Iron Mountain
Annual Report 2020

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2020 Annual Financial Report Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 1-13045 _________________________________________________________ IRON MOUNTAIN INCORPORATED (Exact name of Registrant as Specified in Its Charter) Delaware (State or other jurisdiction of incorporation) One Federal Street, Boston, Massachusetts (Address of principal executive offices) 23-2588479 (I.R.S. Employer Identification No.) 02110 (Zip Code) 617-535-4766 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Trading Symbols(s) Name of Exchange on Which Registered Common Stock, $.01 par value per share IRM New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒ Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer Non-accelerated filer Emerging growth company ☒ ☐ ☐ Accelerated filer Smaller reporting company ☐ ☐ Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report .Yes ☒ No ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ As of June 30, 2020, the aggregate market value of the Common Stock of the registrant held by non-affiliates of the registrant was approximately $7.4 billion based on the closing price on the New York Stock Exchange on such date. Number of shares of the registrant’s Common Stock at February 19, 2021: 288,421,215 DOCUMENTS INCORPORATED BY REFERENCE Certain information required in Items 10, 11, 12, 13 and 14 of Part III of this Annual Report on Form 10-K (the “Annual Report”) is incorporated by reference from our definitive Proxy Statement for our 2021 Annual Meeting of Stockholders (our “Proxy Statement”) to be filed with the Securities and Exchange Commission (the “SEC”) within 120 days after the close of the fiscal year ended December 31, 2020. Table of Contents IRON MOUNTAIN INCORPORATED 2020 FORM 10-K ANNUAL REPORT TABLE OF CONTENTS PART I PART II 01 08 20 20 23 23 25 25 25 57 58 58 58 61 ITEM 1. BUSINESS ITEM 1A. RISK FACTORS ITEM 1B. UNRESOLVED STAFF COMMENTS ITEM 2. PROPERTIES ITEM 3. LEGAL PROCEEDINGS ITEM 4. MINE SAFETY DISCLOSURES ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER ITEM 6. MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES [RESERVED.] ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE ITEM 9A. CONTROLS AND PROCEDURES ITEM 9B. OTHER INFORMATION PART III 63 63 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE ITEM 11. EXECUTIVE COMPENSATION 63 63 63 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES PART IV 65 138 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES ITEM 16. FORM 10-K SUMMARY Table of Contents References in this Annual Report on Form 10-K for the year ended December 31, 2020 (this "Annual Report") to “the Company,” “Iron Mountain,” “we,” “us” or “our” include Iron Mountain Incorporated, a Delaware corporation, and its predecessor, as applicable, and its consolidated subsidiaries, unless the context indicates otherwise. CAUTIONARY NOTE REGARDING FORWARD- LOOKING STATEMENTS We have made statements in this Annual Report that constitute “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995 and other securities laws. These forward-looking statements concern our operations, economic performance, financial condition, goals, beliefs, future growth strategies, investment objectives, plans and current expectations, such as our (1) expectations and assumptions regarding the impact of the COVID-19 (as defined below) pandemic on us and our customers, including on our businesses, financial position, results of operations and cash flows, (2) commitment to future dividend payments, (3) expected change in volume of records stored with us, (4) expected organic revenue growth, including 2021 consolidated organic storage rental revenue growth rate and consolidated organic total revenue growth rate, (5) expectations that profits will increase in our growth portfolio, including our higher-growth markets, and that our growth portfolio will become a larger part of our business over time, (6) expectations related to our revenue management programs and continuous improvement initiatives, (7) expectations related to monetizing our owned industrial real estate assets as part of our capital recycling program, (8) expected ability to identify and complete acquisitions and drive returns on invested capital, (9) anticipated capital expenditures, (10) expected benefits, costs and actions related to, and timing of, Project Summit (as defined below), and (11) other forward-looking statements related to our business, results of operations and financial condition. These forward-looking statements are subject to various known and unknown risks, uncertainties and other factors, and you should not rely upon them except as statements of our present intentions and of our present expectations, which may or may not occur. When we use words such as “believes,” “expects,” “anticipates,” “estimates”, "plans", "intends" 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. In addition, important factors that could cause actual results to differ from expectations include, among others: • the severity and duration of the COVID-19 pandemic and its effects on the global economy, including its effects on us, the markets we serve and our customers and the third parties with whom we do business within those markets; • our ability to execute on Project Summit and the potential impacts of Project Summit on our ability to retain and recruit employees; • our ability to remain qualified for taxation as a real estate investment trust for United States federal income tax purposes (“REIT”); • changes in customer preferences and demand for our storage and information management services, including as a result of the shift from paper and tape storage to alternative technologies that require less physical space; • our ability or inability to execute our strategic growth plan, including our ability to invest according to plan, incorporate new digital information technologies into our offerings, achieve satisfactory returns on new product offerings, continue our revenue management, expand internationally, complete acquisitions on satisfactory terms, integrate acquired companies efficiently and grow our business through joint ventures; • changes in the amount of our capital expenditures; • our ability to raise debt or equity capital and changes in the cost of our debt; • • the cost and our ability to comply with laws, regulations and customer demands, including those relating to data security and privacy issues, as well as fire and safety and environmental standards; the impact of litigation or disputes that may arise in connection with incidents in which we fail to protect our customers’ information or our internal records or information technology (“IT”) systems and the impact of such incidents on our reputation and ability to compete; • changes in the price for our storage and information management services relative to the cost of providing such storage and information management services; • changes in the political and economic environments in the countries in which our international subsidiaries operate and changes in the global political climate, particularly as we consolidate operations and move records and data across borders; • our ability to comply with our existing debt obligations and restrictions in our debt instruments; • • • • other trends in competitive or economic conditions affecting our financial condition or results of operations not presently the impact of service interruptions or equipment damage and the cost of power on our data center operations; the cost or potential liabilities associated with real estate necessary for our business; failures in our adoption of new IT systems; • contemplated; and the other risks described in our periodic reports filed with the SEC, including under the caption "Risk Factors" in Part I, Item 1A of this Annual Report. Except as required by law, we undertake no obligation to update any forward-looking statements appearing in this report. Table of Contents Table of Contents PART I ITEM 1. BUSINESS. BUSINESS OVERVIEW We help organizations around the world protect their information, reduce storage costs, comply with regulations, facilitate corporate disaster recovery, and better use their information and IT infrastructure for business advantages, regardless of its format, location or life cycle stage. We do this by storing physical records and data backup media, offering information management solutions, and providing data center space for enterprise-class colocation and hyperscale deployments. We offer comprehensive records and information management services and data management services, along with the expertise and experience to address complex storage and information management challenges such as rising storage rental costs, legal and regulatory compliance, and disaster recovery requirements. We provide secure and reliable data center facilities to protect digital information and ensure the continued operation of our customers’ IT infrastructure, with reliable and flexible deployment options. Founded in an underground facility near Hudson, New York in 1951, Iron Mountain Incorporated, a Delaware corporation, has approximately 225,000 customers in a variety of industries in 56 countries around the world, as of December 31, 2020. We currently serve customers across an array of market verticals - commercial, legal, financial, healthcare, insurance, life sciences, energy, business services, entertainment and government organizations, including approximately 96% of the Fortune 1000. As of December 31, 2020, we employed approximately 24,000 people. We are listed on the New York Stock Exchange (the “NYSE”) and are a constituent of the Standard & Poor’s 500 Index and the MSCI REIT index. As of December 31, 2020, we were number 619 on the Fortune 1000. We have been organized and have operated as a REIT beginning with our taxable year ended December 31, 2014. BUSINESS STRATEGY OVERVIEW Our company has been a market leader in the physical ecosystem supporting information storage and retrieval, as most businesses have relied on paper documents or computer tapes to store their valuable information. Over time, customers are increasing their digital information, with the new information storage ecosystem being a hybrid of physical and digital mediums. We are a different company than the one we have been historically. The strategic journey we are on is driving this change and our focus remains on three pillars outlined below to grow our business. Continued growth in physical storage through revenue management as well as volume growth achieved in faster growing emerging markets and consumer and adjacent business growth in developed markets • We are establishing and enhancing leadership positions in higher-growth markets such as central and eastern Europe, Latin America, Asia and Africa, through both organic expansion and acquisitions in countries where GDP growth is faster and outsourcing information management is at an earlier stage. • We continue to identify, acquire, incubate and scale complementary businesses and products to support our long-term growth objectives and drive solid returns on invested capital. These opportunities include our digital services and our Entertainment Services, Fine Arts and Consumer Storage (each as defined below) businesses. Utilizing our global scale as well as 70 years of customer trust to deliver differentiated data center offerings • We have made significant progress in scaling our Global Data Center Business through acquisitions and organic growth, with 15 operating data centers across 13 global markets. • As of December 31, 2020, approximately 87% of our data center capacity was leased. With total potential capacity of 376 megawatts ("MW") in land and buildings currently owned or operated by us, we are among the largest global data center operators. Developing and offering new products and services that allow our customers to achieve reliable and secure information management solutions in an increasingly hybrid physical and digital world • Our customers are faced with navigating a more complex regulatory environment, and one in which hybrid physical and digital solutions have become the norm. Our strategy is underpinned by our persistent focus on best- in-class customer experience, as we continue to seek innovative solutions to help our customers progress on their journey from physical storage to a digital ecosystem. IRON MOUNTAIN 2020 FORM 10-K 1 Table of Contents Part I PROJECT SUMMIT In October 2019, we announced our global program ("Project Summit") designed to better position us for future growth and achievement of our strategic objectives. We expanded Project Summit during the first quarter of 2020 to include additional opportunities to streamline our business and operations, as well as accelerated the timing of certain opportunities previously identified. Such opportunities include leveraging new technology solutions to enable us to modernize our service delivery model and more efficiently utilize our fleet, labor and real estate. For further details on Project Summit, see the "Overview" section of “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Annual Report. DESIGNED TO ACCELERATE EXECUTION OF STRATEGY AND CONTINUE GROWTH Simplifying Global Structure Compelling Adjusted EBITDA Benefits • Combining Records and Information ("RIM") operations under one global leader • Rebalancing resources to sharpen focus on higher growth areas ~$375M Expected annual run-rate benefits realized exiting 2021 $165M Benefits delivered in 2020 Streamlining Management Structure for the Future Enhancing Customer Experience • Condensing number of layers and reporting levels • Reducing number of positions at Vice President level and above by ~45% • Reducing total managerial and administrative workforce by 700 positions • Realignment to create a more dynamic, agile organization better positioned to make faster decisions and execute strategy in key growth areas • Aligning global and regional customer-facing resources across RIM product lines to provide customers with a more integrated experience • Leveraging technology to modernize processes for better alignment between new digital solutions and our core business • Providing customers with a consistent experience across global footprint and introducing new ways of engaging with customers 2 IRON MOUNTAIN 2020 FORM 10-K Table of Contents BUSINESS SEGMENTS Part I The amount of revenues derived from our business segments and other relevant data, including financial information about geographic areas and product and service lines, for the years ended December 31, 2020, 2019 and 2018, are set forth in Note 10 to Notes to Consolidated Financial Statements included in this Annual Report. GLOBAL RIM BUSINESS The Global RIM Business segment includes five distinct offerings. Records Management, stores physical records and provides healthcare information services, vital records services, courier operations, and the collection, handling and disposal of sensitive documents (collectively, “Records Management”) for customers in 56 countries around the globe. As of December 31, 2020, we stored approximately 710 million cubic feet of hardcopy records. Data Management, provides storage and rotation of backup computer media as part of corporate disaster recovery plans, including service and courier operations (“Data Protection & Recovery”); server and computer backup services; and related services offerings, (collectively, “Data Management”). Global Digital Solutions (“GDS”), develops, implements and supports comprehensive storage and information management solutions for the complete lifecycle of our customers’ information, including the management of physical records, conversion of documents to digital formats and digital storage of information, primarily in the United States and Canada. Secure Shredding, includes the scheduled pick-up of office records that customers accumulate in specially designed secure containers we provide and is a natural extension of our hardcopy records management operations, completing the lifecycle of a record. Complementary to our shredding operations is the sale of the resultant waste paper to third-party recyclers. Through a combination of shredding facilities and mobile shredding units consisting of custom built trucks, we are able to offer secure shredding services to our customers throughout the United States, Canada and South Africa. Consumer Storage, provides on-demand, valet storage for consumers (“Consumer Storage”) across 31 markets in North America through a strategic partnership (the “MakeSpace JV”) with MakeSpace Labs, Inc., a consumer storage provider (“MakeSpace”), formed in March 2019. The MakeSpace JV utilizes data analytics and machine learning to provide effective customer acquisition and a convenient and seamless consumer storage experience. GLOBAL DATA CENTER BUSINESS The Global Data Center Business segment provides enterprise-class data center facilities and hyperscale-ready capacity to protect mission-critical assets and ensure the continued operation of our customers’ IT infrastructure, with secure, reliable and flexible data center options. The world’s most heavily regulated organizations have trusted us with their data centers for over 15 years, and as of December 31, 2020, five of the top 10 global cloud providers were Iron Mountain Data Center customers. As of December 31, 2020, our Global Data Center Business footprint spans nine markets in the United States: Denver, Colorado; Kansas City, Missouri; Boston, Massachusetts; Boyers, Pennsylvania; Manassas, Virginia; Edison, New Jersey; Columbus, Ohio; and Phoenix and Scottsdale, Arizona and four international markets: Amsterdam, London, Singapore and, through an unconsolidated joint venture, Frankfurt. CORPORATE AND OTHER BUSINESS The Corporate and Other Business segment consists primarily of Adjacent Businesses and other corporate items. Adjacent Businesses is comprised of (i) entertainment and media which helps industry clients store, safeguard and deliver physical media of all types, and provides digital content repository systems that house, distribute, and archive key media assets, throughout the United States, Canada, France, China - Hong Kong S.A.R., the Netherlands and the United Kingdom (“Entertainment Services”) and (ii) technical expertise in the handling, installation and storing of art in the United States, Canada and Europe (“Fine Arts”). Our Corporate and Other Business segment also includes costs related to executive and staff functions, including finance, human resources and IT, which benefit the enterprise as a whole. IRON MOUNTAIN 2020 FORM 10-K 3 Table of Contents Part I BUSINESS ATTRIBUTES Our business has the following attributes: Large, Diversified, Global Business The world’s most heavily regulated organizations trust us with the storage of their records. Our mission-critical storage offerings and related services generated approximately $4.1 billion in annual revenue in 2020. Our business has a highly diverse customer base of approximately 225,000 customers - with no single customer accounting for more than 1% of revenue during the year ended December 31, 2020 - and operates in 56 countries globally. This presents a significant cross-sell opportunity for our Global Data Center and Global Digital Solutions businesses. Recurring, Durable Revenue Stream We generate a majority of our revenues from contracted storage rental fees, via agreements that generally range from one to five years in length. Historically, in our Records Management business, we have seen strong customer retention (of approximately 98%) and solid physical records retention; more than 50% of physical records that entered our facilities 15 years ago are still with us today. We have also seen strong customer retention in our Global Data Center Business, with low annual customer churn of approximately 4% - 8%. Comprehensive Information Management Solution As an S&P 500 REIT with approximately 1,450 locations globally and with offerings spanning physical storage, digitization solutions and digital storage, we are positioned to provide a holistic offering to our customers. We are able to cater to our customers’ physical and digital needs and to help guide their digital transformation journey. Significant Owner and Operator of Real Estate We operate approximately 93 million square feet of real estate worldwide. Our owned real estate footprint spans nearly 26 million square feet and is concentrated in major metropolitan statistical areas in North America, Western Europe and Latin America. Limited Revenue Cyclicality Historically, economic downturns have not significantly affected our storage rental business. Due to the durability of our total global physical volumes, the success of our revenue management initiatives, and the growth of our Global Data Center Business, we believe we can continue to grow organic storage rental revenue over time. Shifting Revenue Mix We have identified a number of areas where we see opportunity for growth as we position ourselves to unlock greater value for our customers. These business lines, including Data Center, Fine Arts and Entertainment Services, Consumer Storage and Secure IT Asset Disposition, represent markets with strong secular growth. 4 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part I In addition, our Global Data Center business has the following attributes: Large Data Center Platform with Significant Expansion Opportunity As of December 31, 2020, we had 130 MW of leasable capacity with an additional 246 MW under construction or held for development. Differentiated Compliance and Security We offer comprehensive compliance support and physical and cyber security. Our multi- layered approach to security includes a combination of technical and human security measures, and experienced senior military and public sector cyber security leaders oversee our security. As of December 31, 2020, our data centers comply with one of the most comprehensive compliance programs in the industry, including enterprise-wide certified ISO 14001 and 50001 environmental and energy management systems. We also report globally on service organizational controls, PCI-DSS compliance, and met FISMA HIGH and FedRAMP controls in the United States. Efficient Access and Flexibility We have the ability to provide customers with a range of deployment options from one cabinet to an entire building, leveraging our global portfolio of hyperscale-ready and underground data centers. We also provide access to numerous carriers, cloud providers and peering exchanges with migration support and IT. 100% Green Powered Data Centers As of December 31, 2020, our Global Data Center platform was powered by 100% renewable energy, with carbon credit assistance and low power usage effectiveness (“PUE"). We are one of the top 25 buyers of renewable energy among the Fortune 1000 and now offer the Green Power Pass, which allows customers to include the power they consume at any Iron Mountain data center as green power in their CDP, RE100, GRI, or other sustainability reporting. COMPETITION We compete with thousands of storage and information management services providers around the world as well as storage and information management services managed and operated internally by organizations. We believe that competition for records and information customers is based on price, reputation and reliability, quality and security of storage, quality of service and scope and scale of technology. While the majority of our competitors operate in only one market or region, we believe we provide a differentiated global offering that competes effectively in these areas. We also compete with numerous data center developers, owners and operators, many of whom own properties similar to ours in some of the same metropolitan areas where our facilities are located. We believe that competition for data center customers is based on availability of power, security considerations, location, connectivity and rental rates, and we generally believe we compete effectively in each of these areas. Additionally, we believe our strong brand, global footprint and excellent commercial relationships enable us to compete successfully and provide significant cross-sell opportunities with our existing customer base. HUMAN CAPITAL MANAGEMENT EMPLOYEES As of December 31, 2020, we employed approximately 9,000 employees in the United States and approximately 15,000 employees outside of the United States. As of December 31, 2020, approximately 500 employees in California and Georgia and three provinces in Canada were represented by unions in North America and approximately 1,100 employees were represented by unions in Latin America (in Argentina, Brazil, Chile, Colombia and Mexico). All union employees are currently under renewed labor agreements or operating under an extension agreement. BENEFIT PROGRAMS Where applicable, employees are generally eligible to participate in our benefit programs, which may include health and welfare arrangements as well as pension schemes. Certain unionized employees in California receive these types of benefits through their unions and are not eligible to participate in our benefit programs. In addition to base compensation and other usual benefits, a significant portion of full-time employees participate in some form of incentive-based compensation program that provides payments based on revenues, profits or attainment of specified objectives for the unit in which they work. IRON MOUNTAIN 2020 FORM 10-K 5 Table of Contents Part I INCLUSION AND DIVERSITY We believe that an inclusive environment with diverse teams produces more creative solutions, results in better, more innovative products and services and is crucial to our efforts to attract and retain key talent. We have prioritized inclusion and diversity ("I&D") as part of our corporate-wide strategic goals. Strategies we have taken to create and sustain a more inclusive and diverse environment include: appointing senior leadership for I&D efforts; ensuring that our recruiting efforts reflect our diversity goals; and launching, expanding and supporting our Employee Resource Groups—groups of our employees that voluntarily join together based on shared characteristics, life experiences, or interest around particular activities. COMPANY CULTURE We recognize that a great culture is foundational to how we deliver on our purpose and strategy and create sustained growth and value for our shareholders. We have committed significant resources to building a sustainable culture that enables innovation and creativity and facilitates trust, employee engagement, belonging and better performance. We understand the importance of listening to our employees, and, to that end, we regularly survey our employees to obtain their views and assess their experience. We use the views expressed in the surveys to adjust our approach on culture and driving employee engagement. We also use employee survey information, headcount data and cost analyses to gain insights into how and where we work. COMMUNITY INVOLVEMENT We are committed to integrating responsible and sustainable practices throughout our organization to help our operations to have a positive impact on the environment and the communities in which we operate. We aim to give back to the communities where we live and work, and believe that this commitment helps in our efforts to attract and retain employees. We offer philanthropic support to our global community through our Living Legacy Initiative, which is our commitment to help preserve and make accessible cultural and historical information and artifacts. We encourage volunteerism in the communities in which we live and work through our Moving Mountains volunteer program, offering paid time off for employees to help community-based and civic-minded organizations. INSURANCE For strategic risk transfer purposes, we maintain a comprehensive insurance program with insurers that we believe to be reputable and that have adequate capitalization in amounts that we believe to be appropriate. Property insurance is purchased on a comprehensive basis, including flood and earthquake (including excess coverage), subject to certain policy conditions, sublimits and deductibles. Property is insured based upon the replacement cost of real and personal property, including leasehold improvements, business income loss and extra expense. Other types of insurance that we carry, which are also subject to certain policy conditions, sublimits and deductibles, include medical, workers’ compensation, general liability, umbrella, automobile, professional, warehouse legal liability and directors’ and officers’ liability policies. GOVERNMENT REGULATION We are required to comply with numerous U.S. federal, state, and foreign laws and regulations covering a wide variety of subject matters which may have a material effect on our capital expenditures, earnings and competitive position. For example, some of our current and formerly owned or leased properties were previously used by entities other than us for industrial or other purposes, or were affected by waste generated from nearby properties, that involved the use, storage, generation and/or disposal of hazardous substances and wastes, including petroleum products. In some instances, this prior use involved the operation of underground storage tanks or the presence of asbestos-containing materials. Where we are aware of environmental conditions that require remediation, we undertake appropriate activity, in accordance with all legal requirements. Although we have from time to time conducted limited environmental investigations and remedial activities at some of our former and current facilities, we have not undertaken an environmental review of all of our properties, including those we have acquired. We therefore may be potentially liable for environmental cost and may be unable to sell, rent, mortgage or use contaminated real estate owned or leased by us. Under various federal, state and local environmental laws, we may be liable for environmental compliance and remediation costs to address contamination, if any, located at owned and leased properties as well as damages arising from such contamination, whether or not we know of, or were responsible for, the contamination, or the contamination occurred while we owned or leased the property. Environmental conditions for which we might be liable may also exist at properties that we may acquire in the future. In addition, future regulatory action and environmental laws may impose costs for environmental compliance that do not exist today. We transfer a portion of our risk of financial loss due to currently undetected environmental matters by purchasing an environmental impairment liability insurance policy, which covers all owned and leased locations. Coverage is provided for both liability and remediation costs. 6 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part I In addition, we are subject to numerous U.S. federal, state, local and foreign laws and regulations relating to data privacy and cybersecurity, which are complex, change frequently and have tended to become more stringent over time. We devote substantial resources, and may in the future have to devote significant additional resources, to facilitate compliance with these laws and regulations, and to investigate, defend or remedy actual or alleged violations or breaches. Any failure by us to comply with, or remedy any violations or breaches of, these laws and regulations could result in the curtailment of certain of our operations, the imposition of fines and penalties, liability resulting from litigation, restrictions on our ability to carry on or expand our operations, significant costs and expenses and reputational harm. For more information about laws and regulations that could affect our business, see “Item 1A. Risk Factors” included in this Annual Report. CORPORATE SOCIAL RESPONSIBILITY Through our approach to Corporate Social Responsibility, we not only see ourselves as having our own responsibility to society, but also in helping our customers with their own environmental, social and governance (ESG) goals, and helping them gain value, make improvements and save costs. We are committed to responsible, sustainable growth and focus our environmental sustainability efforts on the concrete steps we can take to minimize the impact our operations have on the environment. To that end, we have publicly adopted long-term energy and emissions goals that establish aggressive reduction targets. We are committed to the safety and well-being of our employees and strive to cultivate a culture of inclusion that values diverse perspectives across our global workforce. Iron Mountain and its employees also make a social impact in the communities in which we operate through charitable giving and volunteerism. We have been recognized for our commitment to Corporate Social Responsibility. We were named one of America’s Most Responsible Companies by Newsweek magazine in 2020. We ranked 81st on Newsweek’s 2021 list of America’s Most Responsible Companies. We received a 100% on the Human Rights Campaign Corporate Equality Index for 2018, 2019, 2020 and 2021. We are committed to transparent reporting on sustainability and corporate responsibility efforts in accordance with the guidelines of the Global Reporting Initiative. Our corporate responsibility report highlights our progress against key measures of success for our efforts in the community, our environment, and for our people. We are a member of the FTSE4 Good Index, MSCI World ESG Index, MSCI ACWI ESG Index and MSCI USA IMI ESG Index, each of which include companies that meet globally recognized corporate responsibility standards. A copy of our corporate responsibility report is available on the “About Us” section of our website, www.ironmountain.com, under the heading “Corporate Social Responsibility." We are not including the information contained on or available through our website as part of, or incorporating such information by reference into, this Annual Report. In addition, we continue to work to further align our reporting with the recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures to disclose climate-related financial risks and opportunities. STRONG SUSTAINABILITY FOCUS • Green Power Pass solution in Data Center market to help customers manage their carbon footprint. • Part of RE100 Initiative — commitment to using renewable energy sources for 100% of our worldwide electricity. • 81% of our global electricity use — including 100% of the electricity used to power our Data Center business — was from renewable sources in 2020. • Recognized as a top 25 U.S. buyer of renewable energy and honored with the U.S. Department of Energy’s Better Buildings Goal Achiever Award. • Reduced GHG emissions by 52% (since 2016) and achieved a 25% reduction in non-IT energy intensity, surpassing an original goal of 20% by 2026. • Received a 100% on the Human Rights Campaign Corporate Equality Index for 2018, 2019, 2020 and 2021. INTERNET WEBSITE Our Internet address is www.ironmountain.com. Under the “Investors” section on our website, we make available, free of charge, our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) as soon as reasonably practicable after such forms are filed with or furnished to the SEC. We are not including the information contained on or available through our website as a part of, or incorporating such information by reference into, this Annual Report. Copies of our corporate governance guidelines, code of ethics and the charters of our audit, compensation, finance, nominating and governance, risk and safety, and technology committees are available on the “Investors” section of our website, www.ironmountain.com, under the heading “Corporate Governance." IRON MOUNTAIN 2020 FORM 10-K 7 Table of Contents Part I ITEM 1A. RISK FACTORS. We face many risks. If any of the events or circumstances described below actually occur, we and our businesses, financial condition or results of operations could suffer, and the trading price of our debt or equity securities could decline. Our current and potential investors should consider the following risks and the information contained under the heading “Cautionary Note Regarding Forward-Looking Statements” before deciding to invest in our securities. BUSINESS RISKS Our customers may shift from paper and tape storage to alternative technologies that require less physical space. We derive most of our revenues from rental fees for the storage of physical records and computer backup tapes and from storage related services. Storage volume and/or demand for our traditional storage related services may decline as our customers adopt alternative storage technologies, which require significantly less space than traditional physical records and tape storage. Our customers’ shift from paper and tape storage to alternative technologies may accelerate as a result of the COVID-19 pandemic. While volumes in our Global RIM Business segment were relatively steady in 2020 and we expect them to remain relatively consistent in the near term, we can provide no assurance that our customers will continue to store most or a portion of their records as paper documents or as tapes, or that the paper documents or tapes they do store with us will require our storage related services at the same levels as they have in the past. A significant shift by our customers to storage of data through non-paper or non-tape-based technologies, whether now existing or developed in the future, could adversely affect our businesses. In addition, the digitization of records may shift our revenue mix from the more predictable storage revenue to service revenue, which is inherently more volatile. The COVID-19 pandemic and its resulting economic impact may materially adversely affect our business, operations, financial results and liquidity. In March 2020, the World Health Organization declared a novel strain of coronavirus (“COVID-19”) a pandemic. This resulted in U.S. federal, state and local and foreign governments and private entities mandating various restrictions, including travel restrictions, restrictions on public gatherings and stay-at-home orders and advisories. In response, we temporarily closed certain of our offices and facilities across the world, implemented certain travel restrictions for our employees and transitioned many of our employees to remote working arrangements, with some of our operations being run with limited personnel on site. In addition, many of our customers have implemented stay-at-home measures and other restrictions that reduce the demand for our routine services. The preventative and protective actions that governments have ordered, or we or our customers have implemented, have resulted in a period of reduced service operations and business disruption for us, our customers and other third parties with which we do business. The COVID-19 pandemic has also had a substantial adverse impact on the global economy. While we do not currently believe that the implications of the COVID-19 pandemic have had a material adverse impact on our ability to collect our accounts receivable, global economic conditions related to the COVID-19 pandemic may have a material adverse effect on our customers, which could impact our future ability to collect our accounts receivable. In addition, if the COVID-19 pandemic and resulting recessionary conditions continue to disrupt the credit and financial markets or impact our credit ratings, our ability to access capital on favorable terms, if at all, could be adversely affected, which could have an adverse effect on our liquidity needs. Due to the unpredictable and rapidly changing nature of the COVID-19 pandemic and the resulting economic distress, the extent to which it continues to impact us will depend on numerous factors that we are currently unable to predict, including: the duration and severity of the COVID-19 pandemic; the development, distribution and efficacy of any COVID-19 vaccines; the duration or re- emergence of outbreaks; the continuation, resumption, and/or expansion of restrictions imposed by governments and businesses; the impact of the pandemic on economic activity and any resulting recessionary conditions, and the strength and duration of any economic recovery; the health of our workforce; our ability to meet staffing needs for critical functions; and the impact on our customers, suppliers, vendors, and other business partners, and their respective financial condition. Furthermore, when the COVID-19 pandemic has ended, our ability to resume normal business operations may be delayed, and actions we have taken to manage costs may make it more challenging to meet any increased customer demand following the pandemic. Failure to execute our strategic growth plan may adversely impact our financial condition and results of operations. As part of our strategic growth plan, we expect to invest in our existing businesses, including records and information management storage and services businesses in our higher-growth markets, data centers and adjacent businesses, and in new businesses, business strategies, products, services, technologies and geographies, and we may selectively divest certain businesses. These initiatives may involve significant risks and uncertainties, including: • our inability to execute on our plan to incorporate the digitization of our customers’ records and new digital information • technologies into our offerings; failure to achieve satisfactory returns on new product offerings, acquired companies, joint ventures, growth initiatives, or other investments, particularly in markets where we do not currently operate or have a substantial presence; • our inability to identify suitable companies to acquire, invest in or partner with; • our inability to complete acquisitions or investments on satisfactory terms; • our inability to structure acquisitions or investments in a manner that complies with our debt covenants and is consistent with our leverage ratio goals; 8 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part I • increased demands on our management, operating systems, internal controls and financial and physical resources and, if necessary, our inability to successfully expand our infrastructure; incurring additional debt necessary to acquire suitable companies or make other growth investments if we are unable to pay the purchase price or make the investment out of working capital or the issuance of our common stock or other equity securities; • our inability to manage the budgeting, forecasting and other process control issues presented by future growth, particularly with • respect to operations in countries outside of the United States or in new lines of business; insufficient revenues to offset expenses and liabilities associated with new investments; and • • our inability to attract, develop and retain skilled employees to lead and support our strategic growth plan, particularly in new businesses, technologies, products or offerings outside our core competencies. Our data center expansion in particular requires significant capital commitments. Our data center expansion and other new ventures are inherently risky and we can provide no assurance that such strategies and offerings will be successful in achieving the desired returns within a reasonable timeframe, if at all, and that they will not adversely affect our business, reputation, financial condition, and operating results. We face competition from other companies, some of which possess substantial resources, in our efforts to grow our data center, international and complementary businesses. As a result, we may be unable to acquire or invest in, or we may pay a premium purchase price for, data centers, technology and higher-growth markets and adjacent businesses that support our strategic growth plan, which could have an adverse effect on our results of operations and financial condition. The foregoing risks may be exacerbated as a result of the COVID-19 pandemic. As stored records and tapes become less active our service revenue growth and profitability from related services may decline. Our Records Management and Data Management service revenue growth is being negatively impacted by declining activity rates as stored records and tapes are becoming less active and more archival, and these activity levels were further negatively impacted by the COVID-19 pandemic. The amount of information available to customers digitally or in their own information systems has been steadily increasing in recent years, and we believe this trend continues to accelerate. As a result, our customers are less likely than they have been in the past to retrieve records and rotate tapes, thereby reducing their activity levels. At the same time, many of our costs related to records and tape related services remain fixed. In addition, our reputation for providing secure information storage is critical to our success, and actions to manage cost structure, such as outsourcing certain transportation, security or other functions, could negatively impact our reputation and adversely affect our business. Ultimately, if we are unable to appropriately align our cost structure with decreased levels of service activity, our operating results could be adversely affected. Our program to simplify our global structure may not be successful. In October 2019, we announced Project Summit, a global program designed to better position us for future growth and achievement of our strategic objectives. Project Summit focuses on simplifying our global records and information management structure, streamlining our managerial structure and leveraging our global and regional customer facing resources. We also plan to implement systems and process changes designed to make our organization more agile and dynamic, streamline our organization and reallocate our resources to better align with our strategic goals. We expect the total program benefits associated with Project Summit, which we have expanded since our initial announcement, to be fully realized exiting 2021. However, we may not be able to realize the full amount of our expected improvements to Adjusted EBITDA in a timely manner, or at all, and the costs associated with Project Summit may exceed our expectations. In addition, this program may yield unintended consequences, such as attrition beyond our intended reduction in force, distraction of our employees and our anticipated systems and process changes may not work as expected and may create additional risks to our business. As a result, Project Summit could have a material adverse effect on our results of operations or financial condition. Our future growth depends in part upon our ability to continue to effectively manage and execute on revenue management. Over the past several years, our organic revenue growth has been positively impacted by our ability to effectively introduce, expand and monitor revenue management initially in our more established markets, and subsequently in our higher-growth markets. If we are not able to continue and effectively manage pricing, our results of operations could be adversely affected and we may not be able to execute on our strategic growth plan. Changes in customer behavior with respect to destruction of records stored with us could adversely affect our business, financial condition and results of operations. Over the past year, our destruction rates, as a percentage of records stored with us, have fluctuated. When destruction rates for records stored with us increase, it has a positive impact on our service revenues in the year of destruction but negatively impacts our longer term storage revenues, adversely affecting our financial condition and results of operations. IRON MOUNTAIN 2020 FORM 10-K 9 Table of Contents Part I We and our customers are subject to laws and governmental regulations relating to data privacy and cybersecurity and our customers’ demands in this area are increasing. This may cause us to incur significant expenses and non-compliance with such regulations and demands could harm our business. We are subject to numerous U.S. federal, state, local and foreign laws and regulations relating to data privacy and cybersecurity. These regulations are complex, change frequently and have tended to become more stringent over time. There are also a number of legislative proposals pending before the U.S. Congress, various state legislative bodies and foreign governments concerning data protection that could affect us. In addition, a growing number of U.S. and foreign legislative and regulatory bodies have adopted consumer notification and other requirements if consumer information is accessed by unauthorized persons and additional regulations regarding the use, access, accuracy and security of such information are possible. In the U.S., we are subject to various state laws which provide for disparate notification regimes. In addition, as a result of the continued emphasis on information security and instances in which personal information has been compromised, our customers are requesting that we take increasingly sophisticated measures to enhance security and comply with data privacy regulations, and that we assume higher liability under our contracts. We devote substantial resources, and may in the future have to devote significant additional resources, to facilitate compliance with laws and regulations, our customers’ data privacy and security demands, and to investigate, defend or remedy actual or alleged violations or breaches. Any failure by us to comply with, or remedy any violations or breaches of, laws and regulations or customer requirements could result in the curtailment of certain of our operations, the imposition of fines and penalties, liability resulting from litigation, restrictions on our ability to carry on or expand our operations, significant costs and expenses and reputational harm. For example, we have experienced incidents in which customers’ information has been lost, and we have been informed by customers that some of the incidents involved the loss of personal information, resulting in monetary costs to those customers for which we have provided reimbursement. It is difficult to predict the impact on our business if we were subject to allegations of having violated existing laws or regulations. Attacks on our internal IT systems could damage our reputation and adversely affect our business, financial condition and results of operations. Our reputation for providing secure information storage to customers is critical to the success of our business. Our reputation or brand, and specifically, the trust our customers place in us, could be negatively impacted in the event of perceived or actual failures by us to store information securely. Although we seek to prevent and detect attempts by unauthorized users to gain access to our IT systems, our IT and network infrastructure may be vulnerable to attacks by hackers or breaches due to employee error or other disruptions. Moreover, until we have migrated businesses we acquire onto our IT systems, we may face additional risks because of the continued use of predecessor IT systems. We have outsourced, and expect to continue to outsource, certain support services to third parties, which may subject our IT and other sensitive information to additional risk. In addition, the continuation of remote work arrangements or operating with limited personnel as a result of the COVID-19 pandemic could increase our cybersecurity risks. A successful breach of the security of our IT systems could lead to theft or misuse of our customers’ proprietary or confidential information and result in third party claims against us and reputational harm. Damage to our reputation could make us less competitive, which could negatively impact our business, financial condition and results of operations. Complying with fire and safety standards may result in significant expense. As of December 31, 2020, we operated approximately 1,450 facilities worldwide, including more than 600 in the United States. Many of these facilities were built and outfitted by third parties and added to our real estate portfolio as part of acquisitions. Some of these facilities contain fire suppression and safety features that are different from our current specifications and current standards for new facilities, although we believe all of our facilities were constructed, in all material respects, in compliance with applicable laws and regulations in effect at the time of their construction or outfitting. In some instances, local authorities may take the position that our fire suppression and safety features in a particular facility are insufficient and require additional measures that may involve considerable expense to us. In addition, where we determine that the fire suppression and safety features of a facility require improvement, we will develop and implement a plan to remediate the issue, although implementation may require an extended period to complete. A significant aspect of the integration of businesses we have acquired or may acquire is the process of making investments in the acquired facilities to conform such facilities to our standards of operations. This process is complex and time-consuming. If additional fire safety and suppression measures beyond our current operating plan were required at a large number of our facilities, the expense required for compliance could negatively impact our business, financial condition or results of operations. If we fail to meet our commitment to transition to more renewable and sustainable sources of energy, it may negatively impact our ability to attract and retain customers, employees and investors who focus on this commitment. Furthermore, changes to environmental laws and standards may increase the cost to operate some of our businesses. This could impact our results of operations and the trading of our stock. We have made a commitment to prioritize sustainable energy practices, reduce our carbon footprint and transition to more renewable and sustainable sources of energy, particularly in our data center business. We have made progress towards reducing our carbon footprint, but if we are not successful in continuing this reduction or if our customers, employees and investors are not satisfied with our sustainability efforts, it may negatively impact our ability to attract and retain customers, employees and investors who focus on this commitment. This could negatively impact our results of operations and the trading of our stock. 10 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part I Furthermore, changes in environmental laws in any jurisdiction in which we operate could increase compliance costs or impose limitations on our operations. For example, our emergency generators at our data centers are subject to regulations and permit requirements governing air pollutants, and the heating, ventilation and air conditioning and fire suppression systems at some of our data centers and data management locations may include ozone-depleting substances that are subject to regulation. While environmental regulations do not normally impose material costs upon operations at our facilities, unexpected events, equipment malfunctions, human error and changes in law or regulations, among other factors, could result in unexpected costs, which could be material. Failure to successfully integrate acquired businesses could negatively impact our balance sheet and results of operations. Strategic acquisitions are an important element of our growth strategy and the success of any acquisition we make depends in part on our ability to integrate the acquired business and realize anticipated synergies. The process of integrating acquired businesses, particularly in new markets, may involve unforeseen difficulties and may require a disproportionate amount of our management’s attention and our financial and other resources. For example, the success of our significant acquisitions depends, in large part, on our ability to realize the anticipated benefits, including cost savings from combining the acquired businesses with ours. To realize these anticipated benefits, we must be able to successfully integrate our business and the acquired businesses, and this integration is complex and time-consuming. We may encounter challenges in the integration process including the following: • challenges and difficulties associated with managing our larger, more complex, company; • conforming standards, controls, procedures and policies, business cultures and compensation and benefits structures between the two businesses; • consolidating corporate and administrative infrastructures; • coordinating geographically dispersed organizations; • potential unknown liabilities and unforeseen expenses or delays associated with an acquisition; and • our ability to deliver on our strategy going forward. Further, our acquisitions subject us to liabilities (including tax liabilities) that may exist at an acquired company, some of which may be unknown. Although we and our advisors conduct due diligence on the operations of businesses we acquire, there can be no guarantee that we are aware of all liabilities of an acquired company. These liabilities, and any additional risks and uncertainties related to an acquired company not known to us or that we may deem immaterial or unlikely to occur at the time of the acquisition, could negatively impact our future business, financial condition and results of operations. We can give no assurance that we will ultimately be able to effectively integrate and manage the operations of any acquired business or realize anticipated synergies. The failure to successfully integrate the cultures, operating systems, procedures and information technologies of an acquired business could have a material adverse effect on our financial condition and results of operations. Our customer contracts may not always limit our liability and may sometimes contain terms that could lead to disputes in contract interpretation. Our customer contracts typically contain provisions limiting our liability regarding the loss or destruction of, or damage to, records, information, or other items stored with us. Our liability for physical storage is often limited to a nominal fixed amount per item or unit of storage (such as per cubic foot) and our liability for digital solutions, data center, destruction and other services unrelated to records, information and other items stored with us is often limited to a percentage of annual revenue under the contract; however, some of our contracts with large customers and some of the contracts assumed in our acquisitions contain no such limits or contain higher limits. We can provide no assurance that our limitation of liability provisions will be enforceable in all instances or, if enforceable, that they would otherwise protect us from liability. In addition to provisions limiting our liability, our customer contracts generally include a schedule setting forth the majority of the customer-specific terms, including storage rental and related service pricing and service delivery terms. Our customers may dispute the interpretation of various provisions in their contracts. In the past, we have had relatively few disputes with our customers regarding the terms of their customer contracts, and most disputes to date have not been material, but we can provide no assurance that we will not have material disputes in the future. Moreover, as we expand our operations in digital solutions and storage of fine arts and other valuable items and respond to customer demands for higher limitation of liability as a result of regulatory changes, our exposure to contracts with higher or no limitations of liability and disputes with customers over the interpretation of their contracts may increase. Although we maintain a comprehensive insurance program, we can provide no assurance that we will be able to maintain insurance policies on acceptable terms or with high enough coverage amounts to cover losses to us in connection with customer contract disputes. IRON MOUNTAIN 2020 FORM 10-K 11 Table of Contents Part I International operations may pose unique risks. As of December 31, 2020, we operated in 55 countries outside the United States. Our international operations account for a significant portion of our overall operations, and as part of our growth strategy, we expect its share to increase as we continue to acquire or invest in businesses in select foreign markets, including countries where we do not currently operate. International operations are subject to numerous risks, including: • the impact of foreign government regulations and United States regulations that apply to us in foreign countries where we operate; in particular, we are subject to United States and foreign anti-corruption laws, such as the Foreign Corrupt Practices Act and the United Kingdom Bribery Act, and, although we have implemented internal controls, policies and procedures and training to deter prohibited practices, our employees, partners, contractors or agents may violate or circumvent such policies and the law; • the volatility of certain foreign economies in which we operate; • political uncertainties and changes in the global political climate or other global events, such as the recent trade wars involving the U.S. or global pandemics, which may impose restrictions on, or create additional risk in relation to, global operations, which risks may become more pronounced as we consolidate operations across countries and need to move records and data across borders; • unforeseen liabilities, particularly within acquired businesses; • costs and difficulties associated with managing international operations of varying sizes and scale, including operations involving cross-border service offerings; • our operations in the United Kingdom and the European Union may be adversely affected by the exit from the European Union (Brexit) by the United Kingdom, and the associated uncertainty; • the risk that business partners upon whom we depend for technical assistance or management and acquisition expertise in some markets outside of the United States will not perform as expected; • difficulties attracting and retaining local management and key employees to operate our business in certain countries; and • cultural differences and differences in business practices and operating standards, as well as risks and challenges in expanding into countries where we have no prior operational experience. Our use of joint ventures could expose us to additional risks and liabilities, including our reliance on joint venture partners that may have economic and business interests that are inconsistent with our business interests, our lack of sole decision-making authority, and disputes between us and our joint venture partners. As part of our growth strategy, particularly in connection with our international and data center expansion, we currently, and may in the future, co-invest with third parties using joint ventures. These joint ventures can result in our holding non-controlling interests in, or having shared responsibility for managing the affairs of, a property or portfolio of properties, business, partnership, joint venture or other entity. As a result, in connection with our pursuit or entrance into any such joint venture, we may be subject to additional risks, including: • our ability to sell our interests in the joint venture may be limited by the joint venture agreement; • our ability to grow our storage volume when we rely on non-controlling interests in joint ventures for this growth; • we may not have the right to exercise sole decision-making authority regarding the properties, business, partnership, joint venture or other entity; • if our partners become bankrupt or fail to fund their share of required capital contributions, we may choose or be required to contribute such capital; • our partners may have economic, tax or other interests or goals that are inconsistent with our interests or goals, and that could affect our ability to negotiate satisfactory joint venture terms, to operate the property or business or maintain our qualification for taxation as a REIT; • our partners may be subject to different laws or regulations than us, or may be structured differently than us for tax purposes, which could create conflicts of interest and/or affect our ability to maintain our qualification for taxation as a REIT; • our partners may take actions that are not within our control, which could require us to dispose of the joint venture asset, transfer it to a taxable REIT subsidiary (“TRS”) in order for us to maintain our qualification for taxation as a REIT, or purchase such partner’s interests or assets at an above-market price; • we may agree to restrictions on our ability to expand our business in certain geographies independently or with other partners; • disputes between us and our partners may result in litigation or arbitration that would increase our expenses and prevent our management from focusing their time and effort on our day-to-day business; and • we may in certain circumstances be liable for the actions of our third-party partners or guarantee all or a portion of the joint venture’s liabilities, which may require us to pay an amount greater than our investment in the joint venture. Each of these factors may result in returns on these investments being less than we expect or in losses, and our financial and operating results may be adversely affected. 12 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part I Significant costs or disruptions at our data centers could adversely affect our business, financial condition and results of operations. Since 2017, we have substantially expanded our Global Data Center Business and we expect to continue to grow our Global Data Center Business. For example, we paid an aggregate cash purchase price of over $1.7 billion for data center businesses we acquired in 2017 and 2018 and incurred other costs associated with the development of real estate to support this business. Our Global Data Center Business depends on providing customers with highly reliable facilities, power infrastructure and operations solutions, and we will need to retain and hire qualified personnel to manage our data centers. Service interruptions or significant equipment damage could result in difficulty maintaining service level commitment obligations that we owe to certain of our customers. Service interruptions or equipment damage may occur at one or more of our data centers because of numerous factors, including: human error; equipment failure; physical, electronic and cyber security breaches; fire, hurricane, flood, earthquake and other natural disasters; water damage; fiber cuts; extreme temperatures; power loss or telecommunications failure; war, terrorism and any related conflicts or similar events worldwide; and sabotage and vandalism. We also purchase significant amounts of electricity from generating facilities and utility companies that are subject to environmental laws, regulations and permit requirements. These environmental requirements are subject to material change, which could result in increases in our electricity suppliers’ compliance costs that may be passed through to us. In addition, climate change may increase the likelihood that our data centers are affected by some of these factors. While these risks could impact our overall business, they could have a more significant impact on our Global Data Center Business, where we have service level commitment obligations to certain of our customers. As a result, service interruptions or significant equipment damage at our data centers could result in difficulty maintaining service level commitments to these customers and potential claims related to such failures. Because our data centers are critical to many of our customers’ businesses, service interruptions or significant equipment damage at our data centers could also result in lost profits or other indirect or consequential damages to our customers. Our Global Data Center Business is susceptible to regional costs of power, power shortages, planned or unplanned power outages and limitations on the availability of adequate power resources. We rely on third parties to provide power to our data centers. We are therefore subject to an inherent risk that such third parties may fail to deliver such power in adequate quantities or on a consistent basis. If the power delivered to our data centers is insufficient or interrupted, we would be required to provide power through the operation of our on-site generators, generally at a significantly higher operating cost. Additionally, global fluctuations in the price of power can increase the cost of energy, and we may be limited in our ability to, or may not always choose to, pass these increased costs on to our customers. We also rely on third party telecommunications carriers to provide internet connectivity to our customers. These carriers may elect not to offer or to restrict their services within our data centers or may elect to discontinue such services. Furthermore, carriers may face business difficulties, which could affect their ability to provide telecommunications services or the quality of such services. If connectivity is interrupted or terminated, our financial condition and results of operations may be adversely affected. Events such as these may also impact our reputation as a data center provider which could adversely affect our results of operations. Our data center expansion requires a significant amount of capital and, if we are not able to raise that capital on advantageous terms, our ability to fund our data center expansion may be limited. Our data center expansion requires significant capital commitments. In addition, we may be required to commit significant operational and financial resources in connection with the organic growth of our Global Data Center Business, generally 12 to 18 months in advance of securing customer contracts, and we may not have enough customer demand to support these data centers when they are built. There can be no assurance we will have sufficient customer demand to support these data centers or data centers we have acquired or that we will not be adversely affected by the risks noted above, which could make it difficult for us to realize expected returns on our investments, if any. We have operations in numerous foreign countries and, as a result, are subject to foreign exchange translation risk, which could have an adverse effect on our financial results. We conduct business operations in numerous foreign countries through our foreign subsidiaries or affiliates, which primarily transact in their respective local currencies. Those local currencies are translated into United States dollars at the applicable exchange rates for inclusion in our consolidated financial statements. The results of operations of, and certain of our debt balances (including intercompany debt balances) associated with, our international businesses are exposed to foreign exchange rate fluctuations. Upon translation, operating results may differ materially from expectations, and significant shifts in foreign currencies can impact our short-term results, as well as our long-term forecasts and targets. Failure to comply with certain regulatory and contractual requirements under our United States Government contracts could adversely affect our revenues, operating results and financial position and reputation. Having the United States Government as a customer subjects us to certain regulatory and contractual requirements. Failure to comply with these requirements could subject us to investigations, price reductions, up to treble damages, and civil penalties. Noncompliance with certain regulatory and contractual requirements could also result in us being suspended or debarred from future United States Government contracting. We may also face private derivative securities claims because of adverse government actions. Any of these outcomes could have a material adverse effect on our revenues, operating results, financial position and reputation. IRON MOUNTAIN 2020 FORM 10-K 13 Table of Contents Part I We may be subject to certain costs and potential liabilities associated with the real estate required for our business. Because our business is heavily dependent on real estate, we face special risks attributable to the real estate we own or lease. Such risks include: • acquisition and occupancy costs that make it difficult to meet anticipated margins and difficulty locating suitable facilities due to a relatively small number of available buildings having the desired characteristics in some real estate markets; • uninsured losses or damage to our storage facilities due to an inability to obtain full coverage on a cost-effective basis for some casualties, such as fires, hurricanes and earthquakes, or any coverage for certain losses, such as losses from riots or terrorist activities; • • inability to use our real estate holdings effectively and costs associated with vacating or consolidating facilities if the demand for physical storage were to diminish; and liability under environmental laws for the costs of investigation and cleanup of contaminated real estate owned or leased by us, whether or not (i) we know of, or were responsible for, the contamination, or (ii) the contamination occurred while we owned or leased the property. Some of our current and formerly owned or leased properties were previously used by entities other than us for industrial or other purposes, or were affected by waste generated from nearby properties, that involved the use, storage, generation and/or disposal of hazardous substances and wastes, including petroleum products. In some instances this prior use involved the operation of underground storage tanks or the presence of asbestos-containing materials. Where we are aware of environmental conditions that require remediation, we undertake appropriate activity, in accordance with all legal requirements. Although we have from time to time conducted limited environmental investigations and remedial activities at some of our former and current facilities, we have not undertaken an environmental review of all of our properties, including those we have acquired. We therefore may be potentially liable for environmental costs like those discussed above and may be unable to sell, rent, mortgage or use contaminated real estate owned or leased by us. Environmental conditions for which we might be liable may also exist at properties that we may acquire in the future. In addition, future regulatory action and environmental laws may impose costs for environmental compliance that do not exist today. Unexpected events, including those resulting from climate change, could disrupt our operations and adversely affect our reputation and results of operations. Unexpected events, including fires or explosions at our facilities, war or terrorist activities, natural disasters such as earthquakes and wildfires, unplanned power outages, supply disruptions, failure of equipment or systems, and severe weather events, such as droughts, heat waves, hurricanes, and flooding, could adversely affect our reputation and results of operations through physical damage to our facilities and equipment and through physical damage to, or disruption of, local infrastructure. During the past several years we have seen an increase in the frequency and intensity of severe weather events and we expect this trend to continue due to climate change. Some of our key facilities worldwide are vulnerable to severe weather events, and global weather pattern changes may also pose long-term risks of physical impacts to our business. Our customers rely on us to securely store and timely retrieve their critical information, and, while we maintain disaster recovery and business continuity plans that would be implemented these situations, these unexpected events could result in customer service disruption, physical damage to one or more key operating facilities and the information stored in those facilities, the temporary closure of one or more key operating facilities or the temporary disruption of information systems, each of which could negatively impact our reputation and results of operations. In addition, these unexpected events could negatively impact our reputation if such events result in adverse publicity, governmental investigations or litigation or if customers do not otherwise perceive our response to be adequate. Fluctuations in commodity prices may affect our operating revenues and results of operations. Our operating revenues and results of operations are impacted by significant changes in commodity prices. In particular, our secure shredding operations generate revenue from the sale of shredded paper for recycling. Further, significant declines in the cost of paper may continue to negatively impact our revenues and results of operations, and increases in other commodity prices, including steel, may negatively impact our results of operations. Failure to manage and adequately implement our new IT systems could negatively affect our business. We rely on IT infrastructure, including hardware, networks, software, people and processes, to provide information to support assessments and conclusions about our operating performance. We are in the process of upgrading a number of our IT systems, including consolidating our existing billing systems, and we face risks relating to these transitions. For example, we may incur greater costs than we anticipate training our personnel on the new systems, we may experience service disruptions or errors in accurately capturing data or retaining our records, and we may be delayed in meeting our various reporting obligations. There can be no assurance that we will manage our IT systems and implement these new systems as planned or that we will do so without disruptions to our operations, which could have an adverse effect on our business, financial condition, results of operations and cash flows. 14 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part I RISKS RELATED TO OUR INDEBTEDNESS Our substantial indebtedness could adversely affect our financial health and prevent us from fulfilling our obligations under our various debt instruments. We have a significant amount of indebtedness. As of December 31, 2020, our total long-term debt was approximately $8.7 billion, stockholders equity was approximately $1.1 billion and we had cash and cash equivalents (including restricted cash) of approximately $205.1 million. Our substantial indebtedness could have important consequences to our current and potential investors. These risks include: • • • • • • • • inability to satisfy our obligations with respect to our various debt instruments; inability to make borrowings to fund future working capital, capital expenditures and strategic opportunities, including acquisitions, further organic development of our Global Data Center Business and expansions into adjacent businesses, and other general corporate requirements, including possible required repurchases, redemptions or prepayments of our various indebtedness; limits on our distributions to stockholders; in this regard if these limits prevented us from satisfying our REIT distribution requirements, we could fail to remain qualified for taxation as a REIT or, if these limits do not jeopardize our qualification for taxation as a REIT but do nevertheless prevent us from distributing 100% of our REIT taxable income, we will be subject to federal corporate income tax, and potentially a nondeductible excise tax, on the retained amounts; limits on future borrowings under our existing or future credit arrangements, which could affect our ability to pay our indebtedness or to fund our other liquidity needs; inability to generate sufficient funds to cover required interest payments; restrictions on our ability to refinance our indebtedness on commercially reasonable terms; limits on our flexibility in planning for, or reacting to, changes in our business and the information management services industry; and inability to adjust to adverse economic conditions that could place us at a disadvantage to our competitors with less debt and who, therefore, may be able to take advantage of opportunities that our indebtedness prevents us from pursuing. We are subject to risks associated with debt financing, including the risk that our cash flow could be insufficient to meet required payments on our debt. In particular, if as a result of the COVID-19 pandemic our revenues, cash flows and/or Adjusted EBITDA continue to decline or we incur additional indebtedness, we may be unable to make required payments on our debt or to satisfy the financial and other covenants contained in our Credit Agreement (as defined in Note 6 to Notes to Consolidated Financial Statements included in this Annual Report) and our indentures. In addition, the expected elimination of the London Interbank Offered Rate (“LIBOR”) may adversely affect interest expense related to borrowings under certain of our credit arrangements and interest rate swaps, and could disrupt financial markets generally, which could potentially negatively impact our financial condition. Despite our current indebtedness levels, we may still be able to incur substantially more debt. The terms of our indentures generally do not cap the maximum amount of additional funds that may be borrowed under our Credit Agreement and possible future credit arrangements. Restrictive debt covenants may limit our ability to pursue our growth strategy. Our Credit Agreement and our indentures contain covenants restricting or limiting our ability to, among other things: • incur additional indebtedness; • pay dividends or make other restricted payments; • make asset dispositions; • create or permit liens; • sell, transfer or exchange assets; • guarantee certain indebtedness; • make acquisitions and other investments; and • enter into partnerships and joint ventures. These restrictions and our long-term commitment to reduce our leverage ratio may adversely affect our ability to pursue our acquisition and other growth strategies. IRON MOUNTAIN 2020 FORM 10-K 15 Table of Contents Part I We may not have the ability to raise the funds necessary to finance the repurchase of outstanding senior notes upon a change of control event as required by our indentures. Upon the occurrence of a “change of control,” as defined in our indentures, we will be required to offer to repurchase all of our outstanding senior notes. However, it is possible that we will not have sufficient funds at the time of a change of control to make the required repurchase of any outstanding notes or that restrictions in our Credit Agreement will not allow such repurchases. Certain important corporate events, however, such as leveraged recapitalizations that would increase the level of our indebtedness, would not constitute a “change of control” under our indentures. Iron Mountain Incorporated (“IMI”) is a holding company, and, therefore, its ability to make payments on its various debt obligations depends in large part on the operations of its subsidiaries. IMI is a holding company; substantially all of its assets consist of the equity in its subsidiaries, and substantially all of its operations are conducted by its direct and indirect consolidated subsidiaries. As a result, its ability to make payments on its debt obligations will be dependent upon the receipt of sufficient funds from its subsidiaries, whose ability to distribute funds may be limited by local capital requirements, joint venture structures and other applicable restrictions. However, our various debt obligations are guaranteed, on a joint and several and full and unconditional basis, by IMI’s U.S. subsidiaries that represent the substantial majority of its U.S. operations. RISKS RELATED TO OUR TAXATION AS A REIT If we fail to remain qualified for taxation as a REIT, we will be subject to tax at corporate income tax rates and will not be able to deduct distributions to stockholders when computing our taxable income. We have elected to be taxed as a REIT since our 2014 taxable year. We believe that our organization and method of operation comply with the rules and regulations promulgated under the Internal Revenue Code of 1986, as amended (the “Code”), such that we will continue to qualify for taxation as a REIT. However, we can provide no assurance that we will remain qualified for taxation as a REIT. If we fail to remain qualified for taxation as a REIT, we will be taxed at corporate income tax rates unless certain relief provisions apply. Qualification for taxation as a REIT involves the application of highly technical and complex provisions of the Code to our operations as well as various factual determinations concerning matters and circumstances not entirely within our control. There are limited judicial or administrative interpretations of applicable REIT provisions of the Code. If, in any taxable year, we fail to remain qualified for taxation as a REIT and are not entitled to relief under the Code: • we will not be allowed a deduction for distributions to stockholders in computing our taxable income; • we will be subject to federal and state income tax on our taxable income at regular corporate income tax rates; and • we would not be eligible to elect REIT status again until the fifth taxable year that begins after the first year for which we failed to qualify for taxation as a REIT. Any such corporate tax liability could be substantial and would reduce the amount of cash available for other purposes. If we fail to remain qualified for taxation as a REIT, we may need to borrow additional funds or liquidate some investments to pay any additional tax liability. Accordingly, funds available for investment and distributions to stockholders could be reduced. As a REIT, failure to make required distributions would subject us to federal corporate income tax. We expect to continue paying regular quarterly distributions; however, the amount, timing and form of our regular quarterly distributions will be determined, and will be subject to adjustment, by our board of directors. To remain qualified for taxation as a REIT, we are generally required to distribute at least 90% of our REIT taxable income (determined without regard to the dividends paid deduction and excluding net capital gain) each year, or in limited circumstances, the following year, to our stockholders. Generally, we expect to distribute all or substantially all of our REIT taxable income. If our cash available for distribution falls short of our estimates, we may be unable to maintain distributions that approximate our REIT taxable income and may fail to remain qualified for taxation as a REIT. In addition, our cash flows from operations may be insufficient to fund required distributions as a result of differences in timing between the actual receipt of income and the payment of expenses and the recognition of income and expenses for federal income tax purposes, or the effect of nondeductible expenditures. To the extent that we satisfy the 90% distribution requirement but distribute less than 100% of our REIT taxable income, we will be subject to federal corporate income tax on our undistributed taxable income. In addition, we will be subject to a 4% nondeductible excise tax on our undistributed taxable income if the actual amount that we distribute to our stockholders for a calendar year is less than the minimum amount specified under the Code. 16 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part I We may be required to borrow funds, sell assets or raise equity to satisfy our REIT distribution requirements, to comply with asset ownership tests or to fund capital expenditures, future growth and expansion initiatives. In order to satisfy our REIT distribution requirements and maintain our qualification and taxation as a REIT, or to fund capital expenditures, future growth and expansion initiatives, we may need to borrow funds, sell assets or raise equity, even if our financial condition or the then-prevailing market conditions are not favorable for these borrowings, sales or offerings. Furthermore, the REIT distribution requirements and our commitment to investors on dividend growth may result in increasing our financing needs to fund capital expenditures, future growth and expansion initiatives, which would increase our indebtedness. An increase in our outstanding debt could lead to a downgrade of our credit ratings, which could negatively impact our ability to access credit markets. Further, certain of our current debt instruments limit the amount of indebtedness we and our subsidiaries may incur. Additional financing, therefore, may be unavailable, more expensive or restricted by the terms of our outstanding indebtedness. For a discussion of risks related to our substantial level of indebtedness, see “Risks Related to Our Indebtedness.” Complying with REIT requirements may limit our flexibility, cause us to forgo otherwise attractive opportunities that we would otherwise pursue to execute our growth strategy, or otherwise reduce our income and amounts available for distribution to our stockholders. To remain qualified for taxation as a REIT, we must satisfy tests concerning, among other things, the sources of our income, the nature and diversification of our assets and the amounts we distribute to our stockholders. Thus, compliance with these tests may require us to refrain from certain activities and may hinder our ability to make certain attractive investments, including the purchase of non-REIT qualifying operations or assets, the expansion of non-real estate activities, and investments in the businesses to be conducted by our TRSs, and to that extent limit our opportunities and our flexibility to change our business strategy. This may restrict our ability to enter into joint ventures or acquire minority interests of companies. Furthermore, acquisition opportunities in domestic and international markets may be adversely affected if we need or require the target company to comply with some REIT requirements prior to closing. We conduct a significant portion of our business activities, including our information management services businesses and several of our international operations, through domestic and foreign TRSs. Under the Code, no more than 25% of the value of the assets of a REIT may be represented by securities of one or more TRSs and other nonqualifying assets. In addition, no more than 20% of the value of the assets of a REIT may be represented by securities of one or more TRSs within the overall 25% nonqualifying assets limitation. These limitations may affect our ability to make additional investments in non-REIT qualifying operations or assets or in international operations through TRSs. If we fail to comply with specified asset ownership tests applicable to REITs as measured at the end of any calendar quarter, we generally must correct such failure within 30 days after the end of the applicable calendar quarter or qualify for statutory relief provisions to avoid losing our qualification for taxation as a REIT. As a result, we may be required to liquidate assets or to forgo our pursuit of otherwise attractive investments. These actions may reduce our income and amounts available for distribution to our stockholders. As a REIT, we are limited in our ability to fund distribution payments using cash generated through our TRSs. Our ability to receive distributions from our TRSs is limited by the rules with which we must comply to maintain our qualification for taxation as a REIT. In particular, at least 75% of our gross income for each taxable year as a REIT must be derived from real estate, which generally includes gross income from providing customers with secure storage space or colocation or wholesale data center space. Consequently, no more than 25% of our gross income may consist of dividend income from our TRSs and other nonqualifying types of income. Thus, our ability to receive distributions from our TRSs may be limited, which may impact our ability to fund distributions to our stockholders using cash flows from our TRSs. Specifically, if our TRSs become highly profitable, we might become limited in our ability to receive net income from our TRSs in an amount required to fund distributions to our stockholders commensurate with that profitability. In addition, a significant amount of our income and cash flows from our TRSs is generated from our international operations. In many cases, there are local withholding taxes and currency controls that may impact our ability or willingness to repatriate funds to the United States to help satisfy REIT distribution requirements. Our extensive use of TRSs, including for certain of our international operations, may cause us to fail to remain qualified for taxation as a REIT. Our operations include an extensive use of TRSs. The net income of our TRSs is not required to be distributed to us, and income that is not distributed to us generally is not subject to the REIT income distribution requirement. However, there may be limitations on our ability to accumulate earnings in our TRSs and the accumulation or reinvestment of significant earnings in our TRSs could result in adverse tax treatment. In particular, if the accumulation of cash in our TRSs causes (1) the fair market value of our securities in our TRSs to exceed 20% of the fair market value of our assets or (2) the fair market value of our securities in our TRSs and other nonqualifying assets to exceed 25% of the fair market value of our assets, then we will fail to remain qualified for taxation as a REIT. Further, a substantial portion of our operations are conducted overseas, and a material change in foreign currency rates could also affect the value of our foreign holdings in our TRSs, negatively impacting our ability to remain qualified for taxation as a REIT. IRON MOUNTAIN 2020 FORM 10-K 17 Table of Contents Part I Even if we remain qualified for taxation as a REIT, some of our business activities are subject to corporate level income tax and foreign taxes, which will continue to reduce our cash flows, and we will have potential deferred and contingent tax liabilities. Even if we remain qualified for taxation as a REIT, we may be subject to some federal, state, local and foreign taxes, including taxes on any undistributed income, and state, local or foreign income, franchise, property and transfer taxes. In addition, we could in certain circumstances be required to pay an excise or penalty tax, which could be significant in amount, in order to utilize one or more relief provisions under the Code to maintain our qualification for taxation as a REIT. A portion of our business is conducted through wholly-owned TRSs because certain of our business activities could generate nonqualifying REIT income as currently structured and operated. The income of our domestic TRSs will continue to be subject to federal and state corporate income taxes. In addition, our international assets and operations will continue to be subject to taxation in the foreign jurisdictions where those assets are held or those operations are conducted. Any of these taxes would decrease our earnings and our available cash. We will also be subject to a federal corporate level income tax at the highest regular corporate income tax rate (currently 21%) on gain recognized from a sale of a REIT asset where our basis in the asset is determined by reference to the basis of the asset in the hands of a C corporation (such as an asset that we hold in one of our qualified REIT subsidiaries (“QRSs”) following the liquidation or other conversion of a former TRS). This 21% tax is generally applicable to any disposition of such an asset during the five-year period after the date we first owned the asset as a REIT asset to the extent of the built-in-gain based on the fair market value of such asset on the date we first held the asset as a REIT asset. In addition, any depreciation recapture income that we recognize because of accounting method changes that we make in connection with our acquisition activities will be fully subject to this 21% tax. Complying with REIT requirements may limit our ability to hedge effectively and increase the cost of our hedging and may cause us to incur tax liabilities. The REIT provisions of the Code limit our ability to hedge assets, liabilities, revenues and expenses. Generally, income from hedging transactions that we enter into to manage risk of interest rate changes with respect to borrowings made or to be made by us to acquire or carry real estate assets and income from certain currency hedging transactions related to our non- United States operations, as well as income from qualifying counteracting hedges, do not constitute “gross income” for purposes of the REIT gross income tests. To the extent that we enter into other types of hedging transactions, the income from those transactions is likely to be treated as nonqualifying income for purposes of the REIT gross income tests. As a result of these rules, we may need to limit our use of advantageous hedging techniques or implement those hedges through our TRSs. This could increase the cost of our hedging activities because our TRSs would be subject to tax on income or gains resulting from hedges entered into by them and may expose us to greater risks associated with changes in interest rates or exchange rates than we would otherwise want to bear. In addition, hedging losses in any of our TRSs generally will not provide any tax benefit, except for being carried forward for possible use against future income or gain in the TRSs. Distributions payable by REITs generally do not qualify for preferential tax rates. Dividends payable by United States corporations to noncorporate stockholders, such as individuals, trusts and estates, are generally eligible for reduced United States federal income tax rates applicable to “qualified dividends.” Distributions paid by REITs generally are not treated as “qualified dividends” under the Code, and the reduced rates applicable to such dividends do not generally apply. However, for tax years beginning before 2026, REIT dividends paid to noncorporate stockholders are generally taxed at an effective tax rate lower than applicable ordinary income tax rates due to the availability of a deduction under the Code for specified forms of income from passthrough entities. More favorable rates will nevertheless continue to apply to regular corporate “qualified” dividends, which may cause some investors to perceive that an investment in a REIT is less attractive than an investment in a non-REIT entity that pays dividends, thereby reducing the demand and market price of our common stock. 18 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part I The ownership and transfer restrictions contained in our certificate of incorporation may not protect our qualification for taxation as a REIT, could have unintended antitakeover effects and may prevent our stockholders from receiving a takeover premium. In order for us to remain qualified for taxation as a REIT, no more than 50% of the value of outstanding shares of our capital stock may be owned, beneficially or constructively, by five or fewer individuals at any time during the last half of each taxable year. In addition, rents from “affiliated tenants” will not qualify as qualifying REIT income if we own 10% or more by vote or value of the customer, whether directly or after application of attribution rules under the Code. Subject to certain exceptions, our certificate of incorporation prohibits any stockholder from owning, beneficially or constructively, more than (i) 9.8% in value of the outstanding shares of all classes or series of our capital stock or (ii) 9.8% in value or number, whichever is more restrictive, of the outstanding shares of any class or series of our capital stock. We refer to these restrictions collectively as the “ownership limits” and we included them in our certificate of incorporation to facilitate our compliance with REIT tax rules. The constructive ownership rules under the Code are complex and may cause the outstanding stock owned by a group of related individuals or entities to be deemed to be constructively owned by one individual or entity. As a result, the acquisition of less than 9.8% of our outstanding common stock (or the outstanding shares of any class or series of our capital stock) by an individual or entity could cause that individual or entity or another individual or entity to own constructively in excess of the relevant ownership limits. Any attempt to own or transfer shares of our common stock or of any of our other capital stock in violation of these restrictions may result in the shares being automatically transferred to a charitable trust or may be void. Even though our certificate of incorporation contains the ownership limits, there can be no assurance that these provisions will be effective to prevent our qualification for taxation as a REIT from being jeopardized, including under the affiliated tenant rule. Furthermore, there can be no assurance that we will be able to monitor and enforce the ownership limits. If the restrictions in our certificate of incorporation are not effective and, as a result, we fail to satisfy the REIT tax rules described above, then absent an applicable relief provision, we will fail to remain qualified for taxation as a REIT. In addition, the ownership and transfer restrictions could delay, defer or prevent a transaction or a change in control that might involve a premium price for our stock or otherwise be in the best interest of our stockholders. As a result, the overall effect of the ownership and transfer restrictions may be to render more difficult or discourage any attempt to acquire us, even if such acquisition may be favorable to the interests of our stockholders. Legislative or other actions affecting REITs could have a negative effect on us or our stockholders. At any time, the federal or state income tax laws governing REITs, the administrative interpretations of those laws, or local laws impacting our REIT structure for our international operations may be amended. Federal, state and local tax laws are constantly under review by persons involved in the legislative process, the IRS, the United States Department of the Treasury (“Treasury”) and state and local taxing authorities. Changes to the tax laws, regulations and administrative interpretations or local laws governing our international operations, which may have retroactive application, could adversely affect us. In addition, some of these changes could have a more significant impact on us as compared to other REITs due to the nature of our business and our substantial use of TRSs, particularly non-United States TRSs or how we have structured our operations outside the United States to comply with our REIT structure. We cannot predict with certainty whether, when, in what forms, or with what effective dates, the tax laws, regulations, administrative interpretations or local laws applicable to us may be changed or if such laws would impact our ability to qualify for taxation as a REIT or the costs for doing so. GENERAL RISK FACTORS Our cash distributions are not guaranteed and may fluctuate. As a REIT, we are generally required to distribute at least 90% of our REIT taxable income to our stockholders. Furthermore, we are committed to growing our dividends, and have stated this publicly. Our board of directors, in its sole discretion, will determine, on a quarterly basis, the amount of cash to be distributed to our stockholders based on a number of factors including, but not limited to, our results of operations, cash flow and capital requirements, economic conditions, tax considerations, borrowing capacity and other factors, including debt covenant restrictions that may impose limitations on cash payments, future acquisitions and divestitures, any stock repurchase program and general market demand for our space and related services. Consequently, our distribution levels may fluctuate and we may not be able to meet our public commitments with respect to dividend growth. IRON MOUNTAIN 2020 FORM 10-K 19 Table of Contents Part I Our business could be adversely impacted if there are deficiencies in our disclosure controls and procedures or internal control over financial reporting. The design and effectiveness of our disclosure controls and procedures and internal control over financial reporting may not prevent all errors, misstatements or misrepresentations. While management will continue to review the effectiveness of our disclosure controls and procedures and internal control over financial reporting, there can be no guarantee that our internal control over financial reporting will be effective in accomplishing all control objectives all of the time. Moreover, the continuation of remote work arrangements as a result of the COVID-19 pandemic could negatively impact our internal controls over financial reporting. Furthermore, our disclosure controls and procedures and internal control over financial reporting with respect to entities that we do not control or manage may be substantially more limited than those we maintain with respect to the subsidiaries that we have controlled or managed over the course of time. Deficiencies, including any material weakness, in our internal control over financial reporting which may occur in the future could result in misstatements of our results of operations, restatements of our financial statements, a decline in our stock price, or otherwise materially adversely affect our business, reputation, results of operations, financial condition or liquidity. We face competition for customers. We compete with multiple businesses in all geographic areas where we operate; our current or potential customers may choose to use those competitors instead of us. In addition, if we are successful in winning customers from competitors, the process of moving their stored records into our facilities is often costly and time consuming. We also compete, in some of our business lines, with our current and potential customers’ internal storage and information management services capabilities and their cloud-based alternatives. These organizations may not begin or continue to use us for their future storage and information management service needs. The performance of our businesses relies on our ability to attract, develop, and retain talented personnel, while controlling our labor costs. We are highly dependent on skilled and qualified personnel to operate our businesses. The failure to attract and retain qualified employees or to effectively control our labor costs could negatively affect our competitive position and operating results. Our ability to control labor costs and attract qualified personnel is subject to numerous external factors, including prevailing wages, labor shortages, the impact of legislation or regulations governing wages and hours, labor relations, immigration, healthcare and other benefits, other employment-related costs and the hiring practices of our competitors. ITEM 1B. UNRESOLVED STAFF COMMENTS. None. ITEM 2. PROPERTIES. As of December 31, 2020, we conducted operations through 1,167 leased facilities and 281 owned facilities. Our facilities are divided among our reportable operating segments as follows: Global RIM Business (1,374), Global Data Center Business (15) and Corporate and Other Business (59). These facilities contain a total of approximately 92.7 million square feet of space. A breakdown of owned and leased facilities by country (and by state within the United States) is listed below: 20 IRON MOUNTAIN 2020 FORM 10-K Table of Contents COUNTRY/STATE North America United States (Including Puerto Rico) Alabama Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts (including Corporate Headquarters) Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina Ohio Oklahoma Oregon Pennsylvania Puerto Rico Rhode Island South Carolina Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Total United States Canada Total North America LEASED OWNED TOTAL NUMBER SQUARE FEET NUMBER SQUARE FEET NUMBER SQUARE FEET Part I 3 8 2 66 10 4 4 1 33 10 2 15 6 2 3 3 4 — 19 8 13 12 3 10 3 1 7 — 34 3 20 19 14 5 11 24 4 1 4 5 40 2 2 12 7 2 6 467 49 516 312,473 496,448 63,604 5,606,499 499,546 199,114 309,067 1,670 2,356,117 826,606 105,021 1,213,808 344,516 145,138 253,919 116,000 388,475 — 2,032,517 545,039 785,563 908,474 201,300 1,225,648 35,990 34,560 276,520 — 3,091,948 151,473 921,775 976,504 1,064,729 228,425 384,296 2,335,704 237,969 70,159 247,375 256,743 2,172,049 78,148 55,200 685,369 719,991 105,502 389,857 33,456,848 3,076,099 36,532,947 1 6 — 10 4 6 1 — 5 5 — 7 — 1 — 4 — 1 2 8 6 — — 5 — 3 1 1 8 — 13 3 5 — 1 4 1 1 2 4 27 1 — 7 5 — 1 160 16 176 12,621 1,207,281 — 958,856 484,490 665,013 120,921 — 263,930 265,049 — 1,309,975 — 14,200 — 418,760 — 95,000 83,442 1,173,503 345,736 — — 373,120 — 316,970 107,041 146,467 2,476,635 — 1,186,266 150,624 290,291 — 55,621 2,067,081 54,352 12,748 214,238 63,909 4 14 2 76 14 10 5 1 38 15 2 22 6 3 3 7 4 1 21 16 19 12 3 15 3 4 8 1 42 3 33 22 19 5 12 28 5 2 6 9 2,229,977 67 90,553 — 795,036 196,028 — 10,655 18,256,389 1,783,258 20,039,647 3 2 19 12 2 7 627 65 692 325,094 1,703,729 63,604 6,565,355 984,036 864,127 429,988 1,670 2,620,047 1,091,655 105,021 2,523,783 344,516 159,338 253,919 534,760 388,475 95,000 2,115,959 1,718,542 1,131,299 908,474 201,300 1,598,768 35,990 351,530 383,561 146,467 5,568,583 151,473 2,108,041 1,127,128 1,355,020 228,425 439,917 4,402,785 292,321 82,907 461,613 320,652 4,402,026 168,701 55,200 1,480,405 916,019 105,502 400,512 51,713,237 4,859,357 56,572,594 IRON MOUNTAIN 2020 FORM 10-K 21 Table of Contents Part I COUNTRY/STATE International Argentina Armenia Australia Austria Belarus Belgium Brazil Bulgaria Chile China Mainland (including China - Hong Kong S.A.R., China-Taiwan and China-Macau S.A.R.) Colombia Croatia Cyprus Czech Republic Denmark England Estonia Eswatini Finland France Germany Greece Hungary India Indonesia Ireland Kazakhstan Latvia Lesotho Lithuania Malaysia Mexico The Netherlands Northern Ireland New Zealand Norway Peru Philippines Poland Romania Russia Scotland Serbia Singapore Slovakia South Africa South Korea Spain Sweden Switzerland Thailand Turkey Ukraine United Arab Emirates Total International Total 22 IRON MOUNTAIN 2020 FORM 10-K LEASED OWNED TOTAL NUMBER SQUARE FEET NUMBER SQUARE FEET NUMBER SQUARE FEET 4 3 44 3 4 4 42 2 8 45 24 1 2 7 3 59 1 3 3 33 14 4 7 75 3 5 4 2 2 2 8 10 9 3 6 5 4 9 19 7 44 — 3 6 5 17 8 31 6 11 3 8 10 6 225,334 13,712 3,004,241 92,296 18,472 202,106 2,854,580 154,204 295,030 1,878,851 938,325 36,737 51,118 152,889 161,361 2,969,416 38,861 6,997 95,896 2,111,261 690,283 291,273 350,898 3,211,253 85,423 133,153 46,482 58,710 4,736 60,543 443,149 478,471 602,564 129,083 413,959 194,321 63,949 338,040 796,561 412,214 1,743,914 — 98,876 297,581 173,792 483,181 257,233 766,667 759,793 283,104 205,827 675,751 208,050 314,628 651 30,375,149 1,167 66,908,096 4 — 2 1 — 1 7 — 10 1 — 1 2 — — 23 — — — 12 2 — — — 1 3 — — — — — 8 3 — — — 10 — — — — 4 — 3 — — — 5 — — 2 — — — 105 281 298,864 — 33,845 30,000 — 104,391 324,655 — 376,183 20,518 — 36,447 46,246 — — 1,175,907 — — — 936,486 93,226 — — — 37,674 158,558 — — — — — 585,885 102,199 — — — 433,770 — — — — 375,294 — 345,056 — — — 170,707 — — 105,487 — — — 8 3 46 4 4 5 49 2 18 46 24 2 4 7 3 82 1 3 3 45 16 4 7 75 4 8 4 2 2 2 8 18 12 3 6 5 14 9 19 7 44 4 3 9 5 17 8 36 6 11 5 8 10 6 524,198 13,712 3,038,086 122,296 18,472 306,497 3,179,235 154,204 671,213 1,899,369 938,325 73,184 97,364 152,889 161,361 4,145,323 38,861 6,997 95,896 3,047,747 783,509 291,273 350,898 3,211,253 123,097 291,711 46,482 58,710 4,736 60,543 443,149 1,064,356 704,763 129,083 413,959 194,321 497,719 338,040 796,561 412,214 1,743,914 375,294 98,876 642,637 173,792 483,181 257,233 937,374 759,793 283,104 311,314 675,751 208,050 314,628 5,791,398 25,831,045 756 1,448 36,166,547 92,739,141 Table of Contents Part I The leased facilities typically have initial lease terms of five to 10 years with one or more renewal options. In addition, some of the leases contain either a purchase option or a right of first refusal upon the sale of the property. We believe that the space available in our facilities is adequate to meet our current needs, although future growth may require that we lease or purchase additional real property. Our total building utilization and total racking utilization by region as of December 31, 2020 in Records Management and Data Management are as follows: REGION North America Europe Latin America Asia Total RECORDS MANAGEMENT(1) DATA MANAGEMENT BUILDING UTILIZATION RACKING UTILIZATION BUILDING UTILIZATION RACKING UTILIZATION 83% 83% 87% 86% 84% 90% 91% 91% 93% 91% 85% 49% 76% 66% 75% 97% 74% 81% 72% 90% (1) Total building utilization and total racking utilization for Records Management includes the utilization for GDS and Consumer Storage. See Note 2.i. to Notes to Consolidated Financial Statements included in this Annual Report for information regarding our minimum annual lease commitments as a lessee. See Schedule III—Schedule of Real Estate and Accumulated Depreciation in this Annual Report for information regarding the cost, accumulated depreciation and encumbrances associated with our owned real estate. The following table sets forth a summary of the lease expirations for leases in place related to our Global Data Center Business, for which we are the lessor, as of December 31, 2020. The information set forth in the table assumes that tenants exercise no renewal options and all early termination rights. YEAR 2021 2022 2023 2024 2025 2026 2027 Thereafter Total NUMBER OF LEASES EXPIRING TOTAL MEGAWATTS EXPIRING PERCENTAGE OF TOTAL MEGAWATTS EXPIRING ANNUALIZED TOTAL CONTRACT RENT EXPIRING (IN THOUSANDS) PERCENTAGE OF TOTAL CONTRACT VALUE ANNUALIZED RENT 594 320 261 81 48 14 3 19 1,340 18.1 17.6 18.7 8.9 11.6 7.6 6.8 41.1 130.4 13.9 % $ 13.5 % 14.4 % 6.8 % 8.9 % 5.8 % 5.2 % 31.5 % 100.0 % $ 57,614 46,544 50,762 22,497 25,593 15,683 6,944 59,851 285,488 20.2 % 16.3 % 17.8 % 7.9 % 9.0 % 5.5 % 2.4 % 20.9 % 100.0 % ITEM 3. LEGAL PROCEEDINGS. We are involved in litigation from time to time in the ordinary course of business. A portion of the defense and/or settlement costs associated with such litigation is covered by various commercial liability insurance policies purchased by us and, in limited cases, indemnification from third parties. In the opinion of management, no material legal proceedings are pending to which we, or any of our properties, are subject. ITEM 4. MINE SAFETY DISCLOSURES. None. IRON MOUNTAIN 2020 FORM 10-K 23 Table of Contents PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Our common stock is traded on the NYSE under the symbol “IRM". The closing price of our common stock on the NYSE on February 19, 2021 was $32.17. As of February 19, 2021, there were 8,071 holders of record of our common stock. See Note 8 to Notes to Consolidated Financial Statements included in this Annual Report for additional information on dividends declared on our common stock. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS We did not sell any unregistered equity securities during the three months ended December 31, 2020, nor did we repurchase any shares of our common stock during the three months ended December 31, 2020. ITEM 6. [RESERVED.] ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The following discussion should be read in conjunction with the Consolidated Financial Statements and Notes thereto and the other financial and operating information included elsewhere in this Annual Report. This discussion contains “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995 and in other securities laws. See “Cautionary Note Regarding Forward-Looking Statements” on page iii of this Annual Report and “Item 1A. Risk Factors” beginning on page 8 of this Annual Report. IRON MOUNTAIN 2020 FORM 10-K 25 Table of Contents Part II OVERVIEW COVID-19 In March 2020, the World Health Organization declared COVID-19 a pandemic. This resulted in U.S. federal, state and local and foreign governments and private entities mandating various restrictions, including travel restrictions, restrictions on public gatherings and stay-at-home orders and advisories. In response, we temporarily closed certain of our offices and facilities across the world and implemented certain travel restrictions for our employees. The preventative and protective actions that governments have ordered, or we or our customers have implemented, have resulted in a period of reduced service operations and business disruption for us, our customers and other third parties with which we do business. While we have broad geographic and customer diversification with operations in 56 countries and no single customer accounting for more than 1% of our revenue during the year ended December 31, 2020, COVID-19 is a global pandemic impacting numerous industries and geographies. While we do not currently believe that the implications of the COVID-19 pandemic have had a material adverse impact on our ability to collect our accounts receivable, global economic conditions related to the COVID-19 pandemic may have a material adverse effect on our customers, which could impact our future ability to collect our accounts receivable. We continue to monitor the credit worthiness of our customers and customer payment trends, as well as the related impact on our liquidity. We have taken certain actions during the year ended December 31, 2020 to manage our costs and capital expenditures, including, but not limited to: (i) the termination of nearly all of our temporary and contract workers; (ii) reductions in our full-time and part-time work forces; (iii) temporary furloughs, reduced hours or other temporary reduction measures; (iv) the deferral of certain previously planned non-essential capital investments; and (v) the implementation of a temporary freeze on future acquisitions. We can provide no assurance that the cost savings measures we have taken, or may take in future periods, will be sufficient to offset any future service level declines, and we continue to evaluate the need for these cost saving measures and additional cost saving measures as additional information regarding the COVID-19 pandemic and the related economic downturn becomes known. We have incurred certain costs due to the COVID-19 pandemic which are direct, incremental and not expected to recur once the pandemic ends, which include the purchase of personal protective equipment for our employees and incremental cleaning costs of our facilities, among other direct costs. We have excluded these costs in calculating our various non-GAAP measures as described below. PROJECT SUMMIT Compelling Adjusted EBITDA Benefits ~$375M Expected annual run-rate benefits realized exiting 2021 $165M Benefits delivered in 2020 Implementation Details • Project Summit began in Q4 2019 and is expected to be substantially completed by the end of 2021 • Cost to implement is estimated to be ~$450M In October 2019, we announced Project Summit, our global program designed to better position us for future growth and achievement of our strategic objectives. We expanded Project Summit during the first quarter of 2020 to include additional opportunities to streamline our business and operations, as well as accelerated the timing of certain opportunities previously identified. Such opportunities include leveraging new technology solutions to enable us to modernize our service delivery model and more efficiently utilize our fleet, labor and real estate. As a result of the program, we expect to reduce the number of positions at vice president and above by approximately 45%. The total program is expected to reduce our total managerial and administrative workforce by approximately 700 positions by the end of 2021. We have also reduced our services and operations workforce. As of December 31, 2020, we have completed approximately 70% of our planned workforce reductions. 26 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part II The activities associated with Project Summit began in the fourth quarter of 2019 and are expected to be substantially complete by the end of 2021. We expect the total program benefits associated with Project Summit to be fully realized exiting 2021. Including the expanded scope of Project Summit, we expect that Project Summit will improve annual Adjusted EBITDA (as defined below) by approximately $375.0 million exiting 2021. We will continue to evaluate our overall operating model, as well as various opportunities and initiatives, including those associated with real estate consolidation, system implementation and process changes, which could result in the identification and implementation of additional actions associated with Project Summit and incremental costs and benefits. 2020 Exiting 2021 $165 million $375 million (expected) We estimate that the implementation of Project Summit will result in total operating expenditures ("Restructuring Charges") of approximately $450.0 million that primarily consist of: (1) employee severance costs; (2) internal costs associated with the development and implementation of Project Summit initiatives; (3) professional fees, primarily related to third party consultants who are assisting with the design and execution of various initiatives as well as project management activities and (4) system implementation and data conversion costs. The following table presents (in millions) total Restructuring Charges related to Project Summit primarily related to employee severance costs, internal costs associated with the development and implementation of Project Summit initiatives and professional fees from the inception of Project Summit through December 31, 2020, for the year ended December 31, 2020 and for the year ended December 31, 2019: From the Inception of Project Summit through December 31, 2020 For the Year Ended December 31, 2020 For the Year Ended December 31, 2019 We have also incurred approximately $10.1 million in capital expenditures related to Project Summit from the inception of Project Summit through December 31, 2020. DIVESTMENTS In March 2019, we contributed our customer contracts and certain intellectual property and other assets used by us to operate our consumer storage business in the United States and Canada (the “IM Consumer Storage Assets”) and approximately $20.0 million in cash (gross of certain transaction expenses) (the “Cash Contribution”) to the MakeSpace JV (the “Consumer Storage Transaction”), established by us and MakeSpace. Upon the closing of the Consumer Storage Transaction on March 19, 2019, the MakeSpace JV owned (i) the IM Consumer Storage Assets, (ii) the Cash Contribution and (iii) the customer contracts, intellectual property and certain other assets used by MakeSpace to operate its consumer storage business in the United States. As part of the Consumer Storage Transaction, we received an initial equity interest of approximately 34% in the MakeSpace JV (the “MakeSpace Investment”). In the second quarter of 2020, we committed to participate in a round of equity funding for the MakeSpace JV whereby we agreed to contribute $36.0 million of the $45.0 million being raised in installments beginning in May 2020 through October 2021. At December 31, 2020, we owned approximately 39% of the outstanding equity in the MakeSpace JV. As described in Note 4 to Notes to Consolidated Financial Statements included in this Annual Report, we have concluded that the divestment of the IM Consumer Storage Assets in the Consumer Storage Transaction does not meet the criteria to be reported as discontinued operations in our consolidated financial statements. In connection with the Consumer Storage Transaction and the MakeSpace Investment, we also entered into a storage and service agreement with the MakeSpace JV to provide certain storage and related services to the MakeSpace JV (the “MakeSpace Agreement”). Revenues and expenses associated with the MakeSpace Agreement are presented as a component of our Global RIM Business segment. During the years ended December 31, 2020 and 2019, we recognized revenue of approximately $33.6 million and $22.5 million, respectively, associated with the MakeSpace Agreement. As a result of the Consumer Storage Transaction, we recorded a gain on sale of approximately $4.2 million to Other expense (income), net, in the first quarter of 2019, representing the excess of the fair value of the consideration received over the sum of (i) the carrying value of our consumer storage operations and (ii) the Cash Contribution. IRON MOUNTAIN 2020 FORM 10-K 27 Table of Contents Part II CHANGES IMPACTING COMPARABILITY WITH PRIOR YEAR During the fourth quarter of 2020, we made changes to the definitions of the following non-GAAP measures: Adjusted EBITDA, Adjusted EPS, FFO (Nareit) and FFO (Normalized) (each as defined below). These changes were implemented to align our definitions more closely with our peers. These changes impacted the results reported for these non-GAAP measures for fiscal years 2019 and 2018. However, these changes did not materially impact the discussion to what was included in previous filings. All prior periods have been recast to conform to these changes. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2019 for a comparison of 2019 to 2018. GENERAL RESULTS OF OPERATIONS - KEY TRENDS • In spite of the COVID-19 pandemic, we have experienced relatively steady volume in our Global RIM Business segment, with organic storage rental revenue growth driven primarily by revenue management. We expect organic storage rental revenue growth to benefit from revenue management and volume to be relatively stable in the near term. We expect our total organic storage rental revenue growth rate for 2021 to be approximately 2% to 4%. • Our organic service revenue during 2020 was significantly impacted by the COVID-19 pandemic, with declines primarily due to decreases in our service activity, particularly in regions where governments have imposed restrictions on our customers’ non- essential business operations. The severity of future service level declines is uncertain and is dependent, in part, on the duration and severity of the COVID-19 pandemic, the resulting governmental and business actions and the duration and strength of any ensuing economic recovery that may follow, particularly within the markets in which we operate and among our customers. Our revenues consist of storage rental revenues as well as service revenues and are reflected net of sales and value-added taxes. Storage rental revenues, which are considered a key driver of financial performance for the storage and information management services industry, consist primarily of recurring periodic rental charges related to the storage of materials or data (generally on a per unit basis) that are typically retained by customers for many years and revenues associated with our data center operations. Service revenues include charges for related service activities, the most significant of which include: (1) the handling of records, including the addition of new records, temporary removal of records from storage, refiling of removed records, customer termination and permanent withdrawal fees, project revenues, and courier operations, consisting primarily of the pickup and delivery of records upon customer request; (2) destruction services, consisting primarily of secure shredding of sensitive documents and the subsequent sale of shredded paper for recycling, the price of which can fluctuate from period to period; and (3) digital solutions, including the scanning, imaging and document conversion services of active and inactive records, and consulting services. Our service revenue growth has been negatively impacted by declining activity rates as stored records are becoming less active. While customers continue to store their records and tapes with us, they are less likely than they have been in the past to retrieve records for research and other purposes, thereby reducing service activity levels. BREAKDOWN OF REVENUES 28 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part II Cost of sales (excluding depreciation and amortization) consists primarily of labor, including wages and benefits for field personnel, facility occupancy costs (including rent and utilities), transportation expenses (including vehicle leases and fuel), other product cost of sales and other equipment costs and supplies. Of these, labor and facility occupancy costs are the most significant. Selling, general and administrative expenses consist primarily of wages and benefits for management, administrative, IT, sales, account management and marketing personnel, as well as expenses related to communications and data processing, travel, professional fees, bad debts, training, office equipment and supplies. Cost of sales (excluding depreciation and amortization) and Selling, general and administrative expenses for the year ended December 31, 2020 consists of the following: COST OF SALES SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Trends in facility occupancy costs are impacted by: • • • • the total number of facilities we occupy; the mix of properties we own versus properties we lease; fluctuations in per square foot occupancy costs; and the levels of utilization of these properties. Trends in total wages and benefits in dollars and as a percentage of total consolidated revenue are influenced by: • changes in headcount and compensation levels; • achievement of incentive compensation targets; • workforce productivity; and • variability in costs associated with medical insurance and workers’ compensation. The expansion of our international businesses has impacted the major cost of sales components and selling, general and administrative expenses. • Our international operations are more labor intensive relative to revenue than our operations in North America and, therefore, labor costs are a higher percentage of international operational revenue. • The overhead structure of our expanding international operations has generally not achieved the same level of overhead leverage as our North American operations, which may result in an increase in selling, general and administrative expenses as a percentage of consolidated revenue as our international operations become a larger percentage of our consolidated results. Our depreciation and amortization charges result primarily from depreciation related to storage systems, which include racking structures, buildings, building and leasehold improvements and computer systems hardware and software. Amortization relates primarily to customer relationship intangible assets, contract fulfillment costs and data center lease-based intangible assets. Both depreciation and amortization are impacted by the timing of acquisitions. IRON MOUNTAIN 2020 FORM 10-K 29 Table of Contents Part II Our consolidated revenues and expenses are subject to the net effect of foreign currency translation related to our operations outside the United States. It is difficult to predict the future fluctuations of foreign currency exchange rates and how those fluctuations will impact our Consolidated Statements of Operations. As a result of the relative size of our international operations, these fluctuations may be material on individual balances. Our revenues and expenses from our international operations are generally denominated in the local currency of the country in which they are derived or incurred. Therefore, the impact of currency fluctuations on our operating income and operating margin is partially mitigated. In order to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency fluctuations, we compare the percentage change in the results from one period to another period in this report using constant currency presentation. The constant currency growth rates are calculated by translating the 2019 results at the 2020 average exchange rates and the 2018 results at the 2019 average exchange rates. Constant currency growth rates are a non-GAAP measure. 30 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part II The following table is a comparison of underlying average exchange rates of the foreign currencies that had the most significant impact on our United States dollar-reported revenues and expenses: Australian dollar Brazilian real British pound sterling Canadian dollar Euro Australian dollar Brazilian real British pound sterling Canadian dollar Euro PERCENTAGE OF UNITED STATES DOLLAR- REPORTED REVENUE FOR THE YEAR ENDED DECEMBER 31, AVERAGE EXCHANGE RATES FOR THE YEAR ENDED DECEMBER 31, 2020 2019 2020 2019 PERCENTAGE STRENGTHENING / (WEAKENING) OF FOREIGN CURRENCY 3.2 % 1.9 % 6.0 % 5.4 % 7.5 % 3.4 % $ 2.6 % $ 6.4 % $ 5.7 % $ 7.4 % $ 0.690 $ 0.196 $ 1.283 $ 0.746 $ 1.141 $ 0.695 0.254 1.277 0.754 1.120 (0.7) % (22.8) % 0.5 % (1.1) % 1.9 % PERCENTAGE OF UNITED STATES DOLLAR- REPORTED REVENUE FOR THE YEAR ENDED DECEMBER 31, AVERAGE EXCHANGE RATES FOR THE YEAR ENDED DECEMBER 31, 2019 2018 2019 2018 PERCENTAGE STRENGTHENING / (WEAKENING) OF FOREIGN CURRENCY 3.4 % 2.6 % 6.4 % 5.7 % 7.4 % 3.7 % $ 2.9 % $ 6.6 % $ 5.9 % $ 7.3 % $ 0.695 $ 0.254 $ 1.277 $ 0.754 $ 1.120 $ 0.748 0.276 1.335 0.772 1.182 (7.1) % (8.0) % (4.3) % (2.3) % (5.2) % The percentage of United States dollar-reported revenues for all other foreign currencies was 13.8%, 12.7% and 12.6% for the years ended December 31, 2020, 2019 and 2018, respectively. NON-GAAP MEASURES ADJUSTED EBITDA During the fourth quarter of 2020, we changed our definition of Adjusted EBITDA to (a) exclude stock-based compensation expense and (b) include our share of Adjusted EBITDA from our unconsolidated joint ventures. We now define Adjusted EBITDA as income (loss) from continuing operations before interest expense, net, provision (benefit) for income taxes, depreciation and amortization (inclusive of our share of Adjusted EBITDA from our unconsolidated joint ventures), and excluding certain items we do not believe to be indicative of our core operating results, specifically: EXCLUDED • Significant Acquisition Costs • Restructuring Charges • • Intangible impairments (Gain) loss on disposal/write-down of property, plant and equipment, net (including real estate) • Other expense (income), net • Stock-based compensation expense • COVID-19 Costs (as defined below) Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by total revenues. We also show Adjusted EBITDA and Adjusted EBITDA Margin for each of our reportable operating segments under “Results of Operations – Segment Analysis” below. IRON MOUNTAIN 2020 FORM 10-K 31         Table of Contents Part II Adjusted EBITDA excludes both interest expense, net and the provision (benefit) for income taxes. These expenses are associated with our capitalization and tax structures, which we do not consider when evaluating the operating profitability of our core operations. Adjusted EBITDA also does not include depreciation and amortization expenses, in order to eliminate the impact of capital investments, which we evaluate by comparing capital expenditures to incremental revenue generated and as a percentage of total revenues. Adjusted EBITDA and Adjusted EBITDA Margin should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with accounting principles generally accepted in the United States of America (“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). RECONCILIATION OF INCOME (LOSS) FROM CONTINUING OPERATIONS TO ADJUSTED EBITDA (IN THOUSANDS): Income (Loss) from Continuing Operations $ 343,096 $ 268,211 $ 367,558 YEAR ENDED DECEMBER 31, 2020 2019 2018 Add/(Deduct): Interest expense, net Provision (benefit) for income taxes Depreciation and amortization Significant Acquisition Costs Restructuring Charges Intangible impairments (Gain) loss on disposal/write-down of property, plant and equipment, net (including real estate) Other expense (income), net, excluding our share of losses (gains) from our unconsolidated joint ventures(1) Stock-based compensation expense(2) COVID-19 Costs(3) Our share of Adjusted EBITDA reconciling items from our unconsolidated joint ventures 418,535 29,609 652,069 — 194,396 23,000 419,298 59,931 658,201 13,293 48,597 — 409,648 42,753 639,514 50,665 — — (363,537) (63,824) (73,622) 133,611 34,272 9,285 1,385 25,720 36,194 — 3,388 (11,867) 31,014 — 3,261 Adjusted EBITDA $ 1,475,721 $ 1,469,009 $ 1,458,924 (1) Includes foreign currency transaction losses (gains), net, debt extinguishment expense and other, net. See Note 2.t. to Notes to Consolidated Financial Statements included in this Annual Report for additional information regarding the components of Other expense (income), net. (2) Stock-based compensation expense related to Project Summit is included within Restructuring Charges for the years ended December 31, 2020 and 2019. (3) Costs that are incremental and directly attributable to the COVID-19 pandemic which are not expected to recur once the pandemic ends (“COVID-19 Costs”). These costs include the purchase of personal protective equipment for our employees and incremental cleaning costs of our facilities, among other direct costs. ADJUSTED EPS During the fourth quarter of 2020, we changed our definition of Adjusted EPS to (a) exclude stock-based compensation expense and (b) include our share of adjusted losses (gains) from our unconsolidated joint ventures. We now define Adjusted EPS as reported earnings per share fully diluted from continuing operations (inclusive of our share of adjusted losses (gains) from our unconsolidated joint ventures) and excluding certain items, specifically: EXCLUDED • Significant Acquisition Costs • Restructuring Charges • Other expense (income), net • Stock-based compensation expense • • Intangible impairments • COVID-19 Costs (Gain) loss on disposal/write-down of property, plant and equipment, net (including real estate) • Tax impact of reconciling items and discrete tax items We do not believe these excluded items to be indicative of our ongoing operating results, and they are not considered when we are forecasting our future results. We believe Adjusted EPS is of value to our current and potential investors when comparing our results from past, present and future periods. 32 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part II RECONCILIATION OF REPORTED EPS—FULLY DILUTED FROM CONTINUING OPERATIONS TO ADJUSTED EPS—FULLY DILUTED FROM CONTINUING OPERATIONS: Reported EPS—Fully Diluted from Continuing Operations $ 1.19 $ 0.93 $ 1.28 YEAR ENDED DECEMBER 31, 2020 2019 2018 Add/(Deduct): Significant Acquisition Costs Restructuring Charges Intangible impairments (Gain) loss on disposal/write-down of property, plant and equipment, net (including real estate) Other expense (income), net, excluding our share of losses (gains) from our unconsolidated joint ventures Stock-based compensation expense(1) COVID-19 Costs(2) Tax impact of reconciling items and discrete tax items(3) Adjusted EPS—Fully Diluted from Continuing Operations(4) — 0.67 0.08 0.05 0.17 — (1.26) (0.22) 0.46 0.12 0.03 0.09 0.13 — $ (0.11) 1.19 $ (0.03) 1.11 $ 0.18 — — (0.25) (0.04) 0.11 — (0.10) 1.16 (1) Stock-based compensation expense related to Project Summit is included within Restructuring Charges for the years ended December 31, 2020 and 2019. (2) These costs include the purchase of personal protective equipment for our employees and incremental cleaning costs of our facilities, among other direct costs. (3) The difference between our effective tax rate and our structural tax rate (or adjusted effective tax rate) for the years ended December 31, 2020, 2019, and 2018 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 for the years ended December 31, 2020, 2019 and 2018 was 15.1%, 17.6%, and 17.9%, respectively. (4) Columns may not foot due to rounding. FFO (NAREIT) AND FFO (NORMALIZED) Funds from operations ("FFO") is defined by the National Association of Real Estate Investment Trusts (“Nareit”) as net income (loss) excluding depreciation on real estate assets, gains on sale of real estate, net of tax, and amortization of data center leased- based intangibles. Consistent with Nareit's definition of FFO, during the fourth quarter of 2020, we began adjusting for our share of reconciling items from our unconsolidated joint ventures from FFO ("FFO (Nareit)"). FFO (Nareit) does not give effect to real estate depreciation because these amounts are computed, under GAAP, to allocate the cost of a property over its useful life. Because values for well-maintained real estate assets have historically increased or decreased based upon prevailing market conditions, we believe that FFO (Nareit) provides investors with a clearer view of our operating performance. Our most directly comparable GAAP measure to FFO (Nareit) is net income (loss). Although Nareit has published a definition of FFO, we modify FFO (Nareit), as is common among REITs seeking to provide financial measures that most meaningfully reflect their particular business ("FFO (Normalized)"). During the fourth quarter of 2020, we changed our definition of FFO (Normalized) to exclude stock-based compensation expense and adjust for our share of FFO (Normalized) reconciling items from our unconsolidated joint ventures. Our definition of FFO (Normalized) excludes certain items included in FFO (Nareit) that we believe are not indicative of our core operating results, specifically: EXCLUDED • Significant Acquisition Costs • Restructuring Charges • Intangible impairments • Stock-based compensation expense • COVID-19 Costs • Real estate financing lease depreciation • Loss (gain) on disposal/write-down of property, plant and • Tax impact of reconciling items and discrete tax items equipment, net (excluding real estate) • Other expense (income), net • (Income) loss from discontinued operations, net of tax IRON MOUNTAIN 2020 FORM 10-K 33 Table of Contents Part II RECONCILIATION OF NET INCOME (LOSS) TO FFO (NAREIT) AND FFO (NORMALIZED) (IN THOUSANDS): Net Income (Loss) Add/(Deduct): Real estate depreciation(1) Gain on sale of real estate, net of tax(2) Data center lease-based intangible assets amortization(3) Our share of FFO (Nareit) reconciling items from our unconsolidated joint ventures FFO (Nareit) Add/(Deduct): Significant Acquisition Costs Restructuring Charges Intangible impairments Loss (gain) on disposal/write-down of property, plant and equipment, net (excluding real estate) Other expense (income), net, excluding our share of losses (gains) from our unconsolidated joint ventures(4) Stock-based compensation expense(5) COVID-19 Costs(6) Real estate financing lease depreciation Tax impact of reconciling items and discrete tax items(7) (Income) loss from discontinued operations, net of tax(8) Our share of FFO (Normalized) reconciling items from our unconsolidated joint ventures YEAR ENDED DECEMBER 31, 2020 2019 2018 $ 343,096 $ 268,315 $ 355,131 298,943 (365,709) 42,637 — 318,967 — 194,396 23,000 303,415 (99,194) 46,696 1,284 520,516 13,293 48,597 — 284,804 (55,328) 43,061 1,391 629,059 50,665 — — 2,523 40,763 (9,818) 133,611 34,272 9,285 13,801 (31,825) — (38) 25,720 36,194 — 13,364 (13,095) (104) (11,867) 31,014 — 13,650 (38,365) 12,427 148 248 FFO (Normalized) $ 697,992 $ 685,396 $ 677,013 (1) Includes depreciation expense related to owned real estate assets (land improvements, buildings, building improvements, leasehold improvements and racking), excluding depreciation related to real estate financing leases. (2) Tax expense associated with the gain on sale of real estate for the years ended December 31, 2020, 2019, and 2018, was $0.4 million, $5.4 million, and $8.5 million, respectively. (3) (4) Includes amortization expense for Data Center In-Place Lease Intangible Assets and Data Center Tenant Relationship Intangible Assets as defined in Note 2.l. to Notes to Consolidated Financial Statements included in this Annual Report. Includes foreign currency transaction losses (gains), net, debt extinguishment expense and other, net. See Note 2.t. to Notes to Consolidated Financial Statements included in this Annual Report for additional information regarding the components of Other expense (income), net. (5) Stock-based compensation expense related to Project Summit is included within Restructuring Charges for the years ended December 31, 2020 and 2019. (6) These costs include the purchase of personal protective equipment for our employees and incremental cleaning costs of our facilities, among other direct costs. (7) Represents the tax impact of (i) the reconciling items above, which impacts our reported income (loss) from continuing operations before provision (benefit) for income taxes but has an insignificant impact on our reported provision (benefit) for income taxes and (ii) other discrete tax items. Discrete tax items resulted in a (benefit) provision for income taxes of $(16.8) million, $(1.5) million and $(27.7) million for the years ended December 31, 2020, 2019 and 2018, respectively. (8) Net of tax (benefit) provision of $0.0 million, $0.0 million and $(0.1) million for the years ended December 31, 2020, 2019 and 2018, respectively. CRITICAL ACCOUNTING ESTIMATES Our discussion and analysis of our financial condition and results of operations are based upon our Consolidated Financial Statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of the financial statements and for the period then ended. On an ongoing basis, we evaluate the estimates used. We base our estimates on historical experience, actuarial estimates, current conditions and various other assumptions that we believe to be reasonable under the circumstances. These estimates form the basis for making judgments about the carrying values of assets and liabilities and are not readily apparent from other sources. Actual results may differ from these estimates. The following should be read in conjunction with Note 2 to Notes to Consolidated Financial Statements included in this Annual Report, which provides a summary of our significant accounting policies. Our critical accounting estimates include the following, which are listed in no particular order: 34 IRON MOUNTAIN 2020 FORM 10-K Table of Contents REVENUE RECOGNITION Part II Revenue is recognized when or as control of promised goods or services is transferred to the customer, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. See Note 2.r. to Notes to Consolidated Financial Statements included in this Annual Report for additional details on our revenue recognition policies. Revenue for all our lines of business, with the exception of storage revenues in our Global Data Center Business (which is subject to leasing guidance), is recognized under Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), the application of which requires that we make estimates and judgements that may affect the amount and timing of revenue we recognize. We have determined that the majority of our contracts contain series performance obligations which qualify to be recognized under a practical expedient available in ASU 2014-09 known as the “right to invoice.” This determination allows variable consideration in such contracts to be allocated to and recognized in the period to which the consideration relates, which is typically the period in which it is billed, rather than requiring estimation of variable consideration at the inception of the contract. From time to time, we make payments to entities that are also customers under a revenue contract. These payments are comprised of Customer Inducements (as defined in Note 2.l. to Notes to Consolidated Financial Statements included in this Annual Report). Consideration payable to a customer is reviewed as part of the transaction price. If the payment to the customer does not represent payment for a distinct service, revenue is recognized only up to the amount of consideration remaining after customer payment obligations are considered. Contract Fulfillment Costs are amortized over a three year term, which we have determined is consistent with the transfer of the underlying performance obligations to which the assets relate. Different determinations on term length would result in differences in the amount and timing of amortization expense recognized. ACCOUNTING FOR ACQUISITIONS Part of our growth strategy has been to acquire businesses. The purchase price of each acquisition has been determined after due diligence of the target business, market research, strategic planning and the forecasting of expected future results and synergies. Estimated future results and expected synergies are subject to revisions as we integrate each acquisition and attempt to leverage resources. Accounting for acquisitions of a business has resulted in the capitalization of the cost in excess of the estimated fair value of the net assets acquired in each of these acquisitions as goodwill. We estimate the fair values of the assets acquired in each acquisition as of the date of acquisition and these estimates are subject to adjustment based on the final assessments of the fair value of intangible assets (primarily customer relationship and data center lease-based intangible assets), property, plant and equipment (primarily building, building improvements, leasehold improvements, data center infrastructure and racking structures), operating leases, contingencies and income taxes (primarily deferred income taxes). See Note 3 to Notes to Consolidated Financial Statements included in this Annual Report for a description of recent acquisitions. Determining the fair values of the net assets acquired requires management’s judgment and often involves the use of assumptions with respect to future cash inflows and outflows, discount rates and market data, among other items. As it relates to our data center acquisitions, the fair values of the net assets acquired requires management’s judgment and often involves the use of assumptions with respect to (i) certain economic costs (as described more fully in Note 2.l. to Notes to Consolidated Financial Statements included in this Annual Report) avoided by acquiring a data center operation with active tenants that would have otherwise been incurred if the data center operation was purchased vacant, (ii) market rental rates and (iii) expectations of lease renewals and extensions. Due to the inherent uncertainty of future events, actual values of net assets acquired could be different from our estimated fair values and could have a material impact on our financial statements. Of the net assets acquired in our acquisitions, the fair value of owned buildings, including building improvements, customer relationship and data center lease-based intangible assets, racking structures and operating leases are generally the most common and most significant. For significant acquisitions or acquisitions involving new markets or new products, we generally use third parties to assist us in estimating the fair value of owned buildings, including building improvements, customer relationship and lease-based intangible assets and market rental rates for acquired operating leases. For acquisitions that are not significant or do not involve new markets or new products, we generally use third parties to assist us in estimating the fair value of acquired owned buildings, including building improvements, and market rental rates for acquired operating leases. When not using third party appraisals of the fair value of acquired net assets, the fair value of acquired customer relationship intangible assets, above and below market in-place operating leases, and racking structures is determined internally. The fair value of acquired racking structures is determined internally by taking current estimated replacement cost at the date of acquisition for the quantity of racking structures acquired, discounted to take into account the quality (e.g. age, material and type) of the racking structures. We use discounted cash flow models to determine the fair value of customer relationship assets, which requires a significant amount of judgment by management, including estimating expected lives of the relationships, expected future cash flows and discount rates. We determine the fair value of tangible data center assets using an estimated replacement cost at the date of acquisition, then discounting for age, economic and functional obsolescence. IRON MOUNTAIN 2020 FORM 10-K 35 Table of Contents Part II Our estimates of fair value are based upon assumptions believed to be reasonable at that time but which are inherently uncertain and unpredictable. Assumptions may be incomplete or inaccurate, and unanticipated events and circumstances may occur, which may affect the accuracy of such assumptions. Total property, plant and equipment and intangible assets acquired in our 2020 acquisitions were approximately $52.0 million and $79.1 million, respectively. IMPAIRMENT OF TANGIBLE AND INTANGIBLE ASSETS ASSETS SUBJECT TO DEPRECIATION OR AMORTIZATION We review long-lived assets and all finite-lived intangible assets for impairment whenever events or changes in circumstances indicate the carrying amount of such assets may not be recoverable. Examples of events or circumstances that may be indicative of impairment include, but are not limited to: • A significant decrease in the market price of an asset; • A significant change in the extent or manner in which a long-lived asset is being used or in its physical condition; • A significant adverse change in legal factors or in the business climate that could affect the value of the asset; • An accumulation of costs significantly greater than the amount originally expected for the acquisition or construction of an asset; • A current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset; and • A current expectation that, more likely than not, an asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. If events indicate the carrying value of such assets may not be recoverable, recoverability of these assets is determined by comparing the sum of the forecasted undiscounted net cash flows of the operation to which the assets relate to their carrying amount. The operations are generally distinguished by the business segment and geographic region in which they operate. If it is determined that we are unable to recover the carrying amount of the assets, the long-lived assets are written down, on a pro rata basis, to fair value. Fair value is determined based on discounted cash flows or appraised values, depending upon the nature of the assets. GOODWILL AND OTHER INDEFINITE-LIVED INTANGIBLE ASSETS NOT SUBJECT TO AMORTIZATION Goodwill and intangible assets with indefinite lives are not amortized but are reviewed annually for impairment, or more frequently if impairment indicators arise. Other than goodwill, we currently have no intangible assets that have indefinite lives and which are not amortized. See Note 2.k. to Notes to Consolidated Financial Statements included in this Annual Report for additional details on our goodwill and other indefinite-lived intangible assets policies. We have selected October 1 as our annual goodwill impairment review date. We have performed our annual goodwill impairment review as of October 1, 2020, 2019 and 2018. We concluded that as of October 1, 2020, 2019 and 2018, goodwill was not impaired. During the first quarter of 2020, we concluded that we had a triggering event related to our Fine Arts reporting unit, requiring us to perform an interim goodwill impairment test. The primary factor contributing to our conclusion was the expected impact of the COVID-19 pandemic to this particular business and its customers and revenue sources, which caused us to believe it was more likely than not that the carrying value of our Fine Arts reporting unit exceeded its fair value. Therefore, we performed an interim goodwill impairment test for our Fine Arts reporting unit utilizing a discounted cash flow model, with updated assumptions on future revenues, operating expenditures and capital expenditures. We concluded that the fair value of our Fine Arts reporting unit was less than its carrying value, and, therefore, we recorded a $23.0 million impairment charge on the goodwill associated with this reporting unit during the first quarter of 2020. Factors that may impact these assumptions include, but are not limited to: (i) our ability to maintain, or grow, storage rental and service revenues in line with current expectations and (ii) our ability to manage our fixed and variable costs in line with potential future revenue declines. Our reporting units at which level we performed our goodwill impairment analysis as of October 1, 2020 were as follows: • North American Records and Information Management reporting unit ("North America RIM") • Australia and New Zealand Records and Information Management reporting unit ("ANZ RIM") • Europe Records and Information • Asia Records and Information • Fine Arts • Entertainment Services • Technology Escrow Services Management reporting unit ("Europe RIM") • Latin America Records and Information Management reporting unit ("Latin America RIM") Management reporting unit ("Asia RIM") • Global Data Center 36 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part II See Note 2.k. to Notes to Consolidated Financial Statements included in this Annual Report for a description of our reporting units. Based on our goodwill impairment analysis as of October 1, 2020, our reporting units that had estimated fair values exceeding their carrying values by greater than 20% represented approximately $4,120.6 million, or 90.4%, of our consolidated goodwill balance at December 31, 2020. Our Global Data Center reporting unit had an estimated fair value that exceeded its carrying value by less than 20%. The reporting unit represented approximately $437.0 million, or 9.6%, of our consolidated goodwill balance at December 31, 2020. The following is a summary of the Global Data Center reporting unit including the goodwill balance (in thousands), percentage by which the fair value of the reporting unit exceeded its carrying value, and certain key assumptions used by us in determining the fair value of the reporting unit as of October 1, 2020: PERCENTAGE BY WHICH THE FAIR VALUE OF THE REPORTING UNIT EXCEEDED THE REPORTING UNIT CARRYING VALUE AS OF OCTOBER 1, 2020 GOODWILL BALANCE AT OCTOBER 1, 2020 KEY ASSUMPTIONS IN THE FAIR VALUE OF REPORTING UNIT MEASUREMENT AS OF OCTOBER 1, 2020 AVERAGE ANNUAL CONTRIBUTION MARGIN USED IN DISCOUNTED CASH FLOW AVERAGE ANNUAL CAPITAL EXPENDITURES AS PERCENTAGE OF REVENUE(1) TERMINAL GROWTH RATE(2) DISCOUNT RATE REPORTING UNIT Global Data Center $ 430,594 8.5 % 8.0 % 43.7 % 27.8 % 3.0 % (1) (2) For purposes of our goodwill impairment analysis, the term “capital expenditures” includes both growth investment and recurring capital expenditures. Terminal growth rates are applied in year 10 of our discounted cash flow analysis. Reporting unit valuations have generally been determined using a combined approach based on the present value of future cash flows (the “Discounted Cash Flow Model”) and market multiples (the “Market Approach"). There are inherent uncertainties and judgments involved when determining the fair value of the reporting units for purposes of our annual goodwill impairment testing. The following includes supplemental information to the table above for the Global Data Center reporting unit where the estimated fair values exceeded its carrying value by less than 20% as of October 1, 2020. The success of this business and the achievement of certain key assumptions developed by management and used in the Discounted Cash Flow Model are contingent upon various factors including, but not limited to, (i) achieving growth from existing customers, (ii) sales to new customers, (iii) increased market penetration and (iv) accurately timing the capital investments related to expansions. Our Global Data Center Business footprint spans nine markets in the United States: Denver, Colorado; Kansas City, Missouri; Boston, Massachusetts; Boyers, Pennsylvania; Manassas, Virginia; Edison, New Jersey; Columbus, Ohio; and Phoenix and Scottsdale, Arizona and four international markets: Amsterdam, London, Singapore and, through an unconsolidated joint venture, Frankfurt. We provide mission-critical data centers that are designed and operated to protect and ensure the continued operation of IT infrastructure for our customers. Data centers are highly specialized and secure assets that serve as centralized repositories of server, storage and network equipment. They are capital intensive and designed to provide the space, power, cooling and network connectivity necessary to efficiently operate mission-critical IT equipment. The demand for data center infrastructure is being driven by many factors, but most importantly by significant growth in data as well as an increased demand for outsourcing. In order to attract and retain customers, as well as sustain growth in our existing and new markets, we must have the capability to tailor our facilities and invest capital to meet the customers’ needs. Our estimate of fair value reflects the expected growth in each of our data center markets along with the corresponding capital investments required to meet demand. The business is primarily comprised of acquisitions completed in 2018 and late 2017; therefore, we would expect that the fair value of this reporting unit will closely approximate its carrying value. Key factors that could reasonably be expected to have a negative impact on the estimated fair value of these reporting units and potentially result in impairment charges include, but are not limited to: (i) a deterioration in general economic conditions, (ii) significant adverse changes in regulatory factors or in the business climate, and (iii) adverse actions or assessment by regulators, all of which could result in adverse changes to the key assumptions used in valuing the reporting units. The inability to meet the assumptions used in the Discounted Cash Flow Model and Market Approach for each of the reporting units, or future adverse market conditions not currently known, could lead to a fair value that is less than the carrying value in any one of our reporting units. Reporting unit valuations have generally been determined using a combined approach based on the Discounted Cash Flow Model and Market Approach. The Discounted Cash Flow Model incorporates significant assumptions including future revenue growth rates, operating margins, discount rates and capital expenditures. The Market Approach requires us to make assumptions related to Adjusted EBITDA multiples. Changes in economic and operating conditions impacting these assumptions or changes in multiples could result in goodwill impairments in future periods. In conjunction with our annual goodwill impairment reviews, we reconcile the sum of the valuations of all of our reporting units to our market capitalization as of such dates. IRON MOUNTAIN 2020 FORM 10-K 37 Table of Contents Part II Although we believe we have sufficient historical and projected information available to us to test for goodwill impairment, it is possible that actual results could differ from the estimates used in our impairment tests. Of the key assumptions that impact the goodwill impairment test, the expected future cash flows and discount rate are among the most sensitive and are considered to be critical assumptions, as changes to these estimates could have an effect on the estimated fair value of each of our reporting units. We have assessed the sensitivity of these assumptions on each of our reporting units as of October 1, 2020. North America RIM, Europe RIM, Latin America RIM, ANZ RIM, Asia RIM, Fine Arts, Entertainment Services and Technology Escrow Services We noted that, based on the estimated fair value of these reporting units determined as of October 1, 2020: • a hypothetical decrease of 10% in the expected annual future cash flows of these reporting units, with all other assumptions unchanged, would have decreased the estimated fair value of these reporting units as of October 1, 2020 by a range of approximately 9.7% to 10.6% but would not, however, have resulted in the carrying value of any of these reporting units with goodwill exceeding their estimated fair value; • a hypothetical increase of 100 basis points in the discount rate, with all other assumptions unchanged, would have decreased the estimated fair value of these reporting units as of October 1, 2020 by a range of approximately 4.6% to 10.7% but would not, however, have resulted in the carrying value of any of these reporting units with goodwill exceeding their estimated fair value. Global Data Center We noted that, as of October 1, 2020, the estimated fair value of the reporting unit: • exceeds its carrying value by less than 20%. Accordingly, any significant negative change in either the expected annual future cash flows of the reporting unit or the discount rate may result in the carrying value of the reporting unit exceeding its estimated fair value. At December 31, 2020, no factors were identified that would alter the conclusions of our October 1, 2020 goodwill impairment analysis. In making this assessment, we considered a number of factors including operating results, business plans, anticipated future cash flows, transactions and marketplace data. There are inherent uncertainties related to these factors and our judgment in applying them to the analysis of goodwill impairment. INCOME TAXES As a REIT, we are generally permitted to deduct from our federal taxable income the dividends we pay to our stockholders. The income represented by such dividends is not subject to federal taxation at the entity level but is taxed, if at all, at the stockholder level. The income of our domestic TRSs, which hold our domestic operations that may not be REIT-compliant as currently operated and structured, is subject, as applicable, to federal and state corporate income tax. In addition, we and our subsidiaries continue to be subject to foreign income taxes in other jurisdictions in which we have business operations or a taxable presence, regardless of whether assets are held or operations are conducted through subsidiaries disregarded for federal income tax purposes or TRSs. We will also be subject to a separate corporate income tax on any gains recognized on the sale or disposition of any asset previously owned by a C corporation during a five-year period after the date we first owned the asset as a REIT asset that are attributable to "built-in gains" with respect to that asset on that date. We will also be subject to a built-in gains tax on our depreciation recapture recognized into income as a result of accounting method changes in connection with our acquisition activities. If we fail to remain qualified for taxation as a REIT, we will be subject to federal income tax at regular corporate income tax rates. Even if we remain qualified for taxation as a REIT, we may be subject to some federal, state, local and foreign taxes on our income and property in addition to taxes owed with respect to our TRS operations. In particular, while state income tax regimes often parallel the federal income tax regime for REITs, many states do not completely follow federal rules and some do not follow them at all. See Note 9 to Notes to Consolidated Financial Statements included in this Annual Report for additional details on our tax policies. Accounting for income taxes requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the tax and financial reporting bases of assets and liabilities and for loss and credit carryforwards. We measure deferred tax assets and liabilities using enacted tax rates expected to be applied to taxable income in the years in which those temporary differences and carryforwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities as a result of a change in tax rates is recognized in income in the period that the change is enacted. Valuation allowances are provided when recovery of deferred tax assets does not meet the more likely than not standard as defined in GAAP. Valuation allowances would be reversed as a reduction to the provision for income taxes if related deferred tax assets are deemed realizable based on changes in facts and circumstances relevant to the recoverability of the asset. 38 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part II At December 31, 2020, we have federal and state net operating loss carryforwards of which we are expecting an insignificant tax benefit to be realized. We have assets for foreign net operating losses of $92.1 million, with various expiration dates (and in some cases no expiration date), subject to a valuation allowance of approximately 43%. If actual results differ unfavorably from certain of our estimates used, we may not be able to realize all or part of our net deferred income tax assets and additional valuation allowances may be required. Although we believe our estimates are reasonable, no assurance can be given that our estimates reflected in the tax provisions and accruals will equal our actual results. These differences could have a material impact on our income tax provision and operating results in the period in which such determination is made. The evaluation of an uncertain tax position is a two-step process. The first step is a recognition process whereby we determine whether it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The second step is a measurement process whereby a tax position that meets the more likely than not recognition threshold is calculated to determine the amount of benefit to recognize in the financial statements. The tax position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. We are subject to income taxes in the United States and numerous foreign jurisdictions. We are subject to examination by various tax authorities in jurisdictions in which we have business operations or a taxable presence. We regularly assess the likelihood of additional assessments by tax authorities and provide for these matters as appropriate. As of December 31, 2020 and 2019, we had approximately $26.0 million and $35.1 million, respectively, of reserves related to uncertain tax positions. The reversal of these reserves will be recorded as a reduction of our income tax provision if sustained. Although we believe our tax estimates are appropriate, the final determination of tax audits and any related litigation could result in changes in our estimates. Following our conversion to a REIT in 2014, we concluded that it was not our intent to reinvest our current and future undistributed earnings of our foreign subsidiaries indefinitely outside the United States. As of December 31, 2016, we concluded that it is our intent to indefinitely reinvest our current and future undistributed earnings of certain of our unconverted foreign TRSs outside the United States. With the exception of certain limited instances, we no longer provide incremental foreign withholding taxes on the retained book earnings of these unconverted foreign TRSs, which was approximately $262.4 million as of December 31, 2020. As a REIT, future repatriation of incremental undistributed earnings of our foreign subsidiaries will not be subject to federal or state income tax, with the exception of foreign withholding taxes in limited instances; however, such future repatriations will require distribution in accordance with REIT distribution rules, and any such distribution may then be taxable, as appropriate, at the stockholder level. We continue, however, to provide for incremental foreign withholding taxes on net book over outside basis differences related to the earnings of our foreign QRSs and certain other foreign TRSs (excluding unconverted foreign TRSs). IRON MOUNTAIN 2020 FORM 10-K 39 Table of Contents Part II RESULTS OF OPERATIONS COMPARISON OF YEAR ENDED DECEMBER 31, 2020 TO YEAR ENDED DECEMBER 31, 2019 AND COMPARISON OF YEAR ENDED DECEMBER 31, 2019 TO YEAR ENDED DECEMBER 31, 2018 (IN THOUSANDS): Revenues Operating Expenses Operating Income Other Expenses, Net Income from Continuing Operations Income (Loss) from Discontinued Operations, Net of Tax Net Income Net Income Attributable to Noncontrolling Interests Net Income Attributable to Iron Mountain Incorporated Adjusted EBITDA(1) Adjusted EBITDA Margin(1) Revenues Operating Expenses Operating Income Other Expenses, Net Income from Continuing Operations Income (Loss) from Discontinued Operations, Net of Tax Net Income Net Income Attributable to Noncontrolling Interests Net Income Attributable to Iron Mountain Incorporated Adjusted EBITDA(1) Adjusted EBITDA Margin(1) YEAR ENDED DECEMBER 31, 2020 2019 DOLLAR CHANGE PERCENTAGE CHANGE $ 4,147,270 $ 4,262,584 $ (115,314) 3,212,485 3,481,246 934,785 591,689 343,096 — 343,096 403 781,338 513,127 268,211 104 268,315 938 $ $ 342,693 1,475,721 $ $ 267,377 1,469,009 $ $ 35.6 % 34.5 % (268,761) 153,447 78,562 74,885 (104) 74,781 (535) 75,316 6,712 (2.7) % (7.7) % 19.6 % 15.3 % 27.9 % (100.0) % 27.9 % (57.0) % 28.2 % 0.5 % YEAR ENDED DECEMBER 31, 2019 2018 DOLLAR CHANGE PERCENTAGE CHANGE $ 4,262,584 $ 4,225,761 $ 3,481,246 3,417,494 781,338 513,127 268,211 104 268,315 938 $ $ 267,377 1,469,009 $ $ 808,267 440,709 367,558 (12,427) 355,131 1,198 353,933 1,458,924 $ $ 34.5 % 34.5 % 36,823 63,752 (26,929) 72,418 (99,347) 12,531 (86,816) (260) (86,556) 10,085 0.9 % 1.9 % (3.3) % 16.4 % (27.0) % (100.8) % (24.4) % (21.7) % (24.5) % 0.7 % (1) See “Non-GAAP Measures—Adjusted EBITDA” in this Annual Report for the definitions of Adjusted EBITDA and Adjusted EBITDA Margin, reconciliation of Adjusted EBITDA to Income (Loss) from Continuing Operations and a discussion of why we believe these non-GAAP measures provide relevant and useful information to our current and potential investors. 40 IRON MOUNTAIN 2020 FORM 10-K Table of Contents REVENUES Part II Consolidated revenues consist of the following (in thousands): YEAR ENDED DECEMBER 31, PERCENTAGE CHANGE 2020 2019 DOLLAR CHANGE ACTUAL CONSTANT CURRENCY(1) IMPACT OF ACQUISITIONS ORGANIC GROWTH(2) Storage Rental $ 2,754,091 $ 2,681,087 $ 73,004 2.7 % Service 1,393,179 1,581,497 (188,318) (11.9) % Total Revenues $ 4,147,270 $ 4,262,584 $ (115,314) (2.7) % 3.8 % (11.0) % (1.7) % 1.4 % 1.8 % 1.6 % 2.4 % (12.8) % (3.3) % YEAR ENDED DECEMBER 31, PERCENTAGE CHANGE 2019 2018 DOLLAR CHANGE ACTUAL CONSTANT CURRENCY(1) IMPACT OF ACQUISITIONS ORGANIC GROWTH(2) Storage Rental $ 2,681,087 $ 2,622,455 $ 58,632 Service 1,581,497 1,603,306 (21,809) Total Revenues $ 4,262,584 $ 4,225,761 $ 36,823 2.2 % (1.4) % 0.9 % 4.3 % 0.9 % 3.0 % 1.8 % 1.9 % 1.9 % 2.5 % (1.0) % 1.1 % (1) Constant currency growth rates are calculated by translating the 2019 results at the 2020 average exchange rates and the 2018 results at the 2019 average exchange rates. (2) Our organic revenue growth rate, which is a non-GAAP measure, represents the year-over-year growth rate of our revenues excluding the impact of business acquisitions, divestitures and foreign currency exchange rate fluctuations, but including the impact of acquisitions of customer relationships. TOTAL REVENUES For the year ended December 31, 2020, the decrease in reported consolidated revenue was driven by declines in reported service revenue partially offset by reported storage rental revenue growth. Foreign currency exchange rate fluctuations decreased our reported consolidated revenues by 1.0% in the year ended December 31, 2020 compared to the prior year period. STORAGE RENTAL REVENUES AND SERVICE REVENUES Primary factors influencing the change in reported storage rental revenue and reported service revenue for the year ended December 31, 2020 compared to the year ended December 31, 2019 include the following: STORAGE RENTAL REVENUES • organic storage rental revenue growth driven by volume growth in faster growing markets SERVICE REVENUES and revenue management; • a 2.1% increase in global records management volume due to acquisitions (excluding acquisitions, global records management volume decreased 1.1%); and • a decrease of $29.1 million due to foreign currency exchange rate fluctuations. • a decrease in service activity as a result of the COVID-19 pandemic, particularly in regions where governments have imposed restrictions on our customers' non-essential business operations; • organic service revenue declines reflecting lower service activity levels; and • a decrease of $15.7 million due to foreign currency exchange rate fluctuations. IRON MOUNTAIN 2020 FORM 10-K 41 Table of Contents Part II OPERATING EXPENSES COST OF SALES Consolidated Cost of sales (excluding depreciation and amortization) consists of the following expenses (in thousands): YEAR ENDED DECEMBER 31, PERCENTAGE CHANGE % OF CONSOLIDATED REVENUES 2020 2019 DOLLAR CHANGE ACTUAL CONSTANT CURRENCY 2020 2019 PERCENTAGE CHANGE (FAVORABLE)/ UNFAVORABLE Product Cost of Sales and Other 154,386 Labor Facilities Transportation COVID-19 Costs Total Cost of sales Labor Facilities Transportation Product Cost of Sales and Other $ 738,038 $ 814,459 $ (76,421) 731,679 125,591 697,330 162,905 158,621 34,349 (37,314) (22.9) % (4,235) (2.7) % 7,648 — 7,648 100.0 % (9.4) % 4.9 % (7.9) % 17.8 % 19.1 % 6.0 % 17.6 % 16.4 % (22.6) % (1.0) % 100.0 % 3.0 % 3.7 % 0.2 % 3.8 % 3.7 % — % $ 1,757,342 $ 1,833,315 $ (75,973) (4.1) % (2.9) % 42.4 % 43.0 % YEAR ENDED DECEMBER 31, PERCENTAGE CHANGE % OF CONSOLIDATED REVENUES 2019 2018 DOLLAR CHANGE ACTUAL CONSTANT CURRENCY $ 814,459 $ 818,729 $ (4,270) (0.5) % 2019 2018 19.1 % 19.4 % 16.4 % 15.4 % 3.8 % 3.7 % 3.8 % 3.9 % 2.2 % 9.5 % 5.1 % (1.4) % 697,330 162,905 158,621 651,114 158,528 165,583 46,216 4,377 (6,962) 7.1 % 2.8 % (4.2) % 2.2 % (1.3) % 1.2 % (0.8) % — % 0.2 % (0.6) % PERCENTAGE CHANGE (FAVORABLE)/ UNFAVORABLE (0.3) % 1.0 % — % (0.2) % 0.5 % Total Cost of sales $ 1,833,315 $ 1,793,954 $ 39,361 4.8 % 43.0 % 42.5 % Primary factors influencing the change in reported consolidated Cost of sales for the year ended December 31, 2020 compared to the year ended December 31, 2019 include the following: • a decrease in labor costs driven by cost containment actions taken in response to lower service activity levels due to the COVID-19 pandemic, partially offset by incremental labor costs associated with recent acquisitions; • a decrease in transportation costs primarily driven by lower third party carrier cost and fuel cost reflecting cost containment actions taken in response to lower service activity levels; • an increase in facilities expenses driven by increases in rent expense, in part due to recent acquisitions and the impact from our recent sale-leaseback activity (which we expect to continue in 2021 as we continue to look for future opportunities to monetize a small portion of our owned industrial real estate assets as part of our ongoing capital recycling program); and • a decrease of $23.5 million due to foreign currency exchange rate fluctuations. 42 IRON MOUNTAIN 2020 FORM 10-K (0.8) % (0.2) % 0.3 % 0.3 % — % (0.4) % (0.5) % (0.3) % 0.2 % 0.1 % (0.5) % Table of Contents Part II SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Consolidated Selling, general and administrative expenses consists of the following expenses (in thousands): YEAR ENDED DECEMBER 31, 2020 2019 PERCENTAGE CHANGE % OF CONSOLIDATED REVENUES DOLLAR CHANGE ACTUAL CONSTANT CURRENCY 2020 2019 PERCENTAGE CHANGE (FAVORABLE)/ UNFAVORABLE General and Administrative $ 513,664 $ 563,965 $ (50,301) (8.9) % (7.9) % 12.4 % 13.2 % Sales, Marketing and Account Management 231,365 245,704 (14,339) Information Technology 168,138 162,606 5,532 15,022 (5.8) % 3.4 % 77.5 % (5.0) % 4.2 % 78.9 % 34,411 19,389 1,637 — 1,637 100.0 % 100.0 % 5.6 % 4.1 % 0.8 % — % 5.8 % 3.8 % 0.5 % — % Bad Debt Expense COVID-19 Costs Total Selling, general and administrative expenses $ 949,215 $ 991,664 $ (42,449) (4.3) % (3.4) % 22.9 % 23.3 % YEAR ENDED DECEMBER 31, 2019 2018 PERCENTAGE CHANGE % OF CONSOLIDATED REVENUES DOLLAR CHANGE ACTUAL CONSTANT CURRENCY 2019 2018 PERCENTAGE CHANGE (FAVORABLE)/ UNFAVORABLE General and Administrative $ 563,965 $ 577,451 $ (13,486) (2.3) % (0.5) % 13.2 % 13.7 % Sales, Marketing and Account Management 245,704 257,306 (11,602) (4.5) % Information Technology 162,606 153,601 19,389 18,625 9,005 764 5.9 % 4.1 % (2.8) % 7.1 % 6.4 % 5.8 % 3.8 % 0.5 % 6.1 % 3.6 % 0.4 % Bad Debt Expense Total Selling, general and administrative expenses $ 991,664 $ 1,006,983 $ (15,319) (1.5) % 0.2 % 23.3 % 23.8 % Primary factors influencing the change in reported consolidated Selling, general and administrative expenses for the year ended December 31, 2020 compared to the year ended December 31, 2019 include the following: • a decrease in general and administrative expenses, driven by decreased wages and benefit expense and other employee related costs, as well as lower professional fees, reflecting benefits from Project Summit and ongoing cost containment measures, partially offset by higher bonus compensation accruals; • a decrease in sales, marketing and account management expenses, driven by decreased compensation expense and other employee related costs, reflecting benefits from Project Summit and ongoing cost containment measures; • higher bad debt expense, primarily driven by increased collectability risk resulting from the COVID-19 pandemic; and • foreign currency exchange rate fluctuations decreased reported consolidated Selling, general and administrative expenses by $9.4 million. DEPRECIATION AND AMORTIZATION Our depreciation and amortization charges result primarily from depreciation related to storage systems, which include racking structures, buildings, building and leasehold improvements and computer systems hardware and software. Amortization relates primarily to customer relationship intangible assets, contract fulfillment costs and data center lease-based intangible assets. Both depreciation and amortization are impacted by the timing of acquisitions. Depreciation expense decreased $8.8 million, or 1.9%, on a reported dollar basis for the year ended December 31, 2020 compared to the year ended December 31, 2019. See Note 2.h. to Notes to Consolidated Financial Statements included in this Annual Report for additional information regarding the useful lives over which our property, plant and equipment is depreciated. Amortization expense increased $2.6 million, or 1.3%, on a reported dollar basis for the year ended December 31, 2020 compared to the year ended December 31, 2019. IRON MOUNTAIN 2020 FORM 10-K 43 Table of Contents Part II SIGNIFICANT ACQUISITION COSTS Significant Acquisition Costs for the years ended December 31, 2020, 2019 and 2018 were approximately $0.0 million, $13.3 million and $50.7 million, respectively, and primarily consisted of operating expenditures associated with (1) our acquisition of Recall that we completed on May 2, 2016 (the “Recall Transaction"), including: (i) advisory and professional fees to complete the Recall Transaction; (ii) costs associated with the divestments required in connection with receipt of regulatory approvals (including transitional services); and (iii) costs to integrate Recall with our existing operations, including moving, severance, facility upgrade, REIT integration and system upgrade costs, as well as certain costs associated with our shared service center initiative for our finance, human resources and information technology functions; and (2) the advisory and professional fees to complete the IODC Transaction (collectively, “Significant Acquisition Costs”). RESTRUCTURING CHARGES Restructuring Charges for the years ended December 31, 2020 and 2019 were approximately $194.4 million and $48.6 million, respectively, and primarily consisted of employee severance costs and professional fees associated with Project Summit. INTANGIBLE IMPAIRMENTS The intangible impairment charge for the year ended December 31, 2020 was $23.0 million and related to the write-down of goodwill associated with our Fine Arts reporting unit in the first quarter of 2020, as discussed above. GAIN ON DISPOSAL/WRITE-DOWN OF PROPERTY, PLANT AND EQUIPMENT, NET Consolidated gain on disposal/write- down of property, plant and equipment, net 2020 Approximately $363.5 million 2019 Approximately $63.8 million YEAR ENDED DECEMBER 31, The gains primarily consisted of: • Gains associated with sale-leaseback • Gains associated with sale and sale-leaseback transactions of approximately $342.1 million, of which (i) approximately $265.6 million relates to the sale-leaseback transactions of 14 facilities in the United States during the fourth quarter of 2020 and (ii) approximately $76.4 million relates to the sale-leaseback transactions of two facilities in the United States during the third quarter of 2020, each as part of our program to monetize a small portion of our industrial real estate assets • Gains of approximately $24.1 million associated with the Frankfurt JV Transaction (as defined below) transactions of approximately $67.8 million in the United States • The sale of certain land and buildings of approximately $36.0 million in the United Kingdom Partially offset by losses from: • The impairment charge on the assets associated with the select offerings within our Iron Mountain Iron Cloud ("Iron Cloud") portfolio and loss on the subsequent sale of certain IT infrastructure assets and rights to certain hardware and maintenance contracts used to deliver these Iron Cloud offerings of approximately $25.0 million • The write-down of certain property, plant and equipment of approximately $15.7 million in the United States OTHER EXPENSES, NET INTEREST EXPENSE, NET Consolidated Interest Expense, Net decreased $0.8 million, to $418.5 million for the year ended December 31, 2020 from $419.3 million for the year ended December 31, 2019. The decrease in Interest Expense, Net during the year ended December 31, 2020 compared to the year ended December 31, 2019 was mainly driven by a decrease in the weighted average interest rate on our outstanding debt, partially offset by higher average debt outstanding for the year ended December 31, 2020. Our weighted average interest rate, inclusive of the commitment fee on the unused portion of our Revolving Credit Facility (as defined below) and fees associated with the letters of credit, was 4.7% and 4.8% at December 31, 2020 and 2019, respectively. See Note 6 to Notes to Consolidated Financial Statements included in this Annual Report for additional information regarding our indebtedness. 44 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part II OTHER EXPENSE (INCOME), NET Consolidated other expense (income), net consists of the following (in thousands): DESCRIPTION Foreign currency transaction losses (gains), net Debt extinguishment expense Other, net Other Expense (Income), Net YEAR ENDED DECEMBER 31, 2020 2019 DOLLAR CHANGE $ $ 29,830 $ 24,852 $ 68,300 45,415 — 9,046 4,978 68,300 36,369 143,545 $ 33,898 $ 109,647 FOREIGN CURRENCY TRANSACTION LOSSES (GAINS), NET We recorded net foreign currency transaction losses of $29.8 million in the year ended December 31, 2020, based on period-end exchange rates. These losses resulted primarily from the impact of changes in the exchange rate of the British pound sterling against the United States dollar compared to December 31, 2019 on our intercompany balances with and between certain of our subsidiaries. DEBT EXTINGUISHMENT EXPENSE Debt extinguishment expense represents the call premiums and write-off of unamortized deferred financing costs associated with the early redemption of the 6% Notes, the 43/8% Notes, the 53/4% Notes, the CAD Notes, the Euro Notes and the 53/8% Notes (as defined below). OTHER, NET Other, net for the year ended December 31, 2020 consists primarily of changes in the estimated value of our mandatorily redeemable noncontrolling interests as well as losses on our equity method investments. PROVISION (BENEFIT) FOR INCOME TAXES Our effective tax rates for the years ended December 31, 2020 and 2019 were 7.9% and 18.3%, respectively. Our effective tax rate is subject to variability in the future due to, among other items: (1) changes in the mix of income between our QRSs and our TRSs, as well as among the jurisdictions in which we operate; (2) tax law changes; (3) volatility in foreign exchange gains and losses; (4) the timing of the establishment and reversal of tax reserves; and (5) our ability to utilize net operating losses that we generate. The primary reconciling items between the federal statutory tax rate of 21.0% and our overall effective tax rate were: 2020 The benefit derived from the dividends paid deduction of $60.4 million and the impact of differences in the tax rates at which our foreign earnings are subject to, resulting in a tax provision of $9.5 million. 2019 The benefit derived from the dividends paid deduction of $40.6 million and the impact of differences in the tax rates at which our foreign earnings are subject to, resulting in a tax provision of $8.6 million. YEAR ENDED DECEMBER 31, As a REIT, we are entitled to a deduction for dividends paid, resulting in a substantial reduction of federal income tax expense. As a REIT, substantially all of our income tax expense will be incurred based on the earnings generated by our foreign subsidiaries and our domestic TRSs. We are subject to income taxes in the United States and numerous foreign jurisdictions. We are subject to examination by various tax authorities in jurisdictions in which we have business operations or a taxable presence. We regularly assess the likelihood of additional assessments by tax authorities and provide for these matters as appropriate. Although we believe our tax estimates are appropriate, the final determination of tax audits and any related litigation could result in changes in our estimates. IRON MOUNTAIN 2020 FORM 10-K 45 Table of Contents Part II INCOME (LOSS) FROM CONTINUING OPERATIONS AND ADJUSTED EBITDA The following table reflects the effect of the foregoing factors on our consolidated income (loss) from continuing operations and Adjusted EBITDA (in thousands): Income (Loss) from Continuing Operations $ 343,096 $ 268,211 $ 74,885 27.9 % Income (Loss) from Continuing Operations as a percentage of Consolidated Revenue 8.3 % 6.3 % Adjusted EBITDA Adjusted EBITDA Margin $ 1,475,721 $ 1,469,009 $ 6,712 0.5 % 35.6 % 34.5 % YEAR ENDED DECEMBER 31, 2020 2019 DOLLAR CHANGE PERCENTAGE CHANGE Income (Loss) from Continuing Operations $ 268,211 $ 367,558 $ (99,347) (27.0) % Income (Loss) from Continuing Operations as a percentage of Consolidated Revenue 6.3 % 8.7 % Adjusted EBITDA Adjusted EBITDA Margin $ 1,469,009 $ 1,458,924 $ 10,085 0.7 % 34.5 % 34.5 % YEAR ENDED DECEMBER 31, 2019 2018 DOLLAR CHANGE PERCENTAGE CHANGE Consolidated Adjusted EBITDA Margin for the year ended December 31, 2020 increased by 110 basis points compared to the prior year, reflecting benefits from Project Summit, revenue management, favorable revenue mix and ongoing cost containment measures, partially offset by fixed cost deleverage on lower service revenue and higher bonus compensation accruals. ↑ INCREASED BY $6.7 MILLION OR 0.5% Consolidated Adjusted EBITDA 46 IRON MOUNTAIN 2020 FORM 10-K Table of Contents SEGMENT ANALYSIS Part II See the discussion of Business Segments under Item I and Note 10 to Notes to Consolidated Financial Statements, both included in this Annual Report, for a description of our reportable operating segments. GLOBAL RIM BUSINESS (IN THOUSANDS) YEAR ENDED DECEMBER 31, PERCENTAGE CHANGE 2020 2019 DOLLAR CHANGE ACTUAL CONSTANT CURRENCY IMPACT OF ACQUISITIONS ORGANIC GROWTH Storage Rental Service $ 2,373,783 $ 2,320,076 $ 53,707 2.3 % 1,325,497 1,492,357 (166,860) (11.2) % Segment Revenue $ 3,699,280 $ 3,812,433 $ (113,153) (3.0) % 3.6 % (10.2) % (1.8) % 1.7 % 1.9 % 1.8 % 1.9 % (12.1) % (3.6) % Segment Adjusted EBITDA $ 1,574,069 $ 1,566,065 $ 8,004 Segment Adjusted EBITDA Margin 42.6 % 41.1 % YEAR ENDED DECEMBER 31, PERCENTAGE CHANGE 2019 2018 DOLLAR CHANGE ACTUAL CONSTANT CURRENCY IMPACT OF ACQUISITIONS ORGANIC GROWTH Storage Rental Service $ 2,320,076 $ 2,301,344 $ 18,732 1,492,357 1,541,256 Segment Revenue $ 3,812,433 $ 3,842,600 Segment Adjusted EBITDA $ 1,566,065 $ 1,572,438 Segment Adjusted EBITDA Margin 41.1 % 40.9 % (48,899) (30,167) (6,373) $ $ 0.8 % (3.2) % (0.8) % 3.0 % (1.0) % 1.4 % 0.8 % 0.3 % 0.6 % 2.2 % (1.3) % 0.8 % 3-YEAR SEGMENT ANALYSIS: GLOBAL RIM BUSINESS (IN MILLIONS) Primary factors influencing the change in revenue and Adjusted EBITDA Margin in our Global RIM Business segment for the year ended December 31, 2020 compared to the year ended December 31, 2019 include the following: • a decline in organic service revenue mainly driven by reduced service activity levels, primarily due to the COVID-19 pandemic; • organic storage rental revenue growth driven by revenue management; • a decrease in revenue of $45.7 million due to foreign currency exchange rate fluctuations; • a 2.1% increase in global records management volume due to acquisitions (excluding acquisitions, global records management volume decreased 1.1%); and • a 150 basis point increase in Adjusted EBITDA Margin primarily driven by benefits from Project Summit, revenue management, favorable revenue mix and ongoing cost containment measures, partially offset by fixed cost deleverage on lower service revenues and higher bonus compensation accruals. IRON MOUNTAIN 2020 FORM 10-K 47 Table of Contents Part II GLOBAL DATA CENTER BUSINESS (IN THOUSANDS) Storage Rental Service Segment Revenue Segment Adjusted EBITDA YEAR ENDED DECEMBER 31, PERCENTAGE CHANGE 2020 263,695 15,617 279,312 126,576 $ $ $ $ $ $ 2019 246,925 10,226 DOLLAR CHANGE $ 16,770 5,391 257,151 $ 22,161 121,517 $ 5,059 ACTUAL 6.8 % 52.7 % 8.6 % CONSTANT CURRENCY 6.5 % IMPACT OF ACQUISITIONS — % ORGANIC GROWTH 6.5 % 51.5 % 8.3 % — % — % 51.5 % 8.3 % Segment Adjusted EBITDA Margin 45.3 % 47.3 % YEAR ENDED DECEMBER 31, PERCENTAGE CHANGE 2019 2018 DOLLAR CHANGE ACTUAL CONSTANT CURRENCY IMPACT OF ACQUISITIONS ORGANIC GROWTH Storage Rental Service Segment Revenue Segment Adjusted EBITDA $ 246,925 $ 218,675 $ 28,250 10,226 257,151 121,517 $ $ 10,308 (82) $ $ 228,983 $ 28,168 99,575 $ 21,942 Segment Adjusted EBITDA Margin 47.3 % 43.5 % 12.9 % (0.8) % 12.3 % 13.4 % (0.7) % 12.8 % 8.1 % 4.1 % 8.0 % 5.3 % (4.8) % 4.8 % 3-YEAR SEGMENT ANALYSIS: GLOBAL DATA CENTER BUSINESS (IN MILLIONS) Primary factors influencing the change in revenue and Adjusted EBITDA Margin in our Global Data Center Business segment for the year ended December 31, 2020 compared to the year ended December 31, 2019 include the following: • organic revenue growth from leases signed in prior periods and service revenue growth, partially offset by churn of 680 basis points; • non-recurring revenue benefits in the prior year include a previously disclosed lease modification fee of $5.4 million, while non- recurring revenue benefits in the current year were $1.8 million; and • a 200 basis point decrease in Adjusted EBITDA Margin reflecting headwinds from flow through of non-recurring revenue benefits described above and a $4.0 million prior year contractual settlement, partially offset by ongoing cost containment measures. 48 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part II CORPORATE AND OTHER BUSINESS (IN THOUSANDS) YEAR ENDED DECEMBER 31, PERCENTAGE CHANGE 2020 2019 DOLLAR CHANGE ACTUAL CONSTANT CURRENCY IMPACT OF ACQUISITIONS ORGANIC GROWTH Storage Rental Service Segment Revenue Segment Adjusted EBITDA Segment Adjusted EBITDA as a Percentage of Consolidated Revenue $ 116,613 $ 114,086 $ 2,527 52,065 168,678 (224,924) $ $ $ $ 78,914 (26,849) 193,000 $ (24,322) (218,573) $ (6,351) (5.4) % (5.1) % 2.2 % (34.0) % (12.6) % 2.1 % (34.1) % (12.7) % (1.1) % 0.3 % (0.5) % 3.2 % (34.4) % (12.2) % YEAR ENDED DECEMBER 31, PERCENTAGE CHANGE 2019 2018 DOLLAR CHANGE ACTUAL CONSTANT CURRENCY IMPACT OF ACQUISITIONS ORGANIC GROWTH Storage Rental Service Segment Revenue Segment Adjusted EBITDA Segment Adjusted EBITDA as a Percentage of Consolidated Revenue $ 114,086 $ 102,436 $ 11,650 78,914 193,000 (218,573) $ $ $ $ 51,742 27,172 154,178 $ 38,822 (213,089) $ (5,484) (5.1) % (5.0) % 11.4 % 52.5 % 25.2 % 11.9 % 55.0 % 26.3 % 8.7 % 46.8 % 21.4 % 3.2 % 8.2 % 4.9 % Primary factors influencing the change in revenue and Adjusted EBITDA in our Corporate and Other Business segment for the year ended December 31, 2020 compared to the year ended December 31, 2019 include the following: • a decline in organic service revenue due to lower service activity levels in our Fine Arts business, primarily related to the COVID-19 pandemic; and • a decrease in Adjusted EBITDA reflecting the impact of lower service activity in our Fine Arts business, increased information technology expenses and higher bonus compensation accruals, partially offset by benefits from Project Summit. IRON MOUNTAIN 2020 FORM 10-K 49 Table of Contents Part II LIQUIDITY AND CAPITAL RESOURCES GENERAL We expect to meet our short-term and long-term cash flow requirements through cash generated from operations, cash on hand, borrowings under our Credit Agreement (as defined below) and proceeds from monetizing a small portion of our total industrial real estate assets in the future, as well as other potential financings (such as the issuance of debt or equity). Our cash flow requirements, both in the near and long term, include, but are not limited to, capital expenditures, the repayment of outstanding debt, shareholder dividends, Project Summit initiatives, potential and pending business acquisitions and normal business operation needs. PROJECT SUMMIT As disclosed above, in October 2019, we announced Project Summit. We estimate that the implementation of Project Summit will result in total Restructuring Charges of approximately $450.0 million. From the inception of Project Summit through December 31, 2020, we have incurred approximately $243.0 million of Restructuring Charges related to Project Summit, primarily related to employee severance costs, internal costs associated with the development and implementation of Project Summit initiatives and professional fees. From the inception of Project Summit through December 31, 2020, we have also incurred approximately $10.1 million of capital expenditures. CASH FLOWS The following is a summary of our cash balances and cash flows (in thousands) as of and for the years ended December 31, Cash Flows from Operating Activities - Continuing Operations $ 987,657 $ 966,655 $ 936,544 Cash Flows from Investing Activities - Continuing Operations Cash Flows from Financing Activities - Continuing Operations Cash and Cash Equivalents, including Restricted Cash, End of Year (85,440) (886,699) 205,063 (735,946) (198,973) 193,555 (2,230,128) 550,678 165,485 2020 2019 2018 A. CASH FLOWS FROM OPERATING ACTIVITIES For the year ended December 31, 2020, net cash flows provided by operating activities increased by $21.0 million compared to the prior year period primarily due to an increase in cash provided by working capital of $125.6 million, primarily related to the timing of payments associated with certain accrued expenses offset by a decrease in net income (including non-cash charges and realized foreign exchange losses) of $104.6 million. B. CASH FLOWS FROM INVESTING ACTIVITIES Our significant investing activities during the year ended December 31, 2020 are highlighted below: • We paid cash for capital expenditures of $438.3 million. Additional details of our capital spending are included in the “Capital Expenditures” section below. • We paid cash for acquisitions (net of cash acquired) of $118.6 million, primarily funded by borrowings under our Revolving Credit Facility. • We received $564.7 million in proceeds from sales of property, plant and equipment, primarily related to proceeds from sale- leaseback transactions of facilities during the third quarter and fourth quarter of 2020 and proceeds received in connection with the Frankfurt JV Transaction during the fourth quarter of 2020. C. CASH FLOWS FROM FINANCING ACTIVITIES Our significant financing activities for the year ended December 31, 2020 included: • Net proceeds of $2,376.0 million associated with the June 2020 Offerings (as defined below). • Net proceeds of $1,089.0 million associated with the issuance of the 41/2% Notes (as defined below). • Payments, including call premiums, of $2,942.6 million associated with the early redemption of the 43/8% Notes, the 6% Notes, the 53/4% Notes, the CAD Notes, the Euro Notes and the 53/8% Notes (each as defined below). • Net payments of $664.9 million primarily associated with the repayments on our Revolving Credit Facility and Accounts Receivable Securitization Program (as defined below). • Payment of dividends in the amount of $716.3 million on our common stock. 50 IRON MOUNTAIN 2020 FORM 10-K Table of Contents CAPITAL EXPENDITURES Part II We present two categories of capital expenditures: (1) Growth Investment Capital Expenditures and (2) Recurring Capital Expenditures with the following sub-categories: (i) Data Center; (ii) Real Estate; (iii) Innovation and Other (for Growth Investment Capital Expenditures only); and (iv) Non-Real Estate (for Recurring Capital Expenditures only). During 2020, a portion of what was previously categorized as Non-Real Estate Growth Capital Expenditures was recategorized as Real Estate Growth Capital Expenditures and the remaining portion was recategorized as Recurring Capital Expenditures. In addition, capital expenditures associated with restructuring (including Project Summit) and integration of acquisitions, which was previously categorized as recurring capital expenditures, have been recategorized as Innovation and Other. We have reclassified the categorization of our prior year capital expenditures to conform with our current presentation. GROWTH INVESTMENT CAPITAL EXPENDITURES: • Data Center: Expenditures primarily related to investments in new construction of data center facilities (including the acquisition of land and development of facilities) or capacity expansion in existing buildings. • Real Estate: Expenditures primarily related to investments in land, buildings, building improvements, leasehold improvements and racking structures to grow our revenues or achieve operational efficiencies. • Innovation and Other: Discretionary capital expenditures for significant new products and services, restructuring (including Project Summit), and integration of acquisitions. RECURRING CAPITAL EXPENDITURES: • Real Estate: Expenditures primarily related to the replacement of components of real estate assets such as buildings, building improvements, leasehold improvements and racking structures. • Non-Real Estate: Expenditures primarily related to the replacement of containers and shred bins, warehouse equipment, fixtures, computer hardware, or third-party or internally-developed software assets that support the maintenance of existing revenues or avoidance of an increase in costs. • Data Center: Expenditures related to the upgrade or re-configuration of existing data center assets. The following table presents our capital spend for 2020, 2019 and 2018 organized by the type of the spending as described above. NATURE OF CAPITAL SPEND (IN THOUSANDS) Growth Investment Capital Expenditures: Data Center Real Estate Innovation and Other Total Growth Investment Capital Expenditures Recurring Capital Expenditures: Real Estate Non-Real Estate Data Center Total Recurring Capital Expenditures Total Capital Spend (on accrual basis) Net increase (decrease) in prepaid capital expenditures Net (increase) decrease in accrued capital expenditures Total Capital Spend (on cash basis) 2020 2019 2018 $ 216,491 $ 401,902 $ 162,666 67,217 18,810 302,518 51,009 76,124 15,959 143,092 445,610 1,836 (9,183) 133,093 17,555 552,550 55,444 74,092 8,589 138,125 690,675 510 1,798 138,307 30,291 331,264 73,146 61,490 9,051 143,687 474,951 (1,844) (13,045) $ 438,263 $ 692,983 $ 460,062 Excluding capital expenditures associated with potential future acquisitions, we expect total capital expenditures of approximately $550.0 million for the year ending December 31, 2021. Of this, we expect our capital expenditures for growth investment to be approximately $410.0 million, and our recurring capital expenditures to be approximately $140.0 million. Our capital expenditures for growth investment includes Global Data Center Business development spend of approximately $300.0 million. DIVIDENDS See Note 8 to Notes to Consolidated Financial Statements included in this Annual Report for information on dividends. IRON MOUNTAIN 2020 FORM 10-K 51 Table of Contents Part II FINANCIAL INSTRUMENTS AND DEBT Financial instruments that potentially subject us to credit risk consist principally of cash and cash equivalents (including money market funds) and accounts receivable. The only significant concentration of liquid investments as of December 31, 2020 is related to cash and cash equivalents. See Note 2.f. to Notes to the Consolidated Financial Statements included in this Annual Report for information on our money market funds. Long-term debt as of December 31, 2020 is as follows (in thousands): Revolving Credit Facility Term Loan A Term Loan B Australian Dollar Term Loan (the "AUD Term Loan") UK Bilateral Revolving Credit Facility 37/8% GBP Senior Notes due 2025 (the "GBP Notes") 47/8% Senior Notes due 2027 (the "47/8% Notes due 2027") 51/4% Senior Notes due 2028 (the "51/4% Notes due 2028") 5% Senior Notes due 2028 (the "5% Notes") 47/8% Senior Notes due 2029 (the "47/8% Notes due 2029") 51/4% Senior Notes due 2030 (the "51/4% Notes due 2030") 41/2% Senior Notes due 2031 (the "41/2% Notes") 55/8% Senior Notes due 2032 (the "55/8% Notes") Real Estate Mortgages, Financing Lease Liabilities and Other Accounts Receivable Securitization Program Total Long-term Debt Less Current Portion DECEMBER 31, 2020 DEBT (INCLUSIVE OF DISCOUNT) UNAMORTIZED DEFERRED FINANCING COSTS CARRYING AMOUNT $ — $ (8,620) $ (8,620) 215,625 679,621 243,152 191,101 546,003 1,000,000 825,000 500,000 1,000,000 1,300,000 1,100,000 600,000 511,922 85,000 8,797,424 (193,759) — (6,244) (1,624) (1,307) (4,983) (9,598) (8,561) (5,486) (12,658) (14,416) (12,648) (6,727) (1,086) (152) 215,625 673,377 241,528 189,794 541,020 990,402 816,439 494,514 987,342 1,285,584 1,087,352 593,273 510,836 84,848 (94,110) 8,703,314 — (193,759) Long-term Debt, Net of Current Portion $ 8,603,665 $ (94,110) $ 8,509,555 See Note 6 to Notes to Consolidated Financial Statements included in this Annual Report for additional information regarding our long-term debt. CREDIT AGREEMENT Our credit agreement (the "Credit Agreement") consists of a revolving credit facility (the “Revolving Credit Facility”) and a term loan (the “Term Loan A”). The Revolving Credit Facility enables IMI and certain of its United States and foreign subsidiaries to borrow in United States dollars and (subject to sublimits) a variety of other currencies (including Canadian dollars, British pounds sterling and Euros, among other currencies) in an aggregate outstanding amount not to exceed $1,750.0 million. Under the Credit Agreement, we have the option to request additional commitments of up to $1,260.0 million, in the form of term loans or through increased commitments under the Revolving Credit Facility, subject to the conditions specified in the Credit Agreement. The Credit Agreement is scheduled to mature on June 4, 2023, at which point all obligations become due. The original principal amount of the Term Loan A was $250.0 million and is to be paid in quarterly installments in an amount equal to $3.1 million per quarter, with the remaining balance due on June 4, 2023. IMI and the Guarantors guarantee all obligations under the Credit Agreement. The interest rate on borrowings under the Credit Agreement varies depending on our choice of interest rate and currency options, plus an applicable margin, which varies based on our consolidated leverage ratio. Additionally, the Credit Agreement requires the payment of a commitment fee on the unused portion of the Revolving Credit Facility, which fee ranges from between 0.25% to 0.4% based on our consolidated leverage ratio and fees associated with outstanding letters of credit. As of December 31, 2020, we had no outstanding borrowings under the Revolving Credit Facility and $215.6 million aggregate outstanding principal amount under the Term Loan A. At December 31, 2020, we had various outstanding letters of credit totaling $3.2 million under the Revolving Credit Facility. The amount available for borrowing under the Revolving Credit Facility as of December 31, 2020, which is based on IMI’s leverage ratio, the last 12 months' earnings before interest, taxes, depreciation and amortization and rent expense (“EBITDAR”), other adjustments as defined in the Credit Agreement and current external debt, was $1,746.8 million (which amount represents the maximum availability as of such date). Available borrowings under the Revolving Credit Facility are subject to compliance with our indenture covenants as discussed below. The average interest rate in effect for all outstanding borrowings under the Credit Agreement was 1.9% as of December 31, 2020. 52 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part II IMI’s wholly owned subsidiary, Iron Mountain Information Management, LLC (“IMIM”), has an incremental term loan B with a principal amount of $700.0 million (the “Term Loan B”). The Term Loan B, which matures on January 2, 2026, was issued at 99.75% of par. The Term Loan B holders benefit from the same security and guarantees as other borrowings under the Credit Agreement. The Term Loan B holders also benefit from the same affirmative and negative covenants as other borrowings under the Credit Agreement; however, the Term Loan B holders are not generally entitled to the benefits of the financial covenants under the Credit Agreement. Principal payments on the Term Loan B are to be paid in quarterly installments of $1.8 million per quarter during the period June 30, 2018 through December 31, 2025, with the balance due on January 2, 2026. The Term Loan B may be prepaid without penalty at any time. The Term Loan B bears interest at a rate of LIBOR plus 1.75%. As of December 31, 2020, we had $679.6 million aggregate outstanding principal amount under the Term Loan B. The interest rate in effect under Term Loan B as of December 31, 2020 was 1.9%. JUNE 2020 OFFERINGS On June 22, 2020, IMI completed private offerings of (i) $500.0 million in aggregate principal amount of the 5% Notes, (ii) $1,300.0 million in aggregate principal amount of the 51/4% Notes due 2030 and (iii) $600.0 million in aggregate principal amount of the 55/8% Notes (collectively, the “June 2020 Offerings”). The 5% Notes, the 51/4% Notes due 2030 and the 55/8% Notes were issued at 100.000% of par. The total net proceeds of approximately $2,376.0 million from the June 2020 Offerings, after deducting the initial purchasers’ commissions, were used to redeem all of the 43/8% Senior Notes due 2021 (“the 43/8% Notes”), the 6% Senior Notes due 2023 (the “6% Notes”) and the 53/4% Senior Subordinated Notes due 2024 (the "53/4% Notes”) and to repay a portion of the outstanding borrowings under the Revolving Credit Facility. On June 29, 2020, we redeemed all of the $500.0 million in aggregate principal outstanding of the 43/8% Notes at 100.000% of par and all of the $600.0 million in aggregate principal outstanding of the 6% Notes at 102.000% of par, plus, in each case, accrued and unpaid interest to, but excluding, the redemption date. We recorded a charge of approximately $17.0 million to Other expense (income), net during the second quarter of 2020 related to the early extinguishment of this debt, representing the call premium associated with the early redemption of the 6% Notes, as well as a write-off of unamortized deferred financing costs associated with the early redemption of the 43/8% Notes and the 6% Notes. On July 2, 2020, we redeemed all of the $1,000.0 million in aggregate principal outstanding of the 53/4% Notes at 100.958% of par, plus accrued and unpaid interest to, but excluding, the redemption date. We recorded a charge of approximately $15.3 million to Other expense (income), net during the third quarter of 2020 related to the early extinguishment of this debt, representing the call premium and write-off of unamortized deferred financing fees. AUGUST 2020 OFFERING On August 18, 2020, IMI completed a private offering of $1,100.0 million in aggregate principal amount of the 41/2% Notes. The 41/2% Notes were issued at 100.000% of par. The total net proceeds of approximately $1,089.0 million from the issuance of the 41/2% Notes, after deducting the initial purchasers’ commissions, were used to redeem all of the 53/8% CAD Senior Notes due 2023 (the “CAD Notes”), the 3% Euro Senior Notes due 2025 (the “Euro Notes”) and the 53/8% Senior Notes due 2026 (the “53/8% Notes”) and to repay a portion of the outstanding borrowings under the Revolving Credit Facility. On August 21, 2020, we redeemed all of the 250.0 million CAD in aggregate principal outstanding of the CAD Notes at 104.031% of par, 300.0 million Euro in aggregate principal outstanding of the Euro Notes at 101.500% of par and $250.0 million in aggregate principal outstanding of the 53/8% Notes at 106.628% of par, plus, in each case accrued and unpaid interest to, but excluding, the redemption date. We recorded a charge of approximately $36.0 million to Other expense (income), net during the third quarter of 2020 related to the early extinguishment of the CAD Notes, the Euro Notes and the 53/8% Notes, representing the call premiums and write off unamortized deferred financing costs associated with the early redemption of these debt instruments. ACCOUNTS RECEIVABLE SECURITIZATION PROGRAM We participate in an accounts receivable securitization program (the “Accounts Receivable Securitization Program”) involving several of our wholly owned subsidiaries and certain financial institutions. Under the Accounts Receivable Securitization Program, certain of our subsidiaries sell substantially all of their United States accounts receivable balances to our wholly owned special purpose entities, Iron Mountain Receivables QRS, LLC and Iron Mountain Receivables TRS, LLC (the “Accounts Receivable Securitization Special Purpose Subsidiaries”). The Accounts Receivable Securitization Special Purpose Subsidiaries use the accounts receivable balances to collateralize loans obtained from certain financial institutions. The Accounts Receivable Securitization Special Purpose Subsidiaries are consolidated subsidiaries of IMI. IMIM retains the responsibility of servicing the accounts receivable balances pledged as collateral for the Accounts Receivable Securitization Program and IMI provides a performance guaranty. The maximum availability allowed is limited by eligible accounts receivable, as defined under the terms of the Accounts Receivable Securitization Program. IRON MOUNTAIN 2020 FORM 10-K 53 Table of Contents Part II On March 31, 2020, we amended the Accounts Receivable Securitization Program to (i) increase the maximum amount available from $275.0 million to $300.0 million and (ii) extend the maturity date from July 30, 2020 to July 30, 2021, at which point all obligations become due. The full amount outstanding under the Accounts Receivable Securitization Program is classified within the current portion of long-term debt in our Consolidated Balance Sheet as of December 31, 2020. As of December 31, 2020, the maximum availability allowed and amount outstanding under the Accounts Receivable Securitization Program was $274.1 million and $85.0 million, respectively. The interest rate in effect under the Accounts Receivable Securitization Program was 1.1% as of December 31, 2020. Commitment fees at a rate of 40 basis points are charged on amounts made available but not borrowed under the Accounts Receivable Securitization Program. LETTERS OF CREDIT As of December 31, 2020, we had outstanding letters of credit totaling $36.2 million, of which $3.2 million reduce our borrowing capacity under the Revolving Credit Facility (as described above). The letters of credit expire at various dates between January 2021 and January 2033. DEBT COVENANTS The Credit Agreement (as defined in Note 6 to Notes of Consolidated Financial Statements included in this Annual Report), our bond indentures and other agreements governing our indebtedness contain certain restrictive financial and operating covenants, including covenants that restrict our ability to complete acquisitions, pay cash dividends, incur indebtedness, make investments, sell assets and take certain other corporate actions. The covenants do not contain a rating trigger. Therefore, a change in our debt rating would not trigger a default under the Credit Agreement, our bond indentures or other agreements governing our indebtedness. The Credit Agreement requires that we satisfy a fixed charge coverage ratio, a net total lease adjusted leverage ratio and a net secured debt lease adjusted leverage ratio on a quarterly basis and our bond indentures require that, among other things, we satisfy a leverage ratio (not lease adjusted) or a fixed charge coverage ratio (not lease adjusted), as a condition to taking actions such as paying dividends and incurring indebtedness. The Credit Agreement uses EBITDAR-based calculations and the bond indentures use EBITDA-based calculations as the primary measures of financial performance for purposes of calculating leverage and fixed charge coverage ratios. The bond indenture EBITDA-based calculations include our consolidated subsidiaries, other than those we have designated as “Unrestricted Subsidiaries” as defined in the bond indentures. Generally, the Credit Agreement and the bond indentures use a trailing four fiscal quarter basis for purposes of the relevant calculations and require certain adjustments and exclusions for purposes of those calculations, which make the calculation of financial performance for purposes of those calculations under the Credit Agreement and bond indentures not directly comparable to Adjusted EBITDA as presented herein. These adjustments can be significant. For example, the calculation of financial performance under the Credit Agreement and certain of our bond indentures includes (subject to specified exceptions and caps) adjustments for non-cash charges and for expected benefits associated with (i) completed acquisitions, (ii) certain executed lease agreements associated with our data center business that have yet to commence, and (iii) restructuring and other strategic initiatives, such as Project Summit. The calculation of financial performance under our other bond indentures includes, for example, adjustments for non-cash charges and for expected benefits associated with (i) completed acquisitions, and (ii) events that are extraordinary, unusual or non-recurring, such as the COVID-19 pandemic. Our leverage and fixed charge coverage ratios under the Credit Agreement and our indentures as of December 31, 2020 are as follows: Net total lease adjusted leverage ratio Net secured debt lease adjusted leverage ratio Fixed charge coverage ratio Bond leverage ratio (not lease adjusted) Bond fixed charge coverage ratio (not lease adjusted) DECEMBER 31, 2020 MAXIMUM/MINIMUM ALLOWABLE 5.3 1.9 2.3 5.9 3.2 Maximum allowable of 6.5 Maximum allowable of 4.0 Minimum allowable of 1.5 Maximum allowable of 7.0(1) Minimum allowable of 2.0(1) (1) The maximum allowable leverage ratio under our indentures for the GBP Notes due 2025, the 47/8% Notes due 2027, the 51/4% Notes due 2028 and the 47/8% Notes due 2029 is 7.0. As of December 31, 2020, we no longer have any indentures subject to a maximum leverage ratio of 6.5. The indentures for the 5% Notes, the 51/4% Notes due 2030, the 41/2% Notes and the 55/8% Notes do not include a maximum leverage ratio covenant; the indentures for these notes instead require us to maintain a minimum fixed charge coverage ratio of 2.0. In certain instances as provided in our indentures, we have the ability to incur additional indebtedness that would result in our bond leverage ratio or bond fixed charge coverage ratio exceeding or falling below the maximum or minimum permitted ratio under our indentures and still remain in compliance with the applicable covenant. Noncompliance with these leverage and fixed charge coverage ratios would have a material adverse effect on our financial condition and liquidity. ___________________________________________________________________________________________________ Our ability to pay interest on or to refinance our indebtedness depends on our future performance, working capital levels and capital structure, which are subject to general economic, financial, competitive, legislative, regulatory and other factors which may be beyond our control. There can be no assurance that we will generate sufficient cash flow from our operations or that future financings will be available on acceptable terms or in amounts sufficient to enable us to service or refinance our indebtedness or to make necessary capital expenditures. 54 IRON MOUNTAIN 2020 FORM 10-K Table of Contents DERIVATIVE INSTRUMENTS INTEREST RATE SWAP AGREEMENTS Part II In March 2018, we entered into interest rate swap agreements to limit our exposure to changes in interest rates on a portion of our floating rate indebtedness. As of December 31, 2020, we had $350.0 million in notional value of interest rate swap agreements outstanding, which expire in March 2022. Under the interest rate swap agreements, we receive variable rate interest payments associated with the notional amount of each interest rate swap, based upon one-month LIBOR, in exchange for the payment of fixed interest rates as specified in the interest rate swap agreements. In July 2019, we entered into forward-starting interest rate swap agreements to limit our exposure to changes in interest rates on a portion of our floating rate indebtedness once our current interest rate swap agreements expire in March 2022. The forward-starting interest rate swap agreements have $350.0 million in notional value, commence in March 2022 and expire in March 2024. Under the swap agreements, we will receive variable rate interest payments based upon one-month LIBOR, in exchange for the payment of fixed interest rates as specified in the interest rate swap agreements. We have designated these interest rate swap agreements, including the forward-starting interest rate swap agreements, as cash flow hedges. CROSS-CURRENCY SWAP AGREEMENTS We enter into cross-currency swap agreements to hedge the variability of exchange rate impacts between the United States dollar and the Euro. The cross-currency swap agreements are designated as a hedge of net investment against certain of our Euro denominated subsidiaries and require an exchange of the notional amounts at maturity. In August 2019, we entered into cross-currency swap agreements whereby we notionally exchanged approximately $110.0 million at an interest rate of 6.0% for approximately 99.1 million Euros at a weighted average interest rate of approximately 3.65%. These cross-currency swap agreements expire in August 2023. In September 2020, we entered into cross-currency swap agreements whereby we notionally exchanged approximately $359.2 million at an interest rate of 4.5% for approximately 300.0 million Euros at a weighted average interest rate of approximately 3.4%. These cross-currency swap agreements expire in February 2026. See Note 5 to Notes to Consolidated Financial Statements included in this Annual Report for additional information on our derivative instruments. EQUITY FINANCING In 2017, we entered into a Distribution Agreement with the Agents pursuant to which we may sell, from time to time, up to an aggregate sales price of $500.0 million of our common stock through the At The Market (ATM) Equity Program. Sales of our common stock made pursuant to the Distribution Agreement may be made in negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act, including sales made directly on the NYSE, or sales made to or through a market maker other than on an exchange, or as otherwise agreed between the applicable Agent and us. We intend to use the net proceeds from sales of our common stock pursuant to the At The Market (ATM) Equity Program for general corporate purposes, which may include acquisitions and investments, including acquisitions and investments in our Global Data Center Business, and repaying amounts outstanding from time to time under the Revolving Credit Facility. During the quarter and year ended December 31, 2020, there were no shares of common stock sold under the At The Market (ATM) Equity Program. As of December 31, 2020, the remaining aggregate sale price of shares of our common stock available for distribution under the At The Market (ATM) Equity Program was approximately $431.2 million. IRON MOUNTAIN 2020 FORM 10-K 55 Table of Contents Part II ACQUISITIONS AND JOINT VENTURES See Note 3 to Notes to Consolidated Financial Statements included in this Annual Report for information regarding our 2020 acquisitions and joint ventures. OSG ACQUISITION On January 9, 2020, we completed the acquisition of OSG Records Management (Europe) Limited ("OSG" and such acquisition, the "OSG Acquisition") for cash consideration of approximately $95.5 million. The OSG Acquisition enabled us to extend our Global RIM Business in Russia, Ukraine, Kazakhstan, Belarus, and Armenia. The results of OSG are fully consolidated within our consolidated financial statements from the closing date of the OSG Acquisition. GLENBEIGH ACQUISITION On February 17, 2020, in order to enhance our existing operations in the United Arab Emirates, we acquired Glenbeigh Records Management DWC-LLC, a storage and records management company, for total cash consideration of approximately $29.1 million. MAKESPACE JV CAPITAL CONTRIBUTION In March 2019, we formed the MakeSpace JV with MakeSpace Labs, Inc. In the second quarter of 2020, we committed to participate in a round of equity funding for the MakeSpace JV whereby we agreed to contribute $36.0 million of the $45.0 million being raised in installments beginning in May 2020 through October 2021. We account for our investment in the MakeSpace JV as an equity method investment, and the carrying value is presented as a component of Other within Other assets, net in our Consolidated Balance Sheet. At December 31, 2020, we owned approximately 39% of the outstanding equity in the MakeSpace JV and the carrying value of our investment in the MakeSpace JV at December 31, 2020 was approximately $16.9 million. FORMATION OF FRANKFURT JOINT VENTURE In October 2020, we formed a joint venture (the "Frankfurt JV") with AGC Equity Partners ("AGC") to design and develop a 280,000 square foot, 27 megawatt, hyperscale data center currently under development in Frankfurt, Germany (the “Frankfurt JV Transaction”). AGC acquired an 80% equity interest in the Frankfurt JV, while we retained a 20% equity interest (the "Frankfurt JV Investment"). The total cash consideration for the 80% equity interest sold to AGC was approximately $105.0 million. We received approximately $93.3 million (gross of certain transaction expenses) upon the closing of the Frankfurt JV, and we are entitled to receive an additional approximately $11.7 million upon the completion of development of the data center, which we expect to occur in the second quarter of 2021. As a result of the Frankfurt JV Transaction, we recognized a gain of approximately $24.1 million, representing the excess of the fair value of the consideration received over the carrying value of the assets, which consisted primarily of land and land development assets which were previously included within our Global Data Center Business segment. We account for our Frankfurt JV Investment as an equity method investment. At the closing date of the Frankfurt JV Transaction, the fair value of the Frankfurt JV Investment was approximately $23.3 million. The carrying value of our Frankfurt JV Investment at December 31, 2020 was $26.5 million, which is presented as a component of Other within Other assets, net in our Consolidated Balance Sheet. NET OPERATING LOSSES At December 31, 2020, we have federal and state net operating loss carryforwards of which we are expecting an insignificant tax benefit to be realized. We have assets for foreign net operating losses of $92.1 million, with various expiration dates (and in some cases no expiration date), subject to a valuation allowance of approximately 43%. 56 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part II ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. CREDIT RISK Financial instruments that potentially subject us to credit risk consist principally of cash and cash equivalents (including money market funds and time deposits) and accounts receivable. The only significant concentrations of liquid investments as of December 31, 2020 relate to cash and cash equivalents held in money market funds with four “Triple A” rated money market funds and time deposits with one global bank. As per our risk management investment policy, we limit exposure to concentration of credit risk by limiting the amount invested in any one mutual fund to a maximum of 1% of the fund's total assets or in any one financial institution to a maximum of $75.0 million. As of December 31, 2020, our cash and cash equivalents balance, including restricted cash, was $205.1 million. INTEREST RATE RISK Given the recurring nature of our revenues and the long-term nature of our asset base, we have the ability and the preference to use long-term, fixed interest rate debt to finance our business at attractive rates, thereby helping to preserve our long-term returns on invested capital. Occasionally, we may use interest rate swaps as a tool to maintain our targeted level of fixed rate debt. As of December 31, 2020, we had $1,108.1 million of variable rate debt outstanding with a weighted average variable interest rate of approximately 3.1%, and $7,689.3 million of fixed rate debt outstanding. As of December 31, 2020, approximately 87% of our total debt outstanding was fixed. If the weighted average variable interest rate on our variable rate debt had increased by 1%, our net income for the year ended December 31, 2020 would have been reduced by approximately $13.8 million. See Note 5 to Notes to Consolidated Financial Statements included in this Annual Report for a discussion on our interest rate swaps and Note 6 to Notes to Consolidated Financial Statements included in this Annual Report for a discussion of our long-term indebtedness, including the fair values of such indebtedness as of December 31, 2020. CURRENCY RISK Our international investments may be subject to risks and uncertainties related to fluctuations in currency valuation. Our reporting currency is the United States dollar. However, our international revenues and expenses are generated in the currencies of the countries in which we operate, primarily the British pound sterling, Euro, Canadian dollar, Brazilian real and the Australian dollar. Declines in the value of the local currencies in which we are paid relative to the United States dollar will cause revenues in United States dollar terms to decrease and dollar-denominated liabilities to increase in local currency. The impact of currency fluctuations on our earnings is mitigated by the fact that most operating and other expenses are also incurred and paid in the local currency. We also have several intercompany obligations between our foreign subsidiaries and IMI and our United States-based subsidiaries. In addition, our foreign subsidiaries and IME also have intercompany obligations between them. These intercompany obligations are primarily denominated in the local currency of the foreign subsidiary. We have adopted and implemented a number of strategies to mitigate the risks associated with fluctuations in foreign currency exchange rates. One strategy is to finance certain of our international subsidiaries with debt that is denominated in local currencies, thereby providing a natural hedge. In determining the amount of any such financing, we take into account local tax considerations, among other factors. Another strategy we utilize is for IMI or IMIM, a wholly-owned subsidiary of IMI, to borrow in foreign currencies to hedge our intercompany financing activities. In addition, on occasion, we enter into currency swaps to temporarily or permanently hedge an overseas investment, such as a major acquisition, to lock in certain transaction economics. We have implemented these strategies for our foreign investments in the United Kingdom, Canada, Australia, Latin America and continental Europe. IM UK has financed a portion of its capital needs through the issuance in British pounds sterling of the GBP Notes due 2025. Our Australian business has financed a portion of its capital needs through direct borrowings in Australian dollars under the AUD Term Loan. This creates a tax efficient natural currency hedge. Prior to their redemption in August 2020, we had designated a portion of our previously outstanding Euro Notes as a hedge of net investment of certain of our Euro denominated subsidiaries. As a result, we recorded $17.0 million ($17.0 million net of tax) of foreign exchange losses related to the “marking-to-market” of such debt to currency translation adjustments which is a component of Accumulated other comprehensive items, net included in our Consolidated Balance Sheet for the year ended December 31, 2020. As of December 31, 2020, cumulative net gains of $3.3 million, net of tax are recorded in Accumulated other comprehensive items, net associated with this net investment hedge. IRON MOUNTAIN 2020 FORM 10-K 57 Table of Contents Part II We have entered into cross-currency swap agreements to hedge the variability of exchange rate impacts between the United States dollar and the Euro. These cross-currency swap agreements are designated as a hedge of net investment against certain of our Euro denominated subsidiaries and require an exchange of the notional amounts at maturity. These cross-currency swaps are marked to market at the end of each reporting period and any changes in fair value are recorded as a component of Accumulated other comprehensive items, net. Unrealized gains are recognized as assets, which are recorded as a component of Other within Other assets, net, while unrecognized losses are recognized as liabilities, which are recorded as a component of Other long-term liabilities in our Consolidated Balance Sheets. See Note 5 to Notes to Consolidated Financial Statements included in this Annual Report for a discussion on our cross-currency swap agreements. As of and during the year ending December 31, 2020, we had no outstanding forward contracts. At the maturity of any forward contract, we may enter into a new forward contract to hedge movements in the underlying currencies. At the time of settlement, we either pay or receive the net settlement amount from any forward contract and recognize this amount in Other expense (income), net in the accompanying statements of operations as a realized foreign exchange gain or loss. At the end of each month, we mark the outstanding forward contracts to market and record an unrealized foreign exchange gain or loss for the mark-to-market valuation. Historically, we have not designated any of the forward contracts we have entered as hedges. The impact of devaluation or depreciating currency on an entity depends on the residual effect on the local economy and the ability of an entity to raise prices and/or reduce expenses. Due to our constantly changing currency exposure and the potential substantial volatility of currency exchange rates, we cannot predict the effect of exchange fluctuations on our business. The effect of a change in foreign currency exchange rates on our net investment in foreign subsidiaries is reflected in the “Accumulated Other Comprehensive Items, net” component of equity. A 10% depreciation in year-end 2020 functional currencies, relative to the United States dollar, would result in a reduction in our equity of approximately $286.5 million. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. The information required by this item is included in Item 15(a) of this Annual Report. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. None. 58 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part II ITEM 9A. CONTROLS AND PROCEDURES. DISCLOSURE CONTROLS AND PROCEDURES The term “disclosure controls and procedures” is defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. These rules refer to the controls and other procedures of a company that are designed to ensure that information is recorded, processed, accumulated, summarized, communicated and reported to management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding what is required to be disclosed by a company in the reports that it files under the Exchange Act. As of December 31, 2020 (the “Evaluation Date”), we carried out an evaluation, under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of our disclosure controls and procedures. Based upon that evaluation, our chief executive officer and chief financial officer concluded that, as of the Evaluation Date, our disclosure controls and procedures are effective. MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Our management, with the participation of our principal executive officer and principal financial officer, is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our internal control system is designed to provide reasonable assurance to our management and board of directors regarding the preparation and fair presentation of published financial statements. Due to their inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions or that the degree of compliance with policies or procedures may deteriorate. Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2020. The effectiveness of our internal control over financial reporting has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report which is included in this Annual Report. IRON MOUNTAIN 2020 FORM 10-K 59 Table of Contents Part II REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of Iron Mountain Incorporated OPINION ON INTERNAL CONTROL OVER FINANCIAL REPORTING We have audited the internal control over financial reporting of Iron Mountain Incorporated and subsidiaries (the “Company”) as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2020, of the Company and our report dated February 24, 2021, expressed an unqualified opinion on those financial statements. BASIS FOR OPINION The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. DEFINITION AND LIMITATIONS OF INTERNAL CONTROL OVER FINANCIAL REPORTING A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ DELOITTE & TOUCHE LLP Boston, Massachusetts February 24, 2021 60 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part II CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING Our management, with the participation of our principal executive officer and principal financial officer, is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our internal control system is designed to provide reasonable assurance to our management and board of directors regarding the preparation and fair presentation of published financial statements. There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the quarter ended December 31, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B. OTHER INFORMATION. Disclosure Pursuant to Section 13(r) of the Exchange Act Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012 and Section 13(r) of the Exchange Act require an issuer to disclose in its annual and quarterly reports whether it or any of its affiliates have knowingly engaged in certain activities, including specified activities or transactions relating to the Government of Iran (as defined in section 560.304 of title 31 of the Code of Federal Regulations) and to persons designated under Executive Order No. 13382 (70 Fed. Reg. 38567). As previously disclosed in our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020 (the “2020 Quarterly Reports”), during the first quarter of 2020, we determined that one of our non-U.S. subsidiaries provided limited hard copy record, electronic media (e.g., CD), box and container storage and handling services during such quarter, and in prior periods since the reporting requirement took effect, to at least one Government of Iran entity and one entity designated under Executive Order No. 13382 - both located outside of Iran. In each case, the customer relationship commenced at a time when U.S. sanctions law did not limit dealings with entities determined to be part of the Government of Iran or designated under Executive Order No. 13382 by non- U.S. entities owned or controlled by U.S. persons. Each relationship automatically continued from year to year without any affirmative step being taken by either party. We also reported in the 2020 Quarterly Reports that we had notified the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) of these limited activities and initiated an internal investigation, and, during that investigation, we had identified two additional customer relationships between the subsidiary in question and entities designated under Executive Order No. 13382 and Executive Order No. 13224, neither of which was active and ongoing during the year ended December 31, 2020. We have been actively cooperating with OFAC in its review of this matter. During the second quarter of 2020, the subsidiary in question notified both entities with active relationships identified during the first quarter of 2020 of its decision to terminate those relationships. Because we consider property held in storage for these two entities to be blocked property under regulations administered by OFAC, the subsidiary in question continues to hold the boxes and will do so in accordance with applicable rules and regulations. Following termination of the relationships, the subsidiary in question received cash of less than 2,000 British pounds sterling from one of the entities for services provided and invoiced prior to the termination. The subsidiary is treating this money as blocked property. The subsidiary has not engaged in any other activity with the entities during the period covered by this report. Consistent with the disclosure contained in the 2020 Quarterly Reports, we do not intend to continue any activity involving the entities in question. The gross revenues attributable to the services provided to these entities while the entities were designated under Executive Order No. 13382 and Executive Order No. 13224 were less than 30,000 British pounds sterling in the aggregate. It is not possible to determine the exact amount of profits attributable to these services, but the net profits are less than the associated revenues. Following the year ended December 31, 2020, we submitted a Final Notice of Voluntary Disclosure (“Final VSD”) with OFAC on January 14, 2021. The Final VSD included a detailed overview of our internal investigation and the remedial measures we have implemented or will be implementing to address the root causes of the potentially violative activity. The Final VSD findings showed that the potential violations were inadvertent. We will continue to cooperate fully with OFAC in its ongoing review of this matter. We continue to enhance our internal processes and procedures designed to identify transactions associated with restricted parties, such as introducing a Global International Sanctions and Trade Law Policy and engaging a more comprehensive third-party screening provider. We are also supplementing our existing compliance training with the launch of global training on sanctions and restricted parties in the first quarter of 2021. We will continue to review and improve our programs and processes, as necessary or appropriate, to comply with all applicable sanctions laws and to comply with the disclosure requirements of Section 13(r) of the Exchange Act. IRON MOUNTAIN 2020 FORM 10-K 61 Table of Contents PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE. The information required by Item 10 is incorporated by reference to our Proxy Statement. ITEM 11. EXECUTIVE COMPENSATION. The information required by Item 11 is incorporated by reference to our Proxy Statement. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. The information required by Item 12 is incorporated by reference to our Proxy Statement. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE. The information required by Item 13 is incorporated by reference to our Proxy Statement. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES. The information required by Item 14 is incorporated by reference to our Proxy Statement. IRON MOUNTAIN 2020 FORM 10-K 63 Table of Contents Table of Contents PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. (a) Financial Statements filed as part of this report: IRON MOUNTAIN INCORPORATED Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets, December 31, 2020 and 2019 Consolidated Statements of Operations, Years Ended December 31, 2020, 2019 and 2018 Consolidated Statements of Comprehensive Income (Loss), Years Ended December 31, 2020, 2019 and 2018 Consolidated Statements of Equity, Years Ended December 31, 2020, 2019 and 2018 Consolidated Statements of Cash Flows, Years Ended December 31, 2020, 2019 and 2018 Notes to Consolidated Financial Statements Financial Statement Schedule III—Schedule of Real Estate and Accumulated Depreciation PAGE 66 68 69 70 71 72 73 125 (b) Exhibits filed as part of this report: As listed in the Exhibit Index following the Financial Statement Schedule III-Schedule of Real Estate and Accumulated Depreciation. IRON MOUNTAIN 2020 FORM 10-K 65 Table of Contents Part IV REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of Iron Mountain Incorporated OPINION ON THE FINANCIAL STATEMENTS We have audited the accompanying consolidated balance sheets of Iron Mountain Incorporated and subsidiaries (the “Company”) as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive income (loss), equity, and cash flows, for each of the three years in the period ended December 31, 2020, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 24, 2021, expressed an unqualified opinion on the Company’s internal control over financial reporting. BASIS FOR OPINION These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. CRITICAL AUDIT MATTER The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 66 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part IV GOODWILL - GLOBAL DATA CENTER REPORTING UNIT - REFER TO NOTE 2.K. TO THE FINANCIAL STATEMENTS CRITICAL AUDIT MATTER DESCRIPTION The Company’s evaluation of goodwill for impairment involves the comparison of the fair value of each reporting unit to its carrying value. The Company determined the fair value of the Global Data Center reporting unit using a combined approach based on the present value of future cash flows (the “Discounted Cash Flow Model”) and market multiples (the “Market Approach”). The determination of the fair value using the Discounted Cash Flow Model requires management to make significant assumptions related to future revenue growth rates, operating margins, discount rates and capital expenditures. The determination of the fair value using the Market Approach requires management to make significant assumptions related to adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) multiples. Changes in economic and operating conditions impacting these assumptions or changes in multiples could result in goodwill impairments in future periods. The goodwill balance allocated to the Global Data Center reporting unit was $431 million as of October 1, 2020 (goodwill impairment testing date). The fair value of the Global Data Center reporting unit exceeded its carrying value as of the measurement date and, therefore, no impairment was recognized. The Global Data Center reporting unit’s fair value exceeded its carrying value by less than 10%, accordingly, auditing the assumptions used in the goodwill impairment analysis for this reporting unit involved especially subjective judgment. HOW THE CRITICAL AUDIT MATTER WAS ADDRESSED IN THE AUDIT Our audit procedures related to future revenue growth rates, operating margins and capital expenditures (collectively, the “Forecast”), Adjusted EBITDA multiples and the selection of discount rates for the Global Data Center reporting unit included the following, among others: • We tested the effectiveness of controls over the evaluation of goodwill for impairment, including those over the Forecast and the selection of the Adjusted EBITDA multiples and discount rates. • We evaluated management’s ability to accurately forecast by comparing actual results to management’s historical forecasts. • We evaluated the reasonableness of management’s Forecast by comparing it to (1) historical results, (2) internal communications to management and the Board of Directors, and (3) forecasted information included in Company press releases and industry reports of the Company and companies in its peer group. • With the assistance of our fair value specialists, we evaluated the Adjusted EBITDA multiples, including testing the underlying source information and mathematical accuracy of the calculations and comparing the multiples selected by management to its guideline companies. • With the assistance of our fair value specialists, we evaluated the discount rates, including testing the underlying source information and the mathematical accuracy of the calculations, and developing a range of independent estimates and comparing those to the discount rates selected by management. /s/ DELOITTE & TOUCHE LLP Boston, Massachusetts February 24, 2021 We have served as the Company’s auditor since 2002. IRON MOUNTAIN 2020 FORM 10-K 67 Table of Contents Part IV IRON MOUNTAIN INCORPORATED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) ASSETS Current Assets: Cash and cash equivalents Accounts receivable (less allowances of $56,981 and $42,856 as of December 31, 2020 and 2019, respectively) Prepaid expenses and other Total Current Assets Property, plant and equipment Less—Accumulated depreciation Property, Plant and Equipment, net Other Assets, Net: Goodwill Customer relationships, customer inducements and data center lease-based intangibles Operating lease right-of-use assets Other Total Other Assets, Net Total Assets LIABILITIES AND EQUITY Current Liabilities: Current portion of long-term debt Accounts payable Accrued expenses and other current liabilities (includes current portion of operating lease liabilities) Deferred revenue Total Current Liabilities Long-term Debt, net of current portion Long-term Operating Lease Liabilities, net of current portion Other Long-term Liabilities Deferred Income Taxes Commitments and Contingencies Redeemable Noncontrolling Interests Equity: Iron Mountain Incorporated Stockholders’ Equity: Preferred stock (par value $0.01; authorized 10,000,000 shares; none issued and outstanding) Common stock (par value $0.01; authorized 400,000,000 shares; issued and outstanding 288,273,049 shares and 287,299,645 shares as of December 31, 2020 and 2019, respectively) Additional paid-in capital (Distributions in excess of earnings) Earnings in excess of distributions Accumulated other comprehensive items, net Total Iron Mountain Incorporated Stockholders’ Equity Noncontrolling Interests Total Equity Total Liabilities and Equity DECEMBER 31, 2020 2019 $ 205,063 $ 193,555 859,344 205,380 1,269,787 8,246,337 850,701 192,083 1,236,339 8,048,906 (3,743,894) (3,425,869) 4,502,443 4,623,037 4,557,609 1,326,977 2,196,502 295,949 8,377,037 4,485,209 1,393,183 1,869,101 209,947 7,957,440 $ 14,149,267 $ 13,816,816 $ 193,759 $ 359,863 1,146,288 295,785 1,995,695 8,509,555 2,044,598 204,508 198,377 389,013 324,708 961,752 274,036 1,949,509 8,275,566 1,728,686 143,018 188,128 59,805 67,682 — 2,883 — 2,873 4,340,078 4,298,566 (2,950,339) (2,574,896) (255,893) 1,136,729 — (262,581) 1,463,962 265 1,136,729 1,464,227 $ 14,149,267 $ 13,816,816 The accompanying notes are an integral part of these consolidated financial statements. 68 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part IV IRON MOUNTAIN INCORPORATED CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA) Revenues: Storage rental Service Total Revenues Operating Expenses: YEAR ENDED DECEMBER 31, 2020 2019 2018 $ 2,754,091 $ 2,681,087 $ 2,622,455 1,393,179 1,581,497 1,603,306 4,147,270 4,262,584 4,225,761 Cost of sales (excluding depreciation and amortization) 1,757,342 1,833,315 1,793,954 Selling, general and administrative Depreciation and amortization Significant Acquisition Costs Restructuring Charges Intangible impairments (Gain) Loss on disposal/write-down of property, plant and equipment, net Total Operating Expenses Operating Income (Loss) Interest Expense, Net (includes Interest Income of $8,312, $6,559 and $6,553 in 2020, 2019 and 2018, respectively) Other Expense (Income), Net Income (Loss) from Continuing Operations Before Provision (Benefit) for Income Taxes Provision (Benefit) for Income Taxes Income (Loss) from Continuing Operations Income (Loss) from Discontinued Operations, Net of Tax Net Income (Loss) Less: Net Income (Loss) Attributable to Noncontrolling Interests Net Income (Loss) Attributable to Iron Mountain Incorporated Earnings (Losses) per Share—Basic: Income (Loss) from Continuing Operations Total (Loss) Income from Discontinued Operations, Net of Tax Net Income (Loss) Attributable to Iron Mountain Incorporated Earnings (Losses) per Share—Diluted: Income (Loss) from Continuing Operations Total (Loss) Income from Discontinued Operations, Net of Tax Net Income (Loss) Attributable to Iron Mountain Incorporated Weighted Average Common Shares Outstanding—Basic Weighted Average Common Shares Outstanding—Diluted 949,215 652,069 — 194,396 23,000 991,664 658,201 13,293 48,597 — 1,006,983 639,514 50,665 — — (363,537) (63,824) (73,622) 3,212,485 3,481,246 3,417,494 934,785 781,338 808,267 418,535 143,545 372,705 29,609 343,096 — 419,298 33,898 328,142 59,931 268,211 104 343,096 268,315 403 938 409,648 (11,692) 410,311 42,753 367,558 (12,427) 355,131 1,198 $ $ $ $ $ $ $ 342,693 $ 267,377 $ 353,933 1.19 $ 0.93 $ — $ — $ 1.19 $ 0.93 $ 1.19 $ 0.93 $ — $ — $ 1.19 $ 0.93 $ 1.28 (0.04) 1.24 1.28 (0.04) 1.23 288,183 288,643 286,971 287,687 285,913 286,653 The accompanying notes are an integral part of these consolidated financial statements. IRON MOUNTAIN 2020 FORM 10-K 69 Table of Contents Part IV IRON MOUNTAIN INCORPORATED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (IN THOUSANDS) Net Income (Loss) Other Comprehensive Income (Loss): Foreign Currency Translation Adjustment Change in Fair Value of Derivative Instruments Total Other Comprehensive Income (Loss) Comprehensive Income (Loss) Comprehensive (Loss) Income Attributable to Noncontrolling Interests YEAR ENDED DECEMBER 31, 2020 2019 2018 $ 343,096 $ 268,315 $ 355,131 45,779 (39,947) 5,832 348,928 (453) 11,994 (8,783) 3,211 271,526 1,066 (164,107) (973) (165,080) 190,051 (2,207) Comprehensive Income (Loss) Attributable to Iron Mountain Incorporated $ 349,381 $ 270,460 $ 192,258 The accompanying notes are an integral part of these consolidated financial statements. 70 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part IV IRON MOUNTAIN INCORPORATED CONSOLIDATED STATEMENTS OF EQUITY (IN THOUSANDS, EXCEPT SHARE DATA) IRON MOUNTAIN INCORPORATED STOCKHOLDERS’ EQUITY COMMON STOCK TOTAL SHARES AMOUNTS ADDITIONAL PAID-IN CAPITAL EARNINGS IN EXCESS OF DISTRIBUTIONS (DISTRIBUTIONS IN EXCESS OF EARNINGS) ACCUMULATED OTHER COMPREHENSIVE ITEMS, NET NONCONTROLLING INTERESTS REDEEMABLE NONCONTROLLING INTERESTS Balance, December 31, 2017 $ 2,285,134 283,110,183 $ 2,831 $ 4,164,562 $ (1,779,674) $ (103,989) $ 1,404 $ 91,418 (30,233) — 30,020 762,340 — 8 30,012 — (30,233) Cumulative-effect adjustment for adoption of ASU 2014-09 Issuance of shares under employee stock purchase plan and option plans and stock- based compensation Issuance of shares in connection with the Over- Allotment Option, net of underwriting discounts and offering expenses Issuance of shares through the At The Market (ATM) Equity Program, net of underwriting discounts and offering expenses Changes in equity related redeemable noncontrolling interests Parent cash dividends declared Foreign currency translation adjustment Change in fair value of derivative instruments Net income (loss) Noncontrolling interests dividends 76,192 2,175,000 22 76,170 8,716 273,486 2 8,714 (16,110) (683,519) (160,548) (973) 353,784 — — — — — — — — — — — — — (16,110) — — — — — — — — — (683,519) — — 353,933 — — — — — — — (160,702) (973) — — — — — — — — 154 — (149) — Balance, December 31, 2018 1,862,463 286,321,009 2,863 4,263,348 (2,139,493) (265,664) 1,409 Cumulative-effect adjustment for adoption of ASU 2016-02 Issuance of shares under employee stock purchase plan and option plans and stock- based compensation Changes in equity related redeemable noncontrolling interests Parent cash dividends declared Foreign currency translation adjustment Change in fair value of derivative instruments Net income (loss) Noncontrolling interests dividends 5,781 — 36,682 978,636 (1,454) (708,561) 11,866 (8,783) 266,233 — — — — — — — — 10 — — — — — — — 5,781 36,672 (1,454) — — — — — — — (708,561) — — 267,377 — — — — — 11,866 (8,783) — — Balance, December 31, 2019 1,464,227 287,299,645 2,873 4,298,566 (2,574,896) (262,581) Issuance of shares under employee stock purchase plan and option plans and stock- based compensation Changes in equity related redeemable noncontrolling interests Parent cash dividends declared Foreign currency translation adjustment Change in fair value of derivative instruments Net income (loss) Noncontrolling interests dividends 37,995 973,404 10 37,985 3,527 (718,136) 46,748 (39,947) 342,315 — — — — — — — — — — — — — 3,527 — — — — — — — (718,136) — — 342,693 — — — — 46,635 (39,947) — — — — — — — — (1,144) — 265 — — — 113 — (378) — — — — — (16,151) — (3,559) — 1,347 (2,523) 70,532 — — (3,136) — 128 — 2,082 (1,924) 67,682 — (4,924) — (969) — 781 (2,765) Balance, December 31, 2020 $ 1,136,729 288,273,049 $ 2,883 $ 4,340,078 $ (2,950,339) $ (255,893) $ — $ 59,805 The accompanying notes are an integral part of these consolidated financial statements. IRON MOUNTAIN 2020 FORM 10-K 71 Table of Contents Part IV IRON MOUNTAIN INCORPORATED CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) Cash Flows from Operating Activities: Net income (loss) (Income) loss from discontinued operations YEAR ENDED DECEMBER 31, 2019 2018 2020 $ 343,096 $ 268,315 $ — (104) 355,131 12,427 Adjustments to reconcile net income (loss) to cash flows from operating activities: Depreciation 447,562 456,323 452,740 Amortization (includes amortization of deferred financing costs and discounts of $17,376, $16,740 and $15,675 in 2020, 2019 and 2018, respectively) Intangible impairments Revenue reduction associated with amortization of permanent withdrawal fees and data center above- and below-market leases Stock-based compensation expense (Benefit) provision for deferred income taxes Loss on early extinguishment of debt (Gain) loss on disposal/write-down of property, plant and equipment, net Foreign currency transactions and other, net (Increase) decrease in assets Increase (decrease) in liabilities Cash Flows from Operating Activities-Continuing Operations Cash Flows from Operating Activities-Discontinued Operations Cash Flows from Operating Activities Cash Flows from Investing Activities: Capital expenditures Cash paid for acquisitions, net of cash acquired Acquisition of customer relationships Customer inducements Contract fulfillment costs and third party commissions Net proceeds from divestments Investments in Joint Ventures and other investments Proceeds from sales of property and equipment and other, net (including real estate) Cash Flows from Investing Activities-Continuing Operations Cash Flows from Investing Activities-Discontinued Operations Cash Flows from Investing Activities Cash Flows from Financing Activities: Repayment of revolving credit facilities, term loan facilities and other debt Proceeds from revolving credit facilities, term loan facilities and other debt Early redemption of senior subordinated and senior notes, including call premiums Net proceeds from sales of senior notes Debt repayment and equity distribution to noncontrolling interests Parent cash dividends Net proceeds associated with the Equity Offering, including Over-Allotment Option Net proceeds associated with the At The Market (ATM) Program Net proceeds (payments) associated with employee stock-based awards Payment of debt financing and stock issuance costs and other Cash Flows from Financing Activities-Continuing Operations Cash Flows from Financing Activities-Discontinued Operations Cash Flows from Financing Activities Effect of Exchange Rates on Cash and Cash Equivalents Increase (decrease) in Cash and Cash Equivalents Cash and Cash Equivalents, including Restricted Cash, Beginning of Year Cash and Cash Equivalents, including Restricted Cash, End of Year Supplemental Information: Cash Paid for Interest Cash Paid for Income Taxes, Net Non-Cash Investing and Financing Activities: Financing Leases Accrued Capital Expenditures Accrued Purchase Price and Other Holdbacks Dividends Payable 221,883 23,000 9,878 37,674 (12,986) 68,300 (363,537) 78,437 (15,443) 149,793 987,657 — 987,657 (438,263) (118,581) (4,346) (10,644) (60,020) — (18,250) 564,664 (85,440) — (85,440) 218,618 — 13,703 35,654 (624) — (63,824) 29,838 5,404 3,352 966,655 — 966,655 (692,983) (58,237) (46,105) (9,371) (76,171) — (19,222) 166,143 (735,946) 5,061 (730,885) 202,449 — 16,281 31,167 (4,239) — (74,134) (16,395) (36,054) (2,829) 936,544 (995) 935,549 (460,062) (1,758,557) (63,577) (8,902) (26,208) 1,019 — 86,159 (2,230,128) 8,250 (2,221,878) (8,604,394) 7,939,458 (2,942,554) (14,535,115) 14,059,818 — (14,192,139) 15,351,614 — 3,465,000 (2,765) (716,290) — — 321 (25,475) (886,699) — (886,699) (4,010) 11,508 193,555 205,063 $ 987,500 (1,924) (704,526) — — 1,027 (5,753) (198,973) — (198,973) (8,727) 28,070 165,485 193,555 $ 390,332 $ 43,468 $ 394,984 $ 61,691 $ 55,782 $ 91,528 $ — $ 187,867 $ 32,742 $ 82,345 $ 4,135 $ 186,021 $ $ $ $ $ $ $ $ — (2,523) (673,635) 76,192 8,716 (1,142) (16,405) 550,678 — 550,678 (24,563) (760,214) 925,699 165,485 388,440 64,493 83,948 84,143 35,218 181,986 The accompanying notes are an integral part of these consolidated financial statements. 72 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2020 (In thousands, except share and per share data) 1. NATURE OF BUSINESS The accompanying financial statements represent the consolidated accounts of Iron Mountain Incorporated, a Delaware corporation (“IMI”), and its subsidiaries (“we” or “us”). We help organizations around the world protect their information, reduce storage costs, comply with regulations, facilitate corporate disaster recovery, and better use their information and information technology (“IT”) infrastructure for business advantages, regardless of its format, location or life cycle stage. We do this by storing physical records and data backup media, offering information management solutions, and providing data center space for enterprise-class colocation and opportunistic hyperscale deployments. We offer comprehensive records and information management services and data management services, along with the expertise and experience to address complex storage and information management challenges such as rising storage rental costs, legal and regulatory compliance, and disaster recovery requirements. We provide secure and reliable data center facilities to protect digital information and ensure the continued operation of our customers’ IT infrastructure, with reliable and flexible deployment options. In March 2020, the World Health Organization declared a novel strain of coronavirus (“COVID-19”) a pandemic. This resulted in U.S. federal, state and local and foreign governments and private entities mandating various restrictions, including travel restrictions, restrictions on public gatherings and stay-at-home orders and advisories. In response, we temporarily closed certain of our offices and facilities across the world and implemented certain travel restrictions for our employees. The preventative and protective actions that governments have ordered, or we or our customers have implemented, have resulted in a period of reduced service operations and business disruption for us, our customers and other third parties with which we do business. Currently, certain of the restrictions have been lifted; however, other restrictions still remain and the broader impacts of the COVID-19 pandemic on our financial position, results of operations and cash flows, including impacts to the estimates we use in the preparation of our financial statements, remain uncertain and difficult to predict as information continues to evolve, and the severity and duration of the pandemic remains unknown, as is our visibility of its effect on the markets we serve and our customers within those markets. In October 2019, we announced a global program designed to better position us for future growth and achievement of our strategic objectives (“Project Summit”). See Note 2.k. and Note 12. On January 10, 2018, we completed the acquisition of IO Data Centers, LLC (“IODC”). See Note 3. We have been organized and have operated as a real estate investment trust for United States federal income tax purposes (“REIT”) beginning with our taxable year ended December 31, 2014. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. PRINCIPLES OF CONSOLIDATION The accompanying financial statements reflect our financial position, results of operations, comprehensive income (loss), equity and cash flows on a consolidated basis. All intercompany transactions and account balances have been eliminated. B. USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires us to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of the financial statements and for the period then ended. On an ongoing basis, we evaluate the estimates used. We base our estimates on historical experience, actuarial estimates, current conditions and various other assumptions that we believe to be reasonable under the circumstances. These estimates form the basis for making judgments about the carrying values of assets and liabilities and are not readily apparent from other sources. Actual results may differ from these estimates. C. FOREIGN CURRENCY Local currencies are the functional currencies for our operations outside the United States, with the exception of certain foreign holding companies, whose functional currency is the United States dollar. In those instances where the local currency is the functional currency, assets and liabilities are translated at period-end exchange rates, and revenues and expenses are translated at average exchange rates for the applicable period. See Note 2.q. IRON MOUNTAIN 2020 FORM 10-K 73 Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) D. CASH, CASH EQUIVALENTS AND RESTRICTED CASH Cash and cash equivalents include cash on hand and cash invested in highly liquid short-term securities, which have remaining maturities at the date of purchase of less than 90 days. Cash and cash equivalents are carried at cost, which approximates fair value. E. ALLOWANCE FOR DOUBTFUL ACCOUNTS AND CREDIT MEMO RESERVES We maintain an allowance for doubtful accounts and a credit memo reserve for estimated losses resulting from the potential inability of our customers to make required payments and potential disputes regarding billing and service issues. In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments-Credit Losses-Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 changes how entities will measure credit losses on most financial assets. The standard eliminates the probable initial recognition of estimated losses and provides a forward-looking expected credit loss model for accounts receivable, loans and other financial instruments. On January 1, 2020 we adopted ASU 2016-13 on a modified retrospective basis for all financial assets measured at amortized cost. The adoption of ASU 2016-13 did not result in a material impact on our consolidated financial statements. Under ASU 2016-13, we calculate and monitor our allowance considering future potential economic and macroeconomic conditions and reasonable and supportable forecasts for expected future collectability of our outstanding receivables, in addition to considering our past loss experience, current and prior trends in our aged receivables and credit memo activity. Our considerations when calculating our allowance include, but are not limited to, the following: the location of our businesses, the composition of our customer base, our product and service lines, potential future economic unrest, and potential future macroeconomic factors, including natural disasters and any impacts associated with the COVID-19 pandemic. Continued adjustments will be made should there be any material change to reasonable and supportable forecasts that may impact our likelihood of collection, as it becomes evident. Our highly diverse global customer base, with no single customer accounting for more than 1% of revenue during the years ended December 31, 2020, 2019 and 2018, limits our exposure to concentration of credit risk. Additionally, we write off uncollectible balances as circumstances warrant, generally, no later than one year past due. Prior to our adoption of ASU 2016-13, we maintained an allowance for doubtful accounts for estimated losses resulting from the potential inability of our customers to make required payments and potential disputes regarding billing and service issues. When calculating the allowance, we considered our past loss experience, current and prior trends in our aged receivables and credit memo activity, current economic conditions, and specific circumstances of individual receivable balances. If the financial condition of our customers were to significantly change, resulting in a significant improvement or impairment of their ability to make payments, an adjustment of the allowance might have been required. Rollforward of allowance for doubtful accounts and credit memo reserves is as follows: YEAR ENDED DECEMBER 31, 2020 2019 2018 BALANCE AT BEGINNING OF THE YEAR CREDIT MEMOS CHARGED TO REVENUE ALLOWANCE FOR BAD DEBTS CHARGED TO EXPENSE DEDUCTIONS AND OTHER(1) BALANCE AT END OF THE YEAR $ 42,856 $ 55,118 $ 34,411 $ (75,404) $ 43,584 46,648 51,846 36,329 19,389 18,625 (71,963) (58,018) 56,981 42,856 43,584 (1) Primarily consists of the issuance of credit memos, the write-off of accounts receivable and the impact associated with currency translation adjustments. 74 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) F. CONCENTRATIONS OF CREDIT RISK Financial instruments that potentially subject us to credit risk consist principally of cash and cash equivalents (including money market funds and time deposits) and accounts receivable. The only significant concentrations of liquid investments as of December 31, 2020 and 2019 related to cash and cash equivalents. At December 31, 2020, we had money market funds with four “Triple A” rated money market funds and time deposits with one global bank. At December 31, 2019, we had money market funds with seven “Triple A” rated money market funds. As per our risk management investment policy, we limit exposure to concentration of credit risk by limiting the amount invested in any one mutual fund to a maximum of 1% of the fund's total assets or in any one financial institution to a maximum of $75,000. See Note 2.o. G. PREPAID EXPENSES AND ACCRUED EXPENSES There are no prepaid expenses with items greater than 5% of total current assets as of December 31, 2020 and 2019. Accrued expenses, with items greater than 5% of total current liabilities are shown separately, and consist of the following: DESCRIPTION Interest Sales tax and VAT payable Dividends Operating lease liabilities Other Accrued expenses DECEMBER 31, 2020 2019 $ 131,448 $ 131,780 187,867 250,239 444,954 $ 1,146,288 $ 97,987 115,352 186,021 223,249 339,143 961,752 H. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are stated at cost and depreciated using the straight-line method with the following useful lives (in years): DESCRIPTION Buildings and building improvements Leasehold improvements Racking Warehouse equipment/vehicles Furniture and fixtures Computer hardware and software RANGE 5 to 40 5 to 10 or life of the lease (whichever is shorter) 1 to 20 or life of the lease (whichever is shorter) 1 to 10 1 to 10 2 to 5 IRON MOUNTAIN 2020 FORM 10-K 75 Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Property, plant and equipment (including financing leases in the respective category), at cost, consist of the following: DESCRIPTION Land Buildings and building improvements Leasehold improvements Racking Warehouse equipment/vehicles Furniture and fixtures Computer hardware and software Construction in progress Property, plant and equipment DECEMBER 31, 2020 2019 $ 354,395 $ 3,040,253 969,273 2,083,199 499,787 52,978 746,993 499,459 448,566 3,029,309 852,022 2,040,832 483,218 54,275 689,261 451,423 $ 8,246,337 $ 8,048,906 Minor maintenance costs are expensed as incurred. Major improvements which extend the life, increase the capacity or improve the safety or the efficiency of property owned are capitalized and depreciated. Major improvements to leased buildings are capitalized as leasehold improvements and depreciated. We capitalize interest expense during the active construction period of major capital projects. Capitalized interest is added to the cost of the underlying assets and is amortized over the useful lives of the assets. During the years ended December 31, 2020, 2019 and 2018, capitalized interest is as follows: YEAR ENDED DECEMBER 31, 2020 2019 2018 Capitalized interest $ 14,321 $ 15,980 $ 3,732 We develop various software applications for internal use. Computer software costs associated with internal use software are expensed as incurred until certain capitalization criteria are met. Third party consulting costs, as well as payroll and related costs for employees directly associated with, and devoting time to, the development of internal use computer software projects (to the extent time is spent directly on the project) are capitalized. Capitalization begins when the design stage of the application has been completed and it is probable that the project will be completed and used to perform the function intended. Capitalization ends when the asset is ready for its intended use. Depreciation begins when the software is placed in service. Computer software costs that are capitalized are periodically evaluated for impairment. During the years ended December 31, 2020, 2019 and 2018, capitalized costs associated with the development of internal use computer software projects are as follows: YEAR ENDED DECEMBER 31, 2020 2019 2018 Capitalized costs associated with the development of internal use computer software projects $ 38,329 $ 34,650 $ 29,407 Entities are required to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred. Asset retirement obligations represent the costs to replace or remove tangible long-lived assets required by law, regulatory rule or contractual agreement. Our asset retirement obligations are primarily the result of requirements under our facility lease agreements which generally have “return to original condition” clauses which would require us to remove or restore items such as shred pits, vaults, demising walls and office build-outs, among others. The significant assumptions used in estimating our aggregate asset retirement obligations are the timing of removals, the probability of a requirement to perform, estimated cost and associated expected inflation rates that are consistent with historical rates and credit-adjusted risk-free rates that approximate our incremental borrowing rate. Our asset retirement obligations at December 31, 2020 and 2019 were $34,537 and $30,831, respectively. 76 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) I. LEASES We lease facilities for certain warehouses, data centers and office space. We also have land leases, including those on which certain facilities are located. The majority of our leased facilities are classified as operating leases that, on average, have initial lease terms of five to 10 years, with one or more lease renewal options to extend the lease term. Our lease renewal option terms generally range from one to five years. The exercise of the lease renewal option is at our sole discretion and may contain fixed rent, fair market value based rent or Consumer Price Index rent escalation clauses. We include option periods in the lease term when our failure to renew the lease would result in an economic disincentive, thereby making it reasonably certain that we will renew the lease. We recognize straight line rental expense over the life of the lease and any fair market value or Consumer Price Index rent escalations are recognized as variable lease expense in the period in which the obligation is incurred. In addition, we lease certain vehicles and equipment. Vehicle and equipment leases typically have lease terms ranging from one to seven years. We account for all leases, both operating and financing, in accordance with ASU No. 2016-02 Leases (Topic 842), as amended ("ASU 2016-02") which we adopted on January 1, 2019 on a modified retrospective basis. We also adopted an accounting policy which provides that leases with an initial term of 12 months or less will not be included within the lease right-of-use assets and lease liabilities recognized on our Consolidated Balance Sheets after the adoption of ASU 2016-02. We will continue to recognize the lease payments for those leases with an initial term of 12 months or less in our Consolidated Statements of Operations on a straight-line basis over the lease term. The lease right-of-use assets and related lease liabilities are classified as either operating or financing. Lease right-of-use assets are calculated as the net present value of future payments plus any capitalized initial direct costs less any tenant improvements or lease incentives. Lease liabilities are calculated as the net present value of future payments. In calculating the present value of the lease payments, we utilize the rate stated in the lease (in the limited circumstances when such rate is explicitly stated) or, if no rate is explicitly stated, we utilize a rate that reflects our securitized incremental borrowing rate by geography for the lease term. We account for nonlease components (which include common area maintenance, taxes, and insurance) with the related lease component. Any variable nonlease components are not included within the lease right-of-use asset and lease liability on our Consolidated Balance Sheets, and instead, are reflected as an expense in the period incurred. At January 1, 2019, we recognized the cumulative effect of initially applying ASU 2016-02 as an adjustment to the opening balance of (Distributions in excess of earnings) Earnings in excess of distributions, resulting in an increase of approximately $5,800 to stockholders’ equity due to certain build to suit leases that were accounted for as financing leases under Accounting Standards Codification (“ASC”) 840, Leases (“ASC 840”) but are accounted for as operating leases under ASU 2016-02. Operating and financing lease right-of-use assets and lease liabilities as of December 31, 2020 and 2019 are as follows: DESCRIPTION Assets: DECEMBER 31, 2020 2019 Operating lease right-of-use assets(1) Financing lease right-of-use assets, net of accumulated depreciation(2)(3) $ 2,196,502 $ 1,869,101 310,534 327,215 Liabilities: Current Operating lease liabilities Financing lease liabilities(3) Long-term Operating lease liabilities Financing lease liabilities(3) $ 250,239 $ 43,149 223,249 46,582 2,044,598 323,162 1,728,686 320,600 (1) At December 31, 2020 and 2019, these assets are comprised of approximately 99% real estate related assets (which include land, buildings and racking) and 1% non-real estate related assets (which include warehouse equipment, vehicles, furniture and fixtures and computer hardware and software). (2) At December 31, 2020, these assets are comprised of approximately 72% real estate related assets and 28% non-real estate related assets. At December 31, 2019, these assets are comprised of approximately 69% real estate related assets and 31% non-real estate related assets. (3) Financing lease right-of-use assets, current financing lease liabilities and long-term financing lease liabilities are included within Property, Plant and Equipment, Net, Current portion of long-term debt and Long-term Debt, net of current portion, respectively, within our Consolidated Balance Sheets. IRON MOUNTAIN 2020 FORM 10-K 77 Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The components of the lease expense for the years ended December 31, 2020 and 2019 are as follows: DESCRIPTION Operating lease cost(1) Financing lease cost: Depreciation of financing lease right-of-use assets Interest expense for financing lease liabilities YEAR ENDED DECEMBER 31, 2020 2019 499,464 $ 459,619 51,629 $ 19,942 59,258 21,031 $ $ (1) Operating lease cost, the majority of which is included in Cost of sales, includes variable lease costs of $111,501 and $105,922 for the years ended December 31, 2020 and 2019, respectively. Weighted average remaining lease terms and discount rates as of December 31, 2020 and 2019 are as follows: Remaining Lease Term Discount Rate DECEMBER 31, 2020 DECEMBER 31, 2019 OPERATING LEASES FINANCING LEASES OPERATING LEASES FINANCING LEASES 11.1 years 6.9 % 11.5 years 5.9 % 11.0 years 7.1 % 11.6 years 5.7 % The estimated minimum future lease payments as of December 31, 2020, are as follows: YEAR 2021 2022 2023 2024 2025 Thereafter Total minimum lease payments OPERATING LEASES(1) SUBLEASE INCOME FINANCING LEASES(1) $ 380,607 $ (6,208) $ 362,970 334,893 307,039 281,487 1,687,706 (5,752) (5,222) (3,771) (1,661) (6,229) 3,354,702 $ (28,843) 62,669 54,499 45,557 38,051 32,261 268,542 501,579 (135,268) 366,311 Less amounts representing interest or imputed interest Present value of lease obligations $ (1,059,865) 2,294,837 $ (1) Estimated minimum future lease payments exclude variable common area maintenance charges, insurance and taxes. At December 31, 2020, we had seven leases which we have signed but which have not yet commenced and are not included in our lease obligation table above. The total undiscounted minimum lease payments for these leases are approximately $236,200 and have lease terms that range from 10 to 25 years. Each of these leases is expected to commence during 2021, with the exception of one lease where the lease commencement date will be driven by the completion of the building construction, which is expected to occur by the end of 2021 or in early 2022. 78 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Other information: Supplemental cash flow information relating to our leases for the years ended December 31, 2020 and 2019 is as follows: CASH PAID FOR AMOUNTS INCLUDED IN MEASUREMENT OF LEASE LIABILITIES: 2020 2019 YEAR ENDED DECEMBER 31, Operating cash flows used in operating leases Operating cash flows used in financing leases (interest) Financing cash flows used in financing leases NON-CASH ITEMS: Operating lease modifications and reassessments New operating leases (including acquisitions and sale-leaseback transactions) J. LONG-LIVED ASSETS $ 360,088 $ 19,942 47,829 $ 143,382 $ 370,011 338,059 21,031 58,033 108,023 170,464 We review long-lived assets, including all finite-lived intangible assets, for impairment whenever events or changes in circumstances indicate the carrying amount of such assets may not be recoverable. Recoverability of these assets is determined by comparing the sum of the forecasted undiscounted net cash flows of the operation to which the assets relate to their carrying amount. The operations are generally distinguished by the business segment and geographic region in which they operate. If it is determined that we are unable to recover the carrying amount of the assets, the long-lived assets are written down, on a pro rata basis, to fair value. Fair value is determined based on discounted cash flows or appraised values, depending upon the nature of the assets. Long-lived assets, including finite-lived intangible assets, are amortized over their useful lives. Annually, or more frequently if events or circumstances warrant, we assess whether a change in the lives over which long-lived assets, including finite-lived intangible assets, are amortized is necessary. 2020 YEAR ENDED DECEMBER 31, 2019 2018 363,537 $ 63,824 $ 73,622 Consolidated gain on disposal/write-down of property, plant and equipment, net $ The gains primarily consisted of: • Gain on sale of real estate of approximately $63,800 in the United Kingdom • Gains associated with the involuntary conversion of assets included in a facility that we own in Argentina partially destroyed in a fire in 2014, of approximately $8,800 during the fourth quarter of 2018 • Gains associated with sale- leaseback transactions of approximately $342,100, of which (i) approximately $265,600 relates to the sale-leaseback transactions of 14 facilities in the United States during the fourth quarter of 2020 and (ii) approximately $76,400 relates to the sale-leaseback transactions of two facilities in the United States during the third quarter of 2020, each as part of our program to monetize a small portion of our industrial real estate assets. The terms for these leases are consistent with the terms of our lease portfolio, which are disclosed in Note 2.i. • Gains of approximately $24,100 associated with the Frankfurt JV Transaction (as defined in Note 3) • Gains associated with sale and sale- leaseback transactions of approximately $67,800 in the United States • The sale of certain land and buildings of approximately $36,000 in the United Kingdom Partially offset by losses from: • The impairment charge on the assets associated with the select offerings within our Iron Mountain Iron Cloud ("Iron Cloud") portfolio and loss on the subsequent sale of certain IT infrastructure assets and rights to certain hardware and maintenance contracts used to deliver these Iron Cloud offerings of approximately $25,000. • The write-down of certain property, plant and equipment of approximately $15,700 in the United States. IRON MOUNTAIN 2020 FORM 10-K 79 Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) K. GOODWILL AND OTHER INDEFINITE-LIVED INTANGIBLE ASSETS Goodwill and intangible assets with indefinite lives are not amortized but are reviewed annually for impairment or more frequently if impairment indicators arise. Other than goodwill, we currently have no intangible assets that have indefinite lives and which are not amortized. We have selected October 1 as our annual goodwill impairment review date. We have performed our annual goodwill impairment review as of October 1, 2020, 2019 and 2018. We concluded that as of October 1, 2020, 2019 and 2018, goodwill was not impaired. During the first quarter of 2020, as discussed in greater detail below, we concluded that we had a triggering event related to our Fine Arts reporting unit, requiring us to perform an interim goodwill impairment test. We concluded that the fair value of our Fine Arts reporting unit was less than its carrying value, and, therefore, we recorded a $23,000 impairment charge on the goodwill associated with this reporting unit during the first quarter of 2020. The following is a discussion regarding (i) the reporting units at which level we tested goodwill for impairment as of October 1, 2019, (ii) changes to the composition of our reporting units between October 1, 2019 and December 31, 2019, (iii) interim goodwill impairment review for our Fine Arts reporting unit during the first quarter of 2020 and (iv) the reporting units at which level we tested goodwill for impairment as of October 1, 2020 and the composition of these reporting units at December 31, 2020 (including the amount of goodwill associated with each reporting unit). When changes occur in the composition of one or more reporting units, the goodwill is reassigned to the reporting units affected based upon their relative fair values. GOODWILL IMPAIRMENT ANALYSIS - 2019 I. REPORTING UNITS AS OF OCTOBER 1, 2019 Our reporting units at which level we performed our goodwill impairment analysis as of October 1, 2019 were as follows: • North American Records and Information Management • Western Europe • Australia, New Zealand and South Africa • Northern/Eastern Europe and Middle East (“ANZ SA”) • North American Data Management and India (“NEE and MEI”) • Asia • Fine Arts • Entertainment Services • Latin America • Global Data Center We concluded that the goodwill associated with each of our reporting units was not impaired as of such date. II. CHANGES TO COMPOSITION OF REPORTING UNITS BETWEEN OCTOBER 1, 2019 AND DECEMBER 31, 2019 During the fourth quarter of 2019, as a result of the realignment of our global managerial structure and changes to our internal financial reporting associated with Project Summit, we reassessed the composition of our reportable operating segments (see Note 10 for a description and definitions of our reporting operating segments) as well as our reporting units. We noted the following changes to our reporting units: • our former North American Records and Information Management (excluding our technology escrow services business) and North American Data Management reporting units are now being managed as our “North America RIM” reporting unit; • our former Western Europe and NEE and MEI reporting units (excluding India) and our business in Africa, which was previously managed as a component of our former ANZ SA reporting unit, is now being managed together as our “Europe RIM” reporting unit; • our business in India, which was previously managed as a component of our former NEE and MEI reporting unit, is now being managed in conjunction with our businesses in Asia as our “Asia RIM” reporting unit; • our former ANZ SA reporting unit will no longer include South Africa and will be referred to as our “Australia and New Zealand RIM” (“ANZ RIM”) reporting unit; and • our technology escrow services business is now being managed separately as our “Technology Escrow Services” reporting unit. 80 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) There were no changes to our Global Data Center, Fine Arts, Entertainment Services and Latin America RIM reporting units. We concluded that the goodwill associated with our North America RIM, Europe RIM, ANZ RIM, Asia RIM and Technology Escrow Services reporting units were not impaired following this change in reporting units. GOODWILL BY REPORTING UNIT AS OF DECEMBER 31, 2019 The carrying value of goodwill, net for each of our reporting units described above as of December 31, 2019 is as follows: SEGMENT Global RIM (as defined in Note 10) Business Global Data Center Business Corporate and Other Business REPORTING UNIT North America RIM Europe RIM Latin America RIM ANZ RIM Asia RIM Global Data Center Fine Arts Entertainment Services Technology Escrow Services CARRYING VALUE AS OF DECEMBER 31, 2019 $ 2,715,550 572,482 140,897 274,913 239,059 424,568 37,533 34,102 46,105 Total $ 4,485,209 GOODWILL IMPAIRMENT ANALYSIS - 2020 I. INTERIM GOODWILL IMPAIRMENT REVIEW - FINE ARTS During the first quarter of 2020, we concluded that we had a triggering event related to our Fine Arts reporting unit, requiring us to perform an interim goodwill impairment test. The primary factor contributing to our conclusion was the expected impact of the COVID-19 pandemic to this particular business and its customers and revenue sources, which caused us to believe it was more likely than not that the carrying value of our Fine Arts reporting unit exceeded its fair value. During the first quarter of 2020, we performed an interim goodwill impairment test for our Fine Arts reporting unit utilizing a discounted cash flow model, with updated assumptions on future revenues, operating expenditures and capital expenditures. We concluded that the fair value of our Fine Arts reporting unit was less than its carrying value, and, therefore, we recorded a $23,000 impairment charge on the goodwill associated with this reporting unit during the first quarter of 2020. Factors that may impact these assumptions include, but are not limited to: (i) our ability to maintain, or grow, storage and retail service revenues in this reporting unit in line with current expectations and (ii) our ability to manage our fixed and variable costs in this reporting unit in line with potential future revenue declines. II. REPORTING UNITS AS OF OCTOBER 1, 2020 Our reporting units at which level we performed our goodwill impairment analysis as of October 1, 2020 were as follows: • North America RIM • Europe RIM • Latin America RIM • ANZ RIM • Asia RIM • Fine Arts • Entertainment Services • Global Data Center • Technology Escrow Services We concluded that the goodwill associated with each of our reporting units was not impaired as of such date. There were no changes to the composition of our reporting units between October 1, 2020 and December 31, 2020. IRON MOUNTAIN 2020 FORM 10-K 81 Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) GOODWILL BY REPORTING UNIT AS OF DECEMBER 31, 2020 The carrying value of goodwill, net for each of our reporting units described above as of December 31, 2020 is as follows: SEGMENT Global RIM Business Global Data Center Business Corporate and Other Business REPORTING UNIT North America RIM Europe RIM Latin America RIM ANZ RIM Asia RIM Global Data Center Fine Arts Entertainment Services Technology Escrow Services CARRYING VALUE AS OF DECEMBER 31, 2020 $ 2,719,182 641,621 117,834 301,251 244,294 436,987 15,176 35,159 46,105 Total $ 4,557,609 Reporting unit valuations have generally been determined using a combined approach based on the present value of future cash flows (the “Discounted Cash Flow Model”) and market multiples (the “Market Approach”). The Discounted Cash Flow Model incorporates significant assumptions including future revenue growth rates, operating margins, discount rates and capital expenditures. The Market Approach requires us to make assumptions related to Adjusted EBITDA (as defined in Note 10) multiples. Changes in economic and operating conditions impacting these assumptions or changes in multiples could result in goodwill impairments in future periods. In conjunction with our annual goodwill impairment reviews, we reconcile the sum of the valuations of all of our reporting units to our market capitalization as of such dates. The changes in the carrying value of goodwill attributable to each reportable operating segment for the years ended December 31, 2020 and 2019 are as follows: GLOBAL RIM BUSINESS GLOBAL DATA CENTER BUSINESS CORPORATE AND OTHER BUSINESS TOTAL CONSOLIDATED Goodwill balance, net of accumulated amortization, as of December 31, 2018 $ 3,899,210 $ 425,956 $ 115,864 $ 4,441,030 Tax deductible goodwill acquired during the year Non-tax deductible goodwill acquired during the year Fair value and other adjustments Currency effects Goodwill balance, net of accumulated amortization, as of December 31, 2019 Non-tax deductible goodwill acquired during the year Goodwill impairment Fair value and other adjustments Currency effects 16,450 11,228 4,439 11,574 — — 258 (1,646) — 1,904 (417) 389 16,450 13,132 4,280 10,317 3,942,901 424,568 117,740 4,485,209 54,258 — (3,815) 30,838 — — — 12,419 — (23,000) 403 1,297 54,258 (23,000) (3,412) 44,554 Goodwill balance, net of accumulated amortization, as of December 31, 2020 Accumulated Goodwill Impairment Balance as of December 31, 2019 Accumulated Goodwill Impairment Balance as of December 31, 2020 $ $ $ 4,024,182 $ 436,987 $ 96,440 $ 4,557,609 132,409 $ 132,409 $ — $ — $ 3,011 $ 26,011 $ 135,420 158,420 82 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) L. FINITE-LIVED INTANGIBLE ASSETS AND LIABILITIES I. CUSTOMER RELATIONSHIP INTANGIBLE ASSETS Customer relationship intangible assets, which are acquired through either business combinations or acquisitions of customer relationships, are amortized over periods ranging from 10 to 30 years. Customer relationship intangible assets are recorded based upon estimates of their fair value. II. CUSTOMER INDUCEMENTS Payments that are made to a customer’s current records management vendor in order to terminate the customer’s existing contract with that vendor (“Permanent Withdrawal Fees”), or direct payments to a customer for which no distinct benefit is received in return, are collectively referred to as "Customer Inducements". Customer Inducements are treated as a reduction of the transaction price over periods ranging from one to 10 years and are included in storage and service revenue in the accompanying Consolidated Statements of Operations. If the customer terminates its relationship with us, the unamortized carrying value of the Customer Inducement intangible asset is charged to revenue. However, in the event of such termination, we generally collect, and record as income, permanent removal fees that generally equal or exceed the amount of the unamortized Customer Inducement intangible asset. III. DATA CENTER INTANGIBLE ASSETS AND LIABILITIES Finite-lived intangible assets associated with our Global Data Center Business consist of the following: DATA CENTER IN-PLACE LEASE INTANGIBLE ASSETS AND DATA CENTER TENANT RELATIONSHIP INTANGIBLE ASSETS Data Center In-Place Lease Intangible Assets (“Data Center In-Place Leases”) and Data Center Tenant Relationship Intangible Assets (“Data Center Tenant Relationships”) reflect the value associated with acquiring a data center operation with active tenants as of the date of acquisition. The value of Data Center In-Place Leases is determined based upon an estimate of the economic costs (such as lost revenues, tenant improvement costs, commissions, legal expenses and other costs to acquire new data center leases) avoided by acquiring a data center operation with active tenants that would have otherwise been incurred if the data center operation was purchased vacant. Data Center In-Place Leases are amortized over the weighted average remaining term of the acquired data center leases. The value of Data Center Tenant Relationships is determined based upon an estimate of the economic costs avoided upon lease renewal of the acquired tenants, based upon expectations of lease renewal. Data Center Tenant Relationships are amortized over the weighted average remaining anticipated life of the relationship with the acquired tenant. DATA CENTER ABOVE-MARKET AND BELOW-MARKET IN-PLACE LEASE INTANGIBLE ASSETS We record Data Center Above-Market In-Place Lease Intangible Assets (“Data Center Above-Market Leases”) and Data Center Below-Market In-Place Lease Intangible Assets (“Data Center Below-Market Leases”) at the net present value of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of the fair market lease rates for each corresponding in-place lease. Data Center Above-Market Leases and Data Center Below-Market Leases are amortized over the remaining non-cancellable term of the acquired in-place lease to storage revenue. IRON MOUNTAIN 2020 FORM 10-K 83 Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The gross carrying amount and accumulated amortization of our finite-lived intangible assets as of December 31, 2020 and 2019, respectively, are as follows: DESCRIPTION Assets: DECEMBER 31, 2020 DECEMBER 31, 2019 GROSS CARRYING AMOUNT ACCUMULATED AMORTIZATION NET CARRYING AMOUNT GROSS CARRYING AMOUNT ACCUMULATED AMORTIZATION NET CARRYING AMOUNT Customer relationship intangible assets(1) Customer inducements(1) Data center lease-based intangible assets(1)(2) Third-party commissions asset(3) $ 1,852,700 $ (668,547) $ 1,184,153 $ 1,751,848 $ (544,721) $ 1,207,127 49,098 269,988 34,317 (26,923) 22,175 52,718 (29,397) 23,321 (149,339) 120,649 265,945 (103,210) 162,735 (8,761) 25,556 31,708 (4,134) 27,574 Liabilities: Data center below-market leases(4) $ 12,854 $ (5,943) $ 6,911 $ 12,750 $ (3,937) $ 8,813 (1) Included in Customer relationships, customer inducements and data center lease-based intangibles in the accompanying Consolidated Balance Sheets as of December 31, 2020 and 2019. (2) Data center lease-based intangible assets includes Data Center In-Place Leases, Data Center Tenant Relationships and Data Center Above-Market Leases. (3) (4) Included in Other (within Other Assets, Net) in the accompanying Consolidated Balance Sheets as of December 31, 2020 and 2019. Included in Other long-term liabilities in the accompanying Consolidated Balance Sheets as of December 31, 2020 and 2019. Amortization expense associated with finite-lived intangible assets, revenue reduction associated with the amortization of Customer Inducements and net revenue reduction associated with the amortization of Data Center Above-Market Leases and Data Center Below-Market Leases for the years ended December 31, 2020, 2019 and 2018 is as follows: Amortization expense included in depreciation and amortization associated with: Customer relationship intangible assets Data center in-place leases and tenant relationships Third-party commissions asset and other finite-lived intangible assets Revenue reduction associated with amortization of: YEAR ENDED DECEMBER 31, 2020 2019 2018 $ 117,514 $ 117,972 $ 113,782 42,637 7,004 46,696 7,957 43,061 5,713 Customer inducements and data center above-market and below-market leases $ 9,878 $ 13,703 $ 16,281 Estimated amortization expense for existing finite-lived intangible assets (excluding Contract Fulfillment Costs, as defined and disclosed in Note 2.r.) is as follows: ESTIMATED AMORTIZATION INCLUDED IN DEPRECIATION AND AMORTIZATION $ 168,756 $ 139,983 135,262 130,298 127,771 625,052 REVENUE REDUCTION ASSOCIATED WITH CUSTOMER INDUCEMENTS AND DATA CENTER ABOVE-MARKET AND BELOW-MARKET LEASES 7,603 5,010 3,084 1,453 508 842 YEAR 2021 2022 2023 2024 2025 Thereafter 84 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) M. DEFERRED FINANCING COSTS Deferred financing costs are amortized over the life of the related debt. If debt is retired early, the related unamortized deferred financing costs are written-off in the period the debt is retired to Other expense (income), net. See Note 6. N. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES Every derivative instrument is required to be recorded in the balance sheet as either an asset or a liability measured at its fair value. Periodically, we acquire derivative instruments that are intended to hedge either cash flows or values that are subject to foreign exchange or other market price risk and not for trading purposes. We have formally documented our hedging relationships, including identification of the hedging instruments and the hedged items, as well as our risk management objectives and strategies for undertaking each hedge transaction. Given the recurring nature of our revenues and the long-term nature of our asset base, we have the ability and the preference to use long-term, fixed interest rate debt to finance our business, thereby preserving our long- term returns on invested capital. We may use interest rate swaps as a tool to maintain our targeted level of fixed rate debt. In addition, we may enter into cross-currency swaps to hedge the variability of exchange rates between the United States and our foreign subsidiaries, as well as interest rates. We may also use borrowings in foreign currencies, either obtained in the United States or by our foreign subsidiaries, to hedge foreign currency risk associated with our international investments. As of December 31, 2020 and 2019, none of our derivative instruments contained credit-risk related contingent features. See Note 5. IRON MOUNTAIN 2020 FORM 10-K 85 Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) O. FAIR VALUE MEASUREMENTS Entities are permitted under GAAP to elect to measure certain financial instruments and certain other items at either fair value or cost. We have elected the cost measurement option in all circumstances where we had an option. Our financial assets or liabilities that are carried at fair value are required to be measured using inputs from the three levels of the fair value hierarchy. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The three levels of the fair value hierarchy are as follows: Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access at the measurement date. Level 2—Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs). Level 3—Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability. The assets and liabilities carried at fair value and measured on a recurring basis as of December 31, 2020 and 2019, respectively, are as follows: DESCRIPTION Money Market Funds(1) Time Deposits(1) Trading Securities Derivative Liabilities(4) DESCRIPTION Money Market Funds(1) Trading Securities Derivative Liabilities(4) TOTAL CARRYING VALUE AT DECEMBER 31, 2020 QUOTED PRICES IN ACTIVE MARKETS (LEVEL 1) SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2) SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3) FAIR VALUE MEASUREMENTS AT DECEMBER 31, 2020 USING $ 62,657 $ — $ 62,657 $ 2,121 10,892 49,703 — 10,636 (2) — 2,121 256 (3) 49,703 — — — — TOTAL CARRYING VALUE AT DECEMBER 31, 2019 QUOTED PRICES IN ACTIVE MARKETS (LEVEL 1) SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2) SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3) FAIR VALUE MEASUREMENTS AT DECEMBER 31, 2019 USING $ 13,653 $ 10,732 9,756 — 10,168 (2) $ — 13,653 $ 564 (3) 9,756 — — — (1) Money market funds and time deposits are measured based on quoted prices for similar assets and/or subsequent transactions. (2) Certain trading securities are measured at fair value using quoted market prices. (3) Certain trading securities are measured based on inputs other than quoted market prices that are observable. (4) Derivative assets and liabilities include (i) interest rate swap agreements, including forward-starting interest rate swap agreements, to limit our exposure to changes in interest rates on a portion of our floating rate indebtedness and (ii) cross-currency swap agreements to hedge the variability of exchange rates impacts between the United States dollar and the Euro and certain of our Euro denominated subsidiaries. Our derivative financial instruments are measured using industry standard valuation models using market-based observable inputs, including interest rate curves, forward and spot prices for currencies and implied volatilities. Credit risk is also factored into the determination of the fair value of our derivative financial instruments. See Note 5 for additional information on our derivative financial instruments. 86 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) We did not have any material items that are measured at fair value on a non-recurring basis for the years ended December 31, 2020, 2019, and 2018, with the exception of: (i) the reporting units as presented in our goodwill impairment analysis (as disclosed in Note 2.k.); (ii) the assets and liabilities acquired through acquisitions (as disclosed in Note 3); (iii) the redemption value of certain redeemable noncontrolling interests (as disclosed in Note 2.p.); and (iv) our initial investments in the Frankfurt JV, the MakeSpace JV and OSG (each as defined in Note 3), all of which are based on Level 3 inputs. The fair value of our long-term debt, which was determined based on either Level 1 inputs or Level 3 inputs, is disclosed in Note 6. Long-term debt is measured at cost in our Consolidated Balance Sheets as of December 31, 2020 and 2019. P. REDEEMABLE NONCONTROLLING INTERESTS Certain unaffiliated third parties own noncontrolling interests in certain of our foreign consolidated subsidiaries. The underlying agreements between us and our noncontrolling interest shareholders for these subsidiaries contain provisions under which the noncontrolling interest shareholders can require us to purchase their respective interests in such subsidiaries at certain times and at a purchase price as stipulated in the underlying agreements (generally at fair value). These put options make these noncontrolling interests redeemable and, therefore, these noncontrolling interests are classified as temporary equity outside of stockholders’ equity. Redeemable noncontrolling interests are reported at the higher of their redemption value or the noncontrolling interest holders’ proportionate share of the underlying subsidiaries net carrying value. Increases or decreases in the redemption value of the noncontrolling interest are offset against Additional Paid-in Capital. In 2018, one of our noncontrolling interest shareholders exercised its option to put its ownership interest back to us. Upon the exercise of the put option, this noncontrolling interest became mandatorily redeemable by us, and, therefore, is accounted for as a liability rather than a component of redeemable noncontrolling interests. Subject to agreement on final settlement terms and conditions, we and this noncontrolling interest shareholder have agreed in principle on the put option price for the noncontrolling interest shares. We are in dispute with this noncontrolling interest shareholder with respect to whether interest from the date of the put and certain other costs should be reimbursable to the noncontrolling interest shareholder. We intend to vigorously defend that interest and certain other reimbursable costs are not owed to the noncontrolling interest shareholder. We have recorded our estimate of the fair value of these noncontrolling interest shares as a component of Accrued expenses on our Consolidated Balance Sheets as of December 31, 2020 and 2019. It is possible that the value ultimately agreed upon with the noncontrolling interest shareholder could differ from our current estimate of the fair value. Subsequent to these noncontrolling interest shares becoming mandatorily redeemable, any increase or decrease in the fair value of such noncontrolling interest is included as a component of Other expense (income), net on our Consolidated Statements of Operations. IRON MOUNTAIN 2020 FORM 10-K 87 Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Q. ACCUMULATED OTHER COMPREHENSIVE ITEMS, NET The changes in accumulated other comprehensive items, net for the years ended December 31, 2020, 2019 and 2018 are as follows: Balance as of December 31, 2017 Other comprehensive (loss) income: Foreign currency translation and other adjustments Change in fair value of derivative instruments Total other comprehensive (loss) income Balance as of December 31, 2018 Other comprehensive income (loss): Foreign currency translation and other adjustments Change in fair value of derivative instruments Total other comprehensive income (loss) Balance as of December 31, 2019 Other comprehensive income (loss): Foreign currency translation and other adjustments Change in fair value of derivative instruments Total other comprehensive income (loss) Balance as of December 31, 2020 FOREIGN CURRENCY TRANSLATION AND OTHER ADJUSTMENTS CHANGE IN FAIR VALUE OF DERIVATIVE INSTRUMENTS TOTAL $ (103,989) $ — $ (103,989) (160,702) — (160,702) (264,691) 11,866 — 11,866 (252,825) 46,635 — 46,635 — (973) (973) (973) — (8,783) (8,783) (9,756) — (39,947) (39,947) (160,702) (973) (161,675) (265,664) 11,866 (8,783) 3,083 (262,581) 46,635 (39,947) 6,688 $ (206,190) $ (49,703) $ (255,893) 88 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) R. REVENUES Our revenues consist of storage rental revenues as well as service revenues and are reflected net of sales and value-added taxes. Storage rental revenues, which are considered a key driver of financial performance for the storage and information management services industry, consist primarily of recurring periodic rental charges related to the storage of materials or data (generally on a per unit basis) that are typically retained by customers for many years and revenues associated with our data center operations. Service revenues include charges for related service activities, the most significant of which include: (1) the handling of records, including the addition of new records, temporary removal of records from storage, refiling of removed records, customer termination and permanent removal fees, project revenues and courier operations, consisting primarily of the pickup and delivery of records upon customer request; (2) destruction services, consisting primarily of secure shredding of sensitive documents and the subsequent sale of shredded paper for recycling, the price of which can fluctuate from period to period; and (3) digital solutions including scanning, imaging and document conversion services of active and inactive records, and consulting services. We account for revenue in accordance with ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). Customers are generally billed monthly based on contractually agreed-upon terms, and storage rental and service revenues are recognized in the month the respective storage rental or service is provided, in line with the transfer of control to the customer. When storage rental fees or services are billed in advance, amounts related to future storage rental or prepaid service contracts are accounted for as deferred revenue and recognized upon the transfer of control to the customer, generally ratably over the contract term. Customer contracts generally include promises to provide monthly recurring storage and related services that are essentially the same over time and have the same pattern of transfer of control to the customer; therefore, most performance obligations represent a promise to deliver a series of distinct services over time (as determined for purposes of ASU 2014-09, a “series”). For those contracts that qualify as a series, we have a right to consideration from the customer in an amount that corresponds directly with the value of the underlying performance obligation transferred to the customer to date. This concept is known as "right to invoice” and we apply the “right to invoice” practical expedient to all revenues, with the exception of storage revenues in our Global Data Center Business (which are subject to leasing guidance). Additionally, each purchasing decision is fully in the control of the customer and; therefore, consideration beyond the current reporting period is variable and allocated to the specific period to which the consideration relates, which is consistent with the practical expedient. Our Global Data Center Business features storage rental provided to the customer at contractually specified rates over a fixed contractual period. Storage rental revenue related to the storage component of our Global Data Center Business is recognized on a straight-line basis over the contract term in accordance with ASU 2016-02. The revenue related to the service component of our Global Data Center Business is recognized in the period the related services are provided. The costs associated with the initial movement of customer records into physical storage and certain commissions are considered costs to obtain or fulfill customer contracts (“Contract Fulfillment Costs”). The following describes each of these Contract Fulfillment Costs recognized under ASU 2014-09: INTAKE COSTS (AND ASSOCIATED DEFERRED REVENUE) The costs of the initial intake of customer records into physical storage (“Intake Costs”) are deferred and amortized as a component of depreciation and amortization in our Consolidated Statements of Operations over three years, consistent with the transfer of the performance obligation to the customer to which the asset relates. In instances where such Intake Costs are billed to the customer, the associated revenue is deferred and recognized over the same three-year period. COMMISSIONS Certain commission payments that are directly associated with the fulfillment of long-term storage contracts are capitalized and amortized as a component of depreciation and amortization in our Consolidated Statements of Operations over three years, consistent with the transfer of the performance obligation to the customer to which the asset relates. Certain direct commission payments associated with contracts with a duration of one year or less are expensed as incurred under the practical expedient which allows an entity to expense as incurred an incremental cost of obtaining a contract if the amortization period of the asset that the entity otherwise would have recognized is one year or less. IRON MOUNTAIN 2020 FORM 10-K 89 Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Contract Fulfillment Costs, which are included as a component of Other within Other Assets, Net, as of December 31, 2020 and 2019 are as follows: DESCRIPTION Intake Costs asset Commissions asset DECEMBER 31, 2020 DECEMBER 31, 2019 GROSS CARRYING AMOUNT ACCUMULATED AMORTIZATION NET CARRYING AMOUNT GROSS CARRYING AMOUNT ACCUMULATED AMORTIZATION NET CARRY ING AMOUNT $ 63,721 $ (33,352) $ 30,369 $ 41,224 $ (23,579) $ 91,069 (38,787) 52,282 68,008 (27,178) 17,645 40,830 Amortization expense associated with the Intake Costs and Commissions assets for the years ended December 31, 2020, 2019 and 2018 are as follows: DESCRIPTION Intake Costs asset Commissions asset Estimated amortization expense for Contract Fulfillment Costs is as follows: YEAR ENDED DECEMBER 31, 2020 2019 2018 $ 13,300 $ 10,144 $ 24,052 19,109 10,380 13,838 YEAR 2021 2022 2023 Deferred revenue liabilities are reflected as follows in our Consolidated Balance Sheets: DESCRIPTION Deferred revenue - Current Deferred revenue - Long-term LOCATION IN BALANCE SHEET Deferred revenue Other Long-term Liabilities ESTIMATED AMORTIZATION $ 38,954 24,861 18,836 DECEMBER 31, 2020 2019 $ 295,785 $ 274,036 35,612 36,029 DATA CENTER LESSOR CONSIDERATIONS Our Global Data Center Business features storage rental provided to customers at contractually specified rates over a fixed contractual period. Prior to January 1, 2019, our data center revenue contracts were accounted for in accordance with ASC 840. Beginning on January 1, 2019, our data center revenue contracts are accounted for in accordance with ASU 2016-02. ASU 2016-02 provides a practical expedient which allows lessors to account for nonlease components (such as power and connectivity, in the case of our Global Data Center Business) with the related lease component if both the timing and pattern of transfer are the same for nonlease components and the lease component, and the lease component, if accounted for separately, would be classified as an operating lease. The single combined component is accounted for under ASU 2016-02 if the lease component is the predominant component and is accounted for under ASU 2014-09 if the nonlease components are the predominant components. We have elected to take this practical expedient. 90 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Storage rental revenue, including revenue associated with power and connectivity, associated with our Global Data Center Business for the years ended December 31, 2020, 2019 and 2018 are as follows: Storage rental revenue(1) YEAR ENDED DECEMBER 31, 2020 2019 2018 $ 263,695 $ 246,925 $ 218,675 (1) Revenue associated with power and connectivity included within storage rental revenue was $47,451, $43,269 and $38,749 for the years ended December 31, 2020, 2019 and 2018, respectively. The revenue related to the service component of our Global Data Center Business remains unchanged from the adoption of ASU 2016-02 and is recognized in the period the related services are provided. Our accounting treatment for data center revenue was not significantly impacted by the adoption of ASU 2016-02. The future minimum lease payments we expect to receive under non-cancellable data center operating leases for which we are the lessor, excluding month to month leases, for the next five years are as follows: YEAR 2021 2022 2023 2024 2025 FUTURE MINIMUM LEASE PAYMENTS $ 225,554 183,027 142,787 111,106 77,308 S. STOCK-BASED COMPENSATION We record stock-based compensation expense, utilizing the straight-line method, for the cost of stock options, restricted stock units (“RSUs”), performance units (“PUs”) and shares of stock issued under our employee stock purchase plan (“ESPP”) (together, "Employee Stock-Based Awards”). For our Employee Stock-Based Awards made on or after February 20, 2019, we have included the following retirement provision: • Upon an employee’s retirement on or after attaining age 58, if the sum of (i) the award recipient’s age at retirement and (ii) the award recipient’s years of service with the company totals at least 70, the award recipient is entitled to continued vesting of any outstanding Employee Stock-Based Awards which include the 2019 Retirement Criteria subsequent to their retirement, provided that, for awards granted in the year of retirement, their retirement occurs on or after July 1 (the “2019 Retirement Criteria”). • Accordingly, (i) grants of Employee Stock-Based Awards to an employee who has met the 2019 Retirement Criteria on or before the date of grant, or will meet the Retirement Criteria before July 1 of the year of the grant, will be expensed between the date of grant and July 1 of the grant year and (ii) grants of Employee Stock-Based Awards to employees who will meet the 2019 Retirement Criteria during the award’s normal vesting period will be expensed between the date of grant and the date upon which the award recipient meets the 2019 Retirement Criteria. • Stock options and RSUs granted to recipients who meet the 2019 Retirement Criteria will continue vesting on the original vesting schedule. If an employee retires and has met the 2019 Retirement Criteria, stock options will remain exercisable for up to three years or the original expiration date of the stock options, if earlier. PUs granted to recipients who meet the 2019 Retirement Criteria will continue to vest and be delivered in accordance with the original vesting schedule of the applicable PU award and remain subject to the same performance conditions. IRON MOUNTAIN 2020 FORM 10-K 91 Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Stock-based compensation expense for Employee Stock-Based Awards included in the accompanying Consolidated Statements of Operations for the years ended December 31, 2020, 2019 and 2018 is as follows: Stock-based compensation expense Stock-based compensation expense, after tax YEAR ENDED DECEMBER 31, 2020 2019 2018 $ 37,674 $ 35,654 $ 36,584 33,103 31,167 28,998 The substantial majority of stock-based compensation expense for Employee Stock-Based Awards is included in Selling, general and administrative expenses in the accompanying Consolidated Statements of Operations. STOCK OPTIONS Options are generally granted with exercise prices equal to the market price of the stock on the date of grant; however, in certain instances, options are granted at prices greater than the market price of the stock on the date of grant. The substantial majority of options we issue become exercisable ratably over a period three years from the date of grant and have a contractual life of 10 years from the date of grant, unless the holder’s employment is terminated sooner. Our non-employee directors are considered employees for purposes of our stock option plans and stock option reporting. The substantial majority of the stock options outstanding at December 31, 2020 are based on the three-year vesting period (10 year contractual life) described above. Our equity compensation plans generally provide that, upon a vesting change in control (as defined in each plan), any unvested options and other awards granted thereunder shall vest immediately if an employee is terminated as a result of the change in control or terminates their own employment for good reason (as defined in each plan). On January 20, 2015, our stockholders approved the adoption of the Iron Mountain Incorporated 2014 Stock and Cash Incentive Plan, as amended (the "2014 Plan”). Under the 2014 Plan, the total amount of shares of common stock reserved and available for issuance pursuant to awards granted under the 2014 Plan is 12,750,000. The 2014 Plan permits us to continue to grant awards through May 24, 2027. A total of 48,253,839 shares of common stock have been reserved for grants of options and other rights under our various stock incentive plans, including the 2014 Plan. The number of shares available for grant under our various stock incentive plans, not including the ESPP, at December 31, 2020 was 2,818,706. The weighted average fair value of stock options granted in 2020, 2019 and 2018 was $2.35, $3.58 and $3.50 per share, respectively. These values were estimated on the date of grant using the Black-Scholes option pricing model. The weighted average assumptions used for grants in the years ended December 31, 2020, 2019 and 2018 are as follows: WEIGHTED AVERAGE ASSUMPTIONS Expected volatility(1) Risk-free interest rate(2) Expected dividend yield(3) Expected life(4) YEAR ENDED DECEMBER 31, 2020 2019 2018 25.4 % 1.45 % 7 % 24.3 % 2.47 % 7 % 25.4 % 2.65 % 7 % 10.0 years 5.0 years 5.0 years (1) Expected volatility is calculated utilizing daily historical volatility over a period that equates to the expected life of the option. (2) Risk-free interest rate is based on the United States Treasury interest rates whose term is consistent with the expected life (estimated period of time outstanding) of the stock options. (3) Expected dividend yield is considered in the option pricing model and represents our current annualized expected per share dividends over the current trade price of our common stock. (4) Expected life of the stock options granted is estimated using the historical exercise behavior of employees. 92 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) A summary of stock option activity for the year ended December 31, 2020 is as follows: WEIGHTED AVERAGE EXERCISE PRICE WEIGHTED AVERAGE REMAINING CONTRACTUAL TERM (YEARS) AGGREGATE INTRINSIC VALUE OPTIONS Outstanding at December 31, 2019 Granted Exercised Forfeited Expired Outstanding at December 31, 2020 Options exercisable at December 31, 2020 Options expected to vest 4,835,721 $ 589,993 (204,540) (151,230) (337,425) 4,732,519 $ 3,439,748 $ 1,266,640 $ 35.64 33.32 24.38 35.36 35.82 35.83 36.40 34.28 6.27 5.46 8.41 $ $ $ 469 469 — RESTRICTED STOCK UNITS Our RSUs generally have a vesting period of three years from the date of grant. However, RSUs granted to our non-employee directors vest immediately upon grant. All RSUs accrue dividend equivalents associated with the underlying stock as we declare dividends. Dividends will generally be paid to holders of RSUs in cash upon the vesting date of the associated RSU and will be forfeited if the RSU does not vest. The fair value of RSUs is the excess of the market price of our common stock at the date of grant over the purchase price (which is typically zero). The fair value of RSUs vested during the years ended December 31, 2020, 2019 and 2018, are as follows: Fair value of RSUs vested $ 26,492 $ 21,191 $ 20,454 A summary of RSU activity for the year ended December 31, 2020 is as follows: YEAR ENDED DECEMBER 31, 2020 2019 2018 Non-vested at December 31, 2019 Granted Vested Forfeited Non-vested at December 31, 2020 RSUs WEIGHTED-AVERAGE GRANT-DATE FAIR VALUE 1,203,599 $ 1,078,124 (792,083) (195,634) 1,294,006 $ 34.71 31.68 33.45 34.28 33.02 PERFORMANCE UNITS The PUs we issue vest based on our performance against predefined operational and share based targets. PUs granted in 2018 vest based on targets for revenue, Adjusted EBITDA, and total return on our common stock in relation to the MSCI United States REIT Index ("TSR Target") and the number of PUs earned may range from 0% to 200% of the initial award. For awards granted in 2019 and thereafter, the vesting is subject to a minimum level of return on invested capital (“ROIC”) in the third year of the performance period, and thereafter the number of PUs earned is based on (i) the revenue performance for each year averaged at the end of the three-year performance period, (ii) the revenue exit rate of new products in the last quarter of the three-year performance period and (iii) a TSR Target. With respect to the PUs granted in 2019 and thereafter, the number of PUs earned may range from 0% to 219% of the initial award. IRON MOUNTAIN 2020 FORM 10-K 93 Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) All of our PUs will be settled in shares of our common stock and are subject to cliff vesting three years from the date of the original PU grant. As detailed above, PUs granted: • On or after February 20, 2019, are subject to the 2019 Retirement Criteria. PUs granted to recipients who meet the 2019 Retirement Criteria will continue to vest and be delivered in accordance with the original vesting schedule of the applicable PU award and remain subject to the same performance conditions. • Prior to February 20, 2019, employees who terminate their employment during the three-year performance period and on or after attaining age 55 and completing 10 years of qualifying service are eligible for pro-rated vesting, subject to the actual achievement against the predefined targets or a market condition as discussed above, based on the number of full years of service completed following the grant date (but delivery of the shares remains deferred). As a result, PUs are generally expensed over the three-year performance period. All PUs accrue dividend equivalents associated with the underlying stock as we declare dividends. Dividends will generally be paid to holders of PUs in cash upon the settlement date of the associated PU and will be forfeited if the PU does not vest. During the years ended December 31, 2020, 2019 and 2018, we issued 425,777, 380,856 and 353,507 PUs, respectively. We forecast the likelihood of achieving the predefined targets for our PUs in order to calculate the expected PUs to be earned. We record a compensation charge based on either the forecasted PUs to be earned (during the performance period) or the actual PUs earned (at the three-year anniversary of the grant date) over the vesting period for each of the awards. The fair value of PUs based on our performance against predefined targets is the excess of the market price of our common stock at the date of grant over the purchase price (which is typically zero). For PUs earned based on a market condition, we utilize a Monte Carlo simulation to fair value these awards at the date of grant, and such fair value is expensed over the three-year performance period. As of December 31, 2020, we expected 100%, 100% and 0% achievement of the predefined targets associated with the awards of PUs made in 2020, 2019 and 2018, respectively. The fair value of earned PUs that vested during the years ended December 31, 2020, 2019 and 2018, is as follows: YEAR ENDED DECEMBER 31, 2020 2019 2018 Fair value of earned PUs that vested $ 11,812 $ 6,503 $ 3,117 A summary of PU activity for the year ended December 31, 2020 is as follows: ORIGINAL PU AWARDS PU ADJUSTMENT(1) TOTAL PU AWARDS WEIGHTED-AVERAGE GRANT-DATE FAIR VALUE Non-vested at December 31, 2019 1,113,691 (314,798) 798,893 $ Granted Vested Forfeited/Performance or Market Conditions Not Achieved 425,777 (316,730) (149,529) — — (4,710) 425,777 (316,730) (154,239) Non-vested at December 31, 2020 1,073,209 (319,508) 753,701 $ 36.56 34.85 37.29 28.28 36.98 (1) Represents an increase or decrease in the number of original PUs awarded based on either the final performance criteria or market condition achievement at the end of the performance period of such PUs or a change in estimated awards based on the forecasted performance against the predefined targets. 94 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) EMPLOYEE STOCK PURCHASE PLAN We offer an ESPP in which participation is available to substantially all United States and Canadian employees who meet certain service eligibility requirements. The ESPP provides for the purchase of our common stock by eligible employees through successive offering periods. We have historically had two six-month offering periods per year, the first of which generally runs from June 1 through November 30 and the second of which generally runs from December 1 through May 31. During each offering period, participating employees accumulate after-tax payroll contributions, up to a maximum of 15% of their compensation, to pay the purchase price at the end of the offering. Participating employees may withdraw from an offering before the purchase date and obtain a refund of the amounts withheld as payroll deductions. At the end of the offering period, outstanding options under the ESPP are exercised, and each employee’s accumulated contributions are used to purchase our common stock. The price for shares purchased under the ESPP is 95% of the fair market price at the end of the offering period, without a look-back feature. As a result, we do not recognize compensation expense for the ESPP shares purchased. For the years ended December 31, 2020, 2019 and 2018, there were 159,853, 129,505 and 119,123 shares, respectively, purchased under the ESPP. As of December 31, 2020, we have 216,287 shares available under the ESPP. ________________________________________________________ As of December 31, 2020, unrecognized compensation cost related to the unvested portion of our Employee Stock-Based Awards was $39,056 and is expected to be recognized over a weighted-average period of 1.7 years. We issue shares of our common stock for the exercises of stock options, and the vesting of RSUs, PUs and shares of our common stock under our ESPP from unissued reserved shares. T. OTHER EXPENSE (INCOME), NET Consolidated other expense (income), net for the years ended December 31, 2020, 2019 and 2018 consists of the following: Foreign currency transaction losses (gains), net(1) Debt extinguishment expense Other, net(2) Other Expense (Income), Net YEAR ENDED DECEMBER 31, 2020 2019 2018 $ 29,830 $ 24,852 $ (15,567) 68,300 45,415 — 9,046 — 3,875 $ 143,545 $ 33,898 $ (11,692) (1) The gain or loss on foreign currency transactions, calculated as the difference between the historical exchange rate and the exchange rate at the applicable measurement date, includes gains or losses primarily related to (i) borrowings in certain foreign currencies under our Revolving Credit Facility (as defined in Note 6), (ii) our previously outstanding Euro Notes (as defined in Note 6), (iii) certain foreign currency denominated intercompany obligations of our foreign subsidiaries to us and between our foreign subsidiaries, which are not considered permanently invested and (iv) amounts that are paid or received on the net settlement amount from forward contracts (as more fully discussed in Note 5). (2) Other, net for the year ended December 31, 2020 consists primarily of changes in the estimated value of our mandatorily redeemable noncontrolling interests as well as losses on our equity method investments. U. INCOME TAXES Accounting for income taxes requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the tax and financial reporting bases of assets and liabilities and for loss and credit carryforwards. Valuation allowances are provided when recovery of deferred tax assets does not meet the more likely than not standard as defined in GAAP. We have elected to recognize interest and penalties associated with uncertain tax positions as a component of the Provision (benefit) for income taxes in the accompanying Consolidated Statements of Operations. IRON MOUNTAIN 2020 FORM 10-K 95 Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) V. INCOME (LOSS) PER SHARE—BASIC AND DILUTED Basic income (loss) per common share is calculated by dividing income (loss) by the weighted average number of common shares outstanding. The calculation of diluted income (loss) per share is consistent with that of basic income (loss) per share but gives effect to all potential common shares (that is, securities such as stock options, RSUs, PUs, warrants or convertible securities) that were outstanding during the period, unless the effect is antidilutive. The calculation of basic and diluted income (loss) per share for the years ended December 31, 2020, 2019 and 2018 is as follows: Income (loss) from continuing operations $ 343,096 $ 268,211 $ Less: Net income (loss) attributable to noncontrolling interests 403 938 Income (loss) from continuing operations (utilized in numerator of Earnings Per Share calculation) Income (loss) from discontinued operations, net of tax 342,693 — 267,273 104 Net income (loss) attributable to Iron Mountain Incorporated $ 342,693 $ 267,377 $ 367,558 1,198 366,360 (12,427) 353,933 YEAR ENDED DECEMBER 31, 2020 2019 2018 Weighted-average shares—basic Effect of dilutive potential stock options Effect of dilutive potential RSUs and PUs Weighted-average shares—diluted Earnings (losses) per share—basic: Income (loss) from continuing operations (Loss) income from discontinued operations, net of tax Net income (loss) attributable to Iron Mountain Incorporated(1) Earnings (losses) per share—diluted: Income (loss) from continuing operations (Loss) income from discontinued operations, net of tax Net income (loss) attributable to Iron Mountain Incorporated(1) 288,183,000 286,971,000 285,913,000 24,903 435,287 145,509 570,435 234,558 505,030 288,643,190 287,686,944 286,652,588 $ $ $ $ 1.19 $ — 1.19 $ 1.19 $ — 1.19 $ 0.93 $ — 0.93 $ 0.93 $ — 0.93 $ 1.28 (0.04) 1.24 1.28 (0.04) 1.23 Antidilutive stock options, RSUs and PUs, excluded from the calculation 5,663,981 4,475,745 3,258,078 (1) Columns may not foot due to rounding. W. NEW ACCOUNTING PRONOUNCEMENTS RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which makes a number of changes meant to add, modify or remove certain disclosure requirements associated with the movement of our financial assets and liabilities among the three levels of the fair value hierarchy. We adopted ASU 2018-13 on January 1, 2020. ASU 2018-13 did not have a material impact on our consolidated financial statements. 96 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) OTHER AS YET ADOPTED ACCOUNTING PRONOUNCEMENTS In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”). ASU 2020-04 provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions, for a limited period of time, to ease the potential burden of recognizing the effects of reference rate reform on financial reporting. The amendments in ASU 2020-04 apply to contracts, hedging relationships and other transactions that reference the London Inter-Bank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued due to the global transition away from LIBOR and certain other interbank offered rates. An entity may elect to apply the amendments provided by ASU 2020-04 beginning March 12, 2020 through December 31, 2022. We are currently evaluating these amendments as they relate to our contracts, hedging relationships and other transactions that reference LIBOR, as well as the impact of ASU 2020-04 on our consolidated financial statements. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) (“ASU 2019-12”). ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions for recognizing deferred taxes for investments, performing intra-period allocation and calculating income taxes in interim periods. ASU 2019-12 also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. ASU 2019-12 is effective for us on January 1, 2021. We do not expect that ASU 2019-12 will have a material impact on our consolidated financial statements. 3. ACQUISITIONS AND JOINT VENTURES ACQUISITIONS We account for acquisitions using the acquisition method of accounting, and, accordingly, the assets and liabilities acquired are recorded at their estimated fair values and the results of operations for each acquisition have been included in our consolidated results from their respective acquisition dates. A. ACQUISITIONS COMPLETED DURING THE YEAR ENDED DECEMBER 31, 2020 Prior to January 9, 2020, we owned a 25% equity interest in OSG Records Management (Europe) Limited ("OSG"). On January 9, 2020, we acquired the remaining 75% equity interest in OSG for cash consideration of approximately $95,500 (the "OSG Acquisition"). The OSG Acquisition enabled us to extend our Global RIM Business in Russia, Ukraine, Kazakhstan, Belarus, and Armenia. The results of OSG are fully consolidated within our consolidated financial statements from the closing date of the OSG Acquisition. In connection with the OSG Acquisition, our previously held 25% equity investment in OSG was remeasured to fair value at the closing date of the OSG Acquisition; as a result, we recorded a gain of approximately $10,000 during the first quarter of 2020, which is included as a component of Other expense (income), net on our Consolidated Statements of Operations. The fair value of the 25% equity investment in OSG was determined based on the purchase price of the OSG Acquisition. On February 17, 2020, in order to enhance our existing operations in the United Arab Emirates, we acquired Glenbeigh Records Management DWC-LLC, a storage and records management company, for total cash consideration of approximately $29,100. B. ACQUISITIONS COMPLETED DURING THE YEAR ENDED DECEMBER 31, 2019 During the year ended December 31, 2019, in order to enhance our existing operations in the United States, Colombia, Germany, Hong Kong, Latvia, Slovakia, Switzerland, Thailand and the United Kingdom and to expand our operations into Bulgaria, we completed the acquisition of 10 storage and records management companies and one art storage company for total cash consideration of approximately $51,000. The individual purchase prices of these acquisitions ranged from approximately $700 to $12,500. IRON MOUNTAIN 2020 FORM 10-K 97 Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 3. ACQUISITIONS AND JOINT VENTURES (CONTINUED) C. ACQUISITIONS COMPLETED DURING THE YEAR ENDED DECEMBER 31, 2018 ACQUISITION OF IO DATA CENTERS On January 10, 2018, we completed the acquisition of the United States operations of IODC, a leading data center colocation space and solutions provider based in Phoenix, Arizona, including the land and buildings associated with four data centers in Phoenix and Scottsdale, Arizona; Edison, New Jersey; and Columbus, Ohio (the “IODC Transaction”). At the closing of the IODC Transaction, we paid approximately $1,347,000. In February 2019, we paid approximately $31,000 in additional purchase price associated with the execution of customer contracts from the closing through the one-year anniversary of the IODC Transaction, which, net of amortization, is reported as a third-party commissions asset as a component of Other within Other assets, net in our Consolidated Balance Sheets at December 31, 2020 and 2019. OTHER 2018 NOTEWORTHY ACQUISITIONS On May 25, 2018, in order to further expand our data center operations in Europe, we acquired EvoSwitch Netherlands B.V. and EvoSwitch Global Services B.V., a data center colocation space and solutions provider with a data center in Amsterdam (the “EvoSwitch Transaction”), for (i) cash consideration of 189,000 Euros (or approximately $222,000, based upon the exchange rate between the Euro and the United States dollar on the closing date of the EvoSwitch Transaction) and (ii) $25,000 of additional consideration in the form of future services we will provide to the seller, which is included in purchase price holdbacks and other in the allocation of the purchase price paid table below. On March 8, 2018, in order to expand our data center operations into Europe and Asia, we acquired the operations of two data centers in London and Singapore from Credit Suisse International and Credit Suisse AG (together, “Credit Suisse”) for a total of (i) 34,600 British pounds sterling and (ii) 81,000 Singapore dollars (or collectively, approximately $111,400, based upon the exchange rates between the United States dollar and the British pound sterling and Singapore dollar on the closing date of the Credit Suisse transaction) (the “Credit Suisse Transaction”). As part of the Credit Suisse Transaction, Credit Suisse entered into a long-term lease with us to maintain existing data center operations. In addition to the transactions noted above, during 2018, in order to enhance our existing operations in the United States, Brazil, China, India, Ireland, Philippines, South Korea and the United Kingdom and to expand our operations into Croatia, we completed the acquisition of 11 storage and records management companies and three art storage companies for total consideration of approximately $98,100. The individual purchase prices of these acquisitions ranged from approximately $1,000 to $34,100. 98 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 3. ACQUISITIONS AND JOINT VENTURES (CONTINUED) D. PURCHASE PRICE ALLOCATION A summary of the cumulative consideration paid and the allocation of the purchase price paid for all of our acquisitions in each respective year is as follows: 2020 2019 TOTAL TOTAL IODC TRANSACTION 2018 OTHER FISCAL YEAR 2018 ACQUISITIONS TOTAL $ 124,614 $ 53,230 $ 1,347,046 $ 432,078 $ 1,779,124 — — 35,218 35,218 — — 1,347,046 467,296 1,814,342 Cash Paid (gross of cash acquired)(1) Purchase Price Holdbacks and Other(2) Fair Value of Investments Applied to Acquisitions Total Consideration Fair Value of Identifiable Assets Acquired: Cash Accounts Receivable, Prepaid Expenses and Other Assets Property, Plant and Equipment(3) Customer Relationship Intangible Assets(4) Operating Lease Right-of-Use Assets Data Center In-Place Leases(5) Data Center Tenant Relationships(6) Data Center Above-Market Leases(7) Debt Assumed — 27,276 151,890 6,545 16,559 52,021 79,065 100,040 — — — (27,363) 4,135 — 57,365 2,260 3,102 5,396 22,071 16,956 — — — — 34,307 7,070 863,027 — — 104,340 77,362 16,439 — 10,227 17,662 44,534 24,732 225,848 1,088,875 44,622 44,622 — 36,130 18,410 2,381 (12,312) (17,206) — (43,218) (694) — 140,470 95,772 18,820 (12,312) (53,436) — (43,218) (12,115) Accounts Payable, Accrued Expenses and Other Liabilities (19,564) (3,233) (36,230) Operating Lease Liabilities Deferred Income Taxes Data Center Below-Market Leases(7) (100,040) (16,956) (9,631) (1,813) — — — — (11,421) Total Fair Value of Identifiable Net Assets Acquired 97,632 27,783 1,054,894 281,850 1,336,744 Goodwill Initially Recorded(8) $ 54,258 $ 29,582 $ 292,152 $ 185,446 $ 477,598 (1) Cash paid for acquisitions, net of cash acquired in our Consolidated Statement of Cash Flows includes contingent and other payments of $512, $7,267 and $23,967 for the years ended December 31, 2020, 2019 and 2018, respectively, related to acquisitions made in the years prior to 2020, 2019 and 2018, respectively. (2) Purchase price holdbacks and other includes $18,824 purchase price accrued for the EvoSwitch Transaction in 2018. (3) Consists primarily of buildings, building improvements, leasehold improvements, data center infrastructure, racking structures, warehouse equipment and computer hardware and software. (4) The weighted average lives of Customer Relationship Intangible Assets associated with acquisitions in 2020, 2019 and 2018 was 14 years, 16 years and 10 years, respectively. (5) The weighted average lives of Data Center In-Place Leases associated with acquisitions in 2018 was six years. (6) The weighted average lives of Data Center Tenant Relationships associated with acquisitions in 2018 was nine years. (7) The weighted average lives of Data Center Above-Market Leases associated with acquisitions in 2018 was three years and the weighted average lives of data center below-market leases associated with acquisitions in 2018 was seven years. (8) The goodwill associated with acquisitions, including IODC, is primarily attributable to the assembled workforce, expanded market opportunities and costs and other operating synergies anticipated upon the integration of the operations of our business and the acquired businesses. IRON MOUNTAIN 2020 FORM 10-K 99 Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 3. ACQUISITIONS AND JOINT VENTURES (CONTINUED) Allocations of the purchase price for acquisitions are based on estimates of the fair value of the net assets acquired and are subject to adjustment upon the finalization of the purchase price allocations. The accounting for business combinations requires estimates and judgments regarding expectations for future cash flows of the acquired business, and the allocations of those cash flows to identifiable tangible and intangible assets, in determining the assets acquired and liabilities assumed. The fair values assigned to tangible and intangible assets acquired and liabilities assumed, including contingent consideration, are based on management’s best estimates and assumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques. The estimates and assumptions underlying the initial valuations are subject to the collection of information necessary to complete the valuations within the measurement periods, which are up to one year from the respective acquisition dates. As the valuation of certain assets and liabilities for purposes of purchase price allocations are preliminary in nature, they are subject to adjustment as additional information is obtained about the facts and circumstances regarding these assets and liabilities that existed at the acquisition date. Any adjustments to our estimates of purchase price allocation will be made in the periods in which the adjustments are determined and the cumulative effect of such adjustments will be calculated as if the adjustments had been completed as of the acquisition dates. Adjustments recorded during the fourth quarter of 2020 and year ended December 31, 2020 were not material to our results from operations. JOINT VENTURES A. FRANKFURT DATA CENTER JOINT VENTURE In October 2020, we formed a joint venture (the “Frankfurt JV”) with AGC Equity Partners (“AGC”) to design and develop a 280,000 square foot, 27 megawatt, hyperscale data center currently under development in Frankfurt, Germany (the “Frankfurt JV Transaction”). AGC acquired an 80% equity interest in the Frankfurt JV, while we retained a 20% equity interest (the "Frankfurt JV Investment"). The total cash consideration for the 80% equity interest sold to AGC was approximately $105,000. We received approximately $93,300 (gross of certain transaction expenses) upon the closing of the Frankfurt JV, and we are entitled to receive an additional approximately $11,700 upon the completion of development of the data center, which we expect to occur in the second quarter of 2021. In connection with the Frankfurt JV Transaction, we also entered into agreements whereby we will earn various fees, including property management and construction and development fees, for services we are providing to the Frankfurt JV. As a result of the Frankfurt JV Transaction, we recognized a gain of approximately $24,100, representing the excess of the fair value of the consideration received over the carrying value of the assets, which consisted primarily of land and land development assets which were previously included within our Global Data Center Business segment. We account for our Frankfurt JV Investment as an equity method investment. At the closing date of the Frankfurt JV Transaction, the fair value of the Frankfurt JV Investment was approximately $23,300. The carrying value of our Frankfurt JV Investment at December 31, 2020 was $26,500, which is presented as a component of Other within Other assets, net in our Consolidated Balance Sheet. B. MAKESPACE JOINT VENTURE In March 2019, we formed a joint venture entity (the “MakeSpace JV”) with MakeSpace Labs, Inc., a consumer storage provider (“MakeSpace”). In the second quarter of 2020, we committed to participate in a round of equity funding for the MakeSpace JV whereby we agreed to contribute $36,000 of the $45,000 being raised in installments beginning in May 2020 through October 2021. We account for our investment in the MakeSpace JV as an equity method investment. At December 31, 2020 and 2019, we owned approximately 39% and 34%, respectively, of the outstanding equity in the MakeSpace JV, and the carrying value of our investment in the MakeSpace JV at December 31, 2020 and 2019 was $16,924 and $18,570, respectively, which is presented as a component of Other within Other assets, net in our Consolidated Balance Sheets. See Note 4 for additional detail on the divestment of our consumer storage business that was completed in conjunction with the formation of the MakeSpace JV. 100 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 4. DIVESTMENTS In March 2019, we contributed our customer contracts and certain intellectual property and other assets used by us to operate our consumer storage business in the United States and Canada (the “IM Consumer Storage Assets”) and approximately $20,000 in cash (gross of certain transaction expenses) (the “Cash Contribution”) to the MakeSpace JV (the "Consumer Storage Transaction"), established by us and MakeSpace. Upon the closing of the Consumer Storage Transaction on March 19, 2019, the MakeSpace JV owned (i) the IM Consumer Storage Assets, (ii) the Cash Contribution and (iii) the customer contracts, intellectual property and certain other assets used by MakeSpace to operate its consumer storage business in the United States. As part of the Consumer Storage Transaction, we received an initial equity interest of approximately 34% in the MakeSpace JV (the "MakeSpace Investment"). In connection with the Consumer Storage Transaction and the investment in the MakeSpace JV, we also entered into a storage and service agreement with the MakeSpace JV to provide certain storage and related services to the MakeSpace JV (see Note 11). We have concluded that the divestment of the IM Consumer Storage Assets in the Consumer Storage Transaction does not meet the criteria to be reported as discontinued operations in our consolidated financial statements, as our decision to divest this business does not represent a strategic shift that will have a major effect on our operations and financial results. Accordingly, the revenues and expenses associated with this business are presented as a component of Income (loss) from continuing operations in our Consolidated Statements of Operations for the year ended December 31, 2019 through the closing date of the Consumer Storage Transaction and for the year ended December 31, 2018 and the cash flows associated with this business are presented as a component of cash flows from continuing operations in our Consolidated Statements of Cash Flows for the year ended December 31, 2019 through the closing date of the Consumer Storage Transaction and for the year ended December 31, 2018. As a result of the Consumer Storage Transaction, we recorded a gain on sale of approximately $4,200 to Other expense (income), net, in the first quarter of 2019, representing the excess of the fair value of the consideration received over the sum of (i) the carrying value of our consumer storage operations and (ii) the Cash Contribution. 5. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES Derivative instruments we are party to include: (i) interest rate swap agreements (which are designated as cash flow hedges), (ii) cross-currency swap agreements (which are designated as net investment hedges) and (iii) foreign exchange currency forward contracts (which are not designated as hedges). INTEREST RATE SWAP AGREEMENTS DESIGNATED AS CASH FLOW HEDGES In March 2018, we entered into interest rate swap agreements to limit our exposure to changes in interest rates on a portion of our floating rate indebtedness. As of December 31, 2020 and 2019, we had $350,000 in notional value of interest rate swap agreements outstanding, which expire in March 2022. Under the interest rate swap agreements, we receive variable rate interest payments associated with the notional amount of each interest rate swap, based upon one-month LIBOR, in exchange for the payment of fixed interest rates as specified in the interest rate swap agreements. In July 2019, we entered into forward-starting interest rate swap agreements to limit our exposure to changes in interest rates on a portion of our floating rate indebtedness once our current interest rate swap agreements expire in March 2022. The forward-starting interest rate swap agreements have $350,000 in notional value, commence in March 2022 and expire in March 2024. Under the swap agreements, we will receive variable rate interest payments based upon one-month LIBOR, in exchange for the payment of fixed interest rates as specified in the interest rate swap agreements. We have designated these interest rate swap agreements, including the forward-starting interest rate swap agreements, as cash flow hedges. Unrealized gains are recognized as assets, while unrealized losses are recognized as liabilities. IRON MOUNTAIN 2020 FORM 10-K 101 Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 5. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (CONTINUED) CROSS-CURRENCY SWAP AGREEMENTS DESIGNATED AS A HEDGE OF NET INVESTMENT In August 2019, we entered into cross-currency swap agreements to hedge the variability of exchange rate impacts between the United States dollar and the Euro. Under the terms of the cross-currency swap agreements we notionally exchanged approximately $110,000 at an interest rate of 6.0% for approximately 99,055 Euros at a weighted average interest rate of approximately 3.65%. These cross-currency swap agreements expire in August 2023 (“August 2023 Cross Currency Swap Agreements”). In September 2020, we entered into cross-currency swap agreements to hedge the variability of exchange rates impacts between the United States dollar and the Euro. Under the terms of the cross-currency swap agreements, we notionally exchanged approximately $359,200 at an interest rate of 4.5% for approximately 300,000 Euros at a weighted average interest rate of approximately 3.4%. These cross-currency swap agreements expire in February 2026 (“February 2026 Cross Currency Swap Agreements”). We have designated these cross-currency swap agreements as hedge of net investments against certain of our Euro denominated subsidiaries and they require an exchange of the notional amounts at maturity. These cross-currency swap agreements are marked to market at each reporting period, representing the fair values of the cross-currency swap agreements, and any changes in fair value are recognized as a component of Accumulated other comprehensive items, net. Unrealized gains are recognized as assets while unrealized losses are recognized as liabilities. FOREIGN EXCHANGE CURRENCY FORWARD CONTRACTS NOT DESIGNATED AS HEDGING INSTRUMENTS On occasion, we enter into forward contracts to hedge our exposures associated with certain foreign currencies. We have not designated any of these forward contracts as hedges. Our policy is to record the fair value of each derivative instrument on a gross basis. As of December 31, 2020 and 2019, we had no outstanding forward contracts. (Liabilities) assets recognized in our Consolidated Balance Sheets as of December 31, 2020 and 2019 by derivative instrument are as follows: DERIVATIVE INSTRUMENT(1) Cash Flow Hedges(2) Interest Rate Swap Agreements Net Investment Hedges(3) August 2023 Cross Currency Swap Agreements February 2026 Cross Currency Swap Agreements DECEMBER 31, 2020 DECEMBER 31, 2019 $ (21,062) $ (8,774) (8,229) (20,412) (982) — (1) Our derivative assets are included as a component of Other within Other assets, net and our derivative liabilities are included as a component of Other long-term liabilities in our Consolidated Balance Sheets. (2) As of December 31, 2020, cumulative net losses of $21,062 are recorded within Accumulated other comprehensive items, net associated with these interest rate swap agreements. (3) As of December 31, 2020, cumulative net losses of $28,641 are recorded within Accumulated other comprehensive items, net associated with these cross currency swap agreements. 102 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 5. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (CONTINUED) Losses (gains) recognized during the years ending December 31, 2020, 2019 and 2018, by derivative instrument, are as follows: DERIVATIVE INSTRUMENT Derivative Instruments Designated as Hedging Instruments(1) Cash Flow Hedges Interest Rate Swap Agreements Net Investment Hedges August 2023 Cross Currency Swap Agreements February 2026 Cross Currency Swap Agreements Derivative Instruments Not Designated as Hedging Instruments(2) Foreign Exchange Currency Forward Contracts YEAR ENDED DECEMBER 31, 2020 2019 2018 $ 12,288 $ 7,801 $ 973 7,247 20,412 — 982 — 737 — — 4,954 (1) These amounts are recognized as unrealized losses (gains), a component of Accumulated other comprehensive items, net. (2) These amounts are recognized as foreign exchange losses (gains), a component of Other expense (income), net. Net cash payments (receipts) included in cash from operating activities related to settlements associated with foreign currency forward contracts for the years ended December 31, 2020, 2019 and 2018 are $0, $737 and $5,797, respectively. EURO NOTES DESIGNATED AS A HEDGE OF NET INVESTMENT Prior to their redemption in August 2020, we designated a portion of our Euro Notes as a hedge of net investment of certain of our Euro denominated subsidiaries. From January 1, 2020 through the date of redemption and for the years ended December 31, 2019 and 2018 we designated, on average, 300,000, 284,986 and 224,424 Euros, respectively, of our Euro Notes as a hedge of net investment of certain of our Euro denominated subsidiaries. As a result, we recorded the following foreign exchange losses (gains) related to the change in fair value of such debt due to currency translation adjustments as a component of Accumulated other comprehensive items, net: Foreign exchange losses (gains) associated with net investment hedge $ 17,005 $ 6,003 $ 11,070 As of December 31, 2020, cumulative net gains of $3,256, net of tax, are recorded in Accumulated other comprehensive items, net associated with this net investment hedge. YEAR ENDED DECEMBER 31, 2020 2019 2018 IRON MOUNTAIN 2020 FORM 10-K 103 Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 6. DEBT Long-term debt is as follows: DECEMBER 31, 2020 DECEMBER 31, 2019 DEBT (INCLUSIVE OF DISCOUNT) UNAMORTIZED DEFERRED FINANCING COSTS CARRYING AMOUNT FAIR VALUE DEBT (INCLUSIVE OF DISCOUNT) UNAMORTIZED DEFERRED FINANCING COSTS CARRYING AMOUNT FAIR VALUE $ — $ (8,620) $ (8,620) $ — $ 348,808 $ (12,053) $ 336,755 $ 348,808 215,625 679,621 — 215,625 215,625 (6,244) 673,377 680,750 228,125 686,395 — 228,125 228,125 (7,493) 678,902 686,890 243,152 (1,624) 241,528 244,014 226,924 (2,313) 224,611 228,156 191,101 (1,307) 189,794 191,101 184,601 (1,801) 182,800 184,601 — — — — — — — — — — — — — — — — — — — — 500,000 (2,436) 497,564 503,450 600,000 (4,027) 595,973 613,500 192,058 (2,071) 189,987 199,380 1,000,000 (6,409) 993,591 1,010,625 336,468 (3,462) 333,006 345,660 546,003 (4,983) 541,020 553,101 527,432 (5,809) 521,623 539,892 — — — — 250,000 (2,756) 247,244 261,641 1,000,000 (9,598) 990,402 1,046,250 1,000,000 (11,020) 988,980 1,029,475 825,000 (8,561) 816,439 868,313 825,000 (9,742) 815,258 859,598 500,000 (5,486) 494,514 523,125 — — — — 1,000,000 (12,658) 987,342 1,050,000 1,000,000 (14,104) 985,896 1,015,640 1,300,000 (14,416) 1,285,584 1,400,750 1,100,000 (12,648) 1,087,352 1,138,500 600,000 (6,727) 593,273 660,000 — — — — — — — — — — — — 511,922 (1,086) 510,836 511,922 573,671 (1,388) 572,283 623,671 85,000 8,797,424 (193,759) (152) 84,848 85,000 (94,110) 8,703,314 — (193,759) 272,062 8,751,544 (389,013) (81) 271,981 272,062 (86,965) 8,664,579 — (389,013) $ 8,603,665 $ (94,110) $ 8,509,555 $ 8,362,531 $ (86,965) $ 8,275,566 Revolving Credit Facility(1) Term Loan A(1) Term Loan B(1)(2) Australian Dollar Term Loan (the “AUD Term Loan”)(3)(4) UK Bilateral Revolving Credit Facility(4) 43/8% Senior Notes due 2021 (the “43/8% Notes”)(5)(6)(7) 6% Senior Notes due 2023 (the “6% Notes”)(5)(6) 53/8% CAD Senior Notes due 2023 (the “CAD Notes”)(5)(7)(8) 53/4% Senior Subordinated Notes due 2024 (the “53/4% Notes”)(5)(6) 3% Euro Senior Notes due 2025 (the “Euro Notes”)(5)(6)(7) 37/8% GBP Senior Notes due 2025 (the “GBP Notes “)(5)(7)(9) 53/8% Senior Notes due 2026 (the “53/8% Notes”)(5)(7)(10) 47/8% Senior Notes due 2027 (the “47/8% Notes due 2027”)(5)(6)(7) 51/4% Senior Notes due 2028 (the “51/4% Notes due 2028”)(5)(6)(7) 5% Senior Notes due 2028 (the “5% Notes”)(5)(6)(7) 47/8% Senior Notes due 2029 (the “47/8% Notes due 2029”)(5)(6)(7) 51/4% Senior Notes due 2030 (the “51/4% Notes due 2030”)(5)(6)(7) 41/2% Senior Notes due 2031 (the “41/2% Notes”)(5)(6)(7) 55/8% Senior Notes due 2032 (the “55/8% Notes”)(5)(6)(7) Real Estate Mortgages, Financing Lease Liabilities and Other(11) Accounts Receivable Securitization Program(12) Total Long-term Debt Less Current Portion Long-term Debt, Net of Current Portion 104 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 6. DEBT (CONTINUED) (1) The capital stock or other equity interests of most of our United States subsidiaries, and up to 66% of the capital stock or other equity interests of most of our first-tier foreign subsidiaries, are pledged to secure these debt instruments, together with all intercompany obligations (including promissory notes) of subsidiaries owed to us or to one of our United States subsidiary guarantors. In addition, Iron Mountain Canada Operations ULC (“Canada Company”) has pledged 66% of the capital stock of its subsidiaries, and all intercompany obligations (including promissory notes) owed to or held by it, to secure the Canadian dollar subfacility under the Revolving Credit Facility. The fair value (Level 3 of fair value hierarchy described at Note 2.o.) of these debt instruments approximates the carrying value (as borrowings under these debt instruments are based on current variable market interest rates (plus a margin that is subject to change based on our consolidated leverage ratio)), as of December 31, 2020 and 2019. (2) The amount of debt for the Term Loan B (as defined below) reflects an unamortized original issue discount of $1,129 and $1,355 as of December 31, 2020 and 2019, respectively. (3) The amount of debt for the AUD Term Loan reflects an unamortized original issue discount of $862 and $1,232 as of December 31, 2020 and 2019, respectively. (4) The fair value (Level 3 of fair value hierarchy described at Note 2.o.) of this debt instrument approximates the carrying value as borrowings under this debt instrument are based on a current variable market interest rate. (5) The fair values (Level 1 of fair value hierarchy described at Note 2.o.) of these debt instruments are based on quoted market prices for these notes on December 31, 2020 and 2019, respectively. (6) Collectively, the “Parent Notes". IMI is the direct obligor on the Parent Notes, which are fully and unconditionally guaranteed, on a senior basis, by IMI’s direct and indirect 100% owned United States subsidiaries that represent the substantial majority of our United States operations (the “Guarantors”). These guarantees are joint and several obligations of the Guarantors. The remainder of our subsidiaries do not guarantee the Parent Notes. (7) Collectively, the “Unregistered Notes". The Unregistered Notes have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or under the securities laws of any other jurisdiction. Unless they are registered, the Unregistered Notes may be offered only in transactions that are exempt from registration under the Securities Act or the securities laws of any other jurisdiction. (8) Canada Company was the direct obligor on the CAD Notes, which were fully and unconditionally guaranteed, on a senior basis, by IMI and the Guarantors. These guarantees were joint and several obligations of IMI and the Guarantors. (9) Iron Mountain (UK) PLC (“IM UK”) is the direct obligor on the GBP Notes, which are fully and unconditionally guaranteed, on a senior basis, by IMI and the Guarantors. These guarantees are joint and several obligations of IMI and the Guarantors. (10) Iron Mountain US Holdings, Inc., one of the Guarantors, was the direct obligor on the 53/8% Notes, which were fully and unconditionally guaranteed, on a senior basis, by IMI and the other Guarantors. These guarantees were joint and several obligations of IMI and such Guarantors. (11) We believe the fair value (Level 3 of fair value hierarchy described at Note 2.o.) of this debt approximates its carrying value. This debt includes the following: Real estate mortgages(i) Financing lease liabilities(ii) Other notes and other obligations(iii) DECEMBER 31, 2020 DECEMBER 31, 2019 $ $ 71,673 $ 366,311 73,938 511,922 $ 77,036 367,182 129,453 573,671 (i) Bear interest at approximately 3.3% and 3.9% at December 31, 2020 and 2019, respectively, and includes $50,000 outstanding under our Mortgage Securitization Program at both December 31, 2020 and 2019. (ii) Bear a weighted average interest rate of 5.9% and 5.7% at December 31, 2020 and 2019, respectively. (iii) These notes and other obligations, which were assumed by us as a result of certain acquisitions bear a weighted average interest rate of 10.7% and 10.8% at December 31, 2020 and 2019, respectively. (12) The Accounts Receivable Securitization Special Purpose Subsidiaries are the obligors under this program. We believe the fair value (Level 3 of fair value hierarchy described at Note 2.o.) of this debt approximates its carrying value. IRON MOUNTAIN 2020 FORM 10-K 105 Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 6. DEBT (CONTINUED) A. CREDIT AGREEMENT Our credit agreement (the "Credit Agreement") consists of a revolving credit facility (the “Revolving Credit Facility”) and a term loan (the “Term Loan A”). The Revolving Credit Facility enables IMI and certain of its United States and foreign subsidiaries to borrow in United States dollars and (subject to sublimits) a variety of other currencies (including Canadian dollars, British pounds sterling and Euros, among other currencies) in an aggregate outstanding amount not to exceed $1,750,000. Under the Credit Agreement, we have the option to request additional commitments of up to $1,260,000, in the form of term loans or through increased commitments under the Revolving Credit Facility, subject to the conditions specified in the Credit Agreement. The Credit Agreement is scheduled to mature on June 4, 2023, at which point all obligations become due. The original principal amount of the Term Loan A was $250,000 and is to be paid in quarterly installments in an amount equal to $3,125 per quarter, with the remaining balance due on June 4, 2023. On December 20, 2019, we entered into an amendment to the Credit Agreement. This amendment amended the definition of EBITDA and certain other definitions and restrictive covenants contained in the Credit Agreement. IMI and the Guarantors guarantee all obligations under the Credit Agreement. The interest rate on borrowings under the Credit Agreement varies depending on our choice of interest rate and currency options, plus an applicable margin, which varies based on our consolidated leverage ratio. Additionally, the Credit Agreement requires the payment of a commitment fee on the unused portion of the Revolving Credit Facility, which fee ranges from between 0.25% to 0.4% based on our consolidated leverage ratio and fees associated with outstanding letters of credit. As of December 31, 2020, we had no outstanding borrowings under the Revolving Credit Facility and $215,625 aggregate outstanding principal amount under the Term Loan A. At December 31, 2020, we had various outstanding letters of credit totaling $3,232 under the Revolving Credit Facility. The remaining amount available for borrowing under the Revolving Credit Facility as of December 31, 2020, which is based on IMI’s leverage ratio, the last 12 months' earnings before interest, taxes, depreciation and amortization and rent expense (“EBITDAR”), other adjustments as defined in the Credit Agreement and current external debt, was $1,746,768 (which amount represents the maximum availability as of such date). Available borrowings under the Revolving Credit Facility are subject to compliance with our indenture covenants as discussed below. The average interest rate in effect for all outstanding borrowings under the Credit Agreement was 1.9% and 3.3% as of December 31, 2020 and 2019, respectively. The average interest rate in effect under the Revolving Credit Facility was 3.2% as of December 31, 2019, and the interest rate in effect under the Term Loan A as of December 31, 2020 and 2019 was 1.9% and 3.5%, respectively. IMI’s wholly owned subsidiary, Iron Mountain Information Management, LLC (“IMIM”), has an incremental term loan B with a principal amount of $700,000 (the “Term Loan B”). The Term Loan B, which matures on January 2, 2026, was issued at 99.75% of par. The Term Loan B holders benefit from the same security and guarantees as other borrowings under the Credit Agreement. The Term Loan B holders also benefit from the same affirmative and negative covenants as other borrowings under the Credit Agreement; however, the Term Loan B holders are not generally entitled to the benefits of the financial covenants under the Credit Agreement. Principal payments on the Term Loan B are to be paid in quarterly installments of $1,750 per quarter during the period June 30, 2018 through December 31, 2025, with the balance due on January 2, 2026. The Term Loan B may be prepaid without penalty at any time. The Term Loan B bears interest at a rate of LIBOR plus 1.75%. As of December 31, 2020, we had $679,621 aggregate outstanding principal amount under the Term Loan B. The interest rate in effect under Term Loan B as of December 31, 2020 and 2019 was 1.9% and 3.6%, respectively. REVOLVING CREDIT FACILITY $1,750,000 Outstanding borrowings $0 TERM LOAN A $250,000 Aggregate outstanding principal amount $215,625 TERM LOAN B $700,000 Aggregate outstanding principal amount $679,621 N/A Interest rate As of December 31, 2020 1.9% Interest rate As of December 31, 2020 1.9% Interest rate As of December 31, 2020 106 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 6. DEBT (CONTINUED) B. NOTES ISSUED UNDER INDENTURES Each series of notes shown below (i) is effectively subordinated to all of our secured indebtedness, including under the Credit Agreement, to the extent of the value of the collateral securing such indebtedness, (ii) ranks pari passu in right of payment with each other and with debt outstanding under the Credit Agreement, the senior notes shown below and other “senior debt” we incur from time to time, and (iii) is structurally subordinated to all liabilities of our subsidiaries that do not guarantee such series of notes. The key terms of our indentures are as follows: SENIOR NOTES GBP Notes 47/8% Notes due 2027 51/4% Notes due 2028 5% Notes 47/8% Notes due 2029 51/4% Notes due 2030 41/2% Notes 55/8% Notes AGGREGATE PRINCIPAL AMOUNT DIRECT OBLIGOR MATURITY DATE £ 400,000 IM UK November 15, 2025 $ 1,000,000 $ $ 825,000 500,000 $ 1,000,000 $ 1,300,000 $ 1,100,000 $ 600,000 IMI IMI IMI IMI IMI IMI IMI September 15, 2027 March 15, 2028 July 15, 2028 September 15, 2029 July 15, 2030 February 15, 2031 July 15, 2032 CONTRACTUAL INTEREST RATE 37/8% 47/8% 51/4% 5% 47 /8% 51 /4% 41/2% 55/8% INTEREST PAYMENTS DUE PAR CALL DATE(1) May 15 and November 15 November 15, 2022 March 15 and September 15 September 15, 2025 March 15 and September 15 March 15, 2025 January 15 and July 15 July 15, 2025 March 15 and September 15 September 15, 2027 January 15 and July 15 July 15, 2028 February 15 and August 15 February 15, 2029 January 15 and July 15 July 15, 2029 (1) We may redeem the notes at any time, at our option, in whole or in part. Prior to the par call date, we may redeem the notes at the redemption price or make-whole premium specified in the applicable indenture, together with accrued and unpaid interest to, but excluding, the redemption date. On or after the par call date, we may redeem the notes at a price equal to 100% of the principal amount being redeemed, together with accrued and unpaid interest to, but excluding, the redemption date. Each of the indentures for the notes provides that we must repurchase, at the option of the holders, the notes at 101% of their principal amount, plus accrued and unpaid interest, upon the occurrence of a “Change of Control,” which is defined in each respective indenture. Except for required repurchases upon the occurrence of a Change of Control or in the event of certain asset sales, each as described in the respective indenture, we are not required to make sinking fund or redemption payments with respect to any of the notes. JUNE 2020 OFFERINGS On June 22, 2020, IMI completed private offerings of the following series of notes in the amounts set forth below (collectively, the "June 2020 Offerings"): SERIES OF NOTES 5% Notes 51/4% Notes due 2030 55/8% Notes AGGREGATE PRINCIPAL AMOUNT $ 500,000 1,300,000 600,000 The 5% Notes, the 51/4% Notes due 2030 and the 55/8% Notes were issued at 100.000% of par. The total net proceeds of approximately $2,376,000 from the June 2020 Offerings, after deducting the initial purchasers’ commissions, were used to redeem all of the 43/8% Notes, the 6% Notes and the 53/4% Notes and to repay a portion of the outstanding borrowings under the Revolving Credit Facility. On June 29, 2020, we redeemed all of the $500,000 in aggregate principal outstanding of the 43/8% Notes at 100.000% of par and all of the $600,000 in aggregate principal outstanding of the 6% Notes at 102.000% of par, plus, in each case, accrued and unpaid interest to, but excluding, the redemption date. We recorded a charge of $17,040 to Other expense (income), net during the second quarter of 2020 related to the early extinguishment of this debt, representing the call premium associated with the early redemption of the 6% Notes, as well as a write-off of unamortized deferred financing costs associated with the early redemption of the 43/8% Notes and the 6% Notes. IRON MOUNTAIN 2020 FORM 10-K 107 Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 6. DEBT (CONTINUED) On July 2, 2020, we redeemed all of the $1,000,000 in aggregate principal outstanding of the 53/4% Notes at 100.958% of par, plus accrued and unpaid interest to, but excluding, the redemption date. We recorded a charge of $15,310 to Other expense (income), net during the third quarter of 2020 related to the early extinguishment of this debt, representing the call premium and write-off of unamortized deferred financing fees. AUGUST 2020 OFFERING On August 18, 2020, IMI completed a private offering of: SERIES OF NOTES 41/2% Notes AGGREGATE PRINCIPAL AMOUNT $ 1,100,000 The 41/2% Notes were issued at 100.000% of par. The total net proceeds of approximately $1,089,000 from the issuance of the 41/2% Notes, after deducting the initial purchasers’ commissions, were used to redeem all of the CAD Notes, the Euro Notes, and the 53/8% Notes and to repay a portion of the outstanding borrowings under the Revolving Credit Facility. On August 21, 2020, we redeemed all of the 250,000 CAD in aggregate principal outstanding of the CAD Notes at 104.031% of par, 300,000 Euro in aggregate principal outstanding of the Euro Notes at 101.500% of par and $250,000 in aggregate principal outstanding of the 53/8% Notes at 106.628% of par, plus, in each case accrued and unpaid interest to, but excluding, the redemption date. We recorded a charge of $35,950 to Other expense (income), net during the third quarter of 2020 related to the early extinguishment of the CAD Notes, the Euro Notes and the 53/8% Notes, representing the call premiums and write off unamortized deferred financing costs associated with the early redemption of these debt instruments. C. AUSTRALIAN DOLLAR TERM LOAN Iron Mountain Australia Group Pty, Ltd. (“IM Australia”), a wholly owned subsidiary of IMI, has an AUD term loan with an original principal balance of 350,000 Australian dollars (“AUD Term Loan”). All indebtedness associated with the AUD Term Loan was issued at 99% of par. Principal payments on the AUD Term Loan are to be paid in quarterly installments in an aggregate amount of 8,750 Australian dollars per year. The AUD Term Loan bears interest at BBSY (an Australian benchmark variable interest rate) plus 3.875%. The AUD Term Loan is scheduled to mature on September 22, 2022, at which point all obligations become due. As of December 31, 2020, we had 316,563 Australian dollars ($244,014 based upon the exchange rate between the United States dollar and the Australian dollar as of December 31, 2020) outstanding on the AUD Term Loan. As of December 31, 2019, we had 325,313 Australian dollars ($228,156 based upon the exchange rate between the United States dollar and the Australian dollar as of December 31, 2019) outstanding on the AUD Term Loan. The interest rate in effect under the AUD Term Loan was 3.9% and 4.8% as of December 31, 2020 and 2019, respectively. OUTSTANDING BORROWINGS AU$244,014 3.9% Interest Rate As of December 31, 2020 108 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 6. DEBT (CONTINUED) D. UK BILATERAL REVOLVING CREDIT FACILITY IM UK and Iron Mountain (UK) Data Centre Limited has a 140,000 British pounds sterling Revolving Credit Facility (the “UK Bilateral Facility”) with Barclays Bank PLC. The maximum amount permitted to be borrowed under the UK Bilateral Facility is 140,000 British pounds sterling, and we have the option to request additional commitments of up to 125,000 British pounds sterling, subject to the conditions specified in the UK Bilateral Facility. The UK Bilateral Facility is fully drawn. The UK Bilateral Facility is secured by certain properties in the United Kingdom. IMI and the Guarantors guarantee all obligations under the UK Bilateral Facility. The UK Bilateral Facility is scheduled to mature on September 23, 2022, at which point all obligations become due. The UK Bilateral Facility contains an option to extend the maturity date for an additional year, subject to the conditions specified in the UK Bilateral Facility, including the lender’s consent. The UK Bilateral Facility bears interest at a rate of LIBOR plus 2.25%. The interest rate in effect under the UK Bilateral Facility was 2.3% and 3.1% as of December 31, 2020 and 2019, respectively. E. ACCOUNTS RECEIVABLE SECURITIZATION PROGRAM MAXIMUM AMOUNT £140,000 OPTIONAL ADDITIONAL COMMITMENTS £125,000 2.3% Interest Rate As of December 31, 2020 We participate in an accounts receivable securitization program (the “Accounts Receivable Securitization Program”) involving several of our wholly owned subsidiaries and certain financial institutions. Under the Accounts Receivable Securitization Program, certain of our subsidiaries sell substantially all of their United States accounts receivable balances to our wholly owned special purpose entities, Iron Mountain Receivables QRS, LLC and Iron Mountain Receivables TRS, LLC (the “Accounts Receivable Securitization Special Purpose Subsidiaries”). The Accounts Receivable Securitization Special Purpose Subsidiaries use the accounts receivable balances to collateralize loans obtained from certain financial institutions. The Accounts Receivable Securitization Special Purpose Subsidiaries are consolidated subsidiaries of IMI. The Accounts Receivable Securitization Program is accounted for as a collateralized financing activity, rather than a sale of assets, and therefore: (i) accounts receivable balances pledged as collateral are presented as assets and borrowings are presented as liabilities on our Consolidated Balance Sheets, (ii) our Consolidated Statements of Operations reflect the associated charges for bad debt expense related to pledged accounts receivable (a component of selling, general and administrative expenses) and reductions to revenue due to billing and service related credit memos issued to customers and related reserves, as well as interest expense associated with the collateralized borrowings and (iii) receipts from customers related to the underlying accounts receivable are reflected as operating cash flows and borrowings and repayments under the collateralized loans are reflected as financing cash flows within our Consolidated Statements of Cash Flows. IMIM retains the responsibility of servicing the accounts receivable balances pledged as collateral for the Accounts Receivable Securitization Program and IMI provides a performance guaranty. The maximum availability allowed is limited by eligible accounts receivable, as defined under the terms of the Accounts Receivable Securitization Program. On March 31, 2020, we amended the Accounts Receivable Securitization Program to (i) increase the maximum amount available from $275,000 to $300,000 and (ii) extend the maturity date from July 30, 2020 to July 30, 2021, at which point all obligations become due. The full amount outstanding under the Accounts Receivable Securitization Program is classified within the current portion of long-term debt in our Consolidated Balance Sheet as of December 31, 2020 and 2019. As of December 31, 2020, the maximum availability allowed and amount outstanding under the Accounts Receivable Securitization Program was $274,100 and $85,000, respectively. At December 31, 2019, both the maximum availability and amount outstanding under the Accounts Receivable Securitization Program was $272,062. The interest rate in effect under the Accounts Receivable Securitization Program was 1.1% and 2.8% as of December 31, 2020 and 2019, respectively. Commitment fees at a rate of 40 basis points are charged on amounts made available but not borrowed under the Accounts Receivable Securitization Program. MAXIMUM AMOUNT $300,000 MAXIMUM AVAILABILITY ALLOWED $274,100 OUTSTANDING BORROWINGS $85,000 1.1% Interest rate As of December 31, 2020 IRON MOUNTAIN 2020 FORM 10-K 109 Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 6. DEBT (CONTINUED) F. CASH POOLING Certain of our subsidiaries participate in cash pooling arrangements (the “Cash Pools”) with Bank Mendes Gans (“BMG”), an independently operated wholly owned subsidiary of ING Group, in order to help manage global liquidity requirements. Under the Cash Pools, cash deposited by participating subsidiaries with BMG is pledged as security against the debit balances of other participating subsidiaries, and legal rights of offset are provided and, therefore, amounts are presented in our Consolidated Balance Sheets on a net basis. Each subsidiary receives interest on the cash balances held on deposit or pays interest on its debit balances based on an applicable rate as defined in the Cash Pools. We currently utilize two separate Cash Pools with BMG, one of which we utilize to manage global liquidity requirements for our qualified REIT subsidiaries (the “QRS Cash Pool”) and the other for our taxable REIT subsidiaries (the “TRS Cash Pool”). We have executed overdraft facility agreements for the QRS Cash Pool and TRS Cash Pool, each in an amount not to exceed $10,000. Each overdraft facility permits us to cover a temporary net debit position in the applicable pool. The approximate amount of the net cash position, gross position and outstanding debit balances for the QRS Cash Pool and TRS Cash Pool as of December 31, 2020 and 2019 were as follows: DECEMBER 31, 2020 DECEMBER 31, 2019 GROSS CASH POSITION OUTSTANDING DEBIT BALANCES NET CASH POSITION GROSS CASH POSITION OUTSTANDING DEBIT BALANCES NET CASH POSITION QRS Cash Pool TRS Cash Pool $ 448,700 $ (447,400) $ 1,300 $ 372,100 $ (369,000) $ 555,500 (553,500) 2,000 319,800 (301,300) 3,100 18,500 The net cash position balances as of December 31, 2020 and 2019 are reflected as Cash and cash equivalents in our Consolidated Balance Sheets. G. LETTERS OF CREDIT As of December 31, 2020, we had outstanding letters of credit totaling $36,160, of which $3,232 reduce our borrowing capacity under the Revolving Credit Facility (as described above). The letters of credit expire at various dates between January 2021 and January 2033. H. DEBT COVENANTS The Credit Agreement, our bond indentures and other agreements governing our indebtedness contain certain restrictive financial and operating covenants, including covenants that restrict our ability to complete acquisitions, pay cash dividends, incur indebtedness, make investments, sell assets and take certain other corporate actions. The covenants do not contain a rating trigger. Therefore, a change in our debt rating would not trigger a default under the Credit Agreement, our bond indentures or other agreements governing our indebtedness. The Credit Agreement requires that we satisfy a fixed charge coverage ratio, a net total lease adjusted leverage ratio and a net secured debt lease adjusted leverage ratio on a quarterly basis and our bond indentures require that, among other things, we satisfy a leverage ratio (not lease adjusted) or a fixed charge coverage ratio (not lease adjusted), as a condition to taking actions such as paying dividends and incurring indebtedness. The Credit Agreement uses EBITDAR-based calculations and the bond indentures use EBITDA-based calculations as the primary measures of financial performance for purposes of calculating leverage and fixed charge coverage ratios. The bond indenture EBITDA-based calculations include our consolidated subsidiaries, other than those we have designated as “Unrestricted Subsidiaries” as defined in the bond indentures. Generally, the Credit Agreement and the bond indentures use a trailing four fiscal quarter basis for purposes of the relevant calculations and require certain adjustments and exclusions for purposes of those calculations, which make the calculation of financial performance for purposes of those calculations under the Credit Agreement and bond indentures not directly comparable to Adjusted EBITDA as presented herein. We are in compliance with our leverage and fixed charge coverage ratios under the Credit Agreement, our bond indentures and other agreements governing our indebtedness as of December 31, 2020 and 2019. Noncompliance with these leverage and fixed charge coverage ratios would have a material adverse effect on our financial condition. 110 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 6. DEBT (CONTINUED) I. MATURITIES OF LONG-TERM DEBT (GROSS OF DISCOUNTS) ARE AS FOLLOWS: YEAR 2021 2022 2023 2024 2025 Thereafter Net Discounts Net Deferred Financing Costs Total Long-term Debt (including current portion) 7. COMMITMENTS AND CONTINGENCIES A. PURCHASE COMMITMENTS $ AMOUNT 193,759 536,811 232,264 45,680 569,005 7,221,896 8,799,415 (1,991) (94,110) $ 8,703,314 We have certain contractual obligations related to purchase commitments which require minimum payments as follows: YEAR 2021 2022 2023 2024 2025 Thereafter PURCHASE COMMITMENTS(1) $ 189,855 45,339 31,507 28,269 25,554 322 $ 320,846 (1) Purchase commitments (i) include obligations for future construction costs associated with the expansion of our Global Data Center Business, which represent a significant amount of the purchase commitments due in 2021 and (ii) exclude our operating and financing lease obligations (see Note 2.i.). B. SELF-INSURED LIABILITIES We are self-insured up to certain limits for costs associated with workers’ compensation claims, vehicle accidents, property and general business liabilities, and benefits paid under employee healthcare and short-term disability programs. At December 31, 2020 and 2019, there were $47,959 and $43,127, respectively, of self-insurance accruals reflected in Accrued expenses on our Consolidated Balance Sheets. The measurement of these costs requires the consideration of historical cost experience and judgments about the present and expected levels of cost per claim. We account for these costs primarily through actuarial methods, which develop estimates of the undiscounted liability for claims incurred, including those claims incurred but not reported. These methods provide estimates of future claim costs based on claims incurred as of the balance sheet date. IRON MOUNTAIN 2020 FORM 10-K 111 Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 7. COMMITMENTS AND CONTINGENCIES (CONTINUED) C. LITIGATION—GENERAL We are involved in litigation from time to time in the ordinary course of business, including litigation arising from damage to customer assets in our facilities caused by fires and other natural disasters. A portion of the defense and/or settlement costs associated with such litigation is covered by various commercial liability insurance policies purchased by us and, in limited cases, indemnification from third parties. Our policy is to establish reserves for loss contingencies when the losses are both probable and reasonably estimable. We record legal costs associated with loss contingencies as expenses in the period in which they are incurred. While the outcome of litigation is inherently uncertain, we do not believe any current litigation will have a material adverse effect on our consolidated financial condition, results of operations or cash flows. 8. STOCKHOLDERS’ EQUITY MATTERS Our board of directors has adopted a dividend policy under which we have paid, and in the future intend to pay, quarterly cash dividends on our common stock. The amount and timing of future dividends will continue to be subject to the approval of our board of directors, in its sole discretion, and to applicable legal requirements. In 2018, 2019 and 2020, our board of directors declared the following dividends: DECLARATION DATE February 14, 2018 May 24, 2018 July 24, 2018 October 25, 2018 February 7, 2019 May 22, 2019 July 26, 2019 October 31, 2019 February 13, 2020 May 5, 2020 August 5, 2020 November 4, 2020 DIVIDEND PER SHARE RECORD DATE TOTAL AMOUNT PAYMENT DATE $ 0.5875 0.5875 March 15, 2018 $ June 15, 2018 167,969 168,078 April 2, 2018 July 2, 2018 0.5875 September 17, 2018 168,148 October 2, 2018 0.6110 December 17, 2018 174,935 January 3, 2019 0.6110 0.6110 March 15, 2019 June 17, 2019 175,242 175,389 April 2, 2019 July 2, 2019 0.6110 September 16, 2019 175,434 October 2, 2019 0.6185 December 16, 2019 177,687 January 2, 2020 0.6185 0.6185 March 16, 2020 June 15, 2020 178,047 178,212 April 6, 2020 July 2, 2020 0.6185 September 15, 2020 178,224 October 2, 2020 0.6185 December 15, 2020 178,290 January 6, 2021 On February 24, 2021, we declared a dividend to our stockholders of record as of March 15, 2021 of $0.6185 per share, payable on April 6, 2021. During the years ended December 31, 2020, 2019 and 2018, we declared dividends in an aggregate and per share amount, based on the weighted average number of common shares outstanding during each respective year, as follows: Declared distributions $ 712,773 $ 703,752 $ 679,130 Amount per share each distribution represents based on weighted average number of common shares outstanding 2.47 2.45 2.38 YEAR ENDED DECEMBER 31, 2020 2019 2018 112 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 8. STOCKHOLDERS’ EQUITY MATTERS (CONTINUED) For federal income tax purposes, distributions to our stockholders are generally treated as nonqualified ordinary dividends (potentially eligible for the lower effective tax rates available for “qualified REIT dividends”), qualified ordinary dividends or return of capital. The United States Internal Revenue Service requires historical C corporation earnings and profits to be distributed prior to any REIT distributions, which may affect the character of each distribution to our stockholders, including whether and to what extent each distribution is characterized as a qualified or nonqualified ordinary dividend. In addition, certain of our distributions qualify as capital gain distributions. For the years ended December 31, 2020, 2019, and 2018, the dividends we paid on our common shares were classified as follows: Nonqualified ordinary dividends Qualified ordinary dividends Capital gains Return of capital YEAR ENDED DECEMBER 31, 2020 2019 2018 43.0 % — % 49.5 % 7.5 % 54.8 % 4.5 % 14.7 % 26.0 % 83.0 % 4.8 % 5.8 % 6.4 % 100.0 % 100.0 % 100.0 % Dividends paid during the years ended December 31, 2020, 2019, and 2018 which were classified as qualified ordinary dividends for federal income tax purposes primarily related to the distribution of historical C corporation earnings and profits related to certain acquisitions completed during the years ended December 31, 2020, 2019, and 2018. In 2020, the percentage of our dividend that was classified as a capital gain was 49.5% and primarily related to the sale of land and buildings in the United States. In 2019, the percentage of our dividend that was classified as a capital gain was 14.7% and primarily related to the sale of land and buildings in the United States and United Kingdom. In 2018, the percentage of our dividend that was classified as a capital gain was 5.8% and primarily related to the sale of land and buildings in the United Kingdom. EQUITY OFFERING In December 2017, we entered into an underwriting agreement (the “Underwriting Agreement”) with a syndicate of 16 banks (the “Underwriters”) related to the public offering by us of 14,500,000 shares of our common stock. In January 2018, the Underwriters, pursuant to the Underwriting Agreement, exercised an option to purchase an additional 2,175,000 shares of common stock, which after deducting underwriters’ commissions and the per share value of the dividend we declared on our common stock on October 24, 2017, resulted in net proceeds of approximately $76,200. IRON MOUNTAIN 2020 FORM 10-K 113 Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 9. INCOME TAXES We have been organized and have operated as a REIT effective beginning with our taxable year that ended on December 31, 2014. As a REIT, we are generally permitted to deduct from our federal taxable income the dividends we pay to our stockholders. The income represented by such dividends is not subject to federal taxation at the entity level but is taxed, if at all, at the stockholder level. The income of our domestic taxable REIT subsidiaries (“TRSs”), which hold our domestic operations that may not be REIT-compliant as currently operated and structured, is subject, as applicable, to federal and state corporate income tax. In addition, we and our subsidiaries continue to be subject to foreign income taxes in other jurisdictions in which we have business operations or a taxable presence, regardless of whether assets are held or operations are conducted through subsidiaries disregarded for federal income tax purposes or TRSs. We will also be subject to a separate corporate income tax on any gains recognized on the sale or disposition of any asset previously owned by a C corporation during a five-year period after the date we first owned the asset as a REIT asset that are attributable to “built-in gains” with respect to that asset on that date. We will also be subject to a built-in gains tax on our depreciation recapture recognized into income as a result of accounting method changes in connection with our acquisition activities. If we fail to remain qualified for taxation as a REIT, we will be subject to federal income tax at regular corporate income tax rates. Even if we remain qualified for taxation as a REIT, we may be subject to some federal, state, local and foreign taxes on our income and property in addition to taxes owed with respect to our TRS operations. In particular, while state income tax regimes often parallel the federal income tax regime for REITs, many states do not completely follow federal rules and some do not follow them at all. The significant components of our deferred tax assets and deferred tax liabilities as of December 31, 2020 and 2019 are presented below: Deferred Tax Assets: Accrued liabilities and other adjustments Net operating loss carryforwards Federal benefit of unrecognized tax benefits Valuation allowance Deferred Tax Liabilities: Other assets, principally due to differences in amortization Plant and equipment, principally due to differences in depreciation Other Net deferred tax liability DECEMBER 31, 2020 2019 $ 52,527 $ 96,710 — (46,938) 102,299 (186,682) (59,711) (29,265) (275,658) $ (173,359) $ 53,197 99,240 3,039 (60,003) 95,473 (177,645) (67,515) (21,903) (267,063) (171,590) The deferred tax assets and deferred tax liabilities as of December 31, 2020 and 2019 are presented below: Noncurrent deferred tax assets (Included in Other, a component of Other assets, net) $ 25,018 $ Deferred income taxes (198,377) 16,538 (188,128) At December 31, 2020, we have federal and state net operating loss carryforwards of which we are expecting an insignificant tax benefit to be realized. We have assets for foreign net operating losses of $92,142, with various expiration dates (and in some cases no expiration date), subject to a valuation allowance of approximately 43%. DECEMBER 31, 2020 2019 114 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 9. INCOME TAXES (CONTINUED) Rollforward of the valuation allowance is as follows: YEAR ENDED DECEMBER 31, 2020 2019 2018 BALANCE AT BEGINNING OF THE YEAR CHARGED (CREDITED) TO EXPENSE OTHER INCREASES/ (DECREASES)(1) BALANCE AT END OF THE YEAR $ 60,003 $ (8,337) $ (4,728) $ 55,666 61,756 6,211 3,568 (1,874) (9,658) 46,938 60,003 55,666 (1) Other increases and decreases in valuation allowances are primarily related to changes in foreign currency exchange rates. The components of income (loss) from continuing operations before provision (benefit) for income taxes for the years ended December 31, 2020, 2019 and 2018 are as follows: United States Canada Other Foreign YEAR ENDED DECEMBER 31, 2020 2019 2018 $ $ 276,145 $ 203,225 $ 52,332 44,228 48,326 76,591 372,705 $ 328,142 $ 203,078 53,779 153,454 410,311 The provision (benefit) for income taxes for the years ended December 31, 2020, 2019 and 2018 consist of the following components: Federal—current Federal—deferred State—current State—deferred Foreign—current Foreign—deferred YEAR ENDED DECEMBER 31, 2020 2019 2018 $ (10,424) $ 7,262 $ 8,834 2,956 (625) 50,063 (21,195) (3,356) 3,943 (1,126) 49,350 3,858 Provision (Benefit) for Income Taxes $ 29,609 $ 59,931 $ 703 (4,162) 918 627 45,371 (704) 42,753 IRON MOUNTAIN 2020 FORM 10-K 115 Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 9. INCOME TAXES (CONTINUED) A reconciliation of total income tax expense and the amount computed by applying the current federal statutory tax rate of 21.0% to income (loss) from continuing operations before provision (benefit) for income taxes for the years ended December 31, 2020, 2019 and 2018, respectively, is as follows: Computed "expected” tax provision Changes in income taxes resulting from: Tax adjustment relating to REIT State taxes (net of federal tax benefit) (Decrease) increase in valuation allowance (net operating losses) (Reversal) reserve accrual and audit settlements (net of federal tax benefit) Foreign tax rate differential Disallowed foreign interest, Subpart F income, and other foreign taxes Other, net Provision (Benefit) for Income Taxes YEAR ENDED DECEMBER 31, 2020 2019 2018 $ 78,268 $ 68,910 $ 86,165 (60,378) 2,258 (8,337) (7,409) 9,472 20,242 (4,507) (40,577) 2,115 6,211 514 8,562 14,241 (45) $ 29,609 $ 59,931 $ (35,165) 1,599 3,568 (13,985) 1,031 903 (1,363) 42,753 Our effective tax rates for the years ended December 31, 2020, 2019 and 2018 were 7.9%, 18.3% and 10.4%, respectively. Our effective tax rate is subject to variability in the future due to, among other items: (1) changes in the mix of income between our qualified REIT subsidiaries (“QRSs”) and our TRSs, as well as among the jurisdictions in which we operate; (2) tax law changes; (3) volatility in foreign exchange gains and losses; (4) the timing of the establishment and reversal of tax reserves; and (5) our ability to utilize net operating losses that we generate. The primary reconciling items between the federal statutory tax rate of 21.0% and our overall effective tax rate were: YEAR ENDED DECEMBER 31, 2020 The benefit derived from the dividends paid deduction of $60,378 and the impact of differences in the tax rates at which our foreign earnings are subject to, resulting in a tax provision of $9,472. 2019 The benefit derived from the dividends paid deduction of $40,577 and the impact of differences in the tax rates at which our foreign earnings are subject to, resulting in a tax provision of $8,562. 2018 The benefit derived from the dividends paid deduction of $35,165, the impact of differences in the tax rates at which our foreign earnings are subject to, resulting in a tax provision of $1,031 and a discrete tax benefit of approximately $14,000 associated with the resolution of a tax matter (which was included as a component of Accrued expenses in our Consolidated Balance Sheet as of December 31, 2017). As a REIT, we are entitled to a deduction for dividends paid, resulting in a substantial reduction of federal income tax expense. As a REIT, substantially all of our income tax expense will be incurred based on the earnings generated by our foreign subsidiaries and our domestic TRSs. 116 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 9. INCOME TAXES (CONTINUED) Following our conversion to a REIT in 2014, we concluded that it was not our intent to reinvest our current and future undistributed earnings of our foreign subsidiaries indefinitely outside the United States. As of December 31, 2016, we concluded that it is our intent to indefinitely reinvest our current and future undistributed earnings of certain of our unconverted foreign TRSs outside the United States. With the exception of certain limited instances, we no longer provide incremental foreign withholding taxes on the retained book earnings of these unconverted foreign TRSs, which was approximately $262,379 as of December 31, 2020. As a REIT, future repatriation of incremental undistributed earnings of our foreign subsidiaries will not be subject to federal or state income tax, with the exception of foreign withholding taxes in limited instances; however, such future repatriations will require distribution in accordance with REIT distribution rules, and any such distribution may then be taxable, as appropriate, at the stockholder level. We continue, however, to provide for incremental foreign withholding taxes on net book over outside basis differences related to the earnings of our foreign QRSs and certain other foreign TRSs (excluding unconverted foreign TRSs). The evaluation of an uncertain tax position is a two-step process. The first step is a recognition process whereby we determine whether it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The second step is a measurement process whereby a tax position that meets the more likely than not recognition threshold is calculated to determine the amount of benefit to recognize in the financial statements. The tax position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. We have elected to recognize interest and penalties associated with uncertain tax positions as a component of the provision (benefit) for income taxes in the accompanying Consolidated Statements of Operations. We recorded a decrease of $1,499 for gross interest and penalties for the year ended December 31, 2020. We recorded an increase of $1,780 and $1,961 for gross interest and penalties for the years ended December 31, 2019 and 2018, respectively. We had $6,212 and $9,282 accrued for the payment of interest and penalties as of December 31, 2020 and 2019, respectively. A summary of tax years that remain subject to examination by major tax jurisdictions is as follows: TAX YEARS See Below 2017 to present 2014 to present TAX JURISDICTION United States—Federal and State United Kingdom Canada The normal statute of limitations for United States federal tax purposes is three years from the date the tax return is filed; however, the statute of limitations may remain open for periods longer than three years in instances where a federal tax examination is in progress. The 2019, 2018 and 2017 tax years remain subject to examination for United States federal tax purposes as well as net operating loss carryforwards utilized in these years. We utilized net operating losses from 2002 through 2003 and 2010 through 2015 in our federal income tax returns for these tax years. The normal statute of limitations for state purposes is between three to five years. However, certain of our state statute of limitations remain open for periods longer than this when audits are in progress. We are subject to income taxes in the United States and numerous foreign jurisdictions. We are subject to examination by various tax authorities in jurisdictions in which we have business operations or a taxable presence. We regularly assess the likelihood of additional assessments by tax authorities and provide for these matters as appropriate. As of December 31, 2020, we had $25,969 of reserves related to uncertain tax positions, of which $23,402 and $2,567 is included in other long-term liabilities and deferred income taxes, respectively, in the accompanying Consolidated Balance Sheet. As of December 31, 2019, we had $35,068 of reserves related to uncertain tax positions, of which $31,992 and $3,076 is included in other long-term liabilities and deferred income taxes, respectively, in the accompanying Consolidated Balance Sheet. Although we believe our tax estimates are appropriate, the final determination of tax audits and any related litigation could result in changes in our estimates. IRON MOUNTAIN 2020 FORM 10-K 117 Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 9. INCOME TAXES (CONTINUED) A rollforward of unrecognized tax benefits is as follows: Gross tax contingencies—December 31, 2017 Gross additions based on tax positions related to the current year Gross additions for tax positions of prior years Gross reductions for tax positions of prior years Lapses of statutes Settlements Gross tax contingencies—December 31, 2018 Gross additions based on tax positions related to the current year Gross additions for tax positions of prior years Gross reductions for tax positions of prior years Lapses of statutes Settlements Gross tax contingencies—December 31, 2019 Gross additions based on tax positions related to the current year Gross additions for tax positions of prior years Gross reductions for tax positions of prior years Lapses of statutes Settlements Gross tax contingencies—December 31, 2020 $ $ 38,533 3,147 981 (2,865) (4,462) (14) 35,320 2,914 1,271 (299) (4,034) (104) 35,068 2,907 80 (5,617) (4,480) (1,989) 25,969 The reversal of these reserves of $25,969 as of December 31, 2020 will be recorded as a reduction of our income tax provision, if sustained. We believe that it is reasonably possible that an amount up to approximately $2,989 of our unrecognized tax positions may be recognized by the end of 2021 as a result of a lapse of statute of limitations or upon closing and settling significant audits in various worldwide jurisdictions. 118 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 10. SEGMENT INFORMATION As of December 31, 2020, our three reportable operating segments are described as follows: (1) Global Records and Information Management (“Global RIM”) Business includes five distinct offerings: (i) Records Management, which stores physical records and provides healthcare information services, vital records services, courier operations, and the collection, handling and disposal of sensitive documents (collectively, “Records Management”) for customers in 56 countries around the globe. (ii) Data Management, which provides storage and rotation of backup computer media as part of corporate disaster recovery plans, including service and courier operations (“Data Protection & Recovery”); server and computer backup services; and related services offerings, (collectively, “Data Management”). (iii) Global Digital Solutions, which develops, implements and supports comprehensive storage and information management solutions for the complete lifecycle of our customers’ information, including the management of physical records, conversion of documents to digital formats and digital storage of information, primarily in the United States and Canada. (iv) Secure Shredding, which includes the scheduled pick-up of office records that customers accumulate in specially designed secure containers we provide and is a natural extension of our hardcopy records management operations, completing the lifecycle of a record. Complementary to our shredding operations is the sale of the resultant waste paper to third-party recyclers. Through a combination of shredding facilities and mobile shredding units consisting of custom built trucks, we are able to offer secure shredding services to our customers throughout the United States, Canada and South Africa. (v) Consumer Storage, which provides on-demand, valet storage for consumers (“Consumer Storage”) across 31 markets in North America through the MakeSpace JV. The MakeSpace JV utilizes data analytics and machine learning to provide effective customer acquisition and a convenient and seamless consumer storage experience. (2) Global Data Center Business, which provides enterprise-class data center facilities and hyperscale-ready capacity to protect mission-critical assets and ensure the continued operation of our customers’ IT infrastructure, with secure, reliable and flexible data center options. As of December 31, 2020, our Global Data Center Business footprint spans nine markets in the United States and four international markets. UNITED STATES Denver, Colorado Kansas City, Missouri Boston, Massachusetts Boyers, Pennsylvania Manassas, Virginia Edison, New Jersey Columbus, Ohio Phoenix and Scottsdale, Arizona INTERNATIONAL MARKETS Amsterdam London Singapore Frankfurt (through an unconsolidated joint venture) (3) Corporate and Other Business, which consists primarily of Adjacent Businesses and other corporate items. Our Adjacent Businesses is comprised of: (i) entertainment and media which helps industry clients store, safeguard and deliver physical media of all types, and provides digital content repository systems that house, distribute, and archive key media assets, throughout the United States, Canada, France, China - Hong Kong S.A.R., the Netherlands and the United Kingdom (“Entertainment Services”) and (ii) technical expertise in the handling, installation and storing of art in the United States, Canada and Europe (“Fine Arts”). Our Corporate and Other Business segment also includes costs related to executive and staff functions, including finance, human resources and IT, which benefit the enterprise as a whole. IRON MOUNTAIN 2020 FORM 10-K 119 Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 10. SEGMENT INFORMATION (CONTINUED) An analysis of our business segment information and reconciliation to the accompanying Consolidated Financial Statements is as follows: GLOBAL RIM BUSINESS GLOBAL DATA CENTER BUSINESS CORPORATE AND OTHER BUSINESS TOTAL CONSOLIDATED As of and for the Year Ended December 31, 2020 Total Revenues $ 3,699,280 $ 279,312 $ 168,678 $ Storage Rental Service Depreciation and Amortization Depreciation Amortization Adjusted EBITDA Total Assets(1) Expenditures for Segment Assets Capital Expenditures Cash Paid for Acquisitions, Net of Cash Acquired Acquisitions of Customer Relationships, Customer Inducements and Contract Fulfillment Costs As of and for the Year Ended December 31, 2019 Total Revenues Storage Rental Service Depreciation and Amortization Depreciation Amortization Adjusted EBITDA Total Assets(1) Expenditures for Segment Assets Capital Expenditures Cash Paid for Acquisitions, Net of Cash Acquired Acquisitions of Customer Relationships, Customer Inducements, Contract Fulfillment Costs and third-party commissions As of and for the Year Ended December 31, 2018 Total Revenues Storage Rental Service Depreciation and Amortization Depreciation Amortization Adjusted EBITDA Total Assets(1) Expenditures for Segment Assets Capital Expenditures Cash Paid for Acquisitions, Net of Cash Acquired Acquisitions of Customer Relationships, Customer Inducements and Contract Fulfillment Costs 2,373,783 1,325,497 455,567 309,969 145,598 1,574,069 10,938,359 338,006 150,175 118,581 69,250 263,695 15,617 134,844 83,106 51,738 126,576 2,727,654 249,459 243,699 — 5,760 116,613 52,065 61,658 54,487 7,171 (224,924) 483,254 44,389 44,389 — — $ 3,812,433 $ 257,151 $ 193,000 $ 2,320,076 1,492,357 454,652 330,534 124,118 1,566,065 10,753,218 398,690 248,232 54,717 246,925 10,226 133,927 78,939 54,988 121,517 2,535,848 427,935 392,029 — 114,086 78,914 69,622 46,850 22,772 (218,573) 527,750 56,242 52,722 3,520 4,147,270 2,754,091 1,393,179 652,069 447,562 204,507 1,475,721 14,149,267 631,854 438,263 118,581 75,010 4,262,584 2,681,087 1,581,497 658,201 456,323 201,878 1,469,009 13,816,816 882,867 692,983 58,237 95,741 35,906 — 131,647 $ 3,842,600 $ 228,983 $ 154,178 $ 2,301,344 1,541,256 472,155 341,384 130,771 1,572,438 9,135,198 443,634 254,308 93,217 218,675 10,308 105,680 58,707 46,973 99,575 2,217,505 1,794,386 152,739 1,639,427 102,436 51,742 61,679 52,649 9,030 (213,089) 504,515 79,286 53,015 25,913 4,225,761 2,622,455 1,603,306 639,514 452,740 186,774 1,458,924 11,857,218 2,317,306 460,062 1,758,557 96,109 2,220 358 98,687 (1) Excludes all intercompany receivables or payables and investment in subsidiary balances. 120 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 10. SEGMENT INFORMATION (CONTINUED) The accounting policies of the reportable segments are the same as those described in Note 2. During the fourth quarter of 2020, we changed our definition of Adjusted EBITDA to (a) exclude stock-based compensation expense and (b) include our share of Adjusted EBITDA from our unconsolidated joint ventures. All prior periods have been recast to conform to these changes. We now define Adjusted EBITDA for each segment as income (loss) from continuing operations before interest expense, net, provision (benefit) for income taxes, depreciation and amortization (inclusive of our share of Adjusted EBITDA from our unconsolidated joint ventures), and excluding certain items we do not believe to be indicative of our core operating results, specifically: EXCLUDED • Significant Acquisition Costs • Restructuring Charges • • Intangible impairments (Gain) loss on disposal/write-down of property, plant and equipment, net (including real estate) • Other expense (income), net • Stock-based compensation expense • COVID-19 Costs (as defined below) Internally, we use Adjusted EBITDA as the basis for evaluating the performance of, and allocated resources to, our operating segments. A reconciliation of Income (Loss) from Continuing Operations to Adjusted EBITDA on a consolidated basis for the years ended December 31, 2020, 2019 and 2018 is as follows: Income (Loss) from Continuing Operations $ 343,096 $ 268,211 $ 367,558 YEAR ENDED DECEMBER 31, 2020 2019 2018 Add/(Deduct): Interest expense, net Provision (benefit) for income taxes Depreciation and amortization Significant Acquisition Costs Restructuring Charges Intangible impairments (Gain) loss on disposal/write-down of property, plant and equipment, net (including real estate) Other expense (income), net, excluding our share of losses (gains) from our unconsolidated joint ventures(1) Stock-based compensation expense(2) COVID-19 Costs(3) Our share of Adjusted EBITDA reconciling items from our unconsolidated joint ventures 418,535 29,609 652,069 — 194,396 23,000 419,298 59,931 658,201 13,293 48,597 — 409,648 42,753 639,514 50,665 — — (363,537) (63,824) (73,622) 133,611 34,272 9,285 1,385 25,720 36,194 — 3,388 (11,867) 31,014 — 3,261 Adjusted EBITDA $ 1,475,721 $ 1,469,009 $ 1,458,924 (1) Includes foreign currency transaction losses (gains), net, debt extinguishment expense and other, net. (2) Stock-based compensation expense related to Project Summit is included within Restructuring Charges for the years ended December 31, 2020 and 2019. (3) Costs that are incremental and directly attributable to the COVID-19 pandemic which are not expected to recur once the pandemic ends (“COVID-19 Costs”). For the year ended December 31, 2020, approximately $7,600 and $1,600 of COVID-19 Costs are included within Cost of sales and Selling, general and administrative expenses, respectively, on our Consolidated Statement of Operations. These costs include the purchase of personal protective equipment for our employees and incremental cleaning costs of our facilities, among other direct costs. IRON MOUNTAIN 2020 FORM 10-K 121 Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 10. SEGMENT INFORMATION (CONTINUED) Information as to our operations in different geographical areas for the years ended December 31, 2020, 2019 and 2018 is as follows: Revenues: United States United Kingdom Canada Australia Remaining Countries Long-lived Assets: United States United Kingdom Canada Australia Remaining Countries YEAR ENDED DECEMBER 31, 2020 2019 2018 $ 2,577,084 $ 2,632,586 $ 2,579,847 247,667 224,860 133,815 963,844 274,931 243,033 143,511 968,523 280,993 249,505 155,367 960,049 $ 7,818,059 $ 7,862,262 $ 6,902,232 838,491 556,120 575,862 755,859 556,591 530,755 547,768 453,398 442,755 3,090,948 2,875,010 2,302,951 Information as to our revenues by product and service lines by segment for the years ended December 31, 2020, 2019 and 2018 is as follows: For the Year Ended December 31, 2020 Records Management(1) Data Management(1) Information Destruction(1)(2) Data Center For the Year Ended December 31, 2019 Records Management(1) Data Management(1) Information Destruction(1)(2) Data Center For the Year Ended December 31, 2018 Records Management(1) Data Management(1) Information Destruction(1)(2) Data Center GLOBAL RIM BUSINESS GLOBAL DATA CENTER BUSINESS CORPORATE AND OTHER BUSINESS TOTAL CONSOLIDATED $ 2,852,296 $ — $ 102,003 $ 2,954,299 488,198 358,786 — — — 279,312 66,675 — — 554,873 358,786 279,312 $ 2,866,192 $ — $ 128,954 $ 2,995,146 520,082 426,159 — — — 257,151 64,046 — — 584,128 426,159 257,151 $ 2,871,253 $ — $ 96,669 $ 2,967,922 539,035 432,312 — — — 228,983 57,509 — — 596,544 432,312 228,983 (1) Each of the offerings within our product and service lines has a component of revenue that is storage rental related and a component that is service revenues, except the destruction services offering, which does not have a storage rental component. (2) Includes Secure Shredding services. 122 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 11. RELATED PARTY TRANSACTIONS In October 2020, in connection with the Frankfurt JV Transaction, we entered into agreements whereby we will earn various fees, including property management and construction and development fees, for services we are providing to the Frankfurt JV (the “Frankfurt JV Agreements”). Revenues and expenses associated with the Frankfurt JV Agreements are presented as a component of our Global Data Business segment. During the year ended December 31, 2020, we recognized revenue of approximately $400 associated with the Frankfurt JV Agreements. In March 2019, in connection with the Consumer Storage Transaction and the MakeSpace Investment, we entered into a storage and service agreement with the MakeSpace JV to provide certain storage and related services to the MakeSpace JV (the "MakeSpace Agreement”). Revenues and expenses associated with the MakeSpace Agreement are presented as a component of our Global RIM Business segment. During the years ended December 31, 2020 and 2019, we recognized revenue of approximately $33,600 and $22,500, respectively, associated with the MakeSpace Agreement. During the years ended December 31, 2020, 2019 and 2018, the Company had no other related party transactions. 12. PROJECT SUMMIT In October 2019, we announced Project Summit, our global program designed to better position us for future growth and achievement of our strategic objectives. We expanded Project Summit during the first quarter of 2020 to include additional opportunities to streamline our business and operations, as well as accelerated the timing of certain opportunities previously identified. Such opportunities include leveraging new technology solutions to enable us to modernize our service delivery model and more efficiently utilize our fleet, labor and real estate. As a result of the program, we expect to reduce the number of positions at vice president and above by approximately 45%. The total program is expected to reduce our total managerial and administrative workforce by approximately 700 positions by the end of 2021. We have also reduced our services and operations workforce. As of December 31, 2020, we have completed approximately 70% of our planned workforce reductions. The activities associated with Project Summit began in the fourth quarter of 2019 and are expected to be substantially complete by the end of 2021. We estimate that the implementation of Project Summit will result in total operating expenditures ("Restructuring Charges") of approximately $450,000 that primarily consist of: (1) employee severance costs; (2) internal costs associated with the development and implementation of Project Summit initiatives; (3) professional fees, primarily related to third party consultants who are assisting with the design and execution of various initiatives as well as project management activities and (4) system implementation and data conversion costs. Restructuring Charges included in the accompanying Consolidated Statement of Operations for the years ended December 31, 2020 and 2019, and from the inception of Project Summit through December 31, 2020, are as follows: YEAR ENDED DECEMBER 31, 2020 YEAR ENDED DECEMBER 31, 2019 FROM THE INCEPTION OF PROJECT SUMMIT THROUGH DECEMBER 31, 2020 Employee severance costs Professional fees and other costs Restructuring Charges $ $ 47,349 $ 147,047 194,396 $ 20,850 $ 27,747 48,597 $ 68,199 174,794 242,993 IRON MOUNTAIN 2020 FORM 10-K 123 Table of Contents Part IV IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2020 (In thousands, except share and per share data) 12. PROJECT SUMMIT (CONTINUED) Restructuring Charges included in the accompanying Consolidated Statement of Operations by segment for the years ended December 31, 2020 and 2019, and from inception of Project Summit through December 31, 2020, are as follows: YEAR ENDED DECEMBER 31, 2020 YEAR ENDED DECEMBER 31, 2019 FROM THE INCEPTION OF PROJECT SUMMIT THROUGH DECEMBER 31, 2020 Global RIM Business Global Data Center Business Corporate and Other Business Restructuring Charges $ $ 67,140 $ 1,632 125,624 194,396 $ 21,900 $ 306 26,391 48,597 $ 89,040 1,938 152,015 242,993 A rollforward of the accrued Restructuring Charges, which is included as a component of Accrued expenses and other current liabilities in our Consolidated Balance Sheet for the year ended December 31, 2020 is as follows: Inception of Project Summit Amounts accrued Payments Other, including currency translation adjustments Balance as of December 31, 2019 Amounts accrued Payments Other, including currency translation adjustments Balance as of December 31, 2020 EMPLOYEE SEVERANCE COSTS PROFESSIONAL FEES AND OTHER TOTAL ACCRUED RESTRUCTURING CHARGES $ $ — $ 20,850 (16,027) — 4,823 47,349 (32,455) (3,439) 16,278 $ — $ 27,747 (14,793) — 12,954 147,047 (136,222) (4) 23,775 $ — 48,597 (30,820) — 17,777 194,396 (168,677) (3,443) 40,053 124 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part IV IRON MOUNTAIN INCORPORATED SCHEDULE III—SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2020 (Dollars in thousands) Schedule III - Schedule of Real Estate and Accumulated Depreciation (“Schedule III”) reflects the cost and associated accumulated depreciation for the real estate facilities that are owned. The gross cost included in Schedule III includes the cost for land, land improvements, buildings, building improvements and racking. Schedule III does not reflect the 1,167 leased facilities in our real estate portfolio. In addition, Schedule III does not include any value for financing leases for property that is classified as land, buildings and building improvements in our consolidated financial statements. The following table presents a reconciliation of the gross amount of real estate assets, as presented in Schedule III below, to the sum of the historical book value of land, buildings and building improvements, racking and construction in progress as disclosed in Note 2.h. to Notes to Consolidated Financial Statements as of December 31, 2020: Gross Amount of Real Estate Assets, As Reported on Schedule III Add Reconciling Items: Book value of racking included in leased facilities(1) Book value of financing leases(2) Book value of construction in progress(3) Total Reconciling Items Gross Amount of Real Estate Assets, As Disclosed in Note 2.h. $ 3,830,489 1,448,654 410,583 287,580 2,146,817 $ 5,977,306 (1) Represents the gross book value of racking installed in our 1,167 leased facilities, which is included in historical book value of racking in Note 2.h., but excluded from Schedule III. (2) Represents the gross book value of buildings and building improvements that are subject to financing leases, which are included in the historical book value of building and building improvements in Note 2.h., but excluded from Schedule III. (3) Represents the gross book value of non-real estate assets that are included in the historical book value of construction in progress assets in Note 2.h. The historical book value of real estate assets associated with owned buildings that were related to construction in progress as of December 31, 2020 is included in Schedule III. The following table presents a reconciliation of the accumulated depreciation of real estate assets, as presented in Schedule III below, to the total accumulated depreciation for all property, plant and equipment presented on our Consolidated Balance Sheet as of December 31, 2020: Accumulated Depreciation of Real Estate Assets, As Reported on Schedule III Add Reconciling Items: Accumulated Depreciation - non-real estate assets(1) Accumulated Depreciation - racking in leased facilities(2) Accumulated Depreciation - financing leases(3) Total Reconciling Items Accumulated Depreciation, As Reported on Consolidated Balance Sheet $ 1,097,616 1,549,986 941,028 155,264 2,646,278 $ 3,743,894 (1) Represents the accumulated depreciation of non-real estate assets that is included in the total accumulated depreciation of property, plant and equipment on our Consolidated Balance Sheet, but excluded from Schedule III as the assets to which this accumulated depreciation relates are not considered real estate assets associated with owned buildings. (2) Represents the accumulated depreciation of racking as of December 31, 2020 installed in our 1,167 leased facilities, which is included in total accumulated depreciation of property, plant and equipment on our Consolidated Balance Sheet, but excluded from Schedule III, as disclosed in Footnote 1 to Schedule III. (3) Represents the accumulated depreciation of buildings and building improvements as of December 31, 2020 that are subject to financing leases, which is included in the total accumulated depreciation of property, plant and equipment on our Consolidated Balance Sheet, but excluded from Schedule III, as disclosed in Footnote 1 to Schedule III. IRON MOUNTAIN 2020 FORM 10-K 125 Table of Contents Part IV IRON MOUNTAIN INCORPORATED SCHEDULE III—SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION (CONTINUED) DECEMBER 31, 2020 (Dollars in thousands) (A) (B) (C) (D) (E) (F) REGION/COUNTRY/ STATE/CAMPUS ADDRESS North America FACILITIES(1) ENCUMBRANCES INITIAL COST TO COMPANY(1) COST CAPITALIZED SUBSEQUENT TO ACQUISITION(1)(2) GROSS AMOUNT CARRIED AT CLOSE OF CURRENT PERIOD(1)(8) ACCUMULATED DEPRECIATION AT CLOSE OF CURRENT PERIOD(1)(8) DATE OF CONSTRUCTION OR ACQUIRED(3) LIFE ON WHICH DEPRECIATION IN LATEST INCOME STATEMENT IS COMPUTED United States (Including Puerto Rico) 140 Oxmoor Ct, Birmingham, Alabama 1420 North Fiesta Blvd, Gilbert, Arizona 4802 East Van Buren, Phoenix, Arizona 615 North 48th Street, Phoenix, Arizona 2955 S. 18th Place, Phoenix, Arizona 4449 South 36th St, Phoenix, Arizona 8521 E. Princess Drive, Scottsdale, Arizona 600 Burning Tree Rd, Fullerton, California 21063 Forbes St, Hayward, California 1025 North Highland Ave, Los Angeles, California 1010 - 1006 North Mansfield, Los Angeles, California 1350 West Grand Ave, Oakland, California 1760 North Saint Thomas Circle, Orange, California 1915 South Grand Ave, Santa Ana, California 2680 Sequoia Dr, South Gate, California 336 Oyster Point Blvd, South San Francisco, California 25250 South Schulte Rd, Tracy, California 3576 N. Moline, Aurora, Colorado 5151 E. 46th Ave, Denver, Colorado 1 $ — $ 1,322 $ 978 $ 2,300 $ 1,181 2001 Up to 40 years 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 — — — — — — — — — — — — — — — — — — 1,637 2,741 4,378 2,115 2001 Up to 40 years 15,599 143,887 159,486 3,246 2019 Up to 40 years 423,107 21,338 444,445 43,817 2018 (5) Up to 40 years 12,178 14,250 26,428 6,019 2007 Up to 40 years 7,305 1,049 8,354 5,190 2012 Up to 40 years 87,865 1,879 89,744 12,425 2018 (5) Up to 40 years 4,762 1,899 6,661 3,091 2002 Up to 40 years 13,407 365 13,772 2,912 2019 (7) Up to 40 years 10,168 26,791 36,959 15,136 1988 Up to 40 years 749 — 749 128 2014 Up to 40 years 15,172 7,251 22,423 15,293 1997 Up to 40 years 4,576 499 5,075 1,981 2002 Up to 40 years 3,420 1,272 4,692 2,027 2001 Up to 40 years 6,329 2,251 8,580 4,291 2002 Up to 40 years 15,100 49 15,149 2,446 2019 (7) Up to 40 years 3,049 1,774 4,823 2,232 2001 Up to 40 years 1,583 6,312 4,469 709 6,052 7,021 2,025 2001 Up to 40 years 1,752 2014 Up to 40 years 126 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part IV IRON MOUNTAIN INCORPORATED SCHEDULE III—SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION (CONTINUED) DECEMBER 31, 2020 (Dollars in thousands) (A) (B) (C) (D) (E) (F) REGION/COUNTRY/ STATE/CAMPUS ADDRESS FACILITIES(1) ENCUMBRANCES INITIAL COST TO COMPANY(1) COST CAPITALIZED SUBSEQUENT TO ACQUISITION(1)(2) GROSS AMOUNT CARRIED AT CLOSE OF CURRENT PERIOD(1)(8) ACCUMULATED DEPRECIATION AT CLOSE OF CURRENT PERIOD(1)(8) DATE OF CONSTRUCTION OR ACQUIRED(3) LIFE ON WHICH DEPRECIATION IN LATEST INCOME STATEMENT IS COMPUTED North America (continued) United States (Including Puerto Rico (continued) 11333 E 53rd Ave, Denver, Colorado 4300 Brighton Boulevard, Denver, Colorado 20 Eastern Park Rd, East Hartford, Connecticut Bennett Rd, Suffield, Connecticut Kennedy Road, Windsor, Connecticut 293 Ella Grasso Rd, Windsor Locks, Connecticut 150-200 Todds Ln, Wilmington, Delaware 13280 Vantage Way, Jacksonville, Florida 12855 Starkey Rd, Largo, Florida 7801 Riviera Blvd, Miramar, Florida 10002 Satellite Blvd, Orlando, Florida 3501 Electronics Way, West Palm Beach, Florida 1890 MacArthur Blvd, Atlanta, Georgia 3881 Old Gordon Rd, Atlanta, Georgia 5319 Tulane Drive SW, Atlanta, Georgia 6111 Live Oak Parkway, Norcross, Georgia 3150 Nifda Dr, Smyrna, Georgia 2425 South Halsted St, Chicago, Illinois 1301 S. Rockwell St, Chicago, Illinois 1 $ — $ 7,403 $ 10,232 $ 17,635 $ 9,949 2001 Up to 40 years 1 1 2 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 — — — — — — — — — — — — — — — — — — 116,336 21,257 137,593 14,131 2017 Up to 40 years 7,417 1,904 9,321 6,340 2002 Up to 40 years 1,768 940 2,708 1,459 2000 Up to 40 years 10,447 31,259 41,706 21,987 2001 Up to 40 years 4,021 2,072 6,093 3,008 2002 Up to 40 years 7,226 1,048 8,274 5,205 2002 Up to 40 years 1,853 573 2,426 1,013 2001 Up to 40 years 3,293 3,005 6,298 3,399 2001 Up to 40 years 8,250 1,927 234 343 8,484 1,027 2017 Up to 40 years 2,270 938 2001 Up to 40 years 4,201 13,851 18,052 7,604 2001 Up to 40 years 1,786 1,185 772 790 2,558 1,193 2002 Up to 40 years 1,975 898 2001 Up to 40 years 2,808 3,940 6,748 3,560 2002 Up to 40 years 3,542 2,720 6,262 517 2017 Up to 40 years 463 7,470 777 1,670 1,240 9,140 763 1990 Up to 40 years 4,536 2006 Up to 40 years 7,947 19,884 27,831 16,600 1999 Up to 40 years IRON MOUNTAIN 2020 FORM 10-K 127 Table of Contents Part IV IRON MOUNTAIN INCORPORATED SCHEDULE III—SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION (CONTINUED) DECEMBER 31, 2020 (Dollars in thousands) (A) (B) (C) (D) (E) (F) REGION/COUNTRY/ STATE/CAMPUS ADDRESS FACILITIES(1) ENCUMBRANCES INITIAL COST TO COMPANY(1) COST CAPITALIZED SUBSEQUENT TO ACQUISITION(1)(2) GROSS AMOUNT CARRIED AT CLOSE OF CURRENT PERIOD(1)(8) ACCUMULATED DEPRECIATION AT CLOSE OF CURRENT PERIOD(1)(8) DATE OF CONSTRUCTION OR ACQUIRED(3) LIFE ON WHICH DEPRECIATION IN LATEST INCOME STATEMENT IS COMPUTED North America (continued) United States (Including Puerto Rico) (continued) 2604 West 13th St, Chicago, Illinois 2211 W. Pershing Rd, Chicago, Illinois 2255 Pratt Blvd, Elk Grove, Illinois 4175 Chandler Dr Opus No. Corp, Hanover Park, Illinois 2600 Beverly Drive, Lincoln, Illinois 6090 NE 14th Street, Des Moines, Iowa South 7th St, Louisville, Kentucky 26 Parkway Drive (fka 133 Pleasant), Scarborough, Maine 8928 McGaw Ct, Columbia, Maryland 10641 Iron Bridge Rd, Jessup, Maryland 96 High St, Billerica, Massachusetts 120 Hampden St, Boston, Massachusetts 32 George St, Boston, Massachusetts 14500 Weston Pkwy, Cary, North Carolina 3435 Sharps Lot Rd, Dighton, Massachusetts 77 Constitution Boulevard, Franklin, Massachusetts 216 Canal St, Lawrence, Massachusetts Bearfoot Road, Northboro, Massachusetts 38300 Plymouth Road, Livonia, Michigan 1 $ — $ 404 $ 2,888 $ 3,292 $ 2,874 2001 Up to 40 years 1 1 1 1 1 4 1 1 1 1 1 1 1 1 1 1 2 1 — — — — — — — — — — — — — — — — — — 4,264 13,995 18,259 9,024 2001 Up to 40 years 1,989 22,048 1,378 622 709 3,893 2,801 923 511 5,882 1,681 2000 Up to 40 years 24,849 10,352 2014 Up to 40 years 2,301 319 2015 Up to 40 years 1,133 443 2003 Up to 40 years 14,547 15,256 5,885 Various Up to 40 years 8,337 389 8,726 3,386 2015 (7) Up to 40 years 2,198 6,441 8,639 3,905 1999 Up to 40 years 3,782 1,459 5,241 2,801 2000 Up to 40 years 3,221 3,948 7,169 3,781 1998 Up to 40 years 164 939 1,103 576 2002 Up to 40 years 1,820 5,391 7,211 5,630 1991 Up to 40 years 1,880 2,229 4,109 2,071 1999 Up to 40 years 1,911 5,413 797 224 2,708 2,130 1999 Up to 40 years 5,637 857 2014 Up to 40 years 1,298 1,123 2,421 1,840 2001 Up to 40 years 55,923 12,745 68,668 42,266 Various Up to 40 years 10,285 1,920 12,205 4,310 2015 (7) Up to 40 years 128 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part IV IRON MOUNTAIN INCORPORATED SCHEDULE III—SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION (CONTINUED) DECEMBER 31, 2020 (Dollars in thousands) (A) (B) (C) (D) (E) (F) REGION/COUNTRY/ STATE/CAMPUS ADDRESS FACILITIES(1) ENCUMBRANCES INITIAL COST TO COMPANY(1) COST CAPITALIZED SUBSEQUENT TO ACQUISITION(1)(2) GROSS AMOUNT CARRIED AT CLOSE OF CURRENT PERIOD(1)(8) ACCUMULATED DEPRECIATION AT CLOSE OF CURRENT PERIOD(1)(8) DATE OF CONSTRUCTION OR ACQUIRED(3) LIFE ON WHICH DEPRECIATION IN LATEST INCOME STATEMENT IS COMPUTED North America (continued) United States (Including Puerto Rico) (continued) 6601 Sterling Dr South, Sterling Heights, Michigan 1985 Bart Ave, Warren, Michigan Wahl Court, Warren, Michigan 31155 Wixom Rd, Wixom, Michigan 3140 Ryder Trail South, Earth City, Missouri Missouri Bottom Road, Hazelwood, Missouri Leavenworth St/18th St, Omaha, Nebraska 4105 North Lamb Blvd, Las Vegas, Nevada 17 Hydro Plant Rd, Milton, New Hampshire 3003 Woodbridge Avenue, Edison, New Jersey 811 Route 33, Freehold, New Jersey 51-69 & 77-81 Court St, Newark, New Jersey 560 Irvine Turner Blvd, Newark, New Jersey 231 Johnson Ave, Newark, New Jersey 650 Howard Avenue, Somerset, New Jersey 100 Bailey Ave, Buffalo, New York 64 Leone Ln, Chester, New York 1368 County Rd 8, Farmington, New York County Rd 10, Linlithgo, New York 77 Seaview Blvd, N. Hempstead New York 1 $ — $ 1,294 $ 1,250 $ 2,544 $ 1,276 2002 Up to 40 years 1 2 1 1 4 3 1 1 1 3 1 1 1 1 1 1 1 2 1 — — — — — — — — — — — — — — — — — — — 1,802 3,426 4,000 3,072 530 2,684 1,482 3,398 2,332 6,110 5,482 6,470 1,187 2000 Up to 40 years 3,882 Various Up to 40 years 2,872 2001 Up to 40 years 2,558 2004 Up to 40 years 28,282 5,073 33,355 8,667 Various (7) Up to 40 years 2,924 19,855 22,779 8,295 Various Up to 40 years 3,430 8,965 12,395 6,276 2002 Up to 40 years 6,179 4,445 10,624 6,895 2001 Up to 40 years 310,404 56,509 366,913 29,990 2018 (5) Up to 40 years 38,697 57,207 95,904 56,003 Various Up to 40 years 11,734 10,437 22,171 2,179 2015 Up to 40 years 9,522 1,718 11,240 1,109 2015 Up to 40 years 8,945 2,399 11,344 1,173 2015 Up to 40 years 3,585 11,835 15,420 6,553 2006 Up to 40 years 1,324 5,086 11,437 12,761 7,052 1998 Up to 40 years 1,132 6,218 3,606 2000 Up to 40 years 2,611 4,788 7,399 4,869 1998 Up to 40 years 102 3,233 3,335 1,782 2001 Up to 40 years 5,719 1,442 7,161 2,925 2006 Up to 40 years IRON MOUNTAIN 2020 FORM 10-K 129 Table of Contents Part IV IRON MOUNTAIN INCORPORATED SCHEDULE III—SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION (CONTINUED) DECEMBER 31, 2020 (Dollars in thousands) (A) (B) (C) (D) (E) (F) REGION/COUNTRY/ STATE/CAMPUS ADDRESS FACILITIES(1) ENCUMBRANCES INITIAL COST TO COMPANY(1) COST CAPITALIZED SUBSEQUENT TO ACQUISITION(1)(2) GROSS AMOUNT CARRIED AT CLOSE OF CURRENT PERIOD(1)(8) ACCUMULATED DEPRECIATION AT CLOSE OF CURRENT PERIOD(1)(8) DATE OF CONSTRUCTION OR ACQUIRED(3) LIFE ON WHICH DEPRECIATION IN LATEST INCOME STATEMENT IS COMPUTED North America (continued) United States (Including Puerto Rico) (continued) 37 Hurds Corner Road, Pawling, New York Ulster Ave/Route 9W, Port Ewen, New York Binnewater Rd, Rosendale, New York 220 Wavel St, Syracuse, New York 2235 Cessna Drive, Burlington, North Carolina 826 Church Street, Morrisville, North Carolina 1275 East 40th, Cleveland, Ohio 7208 Euclid Avenue, Cleveland, Ohio 4260 Tuller Ridge Rd, Dublin, Ohio 3366 South Tech Boulevard, Miamisburg, Ohio 302 South Byrne Rd, Toledo, Ohio 7530 N. Leadbetter Road, Portland, Oregon Branchton Rd, Boyers, Pennsylvania 800 Carpenters Crossings, Folcroft, Pennsylvania Las Flores Industrial Park, Rio Grande, Puerto Rico 24 Snake Hill Road, Chepachet, Rhode Island 1061 Carolina Pines Road, Columbia, South Carolina 2301 Prosperity Way, Florence, South Carolina Mitchell Street, Knoxville, Tennessee 1 $ — $ 4,323 $ 1,285 $ 5,608 $ 2,471 2005 Up to 40 years 3 2 1 1 1 1 1 1 1 1 1 3 1 1 1 1 1 2 — — — — — — — — — — — — — — — 23,137 11,745 34,882 23,388 2001 Up to 40 years 5,142 11,827 16,969 7,696 Various Up to 40 years 2,929 2,765 5,694 3,098 1997 Up to 40 years 1,602 7,087 3,129 3,336 328 266 606 4,071 1,930 277 2015 Up to 40 years 7,353 1,558 2017 Up to 40 years 3,735 7,407 2,137 1999 Up to 40 years 3,471 2001 Up to 40 years 1,030 1,881 2,911 1,562 1999 Up to 40 years 29,092 674 29,766 3,085 2018 (5) Up to 40 years 602 5,187 1,090 1,874 1,692 7,061 820 2001 Up to 40 years 4,314 2002 Up to 40 years 21,166 243,167 264,333 70,834 Various Up to 40 years 2,457 976 3,433 2,168 2000 Up to 40 years 4,185 3,528 7,713 4,698 2001 Up to 40 years 2,659 2,243 4,902 3,120 2001 Up to 40 years — 11,776 2,348 14,124 3,706 2016 (7) Up to 40 years — — 2,846 1,259 4,105 1,427 2016 (7) Up to 40 years 718 4,575 5,293 2,229 Various Up to 40 years 130 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part IV IRON MOUNTAIN INCORPORATED SCHEDULE III—SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION (CONTINUED) DECEMBER 31, 2020 (Dollars in thousands) (A) (B) (C) (D) (E) (F) REGION/COUNTRY/ STATE/CAMPUS ADDRESS FACILITIES(1) ENCUMBRANCES INITIAL COST TO COMPANY(1) COST CAPITALIZED SUBSEQUENT TO ACQUISITION(1)(2) GROSS AMOUNT CARRIED AT CLOSE OF CURRENT PERIOD(1)(8) ACCUMULATED DEPRECIATION AT CLOSE OF CURRENT PERIOD(1)(8) DATE OF CONSTRUCTION OR ACQUIRED(3) LIFE ON WHICH DEPRECIATION IN LATEST INCOME STATEMENT IS COMPUTED North America (continued) United States (Including Puerto Rico) (continued) 6005 Dana Way, Nashville, Tennessee 11406 Metric Blvd, Austin, Texas 6600 Metropolis Drive, Austin, Texas Capital Parkway, Carrollton, Texas 1800 Columbian Club Dr, Carrolton, Texas 1905 John Connally Dr, Carrolton, Texas 13425 Branchview Ln, Dallas, Texas Cockrell Ave, Dallas, Texas 1819 S. Lamar St, Dallas, Texas 2000 Robotics Place Suite B, Fort Worth, Texas 1202 Ave R, Grand Prairie, Texas 6203 Bingle Rd, Houston, Texas 3502 Bissonnet St, Houston, Texas 2600 Center Street, Houston, Texas 5707 Chimney Rock, Houston, Texas 5249 Glenmont Ave, Houston, Texas 15333 Hempstead Hwy, Houston, Texas 5757 Royalton Dr, Houston, Texas 9601 West Tidwell, Houston, Texas 7800 Westpark, Houston, Texas 15300 FM 1825, Pflugerville, Texas 2 $ — $ 1,827 $ 3,063 $ 4,890 $ 2,105 2000 Up to 40 years 1 1 3 1 1 1 1 1 1 1 1 1 1 1 1 3 1 1 1 2 — — — — — — — — — — — — — — — — — — — — 5,489 2,212 7,701 4,274 2002 Up to 40 years 4,519 454 4,973 1,529 2011 Up to 40 years 8,299 19,673 9,991 1,190 18,290 3,182 2015 (7) Up to 40 years 20,863 10,111 2013 Up to 40 years 2,174 848 3,022 1,481 2000 Up to 40 years 3,518 3,685 7,203 4,335 2001 Up to 40 years 1,277 3,215 5,328 1,597 1,145 2,269 2,874 4,360 7,597 2,013 2000 Up to 40 years 2,715 2000 Up to 40 years 3,173 2002 Up to 40 years 8,354 2,204 10,558 6,283 2003 Up to 40 years 3,188 7,687 11,495 14,683 9,102 2001 Up to 40 years 722 8,409 6,051 2002 Up to 40 years 2,840 2,227 5,067 2,724 2000 Up to 40 years 1,032 1,211 2,243 1,145 2002 Up to 40 years 3,467 2,406 5,873 2,952 2000 Up to 40 years 6,327 37,843 44,170 14,745 2004 Up to 40 years 1,795 1,024 2,819 1,374 2000 Up to 40 years 1,680 2,395 4,075 1,424 2001 Up to 40 years 6,323 3,811 1,344 8,015 7,667 2,010 2015 (7) Up to 40 years 11,826 5,482 2001 Up to 40 years IRON MOUNTAIN 2020 FORM 10-K 131 Table of Contents Part IV IRON MOUNTAIN INCORPORATED SCHEDULE III—SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION (CONTINUED) DECEMBER 31, 2020 (Dollars in thousands) (A) (B) (C) (D) (E) (F) REGION/COUNTRY/ STATE/CAMPUS ADDRESS FACILITIES(1) ENCUMBRANCES INITIAL COST TO COMPANY(1) COST CAPITALIZED SUBSEQUENT TO ACQUISITION(1)(2) GROSS AMOUNT CARRIED AT CLOSE OF CURRENT PERIOD(1)(8) ACCUMULATED DEPRECIATION AT CLOSE OF CURRENT PERIOD(1)(8) DATE OF CONSTRUCTION OR ACQUIRED(3) LIFE ON WHICH DEPRECIATION IN LATEST INCOME STATEMENT IS COMPUTED North America (continued) United States (Including Puerto Rico) (continued) 930 Avenue B, San Antonio, Texas 931 North Broadway, San Antonio, Texas 1665 S. 5350 West, Salt Lake City, Utah 11052 Lakeridge Pkwy, Ashland, Virginia 2301 International Parkway, Fredericksburg, Virginia 11660 Hayden Road, Manassas, Virginia 4555 Progress Road, Norfolk, Virginia 3725 Thirlane Rd. N.W., Roanoke, Virginia 7700-7730 Southern Dr, Springfield, Virginia 22445 Randolph Dr, Sterling, Virginia 307 South 140th St, Burien, Washington 8908 W. Hallett Rd, Cheney, Washington 6600 Hardeson Rd, Everett, Washington 1201 N. 96th St, Seattle, Washington 4330 South Grove Road, Spokane, Washington 12021 West Bluemound Road, Wauwatosa, Wisconsin 1 $ — $ 393 $ 245 $ 638 $ 279 1998 Up to 40 years 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 — — — — — — — — — — — — — — — 3,526 1,161 4,687 2,963 1999 Up to 40 years 6,239 4,273 10,512 5,622 2002 Up to 40 years 1,709 1,927 3,636 1,974 1999 Up to 40 years 20,980 240 21,220 6,397 2015 (7) Up to 40 years 104,824 — 104,824 — 2020 Up to 40 years 6,527 1,125 7,652 3,541 2011 Up to 40 years 2,577 190 2,767 1,265 2015 (7) Up to 40 years 14,167 2,776 16,943 9,761 2002 Up to 40 years 7,598 3,737 11,335 6,328 2005 Up to 40 years 2,078 2,367 4,445 2,476 1999 Up to 40 years 510 4,266 4,776 2,250 1999 Up to 40 years 5,399 3,435 8,834 3,774 2002 Up to 40 years 4,496 2,531 7,027 3,744 2001 Up to 40 years 3,906 850 4,756 608 2015 Up to 40 years 1,307 2,134 3,441 1,542 1999 Up to 40 years 160 $ — $ 1,833,229 $ 1,062,809 $ 2,896,038 $ 777,507 132 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part IV IRON MOUNTAIN INCORPORATED SCHEDULE III—SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION (CONTINUED) DECEMBER 31, 2020 (Dollars in thousands) (A) (B) (C) (D) (E) (F) REGION/COUNTRY/ STATE/CAMPUS ADDRESS FACILITIES(1) ENCUMBRANCES INITIAL COST TO COMPANY(1) COST CAPITALIZED SUBSEQUENT TO ACQUISITION(1)(2) GROSS AMOUNT CARRIED AT CLOSE OF CURRENT PERIOD(1)(8) ACCUMULATED DEPRECIATION AT CLOSE OF CURRENT PERIOD(1)(8) DATE OF CONSTRUCTION OR ACQUIRED(3) LIFE ON WHICH DEPRECIATION IN LATEST INCOME STATEMENT IS COMPUTED North America (continued) Canada One Command Court, Bedford 195 Summerlea Road, Brampton 10 Tilbury Court, Brampton 8825 Northbrook Court, Burnaby 8088 Glenwood Drive, Burnaby 5811 26th Street S.E., Calgary 3905-101 Street, Edmonton 68 Grant Timmins Drive, Kingston 3005 Boul. Jean- Baptiste Deschamps, Lachine 1655 Fleetwood, Laval 4005 Richelieu, Montreal 1209 Algoma Rd, Ottawa 1650 Comstock Rd, Ottawa 235 Edson Street, Saskatoon 640 Coronation Drive, Scarborough 610 Sprucewood Ave, Windsor 1 $ — $ 3,847 $ 4,719 $ 8,566 $ 4,517 2000 Up to 40 years 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 — — — — 5,403 6,786 12,189 5,982 2000 Up to 40 years 5,007 17,897 22,904 8,974 2000 Up to 40 years 8,091 2,476 10,567 5,097 2001 Up to 40 years 4,326 7,414 11,740 5,143 2005 Up to 40 years — 14,658 9,497 24,155 12,102 2000 Up to 40 years — — — — — — — — — 2,020 3,639 2,751 910 753 579 2,930 1,703 2000 Up to 40 years 4,392 458 2016 Up to 40 years 3,330 1,506 2000 Up to 40 years 8,196 18,761 26,957 14,003 2000 Up to 40 years 1,800 2,657 4,457 1,912 2000 Up to 40 years 1,059 7,178 8,237 4,426 2000 Up to 40 years 7,478 90 7,568 2,884 2017 Up to 40 years 829 1,731 2,560 955 2008 Up to 40 years 1,853 1,345 3,198 1,399 2000 Up to 40 years — 1,243 733 1,976 778 2007 Up to 40 years 16 $ 176 $ — $ 72,200 $ 83,526 $ 155,726 $ 71,839 — $ 1,905,429 $ 1,146,335 $ 3,051,764 $ 849,346 IRON MOUNTAIN 2020 FORM 10-K 133 Table of Contents Part IV IRON MOUNTAIN INCORPORATED SCHEDULE III—SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION (CONTINUED) DECEMBER 31, 2020 (Dollars in thousands) (A) (B) (C) (D) (E) (F) FACILITIES(1) ENCUMBRANCES INITIAL COST TO COMPANY(1) COST CAPITALIZED SUBSEQUENT TO ACQUISITION(1)(2) GROSS AMOUNT CARRIED AT CLOSE OF CURRENT PERIOD(1)(8) ACCUMULATED DEPRECIATION AT CLOSE OF CURRENT PERIOD(1)(8) DATE OF CONSTRUCTION OR ACQUIRED(3) LIFE ON WHICH DEPRECIATION IN LATEST INCOME STATEMENT IS COMPUTED 1 $ — $ 6,542 $ 9,431 $ 15,973 $ 4,510 2010 Up to 40 years 1 1 1 1 1 1 9 1 2 3 3 1 1 1 3 4 1 1 — — 2,541 7,137 9,678 4,953 2003 Up to 40 years 1,408 829 2,237 151 2003 Up to 40 years — 3,136 4,031 7,167 802 2003 Up to 40 years — 1,935 131 2,066 173 2018 Up to 40 years — 6,980 1,871 8,851 5,284 2003 Up to 40 years — 20,486 5,433 25,919 1,056 2004 Up to 40 years — 7,418 3,786 11,204 5,731 2004 Up to 40 years — 10,847 6,902 17,749 7,551 2003 Up to 40 years — 5,277 7,422 12,699 9,082 2003 Up to 40 years — 3,119 2,060 5,179 3,077 2003 Up to 40 years — 20,307 9,978 30,285 12,649 2003 Up to 40 years — — — 4,039 496 4,535 2,538 2008 Up to 40 years 681 1,519 2,200 1,497 2004 Up to 40 years 2,636 588 3,224 1,326 2006 Up to 40 years — 1,750 2,881 4,631 2,590 2003 Up to 40 years — 21,318 1,177 22,495 5,376 2016 (4) Up to 40 years — 1,322 36 1,358 326 2016 (4) Up to 40 years — 3,390 1,087 4,477 1,177 2016 (4) Up to 40 years REGION/COUNTRY/ STATE/CAMPUS ADDRESS Europe Gewerbeparkstr. 3, Vienna, Austria Woluwelaan 147, Diegem, Belgium Stupničke Šipkovine 62, Zagreb, Croatia Kratitirion 9 Kokkinotrimithia Industrial District, Nicosia, Cyprus Karyatidon 1, Agios Sylas Industrial Area (3rd), Limassol, Cyprus 65 Egerton Road, Birmingham, England Corby 278, Long Croft Road, Corby, England Otterham Quay Lane, Gillingham, England Pennine Way, Hemel Hempstead, England Kemble Industrial Park, Kemble, England Gayton Road, Kings Lynn, England Cody Road, London, England 17 Broadgate, Oldham, England Harpway Lane, Sopley, England Unit 1A Broadmoor Road, Swindom, England Jeumont- Schneider, Champagne Sur Seine, France Bat I-VII Rue de Osiers, Coignieres, France 26 Rue de I Industrie, Fergersheim, France Bat A, B, C1, C2, C3 Rue Imperiale, Gue de Longroi, France 134 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part IV IRON MOUNTAIN INCORPORATED SCHEDULE III—SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION (CONTINUED) DECEMBER 31, 2020 (Dollars in thousands) (A) (B) (C) (D) (E) (F) REGION/COUNTRY/ STATE/CAMPUS ADDRESS Europe (continued) FACILITIES(1) ENCUMBRANCES INITIAL COST TO COMPANY(1) COST CAPITALIZED SUBSEQUENT TO ACQUISITION(1)(2) GROSS AMOUNT CARRIED AT CLOSE OF CURRENT PERIOD(1)(8) ACCUMULATED DEPRECIATION AT CLOSE OF CURRENT PERIOD(1)(8) DATE OF CONSTRUCTION OR ACQUIRED(3) LIFE ON WHICH DEPRECIATION IN LATEST INCOME STATEMENT IS COMPUTED Le Petit Courtin Site de Dois, Gueslin, Mingieres, France ZI des Sables, Morangis, France 45 Rue de Savoie, Manissieux, Saint Priest, France Gutenbergstrabe 55, Hamburg, Germany Brommer Weg 1, Wipshausen, Germany Warehouse and Offices 4 Springhill, Cork, Ireland 17 Crag Terrace, Dublin, Ireland Damastown Industrial Park, Dublin, Ireland Portsmuiden 46, Amsterdam, The Netherlands Schepenbergweg 1, Amsterdam, The Netherlands Vareseweg 130, Rotterdam, The Netherlands Howemoss Drive, Aberdeen, Scotland Traquair Road, Innerleithen, Scotland Nettlehill Road, Houston Industrial Estate, Livingston, Scotland Av Madrid s/n Poligono Industrial Matillas, Alcala de Henares, Spain Calle Bronce, 37, Chiloeches, Spain Ctra M.118 , Km.3 Parcela 3, Madrid, Spain Abanto Ciervava, Spain 1 $ — $ 14,141 $ 1,025 $ 15,166 $ 2,558 2016 (4) Up to 40 years 1 1 1 1 1 1 1 1 1 1 2 1 1 1 1 1 2 277 12,407 17,744 30,151 21,152 2004 Up to 40 years — 5,546 322 5,868 1,075 2016 (4) Up to 40 years — 4,022 1,148 5,170 1,292 2016 (4) Up to 40 years — 3,220 2,039 5,259 3,712 2006 Up to 40 years — 9,040 3,617 12,657 5,520 2014 Up to 40 years — — 2,818 1,075 3,893 1,556 2001 Up to 40 years 16,034 9,136 25,170 9,330 2012 Up to 40 years — 1,852 2,175 4,027 2,662 2015 (7) Up to 40 years — 1,258 (600) 658 353 2015 (7) Up to 40 years — 1,357 1,244 2,601 1,900 2015 (7) Up to 40 years — 6,970 5,997 12,967 5,506 Various Up to 40 years — 113 2,251 2,364 1,229 2004 Up to 40 years — 11,517 27,529 39,046 19,822 2001 Up to 40 years — 186 270 456 367 2014 Up to 40 years — — 11,011 3,540 14,551 3,734 2010 Up to 40 years 3,981 6,751 10,732 7,128 2001 Up to 40 years — 1,053 11 1,064 504 Various Up to 40 years 57 $ 277 $ 231,658 $ 152,069 $ 383,727 $ 159,249 IRON MOUNTAIN 2020 FORM 10-K 135 Table of Contents Part IV IRON MOUNTAIN INCORPORATED SCHEDULE III—SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION (CONTINUED) DECEMBER 31, 2020 (Dollars in thousands) (A) (B) (C) (D) (E) (F) REGION/COUNTRY/ STATE/CAMPUS ADDRESS Latin America Amancio Alcorta 2396, Buenos Aires, Argentina Azara 1245, Buenos Aires, Argentina Spegazzini, Ezeiza Buenos Aires, Argentina Av Ernest de Moraes 815, Bairro Fim do Campo, Jarinu Brazil Rua Peri 80, Jundiai, Brazil Francisco de Souza e Melo, Rio de Janerio, Brazil Hortolandia, Sao Paulo, Brazil El Taqueral 99, Santiago, Chile Panamericana Norte 18900, Santiago, Chile Avenida Prolongacion del Colli 1104, Guadalajara, Mexico Privada Las Flores No. 25 (G3), Guadalajara, Mexico Tula KM Parque de Las, Huehuetoca, Mexico Carretera Pesqueria Km2.5(M3), Monterrey, Mexico Lote 2, Manzana A, (T2& T3), Toluca, Mexico Prolongacion de la Calle 7 (T4), Toluca, Mexico Panamericana Sur, KM 57.5, Lima, Peru Av. Elmer Faucett 3462, Lima, Peru Calle Los Claveles-Seccion 3, Lima, Peru FACILITIES(1) ENCUMBRANCES INITIAL COST TO COMPANY(1) COST CAPITALIZED SUBSEQUENT TO ACQUISITION(1)(2) GROSS AMOUNT CARRIED AT CLOSE OF CURRENT PERIOD(1)(8) ACCUMULATED DEPRECIATION AT CLOSE OF CURRENT PERIOD(1)(8) DATE OF CONSTRUCTION OR ACQUIRED(3) LIFE ON WHICH DEPRECIATION IN LATEST INCOME STATEMENT IS COMPUTED 2 $ — $ 655 $ 722 $ 1,377 $ 439 Various Up to 40 years 1 1 1 2 3 1 5 5 1 1 2 2 1 1 7 2 1 — 166 (164) 2 — 1998 Up to 40 years — 12,773 (10,481) 2,292 520 2012 Up to 40 years — 12,562 (4,547) 8,015 1,514 2016 (4) Up to 40 years — — — — — 8,894 (3,358) 5,536 1,146 2016 (4) Up to 40 years 1,868 7,676 9,544 3,150 Various Up to 40 years 24,078 (4,430) 19,648 3,332 2014 Up to 40 years 2,629 34,428 37,057 12,808 Various Up to 40 years 4,001 19,606 23,607 8,310 2004 Up to 40 years — 374 1,338 1,712 1,068 2002 Up to 40 years — 905 1,188 2,093 1,016 2004 Up to 40 years — 19,937 (1,421) 18,516 3,672 2016 (4) Up to 40 years — 3,537 4,462 7,999 3,749 2004 Up to 40 years — 2,204 4,481 6,685 5,279 2002 Up to 40 years — 7,544 14,744 22,288 7,474 2007 Up to 40 years — 1,549 692 2,241 1,222 Various Up to 40 years 528 4,112 4,882 8,994 4,822 Various Up to 40 years — 8,179 29,493 37,672 9,399 2010 Up to 40 years 39 $ 528 $ 115,967 $ 99,311 $ 215,278 $ 68,920 136 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part IV IRON MOUNTAIN INCORPORATED SCHEDULE III—SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION (CONTINUED) DECEMBER 31, 2020 (Dollars in thousands) (A) (B) (C) (D) (E) (F) REGION/COUNTRY/ STATE/CAMPUS ADDRESS Asia Warehouse No 4, Shanghai, China Jalan Karanggan Muda Raya No 59, Bogor Indonesia 1 Serangoon North Avenue 6, Singapore 2 Yung Ho Road, Singapore 26 Chin Bee Drive, Singapore IC1 69 Moo 2, Soi Wat Namdaeng, Bangkok, Thailand Australia 8 Whitestone Drive, Austins Ferry, Australia 6 Norwich Street, South Launceston, Australia Total FACILITIES(1) ENCUMBRANCES INITIAL COST TO COMPANY(1) COST CAPITALIZED SUBSEQUENT TO ACQUISITION(1)(2) GROSS AMOUNT CARRIED AT CLOSE OF CURRENT PERIOD(1)(8) ACCUMULATED DEPRECIATION AT CLOSE OF CURRENT PERIOD(1)(8) DATE OF CONSTRUCTION OR ACQUIRED(3) LIFE ON WHICH DEPRECIATION IN LATEST INCOME STATEMENT IS COMPUTED 1 $ 1 1 1 1 2 7 $ 1 $ 1 — $ 1,530 $ 818 $ 2,348 $ 478 2013 Up to 40 years — 7,897 4,902 12,799 2,714 2017 Up to 40 years — 58,637 54,113 112,750 7,309 2018 (7) Up to 40 years — — — 10,395 1,968 12,363 1,977 2016 (4) Up to 40 years 15,699 3,009 18,708 2,986 2016 (4) Up to 40 years 13,226 2,888 16,114 3,995 2016 (4) Up to 40 years — $ 107,384 $ 67,698 $ 175,082 $ 19,459 — $ 681 $ 2,850 $ 3,531 $ 519 2012 Up to 40 years — 1,090 17 1,107 123 2015 Up to 40 years 2 $ 281 $ — $ 1,771 $ 2,867 $ 4,638 $ 642 805 $ 2,362,209 $ 1,468,280 $ 3,830,489 $ 1,097,616 (1) The above information only includes the real estate facilities that are owned. The gross cost includes the cost for land, land improvements, buildings, building improvements and racking. The listing does not reflect the 1,167 leased facilities in our real estate portfolio. In addition, the above information does not include any value for financing leases for property that is classified as land, buildings and building improvements in our consolidated financial statements. (2) Amount includes cumulative impact of foreign currency translation fluctuations. (3) Date of construction or acquired represents the date we constructed the facility or acquired the facility through purchase or acquisition. (4) Property was acquired in connection with our acquisition of Recall Holdings Limited. (5) Property was acquired in connection with the IODC Transaction. (6) Property was acquired in connection with the Credit Suisse Transaction. (7) This date represents the date the categorization of the property was changed from a leased facility to an owned facility. IRON MOUNTAIN 2020 FORM 10-K 137 Table of Contents Part IV IRON MOUNTAIN INCORPORATED SCHEDULE III—SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION (CONTINUED) DECEMBER 31, 2020 (Dollars in thousands) (8) The following tables present the changes in gross carrying amount of real estate owned and accumulated depreciation for the years ended December 31, 2020 and 2019: GROSS CARRYING AMOUNT OF REAL ESTATE Gross amount at beginning of period Additions during period: Discretionary capital projects Other adjustments(1) Foreign currency translation fluctuations Deductions during period: Cost of real estate sold, disposed or written-down Other adjustments(2) YEAR ENDED DECEMBER 31, 2020 2019 $ 3,856,515 $ 3,700,307 157,239 66,978 10,198 234,415 (178,869) (81,572) (260,441) 278,508 25,077 5,978 309,563 (153,355) — (153,355) Gross amount at end of period $ 3,830,489 $ 3,856,515 (1) For the year ended December 31, 2020, this includes previously recorded construction in progress, not classified as owned real estate at December 31, 2019. For the year ended December 31, 2019, this includes costs associated with real estate we acquired which primarily includes building improvements and racking, which were previously subject to leases. (2) For the year ended December 31, 2020, this includes the cost of racking associated with the facilities sold as part of the sale-leaseback transactions. ACCUMULATED DEPRECIATION Gross amount of accumulated depreciation at beginning of period Additions during period: Depreciation Other adjustments(1) Foreign currency translation fluctuations Deductions during period: Amount of accumulated depreciation for real estate assets sold, disposed or written-down Other adjustments(2) YEAR ENDED DECEMBER 31, 2020 2019 $ 1,072,013 $ 1,011,050 123,447 122,366 — 8,590 1,314 3,514 132,037 127,194 (54,978) (51,456) (66,231) — (106,434) (66,231) Gross amount of end of period $ 1,097,616 $ 1,072,013 (1) For the year ended December 31, 2019, this includes accumulated depreciation associated with building improvements and racking, which were previously subject to leases (2) For the year ended December 31, 2020, this includes the accumulated depreciation of racking associated with the facilities sold as part of the sale-leaseback transactions. The aggregate cost of our real estate assets for federal tax purposes at December 31, 2020 was approximately $3,769,000. ITEM 16. FORM 10-K SUMMARY. Not applicable. 138 IRON MOUNTAIN 2020 FORM 10-K Table of Contents INDEX TO EXHIBITS Part IV Certain exhibits indicated below are incorporated by reference to documents we have filed with the SEC. Each exhibit marked by a pound sign (#) is a management contract or compensatory plan. EXHIBIT 3.1 3.2 3.3 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 10.1 10.2 10.3 10.4 10.5 10.6 10.7 10.8 10.9 10.10 ITEM Certificate of Incorporation of the Company, as filed with the Secretary of State of the State of Delaware on June 26, 2014, as corrected by the Certificate of Correction of the Company filed with the Secretary of State of the State of Delaware on June 30, 2014. (Incorporated by reference to Annex B-1 to the Iron Mountain Incorporated Proxy Statement for the Special Meeting of Stockholders, filed with the SEC on December 23, 2014.) Certificate of Merger, filed by the Company, effective as of January 20, 2015. (Incorporated by reference to the Company’s Current Report on Form 8‑K dated January 21, 2015.) Bylaws of the Company. (Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.) Senior Indenture, dated as of September 18, 2017, among the Company, the Guarantors named therein and Wells Fargo Bank, National Association, as trustee, relating to the 4.875% Senior Notes due 2027. (Incorporated by reference to the Company’s Current Report on Form 8-K dated September 18, 2017.) Senior Indenture, dated as of November 13, 2017, among the Company, the Guarantors named therein, Wells Fargo Bank, National Association, as trustee, and Société Générale Bank & Trust, as paying agent, registrar and transfer agent, relating to the 3.875% GBP Senior Notes due 2025. (Incorporated by reference to the Company’s Current Report on Form 8-K dated November 13, 2017.) Senior Indenture, dated as of December 27, 2017, among the Company, the Guarantors named therein and Wells Fargo Bank, National Association, as trustee, relating to the 5.25% Senior Notes due 2028. (Incorporated by reference to the Company’s Current Report on Form 8-K dated December 27, 2017.) Senior Indenture, dated as of September 9, 2019, among the Company, the Subsidiary Guarantors and Wells Fargo Bank, National Association, as trustee, relating to the 4.875% Senior Notes due 2029.(Incorporated by reference to the Company's Current Report on Form 8-K dated September 9, 2019.) Senior Indenture, dated as of June 22, 2020, among the Company, the Guarantors named therein and Wells Fargo Bank, National Association, as trustee, relating to the 5.000% Senior Notes due 2028. (Incorporated by reference to the Company’s Current Report on Form 8-K dated June 22, 2020.) Senior Indenture, dated as of June 22, 2020, among the Company, the Guarantors named therein and Wells Fargo Bank, National Association, as trustee, relating to the 5.250% Senior Notes due 2030. (Incorporated by reference to the Company’s Current Report on Form 8-K dated June 22, 2020.) Senior Indenture, dated as of June 22, 2020, among the Company, the Guarantors named therein and Wells Fargo Bank, National Association, as trustee, relating to the 5.625% Senior Notes due 2032. (Incorporated by reference to the Company’s Current Report on Form 8-K dated June 22, 2020.) Senior Indenture, dated as of August 18, 2020, among the Company, the Guarantors named therein and Wells Fargo Bank, National Association, as trustee, relating to the 4.500% Senior Notes due 2031. (Incorporated by reference to the Company’s Current Report on Form 8-K dated August 18, 2020.) Form of Stock Certificate representing shares of Common Stock, $0.01 par value per share, of the Company. (Incorporated by reference to the Company’s Current Report on Form 8‑K dated January 21, 2015.) Description of Securities. (Incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 2019.) 2008 Restatement of the Iron Mountain Incorporated Executive Deferred Compensation Plan. (#) (Incorporated by reference to the Company’s Annual Report on Form 10‑K for the year ended December 31, 2007.) First Amendment to 2008 Restatement of the Iron Mountain Incorporated Executive Deferred Compensation Plan. (#) (Incorporated by reference to the Company’s Annual Report on Form 10‑K for the year ended December 31, 2008.) Third Amendment to 2008 Restatement of the Iron Mountain Incorporated Executive Deferred Compensation Plan. (#) (Incorporated by reference to the Company’s Quarterly Report on Form 10‑Q for the quarter ended June 30, 2012.) Fourth Amendment to 2008 Restatement of the Iron Mountain Incorporated Executive Deferred Compensation Plan. (#) (Incorporated by reference to the Company’s Annual Report on Form 10‑K for the year ended December 31, 2012.) Iron Mountain Incorporated 1995 Stock Incentive Plan, as amended. (#) (Incorporated by reference to Iron Mountain / DE’s Current Report on Form 8‑K dated April 16, 1999.) Iron Mountain Incorporated 2002 Stock Incentive Plan. (#) (Incorporated by reference to the Company’s Annual Report on Form 10‑K for the year ended December 31, 2002.) Third Amendment to the Iron Mountain Incorporated 2002 Stock Incentive Plan. (#) (Incorporated by reference to the Company’s Current Report on Form 8-K dated June 11, 2008.) Fourth Amendment to the Iron Mountain Incorporated 2002 Stock Incentive Plan. (#) (Incorporated by reference to the Company’s Current Report on Form 8‑K dated December 10, 2008.) Fifth Amendment to the Iron Mountain Incorporated 2002 Stock Incentive Plan. (#) (Incorporated by reference to the Company’s Current Report on Form 8‑K dated June 9, 2010.) Sixth Amendment to the Iron Mountain Incorporated 2002 Stock Incentive Plan. (#) (Incorporated by reference to the Company’s Quarterly Report on Form 10‑Q for the quarter ended June 30, 2011.) IRON MOUNTAIN 2020 FORM 10-K 139 Table of Contents Part IV EXHIBIT 10.11 10.12 10.13 10.14 10.15 10.16 10.17 10.18 10.19 10.20 10.21 10.22 10.23 10.24 10.25 10.26 10.27 10.28 10.29 10.30 10.31 10.32 10.33 10.34 ITEM Iron Mountain Incorporated 2014 Stock and Cash Incentive Plan. (#) (Incorporated by reference to Annex C to the Iron Mountain Incorporated Proxy Statement for the Special Meeting of Stockholders, filed with the SEC on December 23, 2014.) First Amendment to the Iron Mountain Incorporated 2014 Stock and Cash Incentive Plan. (#) (Incorporated by reference to the Company’s Current Report on Form 8-K dated May 23, 2017.) Second Amendment to the Iron Mountain Incorporated 2014 Stock and Cash Incentive Plan. (#) (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018.) Form of Iron Mountain Incorporated Amended and Restated Non‑Qualified Stock Option Agreement. (#) (Incorporated by reference to the Company’s Annual Report on Form 10‑K for the year ended December 31, 2004.) Form of Iron Mountain Incorporated Incentive Stock Option Agreement. (#) (Incorporated by reference to the Company’s Annual Report on Form 10‑K for the year ended December 31, 2004.) Form of Iron Mountain Incorporated 1995 Stock Incentive Plan Non‑Qualified Stock Option Agreement (version 1). (#) (Incorporated by reference to the Company’s Annual Report on Form 10‑K for the year ended December 31, 2004.) Form of Iron Mountain Incorporated 1995 Stock Incentive Plan Amended and Restated Iron Mountain Non‑Qualified Stock Option Agreement. (#) (Incorporated by reference to the Company’s Annual Report on Form 10‑K for the year ended December 31, 2004.) Form of Iron Mountain Incorporated 1995 Stock Incentive Plan Incentive Stock Option Agreement. (#) (Incorporated by reference to the Company’s Annual Report on Form 10‑K for the year ended December 31, 2004.) Form of Iron Mountain Incorporated 1995 Stock Incentive Plan Non‑Qualified Stock Option Agreement (version 2). (#) (Incorporated by reference to the Company’s Annual Report on Form 10‑K for the year ended December 31, 2004.) Form of Iron Mountain Incorporated 2002 Stock Incentive Plan Stock Option Agreement (version 2B). (#) (Incorporated by reference to the Company’s Annual Report on Form 10‑K for the year ended December 31, 2013.) Form of Performance Unit Agreement pursuant to the Iron Mountain Incorporated 2002 Stock Incentive Plan (version 3). (#) (Incorporated by reference to the Company’s Quarterly Report on Form 10‑Q for the quarter ended March 31, 2013.) Form of Performance Unit Agreement pursuant to the Iron Mountain Incorporated 2002 Stock Incentive Plan (version 20). (#) (Incorporated by reference to the Company’s Quarterly Report on Form 10‑Q for the quarter ended March 31, 2013.) Form of Performance Unit Agreement pursuant to the Iron Mountain Incorporated 2002 Stock Incentive Plan (version 21). (#) (Incorporated by reference to the Company’s Current Report on Form 8‑K dated March 19, 2014.) Form of Restricted Stock Unit Agreement pursuant to the Iron Mountain Incorporated 2002 Stock Incentive Plan (version 3). (#) (Incorporated by reference to the Company’s Quarterly Report on Form 10‑Q for the quarter ended June 30, 2012.) Form of Restricted Stock Unit Agreement pursuant to the Iron Mountain Incorporated 2002 Stock Incentive Plan (version 12). (#) (Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.) Form of Restricted Stock Unit Agreement pursuant to the Iron Mountain Incorporated 2014 Stock and Cash Incentive Plan (version 1). (#) (Incorporated by reference to the Company’s Annual Report on Form 10 K for the year ended December 31, 2014.) Form of Restricted Stock Unit Agreement pursuant to the Iron Mountain Incorporated 2014 Stock and Cash Incentive Plan (version 2). (#) (Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.) Form of Restricted Stock Unit Agreement pursuant to the Iron Mountain Incorporated 2014 Stock and Cash Incentive Plan (version 3). (#) (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019.) Form of Stock Option Agreement pursuant to the Iron Mountain Incorporated 2014 Stock and Cash Incentive Plan (version 1). (#) (Incorporated by reference to the Company’s Annual Report on Form 10‑K for the year ended December 31, 2014.) Form of Stock Option Agreement pursuant to the Iron Mountain Incorporated 2014 Stock and Cash Incentive Plan (version 2). (#) (Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.) Form of Stock Option Agreement pursuant to the Iron Mountain Incorporated 2014 Stock and Cash Incentive Plan (version 3). (#) (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019.) Form of Stock Option Form of Stock Option Agreement pursuant to the Iron Mountain Incorporated 2014 Stock and Cash Incentive Plan (version 4). (#) (Incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 2019.) Form of Performance Unit Agreement pursuant to the Iron Mountain Incorporated 2014 Stock and Cash Incentive Plan (version 1). (#) (Incorporated by reference to the Company’s Annual Report on Form 10‑K for the year ended December 31, 2016.) Form of Performance Unit Agreement pursuant to the Iron Mountain Incorporated 2014 Stock and Cash Incentive Plan (version 2). (#) (Incorporated by reference to the Company’s Annual Report on Form 10‑K for the year ended December 31, 2016.) 140 IRON MOUNTAIN 2020 FORM 10-K Table of Contents Part IV EXHIBIT 10.35 10.36 10.37 10.38 10.39 10.40 10.41 10.42 10.43 10.44 10.45 10.46 10.47 10.48 10.49 10.50 10.51 10.52 10.53 21.1 23.1 31.1 31.2 32.1 32.2 ITEM Form of Performance Unit Agreement pursuant to the Iron Mountain Incorporated 2014 Stock and Cash Incentive Plan (version 3). (#) (Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.) Form of Performance Unit Agreement pursuant to the Iron Mountain Incorporated 2014 Stock and Cash Incentive Plan (version 4). (#) (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019). Change in Control Agreement, dated September 8, 2008, between the Company and Ernest W. Cloutier. (#) (Incorporated by reference to the Company’s Quarterly Report on Form 10‑Q for the quarter ended March 31, 2014.) Employment Offer Letter, dated November 30, 2012, from the Company to William L. Meaney. (#) (Incorporated by reference to the Company’s Current Report on Form 8‑K dated December 3, 2012.) Contract of Employment with Iron Mountain, between Patrick Keddy and Iron Mountain (UK) Ltd., effective as of April 2, 2015. (#) (Incorporated by reference to the Company’s Annual Report on Form 10‑K for the year ended December 31, 2015.) Ernest Cloutier Secondment Letter, dated March 27, 2017. (#) (Incorporated by reference to the Company’s Quarterly Report on Form 10‑Q for the quarter ended March 31, 2017.) Restated Compensation Plan for Non-Employee Directors. (#) (Filed herewith.) Iron Mountain Incorporated Director Deferred Compensation Plan. (#) (Incorporated by reference to the Company’s Annual Report on Form 10‑K for the year ended December 31, 2007.) The Iron Mountain Companies Severance Plan. (#) (Incorporated by reference to the Company’s Current Report on Form 8‑K, dated March 13, 2012.) Amended and Restated Severance Plan Severance Program No. 1. (#) (Incorporated by reference to the Company’s Quarterly Report on Form 10‑Q for the quarter ended March 31, 2012.) First Amendment to Amended and Restated Severance Plan Severance Program No. 1. (#) (Incorporated by reference to the Company’s Annual Report on Form 10‑K for the year ended December 31, 2012.) Second Amendment to The Iron Mountain Companies Severance Plan Severance Program No. 1. (#) (Incorporated by reference to the Company’s Current Report on Form 8‑K dated December 19, 2014.) Severance Program No. 2. (#) (Incorporated by reference to the Company’s Current Report on Form 8‑K dated December 3, 2012.) Credit Agreement, dated as of June 27, 2011, as amended and restated as of August 21, 2017, among the Company, Iron Mountain Information Management, LLC, certain other subsidiaries of the Company party thereto, the lenders and other financial institutions party thereto, JPMorgan Chase Bank, N.A., Toronto Branch, as Canadian Administrative Agent, and JPMorgan Chase Bank, N.A., as Administrative Agent. (Incorporated by reference to the Company’s Current Report on Form 8‑K dated August 21, 2017.) First Amendment, dated as of December 12, 2017, to Credit Agreement, dated as of June 27, 2011, as amended and restated as of August 21, 2017, among the Company, Iron Mountain Information Management, LLC, certain other subsidiaries of the Company party thereto, the lenders and other financial institutions party thereto, JPMorgan Chase Bank, N.A., Toronto Branch, as Canadian Administrative Agent, and JPMorgan Chase Bank, N.A., as Administrative Agent. (Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.) Second Amendment, dated as of March 22, 2018, to Credit Agreement, dated as of June 27, 2011, as amended and restated as of August 21, 2017, among the Company, Iron Mountain Information Management, LLC, certain other subsidiaries of the Company party thereto, the lenders and other financial institutions party thereto, JPMorgan Chase Bank, N.A., Toronto Branch, as Canadian Administrative Agent, and JPMorgan Chase Bank, N.A., as Administrative Agent. (Incorporated by reference to the Company’s Current Report on Form 8-K dated March 22, 2018.) Third Amendment and Refinancing Facility Agreement, dated as of June 4, 2018, to Credit Agreement, dated as of June 27, 2011, as amended and restated as of August 21, 2017, among the Company, Iron Mountain Information Management, LLC, certain other subsidiaries of the Company party thereto, the lenders and other financial institutions party thereto, JPMorgan Chase Bank, N.A., Toronto Branch, as Canadian Administrative Agent, and JPMorgan Chase Bank, N.A., as Administrative Agent. (Incorporated by reference to the Company’s Current Report on Form 8-K dated June 4, 2018.) Fourth Amendment, dated as of December 20, 2019, to Credit Agreement, dated as of June 27, 2011, as amended and restated as of August 21, 2017, among the Company, Iron Mountain Information Management, LLC, certain other subsidiaries of the Company party thereto, the lenders and other financial institutions party thereto, JPMorgan Chase Bank, N.A., Toronto Branch, as Canadian Administrative Agent, and JPMorgan Chase Bank, N.A., as Administrative Agent. (Incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 2019.) Incremental Term Loan Activation Notice, dated as of March 22, 2018, among Iron Mountain Information Management, LLC and the lenders party thereto. (Incorporated by reference to the Company’s Current Report on Form 8-K dated March 22, 2018.) Subsidiaries of the Company. (Filed herewith.) Consent of Deloitte & Touche LLP (Iron Mountain Incorporated, Delaware). (Filed herewith.) Rule 13a‑14(a) Certification of Chief Executive Officer. (Filed herewith.) Rule 13a‑14(a) Certification of Chief Financial Officer. (Filed herewith.) Section 1350 Certification of Chief Executive Officer. (Furnished herewith.) Section 1350 Certification of Chief Financial Officer. (Furnished herewith.) IRON MOUNTAIN 2020 FORM 10-K 141 Table of Contents Part IV EXHIBIT 101.INS ITEM XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. 101.SCH Inline XBRL Taxonomy Extension Schema Document. 101.CAL 101.DEF 101.LAB Inline XBRL Taxonomy Label Linkbase Document. 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document. Inline XBRL Taxonomy Extension Calculation Linkbase Document. Inline XBRL Taxonomy Extension Definition Linkbase Document. 104 Cover Page Interactive Data File. (Formatted as Inline XBRL and contained in Exhibit 101.) 142 IRON MOUNTAIN 2020 FORM 10-K Table of Contents SIGNATURES Part IV Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. IRON MOUNTAIN INCORPORATED By: /s/ DANIEL BORGES Daniel Borges Senior Vice President, Chief Accounting Officer (Principal Accounting Officer) Dated: February 24, 2021 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. NAME TITLE DATE /s/ WILLIAM L. MEANEY William L. Meaney /s/ BARRY A. HYTINEN Barry A. Hytinen /s/ DANIEL BORGES Daniel Borges President and Chief Executive Officer and Director (Principal Executive Officer) February 24, 2021 Executive Vice President and Chief Financial Officer (Principal Financial Officer) February 24, 2021 Senior Vice President, Chief Accounting Officer (Principal Accounting Officer) February 24, 2021 /s/ JENNIFER M. ALLERTON Director February 24, 2021 Jennifer M. Allerton /s/ PAMELA M. ARWAY Director February 24, 2021 Pamela M. Arway /s/ CLARKE H. BAILEY Director February 24, 2021 Clarke H. Bailey /s/ KENT P. DAUTEN Director February 24, 2021 Kent P. Dauten /s/ PAUL F. DENINGER Director February 24, 2021 Paul F. Deninger /s/ MONTE E. FORD Director February 24, 2021 Monte E. Ford IRON MOUNTAIN 2020 FORM 10-K 143 Table of Contents Part IV NAME TITLE /s/ PER-KRISTIAN HALVORSEN Director Per-Kristian Halvorsen DATE February 24, 2021 /s/ ROBIN L. MATLOCK Director February 24, 2021 Robin L. Matlock /s/ WENDY J. MURDOCK Director February 24, 2021 Wendy J. Murdock /s/ WALTER C. RAKOWICH Director February 24, 2021 Walter. C. Rakowich /s/ DOYLE R. SIMONS Director February 24, 2021 Doyle R. Simons /s/ ALFRED J. VERRECCHIA Director February 24, 2021 Alfred J. Verrecchia 144 IRON MOUNTAIN 2020 FORM 10-K Wendy Murdock1, 4 Retired Executive MasterCard Worldwide New York, NY Walter C. Rakowich1, 3, 4 Retired Executive Former CEO of Prologis San Francisco, CA Doyle R. Simons2, 4 Retired Executive Former CEO of Weyerhaeuser Seattle, WA CORPORATE DIRECTORS AND OFFICERS (As of 03/01/20) DIRECTORS Alfred J. Verrecchia3, 7 Chairperson of the Board of Directors Iron Mountain Incorporated Boston, MA Jennifer Allerton1, 5, 6 Retired Executive Hoffmann La Roche Ltd Basel, Switzerland Pamela M. Arway2, 3 Retired Executive American Express Company, Inc. New York, NY Clarke H. Bailey1, 3, 5 Retired Executive EDCI Holdings, Inc. New York, NY Kent P. Dauten1, 3, 4 Chairman Keystone Capital, Inc. Deerfield, IL EXECUTIVE OFFICERS William L. Meaney President and Chief Executive Officer Ernest W. Cloutier Executive Vice President and General Manager, Global Records and Information Management Deirdre Evens Executive Vice President and General Manager, Records and Information Management, North America Edward E. Greene Executive Vice President, Chief Human Resources Officer Paul F. Deninger2, 4, 6 Senior Managing Director Davis Partners Group Boston, MA Monte E. Ford2, 5, 6 Principal Partner CIO Strategy Exchange Westlake, TX Per-Kristian Halvorsen2, 3, 5, 6 Retired Executive Intuit Inc. Mountain View, CA Robin L. Matlock2, 5, 6 Retired Executive VMware, Inc. Palo Alto, CA William L. Meaney President and Chief Executive Officer Iron Mountain Incorporated Boston, MA Barry A. Hytinen Executive Vice President and Chief Financial Officer Mark Kidd Executive Vice President and General Manager, Data Centers Deborah Marson Executive Vice President, General Counsel and Secretary John Tomovcsik Executive Vice President and Chief Operating Officer 1 Member of Audit Committee (Mr. Rakowich is Chairperson) 2 Member of the Compensation Committee (Ms. Arway is Chairperson) 3 Member of the Nominating and Governance Committee (Mr. Verrecchia is Chairperson) 4 Member of the Finance Committee (Mr. Dauten is Chairperson) 5 Member of the Risk and Safety Committee (Mr. Bailey is Chairperson) 6 7 Member of the Technology Committee (Mr. Halvorsen is Chairperson) Independent Chairperson of the Board CORPORATE INFORMATION STOCKHOLDER INFORMATION Transfer Agent and Registrar Computershare 877/897-6892 201/680-6578 (outside the United States, US territories & Canada) 800/231-5469 (hearing impaired—TDD phone) shrrelations@cpushareownerservices.com www.computershare.com/investor Address stockholder inquiries and send certificates for transfer and address changes to: Iron Mountain Incorporated c/o Computershare Investor Services P.O. Box 505000, Louisville, KY 40233-5000 Overnight delivery Computershare Investor Services 462 South 4th Street, Suite 1600 Louisville, KY 40202 Copies of the Annual Report on Form 10-K are available upon request by contacting the company at the address below, attention: Investor Relations Corporate Headquarters Iron Mountain Incorporated One Federal Street Boston, MA 02110 800/935-6966 www.ironmountain.com Common Stock Data Traded: NYSE Symbol: IRM Beneficial Stockholders: 283,329 as of March 15, 2021 Investor Relations Greer Aviv Senior Vice President, Investor Relations Iron Mountain Incorporated One Federal Street Boston, MA 02110 617/535-2887 Annual Meeting Date Iron Mountain Incorporated will conduct its annual meeting of stockholders on Wednesday May 12, 2021, 9:00am ET via live audio webcast, accessed by visiting https://www.virtualshareholdermeeting.com/IRM2021 Independent Registered Public Accounting Firm Deloitte & Touche LLP 200 Berkeley Street Boston, MA 02116 OPERATIONAL LOCATIONS (As of 12/31/20) Asia Pacific Australia China India Indonesia Malaysia New Zealand Philippines Singapore South Korea Thailand Europe Armenia Austria Belarus Belgium Bulgaria Croatia Cyprus Czech Republic Denmark England Estonia Eswatini Finland France Germany Greece Hungary Kazakhstan Latvia Lesotho Lithuania Netherlands Northern Ireland Norway Poland Republic of Ireland Romania Russia Scotland Serbia Slovakia South Africa Spain Sweden Switzerland Turkey Ukraine United Arab Emirates IRM Stock Performance COMPARISON OF 60 MONTH CUMULATIVE TOTAL RETURN AMONG IRON MOUNTAIN, THE MSCI REIT INDEX, THE S&P 500 AND THE RUSSELL 1000 120 100 80 60 40 20 0 -20 % n r u t e R l a t o T Latin America Argentina Brazil Chile Colombia Mexico Peru North America Canada United States IRM RMZ S&P 500 Russell 1000 -40 12/31/2015 12/31/2016 12/31/2017 12/31/2018 12/31/2019 12/31/2020 Note: Fiscal year end December 31, 2020 Source: FactSet This graph compares the change in the cumulative total return on our common stock to the cumulative total returns of the S&P 500 Index, the Russell 1000 Index and the MSCI REIT Index for the period from December 31, 2015, through December 31, 2020. This comparison assumes an investment of $100 on December 31, 2015, and the reinvestments of any dividends.

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