Company: PSA-PH
Filing Date: 2025-07-30
Form Type: 10-Q
Source: 0001393311-25-000120
Chunk: 41

Company: Public Storage
Filing Date: 2025-07-30
Form: 10-Q
Item: Item 2
Chunk 41
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 as a REIT allows us to minimize the payment of U.S. federal corporate income tax expense, we are required to distribute at least 90% of our taxable income to our shareholders. Notwithstanding this requirement, our annual operating retained cash flow was approximately $480 million in 2023 and $400 million in 2024. Retained operating cash flow represents our expected cash flow provided by operating activities (including property operating costs and interest payments described below), less shareholder distributions and capital expenditures. We expect retained cash flow of approximately $600 million for 2025.

Capital needs in excess of retained cash flow are met with: (i) medium and long-term debt, (ii) preferred equity, (iii) limited partnership interests, and (iv) common equity. We select among these sources of capital based upon relative cost, availability, the desire for leverage, and considering potential constraints caused by certain features of capital sources, such as debt covenants. We view our line of credit, as well as any short-term bank loans, as bridge financing. 

Because raising capital is important to our growth, we endeavor to maintain a strong financial profile characterized by strong credit metrics, including low leverage relative to our total capitalization and operating cash flows. We are one of the highest rated REITs, as rated by major rating agencies Moody’s and Standard & Poor’s. Our senior notes payable have an “A” credit rating by Standard & Poor’s and “A2” by Moody’s. Our credit ratings on each of our series of preferred shares are “A3” by Moody’s and “BBB+” by Standard & Poor’s. Our credit profile enables us to effectively access both the public and private capital markets to raise capital.

Our revolving line of credit has a borrowing limit of $1.5 billion. The revolving line of credit generally serves as a temporary “bridge” financing until we are able to raise longer term capital. As of June 30, 2025 and July 30, 2025, there were no borrowings outstanding on the revolving line of credit; however, we do have approximately $20.0 million of outstanding letters of credit, which limits our borrowing capacity to $1,480.0 million as of July 30, 2025. Our line of credit matures on June 12, 2027.

In December 2024, we implemented an “at the market” offering program pursuant to which we may, from time to time,  sell common shares