Iron Mountain Incorporated Q3/2011 Financial Results

Transcription

1 Place image here Iron Mountain Incorporated Q3/2011 Financial Results October 27, Iron Mountain Incorporated. All rights reserved. Iron Mountain and the design of the mountain are registered trademarks of Iron Mountain Incorporated. 1

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 federal securities laws, and is subject to the safe-harbor created by such Act. Forward-looking statements include our 2011 and 2012 financial performance outlook and statements regarding our operations, economic performance, financial condition, goals, beliefs, future growth strategies, investment objectives, plans and current expectations and our intent and ability to repurchase shares and pay dividends. The forwardlooking 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 forwardlooking 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) the cost to comply with current and future laws, regulations and customer demands relating to privacy issues; (ii) the impact of litigation or disputes that may arise in connection with incidents in which we fail to protect our customers' information; (iii) changes in the price for our services relative to the cost of providing such services; (iv) changes in customer preferences and demand for our services; (v) the cost or potential liabilities associated with real estate necessary for our business; (vi) the performance of business partners upon whom we depend for technical assistance or management expertise outside the U.S.; (vii) changes in the political and economic environments in the countries in which our international subsidiaries operate; (viii) claims that our technology violates the intellectual property rights of a third party; (ix) the impact of legal restrictions or limitations under stock repurchase plans on price, volume or timing of stock repurchases; (x) the impact of alternative, more attractive investments on dividends or stock repurchases; (xi) our ability or inability to complete acquisitions on satisfactory terms and to integrate acquired companies efficiently; (xii) other trends in competitive or economic conditions affecting our financial condition or results of operations not presently contemplated; and (xiii) other risks described more fully in the Company s most recently filed Current Reports on Form 8-K under Item 1A. Risk Factors dated September 19, 2011 and in the Quarterly Report on Form 10-Q for the quarter ended March 31, 2011 and other documents that the Company files with the Securities and Exchange Commission from time to time. Except as required by law, we undertake 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 (Adjusted OIBDA), Free Cash Flow Before Acquisitions & Investments (FCF) and Adjusted Earnings Per Share (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 2

3 Key Messages Solid Q3 operating results in line with expectations 6% revenue growth supported by sustained 3% storage internal growth International margin improvement on track to achieve full year goals Significant progress made towards shareholder payout commitment $588MM of cash returned to shareholders in the quarter $400MM senior subordinated note offering ensures sufficient liquidity FY 2011 outlook revised to incorporate recent strengthening of U.S. dollar and projected restructuring costs to support International margin expansion Underlying business performance remains within expected range FY 2012 outlook targets continued solid storage revenue growth and strong FCF performance Profit gains supported by International margin expansion Overall growth constrained by FX impacts and lower commodity prices 3

4 Quarterly Results As Expected % Growth ($MM, except per share data) Q3/2010 (1) Q3/2011 Reported Internal Revenue $ 731 $ 772 6% 3% NA Physical $549 $568 3% 3% Int l Physical $182 $205 13% 2% Gross Profit (2) $ 432 $ 462 7% Gross Profit % 59.0% 59.9% Adjusted OIBDA $ 251 $ 252 0% Adjusted OIBDA % 34.4% 32.7% EPS Continuing Ops FD $0.14 $0.17 Adj. EPS Continuing Ops FD $0.37 $0.37 0% (1) Restated to exclude discontinued operations (2) Excluding depreciation and amortization 4

5 Revenue Growth Supported By Storage Gains Internal Growth by Revenue Type Q3/2011 YTD/2011 FY/2011 Guidance (1) Storage 3% 3% 2% -- 3% Core Services (1)% (1)% (1)% -- 1% Total Core Revenue 2% 2% 1% -- 3% Complementary Services 9% 5% 2% -- 8% Total Internal Growth 3% 2% 1% -- 3% Impact of Acquisitions/Divestitures <1% <1% <1% Impact of FX Fluctuations & Other ~2% ~2% ~2% Total Reported Growth 6% 5% 4% -- 6% NOTE: Columns may not foot due to rounding. (1) Issued on July 27, 2011 and restated to exclude discontinued operations. 5

6 On Track to Achieve Full Year Goals % Growth ($MM, except per share data) YTD/2010 (1) YTD/2011 Reported Internal Revenue $2,181 $2,285 5% 2% Gross Profit (2) $1,276 $1,345 5% Gross Profit % 58.5% 58.8% Adjusted OIBDA $ 699 $ 695 (1)% Adjusted OIBDA % 32.1% 30.4% EPS Continuing Ops FD $0.54 $0.88 Adj. EPS Continuing Ops FD $0.95 $0.93 (2)% CAPEX (ex RE) (3) $ 156 $ 119 (24)% CAPEX (ex RE) % (3) 7.1% 5.2% Free Cash Flow (4) $ 257 $ % (1) Restated to exclude discontinued operations (2) Excluding depreciation and amortization (3) Based on incurred versus cash paid basis. Excludes $7MM and $15MM of real estate spending in 2010 and 2011, respectively (4) Before discretionary investments in acquisitions and real estate, net 6

7 International Performance Drives Profit Gains % Growth ($MM) YTD/2010 (1) YTD/2011 Reported Internal Revenue $1,649 $1,680 2% 2% NA Physical Adjusted OIBDA $ 731 $ 724 (1)% Adjusted OIBDA % 44.3% 43.1% CAPEX (ex RE) % (2) 4.4% 4.0% Revenue $ 532 $ % 3% International Physical Adjusted OIBDA $ 98 $ % Adjusted OIBDA % 18.4% 19.9% CAPEX (ex RE) % (2) 11.0% 7.7% Corporate Adjusted OIBDA $(129) $(149) (15)% CAPEX (ex RE) % (2) 1.1% 0.2% (1) Restated to exclude discontinued operations (2) Based on incurred versus cash paid basis 7

8 Delivering Shareholder Payouts Significant Progress Against $1.2B Payout Commitment $1,000 $800 $600 $400 $200 $0 Cumulative Shareholder Payouts ($MM) Key Developments $726MM of $1.2B returned through October 21, MM shares acquired for $628MM $98MM paid in dividends Acquired 16.8MM shares for $537MM in Q3 $250MM funded in May 2011 through PVSRs Additional 3MM shares acquired in October for $91MM Increased leverage with $400MM debt offering Dividends Buybacks Currently at 3.0x leverage vs. midpoint of 3x to 4x target range 8

9 Well Positioned Balance Sheet As of September 30, 2011 ($MM) As of September 30, 2011 Debt, net of cash $2,840 % fixed with respect to interest rates 85% Weighted average interest rate 6.9% Weighted average maturity 6.7 years 6 Consolidated Leverage (1) $800 Debt Maturity Schedule ($MM) 5 $600 4 $ x $ YTD $ (1) Per our senior credit agreement. 9

10 2011 Financial Outlook ($MM) Constant Currency % Growth vs (1) FY/2011 (1) Revenue 2% - 3% $3,020 - $3,045 Adjusted OIBDA (4)% - (2)% $905 - $925 Adjusted EPS Continuing Ops FD $ $1.24 Capex (2) ~$225 Free Cash Flow (3) $380 - $400 (1) Restated to exclude discontinued operations (2) Based on incurred versus cash basis and includes ~$18MM of capital spending on real estate (3) Before discretionary investments in acquisitions and real estate, net 10

11 2012 Preliminary Guidance: Key Factors Consistent revenue growth outlook supported by solid storage gains 0% - 2% internal revenue gains constrained by lower recycled paper prices At recent rates, FX will decrease reported results by ~1% Adjusted OIBDA margin improvement supported by additional International margin gains Overall Adjusted OIBDA growth constrained by lower recycled paper prices Targeting strong FCF performance supported by sustained high returns and capital efficiencies Per share metrics will benefit from fewer shares outstanding in

12 2012 Preliminary Outlook ($MM) Constant Dollar % Growth vs (1) FY/2012 Revenue 0% - 2% $2,990 - $3,070 Adjusted OIBDA 1% - 5% $915 - $955 Adjusted EPS FD $ $1.33 Capex (2) ~$220 Free Cash Flow (3) $360 - $400 (1) Based on the midpoint of guidance issued on October 27, 2011 (2) Based on incurred versus cash basis and includes ~$16MM of capital spending on real estate (3) Before discretionary investments in acquisitions and real estate, net 12

13 Appendix Place image here October 27, Iron Mountain Incorporated. All rights reserved. Iron Mountain and the design of the mountain are registered trademarks of Iron Mountain Incorporated. 13

14 Global Records Management Volume Growth Drivers (1) 12% 9% 6% 3% 0% -3% -6% -9% Net Volume Growth Q1-08 Q2-08 Q3-08 Q4-08 Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Organic New Sales Outperm/Terms & Destructions (1) Represents annualized change in volume as a percentage of beginning cubic feet for each period presented 14