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JPMorgan 2013 Ultimate Services Conference
November 13, 2013
Bill Meaney
President & CEO

© 2012 Iron Mountain Incorporate...
Key Messages

• Global market leader with sustainable business drivers

• Strategy extends durability of high-return busin...
Global Market Leader
 Diversified global business
•
•
•
•

$3B revenues
>155,000 customers
Serving 94% of Fortune 1000
65...
Durable, Expanding Storage Rental Stream
24 Consecutive Years of
Storage Rental Growth

Expanding Global Platform

$1,733
...
Storage Rental is Sticky and Durable
• Storage rental is key economic driver

• Large & growing
- 58% of revenues ($1.7B)
...
Predictable Storage Revenue has Weathered All Storms
IRM Storage Rental Internal Growth vs. REIT Same Store NOI
Growth
(Hi...
Large, Diversified Global Market Opportunity
Remains
$23B Global Market

North America Revenue Mix by Vertical
Market Segm...
Strategy Designed to Provide Platform for LongTerm Revenue and Profit Growth

• Sustaining the durability of our high-retu...
Acquisitions Are Key Driver of Business Strategy

Details by Segment

Mature

Number of Acquisitions
Key Markets
Purchase ...
Emerging Markets Drive Enhanced Performance
• Emerging markets represent
significant opportunity for growth
- Include Lat ...
Leveraging Core Competencies and Customers to
Expand Existing Rental Business
IRON MOUNTAIN DATA CENTERSTM
• A growth oppo...
Solid Storage Rental Growth Outlook

2014 - 2016 Storage Rental Build
$MM

(Average Annual Contribution to Growth)

2014 –...
Investment Opportunities Yield Attractive ROIC
Average ROIC for Key Value-Driving Activities

Investments

Increase Networ...
Strong Cash Flow Supports Capital Allocation Strategy
2014 Potential Cash Available for Investment
Adjusted OIBDA

$MM
$93...
Successful REIT Conversion Enhances Strategy

• Iron Mountain possesses characteristics of a strong REIT
- Aligned with bu...
REIT Approach Aligns with Business & Capital
Allocation Strategies
Pro Forma REIT Metrics(1)

• Committed to returning exc...
IRM is Effectively “Enterprise Storage”
IRM = Enterprise
Self-storage = Consumer
 Similarities:
• High storage Net Operat...
Summary

• Iron Mountain is a durable, high-return business that will
generate significant excess free cash flow
• Signifi...
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Iron Mountain 2013 JPM

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Iron Mountain 2013 JPM

  1. 1. JPMorgan 2013 Ultimate Services Conference November 13, 2013 Bill Meaney President & CEO © 2012 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.
  2. 2. Key Messages • Global market leader with sustainable business drivers • Strategy extends durability of high-return business • Business generates significant free cash flow to support long-term dividend growth • Successful REIT conversion enhances strategy 2
  3. 3. Global Market Leader  Diversified global business • • • • $3B revenues >155,000 customers Serving 94% of Fortune 1000 65MM ft2 of real estate in >1,000 facilities  Compelling customer value proposition • • • Reduce costs and risks of storing and protecting information assets Broadest range of footprint and services Most trusted brand  Majority of revenue from storage rental and related services 36 5 Countries • • • Records management Data protection Shredding 73% 18% 9% Continents 3
  4. 4. Durable, Expanding Storage Rental Stream 24 Consecutive Years of Storage Rental Growth Expanding Global Platform $1,733 $2,000 Int’l CAGR 8.5% $1,600 $1,200 $800 NA CAGR 2.2% $400 2012 $0 2009 2010 2011 NA Storage Rental ($MM) 2012 2013F Intl C$ Storage Rental ($MM) 4
  5. 5. Storage Rental is Sticky and Durable • Storage rental is key economic driver • Large & growing - 58% of revenues ($1.7B) - Trending at ~4% - 5% constant dollar growth • GDP correlated & inflation hedged • Diversified customer base – No customer >2% of total revenues • Low customer turnover (~2% annually) - Strong value proposition with related services - High switching costs • Long average life of a box in storage (~15 years) • Highly measurable with modular capacity additions 5
  6. 6. Predictable Storage Revenue has Weathered All Storms IRM Storage Rental Internal Growth vs. REIT Same Store NOI Growth (Historical and Estimated) 8% 6% 4% 2% 0% 2007 2008 2009 2010 2011 2012 2013 -2% -4% -6% Industrial average Self-storage average IRM storage rental internal growth Big 5 composite* Source: Benchmark data provided by Green Street Advisors *Composite of apartment, industrial, mall, office and strip center REITs 6
  7. 7. Large, Diversified Global Market Opportunity Remains $23B Global Market North America Revenue Mix by Vertical Market Segment Records Management Shredding Financial Services Healthcare Un-Vended Government DP Legal & Business Services Other Private Sector Source: Company estimates  Substantial un-vended opportunity remains in mature markets  Emerging markets beginning first-time outsourcing wave  Diversified end-user market segments 7
  8. 8. Strategy Designed to Provide Platform for LongTerm Revenue and Profit Growth • Sustaining the durability of our high-return businesses in mature markets • Building leadership positions in high-quality emerging markets through acquisitions and strong internal growth • Identifying, incubating and scaling new business opportunities 8
  9. 9. Acquisitions Are Key Driver of Business Strategy Details by Segment Mature Number of Acquisitions Key Markets Purchase Price Number of Facilities (Square Feet) Storage Rental Revenue (current run-rate) Impact on Financial Performance Total Revenues Adjusted OIBDA Capex Emerging 3 3 USA, France Colombia, Brazil, Peru $220MM $100MM 47 (2.2MM) 22 (0.7MM) ~$37MM ~$27MM 2013 2014 $30MM – $35MM $105MM – $115MM $3MM – $5MM $20MM – $25MM ~$4MM ~$37MM 9
  10. 10. Emerging Markets Drive Enhanced Performance • Emerging markets represent significant opportunity for growth - Include Lat Am, Asia Pac, Eastern and Central Europe and BRIC - Annual revenues of ~$300MM C$ Storage Rental Growth Rates YTD/2013 vs. YTD/2012 20% 3% • Strong double-digit storage rental growth augments annuity • Acquisitions are a key component of strategy to accelerate growth into leadership positions - 2012: Brazil, Turkey, Switzerland, Hungary - 2013: Brazil, Colombia (new market), Peru 2% Developed Emerging Enterprise Emerging 10% % of Global Revenues Developed 90% 10
  11. 11. Leveraging Core Competencies and Customers to Expand Existing Rental Business IRON MOUNTAIN DATA CENTERSTM • A growth opportunity that fits well with our business - • 200,000 ft2 of potential development over next 10 years Recurring revenues tied to long-term leases REIT-compatible • $10B North American market growing at ~10% per year • Offering a portfolio of services for organizations seeking a secure, compliant data center environment • Exploring construction of additional locations in key markets on company-owned land • Majority of future capital investment will be success based 11
  12. 12. Solid Storage Rental Growth Outlook 2014 - 2016 Storage Rental Build $MM (Average Annual Contribution to Growth) 2014 – 2016 Outlook $5MM – $20MM $120 2.0%-5.0% C$ Growth Rates 2014-2016 Revenue Growth 1% - 3% 1% - 3%+ Storage Rental 3% - 4% 2% - 5% Services 5.0%-9.0% $90 2011 2013 (2)% - 1% (1)% - 2% $60 1.0%-3.0% $30 $0 NA (Base) Int'l (Base) New Business Low Range Total High Range 12
  13. 13. Investment Opportunities Yield Attractive ROIC Average ROIC for Key Value-Driving Activities Investments Increase Network Utilization Expand Storage Network New Sales & Penetration Acquisitions Sales, Marketing & Account Management Racking Building Acquisition Capital Incremental Pre-Tax ROIC 30%+ 10% - 20% 13
  14. 14. Strong Cash Flow Supports Capital Allocation Strategy 2014 Potential Cash Available for Investment Adjusted OIBDA $MM $930 - $960 Add: Other Non-Cash Items & Adjustments Less: Interest Cash Taxes Maintenance Capex $30 - $40 ~$260 ~$130 ~$85 $485 - $525 Acquisition Integration & RE Consolidation Core Growth & Other Capex / CAC FCF Before Discretionary Investments $50 ~$135 $300 - $340 Real Estate(1) ~$50MM (1) Including data centers • Committed to returning excess FCF to shareholders - $1.8B of cash returned to shareholders since 2009 • Current dividend payout is nearly 60% of normalized FCF • Growth capex generates high, predictable returns • Robust pipeline of attractive investment opportunities – tuck-in acquisitions & real estate Shareholder Payouts Core Acquisitions Avg $50MM - $150MM Current Dividends $207MM (~60% of FCF) 14
  15. 15. Successful REIT Conversion Enhances Strategy • Iron Mountain possesses characteristics of a strong REIT - Aligned with business & capital allocation strategies - Iron Mountain is effectively “Enterprise Storage” • We can fund our business strategy effectively within this structure • Significant opportunity to drive total returns to shareholders, optimize WACC and create value 15
  16. 16. REIT Approach Aligns with Business & Capital Allocation Strategies Pro Forma REIT Metrics(1) • Committed to returning excess capital to shareholders • Significant shareholder benefits - Single level of US tax - Efficient structure to repatriate foreign storage rental income - Disciplined mechanism for capital allocation • The right tool for maximizing total returns to shareholders - REIT structure drives higher dividends - Higher distributable income due to lower tax vs. book D&A (~$70MM) • Strong cash flows support dividend coverage (For illustrative purposes only) $MM (except per share data) 2013 FFO $510 FFO/share(2) $2.68 AFFO $625 AFFO/share(2) $3.29 Dividends(3) Dividends/share(2) $400 - $435 $2.08 $2.27 (1) Excludes $140MM cash portion of the 2012 E&P distribution (2) Based on 192M shares outstanding (3) Includes ~$70MM benefit from book / tax difference for D&A 16
  17. 17. IRM is Effectively “Enterprise Storage” IRM = Enterprise Self-storage = Consumer  Similarities: • High storage Net Operating Income/SF is primary value driver • Multiple customers in each facility • Multimarket presence and quality brands support repeat business • Low maintenance capex, customer acquisition costs and tenant improvements • Low economic obsolescence of physical structures 17
  18. 18. Summary • Iron Mountain is a durable, high-return business that will generate significant excess free cash flow • Significant opportunities exist to continue to grow cash flow to sustain our business for a very long time • Successful REIT conversion will enhance returns 18

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