2. Safe Harbor Language and Reconciliation of
Non-GAAP Measures
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995:
This presentation contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other
securities laws and is subject to the safe-harbor created by such Act. Forward-looking statements include our 2014 financial performance outlook and
statements regarding our operations, economic performance, financial condition, goals, beliefs, future growth strategies, investment objectives, plans
and current expectations, such as our acquisition pipeline, the anticipated benefits from our organizational realignment and our proposed conversion to
a REIT. These forward-looking statements are subject to various known and unknown risks, uncertainties and other factors. When we use words such
as "believes," "expects," "anticipates," "estimates" or similar expressions, we are making forward-looking statements. Although we believe that our
forward-looking statements are based on reasonable assumptions, our expected results may not be achieved, and actual results may differ materially
from our expectations. Important factors that could cause actual results to differ from expectations include, among others: (i) even though we continue
to pursue conversion to a REIT, we may not be able to convert to a REIT effective January 1, 2014 or at all. Please see the particular risks related to
the REIT conversion described in the Company’s Annual Report on Form 10-K filed March 1, 2013 and Quarterly Report on Form 10-Q for the quarter
ended June 30, 2013, filed on August 1, 2013; (ii) the cost to comply with current and future laws, regulations and customer demands relating to privacy
issues; (iii) the impact of litigation or disputes that may arise in connection with incidents in which we fail to protect our customers' information;
(iv) changes in the price for our storage and information management services relative to the cost of providing such storage and information
management services; (v) changes in customer preferences and demand for our storage and information management services; (vi) the adoption of
alternative technologies and shifts by our customers to storage of data through non-paper based technologies; (vii) the cost or potential liabilities
associated with real estate necessary for our business; (viii) the performance of business partners upon whom we depend for technical assistance or
management expertise outside the U.S.; (ix) changes in the political and economic environments in the countries in which our international subsidiaries
operate; (x) claims that our technology violates the intellectual property rights of a third party; (xi) changes in the cost of our debt; (xii) the impact of
alternative, more attractive investments on dividends; (xiii) our ability or inability to complete acquisitions on satisfactory terms and to integrate acquired
companies efficiently; (xiv) other trends in competitive or economic conditions affecting our financial condition or results of operations not presently
contemplated; and (xv) other risks described more fully in the Company’s Annual Report on Form 10-K filed on March 1, 2013, and Quarterly Report on
Form 10-Q for the quarter ended June 30, 2013, under “Item 1A. Risk Factors,” and other documents that the Company files with the Securities and
Exchange Commission from time to time. Except as required by law, the Company undertakes no obligation to release publicly the result of any
revision to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
Reconciliation of Non-GAAP Measures:
Throughout this presentation, Iron Mountain will be discussing Adjusted Operating Income Before Depreciation, Amortization and Intangible
Impairments (Adjusted OIBDA), Free Cash Flows Before Acquisitions & Discretionary Investments (FCF) and Adjusted Earnings Per Share from
Continuing Operations (Adjusted EPS), which do not conform to accounting principles generally accepted in the United States (GAAP). For additional
information and the reconciliation of these measures to the appropriate GAAP measure, as required by Securities and Exchange Commission
Regulation G, please access the Supplemental Data link on the Investor Relations page of the Company’s website at www.ironmountain.com.
PROPRIETARY INFORMATION OF IRON MOUNTAIN
2
3. Financial Review – Key Messages
Q4 performance driven by strong C$ storage rental growth of 4.9%
• Core acquisition activity supports future growth
• Adjusted OIBDA and Adjusted EPS reduced by $19MM restructuring charge
Full-year revenue, Adjusted OIBDA and Adjusted EPS results in-line with guidance
• International segment successfully achieves 3-year margin improvement goals
• Free Cash Flow is $390MM on lower cash taxes
Company reiterates 2014 guidance
• Company expects solid C$ growth for revenues (2%-4%) and Adjusted OIBDA (2%-5%)
PROPRIETARY INFORMATION OF IRON MOUNTAIN
3
4. Acquisitions Enhance Solid Operating Results
% Growth
($MM, except per share data)
Q4/2012
Q4/2013
R$
C$
Internal
$ 758
$ 769
1%
3%
(1)%
North America
$548
$544
(1)%
0%
(3)%
International
$210
$225
7%
10%
3%
Gross Profit(1)
$ 420
$ 432
3%
4%
Gross Profit %
55.4%
56.3%
Adjusted OIBDA(2)
$ 207
$ 195
(6)%
(5)%
Adjusted OIBDA(2) Margin %
27.2%
25.4%
Adj. EPS(2) Continuing Ops – FD
$0.20
$0.15
Enterprise Revenue
(1)
(2)
(25)%
Excluding depreciation and amortization
Excludes certain costs and expenditures associated with the Special Committee and the Company’s proposed conversion to a REIT
PROPRIETARY INFORMATION OF IRON MOUNTAIN
4
5. Storage Rental Drives Revenue Performance
Revenue Growth Build
Q4/2013
FY/2013
4.9%
3.9%
2.2%
1.8%
12.5%
10.0%
Service (C$)
(0.4)%
(1.5)%
North America
(3.5)%
(3.6)%
6.4%
3.6%
2.7%
1.6%
1.3%
2.1%
(1.6)%
(3.1)%
(11.6)%
(4.3)%
(1.1)%
(0.2)%
3.8%
1.8%
(1.3)%
(0.9)%
1.3%
0.7%
Storage Rental (C$)
North America
International
International
Total C$ Growth
Storage Rental Internal Growth
Core Service Internal Growth
Complementary Service Internal Growth
Total Revenue Internal Growth
Impact of Acquisitions
Impact of FX Rate Changes & Other Adjustments
Total Reported Growth
NOTE: Columns may not foot due to rounding.
PROPRIETARY INFORMATION OF IRON MOUNTAIN
5
6. FY Results Consistent with Outlook
% Growth
FY/2012
FY/2013
R$
C$
Internal
Enterprise Revenue
$3,005
$3,026
1%
2%
0%
Gross Profit(1)
$1,728
$1,737
1%
1%
Gross Profit %
57.5%
57.4%
Adjusted OIBDA(2)
$ 912
$ 896
(2)%
(1)%
Adjusted OIBDA(2) Margin %
30.4%
29.6%
$1.21
$1.03
$ 182
$ 223
6.1%
7.4%
$ 347
$ 390
($MM, except per share data)
Adj. EPS(2) Continuing Ops – FD
CAPEX (ex RE) (2)(3)
CAPEX (ex RE) (2)(3)%
Free Cash Flow(2)(4)
(15)%
(1)
(2)
Excluding depreciation and amortization
Excludes certain costs and expenditures associated with the Special Committee and the Company’s proposed conversion to a REIT
(3)
Based on incurred versus cash paid basis. Excludes $54MM and $66MM of real estate spending in 2012 and 2013, respectively, and $13MM and $23MM of REIT-related capex
in 2012 and 2013, respectively
(4)
Before discretionary investments in acquisitions and real estate, net
PROPRIETARY INFORMATION OF IRON MOUNTAIN
6
7. Solid Operating Performance Across Portfolio
FY Results(1)
($MM)
2012
% Growth
2013
R$
C$
Internal
(2)%
Revenue
$2,180
(1)%
0%
Adjusted OIBDA
$ 916
$ 885
(3)%
(3)%
Adjusted OIBDA Margin %
41.7%
40.6%
4.5%
5.5%
Revenue
$ 807
$ 846
5%
7%
Adjusted OIBDA
$ 174
$ 206
19%
19%
Adjusted OIBDA Margin %
North America
$2,199
21.5%
24.4%
8.3%
9.1%
$ (178)
$ (195)
(10)%
(10)%
0.5%
0.9%
CAPEX (ex RE) %(2)
International
CAPEX (ex RE) %(2)
Corporate
Adjusted OIBDA
CAPEX (ex RE) %(2)
(1)
Excludes certain costs and expenditures associated with the Special Committee and the Company’s proposed conversion to a REIT
(2)
3%
Based on incurred versus cash paid basis
PROPRIETARY INFORMATION OF IRON MOUNTAIN
7
8. Strong Balance Sheet
As of December 31, 2013
($MM)
As of December 31, 2013
Debt, net of cash
$4,051
% fixed with respect to interest rates
Weighted average interest rate
Weighted average maturity
6.2%
Consolidated Leverage
84%
6.8 years
Debt Maturity Schedule ($MM)
7
$1,000
New Covenant Limit <= 6.5x
6
$800
5.0x
5
$600
4
4.3x
$400
3
$200
2
07
08
09
10
11
12
Q1/13 Q2/13 Q3/13 Q4/13
Net Total Lease Adjusted Leverage Ratio (NEW)
Consolidated Leverage Ratio (OLD)
$0
2014
2016
2018
= Senior Credit Facility
2020
2022
2024
= Subordinated Debt
PROPRIETARY INFORMATION OF IRON MOUNTAIN
8
9. FY 2014 Outlook
($MM)
Current
Previous
C$ Growth
$3,090 - $3,170
$3,090 - $3,170
2% - 4%
Adjusted OIBDA(1)(2)
$930 - $960
$930 - $960
2% - 5%
Adjusted EPS(1) – FD
$1.03 - $1.14
$1.03 - $1.14
Capex (ex RE)(1)(3)
~$245
~$245
Real Estate(4)
~$90
~$90
Free Cash Flow(1)(5)
$300 - $340
$300 - $340
Revenues
Investments:
(1)
(2)
(3)
(4)
(5)
Excludes certain costs and expenditures associated with the Company’s proposed conversion to a REIT
Excludes ~$7MM of charges related to the company’s organizational realignment
Based on incurred versus cash basis. Includes ~$8MM associated with the relocation of our Boston headquarters, ~$37MM for 2013 acquisitions and ~10MM for large real
estate consolidations in Argentina and Brazil
Based on incurred versus cash basis. Includes ~$40MM associated with the expansion of our data center capacity
Before discretionary investments in acquisitions and real estate and REIT Costs, net
PROPRIETARY INFORMATION OF IRON MOUNTAIN
9
11. REIT Related & Other Expenditures
Q4 Actual
$MM
2012
2013
FY Actual
2012
2013
Outlook
2014
Operating Expense
$ 18
$ 14
$ 34
$ 83
$27 -- $37
Capital Expenditures
$ 10
$ 3
$ 13
$ 23
$5 -- $10
Total
$ 28
$ 17
$ 47
$106
$32 -- $47
Tax Payments Related to D&A
Recapture
$ 44
$ 13
$ 80
$ 53
$77 -- $92
Estimated E&P Distribution
---
---
---
---
$500 -- $1,000
NOTE: Represents certain costs and expenditures associated with the work of the Special Committee and the Company’s proposed conversion to a REIT
Columns may not foot due to rounding
PROPRIETARY INFORMATION OF IRON MOUNTAIN
11
12. Global Records Management YoY Volume
Growth Drivers(1)
Year-Over-Year Net Volume Growth Rates:
1.5%
2.6%
2.9%
2.9%
2.8%
1.4%
3.2%
5.8%
15%
12%
4.5%
9%
1.6%
1.7%
1.7%
0.2%
2.2%
1.6%
0.3%
2.0%
1.9%
1.9%
1.9%
1.9%
1.9%
2.0%
2.1%
6.7%
6.8%
6.8%
6.8%
6.6%
6.4%
6.3%
6.4%
-7.4%
-7.6%
-7.5%
-7.4%
-7.4%
-7.3%
-7.2%
-7.2%
Q1-12
Q2-12
Q3-12
Q4-12
Q1-13
Q2-13
Q3-13
Q4-13
6%
3%
0%
-3%
-6%
-9%
Organic
(1)
(2)
New Sales
Acquisitions(2)
Outperm/Terms & Destructions
Represents year-over-year change in volume as of the end of each period presented. The quarterly percentages are calculated by dividing the trailing four quarters’ total
activity by the ending balance of the same prior year period.
Includes acquisitions of customers and businesses
PROPRIETARY INFORMATION OF IRON MOUNTAIN
12
