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On the financial front, we have consistently managed our portfolio under the conservative principles of strong coverage ratios, low leverage, and a high level of unencumbered assets. In 2002, we obtained financing at attractive rates and lengthened our debt maturity profile in a $90 million debt exchange with Teachers Insurance Annuity Association. Our balance sheet continues to be one of the strongest and most flex-ible in the industry, allowing us to capitalize on sizeable growth opportunities.
We are fortunate to have a diverse and strong credit-quality tenant base that provides a stable, high-quality earnings stream for our Company. While this year revenues declined 1 percent, from $575.3 million to $569.6 million, our funds from operations rose 4.5 percent, from $260.5 million to $272.3 million, and our net income increased 6.1 percent, from $131.7 million to $139.7 million. (See pages 62 and 63 of Form 10-K.) We're very proud to report that Mack-Cali increased its dividend for the eighth year in a row, from $2.48 to $2.52 per share on an annualized basis. We also maintained our solid investment grade credit ratings and received a positive outlook from Moody's. While stocks across the board were affected by the weak economy in 2002, real estate investment trusts continued to outperform the S&P 500. Since Mack-Cali became a public company in 1994, we have outperformed both the National Association of Real Estate Investment Trusts (NAREIT) equity index and the S&P 500, producing a total return of over 200 percent. As we enter 2003, our economy and our industry continue to face considerable uncertainty and pressure. We anticipate that demand in our industry will remain flat this coming year. Despite this inhospitable climate, Mack-Cali remains well-positioned both to withstand the current economic situation and to capitalize on a recovering economy due to our focused strategy, exceptional assets, high-quality tenant base, outstanding property management, strong occupancies, and powerful balance sheet. Thank you for your continued interest in and support of Mack-Cali.
Sincerely,
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