Iron Mountain Reports First Quarter 2018 Results

Transcription

1 FOR MMEDATE RELEASE ron Mountain Reports First Quarter 2018 Results BOSTON April 26, 2018 ron Mountain ncorporated (NYSE: RM), the storage and information management services company, announces financial and operating results for the first quarter of The conference call / webcast details, earnings call presentation and supplemental financial information, which includes definitions of certain capitalized terms used in this release and reconciliations of non-gaap measures to the appropriate GAAP measures, are available on ron Mountain s nvestor Relations website at or by clicking HERE. Financial Performance Highlights Total Revenues, on a reported basis, for the first quarter of 2018 were $1.04 billion, up 11% from $939 million in On a constant dollar (C$) basis, Total Revenues grew 8% over the first quarter of ncome from Continuing Operations for the first quarter of 2018 was $46 million, compared with $59 million in the first quarter of ncome from Continuing Operations in the first quarter of 2018 included Other Expense of $20 million primarily related to foreign currency transaction losses, while the first quarter of 2017 included Other ncome of $6 million associated with a foreign currency transaction gain. n addition, ncome from Continuing Operations in the first quarter of 2018 included significant acquisition costs of $19 million, compared with $21 million in the first quarter of On a reported dollar basis, Adjusted EBTDA for the first quarter of 2018 was $343 million, an increase of 17% from $293 million in 2017, reflecting the impact of acquisitions, higher gross margins as well as benefits from synergies and the company s Transformation nitiative. On a C$ basis, Adjusted EBTDA increased by 14%. Reported EPS - Fully Diluted from Continuing Operations for the first quarter of 2018 was $0.16 compared with $0.22 in the year-ago period. Reported EPS was impacted by increased interest, depreciation and amortization expense related to recent data center business acquisitions. Adjusted EPS for the first quarter was $0.24, compared with $0.24 in the first quarter of The structural tax rate was 19.5%, compared with 23.1% a year ago. Net ncome for the first quarter of 2018 was $45 million compared with $59 million in 2017, reflecting the same impacts as noted for Reported EPS above. FFO (Normalized) per share was $0.49 for the first quarter of 2018, compared with $0.48 in AFFO was $222 million for the first quarter of 2018 compared with $171 million in 2017, an increase of 30%. The increase was primarily driven by the growth in Adjusted EBTDA. Guidance The company maintained its 2018 full year guidance. The Company expects, on a constant dollar basis, Revenue growth of 7% to 9%, Adjusted EBTDA growth of 12% to 16% and AFFO growth of 5% to 13% for full year Guidance details are available on Page 6 of supplemental financial information. Forward Looking Statement Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: This release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other

2 securities laws and is subject to the safe-harbor created by such Act. Forward-looking statements include, but are not, limited to, our financial performance outlook and statements concerning our operations, economic performance, financial condition, goals, beliefs, future growth strategies, investment objectives, plans and current expectations, such as 2018 guidance, and statements about our investment and other goals. These forward-looking statements are subject to various known and unknown risks, uncertainties and other factors. When we use words such as "believes," "expects," "anticipates," "estimates" or similar expressions, we are making forward-looking statements. Although we believe that our forward-looking statements are based on reasonable assumptions, our expected results may not be achieved, and actual results may differ materially from our expectations. n addition, important factors that could cause actual results to differ from expectations include, among others: (i) our 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 our customers to storage of data through non-paper based technologies; (iii) changes in customer preferences on and demand for our storage and information management services; (iv) the cost to comply with current and future laws, regulations and customer demands relating to data security and privacy issues, as well as fire and safety standards; (v) the impact of litigation or disputes that may arise in connection with incidents in which we fail to protect our customers' information and the cost of complying with and improving data security; (vi) changes in the political and economic environments in the countries in which our international subsidiaries operate and changes in the global political climate; (vii) our ability or inability to manage growth, expand internationally, complete acquisitions on satisfactory terms and to close pending acquisitions and to integrate acquired companies efficiently; (viii) the impact of service interruptions or equipment damage, and cost of power on our data center operations; (ix) our ability or inability to satisfy our debt obligations and restrictions in our debt instruments; (x) changes in the amount of our capital expenditures and our ability to invest in accordance with plan; (xi) changes in the cost of our debt; (xii) the impact of alternative, more attractive investments on dividends; (xiii) the cost or potential liabilities associated with real estate necessary for our business; (xiv) the performance of business partners upon whom we depend for technical assistance and shared services; (xv) other trends in competitive or economic conditions affecting our financial condition or results of operations not presently contemplated; and (xvi) other risks described more fully in our filings with the Securities and Exchange Commission, including under the caption Risk Factors in our periodic reports or incorporated therein. You should not rely upon forward-looking statements except as statements of our present intentions and of our present expectations, which may or may not occur. 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. About ron Mountain ron Mountain ncorporated (NYSE: RM), founded in 1951, is the global leader for storage and information management services. Trusted by more than 225,000 organizations around the world, and with a real estate network of more than 85 million square feet across more than 1,400 facilities in over 50 countries, ron Mountain stores and protects billions of valued assets, including critical business information, highly sensitive data, and cultural and historical artifacts. Providing solutions that include information management, digital transformation, secure storage, secure destruction, as well as data centers, cloud services and art storage and logistics, ron Mountain helps customers lower cost and risk, comply with regulations, recover from disaster, and enable a more digital way of working. isit for more information. nvestor Relations Contacts: Melissa Marsden Anjaneya Singh, CFA Senior ice President, nvestor Relations Director, nvestor Relations melissa.marsden@ironmountain.com anjaneya.singh@ironmountain.com (617) (617) Media Contacts: Christian T. Potts Kaitlyn Rawlett Director, Corporate Communications Weber Shandwick Christian.Potts@ironmountain.com KRawlett@webershandwick.com (617) (212)

3 Q Quarterly Results Conference Call April 26, 2018

4 Safe Harbor Language and Reconciliation of Non-GAAP Measures This presentation contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws and is subject to the safeharbor created by such Act. Forward-looking statements include, but are not limited to, our financial performance outlook and statements concerning our operations, economic performance, financial condition, goals, beliefs, future growth strategies, investment objectives, plans and current expectations such as 2018 guidance, and statements about our investment and other goals. These forward-looking statements are subject to various known and unknown risks, uncertainties and other factors. When we use words such as "believes," "expects," "anticipates," "estimates" or similar expressions, we are making forward-looking statements. Although we believe that our forward-looking statements are based on reasonable assumptions, our expected results may not be achieved, and actual results may differ materially from our expectations. n addition, important factors that could cause actual results to differ from expectations include, among others: (i) our ability to remain qualified for taxation as a real estate investment trust for U.S. federal income tax purposes ("RET"); (ii) the adoption of alternative technologies and shifts by our customers to storage of data through non-paper based technologies; (iii) changes in customer preferences, and demand for our storage and information management services; (iv) the cost to comply with current and future laws, regulations and customer demands relating to data security and privacy issues, as well as fire and safety standards; (v) the impact of litigation or disputes that may arise in connection with incidents in which we fail to protect our customers' information; (vi) changes in the price for our 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 our international subsidiaries operate and changes in the global political climate; (viii) our ability or inability to manage growth, expand internationally, complete acquisitions on satisfactory terms, to close pending acquisitions and to integrate acquired companies efficiently; (ix) changes in the amount of our growth and maintenance capital expenditures and our ability to invest according to plan; (x) our ability to comply with our existing debt obligations and restrictions in our debt instruments or to obtain additional financing to meet our working capital needs; (xi) the impact of service interruptions or equipment damage and the cost of power on our data center operations; (xii) changes in the cost of our debt; (xiii) the impact of alternative, more attractive investments on dividends; (xiv) the cost or potential liabilities associated with real estate necessary for our business; (xv) the performance of business partners upon whom we depend for technical assistance or management expertise outside the United States; (xvi) other trends in competitive or economic conditions affecting our financial condition or results of operations not presently contemplated; and (xvii) other risks described more fully in our filings with the Securities and Exchange Commission, including under the caption Risk Factors in our periodic reports, or incorporated therein. You should not rely upon forward-looking statements except as statements of our present intentions and of our present expectations, which may or may not occur. 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. 2 Reconciliation of Non-GAAP Measures: Throughout this presentation, ron Mountain will discuss (1) Adjusted EBTDA, (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, income (loss) from continuing operations, net income (loss) or cash flows from operating activities from continuing operations (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 the definitions are included in Supplemental Financial nformation. ron 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 ron Mountain s transactions, loss or gain related to the disposition property, plant and equipment (including of real estate) and other income or expense. Without this information, ron Mountain does not believe that a reconciliation would be meaningful. Selected metrics definitions are available in the Appendix.

5 2018 Off to a Solid Start 3 Strong Q1 18 performance supported by storage rental durability and margin expansion Revenue up 11%, Adjusted EBTDA up 17% and AFFO up 30% with 170 bps expansion of Adjusted EBTDA margin AFFO growth of 20% including increase in share count, supports targeted dividend per share growth of ~7% for 2018 Completed O and Credit Suisse data center acquisitions, and integration well on track Healthy growth in key operating metrics Strong 3.7% internal storage revenue growth exceeds 3% - 3.5% target for full year nternal service revenue growth of 1.4% reflects growth in shredding, imaging and special projects Total internal revenue growth of 2.8% represents highest level reported in more than three years Core business continues to perform well Continued worldwide positive internal volume growth mproved revenue management continues to more than offset moderating internal volume growth in developed markets Continuing to see solid internal revenue growth and attractive acquisition opportunities in Emerging Markets Note: Definition of Non-GAAP and other measures and reconciliations of Non-GAAP to GAAP measures can be found in the Supplemental Financial nformation

6 Data Center Growth Enhances 2020 Plan and Accelerates Long-term Growth 4 80% Developed Portfolio North America and Western Europe Q1 18: ~2% nternal Revenue Growth Q1 18 Revenue Mix 20% Growth Portfolio Emerging Markets, Data Center and Adj. Businesses Q1 18: 8% nternal Revenue Growth 2020 Revenue Mix 70% Developed Portfolio North America And Western Europe 30% Growth Portfolio Emerging Markets, Data Center and Adj. Businesses Adjusted EBTDA Growth 2% 10% Adjusted EBTDA Growth 3% 10% 3.5%+ Average nternal Adj. EBTDA Growth 5%+ Average nternal Adj. EBTDA Growth Note: Emerging Markets is Other nternational, excluding Australia and New Zealand

7 Continued Execution of Strategic Plan 5 Driving Growth and Margins in Developed Markets Achieved 2.9% internal storage revenue growth despite net internal volume decrease of (0.5%), consistent with annual guidance provided on Q4 17 call Making further inroads in U.S. Federal business nvested in Faster-growing Businesses: Data Centers and ABOs Q1 data center investment includes O and Credit Suisse acquisitions and build out of data halls in Phoenix, Denver and New Jersey with good pre-leasing Pending Artex (fine art) acquisition continues industry roll-up strategy adding museum services Continued Strong nternal Growth in Emerging Markets (1) Achieved 5.6% internal storage rental revenue growth in Q1 Expanded presence and leadership through acquisitions in existing markets (1) Emerging Markets is Other nternational, excluding Australia and New Zealand. (2) Percentage of total revenue is based on 2014 C$ foreign currency rates at time goal was established

8 Disciplined Capital Allocation Designed to Maximize Returns 6 Lease Adjusted Net Debt to EBTDAR (1) Optimal Range (2) Dividend as % of AFFO (3) Optimal Range Sources of capital: Growth in operating cash flow Secured and unsecured borrowings Real estate capital recycling ATM program or other equity ROC hurdle rate above WACC 75% 70% 85% 81% 65% ~73% 2018 Guidance 2020 Target (1) See definition in the appendix of the Supplemental Financial nformation (2) Most restrictive Credit Facility covenant is lease adjusted net debt/ebtdar of 6.5x. (3) Targeted dividend increase of 4% annually through 2020

9 Solid Worldwide Financial Performance 7 Growth $ and shares in mm Q1-17 Q1-18 R$ C$ nternal Growth Revenue $939 $1, % 8.0% 2.8% Storage $572 $ % 10.7% 3.7% Service $367 $ % 3.7% 1.4% Adjusted Gross Profit (1) $520 $ % Gross Profit Margin (1) 55.4% 57.0% 160 bps ncome from Continuing Operations $59 $46 (22.5%) Adjusted EBTDA (2) $293 $ % 13.9% Adjusted EBTDA Margin 31.2% 32.9% 170 bps Net ncome $59 $45 (22.8%) AFFO (2) $171 $ % Dividend/Share $0.550 $ % Fully Diluted Shares Outstanding % (1) Reflects adjusted gross profit, excluding Significant Transaction Costs; reconciliation can be found in the Supplemental Financial nformation on Page 5 (2) Reconciliation for Adjusted EBTDA and AFFO to their respective GAAP measures can be found in the Supplemental Financial nformation on Pages 13 and 15, respectively

10 Strong nternal Revenue Growth in Q1 8 nternal Revenue Growth Developed Markets (1) Other nternational (2) Total Storage 2.9% 5.6% 3.7% Service 1.0% 4.4% 1.4% Total 2.1% 5.1% 2.8% % of Total Revenue by Segment Storage 43.9% 12.6% 62.5% Service 29.3% 7.3% 37.5% (1) Represents North America Records and nformation Management, North America Data Management and Western Europe reporting segments (2) Other nternational represents emerging markets, Australia and New Zealand Quarterly segment operating performance can be found on Page 10 of the Supplemental Financial nformation

11 Solid Adjusted EBTDA Margin Performance Across Segments 9 Adjusted EBTDA Q Q Change in bps North America RM 41.3% 42.8% 150 North America DM 54.8% 53.9% (90) Western Europe 28.4% 32.2% 380 Other nternational 29.2% 29.2% 0 Global Data Center 24.2% 44.6% 2040 Total 31.2% 32.9% 170 Reconciliation for Total Adjusted EBTDA to its respective GAAP measure can be found in the Supplemental Financial nformation on Page 13

12 Competitive Capital Structure 10 Net Leverage Across RET Sectors RM vs. ndustry Source: J.P. Morgan RET Weekly U.S. Real Estate report April 9, 2018 and company reports

13 2020 Plan (1) : Profitable, Sustainable Growth 11 Worldwide Revenue ($ in MM) AFFO Growth (2) ($ in MM) $3,846 $4,600 $4, Actual 2020E $752 Projected Minimum Dividend per Share (3) $1,000 - $1, Actual 2020E Adjusted EBTDA ($ in MM) $2.35 $2.54 $1,260 $1,680 $1, E 2020E Lease Adjusted Leverage Ratio Year-End 2017 Actual 2020E 5.5x ~5.0x (1) Updated to reflect 2017 actuals and 2018 Guidance, including adoption of revenue recognition standards and expansion of data center business ranges at 2018 C$ rates. (2) Assumes Real Estate and Non-Real Estate Maintenance CapEx and Non-Real Estate nvestment of 4% of Total Revenue for (3) Assumes 287 million shares outstanding for 2018 increasing to 295 to 300 million shares outstanding in 2020, reflecting long-term incentive comp and potential issuances under existing ATM program. 2018E 2020E

14 Key Takeaways 12 Quarter punctuated by strong total revenue growth and 3.7% internal storage rental revenue growth Driving continued improvement in Adjusted EBTDA margins Continuing to execute against our strategic plan to shift revenue mix to faster growing businesses On track with deleveraging and dividend payout ratio goals, while growing our dividend per share Accelerating growth in Data Center enhances 2020 plan and creates long-term growth platform Prudent capital management to drive further shareholder returns

15 Appendix

16 2018 Guidance 14 $ in MM except Earnings per Share 2018 C$ Guidance 2018 C$ Growth Revenue $4,160 - $4,260 7% - 9% Adjusted EBTDA $1,435 - $1,485 12% - 16% Adjusted EPS Fully Diluted $ $1.20 (15)% - 2% AFFO $805 - $865 5% - 13% Expected internal storage rental revenue growth of 3% - 3.5% and total internal revenue growth of 2% - 3% Revenue recognition standards: expect to benefit Revenue by $7 mm and Adjusted EBTDA by $25 mm to $30 mm. No benefit is expected for Adjusted EPS or AFFO. D&A is expected to be $640 - $660 million; nterest expense is expected to be $415 mm to $425 mm and cash taxes $65 mm to $75 mm Expect structural tax rate in the range of 18% - 20% Assumes full-year weighted average shares outstanding of 287 mm Real Estate and Non-Real Estate maintenance CapEx and Non-Real Estate nvestments expected to be $155 to $165 mm Real Estate nvestment and nnovation of $150 mm to $160 mm Optimizing real estate portfolio through capital recycling opportunities Base business acquisitions (~$150 mm) plus acquisitions of customer relationships and inducements (~$60 mm), excl. data center acquisitions Data Center growth investment expected to be ~$185 mm excluding future acquisitions Note: ron 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 ron Mountain s transactions, loss or gain related to the disposition of real estate and other income or expense. Without this information, ron Mountain does not believe that a reconciliation would be meaningful.

17 ncreasing Cash Available for Dividends and Discretionary nvestments E $ in MM Adjusted EBTDA $ 1,435 $ 1,485 Non-cash stock compensation / other (including non-cash permanent withdrawal fees) Adjusted EBTDA and non-cash expenses $ 1,480 $ 1,530 Less: Amortization of capitalized sales commissions Cash interest and normalized cash taxes Total maintenance CapEx and non-real estate investment Customer inducements and acquisition of customer relationships (1) Cash available for dividends and investments $ 735 $ 815 Expected common dividend to be declared Cash available for core and discretionary investments $ 60 $ 140 ncremental Capital for Discretionary nvestments from borrowing, ATM and capital recycling $490 $100 Sources (3) $100 $185 $155 $150 Growth nvestments (3) Credit Suisse Data Center Growth Real Estate nvestment and nnovation (2) Base Acquisitions (1) Customer inducements and acquisitions of customer relationships are not deducted from AFFO as they represent discretionary growth investment (2) ncludes core growth racking and excludes Northern irginia Data Center development under capital lease (3) Excludes the capital associated with O Data Centers acquisition, which closed on January 10, and future data center acquisitions. Represents midpoint of ranges. Note: ron 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 ron Mountain s transactions, loss or gain related to the disposition of real estate and other income or expense. Without this information, ron Mountain does not believe that a reconciliation would be meaningful.

18 Storage Continues to Drive Growth 16 Q1 18 Service Revenue 38% of total revenues 28% gross profit margin 18.7% 18.3% 4.3% 0.1% 4.4% 1.5% 49.1% Q1 18 Storage Revenue 62% of total revenues 74% gross profit margin 19% of adjusted gross profit 9.7% 0.8% 10.5% 9.1% 4.4% 0.5% 47.0% 81% of adjusted gross profit Adjacent Businesses Secure Shredding Records Management Digital Solutions Data Center Data Management

19 Developed and Other nternational RM olume 17.1% 16.0% 15.3% 16.3% 14.6% 15.6% 2.2% 2.2% 2.1% Developed Markets 16.5% 86.9% 87.0% Other nternational 15.7% 75.1% 2.2% 1.8% 80.4% 0.5% 0.3% 80.2% 2.4% 0.3% -0.4% 0.3% 67.5% 2.1% 0.1% 61.7% 2.0% 2.0% 1.7% % -4.9% -1.7% Q % -5.0% -1.7% Q % -5.2% -1.7% Q % -5.2% -1.7% Q % -4.5% -1.6% Q % -4.3% -1.6% Q % -4.3% -1.7% Q % -4.4% -1.7% -0.4% Q % 9.9% -4.3% -3.7% Q % 10.5% -4.6% -4.5% Q % 11.4% -4.4% -5.3% Q % 5.4% 11.2% -4.2% -5.3% Q % 4.3% 3.3% 3.0% 7.6% -1.4% 7.8% -0.2% -3.6% -2.8% -3.5% -2.7% (1) Q2-17 Q % 5.7% 1.8% 1.8% 2.6% 2.4% 7.6% -2.8% -3.2% Q % -2.8% -3.0% Q1-18 (2) (3) (1) Q2-17 cube growth has been adjusted to reflect required regulatory divestments in RM s legacy Australian business. (2) Represents CuFt acquired at close. CuFt activity post close flows through new sales, new volume from existing customers, destructions, outperms / terms as appropriate. Acquisitions/ dispositions reflects business acquisition volume net of dispositions required by Recall transaction and sale of Russia / Ukraine business. (3) Acquisitions of customer relationships are included in new sales as the nature of these transactions is similar to new customer wins.

20 Supplemental Financial nformation First Quarter 2018 Unaudited

21 Safe Harbor Statement Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: This presentation contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws and is subject to the safe-harbor created by such Act. Forward-looking statements include, but are not limited to, our financial performance outlook and statements concerning our operations, economic performance, financial condition, goals, beliefs, future growth strategies, investment objectives, plans and current expectations such as 2018 guidance, and statements about our investment and other goals. These forward-looking statements are subject to various known and unknown risks, uncertainties and other factors. When we use words such as "believes," "expects," "anticipates," "estimates" or similar expressions, we are making forward-looking statements. Although we believe that our forward-looking statements are based on reasonable assumptions, our expected results may not be achieved, and actual results may differ materially from our expectations. n addition, important factors that could cause actual results to differ from expectations include, among others: (i) our ability to remain qualified for taxation as a real estate investment trust for U.S. federal income tax purposes ("RET"); (ii) the adoption of alternative technologies and shifts by our customers to storage of data through non-paper based technologies; (iii) changes in customer preferences, and demand for our storage and information management services; (iv) the cost to comply with current and future laws, regulations and customer demands relating to data security and privacy issues, as well as fire and safety standards; (v) the impact of litigation or disputes that may arise in connection with incidents in which we fail to protect our customers' information; (vi) changes in the price for our 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 our international subsidiaries operate and changes in the global political climate; (viii) our ability or inability to manage growth, expand internationally, complete acquisitions on satisfactory terms, to close pending acquisitions and to integrate acquired companies efficiently; (ix) changes in the amount of our growth and maintenance capital expenditures and our ability to invest according to plan; (x) our ability to comply with our existing debt obligations and restrictions in our debt instruments or to obtain additional financing to meet our working capital needs; (xi) the impact of service interruptions or equipment damage and the cost of power on our data center operations; (xii) changes in the cost of our debt; (xiii) the impact of alternative, more attractive investments on dividends; (xiv) the cost or potential liabilities associated with real estate necessary for our business; (xv) the performance of business partners upon whom we depend for technical assistance or management expertise outside the United States; (xvi) other trends in competitive or economic conditions affecting our financial condition or results of operations not presently contemplated; and (xvii) other risks described more fully in our filings with the Securities and Exchange Commission, including under the caption Risk Factors in our periodic reports, or incorporated therein. You should not rely upon forward-looking statements except as statements of our present intentions and of our present expectations, which may or may not occur. You should read these cautionary statements as being applicable to all forwardlooking statements wherever they appear. Except as required by law, we undertake no obligation to release publicly the result of any revision to these forwardlooking 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, ron Mountain will discuss (1) Adjusted EBTDA, (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, income (loss) from continuing operations, net income (loss) or cash flows from operating activities from continuing operations (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 the definitions are included later in this document (see Table of Contents). ron 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 ron Mountain s transactions, loss or gain related to the disposition property, plant and equipment (including of real estate) and other income or expense. Without this information, ron Mountain does not believe that a reconciliation would be meaningful. 2

22 Table of Contents - Company Profile 4 - Financial Highlights and Guidance Operating Metrics Balance Sheets, Statements of Operations and Reconciliations Storage Net Operating ncome and EBTDA, and Service Business EBTDA Real Estate Metrics Data Center Customer and Portfolio Metrics 28 - Debt Schedule and Capitalization Capital Expenditures and nvestments Components of alue 35 - Appendix and Definitions All figures except per share and facility counts in 000s unless noted All figures in reported dollars unless noted Figures may not foot due to rounding nvestor Relations Contacts: Melissa Marsden, Senior ice President, nvestor Relations melissa.marsden@ironmountain.com Anjaneya Singh, Director, nvestor Relations anjaneya.singh@ironmountain.com 3

23 Company Profile ron Mountain is a global leader in enterprise storage with a high-return, real estate-based business model, yielding annualized revenue of approximately $4.2 billion. The company provides storage and information management services to a high-quality, diversified customer base across numerous industries and government organizations. As of 3/31/18, ron Mountain served more than 225,000 customers, including approximately 95% of the Fortune 1000, and no single customer accounted for more than 1% of revenues, or 2% of volume. ron Mountain provides storage and information management services in 53 countries on six continents, storing approximately 680 million cubic feet of records in a portfolio of more than 1,400 facilities totaling more than 85 million square feet of space. The company employs more than 24,000 people. Countries Served ron Mountain is organized as a RET, and its financial model is based on the recurring nature of its storage rental revenues and resulting storage net operating income (NO). Supported by consistent storage rental revenues, the company generates predictable, low-volatility growth in key metrics such as storage NO and AFFO. This fundamental financial characteristic provides stability through economic cycles. Diversification of Total Revenues (As of 3/31/2018) ron Mountain has the opportunity to invest capital at attractive returns both domestically and internationally. The company believes that there remains a large un-vended opportunity that can support sustained storage volumes in developed markets such as North America and high growth opportunities in emerging markets where customers are in early stages of outsourcing their storage of physical documents. Strong Track Record of Storage Rental Revenue Growth $2,378 M Region 19% 7% 7% 66% 38% Mix 62% Product 13% 10% 4% 63% 10% 28-year Compound Annual Growth Rate 16.3% North America (1) Europe Latin America Asia Storage Service Records Mgmt Data Protection Shredding Data Center (2) Other (1) ncludes South Africa and United Arab Emirates. (2) ncludes Fulfillment Services, nformation Governance and Digital Solutions, Technology Escrow Services, Consulting, Entertainment Services, Fine Art Storage, Consumer Storage and other ancillary services. 4

24 Financial Highlights Q Q % Change Storage Rental $572,279 $651, % Service 366, , % Total Revenues $938,876 $1,042, % Gross Profit $512,169 $593, % Gross Margin 54.6% 57.0% 240 bps Gross Profit $512,169 $593, % Less: Significant Acquisition Costs included in Cost of Sales 7, (96.2%) Adjusted Gross Profit $520,056 $594, % Adjusted Gross Profit Margin 55.4% 57.0% 160 bps Adjusted Storage and Service Profit and Margin Adjusted Storage Gross Profit $424,407 $483, % Adjusted Storage Gross Margin 74.2% 74.2% 0 bps Adjusted Service Gross Profit $95,649 $110, % Adjusted Service Gross Margin 26.1% 28.4% 230 bps Storage Net Operating ncome (NO) (1) $469,153 $525, % SG&A Costs $240,166 $269, % Less: Significant Acquisition Costs ncluded in SG&A $12,684 $18, % Adjusted SG&A Costs $227,482 $251, % Adjusted SG&A as a % of Revenue 24.2% 24.1% -10 bps ncome (Loss) from Continuing Operations $58,844 $45,614 (22.5%) Adjusted EBTDA $292,574 $343, % Adjusted EBTDA Margin 31.2% 32.9% 170 bps (1) Please see slide 19 for Storage Net Operating ncome reconciliation. Reported EPS - Fully Diluted from Continuing Operations $0.22 $0.16 (27.5%) Adjusted EPS $0.24 $ % Net ncome (Loss) $58,507 $45,152 (22.8%) AFFO $170,937 $221, % Ordinary Dividends per Share $ $ % Weighted Average Fully-diluted Shares Outstanding 264, , % 5

25 2018 Guidance Summary (1) Financial Performance Outlook $MM (except per share items) C$ 2018 Guidance (2) C$ Change YOY Revenue $4,160 - $4,260 7% - 9% Adjusted EBTDA $1,435 - $1,485 12% - 16% Adjusted EPS $ $1.20 (15%) - 2% AFFO (2) $805 - $865 5% - 13% Note: 2018 Guidance assumes: Expected internal storage rental revenue growth of 3% - 3.5% and total internal revenue growth of 2% - 3% Revenue recognition standards: expect to benefit Revenue by $7mm and Adjusted EBTDA by approximately $15mm. No benefit is expected for Adjusted EPS or AFFO. Depreciation and amortization expenses are expected to be $640mm to $660mm; nterest expense is expected to be $415mm to $425mm and cash taxes to be $65mm to $75mm Expect structural tax rate in the range of 18% - 20% Assumes full-year weighted average shares outstanding of 287mm Real Estate and Non-Real Estate Maintenance CapEx and Non-Real Estate nvestments expected to be $155mm to $165mm Real Estate nvestment and nnovation of $150mm to $160mm Optimizing real estate portfolio through capital recycling opportunities Base business acquisitions (~$150mm) plus acquisitions of customer relationships and inducements (~$60mm), excluding data center acquisitions Data Center growth investment expected to be ~$185mm, excluding acquisitions Closed acquisitions of Credit Suisse data centers on March 8, 2018 and O Data Centers on January 10, 2018 (1) ron 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 ron Mountain s transactions, loss or gain related to the disposition of real estate and other income or expense. Without this information, ron Mountain does not believe that a reconciliation would be meaningful. (2) AFFO 2018 Guidance excludes capital expenditures associated with the integration of Recall. 6

26 Year-over-Year Revenue Growth Revenue Grow th Rates Storage Rental Revenue Q Service Revenue Total Revenue Reported 13.8% 6.7% 11.0% Less: mpact of F Rate Changes and Adjustments (1) 2.3% 4.3% 3.1% Adjusted Constant Currency 11.5% 2.4% 7.9% Less: mpact of Acquisitions and Dispositions 7.8% 1.0% 5.1% nternal Revenue Grow th Rate 3.7% 1.4% 2.8% Q Revenue Q Gross Profit Storage Rental Service 18.7% Storage Rental Service 37.5% 62.5% 81.3% (1) ncludes adjustments for adoption of Revenue Recognition standards. 7

27 Records Management olume Growth Total ron Mountain (686 CuFt MM) nternal Growth % 1.7% 1.8% 1.7% 1.9% 1.4% 1.3% 1.1% 0.6% 29.2% 27.6% 26.3% 25.9% 27.4% 24.6% 25.0% 23.1% 2.6% 2.7% 2.8% 3.0% 2.4% 1.0% 1.4% 1.7% 1.1% 0.1% 0.6% 2.4% 2.3% 2.2% 1.9% 6.0% 6.2% 6.3% 6.4% 5.2% 5.0% 4.9% 4.7% 0.5% Percentage of Total Cubic olume at 3/31/18 North America Western Europe 60.6% Other nternational 13.9% 25.5% -4.8% -4.9% -5.0% -5.0% -4.1% -4.0% -3.9% -4.0% -2.1% -2.2% -2.3% -2.4% -2.1% -2.1% -2.1% -2.0% Q2-16 Q3-16 Q4-16 Q1-17 (1) Q2-17 Q3-17 Q4-17 Q1-18 North America (415 CuFt MM) 11.6% 11.5% 1.7% 11.8% 11.4% 1.9% 10.6% 11.0% 10.7% 10.5% 0.3% 0.1% 1.6% 1.9% 0.3% 1.6% 1.6% 0.3% 0.0% 1.6% 0.3% -0.8% 1.3% 0.1% 13.9% 5.1% 5.2% 5.0% 5.0% 4.2% 4.0% 3.9% 3.7% 60.6% 25.5% -5.1% -5.1% -5.1% -5.0% -4.4% -4.3% -4.3% -4.4% -1.6% Q % Q % Q % Q % Q2-17 (1) -1.5% Q % -1.4% 0.0% -0.8% Q4-17 Q1-18 Business Acquisitions / Dispositions (2) New Sales (3) New olume from Existing Customers Destructions Outperm/Terms (1) Q2-17 cube growth has been adjusted to reflect required regulatory divestments of RM s legacy Australian business. (2) Represents CuFt acquired at close. CuFt activity post close flows through new sales, new volume from existing customers, destructions, outperms / terms as appropriate. Acquisitions/ dispositions reflects business acquisition volume net of divestments required by Recall transaction and sale of Russia / Ukraine business. (3) Acquisitions of customer relationships are included in new sales as the nature of these transactions is similar to new customer wins. 8

28 Records Management olume Growth Western Europe (95 CuFt MM) 49.3% 48.4% 49.2% Percentage of Total Cubic olume at 3/31/ % 34.1% 4.8% 5.5% 46.1% 4.4% 5.8% 45.7% 4.9% 6.3% 45.5% 5.7% 6.9% 11.7% 9.2% 4.3% 5.1% 2.0% 1.7% 1.1% 4.0% 4.7% 3.9% 4.6% 3.5% 4.4% 60.6% 13.9% 3.6% 25.5% -3.9% -2.6% Q % -2.7% Q % -2.7% Q % -2.6% Q % -2.1% Q2-17 (1) -4.4% -2.3% Q % -2.7% Q % -2.8% Q1-18 Other nternational (175 CuFt MM) 87.0% 86.9% 75.1% 13.9% 80.2% 80.4% 67.5% 61.7% 4.8% 9.9% -4.3% -3.7% 5.2% 10.5% -4.6% -4.5% 5.9% 11.4% -4.4% -5.3% 54.6% 5.4% 11.2% -4.2% -5.3% 3.0% 3.3% 7.6% -1.4% -3.6% -2.8% 4.3% 6.0% 5.7% 1.8% 3.0% 2.6% 2.4% 7.8% 7.6% 7.3% -0.2% -2.7% -2.8% -3.5% -3.2% -3.0% 1.8% -2.8% 60.6% 25.5% Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 (1) Q3-17 Q4-17 Q1-18 (2) Business Acquisitions/ Dispositions New Sales New olume from Existing Customers (3) Destructions Outperm/Terms (1) Q2-17 cube growth has been adjusted to reflect required regulatory divestments of RM s legacy Australian business. (2) Represents CuFt acquired at close. CuFt activity post close flows through new sales, new volume from existing customers, destructions, outperms / terms as appropriate. Acquisitions/ dispositions reflects business acquisition volume net of divestments required by Recall transaction and sale of Russia / Ukraine business. (3) Acquisitions of customer relationships are included in new sales as the nature of these transactions is similar to new customer wins. 9

29 Quarterly Operating Performance Q1 Results % Grow th By Reporting Segment Q Q Reported - mpact of F Rate Changes and Adjustments (1) = Constant Currency - mpact of Acquisitions and Dispositions = nternal Grow th NA Records and nformation Management Business Storage Rental $298,183 $304, % (1.3)% 3.5% 0.1% 3.4% Service 209, , % 3.9% 2.1% 0.2% 1.9% Total Revenues $507,597 $526, % 0.9% 2.9% 0.1% 2.8% Adjusted EBTDA & Margin 209, % 225, % NA Data Management Business Storage Rental $68,824 $69, % (0.5)% 1.1% 0.0% 1.1% Service 32,010 30,718 (4.0)% 2.1% (6.1)% 0.0% (6.1)% Total Revenues $100,834 $99,964 (0.9)% 0.3% (1.2)% 0.0% (1.2)% Adjusted EBTDA & Margin 55, % 53, % Western European Business Storage Rental $71,567 $83, % 14.9% 2.4% 0.0% 2.4% Service 48,505 52, % 9.5% (0.4)% 0.0% (0.4)% Total Revenues $120,072 $136, % 12.7% 1.3% 0.0% 1.3% Adjusted EBTDA & Margin 34, % 44, % Other nternational Business Storage Rental $117,615 $131, % 4.8% 7.2% 1.6% 5.6% Service 71,626 76, % 2.8% 3.6% (0.8)% 4.4% Total Revenues $189,241 $207, % 4.0% 5.9% 0.8% 5.1% Adjusted EBTDA & Margin 55, % 60, % Global Data Center Business Storage Rental $5,858 $45, % 0.0% 676.6% 648.0% 28.6% Service 365 1, % 0.0% 203.6% 163.1% 40.5% Total Revenues $6,223 $46, % 0.0% 648.9% 619.6% 29.3% Adjusted EBTDA & Margin 1, % 20, % Corporate and Other Business Storage Rental $10,232 $15, % 0.0% 55.3% 50.9% 4.4% Service 4,677 8, % 0.0% 77.8% 78.3% (0.5)% Total Revenues $14,909 $24, % 0.0% 62.4% 59.6% 2.8% Adjusted EBTDA (63,221) (62,078) Total Storage Rental $572,279 $651, % 2.3% 11.5% 7.8% 3.7% Service 366, , % 4.3% 2.4% 1.0% 1.4% Total Revenues $938,876 $1,042, % 3.1% 7.9% 5.1% 2.8% Adjusted EBTDA & Margin 292, % 343, % (1) ncludes adjustments for adoption of Revenue Recognition standards. 10

30 Consolidated Balance Sheets ASSETS 12/31/2017 3/31/2018 Current Assets: Cash and Cash Equivalents $925,699 $442,491 Accounts Receivable, Net 835, ,106 Other Current Assets 188, ,276 Total Current Assets 1,950,315 1,524,873 Property, Plant and Equipment: Property, Plant and Equipment 6,251,100 7,306,059 Less: Accumulated Depreciation (2,833,421) (2,940,588) Property, Plant and Equipment, Net 3,417,679 4,365,471 Other Assets, Net: Goodw ill 4,070,267 4,325,478 Other Non-current Assets, Net: 1,534,141 1,782,327 Total Other Assets, Net 5,604,408 6,107,805 Total Assets $10,972,402 $11,998,149 LABLTES AND EQUTY Current Liabilities: Current Portion of Long-term Debt $146,300 $137,198 Other Current Liabilities 1,183,873 1,093,864 Total Current Liabilities 1,330,173 1,231,062 Long-term Debt, Net of Current Portion 6,896,971 8,020,873 Other Long-term Liabilities (1) 446, ,939 Total Long-term Liabilities 7,343,387 8,505,812 Total Liabilities $8,673,560 $9,736,874 Equity Total Stockholders' Equity $2,297,438 $2,259,747 Noncontrolling nterests 1,404 1,528 Total Equity 2,298,842 2,261,275 Total Liabilities and Equity $10,972,402 $11,998,149 (1) ncludes redeemable noncontrolling interests of $91mm and $93mm as of December 31, 2017 and March 31, 2018, respectively. 11

31 Consolidated Statements of Operations Q Q % Change Revenues: Storage Rental $572,279 $651, % Service 366, , % Total Revenues $938,876 $1,042, % Operating Expenses: Cost of Sales (excluding Depreciation and Amortization) (1) 426, , % Selling, General and Administrative (2) 240, , % Depreciation and Amortization 124, , % (Gain) Loss on Disposal/Write-Dow n of PP&E (excluding Real Estate), Net (459) (1,130) n/a Total Operating Expenses 791, , % Operating ncome (Loss) 147, , % nterest Expense, Net 86,055 97, % Foreign Currency Transaction (Gain) / Loss (4,164) 21,785 n/a Other (ncome) Expense, Net (2,200) (1,634) (25.7%) ncome (Loss) before Provision (Benefit) for ncome Taxes and Gain on Sale of Real Estate 68,064 46,782 (31.3)% Provision (Benefit) for ncome Taxes 9,220 1,168 (87.3)% ncome (Loss) from Continuing Operations 58,844 45,614 (22.5)% (Loss) ncome from Discontinued Operations, Net of Tax (337) (462) 37.1% Net ncome (Loss) 58,507 45,152 (22.8)% Less: Net ncome (Loss) Attributable to Noncontrolling nterests % Net ncome (Loss) Attributable to ron Mountain ncorporated $58,125 $44,684 (23.1)% Earnings (Losses) per Share - Basic: ncome (Loss) from Continuing Operations $0.22 $0.16 (27.3)% Total ncome (Loss) from Discontinued Operations $0.00 $0.00 n/a Net ncome (Loss) Attributable to ron Mountain ncorporated $0.22 $0.16 (27.3)% Earnings (Losses) per Share - Diluted: ncome (Loss) from Continuing Operations $0.22 $0.16 (27.3)% Total ncome (Loss) from Discontinued Operations $0.00 $0.00 n/a Net ncome (Loss) Attributable to ron Mountain ncorporated $0.22 $0.16 (27.3)% Weighted Average Common Shares Outstanding - Basic 263, , % Weighted Average Common Shares Outstanding - Diluted 264, , % (1) ncludes $7.9mm and $0.3mm of Significant Acquisition Costs in Q and Q1 2018, respectively. (2) ncludes $12.7mm and $18.7mm of Significant Acquisition Costs in Q and Q1 2018, respectively. 12

32 Reconciliation of ncome (Loss) from Continuing Operations to Adjusted EBTDA Q Q % Change ncome from Continuing Operations $58,844 $45,614 (22.5)% Add / (Deduct): nterest Expense, Net 86,055 97, % Provision (Benefit) for ncome Taxes 9,220 1,168 (87.3)% Foreign Currency Transaction Losses (Gains) (1) (4,164) 21,785 n/a Other Expense (ncome), Net (2,200) (1,634) (25.7)% Significant Acquisition Costs 20,571 19,008 (7.6)% Loss (Gain) on Disposal/Write-Dow n of PP&E (excluding Real Estate), Net (459) (1,130) n/a Depreciation and Amortization 124, , % Adjusted EBTDA $292,574 $343, % (1) ncludes realized and unrealized F (gains) losses. 13

33 Reconciliation of Reported Earnings per Share to Adjusted Earnings per Share Q Q % Change Reported EPS - Fully Diluted from Continuing Operations $ 0.22 $ 0.16 (27.3)% Add (Deduct): ncome (Loss) Attributable to Noncontrolling nterests - - Foreign Currency Transaction Losses (Gains) (0.02) 0.08 Other Expense (ncome), Net (0.01) (0.01) Loss (Gain) on Disposal/Write-Dow n of PP&E (excluding Real Estate), Net - - Significant Acquisition Costs Tax mpact of Reconciling tems and Discrete Tax tems (1) (0.04) (0.05) Adjusted EPS - Fully Diluted from Continuing Operations $ 0.24 $ % (1) The difference between our effective tax rate and our structural tax rate (or adjusted effective tax rate) for the three months ended March 31, 2017 and 2018, respectively, is primarily due to (i) the reconciling items above, which impact our reported income (loss) from continuing operations 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 was 23.1% for the three months ended March 31, 2017 and 19.5% for the three months ended March 31, The Tax mpact of Reconciling tems and Discrete Tax tems is calculated using the current quarter s estimate of the annual structural tax rate for both the three and full year periods. This may result in the current period adjustment plus prior reported quarterly adjustments to not sum to the full year adjustment. 14

34 Reconciliation of Net ncome to FFO & AFFO Q Q % Change Net ncome $58,507 $45,152 (22.8)% Add / (Deduct): Real Estate Depreciation 62,956 72,979 FFO (Nareit) $121,463 $118,131 (2.7)% Add / (Deduct): (Gain) Loss on Disposal/Write-Dow n of PP&E (excluding Real Estate), Net (459) (1,130) Foreign Currency Transaction (Gains) Losses (1) (4,164) 21,785 (ncome) Other Expense, Net (2,200) (1,634) Tax mpact of Reconciling tems and Discrete Tax tems (2) (9,678) (15,379) (ncome) Loss from Discontinued Operations, Net of Tax Significant Acquisition Costs 20,571 19,008 FFO (Normalized) $125,870 $141, % Add / (Deduct): Non-Real Estate Depreciation 36,636 40,453 Amortization of Customer Relationship ntangible Assets (3) 25,115 43,559 Amortization of Deferred Financing Costs 3,906 3,553 Revenue Reduction Associated w ith Amortization of Permanent Withdraw al Fees and Above - and Below -Market 3,158 3,664 Non-Cash Rent Expense (ncome) 1,979 (1,258) Stock-based Compensation Expense 6,549 7,384 Reconciliation to Normalized Cash Taxes (4) (11,523) 5,948 Less: Non-Real Estate nvestment (5) 6,074 7,651 Real Estate, Data Center and Non-Real Estate Maintenance CapEx (6) 14,679 15,392 AFFO $170,937 $221, % Per Share Amounts (Fully Diluted Shares) FFO (Nareit) $0.46 $0.41 (10.9)% FFO (Normalized) $0.48 $ % Weighted Average Common Shares Outstanding - Basic 263, , % Weighted Average Common Shares Outstanding - Diluted 264, , % (1) ncludes realized and unrealized F (gains) losses. (2) Calculated as actual cash taxes less current tax provision and other one-time cash tax items, to reflect actual cash tax (impact)/benefit to AFFO. (3) Excludes amortization of capitalized commissions of $0.0mm and $3.6mm in Q and Q1 2018, respectively. (4) Our structural tax rate for purposes of calculation of Adjusted EPS and FFO (Normalized) was 23.1% for the three months ended March 31, 2017 and 19.5% for the three months ended March 31, The Tax mpact of Reconciling tems and Discrete Tax tems is calculated using the current quarter s estimate of the annual structural tax rate for both the three months and full year periods. (5) Non-Real Estate nvestment excludes Significant Acquisition integration CapEx of $3.9mm and $1.9mm in Q and Q1 2018, respectively. ncludes Non-Real Estate nvestment associated with data center business of $0.1mm and $1.3mm in Q and Q1 2018, respectively. (6) Maintenance CapEx excludes Significant Acquisition integration maintenance expense of $0.6mm and $0.0mm in Q and Q1 2018, respectively. ncludes Maintenance CapEx associated with data center business of $0.4mm in Q