Equity Office Announces First Quarter 2001 Results FFO Per Share Increases 13%

Apr 26, 2001, 01:00 ET from Equity Office Properties Trust

    CHICAGO, April 26 /PRNewswire/ -- Equity Office Properties Trust
 (NYSE:   EOP) today reported results for the first quarter ended March 31, 2001.
 Funds from operations (FFO) for the first quarter ended March 31, 2001,
 totaled $272.6 million or $.78 per share on a fully diluted basis, as compared
 to FFO for the same period in 2000 of $195.6 million, or $.69 per fully
 diluted share.  This represents a 13% increase in fully diluted FFO per share
 between periods.  Revenues for the first quarter 2001 totaled $663.2 million,
 as compared to $468.9 million for the first quarter 2000, a 41% increase.  The
 weighted average number of basic shares and units outstanding totaled
 348,476,502 in the first quarter, and totaled 351,400,853 on a fully diluted
 basis.
     "Despite increased economic volatility, we continued to deliver double-
 digit FFO earnings growth in the first quarter" stated Tim Callahan, president
 and chief executive officer of Equity Office.  "These results are consistent
 with our strategy to focus on higher growth office markets with strong
 fundamentals."
     Net income before extraordinary items totaled $132.9 million in the first
 quarter 2001, as compared to $103.9 million in 2000, a 28% increase year over
 year.
     Same store net operating income for the first quarter 2001 increased 5.3%
 on a GAAP basis and 6.8% on a cash basis, compared to the first quarter 2000.
 Occupancy on this same store portfolio consisting of 288 properties acquired
 or placed in service on or prior to January 1, 2000, increased from 93.9% on
 January 1, 2000, to 94.1% on March 31, 2001.  Equity Office's total portfolio
 at March 31, 2001, was 94.2% occupied and 95.5% leased.
     Operating margins increased to 67.0% in the first quarter 2001, as
 compared to 66.3% for the first quarter 2000.
     Leasing activity during the quarter totaled approximately 3,622,500 square
 feet.  The weighted average gross rental rate on leases signed was $40.18, as
 compared to $26.30 for the average rental rate on expiring leases, a 53%
 increase in rental rates on a GAAP basis.
 
     Quarterly Highlights
 
     * On February 23, 2001, Equity Office announced a merger agreement with
       Spieker Properties, Inc. valuing Spieker at approximately $7.3 billion,
       including transaction costs, approximately $2.1 billion in debt and
       $431 million in preferred stock and partnership units.  Equity Office
       will pay approximately $1.085 billion in cash and issue approximately
       118.6 million new Equity Office common shares and EOP Partnership Units,
       and 14.3 million new Equity Office preferred shares.  The merger is
       expected to close prior to mid-July 2001.
 
     * Also in February, Fortune Magazine recognized Equity Office as the
       #1 Real Estate Company on America's Most Admired Companies list for
       2000.  EOP placed in the top three percentile of the 535 companies
       that made the list, and scored higher than any other Illinois-based
       company.  Fortune's Most Admired list is based on companies' strengths
       in the following areas: Management Quality, Product Quality,
       Innovativeness, Long-Term Investment Value, Financial Soundness,
       Talent, Social Responsibility and Use of Corporate Assets.
 
     * In January, Equity Office announced the formation of a new Seattle
       Region.  The announcement was made in tandem with Equity Office's
       decision to bring in-house the leasing and management for the majority
       of its 8.1-million-square-foot Pacific Northwest portfolio, previously
       managed by Wright Runstad.  The two companies remain in partnership, and
       Wright Runstad & Company is continuing to lease and manage a portion of
       Equity Office's local portfolio.
 
     * In January, the company sold the 57,366 square foot Warner Park Center
       in Woodland Hills, CA, for approximately $9 million.
 
     Earnings Estimates:
     On today's conference call, management will discuss earnings guidance for
 2001 and 2002.  Based on management's view of current market conditions and
 certain assumptions with regard to rental rates and other projections, a
 general range of fully diluted FFO per share for each year will be discussed
 as follows:
 
                           Year          Range
                           2001       $3.18 - $3.20
                           2002       $3.57 - $3.62
 
     These results assume the closing of the proposed merger with Spieker
 Properties, Inc. and accretion, as a result of that transaction, of
 approximately $.01 in 2001 and $.10 in 2002 per each fully diluted common
 share of Equity Office.
     Estimates of future FFO per share are by definition, and certain other
 matters discussed in this press release may be, forward-looking statements
 within the meaning of the Private Securities Litigation Reform Act of 1995.
 Although Equity Office Properties Trust believes the expectations reflected in
 such forward-looking statements are based on reasonable assumptions, there can
 be no assurance that its expectations will be attained.  Certain factors that
 could cause actual results to differ materially from Equity Office's
 expectations are set forth as risk factors in the company's SEC reports and
 filings, including its current report on Form 8-K dated March 23, 2001.
 Included among these factors are changes in general economic conditions
 including changes in the economic conditions affecting industries in which its
 principal tenants compete; any failure of the general economy to recover
 timely from the current economic downturn; Equity Office's ability to timely
 lease or re-lease space at current or anticipated rents; its ability to
 achieve economies of scale over time; the demand for tenant services beyond
 those traditionally provided by landlords; changes in interest rates; changes
 in operating costs, including utility costs; its ability to attract and retain
 high-quality personnel at a reasonable cost in a highly competitive labor
 environment; future demand for its debt and equity securities; its ability to
 refinance its debt on reasonable terms at maturity; its ability to complete
 current and future development projects on schedule and on budget; the demand
 for office space in California and other West Coast markets in which Equity
 Office and Spieker have a presence; Equity Office's ability to merge
 successfully the operations of Spieker into Equity Office; and continuing
 supply constraints in Spieker's current markets.  Many of these factors are
 beyond Equity Office's ability to control or predict.  Forward-looking
 statements are not guarantees of performance.  For forward-looking statements
 herein, Equity Office claims the protection of the safe harbor for forward-
 looking statements contained in the Private Securities Litigation Reform Act
 of 1995.  The company assumes no obligation to update or supplement forward-
 looking statements that become untrue because of subsequent events.
     Investors are urged to read the joint proxy statement/prospectus relating
 to the proposed merger of Spieker Properties, Inc. with and into Equity Office
 Properties Trust, and to read the consent solicitation/information
 statement/prospectus relating to the proposed merger of Spieker Properties,
 L.P. with and into EOP Operating Limited Partnership, as these documents will
 contain important information.  Initial filings of the joint proxy
 statement/prospectus and the consent solicitation/information
 statement/prospectus have been made with the Securities and Exchange
 Commission.  Investors may obtain a free copy of these filings at the
 Commission's web site at http://www.sec.gov .  Investors may also obtain a
 copy of the final joint proxy statement/prospectus and the final consent
 solicitation/information statement/prospectus by directing a request to Equity
 Office Properties Trust, Two North Riverside Plaza, Chicago, Illinois 60606,
 Attention: Diane Morefield.  Information concerning the identity of
 participants in the solicitation of proxies by the Equity Office board of
 trustees and their direct or indirect interests, by security holdings or
 otherwise, may be obtained from the joint proxy statement/prospectus.
     Equity Office Properties Trust (NYSE:   EOP) is the nation's largest
 publicly held office building owner and manager with a portfolio of 380
 buildings comprising 99 million square feet in 24 states and the District of
 Columbia. Equity Office has an ownership presence in 37 Metropolitan
 Statistical Areas (MSAs) and in 103 submarkets, enabling it to provide a wide
 range of office solutions for local, regional and national customers. On
 February 23, 2001, Equity Office announced a merger agreement, subject to
 shareholder approval, with Spieker Properties, Inc., a publicly traded real
 estate company.  At the time of the announcement, Spieker owned and operated
 approximately 38 million square feet of commercial real estate space, 25
 million square feet of which was office space, in California and the Pacific
 Northwest.  Equity Office currently expects the transaction to close prior to
 mid-July 2001, subject to its approval by Equity Office and Spieker
 shareholders.
     Copies of EOP's March 31, 2001 First Quarter Supplemental Disclosure
 package and Form 10-Q are available upon request to Tina Royse, Administrative
 Assistant - Investor Relations, Two North Riverside Plaza, Chicago, Illinois
 60606, 1-800-692-5304, e-mail: tina_royse@equityoffice.com.
     In addition, the First Quarter Supplemental Disclosure and further Equity
 Office information can be found on the company's web site at
 www.equityoffice.com .
 
 
     Statements of Operations
     (Dollars in thousands, except per share amounts)
 
                                             Equity Office Properties Trust
                                           For the three months ended March 31,
                                                      2001              2000
 
     Revenues:
          Rental                                   $509,135          $358,366
          Tenant reimbursements                      97,321            62,983
          Parking                                    30,590            26,731
          Other                                      13,163            12,856
          Fee income                                  2,172             2,235
          Interest / dividends                       10,835             5,704
                Total revenues                      663,216           468,875
 
     Expenses:
          Interest:
               Expense incurred                     157,940           100,532
               Amortization of deferred
                financing costs                       1,326             1,377
          Depreciation                              114,566            83,889
          Amortization                                9,082             4,386
          Real estate taxes                          76,662            57,910
          Insurance                                   3,307             2,740
          Repairs and maintenance                    65,600            47,899
          Property operating                         69,022            46,788
          Ground rent                                 3,081             2,024
          General and administrative                 25,639            19,651
                Total expenses                      526,225           367,196
 
     Income before allocation to minority
      interests, income from investment in
         unconsolidated joint ventures,
          net gain on sales of real
          estate, extraordinary
         items and cumulative effect of a
          change in accounting principle            136,991           101,679
     Minority Interests:
       EOP Partnership                              (16,282)          (12,416)
       Partially owned properties                    (3,253)             (553)
     Income from investment in
      unconsolidated joint ventures                  15,426            11,374
     Net gain on sales of real estate                   -               3,862
     Income before extraordinary items and
      cumulative effect of a change in
       accounting principle                         132,882           103,946
     Extraordinary items                                -                (611)
     Cumulative effect of a change in
      accounting principle                           (1,142)              -
     Net income                                     131,740           103,335
     Put option settlement                              -              (1,030)
     Preferred distributions, net                   (10,884)          (10,697)
         Net income available for Common
          Shares                                   $120,856           $91,608
 
     Net income available per weighted
      average Common Share outstanding -
      Basic                                           $0.39             $0.37
 
     Weighted average Common Shares
      outstanding - Basic                           306,971           247,695
 
     Net income available per weighted
      average Common Share
             and common share equivalent
              outstanding - Diluted                   $0.39             $0.37
 
     Weighted average Common Shares and
      common share
           equivalents outstanding -
            Diluted                                 351,401           283,569
 
     Property Revenues less Property
      Operating Expenses                           $435,618          $305,599
 
     Property Operating Margin                        67.0%             66.3%
 
 
     Funds From Operations
      (Dollars in thousands, except per share/unit amounts)
 
                                             Equity Office Properties Trust
                                          For the three months ended March 31,
                                                 2001              2000
 
     Income before allocation to minority
      interests, income from
          investment in unconsolidated
           joint ventures, net gain on
           sales
          of real estate, extraordinary
           items and cumulative effect of
           a change in accounting
           principle                               $136,991          $101,679
     Add back (deduct):
          (Income) allocated to minority
           interests for partially owned
           properties                                (3,253)             (553)
          Income from investments in
           unconsolidated joint ventures             15,426            11,374
         Depreciation and amortization
          (real estate related) (including
                 Equity Office's share of
                  unconsolidated joint
                  ventures)                         134,311            94,786
          Put option settlement                         -              (1,030)
          Preferred distributions                   (10,884)          (10,697)
     Funds from Operations                          272,591           195,559
          Less deferred rental revenue              (14,985)          (12,707)
          Plus deferred rental expense                  661               501
     Adjusted Funds from Operations                $258,267          $183,353
 
     Funds from Operations per weighted
      average Common Share and Unit -
      Basic                                           $0.78             $0.69
 
     Weighted average Common Shares and
      Units outstanding - Basic                     348,477           281,381
 
     Funds from Operations per weighted
      average Common Share, Unit and
        common share equivalent
         outstanding - Diluted                        $0.78             $0.69
 
     Weighted average Common Shares, Units
      and common share
        equivalents outstanding - Diluted           351,401           283,569
 
 
     Balance Sheets
     (Dollars in thousands, except per share amounts)
 
                                         Equity Office Properties Trust
                                                         December 31,
                                          March 31, 2001         2000
 
     Assets:
          Investment in real estate         $17,543,327  $17,460,534
          Developments in process                81,079       70,422
          Land available for development         88,424       88,424
          Accumulated depreciation           (1,100,273)    (978,055)
                     Investment in real
                      estate, net of
                      accumulated
                      depreciation           16,612,557   16,641,325
          Cash and cash equivalents              37,610       53,256
          Tenant and other receivables (net
           of allowance for doubtful
           accounts of $2,563 and $1,873,
           respectively)                         84,648      101,784
          Deferred rent receivable              222,187      207,088
          Escrow deposits and restricted
           cash                                  45,131       39,832
          Investments in unconsolidated
           joint ventures                     1,135,205    1,164,613
          Deferred financing costs (net of
           accumulated amortization of
           $25,273 and $21,756,
           respectively)                         78,338       81,854
          Deferred leasing costs (net of
           accumulated amortization of
           $50,966 and $39,906,
           respectively)                        158,779      151,178
          Prepaid expenses and other assets
           (net of discounts of $78,337 and
           $78,871, respectively)               348,843      353,323
                     Total Assets           $18,723,298  $18,794,253
 
     Liabilities and Shareholders' Equity:
          Mortgage debt (including a net
           discount of $(19,056) and
           $(17,825), respectively)          $2,784,255   $2,915,801
          Unsecured notes (including a net
           discount of $(3,596) and
           $(3,807), respectively)            5,836,404    5,836,193
          Line of credit                         37,500       51,000
          Accounts payable and accrued
           expenses                             418,781      497,811
          Distribution payable                  160,679        3,681
          Other liabilities                     181,915      204,298
                     Total Liabilities        9,419,534    9,508,784
          Commitments and contingencies
          Minority Interests:
             EOP Partnership                    995,943    1,021,235
             Partially owned properties         198,280      197,161
                     Total Minority
                      Interests               1,194,223    1,218,396
          Shareholders' Equity:
             Preferred Shares, 100,000,000
              authorized:
                  8.98% Series A Cumulative
                   Redeemable Preferred
                   Shares, liquidation
                   preference
                         $25.00 per share,
                          7,994,000 issued
                          and outstanding       199,850      199,850
                  5.25% Series B
                   Convertible, Cumulative
                   Redeemable Preferred
                   Shares, liquidation
                         preference $50.00
                          per share,
                          5,990,000 and
                          6,000,000 issued
                          and outstanding,
                          respectively          299,500      300,000
                  8.625% Series C
                   Cumulative Redeemable
                   Preferred Shares,
                   liquidation preference
                         $25.00 per share,
                          4,562,900 issued
                          and outstanding       114,073      114,073
             Common Shares, $0.01 par
              value; 750,000,000 shares
              authorized,
                  309,016,219 and
                   306,966,596 issued and
                   outstanding,
                   respectively                   3,090        3,070
             Additional paid in capital       7,699,669    7,645,901
             Deferred compensation              (30,157)     (14,871)
             Dividends in excess of
              accumulated earnings             (170,897)    (152,695)
             Accumulated other
              comprehensive loss                 (5,587)     (28,255)
                     Total Shareholders'
                      Equity                  8,109,541    8,067,073
                     Total Liabilities and
                      Shareholders' Equity  $18,723,298  $18,794,253
 
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SOURCE Equity Office Properties Trust
    CHICAGO, April 26 /PRNewswire/ -- Equity Office Properties Trust
 (NYSE:   EOP) today reported results for the first quarter ended March 31, 2001.
 Funds from operations (FFO) for the first quarter ended March 31, 2001,
 totaled $272.6 million or $.78 per share on a fully diluted basis, as compared
 to FFO for the same period in 2000 of $195.6 million, or $.69 per fully
 diluted share.  This represents a 13% increase in fully diluted FFO per share
 between periods.  Revenues for the first quarter 2001 totaled $663.2 million,
 as compared to $468.9 million for the first quarter 2000, a 41% increase.  The
 weighted average number of basic shares and units outstanding totaled
 348,476,502 in the first quarter, and totaled 351,400,853 on a fully diluted
 basis.
     "Despite increased economic volatility, we continued to deliver double-
 digit FFO earnings growth in the first quarter" stated Tim Callahan, president
 and chief executive officer of Equity Office.  "These results are consistent
 with our strategy to focus on higher growth office markets with strong
 fundamentals."
     Net income before extraordinary items totaled $132.9 million in the first
 quarter 2001, as compared to $103.9 million in 2000, a 28% increase year over
 year.
     Same store net operating income for the first quarter 2001 increased 5.3%
 on a GAAP basis and 6.8% on a cash basis, compared to the first quarter 2000.
 Occupancy on this same store portfolio consisting of 288 properties acquired
 or placed in service on or prior to January 1, 2000, increased from 93.9% on
 January 1, 2000, to 94.1% on March 31, 2001.  Equity Office's total portfolio
 at March 31, 2001, was 94.2% occupied and 95.5% leased.
     Operating margins increased to 67.0% in the first quarter 2001, as
 compared to 66.3% for the first quarter 2000.
     Leasing activity during the quarter totaled approximately 3,622,500 square
 feet.  The weighted average gross rental rate on leases signed was $40.18, as
 compared to $26.30 for the average rental rate on expiring leases, a 53%
 increase in rental rates on a GAAP basis.
 
     Quarterly Highlights
 
     * On February 23, 2001, Equity Office announced a merger agreement with
       Spieker Properties, Inc. valuing Spieker at approximately $7.3 billion,
       including transaction costs, approximately $2.1 billion in debt and
       $431 million in preferred stock and partnership units.  Equity Office
       will pay approximately $1.085 billion in cash and issue approximately
       118.6 million new Equity Office common shares and EOP Partnership Units,
       and 14.3 million new Equity Office preferred shares.  The merger is
       expected to close prior to mid-July 2001.
 
     * Also in February, Fortune Magazine recognized Equity Office as the
       #1 Real Estate Company on America's Most Admired Companies list for
       2000.  EOP placed in the top three percentile of the 535 companies
       that made the list, and scored higher than any other Illinois-based
       company.  Fortune's Most Admired list is based on companies' strengths
       in the following areas: Management Quality, Product Quality,
       Innovativeness, Long-Term Investment Value, Financial Soundness,
       Talent, Social Responsibility and Use of Corporate Assets.
 
     * In January, Equity Office announced the formation of a new Seattle
       Region.  The announcement was made in tandem with Equity Office's
       decision to bring in-house the leasing and management for the majority
       of its 8.1-million-square-foot Pacific Northwest portfolio, previously
       managed by Wright Runstad.  The two companies remain in partnership, and
       Wright Runstad & Company is continuing to lease and manage a portion of
       Equity Office's local portfolio.
 
     * In January, the company sold the 57,366 square foot Warner Park Center
       in Woodland Hills, CA, for approximately $9 million.
 
     Earnings Estimates:
     On today's conference call, management will discuss earnings guidance for
 2001 and 2002.  Based on management's view of current market conditions and
 certain assumptions with regard to rental rates and other projections, a
 general range of fully diluted FFO per share for each year will be discussed
 as follows:
 
                           Year          Range
                           2001       $3.18 - $3.20
                           2002       $3.57 - $3.62
 
     These results assume the closing of the proposed merger with Spieker
 Properties, Inc. and accretion, as a result of that transaction, of
 approximately $.01 in 2001 and $.10 in 2002 per each fully diluted common
 share of Equity Office.
     Estimates of future FFO per share are by definition, and certain other
 matters discussed in this press release may be, forward-looking statements
 within the meaning of the Private Securities Litigation Reform Act of 1995.
 Although Equity Office Properties Trust believes the expectations reflected in
 such forward-looking statements are based on reasonable assumptions, there can
 be no assurance that its expectations will be attained.  Certain factors that
 could cause actual results to differ materially from Equity Office's
 expectations are set forth as risk factors in the company's SEC reports and
 filings, including its current report on Form 8-K dated March 23, 2001.
 Included among these factors are changes in general economic conditions
 including changes in the economic conditions affecting industries in which its
 principal tenants compete; any failure of the general economy to recover
 timely from the current economic downturn; Equity Office's ability to timely
 lease or re-lease space at current or anticipated rents; its ability to
 achieve economies of scale over time; the demand for tenant services beyond
 those traditionally provided by landlords; changes in interest rates; changes
 in operating costs, including utility costs; its ability to attract and retain
 high-quality personnel at a reasonable cost in a highly competitive labor
 environment; future demand for its debt and equity securities; its ability to
 refinance its debt on reasonable terms at maturity; its ability to complete
 current and future development projects on schedule and on budget; the demand
 for office space in California and other West Coast markets in which Equity
 Office and Spieker have a presence; Equity Office's ability to merge
 successfully the operations of Spieker into Equity Office; and continuing
 supply constraints in Spieker's current markets.  Many of these factors are
 beyond Equity Office's ability to control or predict.  Forward-looking
 statements are not guarantees of performance.  For forward-looking statements
 herein, Equity Office claims the protection of the safe harbor for forward-
 looking statements contained in the Private Securities Litigation Reform Act
 of 1995.  The company assumes no obligation to update or supplement forward-
 looking statements that become untrue because of subsequent events.
     Investors are urged to read the joint proxy statement/prospectus relating
 to the proposed merger of Spieker Properties, Inc. with and into Equity Office
 Properties Trust, and to read the consent solicitation/information
 statement/prospectus relating to the proposed merger of Spieker Properties,
 L.P. with and into EOP Operating Limited Partnership, as these documents will
 contain important information.  Initial filings of the joint proxy
 statement/prospectus and the consent solicitation/information
 statement/prospectus have been made with the Securities and Exchange
 Commission.  Investors may obtain a free copy of these filings at the
 Commission's web site at http://www.sec.gov .  Investors may also obtain a
 copy of the final joint proxy statement/prospectus and the final consent
 solicitation/information statement/prospectus by directing a request to Equity
 Office Properties Trust, Two North Riverside Plaza, Chicago, Illinois 60606,
 Attention: Diane Morefield.  Information concerning the identity of
 participants in the solicitation of proxies by the Equity Office board of
 trustees and their direct or indirect interests, by security holdings or
 otherwise, may be obtained from the joint proxy statement/prospectus.
     Equity Office Properties Trust (NYSE:   EOP) is the nation's largest
 publicly held office building owner and manager with a portfolio of 380
 buildings comprising 99 million square feet in 24 states and the District of
 Columbia. Equity Office has an ownership presence in 37 Metropolitan
 Statistical Areas (MSAs) and in 103 submarkets, enabling it to provide a wide
 range of office solutions for local, regional and national customers. On
 February 23, 2001, Equity Office announced a merger agreement, subject to
 shareholder approval, with Spieker Properties, Inc., a publicly traded real
 estate company.  At the time of the announcement, Spieker owned and operated
 approximately 38 million square feet of commercial real estate space, 25
 million square feet of which was office space, in California and the Pacific
 Northwest.  Equity Office currently expects the transaction to close prior to
 mid-July 2001, subject to its approval by Equity Office and Spieker
 shareholders.
     Copies of EOP's March 31, 2001 First Quarter Supplemental Disclosure
 package and Form 10-Q are available upon request to Tina Royse, Administrative
 Assistant - Investor Relations, Two North Riverside Plaza, Chicago, Illinois
 60606, 1-800-692-5304, e-mail: tina_royse@equityoffice.com.
     In addition, the First Quarter Supplemental Disclosure and further Equity
 Office information can be found on the company's web site at
 www.equityoffice.com .
 
 
     Statements of Operations
     (Dollars in thousands, except per share amounts)
 
                                             Equity Office Properties Trust
                                           For the three months ended March 31,
                                                      2001              2000
 
     Revenues:
          Rental                                   $509,135          $358,366
          Tenant reimbursements                      97,321            62,983
          Parking                                    30,590            26,731
          Other                                      13,163            12,856
          Fee income                                  2,172             2,235
          Interest / dividends                       10,835             5,704
                Total revenues                      663,216           468,875
 
     Expenses:
          Interest:
               Expense incurred                     157,940           100,532
               Amortization of deferred
                financing costs                       1,326             1,377
          Depreciation                              114,566            83,889
          Amortization                                9,082             4,386
          Real estate taxes                          76,662            57,910
          Insurance                                   3,307             2,740
          Repairs and maintenance                    65,600            47,899
          Property operating                         69,022            46,788
          Ground rent                                 3,081             2,024
          General and administrative                 25,639            19,651
                Total expenses                      526,225           367,196
 
     Income before allocation to minority
      interests, income from investment in
         unconsolidated joint ventures,
          net gain on sales of real
          estate, extraordinary
         items and cumulative effect of a
          change in accounting principle            136,991           101,679
     Minority Interests:
       EOP Partnership                              (16,282)          (12,416)
       Partially owned properties                    (3,253)             (553)
     Income from investment in
      unconsolidated joint ventures                  15,426            11,374
     Net gain on sales of real estate                   -               3,862
     Income before extraordinary items and
      cumulative effect of a change in
       accounting principle                         132,882           103,946
     Extraordinary items                                -                (611)
     Cumulative effect of a change in
      accounting principle                           (1,142)              -
     Net income                                     131,740           103,335
     Put option settlement                              -              (1,030)
     Preferred distributions, net                   (10,884)          (10,697)
         Net income available for Common
          Shares                                   $120,856           $91,608
 
     Net income available per weighted
      average Common Share outstanding -
      Basic                                           $0.39             $0.37
 
     Weighted average Common Shares
      outstanding - Basic                           306,971           247,695
 
     Net income available per weighted
      average Common Share
             and common share equivalent
              outstanding - Diluted                   $0.39             $0.37
 
     Weighted average Common Shares and
      common share
           equivalents outstanding -
            Diluted                                 351,401           283,569
 
     Property Revenues less Property
      Operating Expenses                           $435,618          $305,599
 
     Property Operating Margin                        67.0%             66.3%
 
 
     Funds From Operations
      (Dollars in thousands, except per share/unit amounts)
 
                                             Equity Office Properties Trust
                                          For the three months ended March 31,
                                                 2001              2000
 
     Income before allocation to minority
      interests, income from
          investment in unconsolidated
           joint ventures, net gain on
           sales
          of real estate, extraordinary
           items and cumulative effect of
           a change in accounting
           principle                               $136,991          $101,679
     Add back (deduct):
          (Income) allocated to minority
           interests for partially owned
           properties                                (3,253)             (553)
          Income from investments in
           unconsolidated joint ventures             15,426            11,374
         Depreciation and amortization
          (real estate related) (including
                 Equity Office's share of
                  unconsolidated joint
                  ventures)                         134,311            94,786
          Put option settlement                         -              (1,030)
          Preferred distributions                   (10,884)          (10,697)
     Funds from Operations                          272,591           195,559
          Less deferred rental revenue              (14,985)          (12,707)
          Plus deferred rental expense                  661               501
     Adjusted Funds from Operations                $258,267          $183,353
 
     Funds from Operations per weighted
      average Common Share and Unit -
      Basic                                           $0.78             $0.69
 
     Weighted average Common Shares and
      Units outstanding - Basic                     348,477           281,381
 
     Funds from Operations per weighted
      average Common Share, Unit and
        common share equivalent
         outstanding - Diluted                        $0.78             $0.69
 
     Weighted average Common Shares, Units
      and common share
        equivalents outstanding - Diluted           351,401           283,569
 
 
     Balance Sheets
     (Dollars in thousands, except per share amounts)
 
                                         Equity Office Properties Trust
                                                         December 31,
                                          March 31, 2001         2000
 
     Assets:
          Investment in real estate         $17,543,327  $17,460,534
          Developments in process                81,079       70,422
          Land available for development         88,424       88,424
          Accumulated depreciation           (1,100,273)    (978,055)
                     Investment in real
                      estate, net of
                      accumulated
                      depreciation           16,612,557   16,641,325
          Cash and cash equivalents              37,610       53,256
          Tenant and other receivables (net
           of allowance for doubtful
           accounts of $2,563 and $1,873,
           respectively)                         84,648      101,784
          Deferred rent receivable              222,187      207,088
          Escrow deposits and restricted
           cash                                  45,131       39,832
          Investments in unconsolidated
           joint ventures                     1,135,205    1,164,613
          Deferred financing costs (net of
           accumulated amortization of
           $25,273 and $21,756,
           respectively)                         78,338       81,854
          Deferred leasing costs (net of
           accumulated amortization of
           $50,966 and $39,906,
           respectively)                        158,779      151,178
          Prepaid expenses and other assets
           (net of discounts of $78,337 and
           $78,871, respectively)               348,843      353,323
                     Total Assets           $18,723,298  $18,794,253
 
     Liabilities and Shareholders' Equity:
          Mortgage debt (including a net
           discount of $(19,056) and
           $(17,825), respectively)          $2,784,255   $2,915,801
          Unsecured notes (including a net
           discount of $(3,596) and
           $(3,807), respectively)            5,836,404    5,836,193
          Line of credit                         37,500       51,000
          Accounts payable and accrued
           expenses                             418,781      497,811
          Distribution payable                  160,679        3,681
          Other liabilities                     181,915      204,298
                     Total Liabilities        9,419,534    9,508,784
          Commitments and contingencies
          Minority Interests:
             EOP Partnership                    995,943    1,021,235
             Partially owned properties         198,280      197,161
                     Total Minority
                      Interests               1,194,223    1,218,396
          Shareholders' Equity:
             Preferred Shares, 100,000,000
              authorized:
                  8.98% Series A Cumulative
                   Redeemable Preferred
                   Shares, liquidation
                   preference
                         $25.00 per share,
                          7,994,000 issued
                          and outstanding       199,850      199,850
                  5.25% Series B
                   Convertible, Cumulative
                   Redeemable Preferred
                   Shares, liquidation
                         preference $50.00
                          per share,
                          5,990,000 and
                          6,000,000 issued
                          and outstanding,
                          respectively          299,500      300,000
                  8.625% Series C
                   Cumulative Redeemable
                   Preferred Shares,
                   liquidation preference
                         $25.00 per share,
                          4,562,900 issued
                          and outstanding       114,073      114,073
             Common Shares, $0.01 par
              value; 750,000,000 shares
              authorized,
                  309,016,219 and
                   306,966,596 issued and
                   outstanding,
                   respectively                   3,090        3,070
             Additional paid in capital       7,699,669    7,645,901
             Deferred compensation              (30,157)     (14,871)
             Dividends in excess of
              accumulated earnings             (170,897)    (152,695)
             Accumulated other
              comprehensive loss                 (5,587)     (28,255)
                     Total Shareholders'
                      Equity                  8,109,541    8,067,073
                     Total Liabilities and
                      Shareholders' Equity  $18,723,298  $18,794,253
 
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 SOURCE  Equity Office Properties Trust