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March 2015
Durable Fundamentals and Differentiated Business Model Deliver Enhanced Returns
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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 statements regarding our operations, economic performance, financial condition, goals, beliefs, future growth strategies, investment objectives, plans and current expectations, 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 remaining special distribution and our ordinary dividends. 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) our expected ordinary dividends 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 to qualify or remain qualified for taxation as a real estate investment trust (“REIT”); (xiv) our ability or inability to complete acquisitions on satisfactory terms and to integrate acquired companies efficiently; (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. 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.
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Ordinary distribution covered
by cash flow
Real Estate investments and
business and customer
acquisitions funded by
potential incremental equity
proceeds and/or borrowing
Cash Available for Distributions and Investment ($MM) Normalized
2015(1)
Adjusted OIBDA $925
Add: Other Non-Cash Items & Adjustments ~$45
Less: Interest
Cash Taxes (run rate)
Maintenance CapEx
Non-Real Estate Investment
Customer Acquisition Costs
~$260
~$45
~$80
~$80
~$35
Cash Available for Distributions and Investment $470
Normalized, Growing Cash Flows Support Ongoing Distributions
Ordinary Distributions(2) ~$405
Excess Cash Flow Available for Investment: ~$65
(1) Cash interest expense, cash taxes, customer acquisition costs and dividends are not intended to represent specific projections for 2015
(2) Subject to board approval and total for the year reflects annualized first quarter dividend of $0.475 per share and assumes 212 million shares outstanding.
Real Estate (Building Purchases and Data
Centers)
Business and Customer
Acquisitions
Core Real Estate (Racking, Building &
Leasehold improvements)
Estimates
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We Store & Manage Information Assets
75% 17% 8%
Records Management Data Management Shredding
Based on FY2014 results
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Diversified Global Business
$3B annual revenues
>155,000 customers
Serving 92% of Fortune 1000
68MM SF of real estate in ~1,100 facilities
Compelling Customer Value Proposition
Reduce costs and risks of storing and protecting information assets
Broadest range of footprint and services
Most trusted brand
Leading Global Presence
36 Countries
5 Continents
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What You Will Hear Today
We are uniquely positioned to create value through our operating model and real estate strategy
Our market leadership position supports long-term value
Fundamentals support stable growth in storage rental
Leading storage rental-driven business, supported by market leadership and stable fundamentals, drives attractive shareholder returns
Attractive business characteristics underscore value creation
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Global Real Estate Portfolio of More than 1,000 Facilities
(2) 2016 target excludes foreign exchange impact and is based on 2014 C$ budget rate
(1) (2)
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Improved Retention and Acquisition Drive Net Volume Growth
6.6% 6.3% 6.3% 6.3% 6.2% 6.1% 6.1% 5.9%
1.9% 1.9% 2.0% 2.1% 2.1% 2.2% 2.1% 2.2%
1.5% 0.3%
2.1% 4.5% 5.2% 5.9%
3.7% 1.7%
-4.7% -4.6% -4.6% -4.6% -4.5% -4.7% -4.5% -4.4%
-2.7% -2.6% -2.6% -2.5% -2.3% -2.0% -1.9% -1.9%
2.6% 1.4% 3.2% 5.8% 6.7% 7.6% 5.5% 3.6%
Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14
New Volume from Existing Customers New Sales Acquisitions Destructions Outperm/Terms
Year-over-Year Global Net Volume Growth Rates (Records Management Only)
Net Volume Growth Rate
Represents year-over-year change in volume as of the end of each period presented. The quarterly percentages are calculated by dividing the trailing four quarters’ total activity by the ending balance of the same prior year period. Includes acquisitions of customers and businesses
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Capturing Opportunity in Emerging Markets
Investing to drive leadership
Currently 13.9% of total revenue(3)
Goal: increase percentage of total revenue to 16%
~50% of emerging market growth driven by acquisitions
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
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 37%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 02/20/2015 closing prices of $36.71 and 212 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 ~18% 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
15.0
16.8
17.3
17.3
18.1
18.7
21.3
20.3
22.3
23.3
18.5 x
LPT
FR
PSB
EGP
DRE
DCT
PLD
CUBE
EXR
PSA
IRM
Price-to-2015 Pro Forma FFO
4.9%
1.9%
2.4%
3.6%
3.1%
3.1%
3.0%
2.6%
2.9%
2.8%
4.8%
LPT
FR
PSB
EGP
DRE
DCT
PLD
CUBE
EXR
PSA
IRM
Pro Forma Current Dividend Yield
*Based on a pro forma 2015 dividend of $1.90 per share, and 212 MM shares outstanding and a stock price of $39.37 as of 02/13/2015. REIT pricing as of 02/13/2015
Source: Company estimates and FactSet mean FFO and AFFO estimates.
19.5
22.6
23.8
22.0
22.0
26.2
26.4
21.2
22.8
24.4
16.7 x
LPT
FR
PSB
EGP
DRE
DCT
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
Our market leadership position supports long-term value
Fundamentals support stable growth in storage rental
Leading storage rental-driven business, supported by market leadership and stable fundamentals, drives attractive shareholder returns
Attractive business characteristics underscore value creation
(1) Includes realized and unrealized FX (gains) losses (2) Excludes realized and unrealized FX (gains) losses; FY 2013 includes $44 million loss on extinguishment of debt and FY 2014 includes $16 million