content_image/66202.jpg content_image/66203.jpg
## MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 

Selected weighted averages for the three years ended December 31, 2004, 2003 and 2002 are as follows: 

<img src='content_image/66202.jpg'>

##  2004 COMPARED TO 2003 

Income from continuing operations increased $3.7 million, or 13.8%, from $26.8 million to $30.6 million for the years ended December 31, 2003 and 2004, respectively. The increase in income from continuing operations was due to many factors, which included, but were not limited to, increases in property net operating income and other non-property related revenues. These increases were partially offset by increases in corporate expenses, interest expense, an impairment loss on land held for sale and decreases in income from joint ventures. Our primary financial focus for our apartment communities is net operating income. Net operating income represents total property revenues less total property expenses. Net operating income increased $6.6 million, or 2.8%, from $234.7 million to $241.3 million for the years ended December 31, 2003 and 2004, respectively. See further discussion of net operating income in our discussion of “Segment Reporting” in the footnotes to our consolidated fi nancial statements. 

The following table presents the components of net operating income for the years ended December 31, 2004 and 2003: 

<img src='content_image/66203.jpg'>

Same store communities are stabilized communities we have owned since January 1, 2003. Non-same store communities are stabilized communities we have acquired or developed since January 1, 2003. Development and lease-up communities are non-stabilized communities we have developed or acquired after January 1, 2003. 

