Business Wire | Nov 4, 2021 06:01AM EDT

Iron Mountain Reports Third Quarter Results

Nov. 04, 2021

BOSTON--(BUSINESS WIRE)--Nov. 04, 2021--Iron Mountain Incorporated (NYSE: IRM), the global leader in innovative storage and information management services, announces financial and operating results for the third 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 third quarter performance demonstrates the continued strength of the business throughout the year, driven by our broad offerings, deep customer relationships, resilient business model, and strength of our team," said William L. Meaney, president and CEO of Iron Mountain. "Our Mountaineers have been executing well despite what continues to be a challenging environment, and we are pleased to continue to drive accelerated growth with continued strong uptake in our digital and SITAD offerings resulting in 19% year over year growth, strong storage growth of 3.2% with positive organic volume, and continued momentum in our Data Center business, which is well on track to deliver bookings in excess of 30 megawatts for the year."

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

($ in millions, except per share data)

Three Months Year to Date Ended

9/30/21 9/30/ Y/Y % 9/30/ 9/30/ Y/Y % 20 Change 21 20 Change

Storage Rental Revenue $719 $696 3% $2,145 $2,057 4%

Service Revenue $412 $340 21% $1,187 $1,031 15%

Total Revenue $1,130 $1,037 9% $3,332 $3,088 8%



Net Income (Loss) $68 $39 77% $391 $96 306%

Adjusted EBITDA $418 $376 11% $1,204 $1,101 9%

Adjusted EBITDA Margin 37.0% 36.3% +70 36.1% 35.7% +40 bps bps



AFFO $263 $216 22% $745 $697 7%

AFFO per share $0.90 $0.75 21% $2.56 $2.42 6%

* Total reported Revenues for the third quarter were $1.13 billion, compared with $1.04 billion in the third quarter of 2020, an increase of 9.0%. Excluding the impact of foreign currency exchange (FX), total reported Revenues increased 7.9% compared to the prior year, driven by a 19.7% increase in Service revenue, while Storage rental revenue increased 2.2%. Year to date, total reported Revenues increased 7.9%, or 5.7%, excluding the impact of FX. * Global Data Center business revenue increased 21.7% in the third quarter, or a 21.2% increase compared to the third quarter of 2020, excluding the impact of FX. Through September 30, 2021, Iron Mountain has executed 22 megawatts of new and expansion leasing. Subsequent to the end of the third quarter, the company signed an additional 2 megawatts of new and expansion leases. * Net Income for the third quarter was $68.1 million compared with $38.6 million in the third quarter of 2020. The following items were included in Net Income: Restructuring Charges of $50.4 million associated with the implementation of Project Summit in the third quarter of 2021 compared to $48.4 million in the third quarter of 2020. Gain on Disposal/Write-Down of PP&E, Net of $0.9 million in the third quarter of 2021 compared to $75.8 million in the third quarter of 2020, primarily related to the company's capital recycling program. Other Income, Net of $18.5 million in the third quarter of 2021, primarily related to fluctuations in foreign currency transaction gains, net, compared to Other Expense, Net of $83.5 million in the third quarter of 2020, primarily related to a debt extinguishment charge of $51.3 million. * Year to date, Net Income was $391.3 million, compared with $96.3 million in 2020. The following items were included in Net Income: Restructuring Charges of $129.7 million compared to $128.7 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 $134.3 million compared to $78.2 million, year to date 2021 and 2020, respectively, primarily related to the company's capital recycling program. Other Income, Net of $200.0 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 Expense, Net of $66.4 million year to date 2020, primarily related to a debt extinguishment charge of $68.3 million. * Adjusted EBITDA for the third quarter was $417.8 million, compared with $376.0 million in the third quarter of 2020, an increase of 11.1%. On a constant currency basis, Adjusted EBITDA increased by 9.9%, 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 $1.2 billion, compared with $1.1 billion in 2020, an increase of 9.3%. On a constant currency basis, Adjusted EBITDA increased 7.0%. * Reported EPS - Fully Diluted from Net Income (Loss) Attributable to Iron Mountain Incorporated for the third quarter was $0.23, compared with $0.13 in the third quarter of 2020. Year to date, Reported EPS - Fully Diluted from Net Income (Loss) Attributable to Iron Mountain Incorporated was $1.34, compared with $0.33 in 2020. * Adjusted EPS for the third quarter was $0.40, compared with $0.33 in the third quarter of 2020. Adjusted EPS reflects a structural tax rate of 16.5% and 16.3%, in the third quarters of 2021 and 2020, respectively. Year to date, Adjusted EPS was $1.09, compared with $0.88 in 2020. * FFO (Normalized) per share was $0.72 for the third quarter, compared with $0.63 in the third quarter of 2020, an increase of 14.3%. Year to date, FFO (Normalized) per share was $2.03, compared with $1.81 in 2020, an increase of 12.4%. * AFFO was $263.5 million for the third quarter, compared with $216.4 million in the third quarter of 2020, an increase of 21.7%. Year to date, AFFO was $744.9 million, compared with $696.8 million in 2020, an increase of 6.9%. * AFFO per share was $0.90 for the third quarter, compared with $0.75 in the third quarter of 2020, an increase of 20.6%. Year to date, AFFO per share was $2.56, compared with $2.42 in 2020, an increase of 6.1%.

Dividend

On November 4, 2021, Iron Mountain's board of directors declared a quarterly cash dividend of $0.6185 per share for the fourth quarter. The fourth-quarter 2021 dividend is payable on January 6, 2022, for shareholders of record on December 15, 2021.

Guidance

Iron Mountain confirmed full-year 2021 guidance; details are summarized in the table below.

2021 Guidance^(1)

($ in millions, except per share data)

2021 Guidance Y/Y % Change

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

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

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

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

(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, including data center leasing, (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 payout ratio 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 costs of complying with, 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.

Condensed Consolidated Balance Sheets

(Unaudited; dollars in thousands)

9/30/2021 12/31/2020

ASSETS

Current Assets:

Cash and Cash Equivalents $161,439 $205,063

Accounts Receivable, Net 884,348 859,344

Prepaid Expenses and Other 223,266 205,380

Total Current Assets $1,269,053 $1,269,787

Property, Plant and Equipment:

Property, Plant and Equipment $8,503,171 $8,246,337

Less: Accumulated Depreciation (3,914,553) (3,743,894)

Property, Plant and Equipment, Net $4,588,618 $4,502,443

Other Assets, Net:

Goodwill $4,472,641 $4,557,609

Customer Relationships, Customer Inducements 1,230,330 1,326,977 and Data Center Lease-Based Intangibles

Operating Lease Right-of-Use Assets 2,308,047 2,196,502

Other 365,706 295,949

Total Other Assets, Net $8,376,724 $8,377,037

Total Assets $14,234,395 $14,149,267



LIABILITIES AND EQUITY

Current Liabilities:

Current Portion of Long-term Debt $318,144 $193,759

Accounts Payable 324,210 359,863

Accrued Expenses and Other Current Liabilities 926,360 1,146,288

Deferred Revenue 257,593 295,785

Total Current Liabilities $1,826,307 $1,995,695

Long-term Debt, Net of Current Portion 8,815,273 8,509,555

Long-term Operating Lease Liabilities, Net of 2,164,449 2,044,598 Current Portion

Other Long-term Liabilities 155,048 204,508

Deferred Income Taxes 236,782 198,377

Redeemable Noncontrolling Interests 61,390 59,805

Total Long-term Liabilities $11,432,942 $11,016,843

Total Liabilities $13,259,249 $13,012,538

Equity

Total Equity $975,146 $1,136,729

Total Liabilities and Equity $14,234,395 $14,149,267

Quarterly Condensed Consolidated Statements of Operations

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

Q3 2021 Q2 2021 Q/Q % Q3 2020 Y/Y % Change Change

Revenues:

Storage Rental $718,614 $718,272 - % $696,294 3.2 %

Service 411,534 401,484 2.5 % 340,353 20.9 %

Total Revenues $1,130,148 $1,119,756 0.9 % $1,036,647 9.0 %



Operating Expenses:

Cost of Sales(excluding $481,663 $474,579 1.5 % $434,505 10.9 %Depreciation andAmortization)

Selling, Generaland 241,596 259,779 (7.0) % 232,095 4.1 %Administrative

Depreciation and 174,818 166,685 4.9 % 157,252 11.2 %Amortization

Acquisition andIntegration 1,138 2,277 (50.0) % - - Costs

Restructuring 50,432 39,443 27.9 % 48,371 4.3 %Charges

(Gain) Loss onDisposal/ (935) (128,935) (99.3) % (75,840) (98.8) %Write-Down of PP&E, Net

Total Operating $948,712 $813,828 16.6 % $796,383 19.1 %Expenses



Operating Income $181,436 $305,928 (40.7) % $240,264 (24.5) %(Loss)

Interest 103,809 105,220 (1.3) % 104,303 (0.5) %Expense, Net

Other (Income) (18,501) (186,230) (90.1) % 83,465 (122.2) %Expense, Net

Net Income(Loss) BeforeProvision $96,128 $386,938 (75.2) % $52,496 83.1 %(Benefit) forIncome Taxes

Provision(Benefit) for 28,017 110,416 (74.6) % 13,934 101.1 %Income Taxes

Net Income $68,111 $276,522 (75.4) % $38,562 76.6 %(Loss)

Less: Net Income(Loss)Attributable to 428 1,237 (65.4) % 168 154.5 %NoncontrollingInterests

Net Income(Loss)Attributable to $67,683 $275,285 (75.4) % $38,394 76.3 %Iron MountainIncorporated



Net Income(Loss) Per ShareAttributable to Iron MountainIncorporated:

Basic $0.23 $0.95 (75.8) % $0.13 76.9 %

Diluted $0.23 $0.95 (75.8) % $0.13 76.9 %



Weighted AverageCommon Shares 289,762 289,247 0.2 % 288,403 0.5 %Outstanding -Basic

Weighted AverageCommon Shares 291,482 291,079 0.1 % 288,811 0.9 %Outstanding -Diluted

Year-to-Date Condensed Consolidated Statements of Operations

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

YTD 2021 YTD 2020 % Change

Revenues:

Storage Rental $2,144,942 $2,056,797 4.3 %

Service 1,187,002 1,030,820 15.2 %

Total Revenues $3,331,944 $3,087,617 7.9 %



Operating Expenses:

Cost of Sales (excluding Depreciation and $1,408,151 $1,308,119 7.6 %Amortization) (1)

Selling, General and Administrative (2) 760,098 712,775 6.6 %

Depreciation and Amortization 507,145 483,686 4.8 %

Acquisition and Integration Costs 3,415 - -

Restructuring Charges 129,686 128,715 0.8 %

Intangible Impairments - 23,000 (100.0) %

(Gain) Loss on Disposal/Write-Down of PP& (134,321) (78,170) 71.8 %E, Net

Total Operating Expenses $2,674,174 $2,578,125 3.7 %



Operating Income (Loss) $657,770 $509,492 29.1 %

Interest Expense, Net 313,451 313,408 -

Other (Income) Expense, Net (200,018) 66,439 (401.1) %

Net Income (Loss) Before Provision $544,337 $129,645 319.9 %(Benefit) for Income Taxes

Provision (Benefit) for Income Taxes 153,073 33,304 359.6 %

Net Income (Loss) $391,264 $96,341 306.1 %

Less: Net Income (Loss) Attributable to 2,693 1,058 154.5 %Noncontrolling Interests

Net Income (Loss) Attributable to Iron $388,571 $95,283 307.8 %Mountain Incorporated



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

Basic $1.34 $0.33 306.1 %

Diluted $1.34 $0.33 306.1 %



Weighted Average Common Shares 289,255 288,105 0.4 %Outstanding - Basic

Weighted Average Common Shares 290,697 288,471 0.8 %Outstanding - 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)

Q3 2021 Q2 2021 Q/Q % Q3 2020 Y/Y % Change Change



Net Income (Loss) $68,111 $276,522 (75.4) % $38,562 76.6 %



Add / (Deduct):

Interest Expense, Net 103,809 105,220 (1.3) % 104,303 (0.5) %

Provision (Benefit) 28,017 110,416 (74.6) % 13,934 101.1 %for Income Taxes

Depreciation and 174,818 166,685 4.9 % 157,252 11.2 %Amortization

Acquisition and 1,138 2,277 (50.0) % - - Integration Costs

Restructuring Charges 50,432 39,443 27.9 % 48,371 4.3 %

(Gain) Loss onDisposal/Write-Down of (935) (128,935) (99.3) % (75,840) (98.8) %PP&E, Net (IncludingReal Estate)

Other (Income)Expense, Net,Excluding our Share of (21,517) (189,605) (88.7) % 81,190 (126.5) %Losses (Gains) fromour UnconsolidatedJoint Ventures

Stock-Based 12,644 22,536 (43.9) % 8,065 56.8 %Compensation Expense

COVID-19 Costs - - - - -

Our Share of AdjustedEBITDA ReconcilingItems from our 1,252 1,072 16.8 % 175 615.0 %UnconsolidatedJoint Ventures

Adjusted EBITDA $417,769 $405,631 3.0 % $376,012 11.1 %

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 (vii) 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 (vii) 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) $391,264 $96,341 306.1 %

Add / (Deduct):

Interest Expense, Net 313,451 313,408 -

Provision (Benefit) for Income Taxes 153,073 33,304 359.6 %

Depreciation and Amortization 507,145 483,686 4.8 %

Acquisition and Integration Costs 3,415 - -

Restructuring Charges 129,686 128,715 0.8 %

Intangible Impairments - 23,000 (100.0) %

(Gain) Loss on Disposal/Write-Down of PP&E, (134,321) (78,170) 71.8 %Net (Including Real Estate)

Other (Income) Expense, Net, Excluding ourShare of Losses (Gains) from (209,001) 59,398 (451.9) %our Unconsolidated Joint Ventures

Stock-Based Compensation Expense 45,913 32,056 43.2 %

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

Our Share of Adjusted EBITDA ReconcilingItems from our Unconsolidated 3,340 450 641.4 %Joint Ventures

Adjusted EBITDA $1,203,965 $1,101,473 9.3 %

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

Q3 Q2 Q/Q % Q3 2020 Y/Y % 2021 2021 Change Change



Reported EPS - FullyDiluted from Net Income $0.23 $0.95 (75.4) % $0.13 78.6 %(Loss) Attributable toIron Mountain Incorporated

Add / (Deduct):

Acquisition and Integration - 0.01 (50.0) % - - Costs

Restructuring Charges 0.17 0.14 27.7 % 0.17 -

(Gain) Loss on Disposal/ (0.01) (0.44) (98.8) % (0.26) (98.0) %Write-Down of PP&E, Net

Other (Income) Expense,Net, Excluding our Share ofLosses (Gains) (0.07) (0.65) (88.7) % 0.28 (126.3) %from our UnconsolidatedJoint Ventures

Stock-Based Compensation 0.04 0.08 (44.0) % 0.03 55.3 %Expense

COVID-19 Costs - - - 0.00 -

Tax Impact of ReconcilingItems and Discrete Tax 0.02 0.31 (94.0) % (0.02) (213.3) %Items (1)

Adjusted EPS - FullyDiluted from Net Income $0.40 $0.38 3.5 % $0.33 20.3 %(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 September 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 three and nine months ended September 30, 2021 and 2020 was 16.5% and 16.3%, and three and six months ended June 30, 2021 was 16.2%, 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)Attributable to Iron $1.34 $0.33 305.1 %Mountain Incorporated

Add / (Deduct):

Acquisition and Integration Costs 0.01 - -

Restructuring Charges 0.45 0.45 -

Intangible Impairments - 0.08 (100.0) %

(Gain) Loss on Disposal/Write-Down of PP&E, Net (0.46) (0.27) 70.5 %

Other (Income) Expense, Net, Excluding our Share ofLosses (Gains) from (0.72) 0.21 (449.2) %our Unconsolidated Joint Ventures

Stock-Based Compensation Expense 0.16 0.11 42.1 %

COVID-19 Costs - 0.03 (100.0) %

Tax Impact of Reconciling Items and Discrete Tax 0.31 (0.06) (657.4) %Items (1)

Income (Loss) Attributable to Noncontrolling 0.01 - - Interests

Adjusted EPS - Fully Diluted from Net Income (Loss)Attributable to Iron $1.09 $0.88 23.8 %Mountain Incorporated

(1) The difference between our effective tax rates and our structural tax rate (or adjusted effective tax rates) for the quarters ended September 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 three and nine months ended September 30, 2021 and 2020 was 16.5% and 16.3%, and three and six months ended June 30, 2021 was 16.2%, 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) to FFO and AFFO

(Dollars in thousands, except per-share data)

Q3 2021 Q2 2021 Q/Q % Q3 2020 Y/Y % Change Change



Net Income $68,111 $276,522 (75.4) % $38,562 76.6 %

Add / (Deduct):

Real Estate 79,463 74,784 6.3 % 72,019 10.3 %Depreciation (1)

Loss (Gain) on Saleof Real Estate, Net 748 (102,476) (100.7) % (75,880) (101.0) %of Tax

Data CenterLease-Based 10,458 10,482 (0.2) % 10,441 0.2 %Intangible AssetAmortization (2)

FFO (Nareit) $158,780 $259,312 (38.8) % $45,142 251.7 %

Add / (Deduct):

Acquisition and 1,138 2,277 (50.0) % - - Integration Costs

Restructuring 50,432 39,443 27.9 % 48,371 4.3 %Charges

(Gain) Loss onDisposal/Write-Downof PP&E, Net (1,668) (1,076) 55.0 % 40 (4,227.3) %(ExcludingReal Estate)

Other (Income)Expense, Net,Excluding our Shareof Losses (21,517) (189,605) (88.7) % 81,190 (126.5) %(Gains) from ourUnconsolidatedJoint Ventures

Stock-BasedCompensation 12,644 22,536 (43.9) % 8,065 56.8 %Expense

COVID-19 Costs - - - - -

Real EstateFinancing Lease 3,740 3,515 6.4 % 3,501 6.8 %Depreciation

Tax Impact ofReconciling Items 5,304 63,570 (91.7) % (4,648) (214.1) %and Discrete TaxItems (3)

Our Share of FFO(Normalized)Reconciling Items (17) (9) 85.2 % (1) 1,600.0 %from ourUnconsolidatedJoint Ventures

FFO (Normalized) $208,836 $199,963 4.4 % $181,660 15.0 %



Per Share Amounts(Fully Diluted Shares):

FFO (Nareit) $0.55 $0.89 (38.2) % $0.16 243.8 %

FFO (Normalized) $0.72 $0.69 4.3 % $0.63 14.3 %



Weighted AverageCommon Shares 289,762 289,247 0.2 % 288,403 0.5 %Outstanding - Basic

Weighted AverageCommon Shares 291,482 291,079 0.1 % 288,811 0.9 %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, losses and 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 (ix) 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) to FFO and AFFO (continued)

(Dollars in thousands)

Q3 2021 Q2 2021 Q/Q % Q3 2020 Y/Y % Change Change



FFO (Normalized) $208,836 $199,963 4.4 % $181,660 15.0 %

Add / (Deduct):

Non-Real Estate 37,128 34,191 8.6 % 32,629 13.8 %Depreciation

Amortization Expense 36,361 36,250 0.3 % 33,271 9.3 %(1)

Amortization ofDeferred Financing 4,027 4,316 (6.7) % 4,149 (2.9) %Costs

Revenue ReductionAssociated withAmortization ofPermanent 2,251 2,065 9.0 % 2,363 (4.8) %Withdrawal Fees andAbove - andBelow-Market Leases

Non-Cash Rent Expense 3,722 3,958 (6.0) % 2,779 33.9 %(Income)

Reconciliation to 8,133 188 4,225.9 % (5,107) (259.2) %Normalized Cash Taxes

Our Share of AFFOReconciling Itemsfrom our 1,021 969 5.3 % 83 1,131.1 %Unconsolidated JointVentures

Less:

Recurring Capital 37,995 35,909 5.8 % 35,407 7.3 %Expenditures

AFFO $263,484 $245,992 7.1 % $216,420 21.7 %



Per Share Amounts(Fully Diluted Shares):

AFFO Per Share $0.90 $0.85 7.0 % $0.75 20.6 %



Weighted AverageCommon Shares 289,762 289,247 0.2 % 288,403 0.5 %Outstanding - Basic

Weighted AverageCommon Shares 291,482 291,079 0.1 % 288,811 0.9 %Outstanding - Diluted

(1) Includes Customer Relationship Value, intake costs, acquisition of customer relationships, and other intangibles. Excludes amortization of capitalized commissions of $7.7M, $7.5M, and $5.4M in Q3 2021, Q2 2021, and Q3 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) to FFO and AFFO

(Dollars in thousands, except per-share data)

YTD 2021 YTD 2020 % Change



Net Income $391,264 $96,341 306.1 %

Add / (Deduct):

Real Estate Depreciation (1) 230,294 224,325 2.7 %

(Gain) Loss on Sale of Real Estate, Net of (106,033) (77,461) 36.9 %Tax

Data Center Lease-Based Intangible Asset 31,423 32,173 (2.3) %Amortization (2)

FFO (Nareit) $546,948 $275,378 98.6 %

Add / (Deduct):

Acquisition and Integration Costs 3,415 - -

Restructuring Charges 129,686 128,715 0.8 %

Intangible Impairments - 23,000 (100.0) %

(Gain) Loss on Disposal/Write-Down of PP& (2,890) (359) 705.3 %E, Net (Excluding Real Estate)

Other (Income) Expense, Net, Excluding ourShare of Losses (Gains) from (209,001) 59,398 (451.9) %our Unconsolidated Joint Ventures

Stock-Based Compensation Expense 45,913 32,056 43.2 %

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

Real Estate Financing Lease Depreciation 10,791 10,095 6.9 %

Tax Impact of Reconciling Items and 65,120 (16,464) (495.5) %Discrete Tax Items (3)

Our Share of FFO (Normalized) ReconcilingItems from our Unconsolidated (30) (31) (1.6) %Joint Ventures

FFO (Normalized) $589,952 $521,073 13.2 %



Per Share Amounts (Fully Diluted Shares):

FFO (Nareit) $1.88 $0.95 97.1 %

FFO (Normalized) $2.03 $1.81 12.4 %



Weighted Average Common Shares Outstanding 289,255 288,105 0.4 %- Basic

Weighted Average Common Shares Outstanding 290,697 288,471 0.8 %- 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) to FFO and AFFO (continued)

(Dollars in thousands, except per-share data)

YTD 2021 YTD 2020 % Change



FFO (Normalized) $589,952 $521,073 13.2 %

Add / (Deduct):

Non-Real Estate Depreciation 106,185 100,357 5.8 %

Amortization Expense (1) 106,097 99,704 6.4 %

Amortization of Deferred Financing Costs 12,470 13,150 (5.2) %

Revenue Reduction Associated with Amortizationof Permanent Withdrawal 6,578 7,612 (13.6) %Fees and Above - and Below-Market Leases

Non-Cash Rent Expense (Income) 13,091 8,276 58.2 %

Reconciliation to Normalized Cash Taxes 10,080 25,881 (61.1) %

Our Share of AFFO Reconciling Items from our 2,902 234 1,140.2 %Unconsolidated Joint Ventures

Less:

Recurring Capital Expenditures 102,487 79,521 28.9 %

AFFO $744,868 $696,766 6.9 %



Per Share Amounts (Fully Diluted Shares):

AFFO Per Share $2.56 $2.42 6.1 %



Weighted Average Common Shares Outstanding - 289,255 288,105 0.4 %Basic

Weighted Average Common Shares Outstanding - 290,697 288,471 0.8 %Diluted

(1) Includes Customer Relationship Value, intake costs, acquisition of customer relationships, and other intangibles. Excludes amortization of capitalized commissions of $22.4M and $17.0M, in YTD 2021 and 2020, respectively.

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