Business Wire | Aug 5, 2021 06:00AM EDT

Iron Mountain Reports Second Quarter Results

Aug. 05, 2021

BOSTON--(BUSINESS WIRE)--Aug. 05, 2021--Iron Mountain Incorporated (NYSE: IRM), the global leader in innovative storage and information management services, announces financial and operating results for the second quarter of 2021. The conference call / webcast details, earnings call presentation and supplemental financial information, which includes definitions of certain capitalized terms used in this release, are available on Iron Mountain's Investor Relations website. Reconciliations of non-GAAP measures to the appropriate GAAP measures are included herein.

"Our stronger than expected performance in both the second quarter and first half of the year reflects the breadth and depth of our products and solutions and the strength of our deep customer relationships. Our second quarter results reflect increased demand for our services across our key markets," said William L. Meaney, president and CEO of Iron Mountain. "As we celebrate and honor Iron Mountain's 70th anniversary this month, I am extremely proud of what our team has accomplished in spite of the continued challenges due to COVID. Our Mountaineers across the globe conquered every obstacle with tenacity, a relentless focus on accelerating growth and an innovative mindset."

Financial Performance Highlights for the Second Quarter and Year-to-Date 2021

($ in millions, except per share data)

Three Months Year to Date Ended

6/30/ 6/30/ Y/Y % 6/30/ 6/30/ Y/Y % 21 20 Change 21 20 Change

Storage Rental Revenue $718 $677 6% $1,426 $1,361 5%

Service Revenue $401 $305 32% $775 $690 12%

Total Revenue $1,120 $982 14% $2,202 $2,051 7%



Net Income (Loss) $277 $(7) NM $323 $58 459%

Adjusted EBITDA $406 $359 13% $786 $725 8%

Adjusted EBITDA Margin 36.2% 36.6% -40 bps 35.7% 35.4% +30 bps



AFFO $246 $250 (1)% $481 $480 -

AFFO per share $0.85 $0.87 (3)% $1.66 $1.67 -

* Total reported Revenues for the second quarter were $1.12 billion, compared with $982.2 million in the second quarter of 2020, an increase of 14.0%. Excluding the impact of foreign currency exchange (FX), total reported Revenues increased 10.2% compared to the prior year, driven by a 26.9% increase in Service revenue, while Storage rental revenue increased 2.7%. Year to date, total reported Revenues increased 7.4%, or 4.6%, excluding the impact of FX. * The Global Data Center business revenue increased 15.3% in the second quarter, or 13.3% year over year, excluding the impact of FX. Through June 30, 2021, Iron Mountain has executed 12.6 megawatts of new and expansion leasing, and is increasing its outlook for full-year data center leasing to greater than 30 megawatts from previous guidance of 25 to 30 megawatts, based on the strength of its first-half performance and pipeline. * Net Income for the second quarter was $276.5 million compared with a Net Loss of $7.1 million in the second quarter of 2020. The following items were included in Net Income: Restructuring Charges of $39.4 million associated with the implementation of Project Summit compared to $39.3 million, in the second quarters of 2021 and 2020, respectively. Gain on Disposal/Write-Down of PP&E, Net of $128.9 million compared to $1.3 million, in the second quarters of 2021 and 2020, respectively, primarily related to the company's capital recycling program. Other Income, Net of $186.2 million in the second quarter of 2021, primarily related to a gain on sale from the divestment of the company's Intellectual Property Management business, compared to Other Expense, Net of $25.7 million in the second quarter of 2020, primarily related to a debt extinguishment charge of $17.0 million. * Year to date, Net Income was $323.2 million, compared with $57.8 million in 2020. The following items were included in Net Income: Restructuring Charges of $79.3 million compared to $80.3 million year to date 2021 and 2020, respectively. Intangible Impairment charge of $23.0 million related to the writedown of goodwill associated with the Fine Arts business in the first quarter of 2020. Gain on Disposal/Write-Down of PP&E, Net of $133.4 million compared to $2.3 million, year to date 2021 and 2020, respectively, primarily related to the company's capital recycling program. Other Income, Net of $181.5 million year to date 2021, primarily related to a gain on sale from the divestment of the company's Intellectual Property Management business, compared to Other Income, Net of $17.0 million year to date 2020, primarily related to a Foreign Currency Transaction Gain of $35.9 million, partially offset by a debt extinguishment charge of $17.0 million. * Adjusted EBITDA for the second quarter was $405.6 million, compared with $359.5 million in the second quarter of 2020, an increase of 12.8%. On a constant currency basis, Adjusted EBITDA increased by 9.0%, driven by the strong increase in Service revenue, benefits from Project Summit and the flow through from revenue management. Year to date, Adjusted EBITDA was $786.2 million, compared with $725.5 million in 2020, an increase of 8.4%. On a constant currency basis, Adjusted EBITDA increased 5.5%. * Reported EPS - Fully Diluted from Net Income (Loss) for the second quarter was $0.95, compared with $(0.02) in the second quarter of 2020. Year to date, Reported EPS - Fully Diluted from Net Income (Loss) was $1.11, compared with $0.20 in 2020. * Adjusted EPS for the second quarter was $0.38, compared with $0.27 in the second quarter of 2020. Adjusted EPS reflects a structural tax rate of 16.2% and 16.7%, in the second quarters of 2021 and 2020, respectively. Year to date, Adjusted EPS was $0.70, compared with $0.55 in 2020. * FFO (Normalized) per share was $0.69 for the second quarter, compared with $0.58 in the second quarter of 2020, an increase of 19.0%. Year to date, FFO (Normalized) per share was $1.32, compared with $1.17 in 2020, or an increase of 12.0%. * AFFO was $246.0 million for the second quarter, compared with $249.7 million in the second quarter of 2020, or a decrease of 1.5%. Year to date, AFFO was $481.4 million, compared with $480.3 million in 2020, or an increase of 0.2%. AFFO in the second quarter and year-to-date 2020 includes previously disclosed tax refunds in the amount of $22.5 million and $27.5 million, respectively. Excluding the benefit of the tax refunds, AFFO in the second quarter and year-to-date 2021 would have increased 8.3% and 6.3% year over year, respectively. * AFFO per share was $0.85 for the second quarter, compared with $0.87 in the second quarter of 2020, or a decrease of 2.5%. Year to date, AFFO per share was $1.66, compared with $1.67 in 2020, or a decrease of 0.5%. Excluding the aforementioned tax refunds, AFFO per share in the second quarter and year-to-date 2021 would have increased 7.7% and 5.6%, respectively.

Dividend

On August 5, 2021, Iron Mountain's board of directors declared a quarterly cash dividend of $0.6185 per share for the third quarter. The third-quarter 2021 dividend is payable on October 6, 2021, for shareholders of record on September 15, 2021.

Guidance

Reflecting outperformance in the first half of the year and positive momentum in the business, Iron Mountain has increased the midpoint of its financial guidance; details are summarized in the table below.

2021 Guidance^(1)

($ in millions, except per share data)

New Y/Y % Previous Y/Y % Change Change

Total Revenue $4,415 - 6% - 9% $4,365 - 5% - 9% $4,515 $4,515

Adjusted EBITDA $1,600 - 8% - 11% $1,585 - 7% - 11% $1,635 $1,635

AFFO $970 - 9% - 13% $955 - 8% - 13% $1,005 $1,005

AFFO Per Share $3.33 - 8% - 12% $3.28 - 7% - 12% $3.45 $3.45

(1) Iron Mountain does not provide a reconciliation of non-GAAP measures that it discusses as part of its annual guidance or long term outlook because certain significant information required for such reconciliation is not available without unreasonable efforts or at all, including, most notably, the impact of exchange rates on Iron Mountain's transactions, loss or gain related to the disposition of real estate and other income or expense. Without this information, Iron Mountain does not believe that a reconciliation would be meaningful.

About Iron Mountain

Iron Mountain Incorporated (NYSE: IRM) is the global leader in innovative storage and information management services, storing and protecting billions of valued assets, including critical business information, highly sensitive data, and cultural and historical artifacts. Founded in 1951 and trusted by more than 225,000 customers worldwide, Iron Mountain helps customers CLIMB HIGHER(tm) to transform their businesses. Through a range of services including digital transformation, data centers, secure records storage, information management, secure destruction, and art storage and logistics, Iron Mountain helps businesses bring light to their dark data, enabling customers to unlock value and intelligence from their stored digital and physical assets at speed and with security, while helping them meet their environmental goals.

To learn more about Iron Mountain, please visit: www.IronMountain.com and follow @IronMountain on Twitter and LinkedIn.

Forward Looking Statements

We have made statements in this press release that constitute "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995 and other securities laws. These forward-looking statements concern our operations, economic performance, financial condition, goals, beliefs, future growth strategies, investment objectives, plans and current expectations, such as our (1) 2021 guidance as well as our expectations for growth, including growth opportunities and growth rates for revenue by segment, organic revenue, organic volume and other metrics, (2) expectations and assumptions regarding the impact from the COVID-19 pandemic on us and our customers, including on our businesses, financial position, results of operations and cash flows, (3) expected benefits, costs and actions related to, and timing of, Project Summit, (4) expectations as to our capital allocation strategy, including our future investments, leverage ratio, dividend payments and possible funding sources (including real estate monetization) and capital expenditures, (5) expectations regarding the closing of pending acquisitions and investments, and (6) other forward-looking statements related to our business, results of operations and financial condition.

These forward-looking statements are subject to various known and unknown risks, uncertainties and other factors, and you should not rely upon them except as statements of our present intentions and of our present expectations, which may or may not occur. When we use words such as "believes," "expects," "anticipates," "estimates," "plans" 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. In addition, important factors that could cause actual results to differ from expectations include, among others: (i) the severity and duration of the COVID-19 pandemic and its effects on the global economy, including its effects on us, the markets we serve and our customers and the third parties with whom we do business within those markets; (ii) our ability to execute on Project Summit and the potential impacts of Project Summit on our ability to retain and recruit employees; (iii) our ability to remain qualified for taxation as a real estate investment trust for United States federal income tax purposes; (iv) changes in customer preferences and demand for our storage and information management services, including as a result of the shift from paper and tape storage to alternative technologies that require less physical space; (v) our ability or inability to execute our strategic growth plan, including our ability to invest according to plan, incorporate new digital information technologies into our offerings, achieve satisfactory returns on new product offerings, continue our revenue management, expand internationally, complete acquisitions on satisfactory terms, integrate acquired companies efficiently and grow our business through joint ventures; (vi) changes in the amount of our capital expenditures; (vii) our ability to raise debt or equity capital and changes in the cost of our debt; (viii) the cost and our ability to comply with laws, regulations and customer demands, including those relating to data security and privacy issues, as well as fire and safety and environmental standards; (ix) the impact of litigation or disputes that may arise in connection with incidents in which we fail to protect our customers' information or our internal records or information technology systems and the impact of such incidents on our reputation and ability to compete; (x) changes in the price for our storage and information management services relative to the cost of providing such storage and information management services; (xi) changes in the political and economic environments in the countries in which our international subsidiaries operate and changes in the global political climate, particularly as we consolidate operations and move records and data across borders; (xii) our ability to comply with our existing debt obligations and restrictions in our debt instruments; (xiii) the impact of service interruptions or equipment damage and the cost of power on our data center operations; (xiv) the cost or potential liabilities associated with real estate necessary for our business; (xv) failures in our adoption of new IT systems; (xvi) unexpected events, including those resulting from climate change, could disrupt our operations and adversely affect our reputation and results of operations; (xvii) other trends in competitive or economic conditions affecting our financial condition or results of operations not presently contemplated; and (xviii) the other risks described in our periodic reports filed with the SEC, including under the caption "Risk Factors" in Part I, Item 1A of our Annual Report. Except as required by law, we undertake no obligation to update any forward-looking statements appearing in this report.

Reconciliation of Non-GAAP Measures:

Throughout this release, Iron Mountain discusses (1) Adjusted EBITDA, (2) Adjusted Earnings per Share ("Adjusted EPS"), (3) Funds from Operations ("FFO Nareit"), (4) FFO (Normalized) and (5) Adjusted Funds from Operations ("AFFO"). These measures do not conform to accounting principles generally accepted in the United States ("GAAP"). These non-GAAP measures are supplemental metrics designed to enhance our disclosure and to provide additional information that we believe to be important for investors to consider in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP, such as operating income, net income (loss) attributable to Iron Mountain Incorporated or cash flows from operating activities (as determined in accordance with GAAP). The reconciliation of these measures to the appropriate GAAP measure, as required by Regulation G under the Securities Exchange Act of 1934, as amended, and their definitions are included later in this release.

Consolidated Balance Sheets

(Unaudited; dollars in thousands)

6/30/2021 12/31/2020

ASSETS

Current Assets:

Cash and Cash Equivalents $315,928 $205,063

Accounts Receivable, Net 852,449 859,344

Prepaid Expenses and Other 222,231 205,380

Total Current Assets $1,390,608 $1,269,787

Property, Plant and Equipment:

Property, Plant and Equipment $8,319,083 $8,246,337

Less: Accumulated Depreciation (3,863,477) (3,743,894)

Property, Plant and Equipment, Net $4,455,606 $4,502,443

Other Assets, Net:

Goodwill $4,508,754 $4,557,609

Customer Relationships, Customer Inducements 1,256,181 1,326,977 and Data Center Lease-Based Intangibles

Operating Lease Right-of-use Assets 2,342,197 2,196,502

Other 360,970 295,949

Total Other Assets, Net $8,468,102 $8,377,037

Total Assets $14,314,316 $14,149,267



LIABILITIES AND EQUITY

Current Liabilities:

Current Portion of Long-term Debt $106,274 $193,759

Accounts Payable 321,286 359,863

Accrued Expenses and Other Current Liabilities 1,064,397 1,146,288

Deferred Revenue 256,245 295,785

Total Current Liabilities $1,748,202 $1,995,695

Long-term Debt, Net of Current Portion 8,760,728 8,509,555

Long-term Operating Lease Liabilities, Net of 2,186,625 2,044,598 Current Portion

Other Long-term Liabilities (1) 471,019 462,690

Total Long-term Liabilities $11,418,372 $11,016,843

Total Liabilities $13,166,574 $13,012,538

Equity

Total Equity $1,147,742 $1,136,729

Total Liabilities and Equity $14,314,316 $14,149,267

(1) Includes redeemable noncontrolling interests of $64.7M and $59.8M as of June 30, 2021 and December 31, 2020, respectively.

Quarterly Consolidated Statements of Operations

(Unaudited; dollars in thousands, except per-share data)

Q2 2021 Q1 2021 Q/Q % Q2 2020 Y/Y % Change Change

Revenues:

Storage Rental $718,272 $708,056 1.4 % $676,956 6.1 %

Service 401,484 373,984 7.4 % 305,283 31.5 %

Total Revenues $1,119,756 $1,082,040 3.5 % $982,239 14.0 %



Operating Expenses:

Cost of Sales(excludingDepreciation $474,579 $451,909 5.0 % $406,693 16.7 %andAmortization)(1)

Selling,General and 259,779 258,723 0.4 % 241,947 7.4 %Administrative(2)

Depreciationand 166,685 165,642 0.6 % 163,850 1.7 %Amortization

Acquisitionand 2,277 - - - - IntegrationCosts

Restructuring 39,443 39,811 (0.9) % 39,298 0.4 %Charges

(Gain) Loss onDisposal/ (128,935) (4,451) 2,797.0 % (1,275) 10,015.0 %Write-Down ofPP&E, Net

TotalOperating $813,828 $911,634 (10.7) % $850,513 (4.3) %Expenses



Operating $305,928 $170,406 79.5 % $131,726 132.2 %Income (Loss)

Interest 105,220 104,422 0.8 % 103,456 1.7 %Expense, Net

Other (Income) (186,230) 4,713 (4,051.2) % 25,700 (824.6) %Expense, Net

Net Income(Loss) BeforeProvision $386,938 $61,271 531.5 % $2,570 14,953.6 %(Benefit) forIncome Taxes

Provision(Benefit) for 110,416 14,640 654.2 % 9,683 1,040.3 %Income Taxes

Net Income $276,522 $46,631 493.0 % $(7,113) (3,987.6) %(Loss)

Less: NetIncome (Loss)Attributable 1,237 1,028 20.4 % (27) (4,734.1) %toNoncontrollingInterests

Net Income(Loss)Attributable $275,285 $45,603 503.7 % $(7,086) (3,984.8) %to IronMountainIncorporated



Net Income(Loss) PerShareAttributable to IronMountainIncorporated:

Basic $0.95 $0.16 493.8 % $(0.02) (4,850.0) %

Diluted $0.95 $0.16 493.8 % $(0.02) (4,850.0) %



WeightedAverage CommonShares 289,247 288,756 0.2 % 288,071 0.4 %Outstanding -Basic

WeightedAverage CommonShares 291,079 289,528 0.5 % 288,071 1.0 %Outstanding -Diluted

(1) Includes $7.6M of direct and incremental costs related to COVID-19 in Q2 2020. (2) Includes $1.6M of direct and incremental costs related to COVID-19 in Q2 2020.

Year-to-Date Consolidated Statements of Operations

(Unaudited; dollars in thousands, except per-share data)

YTD 2021 YTD 2020 % Change

Revenues:

Storage Rental $1,426,328 $1,360,503 4.8 %

Service 775,468 690,467 12.3 %

Total Revenues $2,201,796 $2,050,970 7.4 %



Operating Expenses:

Cost of Sales (excluding Depreciation and $926,488 $873,614 6.1 %Amortization) (1)

Selling, General and Administrative (2) 518,502 480,680 7.9 %

Depreciation and Amortization 332,327 326,434 1.8 %

Acquisition and Integration Costs 2,277 - -

Restructuring Charges 79,254 80,344 (1.4) %

Intangible Impairments - 23,000 (100.0) %

(Gain) Loss on Disposal/Write-Down of PP& (133,386) (2,330) 5,624.7 %E, Net

Total Operating Expenses $1,725,462 $1,781,742 (3.2) %



Operating Income (Loss) $476,334 $269,228 76.9 %

Interest Expense, Net 209,642 209,105 0.3 %

Other (Income) Expense, Net (181,517) (17,026) 966.1 %

Net Income (Loss) Before Provision $448,209 $77,149 481.0 %(Benefit) for Income Taxes

Provision (Benefit) for Income Taxes 125,056 19,370 545.6 %

Net Income (Loss) $323,153 $57,779 459.3 %

Less: Net Income (Loss) Attributable to 2,265 890 154.5 %Noncontrolling Interests

Net Income (Loss) Attributable to Iron $320,888 $56,889 464.1 %Mountain Incorporated



Net Income (Loss) Per Share Attributable to Iron Mountain Incorporated:

Basic $1.11 $0.20 455.0 %

Diluted $1.11 $0.20 455.0 %



Weighted Average Common Shares Outstanding 289,001 287,955 0.4 %- Basic

Weighted Average Common Shares Outstanding 290,303 288,301 0.7 %- Diluted

(1) Includes $7.6M of direct and incremental costs related to COVID-19 in YTD 2020. (2) Includes $1.6M of direct and incremental costs related to COVID-19 in YTD 2020.

Quarterly Reconciliation of Net Income (Loss) to Adjusted EBITDA

(Dollars in thousands)

Q2 2021 Q1 2021 Q/Q % Q2 2020 Y/Y % Change Change



Net Income (Loss) $276,522 $46,631 493.0 % $(7,113) (3,987.6) %



Add / (Deduct):

Interest Expense, 105,220 104,422 0.8 % 103,456 1.7 %Net

Provision(Benefit) for 110,416 14,640 654.2 % 9,683 1,040.3 %Income Taxes

Depreciation and 166,685 165,642 0.6 % 163,850 1.7 %Amortization

Acquisition and 2,277 - - - - Integration Costs

Restructuring 39,443 39,811 (0.9) % 39,298 0.4 %Charges

(Gain) Loss onDisposal/Write-Down of PP& (128,935) (4,451) 2,796.8 % (1,275) 10,012.5 %E, Net (IncludingReal Estate)

Other (Income)Expense, Net,Excluding ourShare of Losses (189,605) 2,121 (9,039.4) % 23,239 (915.9) %(Gains) from ourUnconsolidatedJoint Ventures

Stock-BasedCompensation 22,536 10,733 110.0 % 18,880 19.4 %Expense

COVID-19 Costs - - - 9,285 (100.0) %

Our Share ofAdjusted EBITDAReconciling Items 1,072 1,016 5.5 % 159 574.2 %from ourUnconsolidatedJoint Ventures

Adjusted EBITDA $405,631 $380,565 6.6 % $359,462 12.8 %

Adjusted EBITDA

We define Adjusted EBITDA as net income (loss) before interest expense, net, provision (benefit) for income taxes, depreciation and amortization (inclusive of our share of Adjusted EBITDA from our unconsolidated joint ventures), and excluding certain items we do not believe to be indicative of our core operating results, specifically: (i) Acquisition and Integration Costs, (ii) Restructuring Charges; (iii Intangible impairments; (iv) (Gain) loss on disposal/write-down of property, plant and equipment, net (including real estate); (v) Other expense (income), net; (vi) Stock-based compensation expense; and (vi) COVID-19 Costs. Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by total revenues. We use multiples of current or projected Adjusted EBITDA in conjunction with our discounted cash flow models to determine our estimated overall enterprise valuation and to evaluate acquisition targets. We believe Adjusted EBITDA and Adjusted EBITDA Margin provide our current and potential investors with relevant and useful information regarding our ability to generate cash flows to support business investment. These measures are an integral part of the internal reporting system we use to assess and evaluate the operating performance of our business.

Adjusted EBITDA excludes both interest expense, net and the provision (benefit) for income taxes. These expenses are associated with our capitalization and tax structures, which we do not consider when evaluating the operating profitability of our core operations. Adjusted EBITDA also does not include depreciation and amortization expenses, in order to eliminate the impact of capital investments, which we evaluate by comparing capital expenditures to incremental revenue generated and as a percentage of total revenues. Adjusted EBITDA and Adjusted EBITDA Margin should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP, such as operating income, net income (loss) or cash flows from operating activities (as determined in accordance with GAAP).

Year-to-Date Reconciliation of Net Income (Loss) to Adjusted EBITDA

(Dollars in thousands)

Adjusted EBITDA

We define Adjusted EBITDA as net income (loss) before interest expense, net, provision (benefit) for income taxes, depreciation and amortization (inclusive of our share of Adjusted EBITDA from our unconsolidated joint ventures), and excluding certain items we do not believe to be indicative of our core operating results, specifically: (i) Acquisition and Integration Costs, (ii) Restructuring Charges; (iii Intangible impairments; (iv) (Gain) loss on disposal/write-down of property, plant and equipment, net (including real estate); (v) Other expense (income), net; (vi) Stock-based compensation expense; and (vi) COVID-19 Costs. Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by total revenues. We use multiples of current or projected Adjusted EBITDA in conjunction with our discounted cash flow models to determine our estimated overall enterprise valuation and to evaluate acquisition targets. We believe Adjusted EBITDA and Adjusted EBITDA Margin provide our current and potential investors with relevant and useful information regarding our ability to generate cash flows to support business investment. These measures are an integral part of the internal reporting system we use to assess and evaluate the operating performance of our business.

Adjusted EBITDA excludes both interest expense, net and the provision (benefit) for income taxes. These expenses are associated with our capitalization and tax structures, which we do not consider when evaluating the operating profitability of our core operations. Adjusted EBITDA also does not include depreciation and amortization expenses, in order to eliminate the impact of capital investments, which we evaluate by comparing capital expenditures to incremental revenue generated and as a percentage of total revenues. Adjusted EBITDA and Adjusted EBITDA Margin should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP, such as operating income, net income (loss) or cash flows from operating activities (as determined in accordance with GAAP).

Year-to-Date Reconciliation of Net Income (Loss) to Adjusted EBITDA

(Dollars in thousands)

YTD 2021 YTD 2020 % Change



Net Income (Loss) $323,153 $57,779 459.3%

Add / (Deduct):

Interest Expense, Net 209,642 209,105 0.3%

Provision (Benefit) for Income Taxes 125,056 19,370 545.6%

Depreciation and Amortization 332,327 326,434 1.8%

Acquisition and Integration Costs 2,277 - -

Restructuring Charges 79,254 80,344 (1.4)%

Intangible Impairments - 23,000 (100.0)%

(Gain) Loss on Disposal/Write-Down of PP&E, Net (133,386) (2,330) 5,624.7%(Including Real Estate)

Other (Income) Expense, Net, Excluding ourShare of Losses (Gains) from our Unconsolidated (187,484) (21,792) 760.3%Joint Ventures

Stock-Based Compensation Expense 33,269 23,991 38.7%

COVID-19 Costs - 9,285 (100.0)%

Our Share of Adjusted EBITDA Reconciling Items 2,088 275 659.3%from our Unconsolidated Joint Ventures

Adjusted EBITDA $786,196 $725,461 8.4%

Quarterly Reconciliation of Reported Earnings per Share to Adjusted Earnings per Share

Q2 Q1 2021 Q/Q % Q2 2020 Y/Y % 2021 Change Change



Reported EPS - FullyDiluted from Net Income $0.95 $0.16 493.8 % $(0.02) n/a(Loss) Attributable toIron Mountain Incorporated

Add / (Deduct):

Acquisition and 0.01 - - - - Integration Costs

Restructuring Charges 0.14 0.14 - 0.14 -

(Gain) Loss on Disposal/ (0.44) (0.02) 2,100.0 % - - Write-Down of PP&E, Net

Other (Income) Expense,Net, Excluding our Shareof Losses (Gains) from our (0.65) 0.01 (6,600.0) % 0.08 (912.5) %Unconsolidated JointVentures

Stock-Based Compensation 0.08 0.04 100.0 % 0.07 14.3 %Expense

COVID-19 Costs - - - % 0.03 (100.0) %

Tax Impact of ReconcilingItems and Discrete Tax 0.31 (0.01) (3,200.0) % (0.02) n/aItems (1)

Adjusted EPS - FullyDiluted from Net Income $0.38 $0.32 18.8 % $0.27 40.7 %(Loss) Attributable toIron Mountain Incorporated

(1) The difference between our effective tax rates and our structural tax rate (or adjusted effective tax rates) for the quarters ended June 30, 2021 and 2020, is primarily due to (i) the reconciling items above, which impact our reported net income (loss) before provision (benefit) for income taxes but have an insignificant impact on our reported provision (benefit) for income taxes and (ii) other discrete tax items. Our structural tax rate for purposes of the calculation of Adjusted EPS for the quarters ended June 30, 2021, March 31, 2021, and June 30, 2020 was 16.2%, 16.6% and 16.7%, respectively. The Tax Impact of Reconciling Items and Discrete Tax Items is calculated using the current quarter's estimate of the annual structural tax rate for the full year. This may result in the current period adjustment plus prior reported quarterly adjustments not summing to the full year adjustment.

Adjusted Earnings Per Share, or Adjusted EPS

We define Adjusted EPS as reported earnings per share fully diluted from net income (loss) attributable to Iron Mountain Incorporated (inclusive of our share of adjusted losses (gains) from our unconsolidated joint ventures) and excluding certain items, specifically: (i) Acquisition and Integration Costs; (ii) Restructuring Charges; (iii) Intangible impairments; (iv) (Gain) loss on disposal/write-down of property, plant and equipment, net (including real estate); (v) Other expense (income), net; (vi) Stock-based compensation expense; (vii) COVID-19 Costs, and (viii) Tax impact of reconciling items and discrete tax items. We do not believe these excluded items to be indicative of our ongoing operating results, and they are not considered when we are forecasting our future results. We believe Adjusted EPS is of value to our current and potential investors when comparing our results from past, present and future periods.

Year-to-Date Reconciliation of Reported Earnings per Share to Adjusted Earnings per Share

YTD YTD % Change 2021 2020



Reported EPS - Fully Diluted from Net Income (Loss) $1.11 $0.20 455.0 %Attributable to Iron Mountain Incorporated

Add / (Deduct):

Acquisition and Integration Costs 0.01 - -

Restructuring Charges 0.27 0.28 (3.6) %

Intangible Impairments - 0.08 (100.0) %

(Gain) Loss on Disposal/Write-Down of PP&E, Net (0.46) (0.01) 4,500.0 %

Other (Income) Expense, Net, Excluding our Share ofLosses (Gains) from our Unconsolidated Joint (0.65) (0.08) 712.5 %Ventures

Stock-Based Compensation Expense 0.11 0.08 37.5 %

COVID-19 Costs - 0.03 (100.0) %

Tax Impact of Reconciling Items and Discrete Tax 0.30 (0.04) (850.0) %Items (1)

Income (Loss) Attributable to Noncontrolling 0.01 - - Interests

Adjusted EPS - Fully Diluted from Net Income (Loss) $0.70 $0.55 27.3 %Attributable to Iron Mountain Incorporated

(1) The difference between our effective tax rates and our structural tax rate (or adjusted effective tax rates) for the quarters ended June 30, 2021 and 2020, is primarily due to (i) the reconciling items above, which impact our reported net income (loss) before provision (benefit) for income taxes but have an insignificant impact on our reported provision (benefit) for income taxes and (ii) other discrete tax items. Our structural tax rate for purposes of the calculation of Adjusted EPS for the year-to-date periods ended June 30, 2021 and June 30, 2020 was 16.2% and 16.7%, respectively. The Tax Impact of Reconciling Items and Discrete Tax Items is calculated using the current quarter's estimate of the annual structural tax rate for the full year. This may result in the current period adjustment plus prior reported quarterly adjustments not summing to the full year adjustment.

Quarterly Reconciliation of Net Income (Loss) Attributable to IRM to FFO and AFFO

(Dollars in thousands, except per-share data)

Q2 2021 Q1 2021 Q/Q % Q2 2020 Y/Y % Change Change



Net Income $276,522 $46,631 493.0 % $(7,113) (3,987.6) %

Add / (Deduct):

Real Estate 74,784 76,047 (1.7) % 75,719 (1.2) %Depreciation (1)

Gain on Sale ofReal Estate, Net (102,476) (4,305) 2,280.2 % (1,089) 9,308.3 %of Tax

Data CenterLease-Based 10,482 10,483 - 10,379 1.0 %Intangible AssetAmortization (2)

FFO (Nareit) $259,312 $128,856 101.2 % $77,896 232.9 %

Add / (Deduct):

Acquisition and 2,277 - - - - Integration Costs

Restructuring 39,443 39,811 (0.9) % 39,298 0.4 %Charges

(Gain) Loss onDisposal/Write-Down of PP& (1,076) (146) 634.6 % (155) 595.8 %E, Net (ExcludingReal Estate)

Other (Income)Expense, Net,Excluding ourShare of Losses (189,605) 2,121 (9,037.5) % 23,239 (915.9) %(Gains) from ourUnconsolidatedJoint Ventures

Stock-BasedCompensation 22,536 10,733 110.0 % 18,880 19.4 %Expense

COVID-19 Costs - - - 9,285 (100.0) %

Real EstateFinancing Lease 3,515 3,536 (0.6) % 3,431 2.4 %Depreciation

Tax Impact ofReconciling Items 63,570 (3,569) (1,881.2) % (5,690) (1,217.2) %and Discrete TaxItems (3)

Our Share of FFO(Normalized)Reconciling Items (9) (4) 109.5 % (10) (10.0) %from ourUnconsolidatedJoint Ventures

FFO (Normalized) $199,963 $181,338 10.3 % $166,174 20.3 %



Per Share Amounts(Fully Diluted Shares):

FFO (Nareit) $0.89 $0.45 97.8 % $0.27 229.6 %

FFO (Normalized) $0.69 $0.63 9.5 % $0.58 19.0 %



Weighted AverageCommon Shares 289,247 288,756 0.2 % 288,071 0.4 %Outstanding -Basic

Weighted AverageCommon Shares 291,079 289,528 0.5 % 288,071 1.0 %Outstanding -Diluted

(1) Includes depreciation expense related to owned real estate assets (land improvements, buildings, building improvements, leasehold improvements and racking), excluding depreciation related to financing leases. (2) Includes amortization expense for Data Center In-Place Lease Intangible Assets and Data Center Tenant Relationship Intangible Assets. (3) Represents the tax impact of (i) the reconciling items above, which impact our reported net income (loss) before provision (benefit) for income taxes but have an insignificant impact on our reported provision (benefit) from income taxes and (ii) other discrete tax items.

Funds From Operations, or FFO (Nareit), and FFO (Normalized)

Funds from operations ("FFO") is defined by the National Association of Real Estate Investment Trusts ("Nareit") as net income (loss) excluding depreciation on real estate assets, gains on sale of real estate, net of tax, and amortization of data center leased-based intangibles and adjusting for our share of reconciling items from our unconsolidated joint ventures from FFO ("FFO (Nareit)"). FFO (Nareit) does not give effect to real estate depreciation because these amounts are computed, under GAAP, to allocate the cost of a property over its useful life. Because values for well-maintained real estate assets have historically increased or decreased based upon prevailing market conditions, we believe that FFO (Nareit) provides investors with a clearer view of our operating performance. Our most directly comparable GAAP measure to FFO (Nareit) is net income (loss).

Although Nareit has published a definition of FFO, we modify FFO (Nareit), as is common among REITs seeking to provide financial measures that most meaningfully reflect their particular business ("FFO (Normalized)"). Our definition of FFO (Normalized) excludes certain items included in FFO (Nareit) that we believe are not indicative of our core operating results, specifically: (i) Acquisition and Integration Costs; (ii) Restructuring Charges; (iii) Intangible impairments; (iv) Loss (gain) on disposal/write-down of property, plant and equipment, net (excluding real estate); (v) Other expense (income), net, (vi) Stock-based compensation expense; (vii) COVID-19 Costs, (viii) Real estate financing lease depreciation; and (viii) Tax impact of reconciling items and discrete tax items.

FFO (Normalized) per share

FFO (Normalized) divided by weighted average fully-diluted shares outstanding.

Quarterly Reconciliation of Net Income (Loss) Attributable to IRM to FFO and AFFO (continued)

(Dollars in thousands)

Q2 2021 Q1 2021 Q/Q % Q2 2020 Y/Y % Change Change



FFO (Normalized) $199,963 $181,338 10.3 % $166,174 20.3 %

Add / (Deduct):

Non-Real Estate 34,191 34,866 (1.9) % 33,779 1.2 %Depreciation

Amortization Expense 36,250 33,486 8.3 % 34,526 5.0 %(1)

Amortization ofDeferred Financing 4,316 4,127 4.6 % 4,488 (3.8) %Costs

Revenue ReductionAssociated withAmortization of 2,065 2,263 (8.7) % 2,566 (19.5) %Permanent WithdrawalFees and Above - andBelow-Market Leases

Non-Cash Rent Expense 3,958 5,410 (26.8) % 2,952 34.1 %(Income)

Reconciliation to 188 1,574 (88.1) % 29,502 (99.4) %Normalized Cash Taxes

Our Share of AFFOReconciling Items from 969 911 6.4 % 77 1,131.1 %our UnconsolidatedJoint Ventures

Less:

Recurring Capital 35,909 28,583 25.6 % 24,369 47.4 %Expenditures

AFFO $245,992 $235,391 4.5 % $249,694 (1.5) %



Per Share Amounts (Fully Diluted Shares):

AFFO Per Share $0.85 $0.81 3.9 % $0.87 (2.5) %



Weighted Average CommonShares Outstanding - 289,247 288,756 0.2 % 288,071 0.4 %Basic

Weighted Average CommonShares Outstanding - 291,079 289,528 0.5 % 288,071 1.0 %Diluted

(1) Includes Customer Relationship Value, intake costs, acquisition of customer relationships, and other intangibles. Excludes amortization of capitalized commissions of $7.5M, $7.2M, and $6.0M in Q2 2021, Q1 2021, and Q2 2020, respectively.

Adjusted Funds From Operations, or AFFO

AFFO is defined as FFO (Normalized) (1) excluding (i) non-cash rent expense (income), (ii) depreciation on non-real estate assets, (iii) amortization expense associated with (a) customer relationship value (CRV), intake costs, acquisitions of customer relationships and other intangibles, and (b) capitalized internal commissions, (iv) amortization of deferred financing costs and debt discount/premium, (v) revenue reduction associated with amortization of permanent withdrawal fees and above-and below-market data center leases, and (vi) the impact of reconciling to normalized cash taxes, and (2) including recurring capital expenditures excluding Significant Acquisition Capital Expenditures. We also adjust for these items to the extent attributable to our portion of unconsolidated ventures. We believe that AFFO, as a widely recognized measure of operations of REITs, is helpful to investors as a meaningful supplemental comparative performance measure to other REITs, including on a per share basis. AFFO should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP, such as operating income, net income (loss) or cash flows from operating activities (as determined in accordance with GAAP).

AFFO per share

AFFO divided by weighted average fully-diluted shares outstanding.

Year-to-date Reconciliation of Net Income (Loss) Attributable to IRM to FFO and AFFO

(Dollars in thousands, except per-share data)

YTD 2021 YTD 2020 % Change



Net Income $323,153 $57,779 459.3 %

Add / (Deduct):

Real Estate Depreciation (1) 150,831 152,306 (1.0) %

Gain on Sale of Real Estate, Net of Tax (106,781) (1,581) 6,655.4 %

Data Center Lease-Based Intangible Asset 20,965 21,732 (3.5) %Amortization (2)

FFO (Nareit) $388,168 $230,236 68.6 %

Add / (Deduct):

Acquisition and Integration Costs 2,277 - -

Restructuring Charges 79,254 80,344 (1.4) %

Intangible Impairments - 23,000 (100.0) %

(Gain) Loss on Disposal/Write-Down of PP& (1,222) (399) 206.2 %E, Net (Excluding Real Estate)

Other (Income) Expense, Net, Excluding ourShare of Losses (Gains) from our (187,484) (21,792) 760.3 %Unconsolidated Joint Ventures

Stock-Based Compensation Expense 33,269 23,991 38.7 %

COVID-19 Costs - 9,285 (100.0) %

Real Estate Financing Lease Depreciation 7,051 6,594 6.9 %

Tax Impact of Reconciling Items and 60,494 (12,613) (579.6) %Discrete Tax Items (3)

Our Share of FFO (Normalized) ReconcilingItems from our Unconsolidated Joint (13) (30) (55.7) %Ventures

FFO (Normalized) $381,794 $338,616 12.8 %



Per Share Amounts (Fully Diluted Shares):

FFO (Nareit) $1.34 $0.80 67.4 %

FFO (Normalized) $1.32 $1.17 12.0 %



Weighted Average Common Shares Outstanding 289,001 287,955 0.4 %- Basic

Weighted Average Common Shares Outstanding 290,303 288,301 0.7 %- Diluted

(1) Includes depreciation expense related to owned real estate assets (land improvements, buildings, building improvements, leasehold improvements and racking), excluding depreciation related to financing leases. (2) Includes amortization expense for Data Center In-Place Lease Intangible Assets and Data Center Tenant Relationship Intangible Assets. (3) Represents the tax impact of (i) the reconciling items above, which impact our reported net income (loss) before provision (benefit) for income taxes but have an insignificant impact on our reported provision (benefit) from income taxes and (ii) other discrete tax items.

Year-to-date Reconciliation of Net Income (Loss) Attributable to IRM to FFO and AFFO (continued)

(Dollars in thousands, except per-share data)

YTD 2021 YTD 2020 % Change



FFO (Normalized) $381,794 $338,616 12.8 %

Add / (Deduct):

Non-Real Estate Depreciation 69,057 67,728 2.0 %

Amortization Expense (1) 69,736 66,433 5.0 %

Amortization of Deferred Financing Costs 8,443 9,001 (6.2) %

Revenue Reduction Associated with Amortizationof Permanent Withdrawal Fees and Above - and 4,327 5,248 (17.5) %Below-Market Leases

Non-Cash Rent Expense (Income) 9,369 5,497 70.4 %

Reconciliation to Normalized Cash Taxes 1,269 31,785 (96.0) %

Our Share of AFFO Reconciling Items from our 1,881 151 1,145.5 %Unconsolidated Joint Ventures

Less:

Recurring Capital Expenditures 64,492 44,112 46.2 %

AFFO $481,384 $480,348 0.2 %



Per Share Amounts (Fully Diluted Shares):

AFFO Per Share $1.66 $1.67 (0.5) %



Weighted Average Common Shares Outstanding - 289,001 287,955 0.4 %Basic

Weighted Average Common Shares Outstanding - 290,303 288,301 0.7 %Diluted

(1) Includes Customer Relationship Value, intake costs, acquisition of customer relationships, and other intangibles. Excludes amortization of capitalized commissions of $14.7M and $11.6M, in YTD 2021 and 2020, respectively.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210805005333/en/

CONTACT: Investor Relations: Greer Aviv Senior Vice President, Investor Relations Greer.Aviv@ironmountain.com (617) 535-2887

CONTACT: Sarah Barry Manager, Investor Relations Sarah.Barry@ironmountain.com (617) 535-2997