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November 2014
Durable Fundamentals and Differentiated Business Model Deliver Enhanced Returns
2
Safe Harbor Language
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 our financial performance outlook and shareholder returns and statements
regarding our operations, economic performance, financial condition, goals, beliefs, future growth strategies, investment objectives, plans and current expectations,
such as projected revenues from our emerging market acquisition pipeline, valuation creation and returns associated with our data center business and the anticipated
benefits of our conversion to a real estate investment trust for federal income tax purposes, including the opportunity to create value by acquiring leased space, our
potential for a broadened investor base and enhanced valuations and the estimated range of our ordinary dividends to be paid in the last quarter of 2014. 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. 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. 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. Important factors that could
cause actual results to differ from our other expectations include, among others: (i) the actual cash dividends paid in the last quarter of 2014 may be materially different
from our estimates (ii) the cost to comply with current and future laws, regulations and customer demands relating to privacy issues; (iii) the impact of litigation or
disputes that may arise in connection with incidents in which we fail to protect our customers' information; (iv) changes in the price for our storage and information
management services relative to the cost of providing such storage and information management services; (v) changes in customer preferences and demand for our
storage and information management services; (vi) the adoption of alternative technologies and shifts by our customers to storage of data through non-paper based
technologies; (vii) the cost or potential liabilities associated with real estate necessary for our business; (viii) the performance of business partners upon whom we
depend for technical assistance or management expertise outside the U.S.; (ix) changes in the political and economic environments in the countries in which our
international subsidiaries operate; (x) claims that our technology violates the intellectual property rights of a third party; (xi) changes in the cost of our debt; (xii) the
impact of alternative, more attractive investments on dividends; (xiii) our ability or inability to complete acquisitions on satisfactory terms and to integrate acquired
companies efficiently; (xiv) other trends in competitive or economic conditions affecting our financial condition or results of operations not presently contemplated; and
(xv) other risks described more fully in our Annual Report on Form 10-K filed on February 28, 2014 under “Item 1A. Risk Factors”, our Quarterly Report on Form 10-Q
filed on July 31, 2014 under “Item 1A Risk Factors” and other documents that we file with the SEC from time to time. Except as required by law, we undertake no
obligation to release publicly the result of any revision to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or
to reflect the occurrence of unanticipated events.
3
We Store & Manage Information Assets
73% 17% 10%
Records Management Data Management Shredding
Based on FY2013 results
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Diversified Global Business
$3B annual revenues
>155,000 customers
Serving 95% of Fortune 1000
67MM SF 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
Leading Global Presence
36 Countries
5 Continents
5
What You Will Hear Today
We are uniquely positioned to create value through our operating model and real estate strategy
We have a defensible moat that protects long-term value
Fundamentals support stable growth in storage rental
Leading storage rental-driven business, supported by defensible market leadership and stable fundamentals, drives attractive shareholder returns
Attractive business characteristics underscore value creation
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Global Real Estate Portfolio of More than 1,000 Facilities
Acquisition opportunities in both emerging and developed markets
Developed markets – strategy to enhance storage growth while maintaining attractive returns 2014 YTD Acquisitions of $12 MM
Emerging markets – investing to build strong leadership positions
Diversified portfolio of targets
Streamlined acquisition process
2014 YTD Acquisitions of $150 MM
M&A Pipeline is Strong and Execution Well Underway
Revenue Pipeline Greater than 4x
Target for 2016
18
Evaluating Data Center Potential for Emerging Business Opportunities
Illustrative Value Creation and
Estimated Stabilized Returns Post-2014
($ MM)
Revenue $27
Adjusted OIBDA ~$15
NOI ~$16
Capital invested ~$100
Data center cap rate 7.5% - 8.5%
Implied value $185 - $215
Implied value creation $85 - $115
ROIC 10% - 14%
Adjusted OIBDA reflects stabilized SG&A expenses
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$3,026
$3,360- $3,470
$2,200
$2,400
$2,600
$2,800
$3,000
$3,200
$3,400
$3,600
2013 Base Incremental M&A 2016 E
Strategic Plan Drives Solid Revenue Growth
($MM)
$200 - $265
$135 - $175 + Potential
Upside from EBOs
+ Potential Upside
from Additional
EBOs
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Low-volatility, Moderate Growth with Attractive Yield
$919
$35-$60
$20-$45 $20-$30 $995 - $1,055
Adj. OIBDA 2013 Base Incremental M&A Speed and Agility Adj. OIBDA 2016 E
*Assumes a 4% dividend yield
2013 excludes restructuring charges
ROIC 9.7% 10% - 11%
Avg. Inv. Capital
~$5.5B ~$6.3B
($MM)
Driving Total Shareholder Returns - projected to be between 8% to 9%*
+ Potential Upside from
EBOs
+ Potential Upside
from Additional
EBOs
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Stockholder Distributions
Receipts and Reporting for 2014
Amounts paid in Jan, April, July, Oct. & Dec. 2014 are included in 2014 taxable income
First REIT distribution of $0.475/share paid on 10/15/14
Reflected quarterly rate expected in December following issuance of shares associated with Special Distribution
For 2014, IRM stockholders should report:
$400mm quarterly distributions PLUS Special Distribution
Under IRS rules, historical C-Corp earnings and profits need to be distributed prior to any REIT distributions
Character of each distribution to stockholders (including qualified vs non-qualified ordinary distributions) will vary, depending upon each stockholder’s specific situation, final amounts distributed, and the final characterization of such distributions at year-end, among other factors
Mid-year Conversion Results in Catch-up Distribution
Declaration
Date Paid Date
Distribution
Amount
Cash
Amount
Distribution
Per Share
Dec 16, ‘13 Jan 15, ‘14 $52mm $52mm $0.27
Mar 14, ‘14 Apr 15, ‘14 $52mm $52mm $0.27
May 28, ‘14 Jul 15, ‘14 $52mm $52mm $0.27
Sept 15, ‘14 Oct 15, ‘14 $92mm $92mm $0.475
Nov ’14 1
(catch-up)
Dec ‘14 ~$52mm ~$52mm ~$0.248
Nov ’14 1 Dec ‘14 ~$100mm ~$100mm $0.477
2014 Special Distribution1
Sept 15, ‘14 Nov 4, ’14 $700mm $140mm $3.61
1 Subject to Board approval and reflects 15.8 million shares issued related to the Special Distribution 2 80% stock / 20% cash , resulted in 15.8 million in additional shares outstanding
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Drivers of Net Asset Value (NAV)
Corporate Governance
Balance Sheet Risk
Franchise Value
Premium / Discount to NAV
Overhead Structure
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Significant Franchise Value Supports Enhanced Valuation
Formal corporate responsibility program and inclusion in SRI Indexes
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Strong Corporate Governance Profile
Demonstrated responsiveness to investors
Non-staggered, independent Board with significant investment
No antitakeover provisions
Rights plan implemented in 2013 to preserve REIT benefit
for shareholders in 2014
Will be rescinded upon stockholder approval of REIT
merger
Low potential conflicts of interest
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Attractive Balance Sheet / Capital Structure Poised for Improvement as a REIT
Debt-to-total-market cap compares favorably
IRM debt-to-total market cap of 36%1
Minor amount of secured debt
Low percentage of floating rate debt
Low repayment/refinancing risk
Limited development/unfunded development
Intend to de-lever over time as a REIT
Refinancing in international markets to provide natural hedge and get
benefits of interest rate tax shield in taxable jurisdictions (1) Based on 10/30/2013 closing prices of $35.38 and 209.3 million shares outstanding
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Overhead Structure Reflects Defensible Moat and Operating Business
High-return storage rental business
Average Adjusted OIBDA margins consistent with other
property types
Service business margins ~19% including overhead
Greater allocation to service due to nature of business
Lower capital intensity, so returns in line with storage business
Integrated business model drives new sales and retention,
but overhead will naturally be higher than traditional REITs
Limited additional operating leverage
Low downside risk, but limited upside potential
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“Enterprise Storage” Compares Favorably
Iron Mountain Self-storage Industrial
North America annual rental revenue/SF $27.00 $13.80 $5.50
Tenant Improvements/SF N/A N/A $1.96
CapEx(1) ~3% 5.3% 12%
Average lease term Large customers: 3 Yrs.
Small customers: 1 Yr. Month-to-Month ~4-6 yrs.
Customer retention ~98% ~85% ~75%
Customer concentration Very low Very Low Low
Customer type Business Consumer Business
Non-Real Estate %(2) 30% 20% 10%
Stabilized Occupancy
(building & racking utilization)
Building: 80% to 85%
Racking: 90% to 95% 90% 93%
Operating Margin(3) Storage: 70% - 75% 68% 70%
(1) IRM CapEx represents maintenance CapEx as a percentage of Revenues. Comps represent recurring CapEx as a percentage of NOI. Excludes leasing commissions. (2) Non-Real Estate % for IRM is as a % of Total Adj. OIBDA. Comps are as a % of Assets. (3) Operating margin for IRM is storage gross margin.
Source: Company estimates and filings. Benchmark data provided by Green Street Advisors and J.P. Morgan
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Potential for Broadened Investor Base and Enhanced Valuation
13.2
15.1
15.6
16.5
16.9
18.3
20.5
17.3
20.4
21.0
16.1 x
LPT
DRE
FR
PSB
DCT
EGP
PLD
CUBE
EXR
PSA
IRM
Price-to-2015 Pro Forma FFO
5.5%
3.6%
2.1%
2.4%
3.3%
3.4%
3.2%
2.6%
3.3%
3.1%
5.6%
LPT
DRE
FR
PSB
DCT
EGP
PLD
CUBE
EXR
PSA
IRM
Pro Forma Current Dividend Yield
*Based on a pro forma 2015 dividend of $2.20 per share, and 209MM shares outstanding and a stock price of $35.38 as of 10/30/2014. REIT pricing as of 10/30/2014
Source: Company estimates and FactSet mean FFO and AFFO estimates.
17.3
19.1
24.9
23.4
24.1
23.8
24.4
18.3
21.3
22.2
12.6 x
LPT
DRE
FR
PSB
DCT
EGP
PLD
CUBE
EXR
PSA
IRM
Price-to-2015 Pro Forma AFFO
SE
LF
-ST
OR
AG
E
IND
US
TR
IAL
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Key Messages
We are uniquely positioned to create value through our operating model and real estate strategy
We have a defensible moat that protects long-term value
Fundamentals support stable growth in storage rental
Leading storage rental-driven business, supported by defensible market leadership and stable fundamentals, drives attractive shareholder returns
Attractive business characteristics underscore value creation