MITCHELL E. HERSH CHIEF EXECUTIVE OFFICER To Our Shareholders T he uncertain economic and political climate continues to linger over our nation, leaving few industries unscathed. This uncertainty—from threats of terrorism and war, a weakened economy, and corporate  scandals—has resulted in a corporate America reluctant to make long-term decisions about capital  spending, employment, and office space. The consequences for the real estate industry have been weakened demand, higher vacancies, and pressure on rents. Mack-Cali is not immune to these pressures.With leasing decisions sometimes now excruciatingly slow, our occupancies slipped slightly. However, the steps we’ve always taken to manage our business allow our Company to succeed even in adverse conditions. As a result, I’m proud to report that in 2002 we kept on track, forged ahead, and made significant progress on our strategic plan of strengthening our position in core high-barrier-to-entry markets in the Northeast and Mid-Atlantic regions. …in 2002 we kept on track, forged ahead, and made significant progress on our strategic plan… Mack-Cali’s 2002 accomplishments were highlighted by progress in selling assets in non-core Southwest and West markets and reinvesting the proceeds to expand our presence in our core markets. We also maintained strong occupancies and a high-caliber tenant base and continued to  provide first-rate service to our tenants. In addition, we increased our dividend, generated solid earnings, and enhanced our financial flexibility. Focusing on Our Core Markets Through strategic acquisitions and development, we increased our presence in our core Northeast and Mid-Atlantic markets—which include New Jersey; Westchester County, New York; suburban Philadelphia; Fairfield County, Connecticut; and Washington, D.C. These core markets now generate 91.0 percent of our base rent compared to 82.3 percent two years ago, when we adopted our current strategy. Our in-depth industry knowledge, years of  1