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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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
