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
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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
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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
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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.
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IRON MOUNTAIN 2020 FORM 10-K
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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
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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.
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IRON MOUNTAIN 2020 FORM 10-K
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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."
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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;
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•
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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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IRON MOUNTAIN 2020 FORM 10-K
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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
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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:
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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.
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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.
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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
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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:
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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.
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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
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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.
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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.
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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
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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.
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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.
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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.
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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.
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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
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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.
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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.
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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.
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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.
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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.
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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%.
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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.
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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.
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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.
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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
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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.
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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.
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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.
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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.
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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
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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.
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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.
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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
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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.
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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.
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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.
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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
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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
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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.
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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.
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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.
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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.
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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.
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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.
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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
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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.
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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
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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.
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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.
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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.
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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)
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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
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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
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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
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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.
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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
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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.
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107
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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
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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
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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.
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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.
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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
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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.
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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
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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
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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.
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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.
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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.
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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.
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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
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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.
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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.
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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
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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
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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.
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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.