Durable Business Drives Cash Flow and Supports Dividend Growth April 2016

Transcription

1 Durable Business Drives Cash Flow and Supports Dividend Growth April 2016

2 Safe Harbor Language and Reconciliation of Non-GAAP Measures Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: Certain statements contained in this communication may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws and be subject to the safe-harbor created by such Act. Forward-looking statements include, but are not limited to, the expected timing of the closing of Iron Mountain s proposed acquisition of Recall, the scope and timing of required divestitures, Iron Mountain s financial performance outlook and shareholder returns, including after giving effect to Iron Mountain s proposed acquisition of Recall, and statements regarding Iron Mountain s goals, beliefs, plans and current expectations. These forward-looking statements are subject to various known and unknown risks, uncertainties and other factors. When Iron Mountain uses words such as "believes," "expects," "anticipates," "estimates" or similar expressions, it is making forward-looking statements. You should not rely upon forwardlooking statements except as statements of Iron Mountain s present intentions and of Iron Mountain s present expectations, which may or may not occur. The forward-looking statements are based on Iron Mountain s estimates based on information available to it as of the date of this Investor Presentation. Iron Mountain s expected results may not be achieved, and actual results may differ materially from its expectations. Important factors that could cause actual results to differ from Iron Mountain s expectations include, among others: (i) Iron Mountain s ability to remain qualified for taxation as a real estate investment trust for U.S. federal income tax purposes; (ii) the adoption of alternative technologies and shifts by Iron Mountain s customers to storage of data through nonpaper based technologies; (iii) changes in customer preferences and demand for Iron Mountain s storage and information management services; (iv) the cost to comply with current and future laws, regulations and customer demands relating to privacy issues; (v) the impact of litigation or disputes that may arise in connection with incidents in which we fail to protect Iron Mountain s customers' information; (vi) changes in the price for Iron Mountain s storage and information management services relative to the cost of providing such storage and information management services; (vii) changes in the political and economic environments in the countries in which Iron Mountain s international subsidiaries operate; (viii) Iron Mountain s ability or inability to complete acquisitions on satisfactory terms and to integrate acquired companies efficiently; (ix) changes in the amount of Iron Mountain s capital expenditures; (x) changes in the cost of Iron Mountain s debt; (xi) the impact of alternative, more attractive investments on dividends; (xii) the cost or potential liabilities associated with real estate necessary for Iron Mountain s business; (xiii) the performance of business partners upon whom we depend for technical assistance or management expertise outside the United States; and (xiv) other trends in competitive or economic conditions affecting Iron Mountain s financial condition or results of operations not presently contemplated. In addition, with respect to the potential Recall transaction, Iron Mountain s ability to close the proposed transaction in accordance with its terms and within the anticipated time period, or at all, is dependent on Iron Mountain s and Recall's ability to satisfy the closing conditions for the transaction, including the receipt of Recall shareholder approval, and the benefits of the potential Recall transaction, including potential cost synergies, accretion and other synergies (including tax synergies), may not be fully realized or may take longer to realize than expected. Additional risks that may affect results are set forth in Iron Mountain s filings with the Securities and Exchange Commission, including Iron Mountain s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, and in Recall s filings with the Australian Stock Exchange, including Recall s Annual Report for the fiscal year ended June 30, 2015 and Recall s interim financial statements for the 6-month period ended December 31, Any forward-looking statements contained herein are based on assumptions that Iron Mountain believes to be reasonable as of the date hereof and Iron Mountain undertakes no obligation, except as required by law, to update these statements as a result of new information or future events. Non-GAAP Measures: Throughout this presentation, Iron Mountain will be discussing Adjusted OIBDA, Adj. EPS, Normalized FFO and AFFO, which 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 when evaluating our financial performance. These non-gaap measures 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 or net income (loss) or cash flows from operating activities from continuing operations (as determined in accordance with GAAP). For additional information please see the appendix of this presentation. 2

3 Driving Durable Cash Flow to Support Business and Dividend Growth Leading Global Presence Large, global and diversified business underpinned by 70 million sq. ft. of real estate Strategic Plan: 2020 Vision Three year plan on track and delivering per guidance; 2020 Vision to accelerate growth Durable cash flow and Strong Dividend Growth Durable business generates significant cash, supports dividend growth and investments 3

4 We Store & Manage Information Assets Diversified Global Business (1) R$3 billion annual revenue 177,000+ customers Serving 94% of Fortune million square feet of real estate in ~1,100 facilities Records & Information Management (2) Data Management (2) Shredding (2) 75% 17% 8% Storage: 70% Service: 30% (1) R$ figures are based on FY2015 Results (2) Percentage of revenue based on R$ FY 2015 results Storage: 60% Service: 40% Service: 100% Compelling Customer Value Proposition Reduce costs and risks of storing and protecting information assets Broadest footprint and range of services Most trusted brand 4

5 Leading Global Presence Most expansive global platform Strong international expansion opportunity Attractive real estate characteristics Low turnover costs Low maintenance capex High retention, low volatility Solid track record of enhancing shareholder value Share buybacks, REIT conversion, dividend enhancement Formal Diversified corporate Global responsibility Business program $3B annual revenues >155,000 customers FTSE4Good and Dow Jones Sustainability Serving 95% Index of constituent Fortune MM SF of real estate in >1,000 facilities Data as of 12/31/ COUNTRIES 5 CONTINENTS 5

6 Storage Rental Stream is Key Economic Driver Illustrative North America RM Storage Annual Economics (1) (per square foot, except for ROIC) Investment Customer acquisition $ 42 Building and outfitting 54 Racking structures 54 Total investment $ 150 Storage Rental NOI Storage rental revenue $ 27 Direct operating costs (3) Allocated field overhead (3) Storage NOI $ 21 Storage Rental ROIC (2) ~14% (1) Reflects average portfolio pricing and assumes an owned facility. (2) Includes maintenance CapEx, assumed at 2% of revenue. 8% 6% 4% 2% 0% -2% -4% Same Store Revenue Growth (Historical) Year Average IRM Internal Storage Revenue Growth (1) 3.8% Self-Storage Average Same Store Revenue (2) 3.8% Industrial Average Same Store Revenue (3) 1.0% Source: Company filings. (1) Represents the weighted average year-over-year growth rate of the Company s revenues after removing the effects of acquisitions, divestitures and foreign currency exchange rate fluctuations. Local currency used for international operations. (2) Represents the annual same-store revenue growth average for Public Storage (PSA), Extra Space Storage (EXR), CubeSmart (CUBE) and Sovran (SSS) (3) Represents the annual same-store revenue growth average for DCT Industrial (DCT), Duke Realty (DRE), First Industrial (FR), Liberty Property (LPT), Prologis (PLD) and PS Business Parks (PSB). 6

7 Sizable Real Estate Portfolio 70 million total square footage Owned: 26 million sq. ft. / 277 Buildings Leased: 44 million sq. ft. / 860 Buildings Owned: 37% of real estate by sq. ft. Average size: 62k sq. ft Storage Records Management Utilization rates (1) Building: 84% Racking: 92% Data Protection Utilization Rates (1) Building: 69% Racking: 81% (1) Building utilization represents total potential building capacity and racking utilization represents installed racking capacity. Rates based on Q results 7

8 Enterprise Storage Compares Favorably North America annual rental revenue/sf Iron Mountain Actual Self-Storage Industrial $27.61 $13.80 $5.50 Tenant Improvements/SF N/A N/A $1.96 Maintenance CapEx (1) 3% 5% 12% Average lease term Large customers: 3 Yrs. Small customers: 1 Yr. Month-to-Month ~4-6 yrs. Average Box Age : 15 Yrs. Customer retention 98% ~85% ~75% Customer concentration Very low Very Low Low Customer type Business Consumer Business Stabilized Occupancy (building & racking utilization) (2) Building: 84% Racking: 92% 90% 93% Storage Net Operating Margin (3) Storage: 80% 68% 70% Largest Public REITs 4Q 15 NOI Annualized (4) IRM Storage: $1,502 million PSA: $1,631 million PLD: $1,748 million Source: Company estimates and filings. Benchmark data provided by Green Street Advisors and J.P. Morgan. (1) IRM CapEx represents real estate maintenance CapEx as a percentage of storage NOI. Comps represent recurring CapEx as a percentage of NOI. Excludes leasing commissions. (2) Building utilization represents total potential building capacity and racking utilization represents installed racking capacity for the Records Management business (3) Excludes rent expense. (4) Represents annualized 4Q15 storage net operating income for IRM, self-storage net operating income for PSA, and net operating income for PLD source from the companies supplemental disclosure 8

9 Strategic Plan Delivering Expected Results OUR PLAN FOR GROWTH DEVELOPED MARKETS 8M cu. ft. Net RM Volume prior to Acquisitions* EMERGING MARKETS Emerging Markets = 15% of Total Revenues on a C$ basis ADJACENT BUSINESSES New Data Center Customers and Expanded into Art Storage GROWTH and VALUE PILLARS TRANSFORMATION, INTEGRATION AND TALENT Drive process improvements, simplification, efficiencies, and develop and enable talent to support business strategy Leverage Real Estate Platform to Create Long-Term Value Consolidate properties for maximum efficiency, leverage development and lease conversion opportunities ENABLERS *Reflects data from Jan 2014 through December

10 Strategic Plan has Driven Performance Turnaround Since Year-end 2013 DEVELOPED MARKETS STRATEGIC PLAN EMERGING MARKETS ADJACENT BUSINESSES Revenue C$ CAGR 1% 33% 20% Worldwide Revenue (C$ in MM) Adjusted OIBDA (C$ in MM) Regular Dividend per Share $2,894 $3,011 $3, $940 $898 $ $1.08 $ Based on 2015 C$ budget rates 10

11 Dramatic Improvement in Internal Revenue Growth Since 2012 Internal Revenue Growth (1) Internal Storage Rental and Service Growth 3.0% 2.7% 2.1% 2.2% Total Internal Growth 1.0% 1.5% -0.7% -0.4% -0.4% -0.3% -4.4% -3.4% Storage Internal Growth Service Internal Growth (1) Internal Revenue Growth Internal revenue growth represents the year-over-year growth rate of revenues excluding the impacts of changes to foreign currency exchange rates, acquisitions and other unusual items. In general, only acquisitions that have been in our results for the full calendar year prior to the quarter of measurement are included in internal revenue growth 11

12 Key Drivers Support Sustainable Document Storage Growth Total market growing, and majority remains un-vended - Emerging markets in early innings of document management outsourcing - Government sector opportunity as it remains largely un-vended Physical documents remain ultimate form of proof Growing regulatory requirements Customer destructions low due to potential risks Net volume before acquisition growing in every major market No single customer represents greater than 2% of total revenue 12

13 Organic Document Storage Continues to Demonstrate Strong, Steady Growth 50-year average customer retention Less than 2% annual volume loss from terminations Boxes stay with us for an average of 15 years (1) Year-over-Year Global Net Volume Growth Rates (Records Management Only) 6.7% 7.6% 5.5% 3.6% 3.6% 2.8% 2.7% 2.3% Net Volume Growth Rate 5.0% 5.5% 3.4% 1.5% 1.6% 1.0% 1.1% 0.7% 2.3% 2.5% 2.4% 2.4% 2.4% 2.3% 2.4% 2.5% 6.2% 6.1% 6.1% 5.9% 5.9% 5.9% 5.7% 5.8% -4.5% -4.7% -4.5% -4.4% -4.4% -4.3% -4.5% -4.6% -2.3% -2.0% -1.9% -1.9% -2.0% -2.1% -2.1% -2.1% Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 New Volume from Existing Customers New Sales Acquisitions Destructions Outperm/Terms Based on annual volume churn rate of 6.7% as of 4Q15 13

14 Standalone Plan to Extend Performance with 2020 Vision TODAY % Developed Core 15% Growth Portfolio Emerging Markets = 14% Adjacent Businesses = 1% 2% Adj. OIBDA 10% Adj. OIBDA 75% Developed Core 25% Growth Portfolio Emerging Markets = 20% Adjacent Businesses = 5% 3% Adj. OIBDA 10% Adj. OIBDA ~3% Internal Growth ROIC = 12% ~5% Internal Growth ROIC = 14% Prior to Recall acquisition 14

15 Summary of Financial Roadmap Growing Storage Revenues And Margins Stabilized Service Gross Margin Improved SG&A Efficiency Disciplined Capital Spend on Maintenance, Non-Real Estate Investment and Racking Consistent Contribution and Cash Flow Improvement Accretive Acquisitions, Real Estate and Adjacent Businesses Dividend Growth Per Share 15

16 Growing Storage Revenues and Margins Total Internal Storage Rental Growth Storage 61% of Total Revenue (1) 3.1% 3.0% 2.1% 2.2% 2.7% Maintain annual growth of 2.5% to 3% through Storage Gross Margin (2) Storage 82% of Total Gross Profit (1) 72.8% 73.6% 75.3% 76.6% 76.6% Modest annual growth, reach 79% by (1) Data as of FY 2015 (2) Includes rent expense and doesn t include termination and permanent withdrawal fees Storage Gross Margin impacted by accounting adjustments in Q

17 Stabilized Service Gross Margins Total Internal Service Revenue Growth Service 39% of Total Revenue (1) 0.4% (0.7%) (0.4%) (3.4%) (4.4%) Improve growth to 1% - 2% annually 2016 through 2020 Archival trends moderate Maintain progress in scanning, projects and shredding Service 18% of Total Gross Profit (1) 40.9% Primary Drivers of Decline Costs not reduced in line with activity Mix shift to lower margin revenue Lower paper price Stabilization Drivers Labor management Transport efficiencies Use of technology 27.7% 27.2% (2) (1) Data as of FY 2015 (2) 2015 Gross Margin represents Q Service Gross Margin 2014 Service Gross Margin 2015 Service Gross Margin 17

18 Worldwide Service Gross Margin Improvement Total Company Service Revenue (2015 C$ in MM) $1,181 $1,209 $1,201 17% 17% 19% 6% 7% 6% 15% 14% 14% 7% 9% 9% 16% 15% 13% 39% 39% 38% Area / CAGR Comp Service +4% Shred Paper +1% Shred Non-Paper -2% DMS +9% DM Core -6% RM Core 0% Shifting revenue mix to additional complementary and other services Generate growth in service gross profit, margins may be lumpy New offerings have average lower gross margin than core, activity-based services However, less capital intensive, therefore have similar returns Note: Examples of Core Service include retrieval refile; complementary services include library moves and Secure IT Asset Disposition 18

19 Improved SG&A Efficiencies Transformation Cumulative SG&A Savings SG&A (1) as % of Revenue $100 $ % 28.0% IRM Trend Transformation $ % Improvement driven by offshoring, outsourcing, automation, procurement effectiveness, and reducing complexity Target levels of SG&A consistent with median level benchmarks for companies of similar scale Actions taken in Q3 15 generate run-rate savings in 2016 of $50 million Actions to be taken in 2016 generate additional $50 million of savings 24.0% 22.0% 20.0% E 2017E 2018E 2019E 2020E (1) Excludes REIT Costs and Recall Costs 19

20 Attractive Discretionary Investment Opportunities DISCRETIONARY INVESTMENTS DEVELOPED AND EMERGING MARKETS BUSINESS ACQUISITIONS ADJACENT BUSINESSES REAL ESTATE Strong Stabilized Returns 20

21 M&A in Emerging and Developed Markets Deliver Solid Growth and Returns Emerging Markets Acquisition Economics Acquisition Spend/Yr. Ongoing Topline Growth $100 MM 10% + Storage Rental IRR 13% 14% Strong returns, supports progress to increase exposure to higher growth markets Developed Markets Acquisition Economics Acquisition Spend/Yr. $50 MM Ongoing Topline Growth 2-3% + Storage Rental IRR 11% 13% Tuck-in deals offer predictable return and quickly synergize Data reflects assumptions for

22 Illustrative Benefit Flow Through from Acquisitions Year 1 Year 2 Year 3 Year 4 Year 5 $34 MM in Revenues ~$17 Million / 50% benefit flow through ~$34 Million / 100% benefit flow through + Internal Growth at ~3% $13 MM in Adj. OIBDA (Stabilized) ~$3 Million / 15% Adj. OIBDA Margin ~$9 Million / 25% Adj. OIBDA Margin ~$11 Million / 30% Adj. OIBDA Margin ~$13 Million / 35% Adj. OIBDA Margin + Internal Growth at 35% Margin Assumptions: $100 MM investment in Year 1 (Jan 1 investment) Assuming acquisition price is ~3X Rev Multiple Benefit flows through on cumulative basis 22

23 Adjacent Businesses Offer Potential Further Upside 2020 Target = 5% of total Revenue 10% long-term organic growth Data center continued organic growth offering good returns Art storage through Crozier acquisition Data Center Economics Capital Invested Per Year $35 MM/Yr. Expected Returns 12-15% Stabilization 2-3 years Art Storage Economics Capital Invested $78 MM in 2015 Expected Returns 13% Stabilization 18 months Data reflects assumptions for

24 Formalizing Art Business with Acquisition of Premier Brand Fine Art Attractive Space for IRM $1 billion industry with solid growth (1) Global Fragmented Durable REIT-friendly storage High per-square foot rates (~$60/SF) Durable storage (90% renewal rate) Crozier Acquisition Leading brand in North America Driver of global industry standards Strong storage (58%) and storage related services (34%) focus ~$30MM annual revenue, 30%+ stabilized Adjusted OIBDA margins Year 1 accretive We Complement Crozier Secure storage expertise Legacy of trust Chain of custody and logistics And Bring Some Critical Advantages Global footprint Roll-up experience Marquee clients in entertainment and government (1) Source: Proprietary industry research 24

25 Real Estate Investment Offers Predictable, Attractive Returns Real Estate an Enabler of Growth Investment in Real Estate focused on consolidation and related development Consolidation drives significant operational improvements Real Estate Investment Consolidation and Development Focus (1) Investment per Yr. $150MM - $180MM Average IRR 12% 16% Stabilization 3 5 Years Additional consolidation potential following Recall acquisition Some lease conversion opportunities also drive consolidation efficiencies (1) Doesn t include investments in core growth racking and data center initiatives 25

26 Recall Acquisition on Track to Close on May 2 Compelling opportunity accelerates IRM s successful strategy Broader geographic footprint, exposure to high growth emerging markets and meaningful cost synergies Supports medium term deleveraging Complementary to REIT structure Regulatory review complete in US, Canada and Australia Recall Scheme Meeting on April 19 to obtain Recall shareholder approval Final Australian court approval of transaction Deal expected to close on May 2 UK Phase 2 Review expected to conclude June 29 UK Recall business to be held separate 26

27 Estimated Synergies and Costs to Achieve Estimated Total Net Synergies (1) Anticipated at Full Integration Estimated Cumulative One-time Costs to Achieve and Integrate (2) Includes Operating and Capital Expenditures and In Line with Prior Guidance Debt financed as incurred $300 $80 $100 $105 $80 $15 $125 $230 $260 $ Fully Synergized Overhead Cost of Sales Tax Real Estate (3) Fully Synergized Operating Expense Capital Expense (1) Net synergies do not reflect impact of costs to achieve synergies and integrate businesses. Synergy estimates are preliminary and may change as ongoing analysis and integration planning progresses. (2) Cost to achieve synergies and integrate businesses includes moving, racking, severance costs, Facilities Upgrade Program, REIT conversion costs, system integration costs and costs to complete the divestitures and any transitional services required to support the divested business during a transition period. This is in line with previous guidance but excludes one-off transaction costs of approximately $80 million in implementing the Scheme. (3) 2016 incudes approximately $20 million of incurred in 2015 to prepare for integration 27

28 2018 Estimated Adj. EPS Accretion vs. Prior Estimates 2018 Estimated Adj. EPS Accretion - Excluding IRM 2020 Plan 25.1% 5.7% 0.9% 2.0% 1.5% IRM 2020 Plan Drives Higher Base Performance 18.5% 16.5% 15.0% 2018 Adj. EPS Accretion of 10% June 2015 Estimate Divestitures (1) Underlying Business Changes (2) Accretion from Operations Acquired before FX FX Impact on Original Estimate (3) Accretion Net of FX Delay in Deal timing (4) Updated Accretion Estimate IRM 2020 Investor Day Plan includes primarily $75 million of incremental Adj. OIBDA benefits from Transformation, out of the total $125 million, and incremental investments in M&A and Real Estate. The flow through to earnings is roughly $60 million. (1) 570 basis points impact of Divestitures comprised of a 300 basis points impact from incremental divested OIBDA and 270 basis points of incremental divested synergies potential including an estimated increase in proceeds from the divestitures (2) Underlying Business Changes relates primarily to acquisitions completed by Iron Mountain and Recall, Iron Mountain s refinancing of indebtedness, and changes in commodity prices and the performance of the businesses compared (3) 200 basis points impact of movements in foreign exchange rates is comprised of an 80 basis points impact on the combined stand-alone Iron Mountain and Recall business and a 120 basis points impact of expected synergies (4) The estimated impact of the Delay in Deal Timing is due to a delay in the expected closing of the proposed Recall acquisition; it does not imply any change in the fully synergised accretion numbers 28

29 Estimated Earnings, Normalized FFO and AFFO Accretion Excluding 2020 Plan Meaningful Accretion Across Relevant Financial Metrics Accretion Percentages Reflect Updated Estimated Synergies Achieved in Each Year Excluding IRM 2020 Plan Adjusted EPS Accretion Normalized FFO Accretion AFFO Accretion 14% 15% 16% 3% 7% 7% 7% 5% 5% 6% 0% 1% Fully Synergized Fully Synergized The bar chart percentages for Adj. EPS Accretion and Normalized FFO Accretion do not reflect the impact of estimated purchase accounting adjustments, primarily fair value adjustments associated with Recall s tangible and intangible assets that Iron Mountain will record upon closing in accordance with GAAP. While the adjustments are expected to result in a significant increase in depreciation and amortization expenses, the adjustments are primarily related to non-cash items and will not have a significant impact on cash flows, AFFO or estimated synergies. Therefore, the adjustments do not impact the fair value assessment of the transaction. Accretion/dilution after adjusting for impact of non-cash U.S. GAAP purchase price adjustments: Adj. EPS: 6% on a Fully Synergized basis Normalized FFO: 4% on a Fully Synergized basis Fully Synergized Note: Assumes IRM weighted average shares outstanding of 267 million, and exchange ratio of x. Accretion estimates are on a per share basis and do not include operating and capital expenditures related to integration, as these are one time in nature and will be excluded from our Adj. EPS, Normalized FFO and AFFO. Assumptions represent our current analysis and are subject to change as our analysis and integration planning process progresses. Effective tax rate estimated to be approximately 19%. 29

30 Updated 2016 Guidance to Reflect Benefit of Recall 2016 Standalone Guidance C$/R$ Consistent with Guidance Given on February 25, Guidance Standalone C$ Growth 2016 Preliminary Guidance C$/R$ With Partial Year Benefit from Recall Preliminary 2016 Guidance With Recall Preliminary 2016 Guidance With Recall Incl. PPA Revenue $3,000 $3,080 3% - 6% $3,450 $3,550 $3,450 $3,550 Adj. OIBDA $950 $970 6% - 8% $1,070 $1,110 $1,070 $1,110 Adj. EPS $1.24 $1.32 (1) 6% - 13% $1.24 $1.32 (2) $1.10 $1.20 (2),(3) Normalize d FFO/Sh. $2.15 $2.22 (1) $2.20 $2.30 (2) $2.10 $2.20 (2),(3) AFFO $515 $530 $610 $650 $610 $650 Capital Expenses and Investments 2016 Standalone Preliminary 2016 Guidance with Recall Maintenance $80 $90 Non-RE Investment $70 $80 Total Capital Expenses $150 $170 Real Estate Investments $265 $320 Business and Customer Acquisitions $140 $180 $140 $180 Total Capital Investments $405 $445 $460 $500 (1) Assumes 212 million shares outstanding (2) Assumes weighted average shares of 253 million shares for full year 2016 (267 million shares outstanding at closing) (3) Adj. EPS and FFO/share includes purchase price accounting adjustments (PPA), which results in $64 million of incremental D&A expense. Preliminary 2016 Guidance with Recall assumes a May 2, 2016 close and all divestitures will be effective day 1 and an effective tax rate estimated to be approximately 19%. Assumptions represent our current analysis and are subject to change as our analysis and integration planning process progresses 30

31 Recall Acquisition Significantly Enhances Estimated Financial Performance Worldwide Revenue (2016 C$ / R$ in MM) Projected Minimum Dividend per Share (1) $3,680 $3, E - Normalized to Reflect REC FY Benefit $4,365 $4, E $1.91 $1.94 $2.20 $ Dividend as % of AFFO 4% Growth through 2020 Adjusted OIBDA (2016 C$ / R$ in MM) 78% 70% $1,140 $1,180 $1,600 $1, E Lease Adjusted Leverage Ratio 2016E - Normalized to Reflect REC FY Benefit 2020E 5.6x 5.0x (1) Assumes 267 million shares outstanding at closing E 31

32 Recall Enhances IRM Cash Available for Dividends and Discretionary Investment $ in mm Cash Available for Dividends and Discretionary Growth Investments $945 $600 $685 $492 $105 $70 $155 $ E 2020E Cash for Investment Organic Growth Racking Dividend 32

33 Key Takeaways Durable RM volume growth delivered; internal and with acquisitions Strategic plan drives sustainable dividend growth and future investments Debt financed investments; equity not required to achieve plan Recall acquisition delivers attractive synergies and supports core growth Adjacent Businesses provide upside potential and are closely linked to core Strong Cash Flow Generation 33

34 Appendix 2015 Iron Mountain Incorporated. All rights reserved. Iron Mountain and the design of the mountain are registered trademarks of Iron Mountain Incorporated. All other trademarks and registered trademarks are the property of their respective owners.

35 Potential for Broadened Investor Base and Enhanced Valuation SELF-STORAGE INDUSTRIAL Price-to-2016 Estimated FFO Price-to-2016 Estimated AFFO Pro Forma Current Dividend Yield IRM 15.2 x IRM 13.1 x IRM 5.9% PSA 28.2 PSA 29.3 PSA 2.5% EXR 25.3 EXR 26.3 EXR 2.5% CUBE 23.9 CUBE 25.2 CUBE 2.5% PSB 19.0 PSB 24.9 DCT 2.9% DCT 18.8 DCT 26.6 DRE 3.2% DRE 18.8 DRE 21.3 PSB 3.0% PLD 17.4 PLD 22.2 PLD 3.8% FR 15.7 FR 20.8 FR 3.4% EGP 15.2 EGP 19.9 EGP 4.0% LPT 13.6 LPT 18.7 LPT 5.7% *Based on a pro forma annualized Q dividend of $1.94 per share, and 212 MM shares outstanding and a stock price of $32.73 as of 04/01/2016. REIT pricing as of 04/01/2016 Source: Company estimates and FactSet mean FFO and AFFO estimates. 35

36 Major Market Presence Supports Durable Revenues and Value San Francisco Los Angeles Seattle San Diego Metro Phoenix-Mesa- Scottsdale Source: Company filings, based on FY Leased SF 58% Owned SF 42% Owned Facilities Denver- Boulder $1.6bn United States Owned Real Estate Chicago Dallas-Fort Worth- Arlington Owned SF 27% Leased SF 73% $0.6bn International Owned Real Estate Boston New York Philadelphia Washington D.C. Book value including leasehold improvements and racking <$5mm $5 to $20mm >$20mm Major MSA Top Owned International Markets by Square Feet Square Feet Total % Country (000s) Int'l SF 1. Canada 1, % 2. United Kingdom 1, % 3. Argentina % 4. Mexico % 5. Scotland % 6. Peru % 7. Chile % 8. France % 9. Spain % 10. Brazil % 11. Republic of lreland % 12. Belgium % 13. Netherlands % 14. Australia % 15. Germany % 16. Austria % 17. China % Total 6, % Source: Company Filings, based on FY

37 New Development Similar to Enterprise Build to Suit. Investment in New Building and Racking Mexico City, Mexico Capacity: 4.7M cu. ft. in 6 buildings all fully utilized Expected annual average growth CF 250K CF Own additional land that can be used for development Construct 3 Wall Addition building and first phase of racking to accommodate growth Expansion Highlights Building size: 63K sq. ft. / 1.2M cu. ft. of capacity Construction cost: $3.0M ($48/sq. ft.) includes underlying land cost Racking cost: $6.4M ($102/sq. ft.) Assume ~ $0.20 to $0.25 per cu. ft. per month in storage rental revenue as well as full utilization 17.5% IRR 37

38 2016 Estimated IRM Cash Available for Dividends and Discretionary Investment Cash Available for Distribution and Investment ($MM) on R$ basis /2016C$ Basis Numbers reflect midpoint of guidance 2016E Standalone 2016E + Recall IRM + REC PF Adj. OIBDA $910 $1,040 Benefit from Transformation $ 50 $50 PF IRM Adj. OIBDA $960 $1,090 Add: Stock Compensation/Other Adj. OIBDA, Transformation and Other Non Cash Expenses $1,005 $1,135 Less: Cash Interest Cash Taxes Real Estate and Non-Real Estate Maintenance Capex Non-Real Estate Investment Customer Acquisitions (1) Cash Available for Dividends and Investments $495 $600 Expected Total Regular Dividend (dividend per share remains the same) $411 $492 Racking Investment for on-going growth $60 $70 Cash Available for Discretionary Investments $24 $38 Lease Adjusted Leverage Ratio 5.6X 5.7X (1) Customer acquisitions includes costs associated with the acquisition of customer relationships and customer inducements such as move costs and permanent withdrawal fees. R$ basis is equivalent to 2016 C$ rates Figures may not tie due to rounding 38

39 2020 Estimated IRM Cash Available for Dividends and Discretionary Investment Cash Available for Distribution and Investment ($MM) I-day October 2015 Current Numbers reflect midpoint of guidance 2020 Vision + Recall Based on 2015 C$ Rates 2020 Vision + Recall Based on R$ Notes IRM PF Adj. OIBDA $1,650 $1,525 Change driven by FX, Divestitures and Paper Prices Benefit from Transformation $125 $125 PF IRM Adj. OIBDA $1,775 $1,650 Add: Stock Compensation/Other Adj. OIBDA, Transformation and Other Non Cash Expenses 1,825 $1,700 Less: Cash Interest Cash Taxes Change due to refined estimates and divestitures Real Estate and Non-Real Estate Maintenance Capex Long-term spend consistent with current % of revenue Non-Real Estate Investment Common platform eliminates need to duplicate spend Customer Acquisitions (1) Cash Available for Dividends and Investments 2015 C$1,000 / R$ 955 $945 Expected Total Regular Dividend (dividend per share remains the same) $700 $685 Racking Investment for on-going growth $105 $105 Total expected dividend payout ($) declined as share assumptions changed Cash Available for Discretionary Investments $150 $155 Lease Adjusted Leverage Ratio 4.9X 5.0X (1) Customer acquisitions includes costs associated with the acquisition of customer relationships and customer inducements such as move costs and permanent withdrawal fees. R$ basis is equivalent to 2016 C$ rates ; Figures may not foot rounding 39

40 Demonstrated Responsiveness to Investors Provision/Statute/Practice IRM Non-staggered Board; 90% independent, 20% female Separation of Chairman and CEO; Independent Board Committee chairs Annual Board and Committee evaluations and self-assessments Directors elected annually by majority vote Directors may be removed without cause by majority vote Shareholders can amend bylaws No poison pill (REIT incorporated in Delaware; no Maryland Unsolicited Takeover Act conflicts) Annual Say on Pay vote Establishing solid CSR presence with quantifiable objectives Formalized CSR reporting; member of FTSE4Good, DJSI and CDP 40

41 Definitions Adjusted Earnings Per Share, or Adj. EPS: Adjusted EPS is defined as reported earnings per share from continuing operations excluding: (1) (gain) loss on disposal/write-down of property, plant and equipment (excluding real estate), net; (2) (gain) on sale of real estate, net of tax; (3) intangible impairments; (4) Recall Costs (as defined below); (5) REIT Costs (as defined below); (6) other expense (income), net; and (7) the 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. Adjusted Funds From Operations, or AFFO: AFFO is defined as FFO (Normalized) excluding non-cash rent expense or income, plus depreciation on non-real estate assets, amortization expense (including amortization of deferred financing costs) and non-cash equity compensation expense, less maintenance capital expenditures and non-real estate investments. We believe AFFO is a useful measure in determining our ability to generate excess cash that may be used for reinvestment in the business, discretionary deployment in investments such as real estate or acquisition opportunities, returning of capital to our stockholders and voluntary prepayments of indebtedness. Additionally AFFO is reconciled to cash flow from operations to adjust for real estate and REIT tax adjustments, REIT Costs, Recall Costs, working capital adjustments and other non-cash expenses. Adjusted Operating Income Before Depreciation, Amortization, Intangible Impairments, and REIT Costs, or Adjusted OIBDA and Adjusted OIBDA Margin: Adjusted OIBDA is defined as operating income before depreciation, amortization, intangible impairments, (gain) loss on disposal/write-down of property, plant and equipment (excluding real estate), net, Recall Costs and REIT Costs. Adjusted OIBDA Margin is calculated by dividing Adjusted OIBDA by total revenues. We use multiples of current or projected Adjusted OIBDA in conjunction with our discounted cash flow models to determine our estimated overall enterprise valuation and to evaluate acquisition targets. We believe Adjusted OIBDA and Adjusted OIBDA Margin provide our current and potential investors with relevant and useful information regarding our ability to generate cash flow 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. 41

42 Definitions Adjusted Operating Income Before Depreciation, Amortization, Intangible Impairments, and REIT Costs, or Adjusted OIBDA (continued) Adjusted OIBDA does not include certain items that we believe are not indicative of our core operating results, specifically: (1) (gain) loss on disposal/write-down of property, plant and equipment (excluding real estate), net; (2) (gain) on sale of real estate, net of tax; (3) intangible impairments; (4) Recall Costs; (5) REIT Costs; (6) other expense (income), net; (7) income (loss) from discontinued operations, net of tax; (8) gain (loss) on sale of discontinued operations, net of tax; and (9) net income (loss) attributable to noncontrolling interests. Adjusted OIBDA also does not include 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. Finally, Adjusted OIBDA 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 OIBDA and Adjusted OIBDA 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 or net income (loss) or cash flows from operating activities from continuing operations (as determined in accordance with GAAP). 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") and us as net income excluding (i) depreciation on real estate assets and (ii) gain on sale of real estate, net of tax ( 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. Although NAREIT has published a definition of FFO, modifications to FFO (NAREIT) are common among REITs as companies seek to provide financial measures that most meaningfully reflect their particular business. Our definition of FFO (Normalized) excludes certain items included in FFO (NAREIT) that we believe are not indicative of our core operating results, specifically: (1) (gain) loss on disposal/write-down of property, plant and equipment (excluding real estate), net; (2) intangible impairments; (3) Recall Costs; (4) REIT Costs; (5) other expense (income), net; (6) deferred income taxes and REIT tax adjustments; (7) income (loss) from discontinued operations, net of tax; and (8) gain (loss) on sale of discontinued operations, net of tax. 42

43 Definitions Recall Costs: Includes operating expenditures associated with our proposed acquisition of Recall, including costs to complete the Recall Transaction, including advisory and professional fees, as well as costs incurred to integrate Recall with our existing operations, including moving, severance, facility upgrade, REIT conversion, system upgrade costs and costs to complete the divestitures required in connection with receipt of regulatory approval and to provide transitional services required to support the divested businesses during a transition period. REIT Costs: Includes costs associated with our conversion to a REIT, excluding REIT compliance costs beginning January 1, 2014 which we expect to recur in future periods. 43