Living Excellence continues to get even better. 2004: CAMDEN INVIGORATED In 2004, there was a steady improvement in earnings. We experienced improved market condi- tions in Las Vegas, Phoenix, Southern California and Florida resulting in sequential revenue growth over the course of the year. The weak market conditions in Houston, Dallas, Austin and Denver negatively impacted our performance. We believe the two factors that will precede a return to sustained revenue growth are stabilized occupancy in the 94% to 95% range and a sequential decline in concessions. It is only when these two factors converge that we will achieve the pricing power necessary to notably increase market rents. In 2004, our portfolio-wide occupancy stabilized in the 94% to 95% range and, in the fourth quarter of last year, we experienced a sequential decline in concessions of $90 per unit annualized or about $1.0 million quarter-over-quarter. This is the best evidence yet that we are on the path to improved operating fundamentals. And, we are primed. PRACTICE MAKES PERFECT We are committed to achieving excellence through a best practices approach, increasing productivity and customer service with an emphasis on training, continuous process improvement and technology. In 2004, we facilitated almost 70 initiatives that are transforming the way we serve our customers. After three years of co-design and development efforts, we launched the rollout of OneSite, our web-based property management system. Twenty-seven percent of our communities were online by the end of 2004. We expect that all communities will be fully operational in August 2005. The system is already streamlining our business processes, increasing our employees’ response time and reducing customer wait time. It is also branding our customer experience from first contact to move-out and creating a seven-day-a-week, just-in-time service solution. Living Excellence  continues to get even better. Two additional systems we implemented last year were a web-based Employee Time and Atten- dance (ETA) system and an Operations Dashboard, our proprietary benchmarking tool. The use of ETA eliminated a manual time-sheet process and replaced it with a paperless, real-time tracking system that saves time, materials and money. The Operations Dashboard is an online measure- ment tool that ranks our communities according to critical monthly operating metrics and compares their performance to both budgeted expectations and the entire portfolio.