Public Storage 2001 Annual Report Download - page 4

P UBLIC S TORAGE ,I NC . 2001 A NNUAL R EPORT
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The U.S. economy faced challenges last year, including those
resulting from the September 11th terrorist attacks. Nevertheless,
the economy was surprisingly resilient, as housing starts, home
purchases and refinancing and certain other consumer spending
remained robust in many metropolitan areas. The expanding
need for storage space across America is linked to these
dynamic economic conditions and to ever-present family for-
mation and relocation activity. Our position as the industry’s
largest operator coupled with substantial market penetration
enables us to respond aggressively during both negative and
positive economic climates with intensive marketing and
management programs to build quality relationships with
our customers as we provide them with storage solutions and
moving services at convenient locations.
Our primary business is storage. We provide storage
solutions to a diverse America. We focus on storage and our
moving service has emerged as a key complementary enter-
prise. Recent tax law changes relating to real estate investment
trusts have enabled us to acquire and expand ancillary business
activities connected to our storage business, namely reinsur-
ance covering tenant goods, moving services, consumer truck
rentals, storage containers and selling moving and storage
supplies from retail stores at our properties. Our seasoned
property management system, in conjunction with our
national reservation center, enables our ancillary businesses to
generate additional consumer contact and to cross-market
goods and services in greater volume. We believe our ancillary
businesses help us rent more space at higher rates.
We also concentrated our energies on other fundamental
growth drivers, including our accretive asset base expansion
strategy, lowering the cost of capital and reducing operating
costs. Successfully implementing these growth drivers as well
as focusing on our core and ancillary businesses benefit share-
holders by improving funds from operations, the single most
important measure of our financial performance.
Leaders cast long shadows, so decisions we make today
will impact our operations and industry well into the future.
To retain our undisputed industry leadership, we will have to
continue providing the best solution for each customer’s indi-
vidual storage problem while structuring resources within the
Public Storage system for optimum efficiency, making us a
superior customer-responsive enterprise.
The Customer-Responsive Enterprise
We believe that the customer-responsive enterprise is one
that formulates the appropriate responses, systemwide or
incremental, to remain tuned for maximum competitive effi-
ciency. Responsiveness shows in three ways: managing the fit
between customer needs and the delivery of goods and services
to accommodate those needs, decreasing operating costs and
competitive/market adaptability.
We believe we have taken extensive measures to offer
customized products and services to meet our customers’ spe-
cific storage needs. Staying sharply focused on our customers’
unique needs is our strength; we are constantly improving the
fit between customer needs and the products and services we
offer to satisfy those needs. Lack of fit can create customer dis-
satisfaction, which could lead customers to pursue competing
storage options. Our broad strategic alliances, outsourcing
selected relocation services to vendors and operating a national
reservation center with Internet-based marketing are intended
to enhance our ability to match our products and services to
what customers want. At the property level, we provide cus-
tomers with clean, secure and well-managed properties. Our
sizeable portfolio is geographically diversified, providing
economies of scale and expanded opportunities to satisfy
customer demand.
T O O UR S HAREHOLDERS
A sizeable, diversified customer base means we avoid relying on a
few major tenants.