                                                                 |                                                                         |                                                                 |         |                          |   |   |         |         |   |      |        
|                                             |                                                                                                                 | Mortgage loan repayment as a result of a property disposition           |                                                                 | $       |                         |   |   | $       |        |   |      | $       |         |            |   | $       | (13,386  | )
|                                             |                                                                                                                 |                                                                         |                                                                 |         |                          |   |   |         |         |   |      |        
|                                             |                                                                                                                 | Mortgage loan assumed upon acquisition of a property                    |                                                                 | $       | 15,200                   |   |   | $       | 44,975  |   |      | $       | 15,200   |            |   | $       | 44,975   |  
|                                             |                                                                                                                 |                                                                         |                                                                 |         |                          |   |   |         |         |   |      |        
|                                             |                                                                                                                 | Units issued in connection with a property acquisition                  |                                                                 | $       |                         |   |   | $       | 3,339   |   |      | $       |         |            |   | $       | 3,339    |  
|                                             |                                                                                                                 |                                                                         |                                                                 |         |                          |   |   |         |         |   |      |        
|                                             |                                                                                                                 | Changes in accounts due to consolidation of certain joint
    ventures: |                                                                 |         |                          |   |   |         |         |   |      |         |          |            |   |         |          |  
|                                             |                                                                                                                 |                                                                         | Decrease in investments in unconsolidated joint ventures        |         | $                        |  |   |         | $       |  |      |         | $        | (844,591   | ) |         | $        |  | 
|                                             |                                                                                                                 |                                                                         |                                                                 |         |                          |   |   |         |         |   |      |        
|                                             |                                                                                                                 |                                                                         | Increase in investments in real estate                          |         | $                        |  |   |         | $       |  |      |         | $        | 2,843,118  |   |         | $        |  | 
|                                             |                                                                                                                 |                                                                         |                                                                 |         |                          |   |   |         |         |   |      |        
|                                             |                                                                                                                 |                                                                         | Increase in accumulated depreciation                            |         | $                        |  |   |         | $       |  |      |         | $        | (286,569   | ) |         | $        |  | 
|                                             |                                                                                                                 |                                                                         |                                                                 |         |                          |   |   |         |         |   |      |        
|                                             |                                                                                                                 |                                                                         | Increase in mortgage debt, net of discounts                     |         | $                        |  |   |         | $       |  |      |         | $        | (681,986   | ) |         | $        |  | 
|                                             |                                                                                                                 |                                                                         |                                                                 |         |                          |   |   |         |         |   |      |        
|                                             |                                                                                                                 |                                                                         | Increase in minority interests  partially owned
    properties |         | $                        |  |   |         | $       |  |      |         | $        | (1,205,236 | ) |         | $        |  | 
|                                             |                                                                                                                 |                                                                         |                                                                 |         |                          |   |   |         |         |   |      |        
|                                             |                                                                                                                 |                                                                         | Increase in other assets and liabilities                        |         | $                        |  |   |         | $       |  |      |         | $        | 123,907    |   |         | $        |  | 
|                                             |                                                                                                                 |                                                                         |                                                                 |         |                          |   |   |         |         |   |      |        
|                                             | Financing Activities:                                                                                           |                                                                         |                                                                 |         |                          |   |   |         |         |   |      |         |          |            |   |         |         
|                                             |                                                                                                                 | Mortgage loan repayment as a result of a property disposition           |                                                                 | $       |                         |   |   | $       |        |   |      | $       |         |            |   | $       | 13,386   |  
|                                             |                                                                                                                 |                                                                         |                                                                 |         |                          |   |   |         |         |   |      |        
|                                             |                                                                                                                 | Mortgage loan assumed upon acquisition of a property                    |                                                                 | $       | (15,200                  | ) |   | $       | (44,975 | ) |      | $       | (15,200  | )          |   | $       | (44,975  | )
|                                             |                                                                                                                 |                                                                         |                                                                 |         |                          |   |   |         |         |   |      |        
|                                             |                                                                                                                 | Units issued in connection with a property acquisition                  |                                                                 | $       |                         |   |   | $       | (3,339  | ) |      | $       |         |            |   | $       | (3,339   | )
|                                             |                                                                                                                 |                                                                         |                                                                 |         |                          |   |   |         |         |   |      |        



6



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP





NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)


10-K.




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





|                              |       |           |     |                        |             |  |                            |             |  |          |             |             |  |             |            |            |  |  |            |            | 
|----------------------------- | ----- | --------- | --- | ---------------------- | ----------- |  | -------------------------- | ----------- |  | -------- | ----------- | ----------- |  | ----------- | ---------- | ---------- |  |  | ---------- | ---------- | 
|                              |       |           |     | Total Office Portfolio |             |  | Effective Office Portfolio |            
|                              |       |           |     |                        |             |  |                            |            
|                              |       | Number of |     |                        | Occupied    |  |                            |             |  | Occupied |             |             | 
|                              |       | Buildings |     |                        | Square Feet |  |                            | Square Feet |  |          | Square Feet |             |  | Square Feet |           
|                              |       |           |     |                        |             |  |                            |             |  |          |             |             |  |             |           
|Wholly-Owned Properties       |       |           | 538 |                        |             |  | 76,119,182                 |             |  |          | 83,826,263  |             |  |             | 76,119,182 |            |  |  | 83,826,263 |           
|Consolidated Joint Ventures   |       |           | 51  |                        |             |  | 19,916,489                 |             |  |          | 21,848,392  |             |  |             | 13,036,377 |            |  |  | 14,375,603 |           
|Unconsolidated Joint Ventures |       |           | 6   |                        |             |  | 3,036,104                  |             |  |          | 3,522,073   |             |  |             | 1,009,939  |            |  |  | 1,180,384  |           
|                              |       |           |     |                        |             |  |                            |             |  |          |             |             |  |             |           
|                              | Total |           |     | 595                    |             |  |                            | 99,071,775  |  |          |             | 109,196,728 |  |             |            | 90,165,498 |  |  |            | 99,382,250 | 
|                              |       |           |     |                        |             |  |                            |             |  |          |             |             |  |             |           
|Percent Occupied              |       |           |     |                        |             |  | 90.7                       | %           |  |          |             |             |  |             | 90.7       | %          |  |  |            |           
|                              |       |           |     |                        |             |  |                            |             |  |          |             |             |  |             |           
|Percent Leased                |       |           |     |                        |             |  | 92.4                       | %           |  |          |             |             |  |             | 92.4       | %          |  |  |            |           
|                              |       |           |     |                        |             |  |                            |             |  |          |             |             |  |             |           



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



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

Consolidation of Variable Interest
Entities, Determining Whether a General
Partner, or the General


7



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(Unaudited)




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

Partners as a Group, Controls a Limited Partnership or
Similar Entity When the Limited Partners Have Certain Rights




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

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




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





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





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



8



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(Unaudited)




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



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

Share-Based
Payment Accounting
for Stock-Based Compensation


Accounting for Stock Issued to Employees


|                                                                                                               |                                                         |               |          |       |               |   |          |       |  
|-------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------- | ------------- | -------- | ----- | ------------- | - | -------- | ----- | -
|                                                                                                               |                                                         | For the three |          |       | For the six   |  
|                                                                                                               |                                                         | months ended  |          |       | months ended  |  
|(Dollars in thousands, except per unit amounts)                                                                |                                                         | June 30, 2005 |          |       | June 30, 2005 |  
|                                                                                                               |                                                         |               |          |       |               |  
|Historical net (loss) available to unitholders                                                                 |                                                         | $             | (229,119 | )     |               | $ | (116,495 | )    
|Add back compensation expense for share options included in
    historical net (loss) available to unitholders |                                                         |               | 1,710    |       |               |   | 3,337    |      
|Deduct compensation expense for share options determined under
    fair value based method                     |                                                         |               | (1,726   | )     |               |   | (3,833   | )    
|                                                                                                               |                                                         |               |          |       |               |  
|Pro forma net (loss) available to unitholders                                                                  |                                                         | $             | (229,135 | )     |               | $ | (116,991 | )    
|                                                                                                               |                                                         |               |          |       |               |  
|(Loss) per unit  basic:                                                                                       |                                                         |               |          |       |               |   |          |      
|                                                                                                               | Historical net (loss) available to unitholders per unit |               | $        | (0.51 | )             |   | $        | (0.26 | )
|                                                                                                               |                                                         |               |          |       |               |  
|                                                                                                               | Pro forma net (loss) available to unitholders per unit  |               | $        | (0.51 | )             |   | $        | (0.26 | )
|                                                                                                               |                                                         |               |          |       |               |  
|(Loss) per unit  diluted:                                                                                     |                                                         |               |          |       |               |   |          |      
|                                                                                                               | Historical net (loss) available to unitholders per unit |               | $        | (0.50 | )             |   | $        | (0.26 | )
|                                                                                                               |                                                         |               |          |       |               |  
|                                                                                                               | Pro forma net (loss) available to unitholders per unit  |               | $        | (0.50 | )             |   | $        | (0.26 | )
|                                                                                                               |                                                         |               |          |       |               |  



| |                                    
| | -----------------------------------
| | Impact of a New Accounting Standard

04-5, 04-5


9



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(Unaudited)




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

04-5,


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

04-5


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



|                                                                         |  |               |         |  |               |   |         | 
|------------------------------------------------------------------------ |  | ------------- | ------- |  | ------------- | - | ------- | 
|                                                                         |  | For the three |         |  | For the six   |  
|                                                                         |  | months ended  |         |  | months ended  |  
|(Dollars in thousands)                                                   |  | June 30, 2006 |         |  | June 30, 2006 |  
|                                                                         |  |               |         |  |               |  
|Increase in total revenues                                               |  | $             | 101,890 |  |               | $ | 200,675 | 
|Increase in total operating expenses                                     |  | $             | 72,796  |  |               | $ | 141,546 | 
|Increase in other expense (primarily interest expense)                   |  | $             | 7,105   |  |               | $ | 18,171  | 
|Decrease in income from investments in unconsolidated joint
    ventures |  | $             | 11,319  |  |               | $ | 20,435  | 
|Increase in minority interests  partially owned
    properties          |  | $             | 10,670  |  |               | $ | 20,523  | 
|Change in income from continuing operations                              |  | $             |        |  |               | $ |        | 

10



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(Unaudited)


NOTE 3  ACQUISITIONS




|                                   |                            |              |                |             |          |           |           |                            |   |                        |        |  |                   |         |  |   |         |        | 
|---------------------------------- | -------------------------- | ------------ | -------------- | ----------- | -------- | --------- | --------- | -------------------------- | - | ---------------------- | ------ |  | ----------------- | ------- |  | - | ------- | ------ | 
|                                   |                            |              |                |             |          |           |           | Effective Office Portfolio |  
|                                   |                            |              |                | Acquisition |          |           | Number of |                            |   |                        |       
|Property                           |                            | Location     |                | Date        |          |           | Buildings |                            |   | Square Feet            |        |  | Purchase Price(a) |        
|                                   |                            |              |                |             |          |           |           |                            |   |                        |        |  |                   |        
|                                   |                            |              |                |             |          |           |           |                            |   | (Dollars in thousands) |       
|First Quarter 2006 Acquisitions:   |                            |              |                |             |          |           |           |                            |   |                        |        |  |                   |         |  |   |         |       
|Office properties:                 |                            |              |                |             |          |           |           |                            |   |                        |        |  |                   |         |  |   |         |       
|                                   | One and Three Harbor Drive |              | Sausalito, CA  |             |          | 1/19/2006 |           |                            |   | 2                      |        |  |                   | 111,772 |  |   | $       | 32,500 | 
|                                   | Pointe OHare              |              | Rosemont, IL   |             |          | 3/8/2006  |           |                            |   | 1                      |        |  |                   | 262,991 |  |   |         | 55,675 | 
|Vacant land:                       |                            |              |                |             |          |           |           |                            |   |                        |        |  |                   |         |  |   |         |       
|                                   | Pointe OHare Land(b)      |              | Rosemont, IL   |             |          | 3/8/2006  |           |                            |   |                       |        |  |                   |        |  |   |         | 2,000  | 
|                                   |                            |              |                |             |          |           |           |                            |   |                        |        |  |                   |        
|Total First Quarter Acquisitions:  |                            |              | 3              |             |          |           | 374,763   |                            |   | $                      | 90,175 | 
|                                   |                            |              |                |             |          |           |           |                            |  
|Second Quarter 2006 Acquisitions:  |                            |              |                |             |          |           |           |                            |   |                        |        |  |                   |         |  |   |         |       
|Office properties:                 |                            |              |                |             |          |           |           |                            |   |                        |        |  |                   |         |  |   |         |       
|                                   | Fountaingrove II(c)        |              | Santa Rosa, CA |             |          | 4/21/2006 |           |                            |   |                       |        |  |                   |        |  |   | $       | 9,597  | 
|                                   | 1200 Corporate Place(d)    |              | Boca Raton, FL |             |          | 5/24/2006 |           |                            |   | 1                      |        |  |                   | 128,959 |  |   |         | 29,500 | 
|                                   | 77 South Bedford           |              | Burlington, MA |             |          | 5/31/2006 |           |                            |   | 1                      |        |  |                   | 144,576 |  |   |         | 23,500 | 
|Other Investments(e)               |                            | New York, NY |                |             | 6/6/2006 |           |           |                            |  |                        |        |  |                  |         |  |   | 12,375  |       
|                                   |                            |              |                |             |          |           |           |                            |   |                        |        |  |                   |        
|Total Second Quarter Acquisitions: |                            |              | 2              |             |          |           | 273,535   |                            |   | $                      | 74,972 | 
|                                   |                            |              |                |             |          |           |           |                            |  
|                                   |                            |              |                |             | Total:   |           |           |                            | 5 |                        |        |  | 648,298           |         |  | $ | 165,147 |       
|                                   |                            |              |                |             |          |           |           |                            |   |                        |        |  |                   |        



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

11



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(Unaudited)




|         |                     
|-------- | --------------------
|NOTE 4  | SALES OF REAL ESTATE



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



|                                   |  |                   |    |             |           |  |           |                            |    |                        |         |  |             |  |  |   |         | 
|---------------------------------- |  | ----------------- | -- | ----------- | --------- |  | --------- | -------------------------- | -- | ---------------------- | ------- |  | ----------- |  |  | - | ------- | 
|                                   |  |                   |    |             |           |  |           | Effective Office Portfolio |   
|                                   |  |                   |    | Disposition |           |  | Number of |                            |    |                        |        
|Property                           |  | Location          |    | Date        |           |  | Buildings |                            |    | Square Feet            |         |  | Sales Price | 
|                                   |  |                   |    |             |           |  |           |                            |    |                        |         |  |             | 
|                                   |  |                   |    |             |           |  |           |                            |    | (Dollars in thousands) |        
|First Quarter 2006 Dispositions:   |  |                   |    |             |           |  |           |                            |    |                        |         |  |             |  |  |   |         | 
|120 Montgomery(a)                  |  | San Francisco, CA |    |             | 1/20/2006 |  |           |                            | 1  |                        |         |  | 430,523     |  |  | $ | 67,500  | 
|Westridge                          |  | San Diego, CA     |    |             | 2/8/2006  |  |           |                            | 1  |                        |         |  | 53,326      |  |  |   | 10,500  | 
|Pacific Corporate Plaza            |  | San Diego, CA     |    |             | 2/8/2006  |  |           |                            | 2  |                        |         |  | 104,847     |  |  |   | 20,000  | 
|8-16 Perimeter(a)                  |  | Atlanta, GA       |    |             | 2/17/2006 |  |           |                            | 5  |                        |         |  | 65,350      |  |  |   | 10,712  | 
|One Crosswoods                     |  | Columbus, OH      |    |             | 3/3/2006  |  |           |                            | 1  |                        |         |  | 129,583     |  |  |   | 5,300   | 
|3001 Stender Way(a)(b)             |  | Santa Clara, CA   |    |             | 3/23/2006 |  |           |                            |   |                        |         |  |            |  |  |   | 2,875   | 
|                                   |  |                   |    |             |           |  |           |                            |    |                        |         |  |             | 
|Total First Quarter Dispositions:  |  |                   | 10 |             |           |  | 783,629   |                            |    | $                      | 116,887 | 
|                                   |  |                   |    |             |           |  |           |                            |   
|Second Quarter 2006 Dispositions:  |  |                   |    |             |           |  |           |                            |    |                        |         |  |             |  |  |   |         | 
|Southgate Office Plaza I & II      |  | Renton, WA        |    |             | 4/6/2006  |  |           |                            | 2  |                        |         |  | 267,810     |  |  | $ | 47,000  | 
|Paces West                         |  | Atlanta, GA       |    |             | 4/19/2006 |  |           |                            | 2  |                        |         |  | 646,471     |  |  |   | 112,750 | 
|California Circle II               |  | Milpitas, CA      |    |             | 6/9/2006  |  |           |                            | 3  |                        |         |  | 95,774      |  |  |   | 10,007  | 
|Brea Corporate Plaza               |  | Brea, CA          |    |             | 6/21/2006 |  |           |                            | 1  |                        |         |  | 117,195     |  |  |   | 25,260  | 
|Brea Park Centre                   |  | Brea, CA          |    |             | 6/21/2006 |  |           |                            | 3  |                        |         |  | 168,315     |  |  |   | 34,740  | 
|Crosby Corporate Center I & II     |  | Bedford, MA       |    |             | 6/21/2006 |  |           |                            | 9  |                        |         |  | 588,918     |  |  |   | 70,745  | 
|                                   |  |                   |    |             |           |  |           |                            |    |                        |         |  |             | 
|Total Second Quarter Dispositions: |  |                   | 20 |             |           |  | 1,884,483 |                            |    | $                      | 300,502 | 
|                                   |  |                   |    |             |           |  |           |                            |   
|                                   |  |                   |    |             | Total:    |  |           |                            | 30 |                        |         |  | 2,668,112   |  |  | $ | 417,389 | 
|                                   |  |                   |    |             |           |  |           |                            |    |                        |         |  |             | 



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

12



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(Unaudited)




|         |                                   
|-------- | ----------------------------------
|NOTE 4  | SALES OF REAL ESTATE  (Continued)



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



|                                                                                                                |                                                |                                                                 |        |      |                    |   |         |          |          |   |         |        |         |   |         |          |          |  
|--------------------------------------------------------------------------------------------------------------- | ---------------------------------------------- | --------------------------------------------------------------- | ------ | ---- | ------------------ | - | ------- | -------- | -------- | - | ------- | ------ | ------- | - | ------- | -------- | -------- | -
|                                                                                                                |                                                | For the three months                                            |        |      | For the six months |  
|                                                                                                                |                                                | ended June 30,                                                  |        |      | ended June 30,     |  
|                                                                                                                |                                                |                                                                 |        |      |                    |  
|(Dollars in thousands)                                                                                          |                                                | 2006                                                            |        |      | 2005               |   |         | 2006     |          |   | 2005    |       
|                                                                                                                |                                                |                                                                 |        |      |                    |   |         |          |          |   |         |       
|Gain on partial sales of real estate included in Income from
    Continuing Operations                          |                                                | $                                                               | 379    |      |                    | $ |        |          |          | $ | 533     |        |         | $ |        |         
|Gain on sales of real estate included in Discontinued
    Operations(c)                                         |                                                |                                                                 | 82,717 |      |                    |   | 91,971  |          |          |   | 118,146 |        |         |   | 116,216 |         
|Minority interests share of gain on sales of real estate                                                       |                                                |                                                                 |       |      |                    |   | (29,699 | )        |          |   |        |        |         |   | (29,699 | )       
|Our share of (loss) gain on sales of real estate classified
    as income from unconsolidated joint ventures(d) |                                                |                                                                 | (91    | )    |                    |   | 17,376  |          |          |   | (91     | )      |         |   | 17,376  |         
|                                                                                                                |                                                |                                                                 |        |      |                    |   |         |          |          |   |         |       
|                                                                                                                |                                                | Our share of the gains on sales of real estate                  |        | $    | 83,005             |   |         | $        | 79,648   |   |         | $      | 118,588 |   |         | $        | 103,893  |  
|                                                                                                                |                                                |                                                                 |        |      |                    |   |         |          |          |   |         |       
|Impairment on properties anticipated to be sold deducted from
    Income from Continuing Operations             |                                                | $                                                               |       |      |                    | $ | (24,382 | )        |          | $ |        |        |         | $ | (24,382 | )       
|Discontinued Operations:                                                                                        |                                                |                                                                 |        |      |                    |   |         |          |          |   |         |        |         |   |         |         
|                                                                                                                | Impairment on properties sold                  |                                                                 |        |     |                    |   |         | (156,474 | )        |   |         |       |         |   |         | (156,474 | )       
|                                                                                                                | Loss on properties sold                        |                                                                 |        | (214 | )                  |   |         | (165,927 | )        |   |         | (1,203 | )       |   |         | (165,927 | )       
|                                                                                                                | Provision for loss on properties held for sale |                                                                 |        |     |                    |   |         | (20,264  | )        |   |         |       |         |   |         | (33,802  | )       
|                                                                                                                |                                                |                                                                 |        |      |                    |   |         |          |          |   |         |       
|                                                                                                                |                                                | Total non-cash impairment charges and losses on properties sold |        | $    | (214               | ) |         | $        | (367,047 | ) |         | $      | (1,203  | ) |         | $        | (380,585 | )
|                                                                                                                |                                                |                                                                 |        |      |                    |   |         |          |          |   |         |       



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

13



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(Unaudited)




|         |                                   
|-------- | ----------------------------------
|NOTE 4  | SALES OF REAL ESTATE  (Continued)



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

Accounting for the Impairment or
Disposal of Long-Lived Assets


|                                                                                                                                                                           |                                                                                           |                              |                         |       |                          |       |          |         |         |          |         |       |        |       |          |         |         |          |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------- | ---------------------------- | ----------------------- | ----- | ------------------------ | ----- | -------- | ------- | ------- | -------- | ------- | ----- | ------ | ----- | -------- | ------- | ------- | -------- | -
|                                                                                                                                                                           |                                                                                           | For the three months         |                         |       | For the six months ended |      
|                                                                                                                                                                           |                                                                                           | ended June 30,               |                         |       | June 30,                 |      
|                                                                                                                                                                           |                                                                                           |                              |                         |       |                          |      
|(Dollars in thousands)                                                                                                                                                     |                                                                                           | 2006                         |                         |       | 2005                     |       |          | 2006    |         |          | 2005    |      
|                                                                                                                                                                           |                                                                                           |                              |                         |       |                          |       |          |         |         |          |         |      
|Property operating revenues                                                                                                                                                |                                                                                           | $                            | 7,299                   |       |                          | $     | 71,502   |         |         | $        | 16,200  |       |        | $     | 157,933  |        
|                                                                                                                                                                           |                                                                                           |                              |                         |       |                          |       |          |         |         |          |         |      
|Expenses:                                                                                                                                                                  |                                                                                           |                              |                         |       |                          |       |          |         |         |          |         |       |        |       |          |        
|                                                                                                                                                                           | Depreciation and amortization                                                             |                              |                         | 897   |                          |       |          | 21,236  |         |          |         | 3,588 |        |       |          | 46,684  |        
|                                                                                                                                                                           | Property operating                                                                        |                              |                         | 3,441 |                          |       |          | 28,447  |         |          |         | 8,567 |        |       |          | 62,038  |        
|                                                                                                                                                                           | Ground rent                                                                               |                              |                         | 181   |                          |       |          | 1,148   |         |          |         | 379   |        |       |          | 2,419   |        
|                                                                                                                                                                           | Impairment                                                                                |                              |                         |      |                          |       |          | 156,474 |         |          |         |      |        |       |          | 156,474 |        
|                                                                                                                                                                           |                                                                                           |                              |                         |       |                          |       |          |         |         |          |         |      
|                                                                                                                                                                           |                                                                                           | Total expenses               |                         |       | 4,519                    |       |          |         | 207,305 |          |         |       | 12,534 |       |          |         | 267,615 |         
|                                                                                                                                                                           |                                                                                           |                              |                         |       |                          |       |          |         |         |          |         |      
|                                                                                                                                                                           |                                                                                           |                              | Operating income (loss) |       |                          | 2,780 |          |         |         | (135,803 | )       |       |        | 3,666 |          |         |         | (109,682 | )
|                                                                                                                                                                           |                                                                                           |                              |                         |       |                          |       |          |         |         |          |         |      
|Other income (expense):                                                                                                                                                    |                                                                                           |                              |                         |       |                          |       |          |         |         |          |         |       |        |       |          |        
|                                                                                                                                                                           | Interest income                                                                           |                              |                         | 1     |                          |       |          | 98      |         |          |         | 386   |        |       |          | 241     |        
|                                                                                                                                                                           | Interest expense and amortization of deferred financing costs
    and prepayment expenses |                              |                         |      |                          |       |          | (5      | )       |          |         |      |        |       |          | (618    | )      
|                                                                                                                                                                           |                                                                                           |                              |                         |       |                          |       |          |         |         |          |         |      
|                                                                                                                                                                           |                                                                                           | Total other income (expense) |                         |       | 1                        |       |          |         | 93      |          |         |       | 386    |       |          |         | (377    | )       
|                                                                                                                                                                           |                                                                                           |                              |                         |       |                          |       |          |         |         |          |         |      
|Income (loss) before income taxes, allocations to minority
    interests, net gain (loss) on sales of real estate and
    provision for (loss) on properties held for sale |                                                                                           |                              | 2,781                   |       |                          |       | (135,710 | )       |         |          | 4,052   |       |        |       | (110,059 | )      
|Income taxes                                                                                                                                                               |                                                                                           |                              | (16                     | )     |                          |       | (24      | )       |         |          | (16     | )     |        |       | (64      | )      
|Income allocated to minority interests  partially
    owned properties (including gains on sales of real estate of $0,
    $29,699, $0 and $29,699, respectively)         |                                                                                           |                              |                        |       |                          |       | (29,987  | )       |         |          |        |       |        |       | (30,440  | )      
|Net gain (loss) on sales of real estate                                                                                                                                    |                                                                                           |                              | 82,503                  |       |                          |       | (73,956  | )       |         |          | 116,943 |       |        |       | (49,711  | )      
|Provision for (loss) on properties held for sale                                                                                                                           |                                                                                           |                              |                        |       |                          |       | (20,264  | )       |         |          |        |       |        |       | (33,802  | )      
|                                                                                                                                                                           |                                                                                           |                              |                         |       |                          |       |          |         |         |          |         |      
|Net income (loss)                                                                                                                                                          |                                                                                           | $                            | 85,268                  |       |                          | $     | (259,941 | )       |         | $        | 120,979 |       |        | $     | (224,076 | )      
|                                                                                                                                                                           |                                                                                           |                              |                         |       |                          |       |          |         |         |          |         |      
|Property net operating income from discontinued operations                                                                                                                 |                                                                                           | $                            | 3,858                   |       |                          | $     | 43,055   |         |         | $        | 7,633   |       |        | $     | 95,895   |        
|                                                                                                                                                                           |                                                                                           |                              |                         |       |                          |       |          |         |         |          |         |      



14



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(Unaudited)


NOTE 5  INVESTMENTS IN UNCONSOLIDATED JOINT
VENTURES




|                                                                                                                                                                     |                                                         |                                                              |         |         |              |   |         |           |           | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------- | ------------------------------------------------------------ | ------- | ------- | ------------ | - | ------- | --------- | --------- | 
|                                                                                                                                                                     |                                                         | June 30,                                                     |         |         | December 31, |  
|(Dollars in thousands)                                                                                                                                               |                                                         | 2006                                                         |         |         | 2005         |  
|                                                                                                                                                                     |                                                         |                                                              |         |         |              |  
|Balance Sheets:                                                                                                                                                      |                                                         |                                                              |         |         |              |   |         |          
|                                                                                                                                                                     | Assets:                                                 |                                                              |         |         |              |   |         |           |          
|                                                                                                                                                                     | Real estate, net of accumulated depreciation            |                                                              | $       | 488,952 |              |   | $       | 3,002,906 |          
|                                                                                                                                                                     | Other assets                                            |                                                              |         | 55,512  |              |   |         | 356,016   |          
|                                                                                                                                                                     |                                                         |                                                              |         |         |              |  
|                                                                                                                                                                     |                                                         | Total Assets                                                 |         | $       | 544,464      |   |         | $         | 3,358,922 | 
|                                                                                                                                                                     |                                                         |                                                              |         |         |              |  
|                                                                                                                                                                     | Liabilities and Partners and Shareholders
    Equity: |                                                              |         |         |              |   |         |           |          
|                                                                                                                                                                     | Mortgage debt                                           |                                                              | $       | 454,617 |              |   | $       | 1,138,455 |          
|                                                                                                                                                                     | Other liabilities                                       |                                                              |         | 40,845  |              |   |         | 151,303   |          
|                                                                                                                                                                     | Partners and shareholders equity                      |                                                              |         | 49,002  |              |   |         | 2,069,164 |          
|                                                                                                                                                                     |                                                         |                                                              |         |         |              |  
|                                                                                                                                                                     |                                                         | Total Liabilities and Partners and Shareholders
    Equity |         | $       | 544,464      |   |         | $         | 3,358,922 | 
|                                                                                                                                                                     |                                                         |                                                              |         |         |              |  
|Our share of historical partners and shareholders
    equity                                                                                                       |                                                         | $                                                            | 10,168  |         |              | $ | 878,225 |          
|Net excess of cost of investments over the net book value of
    underlying net assets (net of accumulated depreciation of
    $28,781 and $21,303, respectively)(a) |                                                         |                                                              | 110,510 |         |              |   | 69,764  |          
|                                                                                                                                                                     |                                                         |                                                              |         |         |              |  
|Carrying value of investments in unconsolidated joint ventures                                                                                                       |                                                         | $                                                            | 120,678 |         |              | $ | 947,989 |          
|                                                                                                                                                                     |                                                         |                                                              |         |         |              |  
|Our share of unconsolidated non-recourse mortgage debt                                                                                                               |                                                         | $                                                            | 165,762 |         |              | $ | 473,725 |          
|                                                                                                                                                                     |                                                         |                                                              |         |         |              |  



|    |                                                                                                                                                                                                                             
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | This amount represents the aggregate difference between our
    historical cost basis and the basis reflected at the joint
    venture level, which is typically amortized over the life of the
    related asset. The basis

15



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(Unaudited)




| |                                                                        
| | -----------------------------------------------------------------------
| | NOTE 5  INVESTMENTS IN UNCONSOLIDATED JOINT
    VENTURES  (Continued)



|                          |                                                      |                                                                             |                |        |                  |        |   |         |        |         |      |        |        |        |   |         |         |         | 
|------------------------- | ---------------------------------------------------- | --------------------------------------------------------------------------- | -------------- | ------ | ---------------- | ------ | - | ------- | ------ | ------- | ---- | ------ | ------ | ------ | - | ------- | ------- | ------- | 
|                          |                                                      | For the                                                                     |                |        | For the          |       
|                          |                                                      | three months ended                                                          |                |        | six months ended |       
|                          |                                                      | June 30,                                                                    |                |        | June 30,         |       
|                          |                                                      |                                                                             |                |        |                  |       
|(Dollars in thousands)    |                                                      | 2006                                                                        |                |        | 2005             |        |   | 2006    |        |         | 2005 |       
|                          |                                                      |                                                                             |                |        |                  |        |   |         |        |         |      |       
|Statements of Operations: |                                                      |                                                                             |                |        |                  |        |   |         |        |         |      |        |        |        |   |        
|                          | Revenues                                             |                                                                             | $              | 32,558 |                  |        | $ | 132,430 |        |         | $    | 63,538 |        |        | $ | 256,750 |        
|                          |                                                      |                                                                             |                |        |                  |        |   |         |        |         |      |       
|                          | Expenses:                                            |                                                                             |                |        |                  |        |   |         |        |         |      |        |        |        |   |         |        
|                          |                                                      | Interest expense and loan cost amortization                                 |                |        | 6,523            |        |   |         | 13,146 |         |      |        | 13,079 |        |   |         | 25,645  |        
|                          |                                                      | Depreciation and amortization                                               |                |        | 5,630            |        |   |         | 32,637 |         |      |        | 10,793 |        |   |         | 62,898  |        
|                          |                                                      | Operating expenses, ground rent and general and administrative
    expenses |                |        | 18,077           |        |   |         | 59,904 |         |      |        | 36,040 |        |   |         | 119,117 |        
|                          |                                                      |                                                                             |                |        |                  |        |   |         |        |         |      |       
|                          |                                                      |                                                                             | Total expenses |        |                  | 30,230 |   |         |        | 105,687 |      |        |        | 59,912 |   |         |         | 207,660 | 
|                          |                                                      |                                                                             |                |        |                  |        |   |         |        |         |      |       
|                          | Net income before (loss) gain on sale of real estate |                                                                             |                | 2,328  |                  |        |   | 26,743  |        |         |      | 3,626  |        |        |   | 49,090  |        
|                          | (Loss) gain on sale of real estate                   |                                                                             |                | (12    | )                |        |   | 39,545  |        |         |      | (12    | )      |        |   | 39,545  |        
|                          |                                                      |                                                                             |                |        |                  |        |   |         |        |         |      |       
|                          | Net income                                           |                                                                             | $              | 2,316  |                  |        | $ | 66,288  |        |         | $    | 3,614  |        |        | $ | 88,635  |        
|                          |                                                      |                                                                             |                |        |                  |        |   |         |        |         |      |       
|Our share of:             |                                                      |                                                                             |                |        |                  |        |   |         |        |         |      |        |        |        |   |        
|                          | Net income                                           |                                                                             | $              | 34     |                  |        | $ | 28,681  |        |         | $    | 90     |        |        | $ | 38,199  |        
|                          |                                                      |                                                                             |                |        |                  |        |   |         |        |         |      |       
|                          | Interest expense and loan cost amortization          |                                                                             | $              | 2,402  |                  |        | $ | 5,008   |        |         | $    | 4,773  |        |        | $ | 9,903   |        
|                          |                                                      |                                                                             |                |        |                  |        |   |         |        |         |      |       
|                          | Depreciation and amortization (real estate related)  |                                                                             | $              | 2,887  |                  |        | $ | 12,506  |        |         | $    | 5,659  |        |        | $ | 24,768  |        
|                          |                                                      |                                                                             |                |        |                  |        |   |         |        |         |      |       
|                          | (Loss) gain on sale of real estate                   |                                                                             | $              | (91    | )                |        | $ | 17,376  |        |         | $    | (91    | )      |        | $ | 17,376  |        
|                          |                                                      |                                                                             |                |        |                  |        |   |         |        |         |      |       

16



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(Unaudited)


NOTE 6  MORTGAGE DEBT




|                                |                                                     |                        |           |         |  
|------------------------------- | --------------------------------------------------- | ---------------------- | --------- | ------- | -
|                                |                                                     | (Dollars in thousands) |          
|                                |                                                     |                        |          
|Balance at December 31, 2005(a) |                                                     | $                      | 2,169,383 |        
|                                | Scheduled principal amortization prior to maturity  |                        |           | (7,753  | )
|                                | Consolidation of mortgage debt(b)                   |                        |           | 682,222 |  
|                                | Mortgage financing(c)                               |                        |           | 180,000 |  
|                                |                                                     |                        |          
|Balance at March 31, 2006(a)    |                                                     |                        | 3,023,852 |        
|                                | Scheduled principal amortization prior to maturity  |                        |           | (7,071  | )
|                                | Mortgage financings(d)                              |                        |           | 405,000 |  
|                                | Assumed through a property acquisition (see Note 3) |                        |           | 15,200  |  
|                                |                                                     |                        |          
|Balance at June 30, 2006(a)     |                                                     | $                      | 3,436,981 |        
|                                |                                                     |                        |          



|    |  |                                                                                                                                                                                                                                                                     
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Excludes net discounts on mortgage debt of $5.2 million,
    $5.2 million and $5.0 million as of December 31,
    2005, March 31, 2006 and June 30, 2006, respectively.                                                                                             
|   
|(b) |  | Upon adoption of EITF 04-5, effective January 1, 2006, we
    consolidated $682.2 million of mortgage debt, excluding
    discounts, as shown in the table below. Our share of the total
    mortgage debt consolidated is $306.9 million as of
    January 1, 2006.

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



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(c) |  | During February 2006, the ownership structure of the Sixty State
    Street property was restructured. Pursuant to this restructure,
    we converted our former debt position in this property into an
    approximate 95% equity interest. In addition, new mortgage
    financing was obtained on the property. The new mortgage loan
    has a principal balance of $180.0 million, bears interest
    at a fixed coupon rate of 5.63% and matures in March 2011. The
    effective interest rate on this loan is 5.67%. Following this
    restructure, we will continue to consolidate the financial
    position and results of operations of this property.
|   
|(d) |  | During May 2006, we obtained mortgage financing for the 100
    Summer Street property. The mortgage loan has a principal
    balance of $180.0 million, bears interest at a fixed coupon
    rate of 5.96% and matures in June 2016. The effective interest
    rate on this loan is 5.98%.                                                                                                                                                                                                                                                                                                                                                                       



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

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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(Unaudited)


NOTE 7  UNSECURED NOTES






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









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

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



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

NOTE 8  LINES OF CREDIT






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



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(Unaudited)


NOTE 8  LINES OF CREDIT 
(Continued)










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



19



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(Unaudited)


NOTE 9  PARTNERS CAPITAL AND MANDATORILY
REDEEMABLE PREFERRED UNITS




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



|                                 |                                                                                                                                                                           |  |             |             |  
|-------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------- | ----------- | -
|Outstanding at December 31, 2005 |                                                                                                                                                                           |  | 424,314,764 |            
|                                 | Repurchased and retired under Equity Offices open market
    repurchase program (at an average purchase price of $31.79 per
    unit)(a)                                 |  |             | (15,353,600 | )
|                                 | Repurchased and retired under Equity Offices Supplemental
    Retirement Savings Plan (at an average purchase price of
    $33.26 per unit)                              |  |             | (55,831     | )
|                                 | Issued to Equity Office upon exercise of share options                                                                                                                    |  |             | 1,218,350   |  
|                                 | Units redeemed for cash (at an average purchase price of
    $30.51 per unit)                                                                                             |  |             | (2,315,316  | )
|                                 | Issued to Equity Office related to restricted shares issued to
    employees, net of cancellations                                                                        |  |             | 596,855     |  
|                                 | Units issued as compensation for Equity Offices Board of
    Trustee fees                                                                                                |  |             | 9,183       |  
|                                 |                                                                                                                                                                           |  |            
|Outstanding at March 31, 2006    |                                                                                                                                                                           |  | 408,414,405 |            
|                                 | Repurchased and retired under Equity Offices open market
    repurchase program or under separate authorization (at an
    average purchase price of $35.73 per unit)(a) |  |             | (20,240,240 | )
|                                 | Repurchased and retired under Equity Offices Supplemental
    Retirement Savings Plan (at an average purchase price of
    $34.36 per unit)                              |  |             | (46,739     | )
|                                 | Issued to Equity Office upon exercise of share options                                                                                                                    |  |             | 1,849,652   |  
|                                 | Units redeemed for cash (at an average purchase price of
    $32.58 per unit)                                                                                             |  |             | (530,220    | )
|                                 | Issued to Equity Office related to restricted share
    cancellations, net of restricted shares issued to employees                                                       |  |             | (48,712     | )
|                                 | Units issued as compensation for Equity Offices Board of
    Trustee fees                                                                                                |  |             | 8,229       |  
|                                 |                                                                                                                                                                           |  |            
|Outstanding at June 30, 2006     |                                                                                                                                                                           |  | 389,406,375 |            
|                                 |                                                                                                                                                                           |  |            



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



| |                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Equity Office also obtained separate authorization during June
    2006 to repurchase an additional $450.0 million of Common
    Shares in connection with our $1.5 billion exchangeable
    unsecured note issuance (see Note 7). Of the Common Shares
    repurchased during the second quarter 2006,
    17,196,740 Common Shares were repurchased concurrently with
    our issuance of the $1.5 billion exchangeable unsecured
    notes.
|
| | In conjunction with such repurchases, we purchased from Equity
    Office and retired a corresponding number of Units for an
    aggregate cash purchase price equal to the aggregate purchase
    price for all Common Share repurchases.                                                                                                                                                                                                    

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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(Unaudited)




|         |                                                                               
|-------- | ------------------------------------------------------------------------------
|NOTE 9  | PARTNERS CAPITAL AND MANDATORILY REDEEMABLE PREFERRED
    UNITS  (Continued)



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



|                         |  |              |          |  |           |  |               |                        |  |  |               | 
|------------------------ |  | ------------ | -------- |  | --------- |  | ------------- | ---------------------- |  |  | ------------- | 
|                         |  | Distribution |          |  |           |  |              
|                         |  | per Unit     |          |  | Date Paid |  |               | Unitholder Record Date | 
|                         |  |              |          |  |           |  |               |                        | 
|Units                    |  | $            | 0.33     |  |           |  | July 17, 2006 |                        |  |  | June 30, 2006 | 
|Series B Preferred Units |  | $            | 0.65625  |  |           |  | May 15, 2006  |                        |  |  | May 1, 2006   | 
|Series G Preferred Units |  | $            | 0.484375 |  |           |  | June 15, 2006 |                        |  |  | June 1, 2006  | 

21



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(Unaudited)


NOTE 10  EARNINGS (LOSS) PER UNIT




|                                                                                                                                                                                                         |                                                                                       |                            |             |           |                          |   |             |           |  |   |             |           |  |   |             |           | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------- | -------------------------- | ----------- | --------- | ------------------------ | - | ----------- | --------- |  | - | ----------- | --------- |  | - | ----------- | --------- | 
|                                                                                                                                                                                                         |                                                                                       | For the three months ended |             |           | For the six months ended |  
|                                                                                                                                                                                                         |                                                                                       | June 30,                   |             |           | June 30,                 |  
|                                                                                                                                                                                                         |                                                                                       |                            |             |           |                          |  
|(Dollars in thousands, except per unit amounts)                                                                                                                                                          |                                                                                       | 2006                       |             |           | 2005                     |   |             | 2006      |  |   | 2005        |          
|                                                                                                                                                                                                         |                                                                                       |                            |             |           |                          |   |             |           |  |   |             |          
|Numerator:                                                                                                                                                                                               |                                                                                       |                            |             |           |                          |   |             |           |  |   |             |           |  |   |             |          
|Income from continuing operations                                                                                                                                                                        |                                                                                       | $                          | 20,965      |           |                          | $ | 39,523      |           |  | $ | 44,691      |           |  | $ | 124,983     |          
|Preferred distributions                                                                                                                                                                                  |                                                                                       |                            | (8,701      | )         |                          |   | (8,701      | )         |  |   | (17,402     | )         |  |   | (17,402     | )        
|                                                                                                                                                                                                         |                                                                                       |                            |             |           |                          |   |             |           |  |   |             |          
|Income from continuing operations available to unitholders                                                                                                                                               |                                                                                       |                            | 12,264      |           |                          |   | 30,822      |           |  |   | 27,289      |           |  |   | 107,581     |          
|Discontinued operations (including net gain (loss) on sales
    of real estate and provision for (loss) on properties held
    for sale of $82,503, $(94,220), $116,943 and $(83,513),
    respectively) |                                                                                       |                            | 85,268      |           |                          |   | (259,941    | )         |  |   | 120,979     |           |  |   | (224,076    | )        
|                                                                                                                                                                                                         |                                                                                       |                            |             |           |                          |   |             |           |  |   |             |          
|Numerator for basic and diluted earnings (loss) per
    unit  net income (loss) available to unitholders                                                                                                |                                                                                       | $                          | 97,532      |           |                          | $ | (229,119    | )         |  | $ | 148,268     |           |  | $ | (116,495    | )        
|                                                                                                                                                                                                         |                                                                                       |                            |             |           |                          |   |             |           |  |   |             |          
|Denominator:                                                                                                                                                                                             |                                                                                       |                            |             |           |                          |   |             |           |  |   |             |           |  |   |             |          
|Denominator for basic earnings (loss) per unit 
    weighted average Units outstanding                                                                                                                  |                                                                                       |                            | 404,009,631 |           |                          |   | 451,728,242 |           |  |   | 407,335,183 |           |  |   | 450,881,385 |          
|Effect of dilutive potential units:                                                                                                                                                                      |                                                                                       |                            |             |           |                          |   |             |           |  |   |             |           |  |   |             |          
|                                                                                                                                                                                                         | Units issuable upon exercise of Equity Office share options and
    restricted shares |                            |             | 4,484,429 |                          |   |             | 3,881,328 |  |   |             | 4,162,053 |  |   |             | 3,219,782 | 
|                                                                                                                                                                                                         |                                                                                       |                            |             |           |                          |   |             |           |  |   |             |          
|Denominator for diluted earnings (loss) per
    unit  weighted average Units outstanding and dilutive
    potential units                                                                               |                                                                                       |                            | 408,494,060 |           |                          |   | 455,609,570 |           |  |   | 411,497,236 |           |  |   | 454,101,167 |          
|                                                                                                                                                                                                         |                                                                                       |                            |             |           |                          |   |             |           |  |   |             |          
|Earnings (loss) per unit  basic:                                                                                                                                                                        |                                                                                       |                            |             |           |                          |   |             |           |  |   |             |           |  |   |             |          
|Income from continuing operations available to unitholders                                                                                                                                               |                                                                                       | $                          | 0.03        |           |                          | $ | 0.07        |           |  | $ | 0.07        |           |  | $ | 0.24        |          
|Discontinued operations                                                                                                                                                                                  |                                                                                       |                            | 0.21        |           |                          |   | (0.58       | )         |  |   | 0.30        |           |  |   | (0.50       | )        
|                                                                                                                                                                                                         |                                                                                       |                            |             |           |                          |   |             |           |  |   |             |          
|Net income (loss) available to unitholders(a)                                                                                                                                                            |                                                                                       | $                          | 0.24        |           |                          | $ | (0.51       | )         |  | $ | 0.36        |           |  | $ | (0.26       | )        
|                                                                                                                                                                                                         |                                                                                       |                            |             |           |                          |   |             |           |  |   |             |          
|Earnings (loss) per unit  diluted:                                                                                                                                                                      |                                                                                       |                            |             |           |                          |   |             |           |  |   |             |           |  |   |             |          
|Income from continuing operations available to unitholders                                                                                                                                               |                                                                                       | $                          | 0.03        |           |                          | $ | 0.07        |           |  | $ | 0.07        |           |  | $ | 0.24        |          
|Discontinued operations                                                                                                                                                                                  |                                                                                       |                            | 0.21        |           |                          |   | (0.57       | )         |  |   | 0.29        |           |  |   | (0.49       | )        
|                                                                                                                                                                                                         |                                                                                       |                            |             |           |                          |   |             |           |  |   |             |          
|Net income (loss) available to unitholders(a)                                                                                                                                                            |                                                                                       | $                          | 0.24        |           |                          | $ | (0.50       | )         |  | $ | 0.36        |           |  | $ | (0.26       | )        
|                                                                                                                                                                                                         |                                                                                       |                            |             |           |                          |   |             |           |  |   |             |          



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

22



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(Unaudited)




NOTE 10  EARNINGS (LOSS) PER
UNIT  (Continued)




|                            |       |                  |       |                      |      |  |                    |           |  |  |           |           |  |      |           |           |  |  |           |           | 
|--------------------------- | ----- | ---------------- | ----- | -------------------- | ---- |  | ------------------ | --------- |  |  | --------- | --------- |  | ---- | --------- | --------- |  |  | --------- | --------- | 
|                            |       |                  |       | For the three months |      |  | For the six months |          
|                            |       |                  |       | ended June 30,       |      |  | ended June 30,     |          
|                            |       | Weighted Average |       |                      |      |  |                    |           | 
|Antidilutive Securities     |       | Exercise Price   |       |                      | 2006 |  |                    | 2005      |  |  | 2006      |           |  | 2005 |          
|                            |       |                  |       |                      |      |  |                    |           |  |  |           |           |  |      |          
|Share options               |       | $                | 32.99 |                      |      |  |                   |           |  |  | 536,875   |           |  |      |          |           |  |  |          |          
|Share options               |       | $                | 33.30 |                      |      |  |                   |           |  |  |          |           |  |      | 56,504    |           |  |  |          |          
|Share options               |       | $                | 32.87 |                      |      |  |                   |           |  |  |          |           |  |      |          |           |  |  | 555,053   |          
|Series B Preferred Units(b) |       | $                | 35.70 |                      |      |  | 8,389,256          |           |  |  | 8,389,256 |           |  |      | 8,389,256 |           |  |  | 8,389,273 |          
|                            |       |                  |       |                      |      |  |                    |           |  |  |           |           |  |      |          
|                            | Total |                  |       |                      |      |  |                    | 8,389,256 |  |  |           | 8,926,131 |  |      |           | 8,445,760 |  |  |           | 8,944,326 | 
|                            |       |                  |       |                      |      |  |                    |           |  |  |           |           |  |      |          



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

NOTE 11  SEGMENT INFORMATION




23



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(Unaudited)




NOTE 11  SEGMENT INFORMATION 
(Continued)




|                                                                                                                     |                                                          |                                                          |         |          |                          |   |         |          |         |   |           |           |           |   |         |           |           | 
|-------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------- | -------------------------------------------------------- | ------- | -------- | ------------------------ | - | ------- | -------- | ------- | - | --------- | --------- | --------- | - | ------- | --------- | --------- | 
|                                                                                                                     |                                                          | For the three months ended                               |         |          | For the six months ended |  
|                                                                                                                     |                                                          | June 30,                                                 |         |          | June 30,                 |  
|                                                                                                                     |                                                          |                                                          |         |          |                          |  
|(Dollars in thousands)                                                                                               |                                                          | 2006                                                     |         |          | 2005                     |   |         | 2006     |         |   | 2005      |          
|                                                                                                                     |                                                          |                                                          |         |          |                          |   |         |          |         |   |           |          
|Property Operating Revenues:                                                                                         |                                                          |                                                          |         |          |                          |   |         |          |         |   |           |           |           |   |         |          
|                                                                                                                     | Rental                                                   |                                                          | $       | 664,423  |                          |   | $       | 572,243  |         |   | $         | 1,328,497 |           |   | $       | 1,136,701 |          
|                                                                                                                     | Tenant reimbursements                                    |                                                          |         | 120,318  |                          |   |         | 91,510   |         |   |           | 251,452   |           |   |         | 184,528   |          
|                                                                                                                     | Parking                                                  |                                                          |         | 37,510   |                          |   |         | 28,447   |         |   |           | 73,471    |           |   |         | 55,943    |          
|                                                                                                                     | Other(a)                                                 |                                                          |         | 16,634   |                          |   |         | 17,791   |         |   |           | 33,421    |           |   |         | 75,889    |          
|                                                                                                                     |                                                          |                                                          |         |          |                          |   |         |          |         |   |           |          
|                                                                                                                     |                                                          | Total Property Operating Revenues                        |         |          | 838,885                  |   |         |          | 709,991 |   |           |           | 1,686,841 |   |         |           | 1,453,061 | 
|                                                                                                                     |                                                          |                                                          |         |          |                          |   |         |          |         |   |           |          
|Property Operating Expenses:                                                                                         |                                                          |                                                          |         |          |                          |   |         |          |         |   |           |           |           |   |         |          
|                                                                                                                     | Real estate taxes                                        |                                                          |         | 101,146  |                          |   |         | 83,304   |         |   |           | 209,101   |           |   |         | 165,764   |          
|                                                                                                                     | Insurance                                                |                                                          |         | 9,091    |                          |   |         | 7,034    |         |   |           | 17,490    |           |   |         | 12,736    |          
|                                                                                                                     | Repairs and maintenance                                  |                                                          |         | 104,039  |                          |   |         | 76,646   |         |   |           | 196,861   |           |   |         | 147,045   |          
|                                                                                                                     | Property operating                                       |                                                          |         | 120,103  |                          |   |         | 99,548   |         |   |           | 248,501   |           |   |         | 198,187   |          
|                                                                                                                     |                                                          |                                                          |         |          |                          |   |         |          |         |   |           |          
|                                                                                                                     |                                                          | Total Property Operating Expenses                        |         |          | 334,379                  |   |         |          | 266,532 |   |           |           | 671,953   |   |         |           | 523,732   | 
|                                                                                                                     |                                                          |                                                          |         |          |                          |   |         |          |         |   |           |          
|                                                                                                                     |                                                          | Property Net Operating Income from Continuing Operations |         | $        | 504,506                  |   |         | $        | 443,459 |   |           | $         | 1,014,888 |   |         | $         | 929,329   | 
|                                                                                                                     |                                                          |                                                          |         |          |                          |   |         |          |         |   |           |          
|Property Operating Margin from Continuing Operations(b)                                                              |                                                          |                                                          | 60.1%   |          |                          |   | 62.5    | %        |         |   | 60.2%     |           |           |   | 64.0    | %        
|                                                                                                                     |                                                          |                                                          |         |          |                          |   |         |          |         |   |           |          
|Reconciliation of Property Net Operating Income from
    Continuing Operations to Income from Continuing Operations: |                                                          |                                                          |         |          |                          |   |         |          |         |   |           |           |           |   |         |          
|Property Net Operating Income from Continuing Operations                                                             |                                                          | $                                                        | 504,506 |          |                          | $ | 443,459 |          |         | $ | 1,014,888 |           |           | $ | 929,329 |          
|Add:                                                                                                                 |                                                          |                                                          |         |          |                          |   |         |          |         |   |           |           |           |   |         |          
|                                                                                                                     | Fee income                                               |                                                          |         | 1,478    |                          |   |         | 3,697    |         |   |           | 2,394     |           |   |         | 8,474     |          
|Less:                                                                                                                |                                                          |                                                          |         |          |                          |   |         |          |         |   |           |           |           |   |         |          
|                                                                                                                     | Depreciation                                             |                                                          |         | (195,750 | )                        |   |         | (160,269 | )       |   |           | (386,473  | )         |   |         | (315,588  | )        
|                                                                                                                     | Amortization                                             |                                                          |         | (32,844  | )                        |   |         | (21,475  | )       |   |           | (69,244   | )         |   |         | (42,612   | )        
|                                                                                                                     | Ground rent                                              |                                                          |         | (6,758   | )                        |   |         | (5,074   | )       |   |           | (12,616   | )         |   |         | (10,193   | )        
|                                                                                                                     | Corporate general and administrative                     |                                                          |         | (16,056  | )                        |   |         | (15,218  | )       |   |           | (33,050   | )         |   |         | (32,391   | )        
|                                                                                                                     | Impairment                                               |                                                          |         |         |                          |   |         | (24,382  | )       |   |           |          |           |   |         | (24,382   | )        
|                                                                                                                     |                                                          |                                                          |         |          |                          |   |         |          |         |   |           |          
|Operating Income                                                                                                     |                                                          |                                                          | 254,576 |          |                          |   | 220,738 |          |         |   | 515,899   |           |           |   | 512,637 |          
|Less:                                                                                                                |                                                          |                                                          |         |          |                          |   |         |          |         |   |           |           |           |   |         |          
|                                                                                                                     | Other expenses, primarily interest expense               |                                                          |         | (220,461 | )                        |   |         | (206,960 | )       |   |           | (444,252  | )         |   |         | (419,435  | )        
|                                                                                                                     | Income taxes                                             |                                                          |         | 147      |                          |   |         | (437     | )       |   |           | (1,064    | )         |   |         | (891      | )        
|                                                                                                                     | Minority interests  partially owned properties          |                                                          |         | (13,710  | )                        |   |         | (2,499   | )       |   |           | (26,515   | )         |   |         | (5,527    | )        
|Add:                                                                                                                 |                                                          |                                                          |         |          |                          |   |         |          |         |   |           |           |           |   |         |          
|                                                                                                                     | Income from investments in unconsolidated joint ventures |                                                          |         | 34       |                          |   |         | 28,681   |         |   |           | 90        |           |   |         | 38,199    |          
|                                                                                                                     | Gain on sales of real estate                             |                                                          |         | 379      |                          |   |         |         |         |   |           | 533       |           |   |         |          |          
|                                                                                                                     |                                                          |                                                          |         |          |                          |   |         |          |         |   |           |          
|Income from Continuing Operations                                                                                    |                                                          | $                                                        | 20,965  |          |                          | $ | 39,523  |          |         | $ | 44,691    |           |           | $ | 124,983 |          
|                                                                                                                     |                                                          |                                                          |         |          |                          |   |         |          |         |   |           |          



|    |  |                                                                                                                                                                                                                                                                                                                                                                             
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Other income consists primarily of income from early lease
    terminations and ancillary income from tenants. Income from
    early lease terminations was $3.0 million and
    $9.8 million for the three months ended June 30, 2006
    and 2005, respectively, and $8.4 million and
    $61.9 million for the six months ended June 30, 2006
    and 2005, respectively.
|   
|(b) |  | Defined as Property Net Operating Income from Continuing
    Operations divided by Total Property Operating Revenues.                                                                                                                                                                                                                                                       

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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(Unaudited)


NOTE 12  RELATED PARTY TRANSACTIONS




NOTE 13  COMMITMENTS AND CONTINGENCIES




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





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





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





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





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

Accounting for
Contingencies,




25



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(Unaudited)




NOTE 13  COMMITMENTS AND CONTINGENCIES 
(Continued)








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

Property Damage, Business Interruption, Earthquake and
Terrorism:


26



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(Unaudited)




NOTE 13  COMMITMENTS AND CONTINGENCIES 
(Continued)




|                                             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                          
|-------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------
|                                             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  | Third-Party                              
|Type of Insurance Coverage                   |  | Our 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)                         |  | $4.9 million per occurrence deductible (plus 10% of the
    remainder of each and every loss with a maximum per occurrence
    exposure of $37.4 million which includes the
    $4.9 million deductible); however, TRIEA provides that if
    the aggregate industry loss as a result of any such foreign
    terrorism occurrence is less than $50 million
    ($100 million in 2007), we are responsible for 100% of such
    loss. Our intent is to insure such amounts in excess of
    $50 million in 2007. |  | $825 million per occurrence(e)           



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | We retain up to $75 million annual aggregate loss
    throughout the portfolio. In the event of a loss in excess of
    the per occurrence or annual aggregate amount, the third-party
    insurance carriers would be obligated to cover the losses up to
    the stated coverage amounts in the table above.                                                                                                                                                                                                                    
|   
|(b) |  | The amount of the third party insurance relating to earthquakes
    is based on 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 actual
    losses suffered in the event of an earthquake would not exceed
    the amount of such insurance coverage.                           
|   
|(c) |  | These amounts include our loss exposure/deductible amount.                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|(d) |  | This coverage includes nuclear, chemical and biological events
    under the Terrorism Risk Insurance Act of 2002
    (TRIA). This coverage does not apply to non-TRIA
    events (which are terrorism events that are not committed by a
    foreigner or a foreign country). We maintain separate insurance
    with a $325 million annual aggregate limit subject to a
    deductible of $1 million for non-TRIA events. This separate
    coverage for non-TRIA events excludes nuclear, biological and
    chemical events.



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

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EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(Unaudited)




| |                                                          
| | ---------------------------------------------------------
| | NOTE 13  COMMITMENTS AND CONTINGENCIES 
    (Continued)





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

Pollution:


Workers Compensation, Automobile Liability and General
Liability:


NOTE 14  SUBSEQUENT EVENTS








|              |  |          |              |             |      |  |           |                            |  |             |      |  |          |       |         |  |  |   |         | 
|------------- |  | -------- | ------------ | ----------- | ---- |  | --------- | -------------------------- |  | ----------- | ---- |  | -------- | ----- | ------- |  |  | - | ------- | 
|              |  |          |              |             |      |  |           | Effective Office Portfolio | 
|              |  |          |              |             |      |  |           |                            | 
|              |  |          |              | Acquisition |      |  | Number of |                            |  | Square      |      |  | Purchase |      
|Property      |  | Location |              |             | Date |  |           | Buildings                  |  |             | Feet |  |          | Price |        
|              |  |          |              |             |      |  |           |                            |  |             |      |  |          |       |        
|              |  |          |              |             |      |  |           |                            |  | (Dollars in |     
|              |  |          |              |             |      |  |           |                            |  | thousands)  |     
|1540 Broadway |  |          | New York, NY |             |      |  | 7/11/2006 |                            |  |             | 1    |  |          |       | 906,287 |  |  | $ | 525,057 | 
|              |  |          |              |             |      |  |           |                            |  |             |      |  |          |       |        
|              |  |          |              |             |      |  | Total     |                            |  |             | 1    |  |          |       | 906,287 |  |  | $ | 525,057 | 
|              |  |          |              |             |      |  |           |                            |  |             |      |  |          |       |        



|                      |  |          |             |             |      |  |           |                            |  |             |      |  |       |       |   |  |  |   |        | 
|--------------------- |  | -------- | ----------- | ----------- | ---- |  | --------- | -------------------------- |  | ----------- | ---- |  | ----- | ----- | - |  |  | - | ------ | 
|                      |  |          |             |             |      |  |           | Effective Office Portfolio | 
|                      |  |          |             |             |      |  |           |                            | 
|                      |  |          |             | Disposition |      |  | Number of |                            |  | Square      |      |  | Sales |      
|Property              |  | Location |             |             | Date |  |           | Buildings                  |  |             | Feet |  |       | Price |  
|                      |  |          |             |             |      |  |           |                            |  |             |      |  |       |       |  
|                      |  |          |             |             |      |  |           |                            |  | (Dollars in |     
|                      |  |          |             |             |      |  |           |                            |  | thousands)  |     
|Centerpointe III Land |  |          | Fairfax, VA |             |      |  | 7/20/2006 |                            |  |             |     |  |       |       |  |  |  | $ | 16,500 | 
|                      |  |          |             |             |      |  |           |                            |  |             |      |  |       |       |  
|                      |  |          |             |             |      |  | Total     |                            |  |             |     |  |       |       |  |  |  | $ | 16,500 | 
|                      |  |          |             |             |      |  |           |                            |  |             |      |  |       |       |  







28



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EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(Unaudited)




|          |                                
|--------- | -------------------------------
|NOTE 14  | SUBSEQUENT EVENTS  (Continued)



29



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##### Table of Contents






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


Forward-Looking Statements


10-Q


10-Q.




Overview






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



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



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



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

30



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##### Table of Contents





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



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



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



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



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



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



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



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









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

Economic Environment




31



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##### Table of Contents









Operating and Leasing Results




| |                                                             
| | ------------------------------------------------------------
| | Operating Results for the Six Months Ended June 30,
    2006



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


32



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



|                                                                         |  |                      |         |  |                     |   |         | 
|------------------------------------------------------------------------ |  | -------------------- | ------- |  | ------------------- | - | ------- | 
|                                                                         |  | For the three months |         |  | For the six months  |  
|(Dollars in thousands)                                                   |  | ended June 30, 2006  |         |  | ended June 30, 2006 |  
|                                                                         |  |                      |         |  |                     |  
|Increase in total revenues                                               |  | $                    | 101,890 |  |                     | $ | 200,675 | 
|Increase in total operating expenses                                     |  | $                    | 72,796  |  |                     | $ | 141,546 | 
|Increase in other expense (primarily interest expense)                   |  | $                    | 7,105   |  |                     | $ | 18,171  | 
|Decrease in income from investments in unconsolidated joint
    ventures |  | $                    | 11,319  |  |                     | $ | 20,435  | 
|Increase in minority interests  partially owned
    properties          |  | $                    | 10,670  |  |                     | $ | 20,523  | 
|Change in income from continuing operations                              |  | $                    |        |  |                     | $ |        | 



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



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





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



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





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





| |                                                                        
| | -----------------------------------------------------------------------
| | Trends in Occupancy and Rental Rates for the Total Office
    Portfolio



|                                                 |                                                                                                                                                    |                                                                |  |           |                    |    |  |           |       |    |      |           |       |    |  |            |       |   
|------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------- |  | --------- | ------------------ | -- |  | --------- | ----- | -- | ---- | --------- | ----- | -- |  | ---------- | ----- | --
|                                                 |                                                                                                                                                    | For the three months ended                                     |  |           | For the six months |   
|                                                 |                                                                                                                                                    | June 30,                                                       |  |           | ended June 30,     |   
|                                                 |                                                                                                                                                    |                                                                |  |           |                    |   
|                                                 |                                                                                                                                                    | 2006                                                           |  |           | 2005               |    |  | 2006      |       |    | 2005 |          
|                                                 |                                                                                                                                                    |                                                                |  |           |                    |    |  |           |       |    |      |          
|Office Property Data for Total Office Portfolio: |                                                                                                                                                    |                                                                |  |           |                    |    |  |           |       |    |      |           |       |    |  |           
|                                                 | Occupancy at end of period                                                                                                                         |                                                                |  | 90.7      | %                  |    |  | 88.4      | %     |    |      | 90.7      | %     |    |  | 88.4       | %    
|                                                 | Gross square footage for tenants whose lease term commenced
    during the period                                                                  |                                                                |  | 3,809,418 |                    |    |  | 4,692,085 |       |    |      | 8,844,682 |       |    |  | 10,699,742 |      
|                                                 | Weighted average annual rent per square foot for tenants whose
    lease term commenced during the period:                                         |                                                                |  |           |                    |    |  |           |       |    |      |           |       |    |  |            |      
|                                                 |                                                                                                                                                    | GAAP basis (a,b)                                               |  | $         | 29.02              |    |  | $         | 28.60 |    |      | $         | 28.42 |    |  | $          | 27.19 |   
|                                                 |                                                                                                                                                    | Cash basis (b,c)                                               |  | $         | 27.98              |    |  | $         | 27.83 |    |      | $         | 27.61 |    |  | $          | 26.11 |   
|                                                 | Gross square footage for expiring and terminated leases during
    the period                                                                      |                                                                |  | 3,802,754 |                    |    |  | 4,445,114 |       |    |      | 9,093,743 |       |    |  | 10,621,890 |      
|                                                 | Weighted average annual rent per square foot for expiring and
    terminated leases during the period:                                             |                                                                |  |           |                    |    |  |           |       |    |      |           |       |    |  |            |      
|                                                 |                                                                                                                                                    | GAAP basis (a)                                                 |  | $         | 29.47              |    |  | $         | 30.07 |    |      | $         | 29.51 |    |  | $          | 29.10 |   
|                                                 |                                                                                                                                                    | Cash basis (c)                                                 |  | $         | 30.67              |    |  | $         | 30.94 |    |      | $         | 30.21 |    |  | $          | 29.89 |   
|                                                 | Change in weighted average annual rent per square foot between
    expiring and terminated leases and leases that commenced during
    the period: |                                                                |  |           |                    |    |  |           |       |    |      |           |       |    |  |            |      
|                                                 |                                                                                                                                                    | GAAP basis  change in annual rent per square foot             |  | $         | (0.45              | )  |  | $         | (1.47 | )  |      | $         | (1.09 | )  |  | $          | (1.91 | ) 
|                                                 |                                                                                                                                                    | GAAP basis  percent change in annual rent per square
    foot |  |           | (1.5               | )% |  |           | (4.9  | )% |      |           | (3.7  | )% |  |            | (6.6  | )%
|                                                 |                                                                                                                                                    | Cash basis  change in annual rent per square foot             |  | $         | (2.69              | )  |  | $         | (3.11 | )  |      | $         | (2.60 | )  |  | $          | (3.78 | ) 
|                                                 |                                                                                                                                                    | Cash basis  percent change in annual rent per
    square foot |  |           | (8.8               | )% |  |           | (10.1 | )% |      |           | (8.6  | )% |  |            | (12.6 | )%



|    |                                                                                                                                   
|--- | ----------------------------------------------------------------------------------------------------------------------------------
|(a) | Based on the average annual base rent per square foot over the
    lease term and current estimated tenant reimbursements, if any.

34



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|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) |  | Weighted average annual rent per square foot for new leases for
    tenants whose lease term commenced during the period may lag the
    market because leasing decisions typically are made one month to
    12 or more months prior to taking occupancy.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|(c) |  | Based on the monthly contractual rent when the lease commenced,
    expired or terminated multiplied by 12 months. For new and
    renewal leases, if the monthly contractual rent when the lease
    commenced is $0 (as a result of rent abatements), then the
    rental rate represents the first monthly rent payment due
    multiplied by 12 months (Annualized Cash Rent).
    The contractual rent amounts include total base rent and
    estimated expense reimbursements from tenants before any
    adjustments for rent abatements and contractual increases or
    decreases in rent. We believe Annualized Cash Rent is a useful
    measure because this information can be used for comparison to
    current market rents as published by various third party sources.

Investment Activity




property-by








35



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##### Table of Contents







Liquidity and Capital Resources




II.   Results of Operations


Period-to-Period Comparisons




36



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



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



37



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



|                                                                                                                                                                                |                                         |                              |                  |         |                            |            |          |                  |          |        |                   |          |          |          |         |         |         |         |          |          |          |         |          |          |          |         |         |        |         |         |        |       |      |      |         |         |         |        |       |        |       |      | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------- | ---------------------------- | ---------------- | ------- | -------------------------- | ---------- | -------- | ---------------- | -------- | ------ | ----------------- | -------- | -------- | -------- | ------- | ------- | ------- | ------- | -------- | -------- | -------- | ------- | -------- | -------- | -------- | ------- | ------- | ------ | ------- | ------- | ------ | ----- | ---- | ---- | ------- | ------- | ------- | ------ | ----- | ------ | ----- | ---- | 
|                                                                                                                                                                                |                                         |                              |                  |         |                            | Same Store |          |                  |         
|                                                                                                                                                                                |                                         | For the three months ended   |                  |         | For the three months ended |            |          | Portfolio Change |          |        | Total Company     |         
|                                                                                                                                                                                |                                         | June 30, 2006                |                  |         | June 30, 2005              |            |          | Favorable/       |          |        | Change Favorable/ |         
|                                                                                                                                                                                |                                         |                              |                  |         |                            |            |          | (Unfavorable)    |          |        | (Unfavorable)     |         
|                                                                                                                                                                                |                                         | Same Store                   |                  |         | Non-Same                   |            |          | Total            |          |        | Same Store        |          |          | Non-Same |         |         | Total   |         |          |          |          |         |          |         
|(Dollars in thousands)                                                                                                                                                          |                                         | Portfolio                    |                  |         | Store                      |            |          | Company          |          |        | Portfolio         |          |          | Store    |         |         | Company |         |          | Amount   |          |         | %        |          |          | Amount  |         |        | %       |        
|                                                                                                                                                                                |                                         |                              |                  |         |                            |            |          |                  |          |        |                   |          |          |          |         |         |         |         |          |          |          |         |          |          |          |         |         |        |         |        
|Revenues:                                                                                                                                                                       |                                         |                              |                  |         |                            |            |          |                  |          |        |                   |          |          |          |         |         |         |         |          |          |          |         |          |          |          |         |         |        |         |         |        |       |      |      |         |         |         |        |       |       
|                                                                                                                                                                                | Property operating revenues             |                              | $                | 701,009 |                            |            | $        | 137,876          |          |        | $                 | 838,885  |          |          | $       | 699,389 |         |         | $        | 10,602   |          |         | $        | 709,991  |          |         | $       | 1,620  |         |         |        | 0.2   | %    |      | $       | 128,894 |         |        |       | 18.2   | %    
|                                                                                                                                                                                | Fee income                              |                              |                  |        |                            |            |          | 1,478            |          |        |                   | 1,478    |          |          |         |        |         |         |          | 3,697    |          |         |          | 3,697    |          |         |         |       |         |         |        |      |      |      |         | (2,219  | )       |        |       | (60.0  | )    
|                                                                                                                                                                                |                                         |                              |                  |         |                            |            |          |                  |          |        |                   |          |          |          |         |         |         |         |          |          |          |         |          |          |          |         |         |        |         |        
|                                                                                                                                                                                |                                         | Total revenues               |                  |         | 701,009                    |            |          |                  | 139,354  |        |                   |          | 840,363  |          |         |         | 699,389 |         |          |          | 14,299   |         |          |          | 713,688  |         |         |        | 1,620   |         |        |       | 0.2  |      |         |         | 126,675 |        |       |        | 17.7  |     
|                                                                                                                                                                                |                                         |                              |                  |         |                            |            |          |                  |          |        |                   |          |          |          |         |         |         |         |          |          |          |         |          |          |          |         |         |        |         |        
|Expenses:                                                                                                                                                                       |                                         |                              |                  |         |                            |            |          |                  |          |        |                   |          |          |          |         |         |         |         |          |          |          |         |          |          |          |         |         |        |         |         |        |       |      |      |         |         |         |        |       |       
|                                                                                                                                                                                | Depreciation and amortization           |                              |                  | 183,201 |                            |            |          | 45,393           |          |        |                   | 228,594  |          |          |         | 173,714 |         |         |          | 8,030    |          |         |          | 181,744  |          |         |         | (9,487 | )       |         |        | (5.5  | )    |      |         | (46,850 | )       |        |       | (25.8  | )    
|                                                                                                                                                                                | Real estate taxes                       |                              |                  | 79,767  |                            |            |          | 21,379           |          |        |                   | 101,146  |          |          |         | 81,569  |         |         |          | 1,735    |          |         |          | 83,304   |          |         |         | 1,802  |         |         |        | 2.2   |      |      |         | (17,842 | )       |        |       | (21.4  | )    
|                                                                                                                                                                                | Insurance                               |                              |                  | 6,652   |                            |            |          | 2,439            |          |        |                   | 9,091    |          |          |         | 6,747   |         |         |          | 287      |          |         |          | 7,034    |          |         |         | 95     |         |         |        | 1.4   |      |      |         | (2,057  | )       |        |       | (29.2  | )    
|                                                                                                                                                                                | Repairs and maintenance                 |                              |                  | 83,360  |                            |            |          | 20,679           |          |        |                   | 104,039  |          |          |         | 75,049  |         |         |          | 1,597    |          |         |          | 76,646   |          |         |         | (8,311 | )       |         |        | (11.1 | )    |      |         | (27,393 | )       |        |       | (35.7  | )    
|                                                                                                                                                                                | Property operating                      |                              |                  | 103,842 |                            |            |          | 16,261           |          |        |                   | 120,103  |          |          |         | 97,558  |         |         |          | 1,990    |          |         |          | 99,548   |          |         |         | (6,284 | )       |         |        | (6.4  | )    |      |         | (20,555 | )       |        |       | (20.6  | )    
|                                                                                                                                                                                | Ground rent                             |                              |                  | 6,169   |                            |            |          | 589              |          |        |                   | 6,758    |          |          |         | 4,992   |         |         |          | 82       |          |         |          | 5,074    |          |         |         | (1,177 | )       |         |        | (23.6 | )    |      |         | (1,684  | )       |        |       | (33.2  | )    
|                                                                                                                                                                                | Corporate general and administrative(a) |                              |                  |        |                            |            |          | 16,056           |          |        |                   | 16,056   |          |          |         |        |         |         |          | 15,218   |          |         |          | 15,218   |          |         |         |       |         |         |        |      |      |      |         | (838    | )       |        |       | (5.5   | )    
|                                                                                                                                                                                | Impairment                              |                              |                  |        |                            |            |          |                 |          |        |                   |         |          |          |         | 4,204   |         |         |          | 20,178   |          |         |          | 24,382   |          |         |         | 4,204  |         |         |        | 100.0 |      |      |         | 24,382  |         |        |       | 100.0  |      
|                                                                                                                                                                                |                                         |                              |                  |         |                            |            |          |                  |          |        |                   |          |          |          |         |         |         |         |          |          |          |         |          |          |          |         |         |        |         |        
|                                                                                                                                                                                |                                         | Total expenses               |                  |         | 462,991                    |            |          |                  | 122,796  |        |                   |          | 585,787  |          |         |         | 443,833 |         |          |          | 49,117   |         |          |          | 492,950  |         |         |        | (19,158 | )       |        |       | (4.3 | )    |         |         | (92,837 | )      |       |        | (18.8 | )   
|                                                                                                                                                                                |                                         |                              |                  |         |                            |            |          |                  |          |        |                   |          |          |          |         |         |         |         |          |          |          |         |          |          |          |         |         |        |         |        
|                                                                                                                                                                                |                                         |                              | Operating income |         |                            | 238,018    |          |                  |          | 16,558 |                   |          |          | 254,576  |         |         |         | 255,556 |          |          |          | (34,818 | )        |          |          | 220,738 |         |        |         | (17,538 | )      |       |      | (6.9 | )       |         |         | 33,838 |       |        |       | 15.3 | 
|                                                                                                                                                                                |                                         |                              |                  |         |                            |            |          |                  |          |        |                   |          |          |          |         |         |         |         |          |          |          |         |          |          |          |         |         |        |         |        
|Other income (expense):                                                                                                                                                         |                                         |                              |                  |         |                            |            |          |                  |          |        |                   |          |          |          |         |         |         |         |          |          |          |         |          |          |          |         |         |        |         |         |        |       |      |      |         |         |         |        |       |       
|                                                                                                                                                                                | Interest and dividend income            |                              |                  | 2,020   |                            |            |          | 3,943            |          |        |                   | 5,963    |          |          |         | 2,118   |         |         |          | 1,448    |          |         |          | 3,566    |          |         |         | (98    | )       |         |        | (4.6  | )    |      |         | 2,397   |         |        |       | 67.2   |      
|                                                                                                                                                                                | Interest expense(b)                     |                              |                  | (41,433 | )                          |            |          | (184,991         | )        |        |                   | (226,424 | )        |          |         | (47,125 | )       |         |          | (163,401 | )        |         |          | (210,526 | )        |         |         | 5,692  |         |         |        | 12.1  |      |      |         | (15,898 | )       |        |       | (7.6   | )    
|                                                                                                                                                                                |                                         |                              |                  |         |                            |            |          |                  |          |        |                   |          |          |          |         |         |         |         |          |          |          |         |          |          |          |         |         |        |         |        
|                                                                                                                                                                                |                                         | Total other income (expense) |                  |         | (39,413                    | )          |          |                  | (181,048 | )      |                   |          | (220,461 | )        |         |         | (45,007 | )       |          |          | (161,953 | )       |          |          | (206,960 | )       |         |        | 5,594   |         |        |       | 12.4 |      |         |         | (13,501 | )      |       |        | (6.5  | )   
|                                                                                                                                                                                |                                         |                              |                  |         |                            |            |          |                  |          |        |                   |          |          |          |         |         |         |         |          |          |          |         |          |          |          |         |         |        |         |        
|Income before income taxes, allocation to minority interests,
    income from investments in unconsolidated joint ventures and
    gain on sales of real estate                 |                                         |                              | 198,605          |         |                            |            | (164,490 | )                |          |        | 34,115            |          |          |          | 210,549 |         |         |         | (196,771 | )        |          |         | 13,778   |          |          |         | (11,944 | )      |         |         | (5.7   | )     |      |      | 20,337  |         |         |        | 147.6 |       
|Income taxes                                                                                                                                                                    |                                         |                              | (368             | )       |                            |            | 515      |                  |          |        | 147               |          |          |          | (71     | )       |         |         | (366     | )        |          |         | (437     | )        |          |         | (297    | )      |         |         | (418.3 | )     |      |      | 584     |         |         |        | 133.6 |       
|Minority Interests:                                                                                                                                                             |                                         |                              |                  |         |                            |            |          |                  |          |        |                   |          |          |          |         |         |         |         |          |          |          |         |          |          |          |         |         |        |         |         |        |       |      |      |         |         |         |        |       |       
|                                                                                                                                                                                | Partially owned properties              |                              |                  | (3,040  | )                          |            |          | (10,670          | )        |        |                   | (13,710  | )        |          |         | (2,499  | )       |         |          |         |          |         |          | (2,499   | )        |         |         | (541   | )       |         |        | (21.6 | )    |      |         | (11,211 | )       |        |       | (448.6 | )    
|Income from investments in unconsolidated joint ventures
    (including (loss) gain on sales of real estate of $(91) and
    $17,376, respectively)                             |                                         |                              | 162              |         |                            |            | (128     | )                |          |        | 34                |          |          |          | (69     | )       |         |         | 28,750   |          |          |         | 28,681   |          |          |         | 231     |        |         |         | 334.8  |       |      |      | (28,647 | )       |         |        | (99.9 | )     
|Gain on sales of real estate                                                                                                                                                    |                                         |                              | 347              |         |                            |            | 32       |                  |          |        | 379               |          |          |          |        |         |         |         |         |          |          |         |         |          |          |         | 347     |        |         |         |       |       |      |      | 379     |         |         |        |      |       
|                                                                                                                                                                                |                                         |                              |                  |         |                            |            |          |                  |          |        |                   |          |          |          |         |         |         |         |          |          |          |         |          |          |          |         |         |        |         |        
|Income from continuing operations                                                                                                                                               |                                         |                              | 195,706          |         |                            |            | (174,741 | )                |          |        | 20,965            |          |          |          | 207,910 |         |         |         | (168,387 | )        |          |         | 39,523   |          |          |         | (12,204 | )      |         |         | (5.9   | )     |      |      | (18,558 | )       |         |        | (47.0 | )     
|Discontinued operations (including net gain (loss) on sales
    of real estate and provision for (loss) on properties held for
    sale of $82,503 and $(94,220), respectively) |                                         |                              |                 |         |                            |            | 85,268   |                  |          |        | 85,268            |          |          |          |        |         |         |         | (259,941 | )        |          |         | (259,941 | )        |          |         |        |        |         |         |       |       |      |      | 345,209 |         |         |        | 132.8 |       
|                                                                                                                                                                                |                                         |                              |                  |         |                            |            |          |                  |          |        |                   |          |          |          |         |         |         |         |          |          |          |         |          |          |          |         |         |        |         |        
|Net income (loss)                                                                                                                                                               |                                         | $                            | 195,706          |         |                            | $          | (89,473  | )                |          | $      | 106,233           |          |          | $        | 207,910 |         |         | $       | (428,328 | )        |          | $       | (220,418 | )        |          | $       | (12,204 | )      |         |         | (5.9   | )%    |      | $    | 326,651 |         |         |        | 148.2 | %     
|                                                                                                                                                                                |                                         |                              |                  |         |                            |            |          |                  |          |        |                   |          |          |          |         |         |         |         |          |          |          |         |          |          |          |         |         |        |         |        

38



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|                                           |  |                            |         |   |                            |            |        |                  |  |   |                   |   |  |          |         |   |         |   |       |        |  |   |         |   |  |        |         |   |   |  |       |    |  |   |        |   |  |  |       |   
|------------------------------------------ |  | -------------------------- | ------- | - | -------------------------- | ---------- | ------ | ---------------- |  | - | ----------------- | - |  | -------- | ------- | - | ------- | - | ----- | ------ |  | - | ------- | - |  | ------ | ------- | - | - |  | ----- | -- |  | - | ------ | - |  |  | ----- | --
|                                           |  |                            |         |   |                            | Same Store |        |                  | 
|                                           |  | For the three months ended |         |   | For the three months ended |            |        | Portfolio Change |  |   | Total Company     |  
|                                           |  | June 30, 2006              |         |   | June 30, 2005              |            |        | Favorable/       |  |   | Change Favorable/ |  
|                                           |  |                            |         |   |                            |            |        | (Unfavorable)    |  |   | (Unfavorable)     |  
|                                           |  | Same Store                 |         |   | Non-Same                   |            |        | Total            |  |   | Same Store        |   |  | Non-Same |         |   | Total   |   |       |        |  |   |         |  
|(Dollars in thousands)                     |  | Portfolio                  |         |   | Store                      |            |        | Company          |  |   | Portfolio         |   |  | Store    |         |   | Company |   |       | Amount |  |   | %       |   |  | Amount |         |   | % | 
|                                           |  |                            |         |   |                            |            |        |                  |  |   |                   |   |  |          |         |   |         |   |       |        |  |   |         |   |  |        |         |   |   | 
|Selected Items from Continuing Operations: |  |                            |         |   |                            |            |        |                  |  |   |                   |   |  |          |         |   |         |   |       |        |  |   |         |   |  |        |         |   |   |  |       |    |  |   |        |   |  |  |       |   
|Property net operating income(c)           |  | $                          | 427,388 |   |                            | $          | 77,118 |                  |  | $ | 504,506           |   |  | $        | 438,466 |   |         | $ | 4,993 |        |  | $ | 443,459 |   |  | $      | (11,078 | ) |   |  | (2.5  | )% |  | $ | 61,047 |   |  |  | 13.8  | % 
|                                           |  |                            |         |   |                            |            |        |                  |  |   |                   |   |  |          |         |   |         |   |       |        |  |   |         |   |  |        |         |   |   | 
|Property operating margin(c,d)             |  |                            | 61.0    | % |                            |            | 55.9   | %                |  |   | 60.1              | % |  |          | 62.7    | % |         |   | 47.1  | %      |  |   | 62.5    | % |  |        |         |   |   |  | (1.7  | )% |  |   |        |   |  |  | (2.4  | )%
|                                           |  |                            |         |   |                            |            |        |                  |  |   |                   |   |  |          |         |   |         |   |       |        |  |   |         |   |  |        |         |   |   | 
|Deferred rental revenue                    |  | $                          | 5,520   |   |                            | $          | 3,129  |                  |  | $ | 8,649             |   |  | $        | 14,839  |   |         | $ | 646   |        |  | $ | 15,485  |   |  | $      | (9,319  | ) |   |  | (62.8 | )% |  | $ | (6,836 | ) |  |  | (44.1 | )%
|                                           |  |                            |         |   |                            |            |        |                  |  |   |                   |   |  |          |         |   |         |   |       |        |  |   |         |   |  |        |         |   |   | 
|Income from early lease terminations       |  | $                          | 2,917   |   |                            | $          | 53     |                  |  | $ | 2,970             |   |  | $        | 9,825   |   |         | $ |      |        |  | $ | 9,825   |   |  | $      | (6,908  | ) |   |  | (70.3 | )% |  | $ | (6,855 | ) |  |  | (69.8 | )%
|                                           |  |                            |         |   |                            |            |        |                  |  |   |                   |   |  |          |         |   |         |   |       |        |  |   |         |   |  |        |         |   |   | 



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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 mortgage debt and does not
    include interest expense on the unsecured notes or the lines of
    credit.                                                                                                                                                                                                        
|   
|(c) |  | Property net operating income consists of property operating
    revenues minus property operating expenses. Included in property
    operating revenues are rental revenue, tenant reimbursements,
    parking and other income, which includes income from early lease
    terminations. Included in property operating expenses are real
    estate taxes, insurance, repairs and maintenance and property
    operating expenses. See Item 1  Note 11 for
    more information.
|   
|(d) |  | Property operating margin is determined by dividing property
    operating revenues less property operating expenses by property
    operating revenues.                                                                                                                                                                                                                                                                                                                            



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







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







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





39



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##### Table of Contents







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







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









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





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







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



40



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##### Table of Contents





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





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





| |                                                                                           
| | ------------------------------------------------------------------------------------------
| | Comparison of the six months ended June 30, 2006 to the
    six months ended June 30, 2005



|                                                                                                                                                                |                                         |                              |                  |           |                          |            |          |                  |          |        |                   |           |           |          |         |           |           |         |          |          |          |         |        |           |           |         |         |         |         |         |       |       |      |       |         |         |          |       |       |       |       |     | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------- | ---------------------------- | ---------------- | --------- | ------------------------ | ---------- | -------- | ---------------- | -------- | ------ | ----------------- | --------- | --------- | -------- | ------- | --------- | --------- | ------- | -------- | -------- | -------- | ------- | ------ | --------- | --------- | ------- | ------- | ------- | ------- | ------- | ----- | ----- | ---- | ----- | ------- | ------- | -------- | ----- | ----- | ----- | ----- | --- | 
|                                                                                                                                                                |                                         |                              |                  |           |                          | Same Store |          |                  |         
|                                                                                                                                                                |                                         | For the six months ended     |                  |           | For the six months ended |            |          | Portfolio Change |          |        | Total Company     |          
|                                                                                                                                                                |                                         | June 30, 2006                |                  |           | June 30, 2005            |            |          | Favorable/       |          |        | Change Favorable/ |          
|                                                                                                                                                                |                                         |                              |                  |           |                          |            |          | (Unfavorable)    |          |        | (Unfavorable)     |          
|                                                                                                                                                                |                                         | Same Store                   |                  |           | Non-Same                 |            |          | Total            |          |        | Same Store        |           |           | Non-Same |         |           | Total     |         |          |          |          |         |        |          
|(Dollars in thousands)                                                                                                                                          |                                         | Portfolio                    |                  |           | Store                    |            |          | Company          |          |        | Portfolio         |           |           | Store    |         |           | Company   |         |          | Amount   |          |         | %      |           |           | Amount  |         |         | %       |        
|                                                                                                                                                                |                                         |                              |                  |           |                          |            |          |                  |          |        |                   |           |           |          |         |           |           |         |          |          |          |         |        |           |           |         |         |         |         |        
|Revenues:                                                                                                                                                       |                                         |                              |                  |           |                          |            |          |                  |          |        |                   |           |           |          |         |           |           |         |          |          |          |         |        |           |           |         |         |         |         |         |       |       |      |       |         |         |          |       |       |      
|                                                                                                                                                                | Property operating revenues             |                              | $                | 1,407,602 |                          |            | $        | 279,239          |          |        | $                 | 1,686,841 |           |          | $       | 1,432,832 |           |         | $        | 20,229   |          |         | $      | 1,453,061 |           |         | ($      | 25,230  | )       |         |       | (1.8  | )%   |       | $       | 233,780 |          |       |       | 16.1  | %    
|                                                                                                                                                                | Fee income                              |                              |                  |          |                          |            |          | 2,394            |          |        |                   | 2,394     |           |          |         |          |           |         |          | 8,474    |          |         |        | 8,474     |           |         |         |        |         |         |       |      |      |       |         | (6,080  | )        |       |       | (71.7 | )    
|                                                                                                                                                                |                                         |                              |                  |           |                          |            |          |                  |          |        |                   |           |           |          |         |           |           |         |          |          |          |         |        |           |           |         |         |         |         |        
|                                                                                                                                                                |                                         | Total revenues               |                  |           | 1,407,602                |            |          |                  | 281,633  |        |                   |           | 1,689,235 |          |         |           | 1,432,832 |         |          |          | 28,703   |         |        |           | 1,461,535 |         |         |         | (25,230 | )       |       |       | (1.8 | )     |         |         | 227,700  |       |       |       | 15.6  |    
|                                                                                                                                                                |                                         |                              |                  |           |                          |            |          |                  |          |        |                   |           |           |          |         |           |           |         |          |          |          |         |        |           |           |         |         |         |         |        
|Expenses:                                                                                                                                                       |                                         |                              |                  |           |                          |            |          |                  |          |        |                   |           |           |          |         |           |           |         |          |          |          |         |        |           |           |         |         |         |         |         |       |       |      |       |         |         |          |       |       |      
|                                                                                                                                                                | Depreciation and amortization           |                              |                  | 358,954   |                          |            |          | 96,763           |          |        |                   | 455,717   |           |          |         | 343,411   |           |         |          | 14,789   |          |         |        | 358,200   |           |         |         | (15,543 | )       |         |       | (4.5  | )    |       |         | (97,517 | )        |       |       | (27.2 | )    
|                                                                                                                                                                | Real estate taxes                       |                              |                  | 165,336   |                          |            |          | 43,765           |          |        |                   | 209,101   |           |          |         | 161,863   |           |         |          | 3,901    |          |         |        | 165,764   |           |         |         | (3,473  | )       |         |       | (2.1  | )    |       |         | (43,337 | )        |       |       | (26.1 | )    
|                                                                                                                                                                | Insurance                               |                              |                  | 12,472    |                          |            |          | 5,018            |          |        |                   | 17,490    |           |          |         | 12,145    |           |         |          | 591      |          |         |        | 12,736    |           |         |         | (327    | )       |         |       | (2.7  | )    |       |         | (4,754  | )        |       |       | (37.3 | )    
|                                                                                                                                                                | Repairs and maintenance                 |                              |                  | 158,391   |                          |            |          | 38,470           |          |        |                   | 196,861   |           |          |         | 143,888   |           |         |          | 3,157    |          |         |        | 147,045   |           |         |         | (14,503 | )       |         |       | (10.1 | )    |       |         | (49,816 | )        |       |       | (33.9 | )    
|                                                                                                                                                                | Property operating                      |                              |                  | 215,171   |                          |            |          | 33,330           |          |        |                   | 248,501   |           |          |         | 194,586   |           |         |          | 3,601    |          |         |        | 198,187   |           |         |         | (20,585 | )       |         |       | (10.6 | )    |       |         | (50,314 | )        |       |       | (25.4 | )    
|                                                                                                                                                                | Ground rent                             |                              |                  | 11,372    |                          |            |          | 1,244            |          |        |                   | 12,616    |           |          |         | 10,031    |           |         |          | 162      |          |         |        | 10,193    |           |         |         | (1,341  | )       |         |       | (13.4 | )    |       |         | (2,423  | )        |       |       | (23.8 | )    
|                                                                                                                                                                | Corporate general and administrative(a) |                              |                  |          |                          |            |          | 33,050           |          |        |                   | 33,050    |           |          |         |          |           |         |          | 32,391   |          |         |        | 32,391    |           |         |         |        |         |         |       |      |      |       |         | (659    | )        |       |       | (2.0  | )    
|                                                                                                                                                                | Impairment                              |                              |                  |          |                          |            |          |                 |          |        |                   |          |           |          |         | 4,204     |           |         |          | 20,178   |          |         |        | 24,382    |           |         |         | 4,204   |         |         |       | 100.0 |      |       |         | 24,382  |          |       |       | 100.0 |      
|                                                                                                                                                                |                                         |                              |                  |           |                          |            |          |                  |          |        |                   |           |           |          |         |           |           |         |          |          |          |         |        |           |           |         |         |         |         |        
|                                                                                                                                                                |                                         | Total expenses               |                  |           | 921,696                  |            |          |                  | 251,640  |        |                   |           | 1,173,336 |          |         |           | 870,128   |         |          |          | 78,770   |         |        |           | 948,898   |         |         |         | (51,568 | )       |       |       | (5.9 | )     |         |         | (224,438 | )     |       |       | (23.7 | )  
|                                                                                                                                                                |                                         |                              |                  |           |                          |            |          |                  |          |        |                   |           |           |          |         |           |           |         |          |          |          |         |        |           |           |         |         |         |         |        
|                                                                                                                                                                |                                         |                              | Operating income |           |                          | 485,906    |          |                  |          | 29,993 |                   |           |           | 515,899  |         |           |           | 562,704 |          |          |          | (50,067 | )      |           |           | 512,637 |         |         |         | (76,798 | )     |       |      | (13.6 | )       |         |          | 3,262 |       |       |       | 0.6 | 
|                                                                                                                                                                |                                         |                              |                  |           |                          |            |          |                  |          |        |                   |           |           |          |         |           |           |         |          |          |          |         |        |           |           |         |         |         |         |        
|Other income (expense):                                                                                                                                         |                                         |                              |                  |           |                          |            |          |                  |          |        |                   |           |           |          |         |           |           |         |          |          |          |         |        |           |           |         |         |         |         |         |       |       |      |       |         |         |          |       |       |      
|                                                                                                                                                                | Interest and dividend income            |                              |                  | 3,021     |                          |            |          | 6,307            |          |        |                   | 9,328     |           |          |         | 4,290     |           |         |          | 2,368    |          |         |        | 6,658     |           |         |         | (1,269  | )       |         |       | (29.6 | )    |       |         | 2,670   |          |       |       | 40.1  |      
|                                                                                                                                                                | Interest expense(b)                     |                              |                  | (80,336   | )                        |            |          | (373,244         | )        |        |                   | (453,580  | )         |          |         | (100,113  | )         |         |          | (325,980 | )        |         |        | (426,093  | )         |         |         | 19,777  |         |         |       | 19.8  |      |       |         | (27,487 | )        |       |       | (6.5  | )    
|                                                                                                                                                                |                                         |                              |                  |           |                          |            |          |                  |          |        |                   |           |           |          |         |           |           |         |          |          |          |         |        |           |           |         |         |         |         |        
|                                                                                                                                                                |                                         | Total other income (expense) |                  |           | (77,315                  | )          |          |                  | (366,937 | )      |                   |           | (444,252  | )        |         |           | (95,823   | )       |          |          | (323,612 | )       |        |           | (419,435  | )       |         |         | 18,508  |         |       |       | 19.3 |       |         |         | (24,817  | )     |       |       | (5.9  | )  
|                                                                                                                                                                |                                         |                              |                  |           |                          |            |          |                  |          |        |                   |           |           |          |         |           |           |         |          |          |          |         |        |           |           |         |         |         |         |        
|Income before income taxes, allocation to minority interests,
    income from investments in unconsolidated joint ventures and
    gain on sales of real estate |                                         |                              | 408,591          |           |                          |            | (336,944 | )                |          |        | 71,647            |           |           |          | 466,881 |           |           |         | (373,679 | )        |          |         | 93,202 |           |           |         | (58,290 | )       |         |         | (12.5 | )     |      |       | (21,555 | )       |          |       | (23.1 | )    
|Income taxes                                                                                                                                                    |                                         |                              | (372             | )         |                          |            | (692     | )                |          |        | (1,064            | )         |           |          | (375    | )         |           |         | (516     | )        |          |         | (891   | )         |           |         | 3       |         |         |         | 0.8   |       |      |       | (173    | )       |          |       | (19.4 | )    

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|                                                                                                                                                                                 |                            |                          |         |        |                          |            |          |                  |   |   |                   |         |   |          |         |        |         |   |          |        |  |   |          |        |   |        |         |      |   |  |       |      |   |   |         |         |   |  |       |        |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | ------------------------ | ------- | ------ | ------------------------ | ---------- | -------- | ---------------- | - | - | ----------------- | ------- | - | -------- | ------- | ------ | ------- | - | -------- | ------ |  | - | -------- | ------ | - | ------ | ------- | ---- | - |  | ----- | ---- | - | - | ------- | ------- | - |  | ----- | ------ | -
|                                                                                                                                                                                 |                            |                          |         |        |                          | Same Store |          |                  |  
|                                                                                                                                                                                 |                            | For the six months ended |         |        | For the six months ended |            |          | Portfolio Change |   |   | Total Company     |        
|                                                                                                                                                                                 |                            | June 30, 2006            |         |        | June 30, 2005            |            |          | Favorable/       |   |   | Change Favorable/ |        
|                                                                                                                                                                                 |                            |                          |         |        |                          |            |          | (Unfavorable)    |   |   | (Unfavorable)     |        
|                                                                                                                                                                                 |                            | Same Store               |         |        | Non-Same                 |            |          | Total            |   |   | Same Store        |         |   | Non-Same |         |        | Total   |   |          |        |  |   |          |       
|(Dollars in thousands)                                                                                                                                                           |                            | Portfolio                |         |        | Store                    |            |          | Company          |   |   | Portfolio         |         |   | Store    |         |        | Company |   |          | Amount |  |   | %        |        |   | Amount |         |      | % | 
|                                                                                                                                                                                 |                            |                          |         |        |                          |            |          |                  |   |   |                   |         |   |          |         |        |         |   |          |        |  |   |          |        |   |        |         |      |   | 
|Minority Interests:                                                                                                                                                              |                            |                          |         |        |                          |            |          |                  |   |   |                   |         |   |          |         |        |         |   |          |        |  |   |          |        |   |        |         |      |   |  |       |      |   |   |         |         |   |  |       |       
|                                                                                                                                                                                 | Partially owned properties |                          |         | (5,991 | )                        |            |          | (20,524          | ) |   |                   | (26,515 | ) |          |         | (5,527 | )       |   |          |       |  |   |          | (5,527 | ) |        |         | (464 | ) |  |       | (8.4 | ) |   |         | (20,988 | ) |  |       | (379.7 | )
|Income from investments in unconsolidated joint ventures
    (including (loss) gain on sales of real estate of $(91) and
    $17,376, respectively)                              |                            |                          | 194     |        |                          |            | (104     | )                |   |   | 90                |         |   |          | 406     |        |         |   | 37,793   |        |  |   | 38,199   |        |   |        | (212    | )    |   |  | (52.2 | )    |   |   | (38,109 | )       |   |  | (99.8 | )     
|Gain on sales of real estate                                                                                                                                                     |                            |                          | 347     |        |                          |            | 186      |                  |   |   | 533               |         |   |          |        |        |         |   |         |        |  |   |         |        |   |        | 347     |      |   |  |      |      |   |   | 533     |         |   |  |      |       
|                                                                                                                                                                                 |                            |                          |         |        |                          |            |          |                  |   |   |                   |         |   |          |         |        |         |   |          |        |  |   |          |        |   |        |         |      |   | 
|Income from continuing operations                                                                                                                                                |                            |                          | 402,769 |        |                          |            | (358,078 | )                |   |   | 44,691            |         |   |          | 461,385 |        |         |   | (336,402 | )      |  |   | 124,983  |        |   |        | (58,616 | )    |   |  | (12.7 | )    |   |   | (80,292 | )       |   |  | (64.2 | )     
|Discontinued operations (including net gain (loss) on sales
    of real estate and provision for (loss) on properties held
    for sale of $116,943 and $(83,513), respectively) |                            |                          |        |        |                          |            | 120,979  |                  |   |   | 120,979           |         |   |          |        |        |         |   | (224,076 | )      |  |   | (224,076 | )      |   |        |        |      |   |  |      |      |   |   | 345,055 |         |   |  | 154.0 |       
|                                                                                                                                                                                 |                            |                          |         |        |                          |            |          |                  |   |   |                   |         |   |          |         |        |         |   |          |        |  |   |          |        |   |        |         |      |   | 
|Net income (loss)                                                                                                                                                                |                            | $                        | 402,769 |        |                          | $          | (237,099 | )                |   | $ | 165,670           |         |   | $        | 461,385 |        |         | $ | (560,478 | )      |  | $ | (99,093  | )      |   | $      | (58,616 | )    |   |  | (12.7 | )%   |   | $ | 264,763 |         |   |  | 267.2 | %     
|                                                                                                                                                                                 |                            |                          |         |        |                          |            |          |                  |   |   |                   |         |   |          |         |        |         |   |          |        |  |   |          |        |   |        |         |      |   | 
|Selected Items from Continuing Operations:                                                                                                                                       |                            |                          |         |        |                          |            |          |                  |   |   |                   |         |   |          |         |        |         |   |          |        |  |   |          |        |   |        |         |      |   |  |       |      |   |   |         |         |   |  |       |       
|Property net operating income(c)                                                                                                                                                 |                            | $                        | 856,232 |        |                          | $          | 158,656  |                  |   | $ | 1,014,888         |         |   | $        | 920,350 |        |         | $ | 8,979    |        |  | $ | 929,329  |        |   | $      | (64,118 | )    |   |  | (7.0  | )%   |   | $ | 85,559  |         |   |  | 9.2   | %     
|                                                                                                                                                                                 |                            |                          |         |        |                          |            |          |                  |   |   |                   |         |   |          |         |        |         |   |          |        |  |   |          |        |   |        |         |      |   | 
|Property operating margin(c,d)                                                                                                                                                   |                            |                          | 60.8    | %      |                          |            | 56.8     | %                |   |   | 60.2              | %       |   |          | 64.2    | %      |         |   | 44.4     | %      |  |   | 64.0     | %      |   |        |         |      |   |  | (3.4  | )%   |   |   |         |         |   |  | (3.8  | )%    
|                                                                                                                                                                                 |                            |                          |         |        |                          |            |          |                  |   |   |                   |         |   |          |         |        |         |   |          |        |  |   |          |        |   |        |         |      |   | 
|Deferred rental revenue                                                                                                                                                          |                            | $                        | 13,837  |        |                          | $          | 7,291    |                  |   | $ | 21,128            |         |   | $        | 31,124  |        |         | $ | 1,134    |        |  | $ | 32,258   |        |   | $      | (17,287 | )    |   |  | (55.5 | )%   |   | $ | (11,130 | )       |   |  | (34.5 | )%    
|                                                                                                                                                                                 |                            |                          |         |        |                          |            |          |                  |   |   |                   |         |   |          |         |        |         |   |          |        |  |   |          |        |   |        |         |      |   | 
|Income from early lease terminations                                                                                                                                             |                            | $                        | 6,514   |        |                          | $          | 1,918    |                  |   | $ | 8,432             |         |   | $        | 61,874  |        |         | $ | (1       | )      |  | $ | 61,873   |        |   | $      | (55,360 | )    |   |  | (89.5 | )%   |   | $ | (53,441 | )       |   |  | (86.4 | )%    
|                                                                                                                                                                                 |                            |                          |         |        |                          |            |          |                  |   |   |                   |         |   |          |         |        |         |   |          |        |  |   |          |        |   |        |         |      |   | 



|    |                                                                                                                                                                                             
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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 mortgage debt and does not
    include interest expense on the unsecured notes or the lines of
    credit.                                                                                                                                                                                                        
|   
|(c) |  | Property net operating income consists of property operating
    revenues minus property operating expenses. Included in property
    operating revenues are rental revenue, tenant reimbursements,
    parking and other income, which includes income from early lease
    terminations. Included in property operating expenses are real
    estate taxes, insurance, repairs and maintenance and property
    operating expenses. See Item 1 
    Note 11 for more information.
|   
|(d) |  | Property operating margin is determined by dividing property
    operating revenues less property operating expenses by property
    operating revenues.                                                                                                                                                                                                                                                                                                                            



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



42



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##### Table of Contents







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







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







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







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







43



---



##### Table of Contents





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





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







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





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





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



III. Liquidity and Capital Resources


Liquidity






44



---



##### Table of Contents















45



---



##### Table of Contents





Distributions




|                         |  |              |          |  |              |                        |        |                      |  |   |                     |  |  |   |       | 
|------------------------ |  | ------------ | -------- |  | ------------ | ---------------------- | ------ | -------------------- |  | - | ------------------- |  |  | - | ----- | 
|                         |  |              |          |  |              | Total Distributions    |       
|                         |  | Quarterly    |          |  | Annual       |                        |        |                      | 
|                         |  | Distribution |          |  | Distribution |                        |        | For the three months |  |   | For the six months  | 
|Security                 |  | per Unit     |          |  | per Unit     |                        |        | ended June 30, 2006  |  |   | ended June 30, 2006 | 
|                         |  |              |          |  |              |                        |        |                      |  |   |                     | 
|                         |  |              |          |  |              | (Dollars in thousands) |       
|Series B Preferred Units |  | $            | 0.65625  |  |              | $                      | 2.625  |                      |  | $ | 3,931               |  |  | $ | 7,862 | 
|Series G Preferred Units |  | $            | 0.484375 |  |              | $                      | 1.9375 |                      |  | $ | 4,117               |  |  | $ | 8,234 | 



Contractual Obligations




|                                                        |                               |                        |            |            |      |   |           |           |  |   |         |           |  |      |         |           |      |   |         |            |  |   |           |           |  |   |           |           | 
|------------------------------------------------------- | ----------------------------- | ---------------------- | ---------- | ---------- | ---- | - | --------- | --------- |  | - | ------- | --------- |  | ---- | ------- | --------- | ---- | - | ------- | ---------- |  | - | --------- | --------- |  | - | --------- | --------- | 
|                                                        |                               | Payments Due by Period |           
|                                                        |                               |                        |           
|(Dollars in thousands)                                  |                               | Total                  |            |            | 2006 |   |           | 2007      |  |   | 2008    |           |  | 2009 |         |           | 2010 |   |         | Thereafter | 
|                                                        |                               |                        |            |            |      |   |           |           |  |   |         |           |  |      |         |           |      |   |         |            | 
|Mortgage debt(a)                                        |                               | $                      | 3,436,981  |            |      | $ | 194,526   |           |  | $ | 267,127 |           |  | $    | 219,699 |           |      | $ | 634,352 |            |  | $ | 449,654   |           |  | $ | 1,671,623 |          
|Unsecured notes(a)                                      |                               |                        | 10,056,493 |            |      |   | 152,924   |           |  |   | 988,523 |           |  |      | 490,333 |           |      |   | 862,475 |            |  |   | 1,564,207 |           |  |   | 5,998,031 |          
|Lines of Credit                                         |                               |                        | 1,148,800  |            |      |   | 1,000,000 |           |  |   |        |           |  |      |        |           |      |   | 148,800 |            |  |   |          |           |  |   |          |          
|Series B Preferred Units                                |                               |                        | 299,497    |            |      |   |          |           |  |   |        |           |  |      | 299,497 |           |      |   |        |            |  |   |          |           |  |   |          |          
|Share of mortgage debt of unconsolidated joint ventures |                               |                        | 165,762    |            |      |   | 1,066     |           |  |   | 2,245   |           |  |      | 2,403   |           |      |   | 9,922   |            |  |   | 3,297     |           |  |   | 146,829   |          
|Consolidated operating lease obligations(b)             |                               |                        | 1,385,635  |            |      |   | 11,596    |           |  |   | 23,401  |           |  |      | 23,137  |           |      |   | 22,927  |            |  |   | 23,015    |           |  |   | 1,281,559 |          
|                                                        |                               |                        |            |            |      |   |           |           |  |   |         |           |  |      |         |           |      |   |         |            | 
|                                                        | Total Contractual Obligations |                        | $          | 16,493,168 |      |   | $         | 1,360,112 |  |   | $       | 1,281,296 |  |      | $       | 1,035,069 |      |   | $       | 1,678,476  |  |   | $         | 2,040,173 |  |   | $         | 9,098,042 | 
|                                                        |                               |                        |            |            |      |   |           |           |  |   |         |           |  |      |         |           |      |   |         |            | 



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





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





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



46



---



##### Table of Contents







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





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



47



---



##### Table of Contents



Debt Financing




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



|                                           |                                     |                                     |                         |       |                   |            |            |      |           |            |            |  
|------------------------------------------ | ----------------------------------- | ----------------------------------- | ----------------------- | ----- | ----------------- | ---------- | ---------- | ---- | --------- | ---------- | ---------- | -
|(Dollars in thousands)                     |                                     | June 30, 2006                       |                         |       | December 31, 2005 |           
|                                           |                                     |                                     |                         |       |                   |           
|Balance (includes discounts and premiums): |                                     |                                     |                         |       |                   |            |            |     
|                                           | Fixed rate:                         |                                     |                         |       |                   |            |            |      |          
|                                           |                                     | Mortgage debt                       |                         | $     | 3,256,183         |            |            | $    | 1,988,377 |           
|                                           |                                     | Unsecured notes                     |                         |       | 9,787,104         |            |            |      | 8,787,620 |           
|                                           |                                     |                                     |                         |       |                   |           
|                                           |                                     |                                     | Total                   |       |                   | 13,043,287 |            |      |           | 10,775,997 |           
|                                           |                                     |                                     |                         |       |                   |           
|                                           | Variable rate(a):                   |                                     |                         |       |                   |            |            |      |          
|                                           |                                     | Mortgage debt                       |                         |       | 175,821           |            |            |      | 175,821   |           
|                                           |                                     | Unsecured notes and lines of credit |                         |       | 1,393,800         |            |            |      | 1,876,000 |           
|                                           |                                     |                                     |                         |       |                   |           
|                                           |                                     |                                     | Total                   |       |                   | 1,569,621  |            |      |           | 2,051,821  |           
|                                           |                                     |                                     |                         |       |                   |           
|                                           |                                     |                                     |                         | Total |                   | $          | 14,612,908 |      |           | $          | 12,827,818 |  
|                                           |                                     |                                     |                         |       |                   |           
|Percent of total debt:                     |                                     |                                     |                         |       |                   |            |            |     
|                                           | Fixed rate                          |                                     |                         | 89.3  | %                 |            |            | 84.0 | %        
|                                           | Variable rate(a)                    |                                     |                         | 10.7  | %                 |            |            | 16.0 | %        
|                                           |                                     |                                     |                         |       |                   |           
|                                           |                                     |                                     |                         | Total |                   |            | 100.0      | %    |           |            | 100.0      | %
|                                           |                                     |                                     |                         |       |                   |           
|                                           | Mortgage debt                       |                                     |                         | 23.5  | %                 |            |            | 16.9 | %        
|                                           | Unsecured notes and lines of credit |                                     |                         | 76.5  | %                 |            |            | 83.1 | %        
|                                           |                                     |                                     |                         |       |                   |           
|                                           |                                     |                                     | Total                   |       |                   | 100.0      | %          |      |           | 100.0      | %         
|                                           |                                     |                                     |                         |       |                   |           
|Effective interest rate at end of period:  |                                     |                                     |                         |       |                   |            |            |     
|                                           | Fixed rate:                         |                                     |                         |       |                   |            |            |      |          
|                                           |                                     | Mortgage debt                       |                         |       | 6.51              | %          |            |      | 7.01      | %         
|                                           |                                     | Unsecured notes                     |                         |       | 6.35              | %          |            |      | 6.80      | %         
|                                           |                                     |                                     |                         |       |                   |           
|                                           |                                     |                                     | Effective interest rate |       |                   | 6.39       | %          |      |           | 6.84       | %         
|                                           |                                     |                                     |                         |       |                   |           
|                                           | Variable rate(a):                   |                                     |                         |       |                   |            |            |      |          
|                                           |                                     | Mortgage debt                       |                         |       | 5.93              | %          |            |      | 5.17      | %         
|                                           |                                     | Unsecured notes and lines of credit |                         |       | 5.85              | %          |            |      | 5.02      | %         
|                                           |                                     |                                     |                         |       |                   |           
|                                           |                                     |                                     | Effective interest rate |       |                   | 5.86       | %          |      |           | 5.03       | %         
|                                           |                                     |                                     |                         |       |                   |           
|                                           |                                     |                                     |                         | Total |                   |            | 6.33       | %    |           |            | 6.55       | %
|                                           |                                     |                                     |                         |       |                   |           



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

48



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##### Table of Contents





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



|                                           |               |          |   |         |              |   |   |         |         |  
|------------------------------------------ | ------------- | -------- | - | ------- | ------------ | - | - | ------- | ------- | -
|                                           |               | June 30, |   |         | December 31, |  
|(Dollars in thousands)                     |               | 2006     |   |         | 2005         |  
|                                           |               |          |   |         |              |  
|Balance (includes discounts and premiums): |               |          |   |         |              |   |   |        
|                                           | Fixed rate    |          | $ | 164,409 |              |   | $ | 472,372 |        
|                                           | Variable rate |          |   | 1,353   |              |   |   | 1,353   |        
|                                           |               |          |   |         |              |  
|                                           |               | Total    |   | $       | 165,762      |   |   | $       | 473,725 |  
|                                           |               |          |   |         |              |  
|Effective interest rate at end of period:  |               |          |   |         |              |   |   |        
|                                           | Fixed rate    |          |   | 5.41    | %            |   |   | 5.47    | %      
|                                           | Variable rate |          |   | 11.14   | %            |   |   | 10.40   | %      
|                                           |               |          |   |         |              |  
|                                           |               | Total    |   |         | 5.46         | % |   |         | 5.48    | %
|                                           |               |          |   |         |              |  



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



|                                |                                                    |                        |           |         |  
|------------------------------- | -------------------------------------------------- | ---------------------- | --------- | ------- | -
|                                |                                                    | (Dollars in thousands) |          
|                                |                                                    |                        |          
|Balance at December 31, 2005(a) |                                                    | $                      | 2,169,383 |        
|                                | Scheduled principal amortization prior to maturity |                        |           | (7,753  | )
|                                | Consolidation of mortgage debt                     |                        |           | 682,222 |  
|                                | Mortgage financing                                 |                        |           | 180,000 |  
|                                |                                                    |                        |          
|Balance at March 31, 2006(a)    |                                                    |                        | 3,023,852 |        
|                                | Scheduled principal amortization prior to maturity |                        |           | (7,071  | )
|                                | Mortgage financings                                |                        |           | 405,000 |  
|                                | Assumed through a property acquisition             |                        |           | 15,200  |  
|                                |                                                    |                        |          
|Balance at June 30, 2006(a)     |                                                    | $                      | 3,436,981 |        
|                                |                                                    |                        |          



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





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



|                             |                                                    |                        |         |          |  
|---------------------------- | -------------------------------------------------- | ---------------------- | ------- | -------- | -
|                             |                                                    | (Dollars in thousands) |        
|                             |                                                    |                        |        
|Balance at December 31, 2005 |                                                    | $                      | 473,725 |         
|                             | Scheduled principal amortization prior to maturity |                        |         | (549     | )
|                             | Consolidation of mortgage debt                     |                        |         | (306,902 | )
|                             |                                                    |                        |        
|Balance at March 31, 2006    |                                                    |                        | 166,274 |         
|                             | Scheduled principal amortization prior to maturity |                        |         | (512     | )
|                             |                                                    |                        |        
|Balance at June 30, 2006     |                                                    | $                      | 165,762 |         
|                             |                                                    |                        |        

49



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##### Table of Contents





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



Lines of Credit




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









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





50



---



##### Table of Contents





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



|                                |            |                        |            |           |  
|------------------------------- | ---------- | ---------------------- | ---------- | --------- | -
|                                |            | (Dollars in thousands) |           
|                                |            |                        |           
|Balance at December 31, 2005(a) |            | $                      | 9,056,556  |          
|                                | Repayments |                        |            | (500,043  | )
|                                |            |                        |           
|Balance at March 31, 2006(a)    |            |                        | 8,556,513  |          
|                                | Issuance   |                        |            | 1,500,000 |  
|                                | Repayments |                        |            | (20       | )
|                                |            |                        |           
|Balance at June 30, 2006(a)     |            | $                      | 10,056,493 |          
|                                |            |                        |           



|    |                                                                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Excludes net discounts of $23.9 million, $24.6 million
    and $24.4 million at December 31, 2005, March 31,
    2006 and June 30, 2006, respectively.







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





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

10-K


51



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##### Table of Contents





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



|                                 |                                                                                                                                                                                   |  |             |             |  
|-------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------- | ----------- | -
|Outstanding at December 31, 2005 |                                                                                                                                                                                   |  | 424,314,764 |            
|                                 | Repurchased and retired under Equity Offices open market
    repurchase program (at an average purchase price of
    $31.79 per unit)(a)                                         |  |             | (15,353,600 | )
|                                 | Repurchased and retired under Equity Offices Supplemental
    Retirement Savings Plan (at an average purchase price of
    $33.26 per unit)                                      |  |             | (55,831     | )
|                                 | Issued to Equity Office upon exercise of share options                                                                                                                            |  |             | 1,218,350   |  
|                                 | Units redeemed for cash (at an average purchase price of
    $30.51 per unit)                                                                                                     |  |             | (2,315,316  | )
|                                 | Issued to Equity Office related to restricted shares issued to
    employees, net of cancellations                                                                                |  |             | 596,855     |  
|                                 | Units issued as compensation for Equity Offices Board of
    Trustees fees                                                                                                       |  |             | 9,183       |  
|                                 |                                                                                                                                                                                   |  |            
|Outstanding at March 31, 2006    |                                                                                                                                                                                   |  | 408,414,405 |            
|                                 | Repurchased and retired under Equity Offices open market
    repurchase
    program or under separate authorization (at an average purchase
    price of
    $35.73 per unit)(a) |  |             | (20,240,240 | )
|                                 | Repurchased and retired under Equity Offices Supplemental
    Retirement Savings Plan (at an average purchase price of
    $34.36 per unit)                                      |  |             | (46,739     | )
|                                 | Issued to Equity Office upon exercise of share options                                                                                                                            |  |             | 1,849,652   |  
|                                 | Units redeemed for cash (at an average purchase price of
    $32.58 per unit)                                                                                                     |  |             | (530,220    | )
|                                 | Issued to Equity Office related to restricted share
    cancellations, net of restricted shares issued to employees                                                               |  |             | (48,712     | )
|                                 | Units issued as compensation for Equity Offices Board of
    Trustees fees                                                                                                       |  |             | 8,229       |  
|                                 |                                                                                                                                                                                   |  |            
|Outstanding at June 30, 2006     |                                                                                                                                                                                   |  | 389,406,375 |            
|                                 |                                                                                                                                                                                   |  |            



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



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Equity Office also obtained separate authorization during June
    2006 to repurchase an additional $450.0 million of Common
    Shares in connection with our $1.5 billion exchangeable
    unsecured note issuance (see Item 1 
    Note 7). Of the Common Shares repurchased during the second
    quarter 2006, 17,196,740 Common Shares were repurchased
    concurrently with our issuance of the $1.5 billion
    exchangeable unsecured notes.
|
| | In conjunction with such repurchases, we purchased from Equity
    Office and retired a corresponding number of Units for an
    aggregate cash purchase price equal to the aggregate purchase
    price for all Common Share repurchases.                                                                                                                                                                                                             

Capital Improvements, Tenant Improvements and Leasing
Costs


Capital Improvements






| |   |                                                                                                                                                                                                                                                                     
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Capital Improvements  costs for improvements
    that enhance the value of the property such as lobby
    renovations, roof replacement, significant renovations for
    Americans with Disabilities Act compliance, chiller replacement
    and elevator upgrades.

52



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##### Table of Contents





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



|                       |                                           |                                     |   |              |             |  |       |             |              |  |            |              |       |             |       |        |             |  |   |     |     |  |   |    |    | 
|---------------------- | ----------------------------------------- | ----------------------------------- | - | ------------ | ----------- |  | ----- | ----------- | ------------ |  | ---------- | ------------ | ----- | ----------- | ----- | ------ | ----------- |  | - | --- | --- |  | - | -- | -- | 
|                       |                                           | For the three months ended June 30, |  
|                       |                                           |                                     |  
|                       |                                           | 2006                                |   |              | 2005        | 
|                       |                                           |                                     |   |              |             | 
|                       |                                           |                                     |   | Consolidated |             |  |       |             | Consolidated | 
|                       |                                           |                                     |   | Consolidated |             |  | Joint |             |              |  |            | Consolidated |       |             | Joint |       
|                       |                                           | Wholly-                             |   |              | Joint       |  |       | Ventures    |              |  | Wholly-    |              |       | Joint       |       |        | Ventures    | 
|                       |                                           | Owned                               |   |              | Ventures    |  |       | (JV Partner |              |  | Owned      |              |       | Ventures    |       |        | (JV Partner | 
|(Dollars in thousands) |                                           | Properties                          |   |              | (Our Share) |  |       | Share)      |              |  | Properties |              |       | (Our Share) |       |        | Share)      | 
|                       |                                           |                                     |   |              |             |  |       |             |              |  |            |              |       |             |       |        |             | 
|Capital Improvements:  |                                           |                                     |   |              |             |  |       |             |              |  |            |              |       |             |       |        |             |  |   |     |     |  |   |   
|                       | Capital improvements                      |                                     | $ | 22,564       |             |  | $     | 2,134       |              |  | $          | 3,651        |       |             | $     | 10,848 |             |  | $ | 540 |     |  | $ | 14 |   
|                       | Development costs and redevelopment costs |                                     |   | 38,508       |             |  |       |            |              |  |            |             |       |             |       | 3,610  |             |  |   |    |     |  |   |   |   
|                       |                                           |                                     |   |              |             |  |       |             |              |  |            |              |       |             |       |        |             | 
|                       |                                           | Total capital improvements          |   | $            | 61,072      |  |       | $           | 2,134        |  |            | $            | 3,651 |             |       | $      | 14,458      |  |   | $   | 540 |  |   | $  | 14 | 
|                       |                                           |                                     |   |              |             |  |       |             |              |  |            |              |       |             |       |        |             | 

|                       |                                           |                                   |   |              |             |  |       |             |              |  |            |              |       |             |       |        |             |  |   |     |     |  |   |    |    | 
|---------------------- | ----------------------------------------- | --------------------------------- | - | ------------ | ----------- |  | ----- | ----------- | ------------ |  | ---------- | ------------ | ----- | ----------- | ----- | ------ | ----------- |  | - | --- | --- |  | - | -- | -- | 
|                       |                                           | For the six months ended June 30, |  
|                       |                                           |                                   |  
|                       |                                           | 2006                              |   |              | 2005        | 
|                       |                                           |                                   |   |              |             | 
|                       |                                           |                                   |   | Consolidated |             |  |       |             | Consolidated | 
|                       |                                           |                                   |   | Consolidated |             |  | Joint |             |              |  |            | Consolidated |       |             | Joint |       
|                       |                                           | Wholly-                           |   |              | Joint       |  |       | Ventures    |              |  | Wholly-    |              |       | Joint       |       |        | Ventures    | 
|                       |                                           | Owned                             |   |              | Ventures    |  |       | (JV Partner |              |  | Owned      |              |       | Ventures    |       |        | (JV Partner | 
|(Dollars in thousands) |                                           | Properties                        |   |              | (Our Share) |  |       | Share)      |              |  | Properties |              |       | (Our Share) |       |        | Share)      | 
|                       |                                           |                                   |   |              |             |  |       |             |              |  |            |              |       |             |       |        |             | 
|Capital Improvements:  |                                           |                                   |   |              |             |  |       |             |              |  |            |              |       |             |       |        |             |  |   |     |     |  |   |   
|                       | Capital improvements                      |                                   | $ | 33,957       |             |  | $     | 2,722       |              |  | $          | 3,789        |       |             | $     | 15,145 |             |  | $ | 802 |     |  | $ | 18 |   
|                       | Development costs and redevelopment costs |                                   |   | 55,857       |             |  |       |            |              |  |            |             |       |             |       | 4,695  |             |  |   |    |     |  |   |   |   
|                       |                                           |                                   |   |              |             |  |       |             |              |  |            |              |       |             |       |        |             | 
|                       |                                           | Total capital improvements        |   | $            | 89,814      |  |       | $           | 2,722        |  |            | $            | 3,789 |             |       | $      | 19,840      |  |   | $   | 802 |  |   | $  | 18 | 
|                       |                                           |                                   |   |              |             |  |       |             |              |  |            |              |       |             |       |        |             | 





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



53



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|                                                       |                                               |                                     |                         |        |              |        |   |             |       |       |              |        |        |        |   |       |       |       | 
|------------------------------------------------------ | --------------------------------------------- | ----------------------------------- | ----------------------- | ------ | ------------ | ------ | - | ----------- | ----- | ----- | ------------ | ------ | ------ | ------ | - | ----- | ----- | ----- | 
|                                                       |                                               | For the three months ended June 30, |                        
|                                                       |                                               |                                     |                        
|                                                       |                                               | 2006                                |                         |        | 2005         |       
|                                                       |                                               |                                     |                         |        |              |       
|                                                       |                                               | Tenant                              |                         |        | Weighted     |        |   | Tenant      |       |       | Weighted     |       
|                                                       |                                               | Improvement                         |                         |        | Average Cost |        |   | Improvement |       |       | Average Cost |       
|                                                       |                                               | and Leasing                         |                         |        | per Square   |        |   | and Leasing |       |       | per Square   |       
|(Dollars in thousands, except per square foot amounts) |                                               | Costs                               |                         |        | Foot Leased  |        |   | Costs       |       |       | Foot Leased  |       
|                                                       |                                               |                                     |                         |        |              |        |   |             |       |       |              |       
|Wholly-Owned Properties:                               |                                               |                                     |                         |        |              |        |   |             |       |       |              |        |        |        |   |      
|                                                       | Renewals                                      |                                     | $                       | 11,024 |              |        | $ | 8.66        |       |       | $            | 16,685 |        |        | $ | 11.33 |      
|                                                       |                                               |                                     |                         |        |              |        |   |             |       |       |              |       
|                                                       | Retenanted                                    |                                     |                         |        |              |        |   |             |       |       |              |        |        |        |   |       |      
|                                                       |                                               | Vacant for less than 12 months      |                         |        | 26,880       |        |   |             | 19.81 |       |              |        | 29,480 |        |   |       | 19.46 |      
|                                                       |                                               | Vacant longer than 12 months        |                         |        | 17,491       |        |   |             | 28.45 |       |              |        | 18,022 |        |   |       | 26.76 |      
|                                                       |                                               |                                     |                         |        |              |        |   |             |       |       |              |       
|                                                       | Total Retenanted                              |                                     |                         | 44,371 |              |        |   | 22.50       |       |       |              | 47,502 |        |        |   | 21.71 |      
|                                                       |                                               |                                     |                         |        |              |        |   |             |       |       |              |       
|                                                       |                                               | Total/ Weighted Average             |                         |        | 55,395       |        |   |             | 17.07 |       |              |        | 64,187 |        |   |       | 17.53 |      
|                                                       |                                               |                                     |                         |        |              |        |   |             |       |       |              |       
|Consolidated Joint Ventures (Our Share):               |                                               |                                     |                         |        |              |        |   |             |       |       |              |        |        |        |   |      
|                                                       | Renewals                                      |                                     |                         | 754    |              |        |   | 7.07        |       |       |              | 21,783 |        |        |   | 45.72 |      
|                                                       |                                               |                                     |                         |        |              |        |   |             |       |       |              |       
|                                                       | Retenanted                                    |                                     |                         |        |              |        |   |             |       |       |              |        |        |        |   |       |      
|                                                       |                                               | Vacant for less than 12 months      |                         |        | 2,745        |        |   |             | 26.92 |       |              |        | 2,597  |        |   |       | 33.80 |      
|                                                       |                                               | Vacant longer than 12 months        |                         |        | 3,251        |        |   |             | 56.75 |       |              |        | 1,255  |        |   |       | 37.44 |      
|                                                       |                                               |                                     |                         |        |              |        |   |             |       |       |              |       
|                                                       | Total Retenanted                              |                                     |                         | 5,996  |              |        |   | 37.65       |       |       |              | 3,852  |        |        |   | 34.90 |      
|                                                       |                                               |                                     |                         |        |              |        |   |             |       |       |              |       
|                                                       |                                               |                                     | Total/ Weighted Average |        |              | 6,750  |   |             |       | 25.39 |              |        |        | 25,635 |   |       |       | 43.69 | 
|                                                       |                                               |                                     |                         |        |              |        |   |             |       |       |              |       
|Consolidated Joint Ventures (JV Partner Share):        |                                               |                                     |                         |        |              |        |   |             |       |       |              |        |        |        |   |      
|                                                       | Renewals                                      |                                     |                         | 296    |              |        |   | 7.13        |       |       |              | 44     |        |        |   | 7.69  |      
|                                                       |                                               |                                     |                         |        |              |        |   |             |       |       |              |       
|                                                       | Retenanted                                    |                                     |                         |        |              |        |   |             |       |       |              |        |        |        |   |       |      
|                                                       |                                               | Vacant for less than 12 months      |                         |        | 3,941        |        |   |             | 34.93 |       |              |        | 68     |        |   |       | 29.27 |      
|                                                       |                                               | Vacant longer than 12 months        |                         |        | 1,966        |        |   |             | 44.78 |       |              |        | 48     |        |   |       | 35.90 |      
|                                                       |                                               |                                     |                         |        |              |        |   |             |       |       |              |       
|                                                       | Total Retenanted                              |                                     |                         | 5,907  |              |        |   | 37.69       |       |       |              | 116    |        |        |   | 31.68 |      
|                                                       |                                               |                                     |                         |        |              |        |   |             |       |       |              |       
|                                                       |                                               |                                     | Total/ Weighted Average |        |              | 6,203  |   |             |       | 31.29 |              |        |        | 160    |   |       |       | 17.10 | 
|                                                       |                                               |                                     |                         |        |              |        |   |             |       |       |              |       
|Unconsolidated Joint Ventures (Our Share):             |                                               |                                     |                         |        |              |        |   |             |       |       |              |        |        |        |   |      
|                                                       | Renewals                                      |                                     |                         | 67     |              |        |   | 12.46       |       |       |              | 517    |        |        |   | 12.41 |      
|                                                       |                                               |                                     |                         |        |              |        |   |             |       |       |              |       
|                                                       | Retenanted                                    |                                     |                         |        |              |        |   |             |       |       |              |        |        |        |   |       |      
|                                                       |                                               | Vacant for less than 12 months      |                         |        | 765          |        |   |             | 61.91 |       |              |        | 2,657  |        |   |       | 32.62 |      
|                                                       |                                               | Vacant longer than 12 months        |                         |        | 1,164        |        |   |             | 38.38 |       |              |        | 3,238  |        |   |       | 52.52 |      
|                                                       |                                               |                                     |                         |        |              |        |   |             |       |       |              |       
|                                                       | Total Retenanted                              |                                     |                         | 1,929  |              |        |   | 45.19       |       |       |              | 5,895  |        |        |   | 41.20 |      
|                                                       |                                               |                                     |                         |        |              |        |   |             |       |       |              |       
|                                                       |                                               |                                     | Total/ Weighted Average |        |              | 1,996  |   |             |       | 41.49 |              |        |        | 6,412  |   |       |       | 34.71 | 
|                                                       |                                               |                                     |                         |        |              |        |   |             |       |       |              |       
|Totals:                                                |                                               |                                     |                         |        |              |        |   |             |       |       |              |        |        |        |   |      
|                                                       | Our share of Total/ Weighted Average          |                                     |                         | 64,141 |              |        |   | 18.02       |       |       |              | 96,234 |        |        |   | 21.71 |      
|                                                       | JV partners share of Total/ Weighted Average |                                     |                         | 6,203  |              |        |   | 31.29       |       |       |              | 160    |        |        |   | 17.10 |      
|                                                       |                                               |                                     |                         |        |              |        |   |             |       |       |              |       
|                                                       |                                               |                                     | Total/ Weighted Average |        | $            | 70,344 |   |             | $     | 18.72 |              |        | $      | 96,394 |   |       | $     | 21.70 | 
|                                                       |                                               |                                     |                         |        |              |        |   |             |       |       |              |       

54



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|                                                       |                                               |                                   |                         |         |              |         |   |             |       |       |              |         |         |         |   |       |       |       | 
|------------------------------------------------------ | --------------------------------------------- | --------------------------------- | ----------------------- | ------- | ------------ | ------- | - | ----------- | ----- | ----- | ------------ | ------- | ------- | ------- | - | ----- | ----- | ----- | 
|                                                       |                                               | For the six months ended June 30, |                        
|                                                       |                                               |                                   |                        
|                                                       |                                               | 2006                              |                         |         | 2005         |        
|                                                       |                                               |                                   |                         |         |              |        
|                                                       |                                               | Tenant                            |                         |         | Weighted     |         |   | Tenant      |       |       | Weighted     |        
|                                                       |                                               | Improvement                       |                         |         | Average Cost |         |   | Improvement |       |       | Average Cost |        
|                                                       |                                               | and Leasing                       |                         |         | per Square   |         |   | and Leasing |       |       | per Square   |        
|(Dollars in thousands, except per square foot amounts) |                                               | Costs                             |                         |         | Foot Leased  |         |   | Costs       |       |       | Foot Leased  |        
|                                                       |                                               |                                   |                         |         |              |         |   |             |       |       |              |        
|Wholly-Owned Properties:                               |                                               |                                   |                         |         |              |         |   |             |       |       |              |         |         |         |   |      
|                                                       | Renewals                                      |                                   | $                       | 29,985  |              |         | $ | 8.93        |       |       | $            | 47,462  |         |         | $ | 11.08 |      
|                                                       |                                               |                                   |                         |         |              |         |   |             |       |       |              |        
|                                                       | Retenanted                                    |                                   |                         |         |              |         |   |             |       |       |              |         |         |         |   |       |      
|                                                       |                                               | Vacant for less than 12 months    |                         |         | 62,043       |         |   |             | 21.16 |       |              |         | 51,477  |         |   |       | 19.05 |      
|                                                       |                                               | Vacant longer than 12 months      |                         |         | 28,564       |         |   |             | 26.59 |       |              |         | 44,299  |         |   |       | 28.10 |      
|                                                       |                                               |                                   |                         |         |              |         |   |             |       |       |              |        
|                                                       | Total Retenanted                              |                                   |                         | 90,607  |              |         |   | 22.61       |       |       |              | 95,776  |         |         |   | 22.38 |      
|                                                       |                                               |                                   |                         |         |              |         |   |             |       |       |              |        
|                                                       |                                               | Total/ Weighted Average           |                         |         | 120,592      |         |   |             | 16.38 |       |              |         | 143,238 |         |   |       | 16.73 |      
|                                                       |                                               |                                   |                         |         |              |         |   |             |       |       |              |        
|Consolidated Joint Ventures (Our Share):               |                                               |                                   |                         |         |              |         |   |             |       |       |              |         |         |         |   |      
|                                                       | Renewals                                      |                                   |                         | 5,642   |              |         |   | 13.01       |       |       |              | 22,291  |         |         |   | 41.82 |      
|                                                       |                                               |                                   |                         |         |              |         |   |             |       |       |              |        
|                                                       | Retenanted                                    |                                   |                         |         |              |         |   |             |       |       |              |         |         |         |   |       |      
|                                                       |                                               | Vacant for less than 12 months    |                         |         | 7,826        |         |   |             | 28.31 |       |              |         | 8,199   |         |   |       | 17.83 |      
|                                                       |                                               | Vacant longer than 12 months      |                         |         | 4,814        |         |   |             | 50.30 |       |              |         | 1,477   |         |   |       | 33.50 |      
|                                                       |                                               |                                   |                         |         |              |         |   |             |       |       |              |        
|                                                       | Total Retenanted                              |                                   |                         | 12,640  |              |         |   | 33.97       |       |       |              | 9,676   |         |         |   | 19.20 |      
|                                                       |                                               |                                   |                         |         |              |         |   |             |       |       |              |        
|                                                       |                                               | Total/ Weighted Average           |                         |         | 18,282       |         |   |             | 22.69 |       |              |         | 31,967  |         |   |       | 30.83 |      
|                                                       |                                               |                                   |                         |         |              |         |   |             |       |       |              |        
|Consolidated Joint Ventures (JV Partner Share):        |                                               |                                   |                         |         |              |         |   |             |       |       |              |         |         |         |   |      
|                                                       | Renewals                                      |                                   |                         | 1,940   |              |         |   | 8.23        |       |       |              | 77      |         |         |   | 7.24  |      
|                                                       |                                               |                                   |                         |         |              |         |   |             |       |       |              |        
|                                                       | Retenanted                                    |                                   |                         |         |              |         |   |             |       |       |              |         |         |         |   |       |      
|                                                       |                                               | Vacant for less than 12 months    |                         |         | 6,127        |         |   |             | 31.68 |       |              |         | 226     |         |   |       | 33.96 |      
|                                                       |                                               | Vacant longer than 12 months      |                         |         | 3,208        |         |   |             | 41.89 |       |              |         | 107     |         |   |       | 30.16 |      
|                                                       |                                               |                                   |                         |         |              |         |   |             |       |       |              |        
|                                                       | Total Retenanted                              |                                   |                         | 9,335   |              |         |   | 34.58       |       |       |              | 333     |         |         |   | 32.64 |      
|                                                       |                                               |                                   |                         |         |              |         |   |             |       |       |              |        
|                                                       |                                               |                                   | Total/ Weighted Average |         |              | 11,275  |   |             |       | 22.30 |              |         |         | 410     |   |       |       | 19.67 | 
|                                                       |                                               |                                   |                         |         |              |         |   |             |       |       |              |        
|Unconsolidated Joint Ventures (Our Share):             |                                               |                                   |                         |         |              |         |   |             |       |       |              |         |         |         |   |      
|                                                       | Renewals                                      |                                   |                         | 79      |              |         |   | 7.09        |       |       |              | 1,126   |         |         |   | 10.18 |      
|                                                       |                                               |                                   |                         |         |              |         |   |             |       |       |              |        
|                                                       | Retenanted                                    |                                   |                         |         |              |         |   |             |       |       |              |         |         |         |   |       |      
|                                                       |                                               | Vacant for less than 12 months    |                         |         | 947          |         |   |             | 46.06 |       |              |         | 6,619   |         |   |       | 32.49 |      
|                                                       |                                               | Vacant longer than 12 months      |                         |         | 1,534        |         |   |             | 40.93 |       |              |         | 9,476   |         |   |       | 52.45 |      
|                                                       |                                               |                                   |                         |         |              |         |   |             |       |       |              |        
|                                                       | Total Retenanted                              |                                   |                         | 2,481   |              |         |   | 42.75       |       |       |              | 16,095  |         |         |   | 41.87 |      
|                                                       |                                               |                                   |                         |         |              |         |   |             |       |       |              |        
|                                                       |                                               |                                   | Total/ Weighted Average |         |              | 2,560   |   |             |       | 36.99 |              |         |         | 17,221  |   |       |       | 34.79 | 
|                                                       |                                               |                                   |                         |         |              |         |   |             |       |       |              |        
|Totals:                                                |                                               |                                   |                         |         |              |         |   |             |       |       |              |         |         |         |   |      
|                                                       | Our share of Total/ Weighted Average          |                                   |                         | 141,434 |              |         |   | 17.17       |       |       |              | 192,426 |         |         |   | 19.06 |      
|                                                       | JV partners share of Total/ Weighted Average |                                   |                         | 11,275  |              |         |   | 22.30       |       |       |              | 410     |         |         |   | 19.67 |      
|                                                       |                                               |                                   |                         |         |              |         |   |             |       |       |              |        
|                                                       |                                               |                                   | Total/ Weighted Average |         | $            | 152,709 |   |             | $     | 17.46 |              |         | $       | 192,836 |   |       | $     | 19.07 | 
|                                                       |                                               |                                   |                         |         |              |         |   |             |       |       |              |        



55



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|                                                                                                             |                                                |                                                               |                                                                   |          |         |         |         |        |        |         |         | 
|------------------------------------------------------------------------------------------------------------ | ---------------------------------------------- | ------------------------------------------------------------- | ----------------------------------------------------------------- | -------- | ------- | ------- | ------- | ------ | ------ | ------- | ------- | 
|                                                                                                             |                                                | For the three months ended                                    |                                                                  
|                                                                                                             |                                                | June 30,                                                      |                                                                  
|                                                                                                             |                                                |                                                               |                                                                  
|(Dollars in thousands)                                                                                       |                                                | 2006                                                          |                                                                   |          | 2005    |        
|                                                                                                             |                                                |                                                               |                                                                   |          |         |        
|Capital improvements:                                                                                        |                                                |                                                               |                                                                   |          |         |         |         |       
|                                                                                                             | Wholly-owned properties                        |                                                               | $                                                                 | 22,564   |         |         | $       | 10,848 |       
|                                                                                                             | Consolidated joint ventures (our share)        |                                                               |                                                                   | 2,134    |         |         |         | 540    |       
|                                                                                                             | Consolidated joint ventures (JV partner share) |                                                               |                                                                   | 3,651    |         |         |         | 14     |       
|Tenant improvements and leasing costs:                                                                       |                                                |                                                               |                                                                   |          |         |         |         |       
|                                                                                                             | Wholly-owned properties                        |                                                               |                                                                   | 55,395   |         |         |         | 64,187 |       
|                                                                                                             | Consolidated joint ventures (our share)        |                                                               |                                                                   | 6,750    |         |         |         | 25,635 |       
|                                                                                                             | Consolidated joint ventures (JV partner share) |                                                               |                                                                   | 6,203    |         |         |         | 160    |       
|Expenditures for corporate furniture, fixtures and equipment,
    software, leasehold improvements and other |                                                |                                                               | 5,144                                                             |          |         |         | 5,047   |       
|                                                                                                             |                                                |                                                               |                                                                   |          |         |        
|                                                                                                             |                                                |                                                               |                                                                   | Subtotal |         |         | 101,841 |        |        |         | 106,431 | 
|Development and redevelopment costs                                                                          |                                                |                                                               | 38,508                                                            |          |         |         | 3,610   |       
|Timing differences                                                                                           |                                                |                                                               | 32,112                                                            |          |         |         | (6,103  | )     
|                                                                                                             |                                                |                                                               |                                                                   |          |         |        
|                                                                                                             |                                                |                                                               | Total capital improvements, tenant improvements and leasing costs |          | $       | 172,461 |         |        | $      | 103,938 |        
|                                                                                                             |                                                |                                                               |                                                                   |          |         |        
|Selected items from the consolidated statements of cash
    flows:                                           |                                                |                                                               |                                                                   |          |         |         |         |       
|                                                                                                             |                                                | Capital and tenant improvements (including development costs) |                                                                   | $        | 141,822 |         |         | $      | 74,557 |        
|                                                                                                             |                                                | Lease commissions and other costs                             |                                                                   |          | 30,639  |         |         |        | 29,381 |        
|                                                                                                             |                                                |                                                               |                                                                   |          |         |        
|                                                                                                             |                                                |                                                               | Total                                                             |          | $       | 172,461 |         |        | $      | 103,938 |        
|                                                                                                             |                                                |                                                               |                                                                   |          |         |        

|                                                                                                             |                                                                   |                          |          |         |         |         |       |         |         |         | 
|------------------------------------------------------------------------------------------------------------ | ----------------------------------------------------------------- | ------------------------ | -------- | ------- | ------- | ------- | ----- | ------- | ------- | ------- | 
|                                                                                                             |                                                                   | For the six months ended |         
|                                                                                                             |                                                                   | June 30,                 |         
|                                                                                                             |                                                                   |                          |         
|(Dollars in thousands)                                                                                       |                                                                   | 2006                     |          |         | 2005    |        
|                                                                                                             |                                                                   |                          |          |         |         |        
|Capital improvements:                                                                                        |                                                                   |                          |          |         |         |         |       |        
|                                                                                                             | Wholly-owned properties                                           |                          | $        | 33,957  |         |         | $     | 15,145  |        
|                                                                                                             | Consolidated joint ventures (our share)                           |                          |          | 2,722   |         |         |       | 802     |        
|                                                                                                             | Consolidated joint ventures (JV partner share)                    |                          |          | 3,789   |         |         |       | 18      |        
|Tenant improvements and leasing costs:                                                                       |                                                                   |                          |          |         |         |         |       |        
|                                                                                                             | Wholly-owned properties                                           |                          |          | 120,592 |         |         |       | 143,238 |        
|                                                                                                             | Consolidated joint ventures (our share)                           |                          |          | 18,282  |         |         |       | 31,967  |        
|                                                                                                             | Consolidated joint ventures (JV partner share)                    |                          |          | 11,275  |         |         |       | 410     |        
|Expenditures for corporate furniture, fixtures and equipment,
    software, leasehold improvements and other |                                                                   |                          | 9,754    |         |         |         | 7,983 |        
|                                                                                                             |                                                                   |                          |          |         |         |        
|                                                                                                             |                                                                   |                          | Subtotal |         |         | 200,371 |       |         |         | 199,563 | 
|Development and redevelopment costs                                                                          |                                                                   |                          | 55,857   |         |         |         | 4,695 |        
|Timing differences                                                                                           |                                                                   |                          | 31,782   |         |         |         | 455   |        
|                                                                                                             |                                                                   |                          |          |         |         |        
|                                                                                                             | Total capital improvements, tenant improvements and leasing costs |                          | $        | 288,010 |         |         | $     | 204,713 |        
|                                                                                                             |                                                                   |                          |          |         |         |        
|Selected items from the consolidated statements of cash
    flows:                                           |                                                                   |                          |          |         |         |         |       |        
|                                                                                                             | Capital and tenant improvements (including development costs)     |                          | $        | 223,425 |         |         | $     | 150,963 |        
|                                                                                                             | Lease commissions and other costs                                 |                          |          | 64,585  |         |         |       | 53,750  |        
|                                                                                                             |                                                                   |                          |          |         |         |        
|                                                                                                             |                                                                   | Total                    |          | $       | 288,010 |         |       | $       | 204,713 |        
|                                                                                                             |                                                                   |                          |          |         |         |        

56



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Developments in Process




|                                   |       |           |         |  |          |  |                   |           |  |                        |       |   |             |         |           |           |          |   |            |         |  |   |         |           |  |  |     |    |  
|---------------------------------- | ----- | --------- | ------- |  | -------- |  | ----------------- | --------- |  | ---------------------- | ----- | - | ----------- | ------- | --------- | --------- | -------- | - | ---------- | ------- |  | - | ------- | --------- |  |  | --- | -- | -
|                                   |       | Estimated |         |  |          |  |                   |           |  |                        |       |   |             |         |          
|                                   |       | Placed in |         |  |          |  |                   |           |  |                        | Costs |   |             | Total   |           |           |         
|                                   |       | Service   |         |  |          |  | Number of         |           |  | Square                 |       |   | Incurred to |         |           | Estimated |          |   | Percentage |        
|Property                           |       | Date(a)   |         |  | Location |  |                   | Buildings |  |                        | Feet  |   |             | Date(b) |           |           | Costs(c) |   |            | Leased  | 
|                                   |       |           |         |  |          |  |                   |           |  |                        |       |   |             |         |           |           |          |   |            |         | 
|                                   |       |           |         |  |          |  |                   |           |  | (Dollars in thousands) |       |   |            
|Kruse Oaks II(d)                   |       |           | Q4 2006 |  |          |  | Portland, OR      |           |  |                        | 1     |   |             |         | 102,000   |           |          | $ | 11,243     |         |  | $ | 20,119  |           |  |  | 6   | % 
|Bridge Pointe Corporate Center III |       |           | Q4 2006 |  |          |  | San Diego, CA     |           |  |                        | 2     |   |             |         | 150,000   |           |          |   | 22,338     |         |  |   | 35,967  |           |  |  | 0   | % 
|1095 Avenue of the Americas(e)     |       |           | Q3 2007 |  |          |  | New York, NY      |           |  |                        | 1     |   |             |         | 1,023,998 |           |          |   | 536,604    |         |  |   | 849,753 |           |  |  | (e) |   
|Foundry Square I (Barclays)        |       |           | Q4 2007 |  |          |  | San Francisco, CA |           |  |                        | 1     |   |             |         | 335,890   |           |          |   | 25,829     |         |  |   | 144,789 |           |  |  | 96  | % 
|City Center Plaza West             |       |           | Q1 2008 |  |          |  | Bellevue, WA      |           |  |                        | 1     |   |             |         | 572,000   |           |          |   | 16,614     |         |  |   | 196,242 |           |  |  | 0   | % 
|Fountaingrove II                   |       |           | Q2 2006 |  |          |  | Santa Rosa, CA    |           |  |                        | 1     |   |             |         | 42,102    |           |          |   | 9,587      |         |  |   | 11,698  |           |  |  | 31  | % 
|                                   |       |           |         |  |          |  |                   |           |  |                        |       |   |             |         |           |           |          |   |            |         | 
|                                   | Total |           |         |  |          |  |                   |           |  |                        |       | 7 |             |         |           | 2,225,990 |          |   | $          | 622,215 |  |   | $       | 1,258,568 |  |  |     | 15 | %
|                                   |       |           |         |  |          |  |                   |           |  |                        |       |   |             |         |           |           |          |   |            |         | 



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

|                                                                                 |                              |                        |         |         | 
|-------------------------------------------------------------------------------- | ---------------------------- | ---------------------- | ------- | ------- | 
|                                                                                 |                              | (Dollars in thousands) |        
|                                                                                 |                              |                        |        
|Developments in process                                                          |                              | $                      | 611,173 |        
|Deferred leasing costs and other related intangibles recorded at
    acquisition |                              |                        | 11,042  |        
|                                                                                 |                              |                        |        
|                                                                                 | Total costs incurred to date |                        | $       | 622,215 | 
|                                                                                 |                              |                        |        



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(c) |  | The Total Estimated Costs include the acquisition cost of the
    land and building in addition to the costs to develop the
    property. The Total Estimated Costs are subject to change upon,
    or prior to, the completion of the development and include
    amounts required to lease-up the property. The Total Estimated
    Costs for City Center Plaza West have been updated subsequent to
    June 30, 2006, based on revised cost estimates.                                     
|   
|(d) |  | We lease the land underlying this development from a third
    party. We have the right to acquire this land under certain
    conditions. Total Estimated Costs do not reflect potential costs
    to acquire the land at a future date.                                                                                                                                                                                                                                                      
|   
|(e) |  | On September 29, 2005, we acquired 79% of the square feet
    of 1095 Avenue of the Americas. Verizon, the sole tenant,
    occupied 96.8% of the portion of the property acquired by us at
    its acquisition. Verizon has been moving out in phases
    throughout 2006 and has vacated more than 90% of that space as
    of June 30, 2006. We have begun to redevelop the property
    as Verizon has vacated the premises, and we anticipate
    completing the redevelopment in Q3 2007.



57



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##### Table of Contents





Inflation




Cash Flows






|                                                         |                                                      |                          |         |          |      |   |         |          |  
|-------------------------------------------------------- | ---------------------------------------------------- | ------------------------ | ------- | -------- | ---- | - | ------- | -------- | -
|                                                         |                                                      | For the six months ended |        
|                                                         |                                                      | June 30,                 |        
|                                                         |                                                      |                          |        
|(Dollars in thousands)                                   |                                                      | 2006                     |         |          | 2005 |  
|                                                         |                                                      |                          |         |          |      |  
|Cash and cash equivalents at the beginning of the period |                                                      | $                        | 78,164  |          |      | $ | 107,126 |         
|                                                         | Net cash provided by operating activities            |                          |         | 529,266  |      |   |         | 468,328  |  
|                                                         | Net cash (used for) provided by investing activities |                          |         | (100,868 | )    |   |         | 935,210  |  
|                                                         | Net cash (used for) financing activities             |                          |         | (353,934 | )    |   |         | (894,667 | )
|                                                         |                                                      |                          |         |          |      |  
|Cash and cash equivalents at the end of the period       |                                                      | $                        | 152,628 |          |      | $ | 615,997 |         
|                                                         |                                                      |                          |         |          |      |  



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



58



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##### Table of Contents







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





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



Analysis of Selected Balance Sheet Items




|                                                                              |  |               |         |  |                   |   |         |        |  |   |         |  
|----------------------------------------------------------------------------- |  | ------------- | ------- |  | ----------------- | - | ------- | ------ |  | - | ------- | -
|(Dollars in thousands)                                                        |  | June 30, 2006 |         |  | December 31, 2005 |   |         | Change | 
|                                                                              |  |               |         |  |                   |   |         |        | 
|Investments in real estate held for sale, net of accumulated
    depreciation |  | $             |        |  |                   | $ | 75,211  |        |  | $ | (75,211 | )
|Escrow deposits and restricted cash                                           |  | $             | 230,170 |  |                   | $ | 38,658  |        |  | $ | 191,512 |  
|Deferred financing costs                                                      |  | $             | 88,237  |  |                   | $ | 58,809  |        |  | $ | 29,428  |  
|Deferred leasing costs and other related intangibles                          |  | $             | 665,429 |  |                   | $ | 522,926 |        |  | $ | 142,503 |  
|Prepaid expenses and other assets                                             |  | $             | 245,388 |  |                   | $ | 303,181 |        |  | $ | (57,793 | )
|Distribution payable                                                          |  | $             | 131,298 |  |                   | $ | 3,736   |        |  | $ | 127,562 |  



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

Accounting for the Impairment and Disposal of
Long-Lived Assets




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





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





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



59



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##### Table of Contents



Business Combinations




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





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



IV. Critical Accounting Policies and Estimates






Related Party Transactions




Subsequent Events




V.  Funds From Operations (FFO)






60



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|                                                                |                                        |                                                                               |         |     |         |   |      |   |          |      |         |  
|--------------------------------------------------------------- | -------------------------------------- | ----------------------------------------------------------------------------- | ------- | --- | ------- | - | ---- | - | -------- | ---- | ------- | -
|                                                                |                                        | For the three months ended June 30,                                           |        
|                                                                |                                        |                                                                               |        
|(Dollars in thousands, except per unit amounts)                 |                                        | 2006                                                                          |         |     |         |   | 2005 |  
|                                                                |                                        |                                                                               |         |     |         |   |      |  
|Reconciliation of net income (loss) to FFO(a):                  |                                        |                                                                               |         |     |         |   |      |   |          |     
|Net income (loss)                                               |                                        | $                                                                             | 106,233 |     |         |   |      | $ | (220,418 | )   
|Adjustments:                                                    |                                        |                                                                               |         |     |         |   |      |   |          |     
|                                                                | Plus depreciation and amortization:    |                                                                               |         |     |         |   |      |   |          |      |        
|                                                                |                                        | Included in income from continuing operations and discontinued
    operations |         |     | 229,491 |   |      |   |          |      | 202,980 |  
|                                                                |                                        | Included in income from investments in unconsolidated joint
    ventures      |         |     | 2,888   |   |      |   |          |      | 12,616  |  
|                                                                |                                        | Allocated to minority interests in partially owned properties                 |         |     | (16,930 | ) |      |   |          |      | (1,416  | )
|                                                                |                                        | Non-real estate related depreciation and amortization                         |         |     | (4,268  | ) |      |   |          |      | (3,422  | )
|                                                                | Less net gain on sales of real estate: |                                                                               |         |     |         |   |      |   |          |      |        
|                                                                |                                        | Included in income from continuing operations and discontinued
    operations |         |     | (83,096 | ) |      |   |          |      | (91,971 | )
|                                                                |                                        | Included in income from investments in unconsolidated joint
    ventures(b)   |         |     | 91      |   |      |   |          |      | (17,376 | )
|                                                                |                                        | Allocated to minority interests in partially owned properties                 |         |     |        |   |      |   |          |      | 29,699  |  
|                                                                |                                        |                                                                               |         |     |         |   |      |  
|FFO                                                             |                                        |                                                                               | 234,409 |     |         |   |      |   | (89,308  | )   
|Preferred distributions                                         |                                        |                                                                               | (8,701  | )   |         |   |      |   | (8,701   | )   
|                                                                |                                        |                                                                               |         |     |         |   |      |  
|FFO available to unitholders  basic                            |                                        | $                                                                             | 225,708 |     |         |   |      | $ | (98,009  | )   
|                                                                |                                        |                                                                               |         |     |         |   |      |  
|Net income (loss) available to unitholders per
    Unit  basic |                                        | $                                                                             | 0.24    |     |         |   |      | $ | (0.51    | )   
|                                                                |                                        |                                                                               |         |     |         |   |      |  
|FFO available to unitholders per Unit  basic                   |                                        | $                                                                             | 0.56    | (c) |         |   |      | $ | (0.22    | )(c)
|                                                                |                                        |                                                                               |         |     |         |   |      |  

|                                                                                 |  |            |             |   |     |   |             |          |  |   |             |   |  |   |             |     
|-------------------------------------------------------------------------------- |  | ---------- | ----------- | - | --- | - | ----------- | -------- |  | - | ----------- | - |  | - | ----------- | ----
|                                                                                 |  | Net Income |             |   | FFO |   |             | Net Loss |  |   | FFO         |  
|                                                                                 |  |            |             |   |     |   |             |          |  |   |             |  
|Adjustments to arrive at net income (loss) and FFO available
    to unitholders: |  |            |             |   |     |   |             |          |  |   |             |   |  |   |             |     
|Net income (loss) and FFO                                                        |  | $          | 106,233     |   |     | $ | 234,409     |          |  | $ | (220,418    | ) |  | $ | (89,308     | )   
|Preferred distributions                                                          |  |            | (8,701      | ) |     |   | (8,701      | )        |  |   | (8,701      | ) |  |   | (8,701      | )   
|                                                                                 |  |            |             |   |     |   |             |          |  |   |             |  
|Net income (loss) and FFO available to unitholders 
    diluted                 |  | $          | 97,532      |   |     | $ | 225,708     |          |  | $ | (229,119    | ) |  | $ | (98,009     | )   
|                                                                                 |  |            |             |   |     |   |             |          |  |   |             |  
|Weighted average Units and dilutive potential units outstanding                  |  |            | 408,494,060 |   |     |   | 408,494,060 |          |  |   | 455,609,570 |   |  |   | 455,609,570 |     
|                                                                                 |  |            |             |   |     |   |             |          |  |   |             |  
|Net income (loss) and FFO available to unitholders per
    Unit  diluted        |  | $          | 0.24        |   |     | $ | 0.55        | (c)      |  | $ | (0.50       | ) |  | $ | (0.22       | )(c)
|                                                                                 |  |            |             |   |     |   |             |          |  |   |             |  

|                                                                                                                                                                    |                                     |                            |             |           |  |  |  |  |             |           | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------- | -------------------------- | ----------- | --------- |  |  |  |  | ----------- | --------- | 
|                                                                                                                                                                    |                                     | Units and unit equivalents |            
|                                                                                                                                                                    |                                     |                            |            
|Weighted average Units outstanding (used for both net income
    (loss) and FFO basic per Unit calculation)                                                         |                                     |                            | 404,009,631 |           |  |  |  |  | 451,728,242 |          
|Effect of dilutive potential units:                                                                                                                                 |                                     |                            |             |           |  |  |  |  |             |          
|                                                                                                                                                                    | Share options and restricted shares |                            |             | 4,484,429 |  |  |  |  |             | 3,881,328 | 
|                                                                                                                                                                    |                                     |                            |             |           |  |  |  | 
|Weighted average Units and dilutive potential units used for net
    income (loss) available to unitholders and the calculation
    of FFO available to unitholders |                                     |                            | 408,494,060 |           |  |  |  |  | 455,609,570 |          
|                                                                                                                                                                    |                                     |                            |             |           |  |  |  | 



|    |  |                                                                                                                                                                                                                                                                                                                                                                                               
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | FFO is a non-GAAP financial measure. The most directly
    comparable GAAP measure is net income (loss), to which it is
    reconciled. See definition below.                                                                                                                                                                                                                                 
|   
|(b) |  | The loss for the three months ended June 30, 2006
    represents an adjustment to the gain previously recorded on
    properties sold in prior periods.                                                                                                                                                                                                                                       
|   
|(c) |  | FFO for the three months ended June 30, 2006 and 2005
    includes $0.2 million and $367.0 million,
    respectively, of non-cash impairment charges and losses on
    properties sold and properties held for sale, which is
    equivalent to $0.00 and $0.81 per Unit on a diluted basis,
    respectively. These charges are not added back to net income
    (loss) when calculating FFO.

61



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##### Table of Contents





|                                                                |                                        |                                                                               |         |     |          |   |      |   |         |     |          |  
|--------------------------------------------------------------- | -------------------------------------- | ----------------------------------------------------------------------------- | ------- | --- | -------- | - | ---- | - | ------- | --- | -------- | -
|                                                                |                                        | For the six months ended June 30,                                             |        
|                                                                |                                        |                                                                               |        
|(Dollars in thousands, except per unit amounts)                 |                                        | 2006                                                                          |         |     |          |   | 2005 |  
|                                                                |                                        |                                                                               |         |     |          |   |      |  
|Reconciliation of net income (loss) to FFO (a):                 |                                        |                                                                               |         |     |          |   |      |   |         |    
|Net income (loss)                                               |                                        | $                                                                             | 165,670 |     |          |   |      | $ | (99,093 | )  
|Adjustments:                                                    |                                        |                                                                               |         |     |          |   |      |   |         |    
|                                                                | Plus depreciation and amortization:    |                                                                               |         |     |          |   |      |   |         |     |         
|                                                                |                                        | Included in income from continuing operations and discontinued
    operations |         |     | 459,305  |   |      |   |         |     | 404,884  |  
|                                                                |                                        | Included in income from investments in unconsolidated joint
    ventures      |         |     | 5,661    |   |      |   |         |     | 25,048   |  
|                                                                |                                        | Allocated to minority interests in partially owned properties                 |         |     | (34,139  | ) |      |   |         |     | (2,979   | )
|                                                                |                                        | Non-real estate related depreciation and amortization                         |         |     | (8,395   | ) |      |   |         |     | (7,022   | )
|                                                                | Less net gain on sales of real estate: |                                                                               |         |     |          |   |      |   |         |     |         
|                                                                |                                        | Included in income from continuing operations and discontinued
    operations |         |     | (118,679 | ) |      |   |         |     | (116,216 | )
|                                                                |                                        | Included in income from investments in unconsolidated joint
    ventures(b)   |         |     | 91       |   |      |   |         |     | (17,376  | )
|                                                                |                                        | Allocated to minority interests in partially owned properties                 |         |     |         |   |      |   |         |     | 29,699   |  
|                                                                |                                        |                                                                               |         |     |          |   |      |  
|FFO                                                             |                                        |                                                                               | 469,514 |     |          |   |      |   | 216,945 |    
|Preferred distributions                                         |                                        |                                                                               | (17,402 | )   |          |   |      |   | (17,402 | )  
|                                                                |                                        |                                                                               |         |     |          |   |      |  
|FFO available to unitholders  basic                            |                                        | $                                                                             | 452,112 |     |          |   |      | $ | 199,543 |    
|                                                                |                                        |                                                                               |         |     |          |   |      |  
|Net income (loss) available to unitholders per
    Unit  basic |                                        | $                                                                             | 0.36    |     |          |   |      | $ | (0.26   | )  
|                                                                |                                        |                                                                               |         |     |          |   |      |  
|FFO available to unitholders per Unit  basic                   |                                        | $                                                                             | 1.11    | (c) |          |   |      | $ | 0.44    | (c)
|                                                                |                                        |                                                                               |         |     |          |   |      |  

|                                                                                 |  |            |             |   |     |   |             |          |  |   |             |   |  |   |             |    
|-------------------------------------------------------------------------------- |  | ---------- | ----------- | - | --- | - | ----------- | -------- |  | - | ----------- | - |  | - | ----------- | ---
|                                                                                 |  | Net Income |             |   | FFO |   |             | Net Loss |  |   | FFO         |  
|                                                                                 |  |            |             |   |     |   |             |          |  |   |             |  
|Adjustments to arrive at net income (loss) and FFO available
    to unitholders: |  |            |             |   |     |   |             |          |  |   |             |   |  |   |             |    
|Net income (loss) and FFO                                                        |  | $          | 165,670     |   |     | $ | 469,514     |          |  | $ | (99,093     | ) |  | $ | 216,945     |    
|Preferred distributions                                                          |  |            | (17,402     | ) |     |   | (17,402     | )        |  |   | (17,402     | ) |  |   | (17,402     | )  
|                                                                                 |  |            |             |   |     |   |             |          |  |   |             |  
|Net income (loss) and FFO available to
    unitholders  diluted                 |  | $          | 148,268     |   |     | $ | 452,112     |          |  | $ | (116,495    | ) |  | $ | 199,543     |    
|                                                                                 |  |            |             |   |     |   |             |          |  |   |             |  
|Weighted average Units and dilutive potential units outstanding                  |  |            | 411,497,236 |   |     |   | 411,497,236 |          |  |   | 454,101,167 |   |  |   | 454,101,167 |    
|                                                                                 |  |            |             |   |     |   |             |          |  |   |             |  
|Net income (loss) and FFO available to unitholders per
    Unit  diluted        |  | $          | 0.36        |   |     | $ | 1.10        | (c)      |  | $ | (0.26       | ) |  | $ | 0.44        | (c)
|                                                                                 |  |            |             |   |     |   |             |          |  |   |             |  

|                                                                                                                                                                    |                                     |                            |             |           |  |  |  |  |             |           | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------- | -------------------------- | ----------- | --------- |  |  |  |  | ----------- | --------- | 
|                                                                                                                                                                    |                                     | Units and unit equivalents |            
|                                                                                                                                                                    |                                     |                            |            
|Weighted average Units outstanding (used for both net income
    (loss) and FFO basic per Unit calculation)                                                         |                                     |                            | 407,335,183 |           |  |  |  |  | 450,881,385 |          
|Effect of dilutive potential units:                                                                                                                                 |                                     |                            |             |           |  |  |  |  |             |          
|                                                                                                                                                                    | Share options and restricted shares |                            |             | 4,162,053 |  |  |  |  |             | 3,219,782 | 
|                                                                                                                                                                    |                                     |                            |             |           |  |  |  | 
|Weighted average Units and dilutive potential units used for net
    income (loss) available to unitholders and the calculation
    of FFO available to unitholders |                                     |                            | 411,497,236 |           |  |  |  |  | 454,101,167 |          
|                                                                                                                                                                    |                                     |                            |             |           |  |  |  | 



|    |  |                                                                                                                                                                                                                                                                                                                                                                                             
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | FFO is a non-GAAP financial measure. The most directly
    comparable GAAP measure is net income (loss), to which it is
    reconciled. See definition below.                                                                                                                                                                                                                               
|   
|(b) |  | The loss for the six months ended June 30, 2006 represents
    an adjustment to the gain previously recorded on properties sold
    in prior periods.                                                                                                                                                                                                                                       
|   
|(c) |  | FFO for the six months ended June 30, 2006 and 2005
    includes $1.2 million and $380.6 million,
    respectively, of non-cash impairment charges and losses on
    properties sold and properties held for sale, which is
    equivalent to $0.00 and $0.84 per unit on a diluted basis,
    respectively. These charges are not added back to net income
    (loss) when calculating FFO.

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FFO Definition:









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








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

Evaluation of Disclosure Controls and Procedures


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


Changes in Internal Control over Financial Reporting




63



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##### Table of Contents






PART II  OTHER INFORMATION







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








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

10-K


We were a net seller of real estate in 2005, which has
reduced our income from continuing operations and funds from
operations. Future disposition activity may also result in gains
or losses on sales of real estate, impairment charges and
earnings dilution.









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



|             |                     |                    |            |               |          |                    |                  |                 |                       |                 |              |   |  |  |   |  | 
|------------ | ------------------- | ------------------ | ---------- | ------------- | -------- | ------------------ | ---------------- | --------------- | --------------------- | --------------- | ------------ | - |  |  | - |  | 
|             |                     |                    |            |               |          | Total Number of    |                  |                 | Dollar Value of Units |                
|             |                     |                    |            |               |          | Units Purchased as |                  |                 | That May Yet be       |                
|             |                     |                    |            | Average Price |          |                    | Part of Publicly |                 |                       | Purchased Under |             
|             |                     | Total Number of    |            |               | Paid Per |                    |                  | Announced Plans |                       |                 | the Plans or |  
|Period       |                     | Units Purchased(a) |            |               | Unit     |                    |                  | or Programs     |                       |                 | Programs     |  
|             |                     |                    |            |               |          |                    |                  |                 |                       |                 |              |  
|April 1  30 |                     |                    | 2,132,569  |               |          | $                  | 32.93            |                 |                       |                 |             |   |  |  |  | 
|May 1  31   |                     |                    | 1,307,811  |               |          |                    | 32.90            |                 |                       |                 |             |   |  |  |  | 
|June 1  30  |                     |                    | 17,417,549 |               |          |                    | 36.18            |                 |                       |                 |             |   |  |  |  | 
|             |                     |                    |            |               |          |                    |                  |                 |                       |                 |              |  
|             | Second quarter 2006 |                    |            | 20,857,929    |          |                    | $                | 35.64           |                       |                 |              |  |  |  |   |  | 
|             |                     |                    |            |               |          |                    |                  |                 |                       |                 |              |  



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | The number of Units purchased is comprised of the redemption of
    Units held by our limited partners, excluding Equity Office.
    Units redeemed in exchange for Common Shares are not considered
    a repurchase and are, therefore, excluded from the table above.
    At any time on or after the first anniversary of the date of
    issuance, our limited partners have the right to require EOP
    Partnership to redeem their Units, subject to certain
    limitations. Equity Office, on behalf of and as the general
    partner of EOP Partnership, has the right to cause the
    redemption obligation to be satisfied by issuance of an
    equivalent number of Common Shares, or by a cash payment equal
    to the value of such Common Shares. Also included in the total
    number of Units purchased are Units redeemed in response to
    repurchases made by Equity Office, including repurchases of
    Equity Office Common Shares in the open market (a) as part
    of its Common Share Repurchase Program, (b) as part of
    separate authorization obtained in connection with the issuance
    of $1.5 billion of exchangeable senior unsecured notes,
    (c) as part of its Supplemental Retirement Savings Plan,
    (d) to fund shares purchased under its 1997 Employee Share
    Purchase Plan and (e) to fund fees paid in Equity Office
    Common Shares to each of its non-employee trustees, except
    Mr. Zell, as well as Equity Office Common Shares
    surrendered to Equity Office to satisfy withholding obligations
    in connection with the vesting of restricted stock issued to
    employees.

64



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##### Table of Contents








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



65



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##### Table of Contents






SIGNATURES




|                     |  |                                                                                                                                                         
|-------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------
|                     |  | EOP OPERATING LIMITED PARTNERSHIP                                                                                                                       
|                    
|                     |  | By: EQUITY OFFICE PROPERTIES TRUST
    its general partner                                                                                              
|                    
|Date: August 8, 2006 |  | /s/ RICHARD D. KINCAID                                                                                                                                  
|                     |  |                                                                                                                                                         
|                     |  | Richard D. Kincaid                                                                                                                                      
|                     |  | President and Chief Executive Officer
    of Equity Office Properties Trust, the general
    partner of EOP Operating Limited Partnership               
|                    
|                    
|Date: August 8, 2006 |  | /s/ MARSHA C. WILLIAMS                                                                                                                                  
|                     |  |                                                                                                                                                         
|                     |  | Marsha C. Williams                                                                                                                                      
|                     |  | Executive Vice President and Chief Financial Officer
    of Equity Office Properties Trust, the general
    partner of EOP Operating Limited Partnership

66



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EXHIBIT INDEX


|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                               |  |                                                                                                                                                          
|------- | -- | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                              
|No.     |    | Description |  | Location                                                                                                                                                                                                                                                                                                                                                                                                     
|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                              
|        | 4  | .1          |  | Second Supplemental Indenture, dated as of June 27, 2006, among
    EOP Partnership, Equity Office and U.S. Bank National
    Association (formerly U.S. Bank Trust National Association)                                                                                                                                                                                                                     |  | Incorporated by reference to Exhibit 4.1 to EOP
    Partnerships and Equity Offices Current Report on
    Form 8-K filed with the SEC on June 28, 2006 
|        | 4  | .2          |  | Form of 4.00% exchangeable senior note due 2026 (attached as
    Exhibit A to the Second Supplemental Indenture filed as
    Exhibit 4.1 hereto)                                                                                                                                                                                                                                                              |  | Incorporated by reference to Exhibit 4.2 to EOP
    Partnerships and Equity Offices Current Report on
    Form 8-K filed with the SEC on June 28, 2006 
|        | 4  | .3          |  | Registration Rights Agreement, dated as of June 27, 2006,
    among EOP Partnership, Equity Office and Merrill Lynch, as
    representative of the Initial Purchasers                                                                                                                                                                                                                                         |  | Incorporated by reference to Exhibit 4.3 to EOP
    Partnerships and Equity Offices Current Report on
    Form 8-K filed with the SEC on June 28, 2006 
|        | 10 | .1          |  | Common Share Delivery Agreement dated as of June 27, 2006
    between EOP Partnership and Equity Office                                                                                                                                                                                                                                                                                                       |  | Incorporated by reference to Exhibit 10.1 to EOP
    Partnerships and Equity Offices Current Report on
    Form 8-K filed with the SEC on June 28, 2006
|        | 10 | .2          |  | Amendment No. 1 made as of June 21, 2006 to Amended
    and Restated Credit Agreement dated December 9, 2005, by
    and among EOP Operating Limited Partnership, Equity Office
    Properties Trust, the Banks listed therein, Wachovia Bank,
    National Association, as Administrative Agent, Bank of America,
    N.A., as Syndication Agent, and JPMorgan Chase Bank, N.A., as
    Documentation Agent. |  | Incorporated by reference to Exhibit 10.1 to EOP
    Partnerships and Equity Offices Current Report on
    Form 8-K filed with the SEC on July 13, 2006
|        | 10 | .3          |  | Amendment No. 2 made as of July 7, 2006 to Amended and
    Restated Credit Agreement dated December 9, 2005, by and
    among EOP Operating Limited Partnership, Equity Office
    Properties Trust, the Banks listed therein, Wachovia Bank,
    National Association, as Administrative Agent, Bank of America,
    N.A., as Syndication Agent, and JPMorgan Chase Bank, N.A., as
    Documentation Agent.  |  | Incorporated by reference to Exhibit 10.2 to EOP
    Partnerships and Equity Offices Current Report on
    Form 8-K filed with the SEC on July 13, 2006
|        | 12 | .1          |  | Statement of Computation of Ratio of Earnings to Fixed Charges                                                                                                                                                                                                                                                                                                                                                |  | Filed herewith                                                                                                                                           
|        | 31 | .1          |  | Certifications of Chief Executive Officer pursuant to
    Rule 13a-14(a) and Rule 15d-14(a) of the Securities
    Exchange Act, as amended                                                                                                                                                                                                                                                                    |  | Filed herewith                                                                                                                                           
|        | 31 | .2          |  | Certifications of Chief Financial Officer pursuant to
    Rule 13a-14(a) and Rule 15d-14(a) of the Securities
    Exchange Act, as amended                                                                                                                                                                                                                                                                    |  | Filed herewith                                                                                                                                           
|        | 32 | .1          |  | Certifications of Chief Executive Officer and Chief Financial
    Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                |  | Filed herewith