6 Funds From Operations (FFO) available to common shareholders increased 7.5% to $47,031,000 in  2004. FFO per diluted share available to common shareholders increased 4.8% to $2.20 per share  in 2004 compared to $2.10 for 2003. The $3,291,000 increase in FFO available to common shareholders in 2004 resulted from the combination  of (1) increased operating income from retail acquisition and development properties and (2) successful leasing efforts in the core portfolio, primarily at 601 Pennsylvania Avenue, offset in part  by the full year of preferred dividends relating to the November 2003 offering and increased general and administrative expenses. At year end 2004, we had 35 operating shopping center properties totaling over 6 million square feet of leasable area. These shopping centers contributed 71% of Saul Centers’ property operating income. During 2004, we acquired four operating shopping centers and completed developments at three centers, increasing our shopping center portfolio leaseable area by over 13%, or approximately 700,000 square feet of space. We invested $87.1 million for the four shopping centers, totaling 539,000 square feet of space. Two of the centers are located in the Washington, DC metropolitan area and are anchored by Safeway. The other two centers, one located in suburban Atlanta, Georgia and the other located in Boca Raton, Florida, are both anchored by Publix, the market share leader in each location. The demographic characteristics of the neighborhoods surrounding each center are attractive, each densely populated with average 1-mile and 3-mile household incomes of $103,000 and $99,000, respectively. Our three recently completed developments were operating at year end 2004 and are over 88% leased. The Shops at Monocacy is a 107,000 square foot Giant anchored retail center in Frederick, Maryland. Development costs, including the 2003 land acquisition, totaled $22.3 million. The center is well located in the fast growing Frederick, Maryland area. We invested $6.5 million in a 30,000 square foot expansion to our Broadlands Village shopping center located near Dulles Airport in Ashburn, Virginia and invested $2.1 million in 15,000 square feet of new shop space at Thruway, located in Winston-Salem, North Carolina. During 2004, our same center core retail portfolio operating income increased 2.2%. Retail spaces were relet at average initial cash rental rates of approximately 6% over rents paid on expiring leases for the 340,000 square feet of same store lease rollovers. Core portfolio real estate taxes and  property operating expenses remained flat in 2004  as compared to 2003, primarily due to a substantial decrease in snow removal expenses in 2004, offsetting the modest expense increases in other categories. Retail Highlights Ashburn Village Olde Forte Village Village Center MESSAGE TO OUR SHAREHOLDERS