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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, 2022
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)
85 New Hampshire Avenue, Suite 150
Portsmouth, New Hampshire
(Address of principal executive offices)
23-2588479
(I.R.S. Employer Identification No.)
03801
(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 ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in
the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐
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, 2022, the aggregate market value of the Common Stock of the registrant held by non-affiliates of the registrant was approximately
$13.9 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 17, 2023: 290,896,121
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 2023 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, 2022.
Table of Contents
IRON MOUNTAIN INCORPORATED
2022 FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS
PART I
PART II
01
09
20
20
24
24
26
26
26
58
59
59
60
62
62
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
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT
INSPECTIONS
PART III 64
64
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 11. EXECUTIVE COMPENSATION
64
64
64
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 66
141
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
ITEM 16. FORM 10-K SUMMARY
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References in this Annual Report on Form 10-K for the year ended December 31, 2022 (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 current
expectations regarding our future results from operations, economic performance, financial condition, goals, strategies, investment
objectives, plans and achievements. 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", "pursue", "will" 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:
• our ability or inability to execute our strategic growth plan, including our ability to invest according to plan, grow our businesses
(including through joint ventures), incorporate alternative technologies into our offerings, achieve satisfactory returns on new
product offerings, continue our revenue management, expand and manage our global operations, complete acquisitions on
satisfactory terms, integrate acquired companies efficiently and transition to more sustainable sources of energy;
• 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;
the impact of our distribution requirements on our ability to execute our business plan;
the costs of complying with and our ability to comply with laws, regulations and customer requirements, including those relating
to data privacy and cybersecurity issues, as well as fire and safety and environmental standards;
the impact of attacks on our internal information technology ("IT") systems, including the impact of such incidents on our
reputation and ability to compete and any litigation or disputes that may arise in connection with such incidents;
• our ability to fund capital expenditures;
• our ability to remain qualified for taxation as a real estate investment trust for United States federal income tax purposes
("REIT");
• changes in the political and economic environments in the countries in which we operate and changes in the global political
climate;
• our ability to raise debt or equity capital and changes in the cost of our debt;
• our ability to comply with our existing debt obligations and restrictions in our debt instruments;
•
•
• unexpected events, including those resulting from climate change or geopolitical events, could disrupt our operations and
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;
adversely affect our reputation and results of operations;
failures to implement and manage new IT systems;
•
• other trends in competitive or economic conditions affecting our financial condition or results of operations not presently
•
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.
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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. Our asset lifecycle management ("ALM")
business allows us to provide end-to-end asset lifecycle services for hyperscale, corporate data center and corporate end-user
device assets.
Founded in an underground facility near Hudson, New York in 1951, Iron Mountain Incorporated, a Delaware corporation, has more
than 225,000 customers in a variety of industries in 60 countries around the world, as of December 31, 2022. 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 95% of the Fortune 1000. As of December 31,
2022, we employed approximately 26,000 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, 2022, we were number 652 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 media. We
are a different company to the one we have been in our past. The strategic journey we are on is driving this change and our focus
remains on the four 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 complementary
business growth in developed markets
Utilizing our global scale as well as
over 70 years of customer trust to
deliver differentiated data center
offerings
• 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
ALM, Entertainment Services, Fine Arts and Consumer Storage (each as
defined below) businesses.
• We have made significant progress in scaling our Global Data Center Business
through acquisitions and organic growth, with 21 operating data centers across
19 global markets, either directly or through unconsolidated joint ventures.
• As of December 31, 2022, approximately 92% of our data center capacity was
leased. With total potential capacity of 747 megawatts ("MW") in land and
buildings currently owned or operated by us, we are among the largest global
data center operators.
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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.
Increased investment in our growth
agenda, our business and customer-
centric solutions
• We have established an investment strategy to fuel our growth. The investments
we outlined in our plan for Project Matterhorn (as defined below) have been
enabled by the success of Project Summit, which was completed in 2021, and
informed by our established leadership position in the physical storage
business, our expanding services such as Global Digital Solutions and ALM and
our significant progress in the Global Data Center Business.
PROJECT MATTERHORN
In September 2022, we announced a global program designed to accelerate the growth of our business ("Project Matterhorn").
Project Matterhorn investments will focus on transforming our operating model to a global operating model. Project Matterhorn will
focus on the formation of a solution-based sales approach that is designed to allow us to optimize our shared services and best
practices to better serve our customers’ needs. We will be investing to accelerate growth and to capture a greater share of the
large, global addressable markets in which we operate. We expect to incur approximately $150.0 million in costs annually related to
Project Matterhorn from 2023 through 2025. Costs are comprised of (1) restructuring costs, which include (i) site consolidation and
other related exit costs, (ii) employee severance costs and (iii) certain professional fees associated with these activities, and (2)
other transformation costs, which include professional fees such as project management costs and costs for third party consultants
who are assisting in the enablement our growth initiatives. Total costs related to Project Matterhorn during the year ended
December 31, 2022 were approximately $41.9 million.
BUSINESS SEGMENTS
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, 2022, 2021 and 2020, are set forth in Note 11
to Notes to Consolidated Financial Statements included in this Annual Report.
GLOBAL RIM BUSINESS
The Global Records and Information Management ("Global RIM") Business segment includes several 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 ("Records Management") for customers in 60
countries around the globe. As of December 31, 2022, we stored approximately 730 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, server and computer backup services and related services offerings ("Data Management").
Global Digital Solutions, 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 ("Global Digital Solutions").
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. 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.
Entertainment Services, entertainment and media services which help 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 ("Entertainment
Services").
Consumer Storage, provides on-demand, valet storage for consumers ("Consumer Storage") through a strategic partnership that
utilizes data analytics and machine learning to provide effective customer acquisition and a convenient and seamless consumer
storage experience.
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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, 2022, five of the top 10 global cloud providers were Iron Mountain Data Center customers.
CORPORATE AND OTHER
Corporate and Other consists primarily of our Fine Arts and ALM businesses and other corporate items ("Corporate and Other").
Fine Arts, provides technical expertise in the handling, installation and storing of art ("Fine Arts").
ALM, provides hyperscale and corporate IT infrastructure managers with services and solutions that enable the decommissioning,
data erasure, processing and disposition or sale of IT hardware and component assets. ALM services are enabled by: secure
logistics, chain of custody and complete asset traceability practices, environmentally-responsible asset processing and recycling,
and data sanitization and asset refurbishment services that enable value recovery through asset remarketing. Our ALM services
focus on protecting and eradicating customer data while maintaining strong, auditable and transparent chain of custody practices.
Corporate and Other 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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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 $5.1 billion in
annual revenue in 2022. Our business has a highly diverse customer base of more than 225,000
customers - with no single customer accounting for more than approximately 1% of revenue
during the year ended December 31, 2022 - and operates in 60 countries globally. This presents
a significant cross-sell opportunity for our expanding solutions, including digital, data center and
ALM.
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.
Comprehensive
Information
Management Solution
As an S&P 500 REIT with approximately 1,400 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 97 million square feet of real estate worldwide. Our owned real estate
footprint spans nearly 23 million square feet.
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 Global Data
Center, ALM, Fine Arts, Entertainment Services and Consumer Storage, represent markets with
strong secular growth.
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In addition, our Global Data Center Business has the following attributes:
Large Data Center
Platform with Significant
Expansion Opportunity
As of December 31, 2022, we had 192 MW of leasable capacity with an additional 556
MW under construction or held for development.
Differentiated Compliance
and Security
Efficient Access
and Flexibility
100% Green Powered
Data Centers
COMPETITION
We offer comprehensive compliance support and physical and cyber security. Our
Security-in-Depth approach to security includes a combination of technical and human
security measures, and experienced senior military and public sector security leaders
oversee our security. As of December 31, 2022, 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, as well as global ISO 27001
certification, and PCI-DSS compliance, and meet FISMA HIGH and FedRAMP controls
in the United States.
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.
As of December 31, 2022, our Global Data Center platform continues to match 100% of
its consumption with renewable electricity procurement and benefits from low power
usage effectiveness ("PUE"). We are one of the top 30 buyers of renewable energy
among the Fortune 1000 and offer the Green Power Pass, which allows customers to
include the power they consume at any Iron Mountain data centers as green power in
their CDP, RE100, GRI, or other sustainability reporting.
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.
Similarly, in our ALM business, we compete with both hyperscalers and individual corporate clients who manage their own asset
recycling and management, as well as external competitors.
HUMAN CAPITAL MANAGEMENT
EMPLOYEES
As of December 31, 2022, we employed approximately 10,000 employees in the United States and approximately 16,000
employees outside of the United States. As of December 31, 2022, approximately 400 employees were represented by unions in
North America and approximately 1,200 employees were represented by unions in Latin America. All union employees are currently
under renewed labor agreements or operating under an extension agreement.
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BENEFIT PROGRAMS
We provide our employees with benefits that are designed to support their overall physical, financial, emotional and social well-
being. These benefits vary by location but generally include health and welfare benefits, paid time off, and programs to support
financial security. Additionally, employees are able to access emotional well-being resources through global employee assistance
programs. Certain unionized employees receive benefits through 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 specific objectives for
the unit in which they work.
COMPANY CULTURE
We recognize that an inspired culture is foundational to how we deliver on our purpose and create sustained growth and value for
our shareholders. Iron Mountain's culture is deeply rooted in its enduring values: Act with Integrity, Own Safety and Security, Build
Customer Value, Take Ownership and Promote Inclusion and Teamwork. While Iron Mountain is a culture of learning,
collaboration, diversity and well-being, we know that culture overall comes down to what it feels like to work at Iron Mountain. This
is why we celebrate and recognize our employees who consistently demonstrate Iron Mountain's values in measurable ways while
inspiring others to do the same. We commit significant resources to sustaining a culture that enables voice and innovation, and
facilitates trust, engagement, belonging and performance. We regularly survey our employees on a range of topics to measure our
engagement and effectiveness and to obtain their views. In addition, we use data to gain insight to the global distribution of our
employees, where they work, how they work and cost to serve. We use all of this information to drive increased employee
engagement and success, as well as to refine our approach.
DIVERSITY, EQUITY AND INCLUSION
At Iron Mountain, 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. As one of our five core company
values, Promoting Inclusion and Teamwork is a behavior all of our employees are expected to demonstrate every day. We have
prioritized diversity, equity and inclusion ("DEI") as part of our corporate-wide strategic goals. Steps we have taken to create and
sustain a more diverse, equitable and inclusive environment include: hiring a Global Chief Diversity, Equity & Inclusion Officer with
significant DEI experience to lead our cultural transformation, and to lead us on the path to creating an environment of
inclusiveness and belonging. Our Global Chief Diversity, Equity & Inclusion Officer works closely with our executive team, Human
Resources, Environmental, Social and Governance ("ESG") and the DEI Councils and our Employee Resource Groups, all of
whom support our DEI strategy in a variety of capacities. We also have a Global DEI Council which is comprised of the executive
team and is chaired by our Chief Executive Officer. The Global DEI Council supports our DEI strategy and initiatives, monitors the
progress of DEI initiatives and the enterprise goals, ensures accountability based upon identified measures and goals and
communicates DEI progress to stakeholders. In 2021, we established the following goals: by 2025, women will represent at least
40% of global leadership roles and individuals from historically underrepresented groups will represent at least 30% of US
leadership roles. The Global DEI Council is not only responsible for providing the resources to help us reach our goals but also
acting aggressively to retain our talent. We review and revise our systems, policies and processes to ensure that our organizational
structures facilitate inclusiveness and accountability. We ensure that our recruiting efforts reflect our diversity goals and we launch,
expand and support Employee Resource Groups, who meet and connect on shared characteristics and life experiences that can
prove impactful to our business, our customers and our employees.
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, cyber, warehouse legal liability and directors’ and officers’ liability policies.
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GOVERNMENT REGULATION
We are required to comply with numerous 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 environmental reviews of all of our properties. We therefore may be potentially liable
for environmental costs 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.
In addition, we are subject to numerous laws and regulations relating to data privacy and cybersecurity, which are complex, change
frequently and have tended to become more stringent over time. We have an established privacy compliance framework and
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 negatively impact our operations, result in
the imposition of fines and penalties, liability and litigation, 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.
SUSTAINABILITY
At Iron Mountain, we are using our influence and expertise to drive innovations that will not only protect and elevate the power of
our customers’ work, but make a lasting, positive impact on people, planet, and performance. Our four focus areas, where we can
deliver uniquely through owned operations and customers' enablement, are safeguarding our customers’ information, empowering
employees, serving our communities, and protecting the environment.
Iron Mountain is committed to sustainable growth and this is highlighted through initiatives and targets within the company. We
have publicly adopted 20 goals to address our environmental footprint, corporate philanthropy and volunteerism and DEI practices.
As signatories of The Climate Pledge, we are on a path to reach net zero greenhouse gas emissions by 2040. As an employer, 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.
Our work continues to receive recognition. We are ranked 44th on Newsweek’s 2023 list of America’s Most Responsible
Companies, and are ranked 4th within our industry. We have received a 100% score on the Human Rights Campaign Corporate
Equality Index every year since 2018.
Iron Mountain is 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 FTSE4Good Index, MSCI
World ESG Index, MSCI World Climate Change Index and MSCI USA ESG Select 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 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, and in
2022 we completed our first climate scenario analysis. The process brought together our most senior leaders from across all
business units and functions to explore the potential impacts of climate change related to several different warming scenarios. The
analysis resulted in the identification of three strategic areas where Iron Mountain should focus its future discussions regarding
climate resilience, which include physical impacts, business strategy and innovation, and reputational and societal risks.
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STRONG ENVIRONMENTAL FOCUS
•
Iron Mountain provides a Green Power Pass solution in the Data Center market to help customers manage their carbon
footprint.
• A part of RE100 and EV100 Initiatives - commitment to use renewable energy sources for 100% of our worldwide electricity by
2040 and convert 100% of our company cars and 50% of our vans to electric vehicles by 2030.
• Founding signatory of the 24/7 Carbon Free Energy (CFE) compact. As of end 2022, Iron Mountain has over 100 locations
across the United States with the ability to track and match renewable energy usage on an hourly basis.
• 80% of our global electricity use was from renewable sources in 2021.
• Reduced GHG emissions by 60% (since 2016) as part of our Science Based Target and net zero by 2040 commitment.
• Received a 100% on the Human Rights Campaign Corporate Equality Index every year since 2018.
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
Failure to execute our strategic growth plan may adversely impact our financial condition and results of operations.
As part of our strategic growth plan, including Project Matterhorn, we expect to invest in our existing businesses, including records
and information management storage and services businesses in our higher-growth markets, data centers, ALM business and
other complementary businesses, and in new businesses, business strategies, products, services, technologies and geographies.
These initiatives may involve significant risks and uncertainties, including:
• our inability to maintain relationships with key customers and suppliers or 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;
• challenges in managing costs to offset the impact of inflationary pressure;
•
•
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 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 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.
If stored records and tapes become less active our service revenue growth and profits 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. 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 will continue. 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 relatively 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, and, if we are unable to appropriately align our cost structure with decreased levels of service activity, our operating
results could be adversely affected.
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Our customers may shift from paper and tape storage to alternative technologies that may shift our revenue mix away from storage
revenue.
We derive substantial revenues from rental fees for the storage of physical records and computer backup media 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 or as retention requirements evolve, which may require significantly less space than traditional
physical records and tape storage. While volumes in our Global RIM Business segment were relatively steady in 2022 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.
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 and our customers are subject to numerous laws and regulations relating to data privacy and cybersecurity. These regulations
are complex, change frequently and have tended to become more stringent over time. In addition, a growing number of regulatory
bodies have adopted data breach notification requirements and increased enforcement of regulations regarding the use, access,
accuracy and security of personal information. Finally, 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 have an established privacy compliance framework and devote substantial resources, and may in the future have to devote
significant additional resources, to facilitate compliance with global 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 negatively impact our operations, result
in the imposition of fines and penalties, contractual liability and litigation, significant costs and expenses and reputational harm.
Attacks on our internal IT systems could damage our reputation, cause us to lose revenues, 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, and incur significant costs to do so, our IT and network infrastructure has in the past been and may in the future be
vulnerable to attacks by hackers, including state-sponsored organizations with significant financial and technological resources,
breaches due to employee error, fraud or malice or other disruptions (including, but not limited to, computer viruses and other
malware, denial of service, and ransomware), which may involve a privacy breach requiring us to notify regulators, clients or
employees and enlist identity theft protection. Moreover, until we have migrated businesses we acquire onto our IT systems or
ensured compliance with our information technology security standards, we have in the past and may in the future face additional
risks because of the continued use of predecessor IT systems. We have outsourced, and expect to continue to outsource, certain
support services, including cloud storage systems and cloud computing services, to third parties, which has in the past and may in
the future subject our IT and other sensitive information to additional risk. In addition, the continuation of remote work
arrangements following the COVID-19 pandemic has increased and could further 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 or our
employees’ personal information and result in third party claims against us, regulatory penalties, and reputational harm. Although
we maintain insurance coverage for various cybersecurity risks, there is no guarantee that all costs or losses incurred will be fully
insured. Damage to our reputation could make us less competitive, which could negatively impact our business, financial condition
and results of operations.
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 or for new offerings, may involve unforeseen difficulties and may require a disproportionate amount of
our management’s attention and our financial and other resources.
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For example, the success of our significant acquisitions depends, in large part, on our ability to realize the anticipated benefits,
including cost savings or revenue acceleration 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;
•
retaining critical acquired talent;
• 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 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 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. 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.
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 standardized provisions limiting our liability regarding the services we perform and the loss
or destruction of, or damage to, records, information, or other items stored with us; however, some of our contracts with large
customers and some of the contracts assumed in our acquisitions contain no such limits or contain non-standard 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 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 into new businesses, including digital solutions and the
storage of valuable items, and respond to customer demands for higher limitation of liability, our exposure to contracts with higher
or no limitations of liability and disputes with customers over contract interpretation 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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As a global company, we are subject to the unique risks of operating in many countries.
As of December 31, 2022, we operated in 60 countries. The global nature of our business and our growth strategy, which includes
continued acquisitions and investments in countries where we do not currently operate, is subject to numerous risks, including:
•
•
fluctuations of currency exchange rates in the markets in which we operate;
the impact of laws and regulations that apply to us in countries where we operate; in particular, we are subject to sanctions and
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;
• costs and difficulties associated with managing global operations, including cross border sales;
•
the volatility of certain economies in which we operate;
• political uncertainties and changes in the global political climate or other global events, such as trade wars or global pandemics,
which may create additional risk in relation to our global operations, which may become more pronounced as we consolidate
operations across countries and need to move data across borders;
•
the risk that business partners upon whom we depend for technical assistance or management and acquisition expertise in
some markets 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.
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, our competitiveness and the trading value 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 Global 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.
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.
Our use of joint ventures could expose us to additional risks and liabilities, including our reliance on joint venture partners who 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;
• 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 unplanned capital; and
• 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.
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.
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 purchase significant amounts of electricity and water for cooling from suppliers 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 suppliers’ compliance costs that may be passed through to us or otherwise constrain the availability of such
resources. 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, which could in turn result in contractual liability to our customers or impair our
ability to obtain and retain customers, which would adversely affect both our ability to generate revenue and our results of
operations.
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 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 face additional risks in expanding our Global Data Center Business, including the significant amount of capital required.
Expanding our Global Data Center Business 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. We are currently experiencing rising construction costs which reflect the increase in cost of labor and
raw materials, as well as supply chain and logistical challenges. Additional or unexpected disruptions to our supply chain or
continued inflationary pressures could significantly affect the cost or timing of our planned expansion projects and interfere with our
ability to meet commitments to customers who have contracted for space in new data centers under construction.
All construction related data center projects require us to carefully select and rely on the experience of one or more design firms,
general contractors, and associated subcontractors during the design and construction process. Should a design firm, general
contractor, significant subcontractor, or key supplier experience financial or operational problems during the design or construction
process, fail to perform properly or at all, we could experience significant delays, increased costs to complete the project, and other
negative impacts to the expected return on our committed capital.
There can be no assurance we will have sufficient customer demand to support the data centers we have acquired, or that we will
not be adversely affected by the risks noted above under "Significant costs or disruptions at our data centers could adversely affect
our business, financial condition and results of operations", which could make it difficult for us to realize expected returns on our
investments, if any.
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Our ALM business may be subject to additional risks, including those related to its client and geographic concentration,
government trade policies, and macroeconomic conditions.
A significant portion of the revenue from our ALM business is derived from a limited number of clients and tied to cyclical projects
involving the decommissioning and destruction of IT assets and the disposition of components of such assets to purchasers in
concentrated geographies. Though we generally enter into long-term contracts with such clients, the volume of work we perform for
specific clients may vary over the life of each contract due to various factors including changes in client behavior or macroeconomic
conditions impacting the availability of new IT assets in the marketplace. There can be no assurance that we will be able to retain
our current volumes, existing clients or that, if we were to lose one or more of our significant clients, we would be able to replace
such clients with clients that generate a comparable amount of revenue. Further, many of the purchasers of the decommissioned IT
asset components are geographically concentrated, particularly within mainland China. If governments enact trade policies that
restrict the export of IT assets into China or other markets in which we sell decommissioned IT asset components, or increase the
enforcement of such policies, then the revenue from the sale of these assets may be negatively impacted. Additionally, uncertain
macroeconomic conditions, particularly within mainland China, may reduce our purchasers’ demand for the IT asset components
that we sell, thereby reducing our revenues and earnings.
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.
We may be subject to certain costs and potential liabilities associated with the real estate required for our business.
As of December 31, 2022, we operated approximately 1,400 facilities worldwide, including approximately 600 in the United States,
and 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;
•
increases in rent expense and property taxes as a result of the increasing demand for industrial real estate;
• 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;
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; and
• costs of complying with fire protection and safety standards.
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.
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Unexpected events, including those resulting from climate change or geopolitical events, could disrupt our operations and
adversely affect our reputation and results of operations.
Unexpected events, including fires or explosions at our facilities, war or other military conflict, 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 in 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 finance operations platforms, 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.
RISKS RELATED TO OUR INDEBTEDNESS
Our indebtedness could adversely affect our financial health and prevent us from fulfilling our obligations under our various debt
instruments.
As of December 31, 2022, our total long-term debt was approximately $10,650.3 million, stockholders equity was approximately
$636.7 million and we had cash and cash equivalents of approximately $141.8 million. Our 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 growth opportunities, including
acquisitions, further organic development of, and investment into, our Global Data Center Business, ALM and Fine Arts
businesses and other service offerings, 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.
Certain of our indebtedness, including indebtedness under our credit agreement, is paid at floating interest rates, and as a result,
our interest expense or the cost of our debt may increase due to rising interest rates or changes to benchmark rates.
IRON MOUNTAIN 2022 FORM 10-K
15
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Part I
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, including our strategic growth plan.
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 for federal income tax purposes beginning with 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. We also have invested in a subsidiary that intends to elect to be taxed as a
REIT and therefore must independently satisfy all REIT qualification requirements. If such subsidiary REIT were to fail to qualify as
a REIT, it may cause us to fail to remain qualified for taxation as a REIT. If we fail to remain qualified for taxation as a REIT,
including as a result of a cascading failure of any subsidiary REIT to remain qualified as a REIT, we will be subject to federal
income taxation 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.
16
IRON MOUNTAIN 2022 FORM 10-K
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Part I
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.
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 strategic growth plan, 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 taxable REIT subsidiaries ("TRSs"), and, to that extent, limit our opportunities and our flexibility to change our
business strategy and execute on our strategic growth plan. This may restrict our ability to acquire certain businesses, 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 20% of the value of the assets
of a REIT may be represented by securities of one or more TRSs. Similar rules apply to other nonqualifying assets. 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 or executing on portions of our strategic growth plan. 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.
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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 (i) the fair market value of our
securities in our TRSs to exceed 20% of the fair market value of our assets or (ii) 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.
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 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 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 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 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 that meet
specified holding period requirements are generally taxed at an effective tax rate lower than applicable ordinary income tax rates
due to the availability of a deduction under the Code for specified forms of income from passthrough entities. More favorable rates
will nevertheless continue to apply to regular corporate "qualified" dividends, which may cause some investors to perceive that an
investment in a REIT is less attractive than an investment in a non-REIT entity that pays dividends, thereby reducing the demand
and market price of our common stock.
18
IRON MOUNTAIN 2022 FORM 10-K
Table of Contents
Part I
The ownership and transfer restrictions contained in our certificate of incorporation may not protect our qualification for taxation as
a REIT, could have unintended antitakeover effects and may prevent our stockholders from receiving a takeover premium.
In order for us to remain qualified for taxation as a REIT, no more than 50% of the value of outstanding shares of our capital stock
may be owned, beneficially or constructively, by five or fewer individuals at any time during the last half of each taxable year. In
addition, rents from "affiliated tenants" will not qualify as qualifying REIT income if we own 10% or more by vote or value of the
customer, whether directly or after application of attribution rules under the Code. Subject to certain exceptions, our certificate of
incorporation prohibits any stockholder from owning, beneficially or constructively, more than (i) 9.8% in value of the outstanding
shares of all classes or series of our capital stock or (ii) 9.8% in value or number, whichever is more restrictive, of the outstanding
shares of any class or series of our capital stock. We refer to these restrictions collectively as the "ownership limits" and we
included them in our certificate of incorporation to facilitate our compliance with REIT tax rules. The constructive ownership rules
under the Code are complex and may cause the outstanding stock owned by a group of related individuals or entities to be deemed
to be constructively owned by one individual or entity. As a result, the acquisition of less than 9.8% of our outstanding common
stock (or the outstanding shares of any class or series of our capital stock) by an individual or entity could cause that individual or
entity or another individual or entity to own constructively in excess of the relevant ownership limits. Any attempt to own or transfer
shares of our common stock or of any of our other capital stock in violation of these restrictions may result in the shares being
automatically transferred to a charitable trust or may be void. Even though our certificate of incorporation contains the ownership
limits, there can be no assurance that these provisions will be effective to prevent our qualification for taxation as a REIT from
being jeopardized, including under the affiliated tenant rule. Furthermore, there can be no assurance that we will be able to monitor
and enforce the ownership limits. If the restrictions in our certificate of incorporation are not effective and, as a result, we fail to
satisfy the REIT tax rules described above, then, absent an applicable relief provision, we will fail to remain qualified for taxation as
a REIT.
In addition, the ownership and transfer restrictions could delay, defer or prevent a transaction or a change in control that might
involve a premium price for our stock or otherwise be in the best interest of our stockholders. As a result, the overall effect of the
ownership and transfer restrictions may be to render more difficult or discourage any attempt to acquire us, even if such acquisition
may be favorable to the interests of our stockholders.
Legislative or other actions affecting REITs could have a negative effect on us or our stockholders.
At any time, the federal or state income tax laws governing REITs, the administrative interpretations of those laws, or local laws
impacting our REIT structure for our international operations may be amended. Federal, state and local tax laws are constantly
under review by persons involved in the legislative process, the IRS, the United States Department of the Treasury ("Treasury")
and state and local taxing authorities. Changes to the tax laws, regulations and administrative interpretations or local laws
governing our international operations, which may have retroactive application, could adversely affect us. In addition, some of
these changes could have a more significant impact on us as compared to other REITs due to the nature of our business and our
substantial use of TRSs, particularly non-United States TRSs, or how we have structured our operations outside the United States
to comply with REIT qualification requirements. 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 remain qualified for taxation as a REIT or the costs of 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.
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. 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.
IRON MOUNTAIN 2022 FORM 10-K
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Table of Contents
Part I
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. Furthermore, our contracts with the United
States Government require us to use personnel with security clearances, and we may not be successful or may experience delays
in attracting, training or retaining qualified personnel with the requisite skills or security clearances. 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, 2022, we conducted operations through 1,143 leased facilities and 237 owned facilities. Our facilities are
divided among our reportable segments and Corporate and Other as follows: Global RIM Business (1,303), Global Data Center
Business (20) and Corporate and Other (57). These facilities contain a total of approximately 96.8 million square feet of space. A
breakdown of owned and leased facilities by country (and by state within the United States) is listed below:
20
IRON MOUNTAIN 2022 FORM 10-K
Table of Contents
Part I
COUNTRY/STATE
North America
United States (Including Puerto Rico)
LEASED
OWNED
TOTAL
NUMBER
SQUARE FEET
NUMBER
SQUARE FEET
NUMBER
SQUARE FEET
Alabama
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Florida
Georgia
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
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
3
7
2
305,168
458,816
63,604
74
7,038,267
7
5
3
1
36
12
1
15
6
3
4
2
4
—
21
9
16
11
3
13
3
1
11
—
28
2
19
21
12
4
12
22
4
1
5
5
36
2
1
17
9
2
5
480
44
524
426,051
312,797
239,640
1,670
2,853,687
940,981
45,000
1,332,038
344,516
148,902
569,161
64,000
388,475
—
2,115,409
636,776
1,008,556
878,128
201,300
1,598,233
38,548
34,560
294,248
—
3,194,278
114,473
1,016,433
1,031,135
1,004,283
196,044
438,586
2,258,440
237,969
70,159
261,011
256,743
2,145,170
78,148
35,200
1,533,701
820,825
105,502
379,857
37,516,488
3,036,929
40,553,417
—
6
—
9
4
3
1
—
1
2
—
7
—
1
—
4
—
1
1
6
1
—
—
1
—
2
1
1
8
—
10
1
4
—
—
3
1
1
2
4
19
1
—
4
4
—
1
115
15
130
—
1,207,281
—
942,356
484,490
527,666
120,921
—
119,374
129,611
—
1,309,975
—
14,200
—
418,760
—
95,000
19,001
933,102
39,502
—
—
25,120
—
266,733
107,041
146,467
2,476,635
—
970,800
97,000
250,291
—
—
2,062,761
54,352
12,748
214,238
63,909
3
13
2
83
11
8
4
1
37
14
1
22
6
4
4
6
4
1
22
15
17
11
3
14
3
3
12
1
36
2
29
22
16
4
12
25
5
2
7
9
1,838,880
55
90,553
—
375,791
180,228
—
10,655
15,605,441
1,713,060
17,318,501
3
1
21
13
2
6
595
59
654
305,168
1,666,097
63,604
7,980,623
910,541
840,463
360,561
1,670
2,973,061
1,070,592
45,000
2,642,013
344,516
163,102
569,161
482,760
388,475
95,000
2,134,410
1,569,878
1,048,058
878,128
201,300
1,623,353
38,548
301,293
401,289
146,467
5,670,913
114,473
1,987,233
1,128,135
1,254,574
196,044
438,586
4,321,201
292,321
82,907
475,249
320,652
3,984,050
168,701
35,200
1,909,492
1,001,053
105,502
390,512
53,121,929
4,749,989
57,871,918
IRON MOUNTAIN 2022 FORM 10-K
21
Table of Contents
Part I
COUNTRY/STATE
International
Argentina
Australia
Austria
Bahrain
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
Egypt
England
Estonia
Eswatini
Finland
France
Germany
Greece
Hungary
India
Indonesia
Ireland
Jordan
Kuwait
Latvia
Lesotho
Lithuania
Malaysia
Mexico
Morocco
The Netherlands
New Zealand
Northern Ireland
Norway
Oman
Peru
Philippines
Poland
Romania
Saudi Arabia
Scotland
Serbia
Singapore
Slovakia
South Africa
South Korea
Spain
Sweden
Switzerland
Thailand
22
IRON MOUNTAIN 2022 FORM 10-K
LEASED
OWNED
TOTAL
NUMBER
SQUARE FEET
NUMBER
SQUARE FEET
NUMBER
SQUARE FEET
2
41
3
2
4
38
1
3
48
17
1
2
7
3
1
66
1
3
3
31
16
6
7
66
16
4
1
2
2
2
2
10
10
9
7
6
3
5
2
2
10
19
8
7
3
3
7
5
15
8
28
8
12
4
134,753
2,990,138
65,924
33,659
202,106
2,594,240
68,889
7,115
1,970,749
784,395
26,049
51,118
152,889
161,361
54,304
4,577,247
38,861
6,997
95,896
2,126,805
894,412
608,081
350,898
3,211,105
487,101
345,962
107,639
11,626
50,681
4,736
60,543
495,755
478,471
665,554
522,687
413,959
129,083
194,321
60,202
47,265
349,132
801,189
451,954
400,687
139,722
118,380
305,223
172,769
464,345
257,233
655,746
1,049,181
283,857
267,989
4
1
1
—
1
6
—
17
1
—
1
2
—
—
1
18
—
—
—
12
3
—
—
—
2
3
—
—
—
—
—
—
8
—
1
—
—
—
—
10
—
—
—
—
3
—
3
—
—
—
6
—
—
2
298,864
13,885
58,771
—
104,391
291,280
—
667,790
20,518
—
36,447
46,246
—
—
163,611
598,009
—
—
—
936,486
308,504
—
—
—
58,965
158,558
—
—
—
—
—
—
585,885
—
37,355
—
—
—
—
433,770
—
—
—
—
324,751
—
345,056
—
—
—
220,199
—
—
105,487
6
42
4
2
5
44
1
20
49
17
2
4
7
3
2
84
1
3
3
43
19
6
7
66
18
7
1
2
2
2
2
10
18
9
8
6
3
5
2
12
10
19
8
7
6
3
10
5
15
8
34
8
12
6
433,617
3,004,023
124,695
33,659
306,497
2,885,520
68,889
674,905
1,991,267
784,395
62,496
97,364
152,889
161,361
217,915
5,175,256
38,861
6,997
95,896
3,063,291
1,202,916
608,081
350,898
3,211,105
546,066
504,520
107,639
11,626
50,681
4,736
60,543
495,755
1,064,356
665,554
560,042
413,959
129,083
194,321
60,202
481,035
349,132
801,189
451,954
400,687
464,473
118,380
650,279
172,769
464,345
257,233
875,945
1,049,181
283,857
373,476
Table of Contents
Part I
COUNTRY/STATE
International (continued)
Turkey
Ukraine
United Arab Emirates
Vietnam
Total International
Total
LEASED
OWNED
TOTAL
NUMBER
SQUARE FEET
NUMBER
SQUARE FEET
NUMBER
SQUARE FEET
9
10
7
1
683,641
208,050
702,524
54,767
619
32,649,965
1,143
73,203,382
—
—
1
—
107
237
—
—
434,442
—
9
10
8
1
683,641
208,050
1,136,966
54,767
6,249,270
23,567,771
726
1,380
38,899,235
96,771,153
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 as of December 31, 2022 in Records Management and Data Management
are as follows:
RECORDS MANAGEMENT(1)
DATA MANAGEMENT
BUILDING
UTILIZATION
81%
RACKING
UTILIZATION
89%
BUILDING
UTILIZATION
44%
RACKING
UTILIZATION
61%
(1) Total building utilization and total racking utilization for Records Management includes the utilization for Global Digital Solutions and Consumer Storage.
See Note 2.j. 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, 2022. The information set forth in the table assumes that tenants exercise no renewal
options and all early termination rights.
YEAR
2023
2024
2025
2026
2027
2028
2029
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
582
331
251
88
31
28
6
17
1,334
22.3
17.7
28.9
21.8
8.2
47.8
22.3
147.9
316.9
7.0 % $
5.6 %
9.1 %
6.9 %
2.6 %
15.1 %
7.0 %
46.7 %
100.0 % $
65,831
48,342
65,643
38,298
17,655
57,131
19,605
106,713
419,218
15.7 %
11.5 %
15.7 %
9.1 %
4.2 %
13.6 %
4.7 %
25.5 %
100.0 %
IRON MOUNTAIN 2022 FORM 10-K
23
Table of Contents
Part I
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.
24
IRON MOUNTAIN 2022 FORM 10-K
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 17, 2023 was $52.60. As of February 17, 2023, there were 3,653 holders of record of our common stock. See Note 9 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, 2022, nor did we repurchase any
shares of our common stock during the three months ended December 31, 2022.
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 9 of this Annual Report.
26
IRON MOUNTAIN 2022 FORM 10-K
Table of Contents
OVERVIEW
PROJECT MATTERHORN
Part II
In September 2022, we announced Project Matterhorn, our global program designed to accelerate the growth of our business.
Project Matterhorn investments will focus on transforming our operating model to a global operating model. Project Matterhorn
will focus on the formation of a solution-based sales approach that is designed to allow us to optimize our shared services and
best practices to better serve our customers' needs. We will be investing to accelerate growth and to capture a greater share of
the large, global addressable markets in which we operate. We expect to incur approximately $150.0 million in costs annually
related to Project Matterhorn from 2023 through 2025. Costs are comprised of (1) restructuring costs, which include (i) site
consolidation and other related exit costs, (ii) employee severance costs and (iii) certain professional fees associated with these
activities, and (2) other transformation costs, which include professional fees such as project management costs and costs for
third party consultants who are assisting in the enablement our growth initiatives. Total costs related to Project Matterhorn during
the year ended December 31, 2022 were approximately $41.9 million and are included in Restructuring and other transformation
in our Consolidated Statement of Operations. There were no Restructuring and other transformation costs related to Project
Matterhorn for the year ended December 31, 2021.
ACQUISITION OF ITRENEW
On January 25, 2022, in order to expand our ALM operations, we acquired an approximately 80% interest in Intercept Parent, Inc.
("ITRenew"). From January 25, 2022, we consolidate 100% of the revenues and expenses associated with this business. ITRenew
is presented in Corporate and Other and primarily operates in the United States. See Acquisitions within the Liquidity and Capital
Resources section below for additional information.
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. As of December 31, 2021, we completed Project Summit. As a result of the program, we
simplified our global structure, rebalanced resources to focus on higher growth areas, realigned our management structure to
create a more dynamic, agile organization, made investments to enhance the customer experience and leveraged new technology
solutions that enabled us to modernize our service delivery model and more efficiently utilize our fleet, labor and real estate. Project
Summit improved annual Adjusted EBITDA (as defined below) by approximately $375.0 million exiting 2021, of which
approximately $50.0 million and $160.0 million were realized in 2022 and 2021, respectively.
The implementation of Project Summit resulted in total restructuring costs of approximately $450.0 million that primarily consisted
of: (i) employee severance costs; (ii) internal costs associated with the development and implementation of Project Summit
initiatives; (iii) professional fees, primarily related to third party consultants who assisted with the design and execution of various
initiatives as well as project management activities and (iv) system implementation and data conversion costs. Total restructuring
costs included in Restructuring and other transformation in our Consolidated Statements of Operations for the year ended
December 31, 2021 were $206.4 million. As Project Summit was completed as of December 31, 2021, there were no restructuring
costs for Project Summit for the year ended December 31, 2022.
DIVESTMENTS AND DECONSOLIDATIONS
OSG RECORDS MANAGEMENT (EUROPE) LIMITED DECONSOLIDATION
On March 24, 2022, as a result of our loss of control, we deconsolidated the businesses included in our acquisition of OSG
Records Management (Europe) Limited, excluding Ukraine ("OSG Deconsolidation"). We recognized a loss of approximately
$105.8 million associated with the deconsolidation to Other (income) expense, net in the first quarter of 2022 representing the
difference between the net asset value prior to the deconsolidation and the subsequent remeasurement of the retained investment
to a fair value of zero. These businesses represented approximately $44.9 million of total revenues and $7.2 million of total net
income for the year ended December 31, 2021.
INTELLECTUAL PROPERTY MANAGEMENT BUSINESS DIVESTMENT
On June 7, 2021, we sold our Intellectual Property Management ("IPM") business, which we predominantly operated in the United
States, for total gross consideration of approximately $215.4 million (the "IPM Divestment"). As a result of the IPM Divestment, we
recorded a gain on sale of approximately $179.0 million to Other (income) expense, net during the year ended December 31, 2021,
representing the excess of the fair value of the consideration received over the sum of the carrying value of the IPM business. Our
IPM business represented approximately $14.2 million and $6.8 million of total revenues and total net income, respectively, for the
year ended December 31, 2021.
IRON MOUNTAIN 2022 FORM 10-K
27
Table of Contents
Part II
GENERAL
RESULTS OF OPERATIONS - KEY TRENDS
• We have experienced 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.
• Our organic service revenue growth is primarily due to increases in our service activity. We expect organic service revenue
growth in 2023 to benefit from our new and existing digital offerings, as well as our traditional services.
• We expect continued total revenue and Adjusted EBITDA growth in 2023 as a result of our focus on new product and service
offerings, innovation, customer solutions and market expansion in line with our Project Matterhorn objectives.
• We expect the impact of a stronger US dollar to create headwinds on reported total revenue and Adjusted EBITDA growth in
2023 against prior periods.
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 (i) 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 (ii) the
decommissioning, data erasure, processing and disposition or sale of IT hardware and component assets; (3) digital solutions,
including the scanning, imaging and document conversion services of active and inactive records, and consulting services; and (4)
data center services, including set up, monitoring and support of our customers' assets which are protected in our data center
facilities, and special project services, including data center fitout. 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. 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.
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.
28
IRON MOUNTAIN 2022 FORM 10-K
Table of Contents
Part II
Cost of sales (excluding depreciation and amortization) and Selling, general and administrative expenses for the year ended
December 31, 2022 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 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 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 and supplier relationship intangible assets, contract fulfillment costs and data center lease-based intangible
assets. Both depreciation and amortization are impacted by the timing of acquisitions.
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 2021 results at the 2022 average exchange rates. Constant currency growth rates are a non-
GAAP measure.
IRON MOUNTAIN 2022 FORM 10-K
29
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
PERCENTAGE OF
UNITED STATES DOLLAR-
REPORTED REVENUE FOR THE
YEAR ENDED DECEMBER 31,
AVERAGE EXCHANGE RATES
FOR THE YEAR ENDED
DECEMBER 31,
2022
2021
2022
2021
PERCENTAGE
STRENGTHENING /
(WEAKENING) OF
FOREIGN CURRENCY
2.8 %
1.8 %
6.5 %
5.3 %
7.0 %
3.3 % $
1.8 % $
6.6 % $
5.6 % $
7.7 % $
0.695 $
0.194 $
1.237 $
0.769 $
1.054 $
0.751
0.186
1.376
0.798
1.183
(7.5) %
4.3 %
(10.1) %
(3.6) %
(10.9) %
The percentage of United States dollar-reported revenues for all other foreign currencies was 12.7% and 14.6% for the years
ended December 31, 2022 and 2021, respectively.
30
IRON MOUNTAIN 2022 FORM 10-K
Table of Contents
NON-GAAP MEASURES
ADJUSTED EBITDA
Part II
Adjusted EBITDA is defined as net income (loss) 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
• Acquisition and Integration Costs (as defined below)
• Other (income) expense, net
• Restructuring and other transformation
• Stock-based compensation expense
•
(Gain) loss on disposal/write-down of property, plant and
equipment, net (including real estate)
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 segments under "Results of Operations – Segment Analysis" below.
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, net income (loss) or cash flows from operating activities (as determined in
accordance with GAAP).
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA (IN THOUSANDS):
Net Income (Loss)
Add/(Deduct):
Interest expense, net
Provision (benefit) for income taxes
Depreciation and amortization
Acquisition and Integration Costs(1)
Restructuring and other transformation
YEAR ENDED DECEMBER 31,
2022
2021
$
562,149 $
452,725
488,014
69,489
727,595
47,746
41,933
417,961
176,290
680,422
12,764
206,426
(Gain) loss on disposal/write-down of property, plant and equipment, net (including real estate)
(93,268)
(172,041)
Other (income) expense, net, excluding our share of losses (gains) from our unconsolidated joint
ventures(2)
Stock-based compensation expense
Our share of Adjusted EBITDA reconciling items from our unconsolidated joint ventures
Adjusted EBITDA
(83,268)
56,861
9,806
(205,746)
61,001
4,897
$
1,827,057 $
1,634,699
(1) Represent operating expenditures directly associated with the closing and integration activities of our business acquisitions that have closed, or are highly probable
of closing, and include (i) advisory, legal and professional fees to complete business acquisitions and (ii) costs to integrate acquired businesses into our existing
operations, including move, severance and system integration costs (collectively, "Acquisition and Integration Costs").
(2)
Includes foreign currency transaction (gains) losses, net, debt extinguishment expense and other, net. See Note 2.v. to Notes to Consolidated Financial Statements
included in this Annual Report for additional information regarding the components of Other (income) expense, net.
IRON MOUNTAIN 2022 FORM 10-K
31
Table of Contents
Part II
ADJUSTED EPS
Adjusted EPS is defined as reported earnings per share fully diluted from net income (loss) attributable to Iron Mountain
Incorporated (inclusive of our share of adjusted losses (gains) from our unconsolidated joint ventures) and excluding certain items,
specifically:
EXCLUDED
• Acquisition and Integration Costs
• Other (income) expense, net
• Restructuring and other transformation
• Stock-based compensation expense
• Amortization related to the write-off of certain customer
• Non-cash amortization related to derivative instruments
relationship intangible assets
•
(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.
RECONCILIATION OF REPORTED EPS—FULLY DILUTED FROM NET INCOME (LOSS) ATTRIBUTABLE TO
IRON MOUNTAIN INCORPORATED TO ADJUSTED EPS—FULLY DILUTED FROM NET INCOME (LOSS)
ATTRIBUTABLE TO IRON MOUNTAIN INCORPORATED:
YEAR ENDED
DECEMBER 31,
2022
2021
Reported EPS—Fully Diluted from Net Income (Loss) Attributable to Iron Mountain Incorporated
$
1.90 $
1.55
Add/(Deduct):
Acquisition and Integration Costs
Restructuring and other transformation
Amortization related to the write-off of certain customer relationship intangible assets
(Gain) loss on disposal/write-down of property, plant and equipment, net (including real estate)
Other (income) expense, net, excluding our share of losses (gains) from our unconsolidated joint ventures
Stock-based compensation expense
Non-cash amortization related to derivative instruments(1)
Tax impact of reconciling items and discrete tax items(2)
Income (loss) Attributable to Noncontrolling Interests
Adjusted EPS—Fully Diluted from Net Income (Loss) Attributable to Iron Mountain Incorporated(3)
0.16
0.14
0.02
(0.31)
(0.28)
0.19
0.03
(0.08)
0.02
$
1.79 $
0.04
0.71
—
(0.59)
(0.71)
0.21
—
0.28
0.01
1.51
(1) Relates to the amortization of the excluded component of our cross-currency swap agreements, which is recognized on a straight-line basis as a component of
Interest expense, net in our Consolidated Statements of Operations.
(2) The difference between our effective tax rate and our structural tax rate (or adjusted effective tax rate) for the years ended December 31, 2022 and 2021 is primarily
due to (i) the reconciling items above, which impact our reported net income (loss) 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, 2022 and 2021 was 15.2% and 17.7%, respectively.
(3) Columns may not foot due to rounding.
32
IRON MOUNTAIN 2022 FORM 10-K
Table of Contents
Part II
FFO (NAREIT) AND FFO (NORMALIZED)
Funds from operations ("FFO") is defined by the National Association of Real Estate Investment Trusts as net income (loss)
excluding depreciation on real estate assets, losses and gains on sale of real estate, net of tax, and amortization of data center
leased-based intangibles ("FFO (Nareit)"). We calculate our FFO measures, including FFO (Nareit), adjusting for our share of
reconciling items from our unconsolidated joint ventures. 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).
We modify FFO (Nareit), as is common among REITs seeking to provide financial measures that most meaningfully reflect their
particular business ("FFO (Normalized)"). 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
• Acquisition and Integration Costs
• Stock-based compensation expense
• Restructuring and other transformation
• Non-cash amortization related to derivative instruments
•
(Gain) loss on disposal/write-down of property, plant and
equipment, net (excluding real estate)
• Real estate financing lease depreciation
• Tax impact of reconciling items and discrete tax items
• Other (income) expense, net
RECONCILIATION OF NET INCOME (LOSS) TO FFO (NAREIT) AND FFO (NORMALIZED) (IN THOUSANDS):
Net Income (Loss)
Add/(Deduct):
Real estate depreciation(1)
(Gain) loss on sale of real estate, net of tax(2)
Data center lease-based intangible assets amortization(3)
FFO (Nareit)
Add/(Deduct):
Acquisition and Integration Costs
Restructuring and other transformation
Loss (gain) on disposal/write-down of property, plant and equipment, net (excluding real estate)
Other (income) expense, net, excluding our share of losses (gains) from our unconsolidated joint
ventures
Stock-based compensation expense
Non-cash amortization related to derivative instruments
Real estate financing lease depreciation
Tax impact of reconciling items and discrete tax items(4)
Our share of FFO (Normalized) reconciling items from our unconsolidated joint ventures
FFO (Normalized)
YEAR ENDED DECEMBER 31,
2022
2021
$
562,149 $
452,725
307,895
(94,059)
16,955
792,940
47,746
41,933
1,564
307,717
(142,892)
42,333
659,883
12,764
206,426
(3,751)
(83,268)
(205,746)
56,861
9,100
13,197
(25,190)
2,874
61,001
—
14,635
56,822
(38)
$
857,757 $
801,996
(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, 2022 and 2021 was $0.8 million and $25.4 million, respectively.
(3)
Includes amortization expense for Data Center In-Place Lease Intangible Assets and Data Center Tenant Relationship Intangible Assets as defined in Note 2.m. to
Notes to Consolidated Financial Statements included in this Annual Report.
(4) Represents the tax impact of (i) the reconciling items above, which impacts our reported net income (loss) 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 $(11.9) million and $19.2 million for the years ended December 31, 2022 and 2021, respectively.
IRON MOUNTAIN 2022 FORM 10-K
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Part II
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:
REVENUE RECOGNITION
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.s. 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 in accordance with Accounting Standards Codification ("ASC") 606, Revenue from Contracts with
Customers ("ASC 606"), 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 ASC 606 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. Revenue from product sales, the
significant majority of which are shred paper and IT asset sales, is recognized at the point in time at which control transfers to the
customer, which is generally upon shipment.
From time to time, we make payments to entities that are also customers under a revenue contract. These payments are primarily
comprised of (i) Customer Inducements (as defined in Note 2.m. to Notes to Consolidated Financial Statements included in this
Annual Report) and (ii) payments to customers of our ALM business under revenue sharing arrangements for the remarketing of
the customer's disposed IT assets. Customer Inducements do not represent payments for a distinct service, and, as such, are
treated as a reduction of the transaction price over periods ranging from one to 10 years. Payments for disposed IT assets are for a
distinct good and, as such, are expensed as cost of goods sold in the period the revenue share is known or estimable.
Contract Fulfillment Costs (as defined in Note 2.s. to Notes to Consolidated Financial Statements included in this Annual Report)
are generally 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 is 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 and supplier 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.m. 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.
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Of the net assets acquired in our acquisitions, the fair value of owned buildings, including building improvements, customer and
supplier 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 and supplier
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 and supplier relationship intangible
assets, above and below market in-place operating leases, and racking structures is determined internally. We use discounted cash
flow models to determine the fair value of customer and supplier relationship intangible assets, which requires a significant amount
of judgment by management, including estimating expected lives of the relationships, expected future cash flows and discount
rates. The fair value of above and below market in-place operating leases is determined internally using a discounted cash flow
model, utilizing the difference in cash flows between the contractual lease payments over the remaining lease term and estimated
market rental rates on comparable assets at the time of the acquisition. 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 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.
The fair value of the Deferred Purchase Obligation associated with the ITRenew Transaction (each as defined below) was
determined utilizing a Monte-Carlo simulation model and takes into account our forecasted projections as it relates to the
underlying performance of the business. The Monte-Carlo simulation model incorporates assumptions as to expected gross profits
over the applicable achievement period, including adjustments for the volatility of timing and amount of the associated revenue and
costs, as well as discount rates that account for the risk of the underlying arrangement and overall market risks.
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 customer and supplier relationship intangible assets acquired in our 2022
acquisitions were approximately $491.3 million.
IMPAIRMENT OF TANGIBLE AND INTANGIBLE ASSETS
ASSETS SUBJECT TO DEPRECIATION OR AMORTIZATION
We review long-lived assets and 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.
We did not record impairment charges for any of our long-lived assets or finite-lived intangibles during the years ended December
31, 2022 and 2021.
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Part II
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.l. 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, 2022 and 2021. We concluded that as of October 1, 2022 and 2021, goodwill was not impaired.
Our reporting units at which level we performed our goodwill impairment analysis as of October 1, 2022 were as follows:
• North American Records and Information Management reporting
• Asia, Australia and New Zealand Records and Information
unit ("North America RIM")
Management reporting unit ("APAC RIM")
• Europe and South Africa Records and Information Management
• Entertainment Services
reporting unit ("ESA RIM")
• Middle East, North Africa and Turkey Records and Information
Management reporting unit ("MENAT RIM")
• Latin America Records and Information Management reporting
unit ("Latin America RIM")
• Global Data Center
• Fine Arts
• ALM
See Note 2.l. 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, 2022, all of our reporting units had estimated fair values exceeding
their carrying values by greater than 20%. Our Global Data Center and ALM reporting units had an estimated fair value that
exceeded their respective carrying values by approximately 20.4% and 28.0%, respectively. The Global Data Center and ALM
reporting units represented approximately $995.9 million, or 20.4%, of our consolidated goodwill balance at December 31, 2022.
The following is a summary of the Global Data Center and ALM reporting units including the goodwill balance (in thousands), the
percentage by which the fair value of the reporting units exceeded their carrying values and certain key assumptions used by us in
determining the fair value of the reporting units as of October 1, 2022:
REPORTING UNIT
Global Data Center
ALM
GOODWILL
BALANCE AT
OCTOBER 1,
2022
$407,787
616,897
PERCENTAGE BY
WHICH THE FAIR VALUE
OF THE REPORTING
UNIT EXCEEDED THE
REPORTING UNIT
CARRYING VALUE AS OF
OCTOBER 1, 2022
20.4%
28.0%
KEY ASSUMPTIONS IN THE FAIR VALUE OF REPORTING UNIT
MEASUREMENT AS OF OCTOBER 1, 2022
AVERAGE ANNUAL
ADJUSTED EBITDA
MARGIN USED IN
DISCOUNTED
CASH FLOW
AVERAGE
ANNUAL CAPITAL
EXPENDITURES AS
PERCENTAGE OF
REVENUE(1)
38.7%
11.2%
19.2%
2.0%
TERMINAL
GROWTH
RATE(2)
3.5%
3.5%
DISCOUNT
RATE
8.5%
15.5%
(1)
(2)
For purposes of our goodwill impairment analysis, the term "capital expenditures" includes both growth investment and recurring capital expenditures. The capital
expenditure assumptions in our goodwill impairment analysis for our Global Data Center reporting unit include significant growth investment in the next three years.
Terminal growth rates are applied after year 10 of our discounted cash flow analysis.
The fair values of our reporting units are generally 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 and ALM reporting units where the
estimated fair value exceeded its carrying value by approximately 20.4% and 28.0%, respectively, as of October 1, 2022. The fair
value of our Global Data Center reporting unit was determined using a combined Discounted Cash Flow Model and Market
Approach, while the fair value of our ALM reporting unit was determined using a Discounted Cash Flow Model approach. The
success of these businesses 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.
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GLOBAL DATA CENTER
Part II
Our Global Data Center Business operates in 21 data centers across 19 global markets, either directly or through unconsolidated
joint ventures. We provide 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. 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 our 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.
ALM
Our ALM business provides hyperscale and corporate IT infrastructure managers with services and solutions that enable the
decommissioning, data erasure, processing and disposition or sale of IT hardware and component assets. ALM services are
enabled by: (i) secure logistics, chain of custody and complete asset traceability practices; (ii) environmentally-responsible asset
processing and recycling; and (iii) data sanitization and asset refurbishment services that enable value recovery through asset
remarketing. The assumptions we used in determining fair value reflect the ongoing and anticipated expansion of these services,
the timing of reopening of supply chains due to closures associated with border restrictions, particularly in mainland China, in
connection with the COVID-19 pandemic, the maintenance and further development of the supplier relationships required to
expand this business and meet customer demand and decommissioning schedules of our supplier's IT hardware and component
assets, as well as associated market pricing and demand for such assets at that time. Our ALM business is substantially comprised
of the ITRenew Transaction entered into during the first quarter of 2022; therefore, we would expect, at this time, that the fair value
of this reporting unit would closely approximate its carrying value.
KEY ASSUMPTIONS
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.
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.
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, 2022.
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Part II
North America RIM, MENAT
RIM, ESA RIM, Latin America
RIM, APAC RIM, Fine Arts and
Entertainment Services
We noted that, based on the estimated fair value of these reporting units determined as of
October 1, 2022:
• 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, 2022 by a range of approximately 9.8% to 10.4%
but would not, however, have resulted in the carrying value of any of these reporting units
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, 2022 by a range of approximately 3.7% to 10.1% but would not, however, have
resulted in the carrying value of any of these reporting units exceeding their estimated fair
value.
Global Data Center
We noted that, as of October 1, 2022, the estimated fair value of the reporting unit:
• exceeds its carrying value by approximately 20.4%.
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.
ALM
We noted that, as of October 1, 2022, the estimated fair value of the reporting unit:
• exceeds its carrying value by approximately 28.0%.
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, 2022, no factors were identified that would alter the conclusions of our October 1, 2022 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 10 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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Part II
At December 31, 2022, we have federal net operating loss carryforwards of $63.5 million, which can be carried forward indefinitely,
of which $57.1 million is expected to be realized to reduce future federal taxable income. We have assets for foreign net operating
losses of $81.9 million, with various expiration dates (and in some cases no expiration date), subject to a valuation allowance of
approximately 56.0%. 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 both December 31, 2022 and 2021,
we had approximately $27.8 million 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.
During 2021, as a result of the enactment of a tax law and the closing of various acquisitions, we concluded that it is no longer our
intention to reinvest our undistributed earnings of our foreign TRSs indefinitely outside the United States. 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. However, such future repatriations may require distributions to our stockholders in
accordance with REIT distribution rules, and any such distribution may then be taxable, as appropriate, at the stockholder level. We
expect to provide for foreign withholding taxes on the current and future earnings of all of our foreign subsidiaries as the result of
such reassessment.
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Part II
RESULTS OF OPERATIONS
The following information summarizes our results of operations for the year ended December 31, 2022 compared to the year ended
December 31, 2021. For a discussion of our results for the year ended December 31, 2021 compared to the year ended December
31, 2020, see "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" included in Exhibit
99.1 of our Current Report on Form 8-K filed with the SEC on August 4, 2022.
COMPARISON OF YEAR ENDED DECEMBER 31, 2022 TO YEAR ENDED DECEMBER 31, 2021
(IN THOUSANDS):
Revenues
Operating Expenses
Operating Income
Other Expenses, Net
Net Income (Loss)
Net Income (Loss) Attributable to Noncontrolling Interests
Net Income (Loss) Attributable to Iron Mountain Incorporated
Adjusted EBITDA(1)
Adjusted EBITDA Margin(1)
YEAR ENDED DECEMBER 31,
2022
2021
DOLLAR
CHANGE
PERCENTAGE
CHANGE
$
5,103,574
$
4,491,531
$
612,043
4,053,703
1,049,871
487,722
562,149
5,168
556,981
1,827,057
$
$
3,637,359
854,172
401,447
452,725
2,506
450,219
1,634,699
$
$
35.8 %
36.4 %
$
$
416,344
195,699
86,275
109,424
2,662
106,762
192,358
13.6 %
11.4 %
22.9 %
21.5 %
24.2 %
106.2 %
23.7 %
11.8 %
(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 Net Income (Loss) and a discussion of why we believe these non-GAAP measures provide relevant and useful information to our current and potential
investors.
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REVENUES
Total revenues consist of the following (in thousands):
Part II
YEAR ENDED DECEMBER 31,
PERCENTAGE CHANGE
2022
2021
DOLLAR
CHANGE
ACTUAL
CONSTANT
CURRENCY(1)
IMPACT OF
ACQUISITIONS
ORGANIC
GROWTH(2)
Storage Rental
$
3,034,023 $
2,870,119 $
163,904
Service
2,069,551
1,621,412
448,139
Total Revenues
$
5,103,574 $
4,491,531 $
612,043
5.7 %
27.6 %
13.6 %
8.8 %
31.7 %
17.0 %
(0.1) %
14.1 %
4.9 %
8.9 %
17.6 %
12.1 %
(1) Constant currency growth rate, which is a non-GAAP measure, is calculated by translating the 2021 results at the 2022 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, 2022, the increase in revenue was driven by organic storage rental revenue growth, organic
service revenue growth and our acquisition of ITRenew. Foreign currency exchange rate fluctuations decreased our reported
revenue growth rate by 3.4% in the year ended December 31, 2022 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, 2022 compared to the year ended December 31, 2021 include the following:
STORAGE RENTAL REVENUES • organic storage rental revenue growth driven by increased volume in faster growing
markets and our Global Data Center Business segment and revenue management;
• a 0.4% increase in total global volume excluding deconsolidations (also excluding
acquisitions, total global volume increased 0.4%); and
• a decrease of $81.5 million due to foreign currency exchange rate fluctuations.
SERVICE REVENUES
• organic service revenue growth reflecting increased service activity levels;
• an increase of $213.1 million due to our acquisition of ITRenew; and
• a decrease of $49.5 million due to foreign currency exchange rate fluctuations.
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Part II
OPERATING EXPENSES
COST OF SALES
Cost of sales (excluding depreciation and amortization) consists of the following expenses (in thousands):
YEAR ENDED
DECEMBER 31,
PERCENTAGE
CHANGE
% OF
CONSOLIDATED
REVENUES
2022
2021
DOLLAR
CHANGE
ACTUAL
CONSTANT
CURRENCY
2022
2021
Labor
Facilities
Transportation
Product Cost of Sales and Other
339,672
Total Cost of sales
$ 2,189,120 $ 1,887,229 $ 301,891
$ 807,220 $ 769,617 $
37,603
884,930
157,298
795,802
136,792
185,018
89,128
20,506
154,654
4.9 %
11.2 %
15.0 %
83.6 %
16.0 %
8.2 %
15.8 %
17.1 %
14.8 %
17.3 %
17.7 %
18.5 %
91.0 %
3.1 %
6.7 %
3.0 %
4.1 %
19.8 %
42.9 %
41.9 %
PERCENTAGE
CHANGE
(FAVORABLE)/
UNFAVORABLE
(1.3) %
(0.4) %
0.1 %
2.6 %
1.0 %
Primary factors influencing the change in reported Cost of sales for the year ended December 31, 2022 compared to the year
ended December 31, 2021 include the following:
• an increase in labor costs driven by an increase in service activity and the impact of recent acquisitions, partially offset by
benefits from Project Summit;
• an increase in facilities expenses driven by increases in rent expense, reflecting the impact from our sale-leaseback activity
during the years ended December 31, 2021 and 2022, as well as increases in utilities and building maintenance costs;
• an increase in product cost of sales and other driven by the acquisition of ITRenew; and
• a decrease of $59.4 million due to foreign currency exchange rate fluctuations.
42
IRON MOUNTAIN 2022 FORM 10-K
Table of Contents
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses consists of the following expenses (in thousands):
YEAR ENDED
DECEMBER 31,
2022
2021
PERCENTAGE
CHANGE
% OF
CONSOLIDATED
REVENUES
DOLLAR
CHANGE
ACTUAL
CONSTANT
CURRENCY
2022
2021
General, Administrative and Other $ 839,844 $ 760,346 $
79,498
10.5 %
13.0 %
16.5 %
16.9 %
Sales, Marketing and Account
Management
Total Selling, general and
administrative expenses
300,733
262,213
38,520
14.7 %
18.1 %
5.9 %
5.8 %
$ 1,140,577,000 $ 1,022,559,000 $ 118,018
11.5 %
14.3 %
22.4 %
22.7 %
Part II
PERCENTAGE
CHANGE
(FAVORABLE)/
UNFAVORABLE
(0.4) %
0.1 %
(0.3) %
Primary factors influencing the change in reported Selling, general and administrative expenses for the year ended December 31,
2022 compared to the year ended December 31, 2021 include the following:
• an increase in general, administrative and other expenses, driven by recent acquisitions, higher wages and benefits, employee
related costs, information technology costs and professional fees, partially offset by benefits from Project Summit;
• an increase in sales, marketing and account management expenses, driven by higher compensation expense, primarily
reflecting increased wages and benefits and recent acquisitions; and
• a decrease of $24.5 million due to foreign currency exchange rate fluctuations.
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 and supplier 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 increased $13.9 million, or 3.0%, on a reported dollar basis for the year ended December 31, 2022
compared to the year ended December 31, 2021. See Note 2.i. 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 $33.3 million, or 15.4%, on a reported dollar basis for the year ended December 31, 2022
compared to the year ended December 31, 2021, primarily related to the amortization of intangible assets acquired as part of the
acquisition of ITRenew.
ACQUISITION AND INTEGRATION COSTS
Acquisition and Integration Costs for the years ended December 31, 2022 and 2021 was approximately $47.7 million and $12.8
million, respectively.
RESTRUCTURING AND OTHER TRANSFORMATION
Restructuring and other transformation costs for the years ended December 31, 2022 and 2021 were approximately $41.9 million
and $206.4 million, respectively, and related to operating expenses associated with the implementation of Project Matterhorn in
2022 and Project Summit in 2021.
IRON MOUNTAIN 2022 FORM 10-K
43
Table of Contents
Part II
GAIN ON DISPOSAL/WRITE-DOWN OF PROPERTY, PLANT AND
EQUIPMENT, NET
Gain on disposal/write-down of
property, plant and equipment, net
The gains primarily consist of:
YEAR ENDED DECEMBER 31,
2022
$93.3 million
2021
$172.0 million
• Gains associated with sale and sale-leaseback
transactions of approximately $94.5 million, of
which (i) approximately $49.0 million relates to
sale and sale-leaseback transactions of 11
facilities and parcels of land in the United States
during the second quarter of 2022, (ii)
approximately $17.0 million relates to sale-
leaseback transactions of two facilities in the
United States and one in Canada during the
third quarter of 2022 and (iii) approximately
$28.5 million relates to sale and sale-leaseback
transactions of 12 facilities and one parcel of
land in the United States and one facility in the
United Kingdom during the fourth quarter of
2022.
• Gains associated with sale and sale-leaseback
transactions of approximately $164.0 million, of
which (i) approximately $127.4 million relates to
sale-leaseback transactions of five facilities in
the United Kingdom during the second quarter
of 2021 and (ii) approximately $36.6 million
relates to sale and sale-leaseback transactions
of nine facilities in the United States during the
fourth quarter of 2021.
OTHER EXPENSES, NET
INTEREST EXPENSE, NET
Interest expense, net increased $70.1 million to $488.0 million for the year ended December 31, 2022 from $418.0 million for the
year ended December 31, 2021. The increase is primarily due to higher average debt outstanding during the year ended December
31, 2022 compared to the prior year period as well as an increase in our weighted average interest rate. Our weighted average
interest rate, inclusive of the fees associated with our outstanding letters of credit, was 5.1% and 4.7% at December 31, 2022 and
2021, respectively. See Note 7 to Notes to Consolidated Financial Statements included in this Annual Report for additional
information regarding our indebtedness.
OTHER (INCOME) EXPENSE, NET
Other (income) expense, net consists of the following (in thousands):
DESCRIPTION
Foreign currency transaction (gains) losses, net
Debt extinguishment expense
Other, net
Other (Income) Expense, Net
YEAR ENDED DECEMBER 31,
2022
2021
DOLLAR
CHANGE
$
$
(61,684) $
(15,753) $
(45,931)
671
(8,768)
—
(177,051)
(69,781) $
(192,804) $
671
168,283
123,023
FOREIGN CURRENCY TRANSACTION (GAINS) LOSSES, NET
We recorded net foreign currency transaction gains of $61.7 million in the year ended December 31, 2022, based on period-end
exchange rates. These gains resulted primarily from the impact of changes in the exchange rate of the Euro and the British pound
sterling against the United States dollar compared to December 31, 2021 on our intercompany balances with and between certain
of our subsidiaries.
44
IRON MOUNTAIN 2022 FORM 10-K
Table of Contents
OTHER, NET
Part II
Other, net for the year ended December 31, 2022 consists primarily of (i) a gain of approximately $93.6 million associated with the
remeasurement of the Deferred Purchase Obligation (as defined below) to the present value of our best estimate of fair value and
(ii) a gain of approximately $35.8 million associated with the Clutter Transaction (as defined below), partially offset by (iii) a loss of
approximately $105.8 million associated with the OSG Deconsolidation (as defined in Note 4) and (iv) losses on our equity method
investments. Other, net for the year ended December 31, 2021 consists primarily of (i) a gain of approximately $179.0 million
associated with our IPM Divestment and (ii) a gain of approximately $20.3 million associated with the loss of control and related
deconsolidation, as of May 18, 2021, of one of our wholly owned Netherlands subsidiaries, for which we had value-added tax
liability exposure that was recorded in 2019, partially offset by (iii) losses on our equity method investments.
PROVISION (BENEFIT) FOR INCOME TAXES
Our effective tax rates for the years ended December 31, 2022 and 2021 were 11.0% and 28.0%, respectively. Our effective tax
rate is subject to variability in the future due to, among other items: (i) changes in the mix of income between our QRSs and our
TRSs, as well as among the jurisdictions in which we operate; (ii) tax law changes; (iii) volatility in foreign exchange gains and
losses; (iv) the timing of the establishment and reversal of tax reserves; (v) our ability to utilize net operating losses that we
generate and (vi) the taxability or deductibility of significant transactions.
The primary reconciling items between the federal statutory tax rate of 21.0% and our overall effective tax rate were:
YEAR ENDED DECEMBER 31,
2022
The benefits derived from the dividends paid deduction of $82.6 million
and the differences in the tax rates to which our foreign earnings are
subject of $22.2 million. In addition, there were gains and losses
recorded in Other (income) expense, net and Gain (loss) on disposal/
write-down of property, plant and equipment, net during the period for
which there were insignificant tax impacts.
2021
The benefit derived from the dividends paid deduction of $8.2 million
which was offset by (i) the impact of differences in the tax rates at
which our foreign earnings are subject to, resulting in a tax provision
of $9.9 million, and (ii) foreign withholding taxes of $23.7 million,
which were either paid during the year or accrued, for the deferred tax
liability for the U.S. tax impact of undistributed earnings of foreign
TRSs that are no longer intended to be permanently reinvested
outside the United States.
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 2022 FORM 10-K
45
Table of Contents
Part II
NET INCOME (LOSS) AND ADJUSTED EBITDA
The following table reflects the effect of the foregoing factors on our net income (loss) and Adjusted EBITDA (in thousands):
Net Income (Loss)
Net Income (Loss) as a percentage of Revenue
Adjusted EBITDA
Adjusted EBITDA Margin
YEAR ENDED DECEMBER 31,
2022
2021
$
$
562,149
11.0 %
1,827,057
$
$
452,725
10.1 %
1,634,699
$
$
35.8 %
36.4 %
DOLLAR
CHANGE
PERCENTAGE
CHANGE
109,424
24.2 %
192,358
11.8 %
Adjusted EBITDA Margin for the year ended December 31,
2022 decreased by 60 basis points compared to the
prior year, primarily reflecting a 150 basis point decrease
from the acquisition of ITRenew, partially offset by improved
service revenue trends, benefits from Project Summit, revenue
management and ongoing cost containment measures.
↑ INCREASED BY $192.4 MILLION
OR 11.8%
Adjusted EBITDA
46
IRON MOUNTAIN 2022 FORM 10-K
Table of Contents
SEGMENT ANALYSIS
Part II
See the discussion of Business Segments under Item I and Note 11 to Notes to Consolidated Financial Statements, both included
in this Annual Report, for a description of our reportable segments.
GLOBAL RIM BUSINESS (IN THOUSANDS)
YEAR ENDED DECEMBER 31,
PERCENTAGE CHANGE
2022
2021
DOLLAR
CHANGE
ACTUAL
CONSTANT
CURRENCY
IMPACT OF
ACQUISITIONS
ORGANIC
GROWTH
Storage Rental
Service
$ 2,606,721
$ 2,517,208
$
89,513
1,688,394
1,477,780
210,614
Segment Revenue
$ 4,295,115
$ 3,994,988
$ 300,127
Segment Adjusted EBITDA
$ 1,887,589
$ 1,709,525
$ 178,064
Segment Adjusted EBITDA Margin
43.9 %
42.8 %
SEGMENT ANALYSIS: GLOBAL RIM BUSINESS (IN MILLIONS)
3.6 %
14.3 %
7.5 %
6.7 %
17.7 %
10.8 %
(0.1) %
6.8 %
— %
17.7 %
— %
10.8 %
Storage Rental
Revenue
Service
Revenue
Segment
Revenue
Segment Adjusted
EBITDA
Primary factors influencing the change in revenue and Adjusted EBITDA Margin in our Global RIM Business segment for the year
ended December 31, 2022 compared to the year ended December 31, 2021 include the following:
• organic storage rental revenue growth driven by revenue management and volume;
• a 0.4% increase in Global RIM volume excluding deconsolidations (also excluding acquisitions, Global RIM volume increased
0.3%);
• organic service revenue growth mainly driven by increases in our traditional service activity levels and growth in our Global
Digital Solutions business;
• a decrease in revenue of $117.1 million due to foreign currency exchange rate fluctuations; and
• a 110 basis point increase in Adjusted EBITDA Margin primarily driven by revenue management, benefits from Project Summit
and ongoing cost containment measures.
IRON MOUNTAIN 2022 FORM 10-K
47
$2,517.2$1,477.8$3,995.0$2,606.7$1,688.4$4,295.120212022$0$500$1,000$1,500$2,000$2,500$3,000$3,500$4,000$4,500$1,709.5$1,887.642.8%43.9%Segment Adjusted EBITDA Margin0%25%50%
Table of Contents
Part II
GLOBAL DATA CENTER BUSINESS (IN THOUSANDS)
Storage Rental
Service
Segment Revenue
Segment Adjusted EBITDA
YEAR ENDED DECEMBER 31,
PERCENTAGE CHANGE
2022
372,208
28,917
401,125
175,622
$
$
$
$
$
$
2021
289,592
37,306
DOLLAR
CHANGE
$ 82,616
(8,389)
326,898
$ 74,227
137,349
$ 38,273
ACTUAL
28.5 %
(22.5) %
22.7 %
CONSTANT
CURRENCY
31.5 %
IMPACT OF
ACQUISITIONS
3.6 %
ORGANIC
GROWTH
27.9 %
(16.5) %
26.2 %
2.3 %
3.6 %
(18.8) %
22.6 %
Segment Adjusted EBITDA Margin
43.8 %
42.0 %
SEGMENT ANALYSIS: GLOBAL DATA CENTER BUSINESS (IN MILLIONS)
Storage Rental
Revenue
Service
Revenue
Segment
Revenue
Segment Adjusted
EBITDA
Primary factors influencing the change in revenue and Adjusted EBITDA Margin in our Global Data Center Business segment for
the year ended December 31, 2022 compared to the year ended December 31, 2021 include the following:
• organic storage rental revenue growth from leases that commenced during 2022 and in prior periods and higher pass-through
power costs, partially offset by churn of 350 basis points;
• an increase in Adjusted EBITDA primarily driven by organic storage rental revenue growth; and
• a 180 basis point increase in Adjusted EBITDA Margin reflecting ongoing cost management and a decline in lower margin
project revenue, partially offset by higher pass-through power costs.
48
IRON MOUNTAIN 2022 FORM 10-K
$289.6$37.3$326.9$372.2$28.9$401.120212022$0$50$100$150$200$250$300$350$400$450$137.3$175.642.0%43.8%Segment Adjusted EBITDA Margin0%25%50%
Table of Contents
Part II
CORPORATE AND OTHER (IN THOUSANDS)
Storage Rental
Service
Revenue
Adjusted EBITDA
YEAR ENDED DECEMBER 31,
PERCENTAGE CHANGE
2022
2021
DOLLAR
CHANGE
ACTUAL
CONSTANT
CURRENCY
IMPACT OF
ACQUISITIONS
ORGANIC
GROWTH
$
$
$
55,094
$
63,319
$
(8,225)
(13.0) %
352,240
407,334
(236,154)
$
$
106,326
245,914
169,645
$ 237,689
231.3 %
140.1 %
(212,175)
$ (23,979)
(11.9) %
244.3 %
147.1 %
(19.4) %
215.3 %
125.0 %
7.5 %
29.0 %
22.1 %
Primary factors influencing the change in revenue and Adjusted EBITDA in Corporate and Other for the year ended December 31,
2022 compared to the year ended December 31, 2021 include the following:
• a decrease in reported storage revenue reflecting the IPM Divestment in the second quarter of 2021;
•
reported service revenue for the year ended December 31, 2022 includes $213.1 million from the acquisition of ITRenew;
• organic service revenue growth mainly driven by increased service activity levels in our Fine Arts and ALM businesses; and
• a decrease in Adjusted EBITDA driven by higher compensation expense and employee related costs, professional fees and the
impact of the IPM Divestment, partially offset by benefits from Project Summit, improved service revenue trends and the impact
of the acquisition of ITRenew.
IRON MOUNTAIN 2022 FORM 10-K
49
Table of Contents
Part II
LIQUIDITY AND CAPITAL RESOURCES
GENERAL
We expect to meet our short-term and long-term cash flow requirements through cash generated from operations, cash on hand,
borrowings under our Credit Agreement (as defined below) and proceeds from monetizing a small portion of our total industrial real
estate assets, as well as other potential financings (such as the issuance of debt). 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,
potential business acquisitions and normal business operation needs.
PROJECT MATTERHORN
As disclosed above, in September 2022, we announced Project Matterhorn. We estimate that the implementation of Project
Matterhorn will result in costs of approximately $150.0 million per year from 2023 through 2025. In 2022, we incurred approximately
$41.9 million of Restructuring and other transformation costs related to Project Matterhorn which are comprised of (1) restructuring
costs, which include (i) site consolidation and other related exit costs, (ii) employee severance costs and (iii) certain professional
fees associated with these activities, and (2) other transformation costs, which include professional fees such as project
management costs and costs for third party consultants who are assisting in the enablement our growth initiatives.
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
Cash Flows from Investing Activities
Cash Flows from Financing Activities
Cash and Cash Equivalents, End of Year
2022
2021
$
927,695 $
758,902
(1,660,423)
639,207
141,797
(473,313)
(220,806)
255,828
A. CASH FLOWS FROM OPERATING ACTIVITIES
For the year ended December 31, 2022, net cash flows provided by operating activities increased by $168.8 million compared to
the prior year period primarily due to an increase in net income (excluding non-cash charges) of $289.6 million, partially offset by a
decrease in cash from working capital of $120.8 million, primarily related to the timing of accounts receivable collections and timing
of accrued expenses.
B. CASH FLOWS FROM INVESTING ACTIVITIES
Our significant investing activities during the year ended December 31, 2022 are highlighted below:
• We paid cash for capital expenditures of $875.4 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 $803.7 million, primarily funded by the issuance of the 5% Notes due
2032 (as defined below).
• We received $170.4 million in proceeds from sales of property, plant and equipment, primarily related to proceeds from sale and
sale-leaseback transactions. See the Gain on disposal/write-down of property, plant and equipment, net section of Results of
Operations for further details.
C. CASH FLOWS FROM FINANCING ACTIVITIES
Our significant financing activities for the year ended December 31, 2022 included:
• Net proceeds of $1,356.3 million primarily associated with borrowings under the Revolving Credit Facility and the Accounts
Receivable Securitization Program.
• Payment of dividends in the amount of $724.4 million on our common stock.
50
IRON MOUNTAIN 2022 FORM 10-K
Table of Contents
CAPITAL EXPENDITURES
Part II
We present two categories of capital expenditures: (1) Growth Investment Capital Expenditures and (2) Recurring Capital
Expenditures with the following sub-categories: (i) Data Center; (ii) Real Estate; (iii) Innovation and Other (for Growth Investment
Capital Expenditures only); and (iv) Non-Real Estate (for Recurring Capital Expenditures only).
GROWTH INVESTMENT CAPITAL EXPENDITURES:
• Data Center: Expenditures primarily related to investments in the construction of data center facilities (including the acquisition
of land), as well as investments to drive revenue growth, expand capacity or achieve operational or cost efficiencies.
• Real Estate: Expenditures primarily related to investments in land, buildings, building improvements, leasehold improvements
and racking structures to grow our revenues, extend the useful life of an asset or achieve operational or cost efficiencies.
•
Innovation and Other: Discretionary capital expenditures for significant new products and services as well as computer
hardware and software to support new products and services or to achieve operational or cost efficiencies. Restructuring and
other transformation costs, including Project Matterhorn and Project Summit, and integration costs of acquisitions are also
included.
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 replacement of equivalent components and overall maintenance of existing data
center assets.
The following table presents our capital spend for 2022 and 2021 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 (decrease) increase in prepaid capital expenditures
Net (increase) decrease in accrued capital expenditures
Total Capital Spend (on cash basis)
2022
2021
$
592,875 $
308,701
181,285
45,371
819,531
60,354
65,134
17,008
142,496
962,027
(2,270)
(84,379)
112,441
37,078
458,220
67,032
67,822
13,347
148,201
606,421
1,343
3,318
$
875,378 $
611,082
Excluding capital expenditures associated with potential future acquisitions, we expect total capital expenditures of approximately
$1,000.0 million for the year ending December 31, 2023. Of this, we expect our capital expenditures for growth investment to be
approximately $855.0 million, and our recurring capital expenditures to approach $145.0 million.
DIVIDENDS
See Note 9 to Notes to Consolidated Financial Statements included in this Annual Report for information on dividends.
IRON MOUNTAIN 2022 FORM 10-K
51
Table of Contents
Part II
FINANCIAL INSTRUMENTS AND DEBT
Financial instruments that potentially subject us to credit risk consist principally of cash and cash equivalents (including money
market funds) and accounts receivable. The only significant concentration of liquid investments as of December 31, 2022 is related
to cash and cash equivalents held in money market funds. See Note 2.g. 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, 2022 is as follows (in thousands):
Revolving Credit Facility
Term Loan A
Term Loan B
Australian Dollar 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 due 2028")
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")
5% Senior Notes due 2032 (the "5% Notes due 2032")
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, 2022
DEBT (INCLUSIVE
OF DISCOUNT)
UNAMORTIZED
DEFERRED
FINANCING
COSTS
CARRYING
AMOUNT
$
1,072,200 $
(6,790) $
1,065,410
240,625
666,073
202,641
169,361
483,888
1,000,000
825,000
500,000
1,000,000
1,300,000
1,100,000
750,000
600,000
425,777
314,700
—
(3,747)
(633)
—
(2,589)
(6,754)
(6,200)
(4,039)
(9,764)
(11,407)
(10,161)
(12,511)
(5,566)
(578)
(531)
240,625
662,326
202,008
169,361
481,299
993,246
818,800
495,961
990,236
1,288,593
1,089,839
737,489
594,434
425,199
314,169
10,650,265
(81,270)
10,568,995
(87,546)
—
(87,546)
Long-term Debt, Net of Current Portion
$
10,562,719 $
(81,270) $ 10,481,449
See Note 7 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"), a term loan A
(the "Term Loan A") and a term loan B (the "Term Loan B"). On March 18, 2022, we entered into an amendment to the Credit
Agreement which included the following changes:
(i) extended the maturity date of the Revolving Credit Facility and the Term Loan A from June 3, 2023 to March 18, 2027;
(ii) refinanced and increased the borrowing capacity that IMI and certain of its United States and foreign subsidiaries are
able to borrow under the Revolving Credit Facility from $1,750.0 million to $2,250.0 million;
(iii) refinanced the existing Term Loan A with a new $250.0 million Term Loan A; and
(iv) increased the net total lease adjusted leverage ratio maximum allowable from 6.5x to 7.0x and removed the net
secured lease adjusted leverage ratio requirement.
The Revolving Credit Facility enables IMI and certain of its subsidiaries to borrow in United States dollars and (subject to sublimits)
Canadian dollars in an aggregate outstanding amount not to exceed $2,250.0 million. Additionally, the Credit Agreement permits us
to incur incremental indebtedness thereunder by adding new term loans or revolving loans or by increasing the principal amount of
any existing loans thereunder. The Revolving Credit Facility and the Term Loan A are scheduled to mature on March 18, 2027, at
which point all obligations become due. On March 18, 2022, we borrowed the full amount of the Term Loan A of $250.0 million. The
Term Loan A is to be paid in quarterly installments in an amount equal to $3.1 million per quarter. IMI’s wholly owned subsidiary,
Iron Mountain Information Management, LLC ("IMIM"), is the borrower under the Term Loan B, which has a principal amount of
$700.0 million. The Term Loan B, which matures on January 2, 2026, was issued at 99.75% of par. Principal payments on the Term
Loan B are to be paid in quarterly installments of $1.8 million.
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IMI and certain subsidiaries of IMI that represent the substantial majority of our operations in the United States, Canada and the
United Kingdom guarantee all obligations under the Credit Agreement. The interest rate on borrowings under the Revolving Credit
Facility varies depending on our choice of interest rate benchmark and currency options, plus an applicable margin, which varies
based on our consolidated leverage ratio. The Term Loan A bears interest at the Secured Overnight Financing Rate ("SOFR") plus
a credit spread adjustment of 0.1% plus 1.75%. The Term Loan B bears interest at the London Inter-Bank Offered Rate ("LIBOR")
plus 1.75%. Additionally, the Credit Agreement requires the payment of a commitment fee on the unused portion of the Revolving
Credit Facility, which fee ranges from 0.2% to 0.3% based on our consolidated leverage ratio.
As of December 31, 2022, we had $1,072.2 million, $240.6 million and $666.1 million outstanding under the Revolving Credit
Facility, the Term Loan A and Term Loan B, respectively. At December 31, 2022, we had various outstanding letters of credit totaling
$3.8 million under the Revolving Credit Facility. The remaining amount available for borrowing under the Revolving Credit Facility
as of December 31, 2022, 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 $1,174.0 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 weighted average
interest rate in effect under the Revolving Credit Facility as of December 31, 2022 was 6.2%. The interest rates in effect under the
Term Loan A and the Term Loan B as of December 31, 2022 were 6.2% and 4.8%, respectively.
VIRGINIA CREDIT AGREEMENT
On October 31, 2022, Iron Mountain Data Centers Virginia 4/5 Subsidiary, LLC, a wholly owned subsidiary of Iron Mountain Data
Centers Virginia 4/5 JV, LP, entered into a credit agreement (the "Virginia Credit Agreement") in order to finance the construction of
two data center facilities in Virginia. The Virginia Credit Agreement consists of a term loan and a letter of credit facility with the first
borrowing under the term loan expected to occur in the third quarter of 2023. Borrowings under the Virginia Credit Agreement are
guaranteed by Iron Mountain Data Centers Virginia 4/5 JV, LP, a special purpose vehicle, and not by IMI or any other subsidiary of
IMI. We have the option to borrow, in the form of term loans, an aggregate outstanding amount not to exceed approximately $205.0
million. At December 31, 2022, we had approximately $6.4 million in outstanding letters of credit under the Virginia Credit
Agreement. The Virginia Credit Agreement requires the payment of a commitment fee on any unused commitments at a rate of
0.4875%. We have the option to select between various base rates for any given borrowing under the Virginia Credit Agreement,
and the interest rate and applicable margin on such borrowings vary depending on the chosen base rate. The Virginia Credit
Agreement is scheduled to mature on October 31, 2025, at which point all obligations will become due. We have two one-year
options that allow us to extend the maturity date beyond the October 31, 2025 expiration date, subject to the conditions specified in
the Virginia Credit Agreement, including the lender's consent. As of December 31, 2022, we have no outstanding borrowings under
the Virginia Credit Agreement.
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 350.0 million 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
7.7 million Australian dollars per year.
On March 18, 2022, IM Australia amended its AUD Term Loan to (i) extend the maturity date from September 22, 2022 to
September 30, 2026 and (ii) decrease the interest rate from BBSY (an Australian benchmark variable interest rate) plus 3.875% to
BBSY plus 3.625%. The interest rate in effect under the AUD Term Loan was 6.9% as of December 31, 2022.
UK BILATERAL REVOLVING CREDIT FACILITY
Iron Mountain (UK) PLC ("IM UK") and Iron Mountain (UK) Data Centre Limited (collectively, the "UK Borrowers") have a 140.0
million British pounds sterling Revolving Credit Facility (the "UK Bilateral Revolving Credit Facility") with Barclays Bank PLC. The
maximum amount permitted to be borrowed under the UK Bilateral Revolving Credit Facility is 140.0 million British pounds sterling,
which was fully drawn as of December 31, 2022. We have the option to request additional commitments of up to 125.0 million
British pounds sterling, subject to the conditions specified in the UK Bilateral Revolving Credit Facility. The UK Bilateral Revolving
Credit Facility is secured by certain properties in the United Kingdom. IMI and subsidiaries of IMI that represent the substantial
majority of our operations in the United States and the United Kingdom guarantee all obligations under the UK Revolving Credit
Bilateral Facility.
The UK Bilateral Revolving Credit Facility was previously scheduled to mature on September 24, 2023, at which point all
obligations were to become due, with the option to extend the maturity date for an additional year, subject to the conditions
specified in the UK Bilateral Revolving Credit Facility, including the lender’s consent. On September 22, 2022, the UK Borrowers
exercised their option to extend the maturity date from September 24, 2023 to September 24, 2024. The interest rate in effect
under the UK Bilateral Revolving Credit Facility was 5.5% as of December 31, 2022.
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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.
On June 29, 2022, we amended the Accounts Receivable Securitization Program to (i) increase the maximum borrowing capacity
from $300.0 million to $325.0 million, with an option to increase the borrowing capacity to $400.0 million, (ii) change the interest
rate under Accounts Receivable Securitization Program from LIBOR plus 1.0% to SOFR plus 0.95%, with a credit spread
adjustment of 0.10% and (iii) extend the maturity date from July 1, 2023 to July 1, 2025, at which point all obligations become due.
As of December 31, 2022, the maximum availability allowed and amount outstanding under the Accounts Receivable Securitization
Program were $325.0 million and $314.7 million, respectively. Commitment fees at a rate of 35 basis points are charged on
amounts made available but not borrowed under the Accounts Receivable Securitization Program.
CASH POOLING
Certain of our subsidiaries participate in cash pooling arrangements (the "Cash Pools") to help manage global liquidity
requirements. We utilize the following Cash Pools: (i) two Cash Pools with Bank Mendes Gans, an independently operated wholly
owned subsidiary of ING Group, one of which we use to manage global liquidity requirements for our QRSs and the other for our
TRSs; (ii) two Cash Pools with JP Morgan Chase Bank, N.A. ("JPM"), one of which we use to manage liquidity requirements for our
QRSs in the Asia Pacific region and the other for our TRSs in the Asia Pacific region; and (iii) two Cash Pools with JPM, which we
entered into in the third quarter of 2022, one of which we use to manage liquidity requirements for our QRSs in the Europe, Middle
East, and Africa regions and the other for our TRSs in the Europe, Middle East, and Africa regions.
Under each of the Cash Pools, cash deposited by participating subsidiaries with certain financial institutions is pledged as security
against the debit balances of other participating subsidiaries with legal rights of offset provided to the financial institutions, and,
therefore, such 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.
LETTERS OF CREDIT
As of December 31, 2022, we had outstanding letters of credit totaling $39.8 million, of which $3.8 million reduce our borrowing
capacity under the Revolving Credit Facility (as described above). The letters of credit expire at various dates between January
2023 and March 2025.
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 other specified 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 net total lease adjusted leverage ratio
and a fixed charge coverage 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.
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The Credit Agreement uses EBITDAR-based calculations and the bond indentures use earnings before interest, taxes, depreciation
and amortization ("EBITDA") based calculations as the primary measures of financial performance for purposes of calculating
leverage and fixed charge coverage ratios. The EBITDAR- and EBITDA-based leverage calculations include our consolidated
subsidiaries, other than those we have designated as "Unrestricted Subsidiaries" as defined in the Credit Agreement and 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. 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.
Our leverage and fixed charge coverage ratios under the Credit Agreement as of December 31, 2022 are as follows:
Net total lease adjusted leverage ratio
Fixed charge coverage ratio
DECEMBER 31, 2022 MAXIMUM/MINIMUM ALLOWABLE
5.1
2.4
Maximum allowable of 7.0
Minimum allowable of 1.5
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, 2022. 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.
DERIVATIVE INSTRUMENTS
INTEREST RATE SWAP AGREEMENTS
In November 2022, we entered into a forward-starting interest rate swap agreement to limit our exposure to changes in interest
rates on future borrowings under our Virginia Credit Agreement. The forward-starting interest rate swap agreement commences in
July 2023 and expires in October 2025 (the "October 2025 Interest Rate Swap Agreement"). The October 2025 Interest Rate Swap
Agreement has an initial notional value of $4.8 million, which is contracted to increase in monthly increments beginning in August
2023 to June 2025 to a total notional value of $153.8 million. Under the October 2025 Interest Rate Swap Agreement, we will
receive variable rate interest payments based upon SOFR, in exchange for the payment of a fixed interest rate as specified in the
October 2025 Interest Rate Swap Agreement.
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. These swap agreements expired in March 2022. 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. These
forward-starting interest rate swap agreements commenced in March 2022. As of December 31, 2022, we have $350.0 million in
notional value outstanding on the interest rate swap agreements, which expire in March 2024 (the "March 2024 Interest Rate Swap
Agreements"). Under the March 2024 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 March 2024 Interest Rate Swap Agreements.
We have designated each of the interest rate swap agreements described above 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.
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In August 2019, we entered into cross-currency swap agreements whereby we notionally exchanged $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 October 2022, one of these cross-currency swap agreements was amended
to increase the notional value exchanged from approximately 49.5 million Euros at an interest rate of 3.6% to approximately 55.5
million Euros at an interest rate of (9.5%), resulting in a total notional value exchanged of approximately 105.0 million Euros at a
weighted average interest rate of approximately (3.3%).
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 300.0 million Euros at a weighted average interest rate of approximately 3.4%. These cross-
currency swap agreements expire in February 2026. In May 2022, these cross-currency swaps were amended to increase the
notional value exchanged to approximately 340.5 million Euros at a weighted average interest rate of approximately 1.2%. In
October 2022, these cross-currency swaps were further amended to increase the notional value exchanged to approximately 362.1
million Euros at a weighted average interest rate of approximately 0.2%.
See Note 6 to Notes to Consolidated Financial Statements included in this Annual Report for additional information on our
derivative instruments.
ACQUISITIONS
See Note 3 to Notes to Consolidated Financial Statements included in this Annual Report for information regarding our 2022
acquisitions.
ITRENEW
On January 25, 2022, in order to expand our ALM operations, we acquired an approximately 80% interest in ITRenew, at an agreed
upon purchase price of $725.0 million, subject to certain working capital adjustments at, and subsequent to, the closing (the
"ITRenew Transaction"). At closing, we paid approximately $748.8 million and acquired approximately $30.7 million of cash on
hand, for a net purchase price of approximately $718.1 million for the ITRenew Transaction. The acquisition agreement provides us
the option to purchase, and provides the shareholders of ITRenew the option to sell, the remaining approximately 20% interest in
ITRenew as follows: (i) approximately 16% on or after the second anniversary of the ITRenew Transaction and (ii) approximately
4% on or after the third anniversary of the ITRenew Transaction (collectively, the "Remaining Interests"). The total payments for the
Remaining Interests, based on the achievement of certain targeted performance metrics, will be no less than $200.0 million and no
more than $531.0 million (the "Deferred Purchase Obligation"). From January 25, 2022, we consolidate 100% of the revenues and
expenses associated with this business. The Deferred Purchase Obligation is reflected as a long-term liability in our Consolidated
Balance Sheet at December 31, 2022, and, accordingly, we have not reflected any non-controlling interests associated with the
ITRenew Transaction as the Remaining Interests have non-substantive equity interest rights. Subsequent increases or decreases
in the fair value estimate of the Deferred Purchase Obligation are included as a component of Other (income) expense, net in our
Consolidated Statements of Operations until the Deferred Purchase Obligation is settled or paid.
XDATA PROPERTIES
On October 5, 2022, in order to further expand our data center operations in Europe, we completed the acquisition of XData
Properties S.L.U., a data center colocation space and solutions provider with a data center in Spain, which we accounted for as an
asset acquisition, for (i) cash consideration of 78.9 million Euros (or approximately $78.2 million, based upon the exchange rate
between the Euro and the United States dollar on the closing date of this acquisition), subject to adjustments, and (ii) up to 10.0
million Euros (or approximately $9.9 million, based upon the exchange rate between the Euro and the United States dollar on the
closing date of this acquisition) of additional consideration, payable based on the achievement of certain power connection
milestones through December 2024.
OTHER 2022 ACQUISITIONS
In addition to the transactions noted above, during the year ended December 31, 2022, in order to enhance our existing operations
in Morocco and expand our fine arts operations in China - Hong Kong S.A.R. and North America, we completed the acquisition of a
records management company, a fine arts company and the assets of a second fine arts company, for a total combined purchase
price of approximately $11.6 million, including deferred purchase obligations, purchase price holdbacks and other deferred
payments of approximately $4.6 million.
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INVESTMENTS
Part II
See Note 5 to Notes to Consolidated Financial Statements included in this Annual Report for information regarding our joint
ventures.
CLUTTER JOINT VENTURE
In February 2022, the joint venture formed by MakeSpace Labs, Inc. and us (the "MakeSpace JV") entered into an agreement with
Clutter, Inc. ("Clutter") pursuant to which the equityholders of the MakeSpace JV contributed their ownership interests in the
MakeSpace JV and Clutter’s shareholders contributed their ownership interests in Clutter to create a newly formed venture (the
"Clutter JV"). In exchange for our 49.99% interest in the MakeSpace JV, we received an approximate 27% interest in the Clutter JV
(the "Clutter Transaction"). As a result of the Clutter Transaction, we recognized a gain related to our contributed interest in the
MakeSpace JV of approximately $35.8 million, which was recorded to Other, net, a component of Other expense (income), net
during the year ended December 31, 2022.
WEB WERKS JOINT VENTURE
In April 2021, we closed on an agreement to form a joint venture (the "Web Werks JV") with the shareholders of Web Werks India
Private Limited, a colocation data center provider in India. In connection with the formation of the Web Werks JV, we made an initial
investment of approximately 3,750.0 million Indian rupees (or approximately $50.1 million, based upon the exchange rate between
the United States dollar and Indian rupee on the closing date of the initial investment) in exchange for a noncontrolling interest in
the form of convertible preference shares in the Web Werks JV. In August 2022, we made an additional investment of
approximately 3,750.0 million Indian rupees (or approximately $46.1 million, based upon the exchange rate between the United
States dollar and Indian rupee on the date of the additional investment) in exchange for an additional interest in the form of
convertible preference shares in the Web Werks JV (the "Second Web Werks JV Investment"). Under the terms of the Web Werks
JV shareholder agreement, we are required to make an additional investment of approximately 3,750.0 million Indian rupees by
May 2023. Subsequent to the Second Web Werks JV Investment, the shareholders of Web Werks retained control of the financial
and operating decisions of the Web Werks JV through their control of Web Werks JV's board of directors. As we do not control the
board of directors or the key management decisions of the Web Werks JV, we account for our interest in the Web Werks JV as an
equity method investment.
JOINT VENTURE SUMMARY
The following joint ventures are accounted for as equity method investments and are presented as a component of Other within
Other assets, net in our Consolidated Balance Sheet. The carrying values and equity interests in our joint ventures at December
31, 2022 are as follows (in thousands):
Web Werks JV
Joint venture with AGC Equity Partners
Clutter JV
NET OPERATING LOSSES
DECEMBER 31, 2022
CARRYING VALUE
EQUITY INTEREST
$
98,278
37,194
54,172
53.58 %
20.00 %
26.73 %
At December 31, 2022, we have federal net operating loss carryforwards of $63.5 million which can be carried forward indefinitely,
of which $57.1 million is expected to be realized to reduce future federal taxable income. We have assets for foreign net operating
losses of $81.9 million, with various expiration dates (and in some cases no expiration date), subject to a valuation allowance of
approximately 56.0%.
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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, 2022 related to cash and cash equivalents held in 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 $75.0 million. As of December 31, 2022, our cash and
cash equivalents balance was $141.8 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, 2022, we had $2,341.4 million of variable rate debt outstanding with a weighted average variable interest rate
of approximately 5.8%, and $8,308.9 million of fixed rate debt outstanding. As of December 31, 2022, approximately 78% 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, 2022 would have been reduced by approximately $17.3 million.
See Note 6 to Notes to Consolidated Financial Statements included in this Annual Report for a discussion on our interest rate
swaps and Note 7 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, 2022.
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 with and between certain of our subsidiaries of differing functional currencies, resulting
in foreign transaction gains or losses based on period-end exchange rates.
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 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. IM UK has financed a portion of its capital needs
through the issuance of the GBP Notes and through borrowings under the UK Bilateral Revolving Credit Facility, each of which are
denominated in British pounds sterling. 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.
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 swap
agreements are marked to market at the end of 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, which are recorded as either a component of (i) Prepaid expenses and other or (ii)
Other within Other assets, net, while unrecognized losses are recognized as liabilities, which are recorded as either a component
of (i) Accrued expenses and other current liabilities or (ii) Other long-term liabilities in our Consolidated Balance Sheets.
See Note 6 to Notes to Consolidated Financial Statements included in this Annual Report for a discussion on our cross-currency
swap agreements.
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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 2022 functional currencies, relative to the United
States dollar, would result in a reduction in our equity of approximately $377.4 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, 2022 (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, 2022.
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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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, 2022, 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, 2022, 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, 2022, of the Company and our report
dated February 23, 2023, 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 23, 2023
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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, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control
over financial reporting.
ITEM 9B. OTHER INFORMATION.
Not Applicable.
ITEM 9C. DISCLOSURE REGARDING FOREIGN
JURISDICTIONS THAT PREVENT INSPECTIONS.
Not Applicable.
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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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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 (PCAOB ID No. 34)
Consolidated Balance Sheets, December 31, 2022 and 2021
Consolidated Statements of Operations, Years Ended December 31, 2022, 2021 and 2020
Consolidated Statements of Comprehensive Income (Loss), Years Ended December 31, 2022, 2021 and 2020
Consolidated Statements of Equity, Years Ended December 31, 2022, 2021 and 2020
Consolidated Statements of Cash Flows, Years Ended December 31, 2022, 2021 and 2020
Notes to Consolidated Financial Statements
Financial Statement Schedule III—Schedule of Real Estate and Accumulated Depreciation
PAGE
67
70
71
72
73
74
75
129
(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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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, 2022 and 2021, 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, 2022, 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, 2022 and 2021, and the results of its operations and
its cash flows for each of the three years in the period ended December 31, 2022, 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, 2022, 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 23, 2023, 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 MATTERS
The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that
were communicated or required to be communicated to the audit committee and that (1) relate 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 matters below, providing a separate opinion on the critical audit matters or on the
accounts or disclosures to which they relate.
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Part IV
GOODWILL - GLOBAL DATA CENTER AND ASSET LIFECYCLE MANAGEMENT
REPORTING UNITS - REFER TO NOTE 2.L. 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
Company determined the fair value of the Asset Lifecycle Management reporting unit using the Discounted Cash Flow Model. 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 balances
allocated to the Global Data Center and Asset Lifecycle Management reporting units were $408 million and $617 million,
respectively, as of October 1, 2022 (goodwill impairment testing date). The fair value of both the Global Data Center and Asset
Lifecycle Management reporting units exceeded its respective carrying value as of the measurement date and, therefore, no
impairment was recognized.
The fair value exceeded the carrying value of the Global Data Center and Asset Lifecycle Management reporting units by less than
30%, 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
"Projected Cash Flows"), the selection of discount rates, and Adjusted EBITDA multiples for these reporting units included the
following, among others:
• We evaluated management’s ability to accurately forecast by comparing actual results to management’s historical forecasts.
• We evaluated the reasonableness of management’s Projected Cash Flows 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 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.
• 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 for the Global Data Center reporting unit.
• We tested the effectiveness of controls over the evaluation of goodwill for impairment, including those over the Projected Cash
Flows and discount rates and, additionally, for the Global Data Center reporting unit, the selection of the Adjusted EBITDA
multiples.
ACQUISITIONS - ITRENEW BUSINESS - SUPPLIER RELATIONSHIP INTANGIBLE ASSET-
REFER TO NOTE 3 TO THE FINANCIAL STATEMENTS
CRITICAL AUDIT MATTER DESCRIPTION
The Company completed the acquisition of 80% of the ITRenew business for $725 million on January 25, 2022. The acquisition
included a deferred purchase obligation for the Company to acquire the remaining ownership percentage based on achievement of
certain performance targets. The Company determined that the fair value of the deferred purchase obligation was $275 million. The
Company accounted for the acquisition under the acquisition method of accounting for business combinations. Accordingly, the
purchase price was allocated to the assets acquired and liabilities assumed based on their respective fair values, including a
supplier relationship intangible asset of $472 million. Management estimated the fair value of the supplier relationship intangible
asset using the multi-period excess earnings method, which is a specific discounted cash flow method. The fair value determination
of the supplier relationship intangible asset required management to make significant estimates and assumptions related to future
cash flows and the selection of the discount rate.
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We identified the supplier relationship intangible asset for ITRenew business as a critical audit matter because of the significant
estimates and assumptions management made to determine the fair value of the asset. This required a high degree of auditor
judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit
procedures to evaluate the reasonableness of management’s forecasts of future cash flows and the selection of the discount rate
for the supplier relationship intangible asset.
HOW THE CRITICAL AUDIT MATTER WAS ADDRESSED IN THE AUDIT
Our audit procedures related to the forecasts of future cash flows and the selection of the discount rate for the supplier relationship
intangible asset included the following, among others:
• We assessed the reasonableness of management’s forecasts of future cash flows by comparing the projections to historical
results and certain external market information.
• With the assistance of our fair value specialists, we evaluated the reasonableness of the (1) valuation methodology and (2)
discount rate by:
◦ Testing the source information underlying the determination of the discount rate and testing the mathematical accuracy
of the calculation.
◦ Developing a range of independent estimates and comparing those to the discount rate selected by management.
• We evaluated whether the estimated future cash flows were consistent with evidence obtained in other areas of the audit.
• We tested the effectiveness of controls over the valuation of the supplier relationship intangible asset, including management’s
controls over forecasts of future cash flows and selection of the discount rate.
/s/ DELOITTE & TOUCHE LLP
Boston, Massachusetts
February 23, 2023
We have served as the Company’s auditor since 2002.
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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 $54,143 and $62,009 as of December 31, 2022 and 2021,
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 and supplier relationships and other intangible assets
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
290,830,296 shares and 289,757,061 shares as of December 31, 2022 and 2021, 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,
2022
2021
$
141,797 $
255,828
1,174,915
230,433
1,547,145
9,025,765
961,419
224,020
1,441,267
8,647,303
(3,910,321)
(3,979,159)
5,115,444
4,668,144
4,882,734
1,423,145
2,583,704
588,342
9,477,925
4,463,531
1,181,043
2,314,422
381,624
8,340,620
$
16,140,514 $
14,450,031
$
87,546 $
469,198
1,031,910
328,910
1,917,564
10,481,449
2,429,167
317,376
263,005
309,428
369,145
1,032,537
307,470
2,018,580
8,962,513
2,171,472
144,053
223,934
95,160
72,411
—
2,908
—
2,898
4,468,035
4,412,553
(3,392,272)
(3,221,152)
(442,003)
636,668
125
636,793
(338,347)
855,952
1,116
857,068
$
16,140,514 $
14,450,031
The accompanying notes are an integral part of these consolidated financial statements.
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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,
2022
2021
2020
$
3,034,023 $
2,870,119 $
2,754,091
2,069,551
1,621,412
1,393,179
5,103,574
4,491,531
4,147,270
Cost of sales (excluding depreciation and amortization)
2,189,120
1,887,229
1,757,342
Selling, general and administrative
Depreciation and amortization
Acquisition and Integration Costs
Restructuring and other transformation
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 $8,276, $7,341 and $8,312 in 2022, 2021
and 2020, respectively)
Other (Income) Expense, Net
Net Income (Loss) Before Provision (Benefit) for Income Taxes
Provision (Benefit) for Income Taxes
Net Income (Loss)
Less: Net Income (Loss) Attributable to Noncontrolling Interests
Net Income (Loss) Attributable to Iron Mountain Incorporated
Earnings (Losses) Per Share Attributable to Iron Mountain Incorporated:
Basic
Diluted
Weighted Average Common Shares Outstanding:
Basic
Diluted
1,140,577
1,022,559
727,595
47,746
41,933
—
680,422
12,764
206,426
—
949,215
652,069
—
194,396
23,000
(93,268)
(172,041)
(363,537)
4,053,703
3,637,359
3,212,485
1,049,871
854,172
934,785
488,014
417,961
(69,781)
(192,804)
631,638
69,489
562,149
5,168
629,015
176,290
452,725
2,506
418,535
143,545
372,705
29,609
343,096
403
556,981 $
450,219 $
342,693
1.92 $
1.90 $
1.56 $
1.55 $
1.19
1.19
290,812
292,444
289,457
290,975
288,183
288,643
$
$
$
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 (Loss) Income:
Foreign Currency Translation Adjustment
Change in Fair Value of Derivative Instruments
Total Other Comprehensive (Loss) Income
Comprehensive Income (Loss)
Comprehensive Income (Loss) Attributable to Noncontrolling Interests
YEAR ENDED DECEMBER 31,
2022
2021
2020
$
562,149 $
452,725 $
343,096
(113,966)
(136,410)
9,829
(104,137)
458,012
4,687
52,380
(84,030)
368,695
930
45,779
(39,947)
5,832
348,928
(453)
Comprehensive Income (Loss) Attributable to Iron Mountain Incorporated
$
453,325 $
367,765 $
349,381
The accompanying notes are an integral part of these consolidated financial statements.
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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
(DISTRIBUTIONS IN
EXCESS OF
EARNINGS)
EARNINGS IN
EXCESS OF
DISTRIBUTIONS
ACCUMULATED
OTHER
COMPREHENSIVE
ITEMS, NET
NONCONTROLLING
INTERESTS
REDEEMABLE
NONCONTROLLING
INTERESTS
Balance, December 31, 2019
$ 1,464,227
287,299,645
$
2,873
$ 4,298,566
$
(2,574,896) $
(262,581) $
265
$
Issuance of shares under
employee stock purchase plan
and option plans and stock-
based compensation
Changes in equity related to
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)
—
—
Balance, December 31, 2020
1,136,729
288,273,049
2,883
4,340,078
(2,950,339)
(255,893)
Issuance of shares under
employee stock purchase plan
and option plans and stock-
based compensation
Changes in equity related to
redeemable noncontrolling
interests
Parent cash dividends
declared
Foreign currency translation
adjustment
Change in fair value of
derivative instruments
Net income (loss)
Noncontrolling interests equity
contributions
Noncontrolling interests
dividends
Purchase of noncontrolling
interests
Redemption of noncontrolling
interests
Balance, December 31, 2021
Issuance and net settlement of
shares under employee stock
purchase plan and option
plans and stock-based
compensation
Changes in equity related to
noncontrolling interests
Parent cash dividends
declared
Foreign currency translation
adjustment
Change in fair value of
derivative instruments
Net income (loss)
Noncontrolling interests equity
contributions and related costs
Noncontrolling interests
dividends
Redemption of noncontrolling
interests
Balance, December 31, 2022
84,004
1,484,012
15
83,989
(11,514)
(721,032)
(135,165)
52,380
450,355
—
—
1,311
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(11,514)
—
—
—
—
—
—
—
—
—
—
(721,032)
—
—
450,219
—
—
—
—
—
—
—
52,380
—
—
—
—
—
857,068
289,757,061
2,898
4,412,553
(3,221,152)
(338,347)
52,012
1,073,235
10
52,002
9,734
(728,101)
(114,079)
9,829
557,343
(2,494)
—
(4,519)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
6,099
—
—
—
—
(2,619)
—
—
—
—
(728,101)
—
—
556,981
—
—
—
—
—
—
(113,485)
9,829
—
—
—
—
—
—
—
113
—
(378)
—
—
—
—
—
—
136
—
—
1,311
—
1,116
—
3,635
—
(594)
—
362
125
—
(4,519)
(134,834)
(331)
67,682
—
(4,924)
—
(969)
—
781
(2,765)
59,805
—
11,682
—
(1,245)
—
2,370
2,200
(2,450)
2,567
(2,518)
72,411
—
(8,264)
—
113
—
4,806
29,047
(2,953)
—
$
636,793
290,830,296
$
2,908
$ 4,468,035
$
(3,392,272) $
(442,003) $
125
$
95,160
The accompanying notes are an integral part of these consolidated financial statements.
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Part IV
IRON MOUNTAIN INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
Cash Flows from Operating Activities:
Net income (loss)
Adjustments to reconcile net income (loss) to cash flows from operating activities:
Depreciation
Amortization (includes amortization of deferred financing costs and discounts of $18,044, $16,548 and
$17,376 in 2022, 2021 and 2020, respectively)
Intangible impairments
Revenue reduction associated with amortization of customer inducements 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
Loss (gain) on divestments and deconsolidations
Gain associated with the remeasurement of the Deferred Purchase Obligation
Gain associated with Clutter Transaction
Foreign currency transactions and other, net
(Increase) decrease in assets
(Decrease) increase in liabilities
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
Net proceeds from IPM Divestment
Investments in joint ventures and other investments
Proceeds from sales of property and equipment and other, net
Cash Flows from Investing Activities
Cash Flows from Financing Activities:
YEAR ENDED DECEMBER 31,
2021
2020
2022
$
562,149 $
452,725 $
343,096
478,984
465,072
447,562
266,655
—
8,119
56,861
(55,920)
671
(93,268)
105,825
(93,600)
(35,821)
(20,524)
(224,641)
(27,795)
927,695
(875,378)
(803,690)
(2,143)
(6,062)
(70,336)
—
(73,233)
170,419
231,898
—
8,852
61,001
28,703
—
(172,041)
(178,983)
—
—
(6,656)
(174,206)
42,537
758,902
(611,082)
(203,998)
(5,892)
(7,402)
(58,524)
213,878
(78,623)
278,330
(1,660,423)
(473,313)
221,883
23,000
9,878
37,674
(12,986)
68,300
(363,537)
—
—
—
78,437
(15,443)
149,793
987,657
(438,263)
(118,581)
(4,346)
(10,644)
(60,020)
—
(18,250)
564,664
(85,440)
Repayment of revolving credit facility, term loan facilities and other debt
(11,593,452)
(5,164,483)
(8,604,394)
Proceeds from revolving credit facility, term loan facilities and other debt
12,949,766
4,972,214
Early redemption of senior subordinated and senior notes, including call premiums
Net proceeds from sales of senior notes
Debt financing and equity contribution from noncontrolling interests
Debt repayment and equity distribution to noncontrolling interests
Repurchase of noncontrolling interest
Parent cash dividends
Net (payments) proceeds associated with employee stock-based awards
Other, net
Cash Flows from Financing Activities
Effect of Exchange Rates on Cash and Cash Equivalents
(Decrease) increase in Cash and Cash Equivalents
Cash and Cash Equivalents, Beginning of Year
Cash and Cash Equivalents, 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
Deferred Purchase Obligations
Dividends Payable
$
$
$
$
$
$
$
—
—
29,172
(2,953)
(4,519)
(724,388)
(4,849)
(9,570)
639,207
(20,510)
(114,031)
255,828
—
737,812
—
(2,450)
(75,000)
(718,340)
25,860
3,581
(220,806)
(14,018)
50,765
205,063
141,797 $
255,828 $
7,939,458
(2,942,554)
3,465,000
—
(2,765)
—
(716,290)
321
(25,475)
(886,699)
(4,010)
11,508
193,555
205,063
482,673 $
428,111 $
99,631 $
130,292 $
390,332
43,468
49,836 $
172,589 $
193,033 $
50,552 $
88,210 $
— $
55,782
91,528
—
194,272 $
190,559 $
187,867
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, 2022
(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 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.
Our asset lifecycle management ("ALM") business allows us to provide end-to-end asset lifecycle services for hyperscale,
corporate data center and corporate end-user device assets.
In September 2022, we announced a global program designed to accelerate the growth of our business ("Project Matterhorn").
Project Matterhorn will focus on the formation of a solution-based sales approach that is designed to allow us to optimize our
shared services and best practices to better serve our customers’ needs. We will be investing to accelerate growth and to capture a
greater share of the large, global addressable markets in which we operate. See Note 13.
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. The accompanying financial statements include the results of those entities over which we
have a controlling financial interest and we are deemed to be the primary beneficiary. 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.r.
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IRON MOUNTAIN INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
D. CASH AND CASH EQUIVALENTS
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. 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. 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 approximately 1% of revenue during the years ended December 31, 2022, 2021 and 2020, 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.
The rollforward of the allowance for doubtful accounts and credit memo reserves is as follows:
YEAR ENDED DECEMBER 31,
2022
2021
2020
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
$
62,009 $
62,891 $
13,666 $
(84,423) $
56,981
42,856
47,931
55,118
26,896
34,411
(69,799)
(75,404)
54,143
62,009
56,981
(1) Primarily consists of the issuance of credit memos, the write-off of accounts receivable and the impact associated with currency translation adjustments.
F. INVENTORY
Inventory is stated at the lower of cost or net realizable value, based on a first-in, first-out methodology. Our inventory primarily
consists of IT-related assets including memory, central processing units, hard drives, adaptors and networking. All of our inventory
is considered finished goods. Inventory is included as a component of Prepaid expenses and other in our Consolidated Balance
Sheets. At December 31, 2022, we have inventory of approximately $11,726, net of related reserves for obsolete, excess and slow-
moving inventory, related to our ALM business. We had no inventory as of December 31, 2021.
G. 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, 2022 and 2021 related to cash and cash equivalents held in 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.p.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
H. PREPAID EXPENSES AND ACCRUED EXPENSES
Prepaid expenses totaled $114,130 and $109,478 as of December 31, 2022 and 2021, respectively. There were no other items
greater than 5% of total current assets included within Prepaid expenses and other as of December 31, 2022 and 2021.
Accrued expenses and other current liabilities with items greater than 5% of total current liabilities are shown separately and
consist of the following:
DESCRIPTION
Interest
Dividends
Operating lease liabilities
Other
DECEMBER 31,
2022
2021
$
128,272 $
194,272
288,738
420,628
124,764
190,559
259,597
457,617
Accrued expenses and other current liabilities
$
1,031,910 $
1,032,537
I. 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
Property, plant and equipment (including financing leases in the respective categories), 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,
2022
2021
$
486,715 $
3,336,778
1,079,419
2,058,054
493,128
49,610
585,792
936,269
372,411
3,391,143
1,054,757
2,075,473
494,464
50,692
823,649
384,714
$
9,025,765 $
8,647,303
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.
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IRON MOUNTAIN INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
CAPITALIZED INTEREST
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, 2022,
2021 and 2020, capitalized interest is as follows:
YEAR ENDED DECEMBER 31,
2022
2021
2020
Capitalized interest
$
14,078 $
12,673 $
14,321
INTERNAL USE SOFTWARE
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, 2022, 2021 and 2020, capitalized costs associated with the development of internal use
computer software projects are as follows:
YEAR ENDED DECEMBER 31,
2022
2021
2020
Capitalized costs associated with the development of internal use computer
software projects
$
44,152 $
48,557 $
38,329
ASSET RETIREMENT OBLIGATIONS
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, 2022 and 2021 were $36,119 and $36,493, respectively, and are
included in Other Long-term Liabilities in our Consolidated Balance Sheets.
J. 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.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
We account for all leases, both operating and financing, in accordance with Accounting Standards Codification ("ASC") Topic 842
Leases, ("ASC 842"). Our accounting policy 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. We 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.
Operating and financing lease right-of-use assets and lease liabilities as of December 31, 2022 and 2021 are as follows:
DESCRIPTION
Assets:
DECEMBER 31,
2022
2021
Operating lease right-of-use assets(1)
Financing lease right-of-use assets, net of accumulated depreciation(2)(3)
$
2,583,704 $
2,314,422
251,690
298,049
Liabilities:
Current
Operating lease liabilities
Financing lease liabilities(3)
Long-term
Operating lease liabilities
Financing lease liabilities(3)
$
288,738 $
43,857
259,597
41,168
$
2,429,167 $
2,171,472
289,048
315,561
(1) At December 31, 2022 and 2021, 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, 2022, these assets are comprised of approximately 64% real estate related assets and 36% non-real estate related assets. At December 31,
2021, 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.
The components of the lease expense for the years ended December 31, 2022, 2021 and 2020 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,
2022
2021
2020
574,115 $
545,097 $
499,464
42,708 $
50,970 $
17,329
19,808
51,629
19,942
$
$
(1) Operating lease cost, the majority of which is included in Cost of sales, includes variable lease costs of $119,184, $111,949 and $111,501 for the years ended
December 31, 2022, 2021 and 2020, respectively.
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IRON MOUNTAIN INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Weighted average remaining lease terms and discount rates as of December 31, 2022 and 2021 are as follows:
Remaining Lease Term
Discount Rate
DECEMBER 31, 2022
DECEMBER 31, 2021
OPERATING LEASES FINANCING LEASES OPERATING LEASES FINANCING LEASES
11.3 years
6.4 %
10.6 years
5.8 %
10.9 years
6.6 %
10.9 years
5.9 %
The estimated minimum future lease payments (receipts) as of December 31, 2022 are as follows:
YEAR
2023
2024
2025
2026
2027
Thereafter
OPERATING LEASES(1) SUBLEASE INCOME FINANCING LEASES(1)
$
435,386 $
(9,499) $
417,058
392,117
360,684
335,269
1,962,941
(5,766)
(3,243)
(2,528)
(3,521)
—
52,340
46,244
119,130
31,232
15,778
144,701
409,425
76,520
332,905
Total minimum lease payments (receipts)
3,903,455 $
(24,557)
Less amounts representing interest or imputed interest
Present value of lease obligations
$
1,185,550
2,717,905
$
(1) Estimated minimum future lease payments exclude variable common area maintenance charges, insurance and taxes.
At December 31, 2022, we have 10 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 $270,023 and
have lease terms that range from 10 to 15 years. Each of these leases is expected to commence during 2023.
Other information: Supplemental cash flow information relating to our leases for the years ended December 31, 2022, 2021 and
2020 is as follows:
YEAR ENDED DECEMBER 31,
CASH PAID FOR AMOUNTS INCLUDED IN MEASUREMENT OF LEASE
LIABILITIES:
2022
2021
2020
Operating cash flows used in operating leases
$
409,163 $
392,987 $
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)
17,329
44,869
19,808
46,118
$
179,094 $
540,830
144,310 $
282,490
360,088
19,942
47,829
143,382
370,011
K. LONG-LIVED ASSETS
We review long-lived 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.
80
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IRON MOUNTAIN INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Gain on disposal/write-down of property, plant and equipment, net for the years ended December 31, 2022, 2021 and 2020 is as
follows:
Gain on disposal/write-
down of property, plant
and equipment, net
$
2022
YEAR ENDED DECEMBER 31,
2021
2020
93,268 $
172,041 $
363,537
The gains primarily
consist of(1):
• Gains associated with sale and
sale-leaseback transactions of
approximately $164,000, of which
(i) approximately $127,400 relates
to sale-leaseback transactions of
five facilities in the United Kingdom
during the second quarter of 2021
and (ii) approximately $36,600
relates to sale and sale-leaseback
transactions of nine facilities in the
United States during the fourth
quarter of 2021.
• Gains associated with sale-
leaseback transactions of
approximately $342,100, of which
(i) approximately $265,600 relates
to sale-leaseback transactions of 14
facilities in the United States during
the fourth quarter of 2020 and (ii)
approximately $76,400 relates to
sale-leaseback transactions of two
facilities in the United States during
the third quarter of 2020.
• Gains of approximately $24,100
associated with the Frankfurt JV
Transaction (as defined in Note 5).
• Gains associated with sale and
sale-leaseback transactions of
approximately $94,500, of which (i)
approximately $49,000 relates to
sale and sale-leaseback
transactions of 11 facilities and
parcels of land in the United States
during the second quarter of 2022,
(ii) approximately $17,000 relates to
sale-leaseback transactions of two
facilities in the United States and
one in Canada during the third
quarter of 2022 and (iii)
approximately $28,500 relates to
sale and sale-leaseback
transactions of 12 facilities and one
parcel of land in the United States
and one facility in the United
Kingdom during the fourth quarter
of 2022.
(1) The gains recognized during the years ended December 31, 2022, 2021 and 2020 are the result of our program to monetize a small portion of our industrial assets
through sale and sale-leaseback transactions. The terms for these leases are consistent with the terms of our lease portfolio, which are disclosed in Note 2.j.
L. 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 test goodwill annually on October 1, and more frequently if impairment indicators arise that would require an interim test. The
following is a discussion regarding (i) interim goodwill impairment review for our Fine Arts reporting unit during the first quarter of
2020, (ii) the reporting units at which level we tested goodwill for impairment as of October 1, 2021 and the composition of these
reporting units at December 31, 2021 (including the amount of goodwill associated with each reporting unit), (iii) interim reporting
unit changes and goodwill impairment review during the second quarter of 2022 and (iv) the reporting units at which level we tested
goodwill for impairment as of October 1, 2022 and the composition of these reporting units at December 31, 2022 (including the
amount of goodwill associated with each reporting unit).
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IRON MOUNTAIN INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
I. INTERIM GOODWILL IMPAIRMENT REVIEW - FINE ARTS, FIRST QUARTER OF 2020
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, 2021
Our reporting units at which level we performed our goodwill impairment analysis as of October 1, 2021 were as follows:
• North America Records and Information Management ("North
• Asia Records and Information Management ("Asia RIM")
America RIM")
• Europe Records and Information Management ("Europe RIM")
• Latin America Records and Information Management ("Latin
America RIM")
• Australia and New Zealand Records and Information
Management ("ANZ RIM")
• Global Data Center
• Fine Arts
• Entertainment 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, 2021 and December 31, 2021.
GOODWILL BY REPORTING UNIT AS OF DECEMBER 31, 2021
The carrying value of goodwill, net for each of our reporting units described above as of December 31, 2021 is as follows:
SEGMENT
Global RIM (as defined in Note 11) Business
REPORTING UNIT
North America RIM
Europe RIM
Latin America RIM
ANZ RIM
Asia RIM
Global Data Center
Fine Arts
Entertainment Services
Global Data Center Business
Corporate and Other
Total
CARRYING VALUE AS OF DECEMBER 31, 2021
$
$
2,720,049
624,502
107,174
284,042
240,494
426,074
27,905
33,291
4,463,531
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
III. 2022 REPORTING UNIT CHANGES
During the second quarter of 2022, as a result of the realignment of our global managerial structure, we reassessed the
composition of our reportable segments (see Note 11 for a description and definition of our reportable segments) as well as our
reporting units.
We note the following changes to our reporting units as a result of the reassessment described above:
• our former Europe RIM reporting unit is now managed as two separate reporting units: (i) our Middle East, North Africa and
Turkey ("MENAT") businesses will comprise our "MENAT RIM" reporting unit and (ii) our other businesses in Europe and
South Africa ("ESA") will comprise our "ESA RIM" reporting unit;
• our former ANZ RIM and Asia RIM reporting units are now managed as one "APAC RIM" reporting unit; and
• our ALM business, which includes our legacy secure IT asset disposition business (which was previously primarily included in
our North America RIM reporting unit) and the business acquired through our acquisition of Intercept Parent, Inc.
("ITRenew"), will comprise our newly formed "ALM" reporting unit.
There were no changes to our Latin America RIM, Global Data Center and Fine Arts reporting units. We have reassigned goodwill
associated with the reporting units impacted by the reorganization on a relative fair value basis, where appropriate. The fair value
of each of our new reporting units was determined based on the application of a combined weighted average approach of
preliminary fair value multiples of revenue and earnings and discounted cash flow techniques. These fair values represent our best
estimate and preliminary assessment of goodwill allocations to each of the new reporting units on a relative fair value basis. We
have completed an interim goodwill impairment analysis before and after the reporting unit changes, and we have concluded that
the goodwill associated with each of our reporting units was not impaired.
IV. REPORTING UNITS AS OF OCTOBER 1, 2022
Our reporting units at which level we performed our goodwill impairment analysis as of October 1, 2022 were as follows:
• North America RIM
• ESA RIM
• MENAT RIM
• Latin America RIM
• APAC RIM
• Entertainment Services
• Global Data Center
• Fine Arts
• ALM
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, 2022 and December 31, 2022.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
GOODWILL BY REPORTING UNIT AS OF DECEMBER 31, 2022
The carrying value of goodwill, net for each of our reporting units described above as of December 31, 2022 is as follows:
SEGMENT
Global RIM Business
Global Data Center Business
Corporate and Other
Total
REPORTING UNIT
North America RIM
ESA RIM
MENAT RIM
Latin America RIM
APAC RIM
Entertainment Services
Global Data Center
Fine Arts
ALM
CARRYING VALUE AS OF DECEMBER 31, 2022
$
$
2,667,400
521,949
25,007
109,069
497,792
31,729
418,502
33,908
577,378
4,882,734
The fair value of our reporting units has 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 11)
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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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The changes in the carrying value of goodwill attributable to each reportable segment for the years ended December 31, 2022 and
2021 are as follows:
GLOBAL RIM
BUSINESS
GLOBAL
DATA
CENTER
BUSINESS
CORPORATE
AND OTHER
TOTAL
CONSOLIDATED
$
4,022,641 $
436,987 $
97,981 $
4,557,609
Goodwill balance, net of accumulated amortization, as of December 31,
2020
Non-tax deductible goodwill acquired during the year
Goodwill allocated to IPM Divestment
Fair value and other adjustments
Currency effects
14,406
—
(6,091)
(58,104)
—
—
—
(10,913)
Goodwill balance, net of accumulated amortization, as of December 31,
2021
3,972,852
426,074
Deductible goodwill acquired during the year
Non-tax deductible goodwill acquired during the year
Fair value and other adjustments(1)
Currency effects
—
696
(12,199)
(108,403)
—
—
—
(7,572)
13,141
(46,105)
(1,268)
856
64,605
912
546,693
384
(1,308)
27,547
(46,105)
(7,359)
(68,161)
4,463,531
912
547,389
(11,815)
(117,283)
Goodwill balance, net of accumulated amortization, as of December 31,
2022
Accumulated Goodwill Impairment Balance as of December 31, 2021
Accumulated Goodwill Impairment Balance as of December 31, 2022
$
$
$
3,852,946 $
418,502 $
611,286 $
4,882,734
132,409 $
132,409 $
— $
— $
26,011 $
26,011 $
158,420
158,420
(1) This amount primarily represents an adjustment to goodwill as a result of the deconsolidation of certain businesses, as described in Note 4.
M. FINITE-LIVED INTANGIBLE ASSETS AND LIABILITIES
I. CUSTOMER AND SUPPLIER RELATIONSHIP INTANGIBLE ASSETS
Customer and supplier 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 and supplier relationship intangible
assets are recorded based upon estimates of their fair value.
II. CUSTOMER INDUCEMENTS
Payments that are made to a customer in order to terminate the customer’s storage of records with its current records management
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 Withdrawal Fees that generally equal or exceed the amount of the unamortized Customer Inducement
intangible asset.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
The gross carrying amount and accumulated amortization of our finite-lived intangible assets as of December 31, 2022 and 2021,
respectively, are as follows:
DESCRIPTION
Assets:
Customer and supplier relationship intangible
assets(1)
Customer inducements(1)
Data center lease-based intangible assets(1)(2)
Third-party commissions asset and other(3)
Liabilities:
DECEMBER 31, 2022
DECEMBER 31, 2021
GROSS
CARRYING
AMOUNT
ACCUMULATED
AMORTIZATION
NET
CARRYING
AMOUNT
GROSS
CARRYING
AMOUNT
ACCUMULATED
AMORTIZATION
NET
CARRYING
AMOUNT
$ 2,162,154 $
(823,392) $ 1,338,762 $ 1,835,949 $
(763,943) $ 1,072,006
47,794
272,649
83,297
(26,158)
(209,902)
(28,581)
21,636
62,747
54,716
51,403
278,904
33,947
(28,400)
(192,870)
(13,716)
23,003
86,034
20,231
Data center below-market leases(4)
$
12,831 $
(7,806) $
5,025 $
12,782 $
(6,923) $
5,859
(1)
Included in Customer and supplier relationship and other intangible assets in the accompanying Consolidated Balance Sheets as of December 31, 2022 and 2021.
(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, 2022 and 2021.
Included in Other long-term liabilities in the accompanying Consolidated Balance Sheets as of December 31, 2022 and 2021.
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(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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, 2022, 2021 and 2020 is as follows:
Amortization expense included in depreciation and amortization associated with:
Customer and supplier 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,
2022
2021
2020
$
156,779 $
117,761 $
117,514
16,955
16,148
42,333
6,987
42,637
7,004
Customer inducements and data center above-market and below-market leases
$
8,119 $
8,852 $
9,878
Estimated amortization expense for existing finite-lived intangible assets (excluding Contract Fulfillment Costs, as defined and
disclosed in Note 2.s.) is as follows:
ESTIMATED AMORTIZATION
YEAR
2023
2024
2025
2026
2027
Thereafter
INCLUDED IN DEPRECIATION
AND AMORTIZATION
$
181,866 $
177,512
175,963
146,812
124,434
648,895
REVENUE REDUCTION ASSOCIATED WITH
CUSTOMER INDUCEMENTS
AND DATA CENTER ABOVE-MARKET AND
BELOW-MARKET LEASES
6,198
3,997
2,504
1,909
1,299
1,447
N. 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 (income) expense, net. See Note 7.
O. 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 dollar and
the currencies of 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, 2022 and 2021, none of our derivative instruments contained credit-risk related contingent
features. See Note 6.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
P. 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, 2022 and 2021, respectively,
are as follows:
FAIR VALUE MEASUREMENTS AT DECEMBER 31, 2022 USING
DESCRIPTION
Money Market Funds(1)
Time Deposits(1)
Trading Securities
Derivative Assets(4)
Derivative Liabilities(4)
Deferred Purchase Obligations(5)
TOTAL CARRYING
VALUE AT
DECEMBER 31, 2022
QUOTED PRICES IN
ACTIVE MARKETS
(LEVEL 1)
SIGNIFICANT OTHER
OBSERVABLE INPUTS
(LEVEL 2)
$
11,311 $
—
$
11,311
$
1,102
9,462
51,396
489
193,033
—
9,426 (2)
—
—
—
1,102
36 (3)
51,396
489
—
SIGNIFICANT
UNOBSERVABLE
INPUTS
(LEVEL 3)
—
—
—
—
—
193,033
DESCRIPTION
Money Market Funds(1)
Time Deposits(1)
Trading Securities
Derivative Assets(4)
Derivative Liabilities(4)
TOTAL CARRYING
VALUE AT
DECEMBER 31, 2021
QUOTED PRICES IN
ACTIVE MARKETS
(LEVEL 1)
SIGNIFICANT OTHER
OBSERVABLE INPUTS
(LEVEL 2)
SIGNIFICANT
UNOBSERVABLE INPUTS
(LEVEL 3)
FAIR VALUE MEASUREMENTS AT DECEMBER 31, 2021 USING
$
101,022 $
—
$
101,022
$
2,238
11,147
11,021
8,344
—
11,062 (2)
—
—
2,238
85 (3)
11,021
8,344
—
—
—
—
—
(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 our forward-starting interest rate swap agreement, to limit our exposure to
changes in interest rates on a portion of our floating rate indebtedness and on future borrowings from our Virginia Credit Agreement (as defined in Note 7) and (ii)
cross-currency swap agreements to hedge the variability of exchange rate 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 6 for additional information on our derivative financial instruments.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(5) Primarily relates to the fair value of the Deferred Purchase Obligation associated with the ITRenew Transaction (each as defined in Note 3), which was determined
utilizing a Monte-Carlo model and takes into account our forecasted projections as it relates to the underlying performance of the business. The Monte-Carlo
simulation model incorporates assumptions as to expected gross profits over the applicable achievement period, including adjustments for the volatility of timing and
amount of the associated revenue and costs, as well as discount rates that account for the risk of the underlying arrangement and overall market risks. Any material
change to these assumptions may result in a significantly higher or lower fair value of the Deferred Purchase Obligation. During the fourth quarter of 2022, we
recorded a change in the estimated fair value of the Deferred Purchase Obligation as described in Note 2.v.
There were no material items that were measured at fair value on a non-recurring basis for the years ended December 31, 2022
and 2021, with the exception of: (i) the reporting units as presented in our goodwill impairment analysis (as disclosed in Note 2.l.);
(ii) assets acquired and liabilities assumed through our acquisitions (as disclosed in Note 3); (iii) the redemption value of certain
redeemable noncontrolling interests (as disclosed in Note 2.q.); (iv) our investments in the Frankfurt JV, the Clutter JV and the Web
Werks JV (each as defined in Note 5); and (v) the fair value of our retained investment of our deconsolidated businesses (as
described in Note 4), 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 7.
Long-term debt is measured at cost in our Consolidated Balance Sheets as of December 31, 2022 and 2021.
Q. REDEEMABLE NONCONTROLLING INTERESTS
Certain unaffiliated third parties own noncontrolling interests in certain of our 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, was accounted for as
a liability rather than a component of redeemable noncontrolling interests. In May 2021, we agreed to final settlement terms and
paid the put option price for the noncontrolling interest shares.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
R. ACCUMULATED OTHER COMPREHENSIVE ITEMS, NET
The changes in Accumulated other comprehensive items, net for the years ended December 31, 2022, 2021 and 2020 are as
follows:
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
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, 2021
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, 2022
FOREIGN
CURRENCY
TRANSLATION
AND
OTHER
ADJUSTMENTS
CHANGE IN FAIR
VALUE OF
DERIVATIVE
INSTRUMENTS
TOTAL
$
(252,825) $
(9,756) $
(262,581)
46,635
—
46,635
(206,190)
(134,834)
—
(134,834)
(341,024)
(113,485)
—
(113,485)
—
(39,947)
(39,947)
(49,703)
—
52,380
52,380
2,677
—
9,829
9,829
$
(454,509) $
12,506 $
46,635
(39,947)
6,688
(255,893)
(134,834)
52,380
(82,454)
(338,347)
(113,485)
9,829
(103,656)
(442,003)
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
S. 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 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 (i) 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 (ii) the
decommissioning, data erasure, processing and disposition or sale of IT hardware and component assets; (3) digital solutions,
including the scanning, imaging and document conversion services of active and inactive records, and consulting services; and (4)
data center services, including set up, monitoring and support of our customers' assets which are protected in our data center
facilities, and special project services, including data center fitout.
We account for our revenue in accordance with ASC 606, Revenue from Contracts with Customers ("ASC 606"), with the exception
of our data center revenue, as described below. 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 ASC 606, a "series"). For those contracts that qualify as a series, we apply the "right to invoice"
practical expedient as 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. Additionally, each purchasing decision is fully in the
control of the customer; 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. Revenue from product sales, the significant
majority of which are shred paper and IT asset sales, is recognized at the point in time at which control transfers to the customer,
which is generally upon shipment.
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 ASC 842. 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 our significant Contract Fulfillment
Costs:
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 generally 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.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
COMMISSIONS
Certain commission payments that are directly associated with the fulfillment of long-term contracts are capitalized and amortized
as a component of depreciation and amortization in our Consolidated Statements of Operations generally 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.
Contract Fulfillment Costs, which are included as a component of Other within Other Assets, Net, as of December 31, 2022 and
2021 are as follows:
DECEMBER 31, 2022
DECEMBER 31, 2021
DESCRIPTION
GROSS
CARRYING
AMOUNT
ACCUMULATED
AMORTIZATION
NET
CARRYING
AMOUNT
GROSS
CARRYING
AMOUNT
ACCUMULATED
AMORTIZATION
NET
CARRYING
AMOUNT
Intake Costs asset
$
68,345 $
(42,132) $
26,213 $
71,336 $
(42,678) $
Commissions asset
133,145
(58,949)
74,196
114,791
(50,553)
28,658
64,238
Amortization expense associated with the Intake Costs and Commissions assets for the years ended December 31, 2022, 2021
and 2020 are as follows:
DESCRIPTION
Intake Costs asset
Commissions asset
Estimated amortization expense for Contract Fulfillment Costs is as follows:
YEAR ENDED DECEMBER 31,
2022
2021
2020
$
18,117 $
17,530 $
40,612
30,739
13,300
24,052
YEAR
2023
2024
2025
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
$
51,785
33,731
14,893
DECEMBER 31,
2022
2021
$
328,910 $
307,470
32,960
33,691
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
DATA CENTER LESSOR CONSIDERATIONS
Our Global Data Center Business features storage rental provided to customers at contractually specified rates over a fixed
contractual period. Our data center revenue contracts are accounted for in accordance with ASC 842. ASC 842 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 ASC 842 if the lease component is the predominant component and
is accounted for under ASC 606 if the nonlease components are the predominant components. We have elected to take this
practical expedient. Our data center revenue contracts may contain Consumer Price Index rent escalation clauses. Consumer
Price Index rent escalation clauses are recognized as income in the period earned.
Storage rental revenue, including revenue associated with power and connectivity, associated with our Global Data Center
Business for the years ended December 31, 2022, 2021 and 2020 are as follows:
Storage rental revenue(1)
YEAR ENDED DECEMBER 31,
2022
2021
2020
$
372,208 $
289,592 $
263,695
(1) Revenue associated with power and connectivity included within storage rental revenue was $130,101, $62,185 and $47,451 for the years ended December 31,
2022, 2021 and 2020, respectively.
The revenue related to the service component of our Global Data Center Business is recognized in the period the related services
are provided.
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
2023
2024
2025
2026
2027
FUTURE MINIMUM LEASE
PAYMENTS
$
295,489
269,438
220,528
185,368
162,032
T. STOCK-BASED COMPENSATION
We record stock-based compensation expense, utilizing the straight-line method, for the cost of stock options, restricted stock units
("RSUs"), and performance units ("PUs") (together, "Employee Stock-Based Awards").
2022 RETIREMENT ELIGIBLE CRITERIA
For our Employee Stock-Based Awards made on or after March 1, 2022, we have included the following retirement provision:
• Upon an employee’s retirement on or after attaining age 55 with at least five years of service, if the sum of (i) the award
recipient’s age at retirement and (ii) the award recipient’s years of service with us totals at least 65, the award recipient is entitled
to continued vesting of any outstanding Employee Stock-Based Awards, provided that their retirement occurs on or after a
minimum of six months from the grant date (the "Retirement Criteria").
• Accordingly, (i) grants of Employee Stock-Based Awards to an employee who has met the Retirement Criteria on or before the
date of grant, or will meet the Retirement Criteria before the six month anniversary in the year of the grant, will be expensed over
six months from the date of grant and (ii) grants of Employee Stock-Based Awards to employees who will meet the 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 Retirement Criteria.
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(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
• Stock options and RSUs granted to award recipients who meet the Retirement Criteria will be delivered to the award recipient
based upon the original vesting schedule. If an award recipient retires and has met the Retirement Criteria, stock options will
remain exercisable until the original expiration date of the stock options. PUs granted to award recipients who meet the
Retirement Criteria will be delivered in accordance with the original vesting schedule of the applicable PU award and remain
subject to the same performance conditions.
Stock-based compensation expense for Employee Stock-Based Awards included in the accompanying Consolidated Statements of
Operations for the years ended December 31, 2022, 2021 and 2020 is as follows:
Stock-based compensation expense
Stock-based compensation expense, after tax
YEAR ENDED DECEMBER 31,
2022
2021
2020
$
56,861 $
61,001 $
52,600
59,243
37,674
36,584
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.
Our stock options outstanding at December 31, 2022 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").
In May 2021, our stockholders approved an amendment to the 2014 Plan to (i) increase the number of shares of our common stock
authorized for issuance thereunder by 8,000,000 from 12,750,000 to 20,750,000, (ii) extend the termination date of the 2014 Plan
from May 24, 2027 to May 12, 2031, (iii) provide that, other than in specified circumstances, no equity-based award will vest before
the first anniversary of the date of grant and (iv) provide that dividends and dividend equivalents are not paid with respect to stock
options or stock appreciation rights.
A total of 20,750,000 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 at
December 31, 2022 was 7,981,518.
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(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The weighted average fair value of stock options granted in 2022, 2021 and 2020 was $7.44, $3.23 and $2.35 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, 2022, 2021 and 2020 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,
2022
2021
2020
28.0 %
1.72 %
5 %
28.3 %
1.45 %
7 %
25.4 %
1.45 %
7 %
10.0 years
10.0 years
10.0 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.
A summary of stock option activity for the year ended December 31, 2022 is as follows:
Outstanding at December 31, 2021
Granted
Exercised
Forfeited
Expired
Outstanding at December 31, 2022
Options exercisable at December 31, 2022
Options expected to vest
RESTRICTED STOCK UNITS
WEIGHTED
AVERAGE
EXERCISE
PRICE
WEIGHTED AVERAGE
REMAINING
CONTRACTUAL
TERM (YEARS)
AGGREGATE
INTRINSIC
VALUE
OPTIONS
4,224,073 $
211,455
(208,093)
(1,116)
—
4,226,319 $
3,531,786 $
694,533 $
36.06
49.67
33.00
35.72
—
36.89
36.49
38.88
5.03
4.41
8.19
$
$
$
54,788
47,169
7,619
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 holder's purchase price (which is typically zero).
The fair value of RSUs vested during the years ended December 31, 2022, 2021 and 2020, are as follows:
Fair value of RSUs vested
$
27,078 $
29,332 $
26,492
YEAR ENDED DECEMBER 31,
2022
2021
2020
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
A summary of RSU activity for the year ended December 31, 2022 is as follows:
Non-vested at December 31, 2021
Granted
Vested
Forfeited
Non-vested at December 31, 2022
PERFORMANCE UNITS
RSUs
WEIGHTED-AVERAGE
GRANT-DATE FAIR VALUE
1,403,633 $
949,413
(802,454)
(244,477)
1,306,115 $
34.11
50.26
33.74
38.63
43.43
The PUs we issue vest based on our performance against predefined operational and share based targets. The vesting is subject
to a minimum level of return on invested capital 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
total return on our common stock in relation to the MSCI United States REIT Index and (iii) for grants issued in 2021 and 2020, the
revenue exit rate of new products in the last quarter of the three-year performance period. The number of PUs earned may range
from 0% to approximately 238% of the initial award.
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. PUs are generally expensed over the three-year performance period. As detailed above, PUs granted are subject to the
Retirement Criteria. PUs granted to recipients who meet the 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.
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, 2022, 2021 and 2020, we issued 435,675, 488,953 and 425,777 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.
The fair value of earned PUs that vested during the years ended December 31, 2022, 2021 and 2020, is as follows:
Fair value of earned PUs that vested
$
20,059 $
29,701 $
11,812
YEAR ENDED DECEMBER 31,
2022
2021
2020
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DECEMBER 31, 2022
(In thousands, except share and per share data)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
A summary of PU activity for the year ended December 31, 2022 is as follows:
Non-vested at December 31, 2021
Granted
Prior year grant adjustments for performance (1)
Vested
Forfeited
Non-vested at December 31, 2022
ORIGINAL
PU AWARDS
PU
ADJUSTMENT(1)
TOTAL PU
AWARDS
WEIGHTED-AVERAGE
GRANT-DATE
FAIR VALUE
873,235
435,675
—
(386,627)
(92,110)
830,173
(541,444)
331,791 $
—
56,894
—
—
435,675
56,894
(386,627)
(92,110)
(484,550)
345,623 $
44.65
52.27
36.78
51.88
49.61
45.65
(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.
EMPLOYEE STOCK PURCHASE PLAN
We offer an Employee Stock Purchase Plan ("ESPP") in which participation is available to substantially all United States and
Canadian employees who meet certain service eligibility requirements. Shares of our common stock may be purchased by eligible
employees at six-month intervals at 95% of the fair market price at the end of each six-month period, without a look-back feature,
up to a maximum of 15% of their gross compensation during the offering period. We do not recognize compensation expense for
the ESPP shares purchased. In May 2021, our stockholders approved an amendment to the ESPP to increase the number of
shares of Common Stock authorized for issuance thereunder from 1,000,000 to 2,000,000. For the years ended December 31,
2022, 2021 and 2020, there were 112,486, 112,297 and 159,853 shares, respectively, purchased under the ESPP. As of
December 31, 2022, we have 991,504 shares available under the ESPP.
As of December 31, 2022, unrecognized compensation cost related to the unvested portion of our Employee Stock-Based Awards
was $49,455 and is expected to be recognized over a weighted-average period of 2.0 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.
U. ACQUISITION AND INTEGRATION COSTS
Acquisition and integration costs represent operating expenditures directly associated with the closing and integration activities of
our business acquisitions that have closed, or are highly probable of closing, and include (i) advisory, legal and professional fees to
complete business acquisitions and (ii) costs to integrate acquired businesses into our existing operations, including move,
severance and system integration costs (collectively, "Acquisition and Integration Costs"). Acquisition and integration costs for the
year ended December 31, 2022, 2021 and 2020 were $47,746, $12,764 and $0, respectively.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
V. OTHER (INCOME) EXPENSE, NET
Other (income) expense, net for the years ended December 31, 2022, 2021 and 2020 consists of the following:
Foreign currency transaction (gains) losses, net(1)
Debt extinguishment expense
Other, net(2)(3)
Other (Income) Expense, Net
YEAR ENDED DECEMBER 31,
2022
2021
2020
$
(61,684) $
(15,753) $
671
(8,768)
—
(177,051)
29,830
68,300
45,415
$
(69,781) $
(192,804) $
143,545
(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 7),
(ii) our previously outstanding 3% Euro Senior Notes due 2025, which were redeemed in 2020, and (iii) certain foreign currency denominated intercompany
obligations of our foreign subsidiaries to us and between our foreign subsidiaries, which are not considered permanently invested.
(2) Other, net for the year ended December 31, 2022 consists primarily of (i) a gain of approximately $93,600 associated with the remeasurement of the Deferred
Purchase Obligation to the present value of our best estimate of fair value and (ii) a gain of approximately $35,800 associated with the Clutter Transaction (as defined
in Note 5), partially offset by (iii) a loss of approximately $105,800 associated with the OSG Deconsolidation (as defined in Note 4) and (iv) losses on our equity
method investments.
(3) Other, net for the year ended December 31, 2021 consists primarily of (i) a gain of approximately $179,000 associated with our IPM Divestment (as defined in Note
4) and (ii) a gain of approximately $20,300 associated with the loss of control and related deconsolidation, as of May 18, 2021, of one of our wholly owned
Netherlands subsidiaries, for which we had value-added tax liability exposure that was recorded in 2019, partially offset by (iii) losses on our equity method
investments.
W. 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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(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
X. 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, 2022, 2021 and 2020 is as follows:
Net Income (Loss)
Less: Net Income (Loss) Attributable to Noncontrolling Interests
Net Income (Loss) Attributable to Iron Mountain Incorporated (utilized in numerator
of Earnings Per Share calculation)
Weighted-average shares—basic
Effect of dilutive potential stock options
Effect of dilutive potential RSUs and PUs
Weighted-average shares—diluted
Net Income (Loss) Per Share Attributable to Iron Mountain Incorporated:
Basic
Diluted
YEAR ENDED DECEMBER 31,
2022
2021
2020
562,149 $
452,725 $
343,096
5,168
2,506
403
556,981 $
450,219 $
342,693
290,812,000
289,457,000
288,183,000
1,125,068
507,109
645,886
872,204
24,903
435,287
292,444,177
290,975,090
288,643,190
1.92 $
1.90 $
1.56 $
1.55 $
1.19
1.19
$
$
$
$
Antidilutive stock options, RSUs and PUs, excluded from the calculation
305,527
1,447,722
5,663,981
Y. NEW ACCOUNTING PRONOUNCEMENTS
NOT YET ADOPTED ACCOUNTING PRONOUNCEMENTS
In December 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.
2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with
Customers ("ASU 2021-08"). ASU 2021-08 requires that an entity recognize and measure contract assets and contract liabilities
acquired in a business combination in accordance with ASU 2014-09 and for the related revenue contracts in accordance with ASU
2014-09 as if it had originated the contracts. ASU 2021-08 will be effective for us on January 1, 2023, with early adoption permitted.
We do not expect ASU 2021-08 to have a material impact on our consolidated financial statements upon its adoption.
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 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. Under ASU 2020-04, an entity could elect to apply the amendments beginning March 12,
2020 through December 31, 2022. In December 2022, the FASB issued ASU No. 2022-06, Reference Rate Reform (Topic 848),
Deferral of the Sunset Date of Topic 848 ("ASU 2022-06") to defer the sunset date of Topic 848 from December 31, 2022 to
December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. 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 and ASU 2022-06 on our consolidated financial statements, but we do not expect the impact to be
material.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
3. 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, 2022
ITRENEW
On January 25, 2022, in order to expand our ALM operations, we acquired an approximately 80% interest in ITRenew at an agreed
upon purchase price of $725,000, subject to certain working capital adjustments at, and subsequent to, the closing (the "ITRenew
Transaction"). At closing, we paid $748,846 and acquired $30,720 of cash on hand, for a net purchase price of $718,126 for the
ITRenew Transaction. The acquisition agreement provides us the option to purchase, and provides the shareholders of ITRenew
the option to sell, the remaining approximately 20% interest in ITRenew as follows: (i) approximately 16% on or after the second
anniversary of the ITRenew Transaction and (ii) approximately 4% on or after the third anniversary of the ITRenew Transaction
(collectively, the "Remaining Interests"). The total payments for the Remaining Interests, based on the achievement of certain
targeted performance metrics, will be no less than $200,000 and no more than $531,000 (the "Deferred Purchase Obligation").
From January 25, 2022, we consolidate 100% of the revenues and expenses associated with this business. The Deferred
Purchase Obligation is reflected as a long-term liability in our Consolidated Balance Sheet at December 31, 2022, and, accordingly,
we have not reflected any non-controlling interests associated with the ITRenew Transaction as the Remaining Interests have non-
substantive equity interest rights. Subsequent increases or decreases in the fair value estimate of the Deferred Purchase
Obligation are included as a component of Other (income) expense, net in our Consolidated Statements of Operations until the
Deferred Purchase Obligation is settled or paid. See Note 2.v.
PRO FORMA FINANCIAL INFORMATION
The unaudited consolidated pro forma financial information (the "Pro Forma Financial Information") below summarizes the
combined results of Iron Mountain and ITRenew on a pro forma basis as if the ITRenew Transaction had occurred on January 1,
2021. The Pro Forma Financial Information is presented for informational purposes and is not necessarily indicative of the results
of operations that would have been achieved if the acquisition had taken place on January 1, 2021. The Pro Forma Financial
Information, for the periods presented, includes purchase accounting adjustments (including amortization of acquired customer and
supplier intangible assets and depreciation of acquired property, plant and equipment) and related tax effects. Through December
31, 2022, we and ITRenew collectively incurred $59,370 of operating expenditures to complete the ITRenew Transaction (including
advisory and professional fees). These operating expenditures have been reflected within the results of operations in the Pro
Forma Financial Information as if they were incurred on January 1, 2021.
Total Revenues
Income from Continuing Operations
YEAR ENDED DECEMBER 31,
2022
2021
$
5,121,548 $
4,939,511
571,381
391,625
In addition to our acquisition of ITRenew, we completed certain other acquisitions during the years ended December 2022, 2021
and 2020. The Pro Forma Financial Information does not reflect these acquisitions due to the insignificant impact of these
acquisitions on our consolidated results of operations.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
3. ACQUISITIONS (CONTINUED)
XDATA PROPERTIES
On October 5, 2022, in order to further expand our data center operations in Europe, we completed the acquisition of XData
Properties S.L.U., a data center colocation space and solutions provider with a data center in Spain, which we accounted for as an
asset acquisition, for (i) cash consideration of 78,900 Euros (or approximately $78,200, based upon the exchange rate between the
Euro and the United States dollar on the closing date of this acquisition), subject to adjustments, and (ii) up to 10,000 Euros (or
approximately $9,900, based upon the exchange rate between the Euro and the United States dollar on the closing date of this
acquisition) of additional consideration, payable based on the achievement of certain power connection milestones through
December 2024.
OTHER 2022 ACQUISITIONS
In addition to the transactions noted above, during the year ended December 31, 2022, in order to enhance our existing operations
in Morocco and expand our fine arts operations in China - Hong Kong S.A.R. and North America, we completed the acquisition of a
records management company, a fine arts company and the assets of a second fine arts company, for a total combined purchase
price of approximately $11,600, including deferred purchase obligations, purchase price holdbacks and other deferred payments of
approximately $4,600.
B. ACQUISITIONS COMPLETED DURING THE YEAR ENDED DECEMBER 31, 2021
On September 15, 2021, in order to further expand our records management operations in the Middle East and North Africa, we
acquired Information Fort, LLC, a records and information management provider, for approximately $90,300.
On September 23, 2021, in order to further enhance our data center operations in Germany, we completed the acquisition of assets
of a Frankfurt data center for approximately 77,900 Euros (or approximately $91,300, based upon the exchange rate between the
Euro and the United States dollar on the closing date of this acquisition).
In addition to the transactions noted above, during the year ended December 31, 2021, in order to enhance our existing operations
in the United Kingdom and Indonesia and to expand our operations into Morocco, we completed the acquisition of two records
management companies and one art storage company for total cash consideration of approximately $45,100.
C. 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 (income) expense, net in 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.
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IRON MOUNTAIN INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
3. ACQUISITIONS (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 (including
asset acquisitions) in each respective year is as follows:
2022
OTHER FISCAL
YEAR 2022
ACQUISITIONS
ITRENEW
2021
2020
TOTAL
TOTAL
TOTAL
$ 749,596 $
85,170 $ 834,766 $ 224,192 $ 124,614
—
—
—
3,878
Cash Paid (gross of cash acquired)(1)
Fair Value of Noncontrolling Interests
—
—
27,276
151,890
6,545
16,559
52,021
79,065
—
—
100,040
(27,363)
(19,564)
Deferred Purchase Obligation, Purchase Price Holdbacks and
Other(2)
Fair Value of Investments Applied to Acquisitions
275,100
—
13,637
288,737
—
—
2,534
—
Total Consideration
1,024,696
98,807
1,123,503
230,604
Fair Value of Identifiable Assets Acquired and Liabilities Assumed:
Cash
Accounts Receivable, Prepaid Expenses and Other Assets
Property, Plant and Equipment
Customer and Supplier Relationship Intangible Assets(3)
Data Center Lease-Based Intangible Assets(4)
Other Intangible Assets(5)
Operating Lease Right-of-Use Assets
Debt Assumed
Accounts Payable, Accrued Expenses and Other Liabilities
Operating Lease Liabilities
Deferred Income Taxes
Total Fair Value of Identifiable Net Assets Acquired
30,694
71,612
7,541
487,600
—
47,300
29,545
—
(60,157)
(29,545)
(100,922)
483,668
963
3,947
93,722
3,672
1,442
—
3,135
—
(2,069)
(3,135)
31,657
75,559
101,263
491,272
1,442
47,300
32,680
—
(62,226)
(32,680)
20,194
26,911
150,095
35,181
9,656
—
40,848
(9,026)
(22,733)
(40,848)
(100,040)
(10,143)
(111,065)
(7,221)
91,534
575,202
203,057
(9,631)
97,632
Goodwill Initially Recorded
$ 541,028 $
7,273 $ 548,301 $
27,547 $
54,258
(1) Cash paid for acquisitions, net of cash acquired in our Consolidated Statement of Cash Flows includes contingent and other payments of $581, $0 and $512 for the
years ended December 31, 2022, 2021 and 2020, respectively, related to acquisitions made in the years prior to 2022, 2021 and 2020, respectively.
(2)
In 2022, Deferred purchase obligation, purchase price holdbacks and other includes $275,100 related to the original fair value estimate of the Deferred Purchase
Obligation for the Remaining Interests and approximately $13,600 of deferred purchase obligation, purchase price holdbacks and other associated with our other
business and asset acquisitions completed in 2022.
(3) The weighted average lives of customer and supplier relationship intangible assets associated with acquisitions in 2022, 2021 and 2020 was 12 years, 11 years and
14 years, respectively.
(4) The weighted average lives of data center Iease-based intangible assets associated with acquisitions in 2022 and 2021 was four years and five years, respectively.
(5) The weighted average lives of other intangible assets associated with acquisitions in 2022 was five years.
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.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
3. ACQUISITIONS (CONTINUED)
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. Purchase price allocation adjustments recorded during the fourth quarter of 2022 and
year ended December 31, 2022 were not material to our balance sheet or results from operations.
4. DIVESTMENTS AND DECONSOLIDATIONS
OSG RECORDS MANAGEMENT (EUROPE) LIMITED DECONSOLIDATION
On March 24, 2022, as a result of our loss of control, we deconsolidated the businesses included in our acquisition of OSG,
excluding Ukraine ("OSG Deconsolidation"). We recognized a loss of approximately $105,800 associated with the deconsolidation
to Other (income) expense, net in the first quarter of 2022 representing the difference between the net asset value prior to the
deconsolidation and the subsequent remeasurement of the retained investment to a fair value of zero. We have concluded that the
deconsolidation does not meet the criteria to be reported as discontinued operations in our consolidated financial statements, as it
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 these businesses are presented as a component of Operating income (loss) in our Consolidated
Statements of Operations through the date of deconsolidation and the cash flows associated with these businesses are presented
as a component of Cash flows from operations in our Consolidated Statements of Cash Flows through the date of the
deconsolidation.
INTELLECTUAL PROPERTY MANAGEMENT BUSINESS DIVESTMENT
On June 7, 2021, we sold our Intellectual Property Management ("IPM") business, which we predominantly operated in the United
States, for total gross consideration of approximately $215,400 (the "IPM Divestment"). As a result of the IPM Divestment, we
recorded a gain on sale of approximately $179,000 to Other (income) expense, net during the year ended December 31, 2021,
representing the excess of the fair value of the consideration received over the sum of the carrying value of the IPM business. We
have concluded that the IPM Divestment 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.
5. INVESTMENTS
CLUTTER JOINT VENTURE
In February 2022, the joint venture formed by MakeSpace Labs, Inc. and us (the "MakeSpace JV") entered into an agreement with
Clutter, Inc. ("Clutter") pursuant to which the equityholders of the MakeSpace JV contributed their ownership interests in the
MakeSpace JV and Clutter’s shareholders contributed their ownership interests in Clutter to create a newly formed venture (the
"Clutter JV"). In exchange for our 49.99% interest in the MakeSpace JV, we received an approximate 27% interest in the Clutter JV
(the "Clutter Transaction"). As a result of the Clutter Transaction, we recognized a gain related to our contributed interest in the
MakeSpace JV of approximately $35,800, which was recorded to Other, net, a component of Other expense (income), net during
the year ended December 31, 2022.
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IRON MOUNTAIN INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
5. INVESTMENTS
WEB WERKS JOINT VENTURE
In April 2021, we closed on an agreement to form a joint venture (the "Web Werks JV") with the shareholders of Web Werks India
Private Limited ("Web Werks"), a colocation data center provider in India. In connection with the formation of the Web Werks JV, we
made an initial investment of approximately 3,750,000 Indian rupees (or approximately $50,100, based upon the exchange rate
between the United States dollar and Indian rupee on the closing date of the initial investment) in exchange for a noncontrolling
interest in the form of convertible preference shares in the Web Werks JV (the "Initial Web Werks JV Investment"). In August 2022,
we made an additional investment of approximately 3,750,000 Indian rupees (or approximately $46,100, based upon the exchange
rate between the United States dollar and Indian rupee on the date of the additional investment) in exchange for an additional
interest in the form of convertible preference shares in the Web Werks JV (the "Second Web Werks JV Investment"). Under the
terms of the Web Werks JV shareholder agreement, we are required to make an additional investment of approximately 3,750,000
Indian rupees by May 2023. The shares we received from the Initial Web Werks JV Investment and the Second Web Werks JV
Investment converted to 382,574 equity shares, representing a 53.58% ownership in the JV as of December 31, 2022, determined
by a valuation based upon the earnings before interest, taxes, depreciation and amortization ("EBITDA") of the Web Werks JV for
the trailing twelve months ending July 31, 2022. Subsequent to the Second Web Werks JV Investment, the shareholders of Web
Werks retained control of the financial and operating decisions of the Web Werks JV through their control of Web Werks JV's board
of directors. As we do not control the board of directors or the key management decisions of the Web Werks JV, we account for our
interest in the Web Werks JV as an equity method investment.
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, which is 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 first
quarter of 2023. 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 during the year ended December 31, 2020 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.
JOINT VENTURE SUMMARY
The joint ventures referred to above are accounted for as equity method investments and are presented as a component of Other
within Other assets, net in our Consolidated Balance Sheets. The carrying values and equity interests in our joint ventures at
December 31, 2022 and 2021 are as follows:
DECEMBER 31, 2022
DECEMBER 31, 2021
CARRYING
VALUE
EQUITY
INTEREST
CARRYING
VALUE
EQUITY
INTEREST
$
98,278
37,194
—
53.58 % $
20.00 %
— %
54,172
26.73 %
51,140
26,167
30,154
—
38.50 %
20.00 %
49.99 %
— %
Web Werks JV
Frankfurt JV
MakeSpace JV
Clutter JV
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
6. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
Derivative instruments we are party to include: (i) interest rate swap agreements (which are designated as cash flow hedges) and
(ii) cross-currency swap agreements (which are designated as net investment hedges).
INTEREST RATE SWAP AGREEMENTS DESIGNATED AS CASH FLOW HEDGES
In November 2022, we entered into a forward-starting interest rate swap agreement to limit our exposure to changes in interest
rates on future borrowings under our Virginia Credit Agreement (as defined in Note 7). The forward-starting interest rate swap
agreement commences in July 2023 and expires in October 2025 (the "October 2025 Interest Rate Swap Agreement"). The
October 2025 Interest Rate Swap Agreement has an initial notional value of $4,800, which is contracted to increase in monthly
increments beginning in August 2023 to June 2025 to a total notional value of $153,800. Under the October 2025 Interest Rate
Swap Agreement, we will receive variable rate interest payments based upon SOFR, in exchange for the payment of a fixed
interest rate as specified in the October 2025 Interest Rate Swap Agreement.
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. These swap agreements expired in March 2022. 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. These
forward-starting interest rate swap agreements commenced in March 2022. As of December 31, 2022 we have $350,000 in
notional value outstanding on these interest rate swap agreements, which expire in March 2024 (the "March 2024 Interest Rate
Swap Agreements"). Under the March 2024 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 March 2024 Interest Rate Swap Agreements.
We have designated each of the interest rate swap agreements described above as cash flow hedges. These interest rate swap
agreements are marked to market at the end of each reporting period, representing the fair values of the interest rate 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.
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 $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 (the "August 2023 Cross Currency Swap Agreements"). In October 2022, one of
these August 2023 Cross Currency Swap Agreements was amended to increase the notional value exchanged from approximately
49,500 Euros at an interest rate of 3.6% to approximately 55,466 Euros at an interest rate of (9.5%), resulting in a total notional
value exchanged under the August 2023 Cross Currency Swap Agreements of approximately 105,020 Euros at a weighted average
interest rate of approximately (3.3%).
In September 2020, 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 these cross-currency swap agreements, we notionally exchanged
approximately $359,200 at an interest rate of 4.5% for 300,000 Euros at a weighted average interest rate of approximately 3.4%.
These cross-currency swap agreements expire in February 2026 (the "February 2026 Cross Currency Swap Agreements"). In May
2022, the February 2026 Cross-Currency Swap Agreements were amended to increase the notional value exchanged to
approximately 340,500 Euros at a weighted average interest rate of approximately 1.2%. In October 2022, the February 2026
Cross-Currency Swap Agreements were further amended to increase the notional value exchanged to approximately 362,083
Euros at a weighted average interest rate of approximately 0.2%.
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IRON MOUNTAIN INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
6. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
We have designated these cross-currency swap agreements as hedges of net investments in 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 the end of 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. The excluded component of our cross-currency swap
agreements is recorded in Accumulated other comprehensive items, net and amortized to interest expense on a straight-line basis.
Net assets (liabilities) recognized in our Consolidated Balance Sheets as of December 31, 2022 and 2021, by derivative
instrument, are as follows:
DERIVATIVE INSTRUMENTS(1)
Cash Flow Hedges(2)
March 2024 Interest Rate Swap Agreements
October 2025 Interest Rate Swap Agreement
Net Investment Hedges(3)
August 2023 Cross Currency Swap Agreements
February 2026 Cross Currency Swap Agreements
DECEMBER 31, 2022
DECEMBER 31, 2021
$
12,915 $
(409)
2,526
35,875
(7,680)
—
(664)
11,021
(1) Our derivative assets are included as a component of (i) Prepaid expenses and other or (ii) Other within Other assets, net and our derivative liabilities are included as
a component of (i) Accrued expenses and other current liabilities or (ii) Other long-term liabilities in our Consolidated Balance Sheets. As of December 31, 2022,
$2,606 is included within Prepaid expenses and other, $48,790 is included within Other assets, and $489 is included within Other long-term liabilities. As of
December 31, 2021, $11,021 is included within Other assets, $2,082 is included within Accrued expense and other current liabilities and $6,262 is included within
Other long-term liabilities.
(2) As of December 31, 2022, cumulative net gains of $12,506 are recorded within Accumulated other comprehensive items, net associated with these interest rate swap
agreements.
(3) As of December 31, 2022, cumulative net gains of $38,401 are recorded within Accumulated other comprehensive items, net associated with these cross-currency
swap agreements. These cumulative net gains are offset by $9,100 related to the excluded component of our cross-currency swap agreements.
Unrealized gains (losses), a component of Accumulated other comprehensive items, net, recognized during the years ending
December 31, 2022, 2021 and 2020, by derivative instrument, are as follows:
DERIVATIVE INSTRUMENTS
Cash Flow Hedges
March 2024 Interest Rate Swap Agreements
October 2025 Interest Rate Swap Agreement
Net Investment Hedges
August 2023 Cross Currency Swap Agreements
February 2026 Cross Currency Swap Agreements
YEAR ENDED DECEMBER 31,
2022
2021
2020
$
20,595 $
(409)
13,382 $
—
3,190
24,854
7,565
31,433
(12,288)
—
(7,247)
(20,412)
As of December 31, 2022, $9,100 is recognized in other Accumulated other comprehensive items, net related to the excluded
component of our cross-currency swap agreements, reflected as a component of Interest expense, net in our Consolidated
Statements of Operations.
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 we designated, on average, 300,000 Euros,
of our Euro Notes as a hedge of net investment of certain of our Euro denominated subsidiaries. As a result, for the year ended
December 31, 2020, we recorded a foreign exchange loss of $17,005 related to the change in fair value of such debt due to
currency translation adjustments as a component of Accumulated other comprehensive items, net. As of December 31, 2022,
cumulative net gains of $3,256, net of tax, are recorded in Accumulated other comprehensive items, net associated with this net
investment hedge.
106
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IRON MOUNTAIN INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
7. DEBT
Long-term debt is as follows:
DECEMBER 31, 2022
DECEMBER 31, 2021
DEBT
(INCLUSIVE OF
DISCOUNT)
UNAMORTIZED
DEFERRED
FINANCING
COSTS
CARRYING
AMOUNT
FAIR
VALUE
DEBT
(INCLUSIVE OF
DISCOUNT)
UNAMORTIZED
DEFERRED
FINANCING
COSTS
CARRYING
AMOUNT
FAIR
VALUE
$
1,072,200
$
(6,790) $ 1,065,410
$ 1,072,200
$
—
$
(5,174) $
(5,174) $
—
240,625
666,073
202,641
169,361
—
240,625
240,625
(3,747)
662,326
666,750
(633)
202,008
204,623
203,125
672,847
223,182
—
203,125
203,125
(4,995)
667,852
675,500
(656)
222,526
223,530
—
169,361
169,361
189,168
(709)
188,459
189,168
483,888
(2,589)
481,299
445,206
540,481
(3,912)
536,569
542,508
1,000,000
(6,754)
993,246
917,500
1,000,000
(8,176)
991,824
1,030,000
825,000
(6,200)
818,800
754,875
825,000
(7,380)
817,620
862,125
500,000
(4,039)
495,961
450,000
500,000
(4,763)
495,237
513,750
1,000,000
(9,764)
990,236
865,000
1,000,000
(11,211)
988,789
1,022,500
1,300,000
(11,407)
1,288,593
1,111,500
1,300,000
(12,911)
1,287,089
1,355,250
1,100,000
(10,161)
1,089,839
891,000
1,100,000
(11,404)
1,088,596
1,094,500
750,000
(12,511)
737,489
622,500
750,000
(13,782)
736,218
767,813
600,000
(5,566)
594,434
520,500
600,000
(6,147)
593,853
637,500
425,777
(578)
425,199
425,777
460,648
(840)
459,808
460,648
314,700
10,650,265
(87,546)
(531)
314,169
314,700
—
(450)
(450)
—
(81,270)
10,568,995
—
(87,546)
9,364,451
(310,084)
(92,510)
9,271,941
656
(309,428)
$
10,562,719
$
(81,270) $ 10,481,449
$
9,054,367
$
(91,854) $ 8,962,513
Revolving Credit Facility(1)
Term Loan A(1)
Term Loan B(1)(2)
Australian Dollar Term Loan (3)(4)
UK Bilateral Revolving Credit
Facility(4)
37/8% GBP Senior Notes due
2025 (the "GBP Notes")(5)(7)(8)
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 due 2028")(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)
5% Senior Notes due 2032 (the
“5% Notes due 2032")(5)(7)(9)
55/8% Senior Notes due 2032 (the
“55/8% Notes")(5)(6)(7)
Real Estate Mortgages,
Financing Lease Liabilities and
Other(10)
Accounts Receivable
Securitization Program(11)
Total Long-term Debt
Less Current Portion
Long-term Debt, Net of Current
Portion
(1) The capital stock or other equity interests of our United States subsidiaries representing the substantial majority of our US operations, 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 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 Revolving
Credit Facility. The fair value (Level 3 of fair value hierarchy described at Note 2.p.) 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, 2022 and 2021.
(2) The amount of debt for the Term Loan B (as defined below) reflects an unamortized original issue discount of $677 and $903 as of December 31, 2022 and 2021,
respectively.
(3) The amount of debt for the AUD Term Loan reflects an unamortized original issue discount of $1,982 and $348 as of December 31, 2022 and 2021, respectively.
(4) The fair value (Level 3 of fair value hierarchy described at Note 2.p.) 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.p.) of these debt instruments are based on quoted market prices for these notes on December 31,
2022 and 2021, 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 United States
subsidiaries that represent the substantial majority of our United States operations (the "Note Guarantors"). These guarantees are joint and several obligations of the
Note Guarantors. The remainder of our subsidiaries do not guarantee the Parent Notes.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
7. DEBT (CONTINUED)
(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)
(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 Note
Guarantors. These guarantees are joint and several obligations of IMI and the Note Guarantors. The remainder of our subsidiaries do not guarantee the GBP Notes.
Iron Mountain Information Management Services, Inc. ("IMIM Services") is the direct obligor on the 5% Notes due 2032, which are fully and unconditionally
guaranteed, on a senior basis, by IMI and the Note Guarantors. These guarantees are joint and several obligations of IMI and the Note Guarantors. The remainder of
our subsidiaries do not guarantee the 5% Notes due 2032.
(10) We believe the fair value (Level 3 of fair value hierarchy described at Note 2.p.) of this debt approximates its carrying value. This debt includes the following:
Real estate mortgages(1)
Financing lease liabilities(2)
Other notes and other obligations(3)
DECEMBER 31, 2022 DECEMBER 31, 2021
$
$
58,355 $
332,905
34,517
425,777 $
58,933
356,729
44,986
460,648
(1) Bear interest at approximately 3.6% at both December 31, 2022 and 2021, and includes $50,000 outstanding under our Mortgage Securitization Program at both
December 31, 2022 and 2021.
(2) Bear a weighted average interest rate of 5.2% and 5.9% at December 31, 2022 and 2021.
(3) These notes and other obligations, which were assumed by us as a result of certain acquisitions bear a weighted average interest rate of 10.1% and 10.7% at
December 31, 2022 and 2021.
(11) 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.p.) of this debt approximates its carrying value.
A. CREDIT AGREEMENT
Our credit agreement (the "Credit Agreement") consists of a revolving credit facility (the "Revolving Credit Facility"), a term loan A
(the "Term Loan A") and a term loan B (the "Term Loan B"). On March 18, 2022, we entered into an amendment to the Credit
Agreement which included the following changes:
(i) extended the maturity date of the Revolving Credit Facility and the Term Loan A from June 3, 2023 to March 18, 2027;
(ii) refinanced and increased the borrowing capacity that IMI and certain of its United States and foreign subsidiaries are
able to borrow under the Revolving Credit Facility from $1,750,000 to $2,250,000;
(iii) refinanced the existing Term Loan A with a new $250,000 Term Loan A; and
(iv) increased the net total lease adjusted leverage ratio maximum allowable from 6.5x to 7.0x and removed the net
secured lease adjusted leverage ratio requirement.
The Revolving Credit Facility enables IMI and certain of its subsidiaries to borrow in United States dollars and (subject to sublimits)
Canadian dollars in an aggregate outstanding amount not to exceed $2,250,000. Additionally, the Credit Agreement permits us to
incur incremental indebtedness thereunder by adding new term loans or revolving loans or by increasing the principal amount of
any existing loans thereunder. The Revolving Credit Facility and the Term Loan A are scheduled to mature on March 18, 2027, at
which point all obligations become due. On March 18, 2022, we borrowed the full amount of the Term Loan A of $250,000. The
Term Loan A is to be paid in quarterly installments in an amount equal to $3,125 per quarter. IMI’s wholly owned subsidiary, Iron
Mountain Information Management, LLC ("IMIM"), is the borrower under the Term Loan B, which has a principal amount of
$700,000. The Term Loan B, which matures on January 2, 2026, was issued at 99.75% of par. Principal payments on the Term
Loan B are to be paid in quarterly installments of $1,750.
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(In thousands, except share and per share data)
7. DEBT (CONTINUED)
IMI and certain subsidiaries of IMI that represent the substantial majority of our operations in the United States, Canada and the
United Kingdom guarantee all obligations under the Credit Agreement. The interest rate on borrowings under the Revolving Credit
Facility varies depending on our choice of interest rate benchmark and currency options, plus an applicable margin, which varies
based on our consolidated leverage ratio. The Term Loan A bears interest at the Secured Overnight Financing Rate ("SOFR") plus
a credit spread adjustment of 0.1% plus 1.75%. The Term Loan B bears interest at a rate of LIBOR plus 1.75%. Additionally, the
Credit Agreement requires the payment of a commitment fee on the unused portion of the Revolving Credit Facility, which fee
ranges from 0.2% to 0.3% based on our consolidated leverage ratio.
As of December 31, 2022, we had $1,072,200, $240,625 and $666,073 outstanding under the Revolving Credit Facility, the Term
Loan A and the Term Loan B, respectively. At December 31, 2022, we had various outstanding letters of credit totaling $3,824
under the Revolving Credit Facility. The remaining amount available for borrowing under the Revolving Credit Facility as of
December 31, 2022, 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
$1,173,976 (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 weighted average interest rate in effect
under the Revolving Credit Facility as of December 31, 2022 was 6.2%. The interest rate in effect under the Term Loan A as of
December 31, 2022 and 2021 was 6.2% and 1.9%, respectively. The interest rate in effect under the Term Loan B as of
December 31, 2022 and 2021 was 4.8% and 3.1%, respectively.
REVOLVING CREDIT FACILITY
$2,250,000
Outstanding borrowings
$1,072,200
TERM LOAN A
$250,000
Aggregate outstanding principal amount
$240,625
TERM LOAN B
$700,000
Aggregate outstanding principal amount
$666,750
6.2%
Interest rate
As of December 31, 2022
6.2%
Interest rate
As of December 31, 2022
4.8%
Interest rate
As of December 31, 2022
B. VIRGINIA CREDIT AGREEMENT
On October 31, 2022, Iron Mountain Data Centers Virginia 4/5 Subsidiary, LLC, a wholly owned subsidiary of Iron Mountain Data
Centers Virginia 4/5 JV, LP, entered into a credit agreement (the "Virginia Credit Agreement") in order to finance the construction of
two data center facilities in Virginia. The Virginia Credit Agreement consists of a term loan and a letter of credit facility with the first
borrowing under the term loan expected to occur in the third quarter of 2023. Borrowings under the Virginia Credit Agreement are
guaranteed by Iron Mountain Data Centers Virginia 4/5 JV, LP, a special purpose vehicle, and not by IMI or any other subsidiary of
IMI. We have the option to borrow, in the form of term loans, an aggregate outstanding amount not to exceed approximately
$205,000. At December 31, 2022, we had approximately $6,400 in outstanding letters of credit under the Virginia Credit
Agreement. The Virginia Credit Agreement requires the payment of a commitment fee on any unused commitments at a rate of
0.4875%. We have the option to select between various base rates for any given borrowing under the Virginia Credit Agreement,
and the interest rate and applicable margin on such borrowings vary depending on the chosen base rate. The Virginia Credit
Agreement is scheduled to mature on October 31, 2025, at which point all obligations will become due. We have two one-year
options that allow us to extend the maturity date beyond the October 31, 2025 expiration date, subject to the conditions specified in
the Virginia Credit Agreement, including the lender's consent. As of December 31, 2022, we have no outstanding borrowings under
the Virginia Credit Agreement.
C. 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.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
7. DEBT (CONTINUED)
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 due 2028
47/8% Notes due 2029
51/4% Notes due 2030
41/2% Notes
5% Notes due 2032
55/8% Notes
AGGREGATE
PRINCIPAL
AMOUNT
DIRECT
OBLIGOR
MATURITY DATE
CONTRACTUAL
INTEREST RATE
£
$
$
$
$
$
$
$
$
400,000
IM UK
November 15, 2025
1,000,000
825,000
500,000
1,000,000
1,300,000
1,100,000
IMI
IMI
IMI
IMI
IMI
IMI
750,000
IMIM Services
600,000
IMI
September 15, 2027
March 15, 2028
July 15, 2028
September 15, 2029
July 15, 2030
February 15, 2031
July 15, 2032
July 15, 2032
37/8%
47/8%
51/4%
5%
47/8%
51/4%
41/2%
5%
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
May 15 and November 15
July 15, 2027
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.
DECEMBER 2021 OFFERING
On December 28, 2021, IMIM Services completed a private offering of:
SERIES OF NOTES
5% Notes due 2032
AGGREGATE
PRINCIPAL AMOUNT
$
750,000
The 5% Notes due 2032 were issued at par. The total net proceeds of approximately $737,800 from the issuance of the 5% Notes
due 2032, after deducting the initial purchasers’ commissions, were used to finance the purchase price of the ITRenew
Transaction, which closed on January 25, 2022, and to pay related fees and expenses. In December 31, 2021, the net proceeds
from the 5% Notes due 2032 were used to temporarily repay borrowings under our Revolving Credit Facility and Accounts
Receivable Securitization Program and invest in money market funds.
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(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
7. DEBT (CONTINUED)
D. 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
7,695 Australian dollars per year. On March 18, 2022, IM Australia amended its AUD Term Loan to (i) extend the maturity date from
September 22, 2022 to September 30, 2026 and (ii) decrease the interest rate from BBSY (an Australian benchmark variable
interest rate) plus 3.875% to BBSY plus 3.625%.
As of December 31, 2022, we had 300,117 Australian dollars ($204,623 based upon the
exchange rate between the United States dollar and the Australian dollar as of
December 31, 2022) outstanding on the AUD Term Loan. As of December 31, 2021, we
had 307,813 Australian dollars ($223,530 based upon the exchange rate between the
United States dollar and the Australian dollar as of December 31, 2021) outstanding on
the AUD Term Loan. The interest rate in effect under the AUD Term Loan was 6.9% and
4.0% as of December 31, 2022 and 2021, respectively.
OUTSTANDING BORROWINGS
AU$300,117
6.9%
Interest rate
As of December 31, 2022
E. UK BILATERAL REVOLVING CREDIT FACILITY
IM UK and Iron Mountain (UK) Data Centre Limited (collectively, the "UK Borrowers") have a 140,000 British pounds sterling
Revolving Credit Facility (the "UK Bilateral Revolving Credit Facility") with Barclays Bank PLC. The maximum amount permitted to
be borrowed under the UK Bilateral Revolving Credit Facility is 140,000 British pounds sterling. We have the option to request
additional commitments of up to 125,000 British pounds sterling, subject to conditions specified in the UK Bilateral Revolving Credit
Facility. The UK Bilateral Revolving Credit Facility is secured by certain properties in the United Kingdom. IMI and subsidiaries of
IMI that represent the substantial majority of our operations in the United States and the United Kingdom guarantee all obligations
under the UK Bilateral Revolving Credit Facility. The UK Bilateral Revolving Credit Facility bears interest at the Sterling Overnight
Index Average plus 2.0%.
The UK Bilateral Revolving Credit Facility was previously scheduled to mature on
September 24, 2023, at which point all obligations were to become due, with the option
to extend the maturity date for an additional year, subject to the conditions specified in
the UK Bilateral Revolving Credit Facility, including the lender’s consent. On September
22, 2022, the UK Borrowers exercised their option to extend the maturity date from
September 24, 2023 to September 24, 2024.
MAXIMUM AMOUNT
£140,000
OPTIONAL ADDITIONAL
COMMITMENTS
£125,000
The UK Bilateral Revolving Credit Facility was fully drawn as of December 31, 2022.
The interest rate in effect under the UK Bilateral Revolving Credit Facility was 5.5% and
2.1% as of December 31, 2022 and 2021, respectively.
5.5%
Interest rate
As of December 31, 2022
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(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
7. DEBT (CONTINUED)
F. 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. 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 June 29, 2022, we amended the Accounts Receivable Securitization Program to (i)
increase the maximum borrowing capacity from $300,000 to $325,000, with an option
to increase the borrowing capacity to $400,000, (ii) change the interest rate under
Accounts Receivable Securitization Program from LIBOR plus 1.0% to SOFR plus
0.95%, with a credit spread adjustment of 0.10% and (iii) extend the maturity date from
July 1, 2023 to July 1, 2025, at which point all obligations become due. As of December
31, 2022 and 2021, the amount outstanding under the Accounts Receivable
Securitization Program was $314,700 and $0, respectively. The interest rate in effect
under the Accounts Receivable Securitization Program was 5.4% as of December 31,
2022. Commitment fees at a rate of 35 basis points are charged on amounts made
available but not borrowed under the Accounts Receivable Securitization Program.
MAXIMUM AMOUNT
$325,000
OUTSTANDING BORROWINGS
$314,700
INTEREST RATE
5.4%
As of December 31, 2022
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(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
7. DEBT (CONTINUED)
G. CASH POOLING
Certain of our subsidiaries participate in cash pooling arrangements (the "Cash Pools") to help manage global liquidity
requirements. We utilize the following Cash Pools: (i) two Cash Pools with Bank Mendes Gans, an independently operated wholly
owned subsidiary of ING Group, one of which we use to manage global liquidity requirements for our qualified REIT subsidiaries
("QRSs") and the other for our taxable REIT subsidiaries ("TRSs"); (ii) two Cash Pools with JP Morgan Chase Bank, N.A. ("JPM"),
one of which we use to manage liquidity requirements for our QRSs in the Asia Pacific region and the other for our TRSs in the
Asia Pacific region; and (iii) two Cash Pools with JPM, which we entered into in the third quarter of 2022, one of which we use to
manage liquidity requirements for our QRSs in the Europe, Middle East, and Africa regions and the other for our TRSs in the
Europe, Middle East, and Africa regions.
Under each of the Cash Pools, cash deposited by participating subsidiaries with certain financial institutions is pledged as security
against the debit balances of other participating subsidiaries with legal rights of offset provided to the financial institutions, and,
therefore, such 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.
The net cash position balances as of December 31, 2022 and 2021 are reflected as Cash and cash equivalents in our
Consolidated Balance Sheets.
H. LETTERS OF CREDIT
As of December 31, 2022, we had outstanding letters of credit totaling $39,795, of which $3,824 reduce our borrowing capacity
under the Revolving Credit Facility (as described above). The letters of credit expire at various dates between January 2023 and
March 2025.
I. 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 other specified 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 net total lease adjusted leverage ratio
and a fixed charge coverage 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 EBITDAR- and
EBITDA-based leverage calculations include our consolidated subsidiaries, other than those we have designated as "Unrestricted
Subsidiaries" as defined in the Credit Agreement and 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, 2022. 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, 2022
(In thousands, except share and per share data)
7. DEBT (CONTINUED)
J. MATURITIES OF LONG-TERM DEBT (GROSS OF DISCOUNTS) ARE AS FOLLOWS:
YEAR
2023
2024
2025
2026
2027
Thereafter
Net Discounts
Net Deferred Financing Costs
Total Long-term Debt (including current portion)
8. COMMITMENTS AND CONTINGENCIES
A. PURCHASE COMMITMENTS
$
AMOUNT
87,546
249,423
920,142
923,943
2,278,061
6,193,809
10,652,924
(2,659)
(81,270)
$
10,568,995
We have certain contractual obligations related to purchase commitments which require minimum payments as follows:
YEAR
2023
2024
2025
2026
2027
Thereafter
PURCHASE
COMMITMENTS(1)
$
528,818
222,189
104,788
13,760
132,045
3,893
$
1,005,493
(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 2023 and (ii) exclude our operating and financing lease obligations (see Note 2.j.) and our deferred purchase
obligations (see Note 2.p.).
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,
2022 and 2021, there were $46,663 and $46,797, 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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(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
8. 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. We have estimated a reasonably possible range
for all loss contingencies and believe it is reasonably possible that we could incur aggregate losses in addition to amounts currently
accrued for all matters up to an additional $21,500 over the next several years.
9. 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 2020, 2021 and 2022, our board of directors declared the following dividends:
DECLARATION DATE
February 13, 2020
May 5, 2020
August 5, 2020
November 4, 2020
February 24, 2021
May 6, 2021
August 5, 2021
November 4, 2021
February 24, 2022
April 28, 2022
August 4, 2022
November 3, 2022
DIVIDEND
PER SHARE
RECORD DATE
TOTAL AMOUNT PAYMENT DATE
$
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
0.6185
0.6185
March 15, 2021
June 15, 2021
178,569
179,026
April 6, 2021
July 6, 2021
0.6185 September 15, 2021
179,080
October 6, 2021
0.6185 December 15, 2021
179,132
January 6, 2022
0.6185
0.6185
March 15, 2022
June 15, 2022
179,661
179,781
April 6, 2022
July 6, 2022
0.6185 September 15, 2022
179,790
October 4, 2022
0.6185 December 15, 2022
179,866
January 5, 2023
On February 23, 2023, we declared a dividend to our stockholders of record as of March 15, 2023 of $0.6185 per share, payable
on April 5, 2023.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
9. STOCKHOLDERS’ EQUITY MATTERS (CONTINUED)
During the years ended December 31, 2022, 2021 and 2020, 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:
YEAR ENDED DECEMBER 31,
2022
2021
2020
Declared distributions
$
719,098 $
715,807 $
712,773
Amount per share each distribution represents based on weighted average number
of common shares outstanding
2.47
2.47
2.47
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, 2022, 2021 and 2020, 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,
2022
2021
2020
90.4 %
— %
9.6 %
— %
53.9 %
13.0 %
21.8 %
11.3 %
43.0 %
0.0 %
49.5 %
7.5 %
100.0 %
100.0 %
100.0 %
Dividends paid during the years ended December 31, 2022, 2021 and 2020 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, 2022, 2021 and 2020. In 2022, the percentage of our dividend that
was classified as a capital gain was 9.6% and was primarily related to the sale of land and buildings in the United States and
Canada. In 2021, the percentage of our dividend that was classified as a capital gain was 21.8% and primarily related to the sale of
land and buildings in the United States and the United Kingdom. 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.
116
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Part IV
IRON MOUNTAIN INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
10. 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 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, 2022 and 2021 are presented
below:
Deferred Tax Assets:
Accrued liabilities and other adjustments
Net operating loss carryforwards
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,
2022
2021
$
80,159 $
97,161
(47,514)
129,806
(243,150)
(78,486)
(52,786)
(374,422)
$
(244,616) $
54,859
90,996
(51,744)
94,111
(178,657)
(76,204)
(46,281)
(301,142)
(207,031)
The deferred tax assets and deferred tax liabilities as of December 31, 2022 and 2021 are presented below:
DECEMBER 31,
2022
2021
Noncurrent deferred tax assets (Included in Other, a component of Other assets, net)
$
18,389 $
Deferred income taxes
(263,005)
16,903
(223,934)
At December 31, 2022, we have federal net operating loss carryforwards of $63,497, which can be carried forward indefinitely, of
which $57,132 is expected to be realized to reduce future federal taxable income. We have assets for foreign net operating losses
of $81,872, with various expiration dates (and in some cases no expiration date), subject to a valuation allowance of approximately
56.0%. 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.
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Part IV
IRON MOUNTAIN INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
10. INCOME TAXES (CONTINUED)
Rollforward of the valuation allowance is as follows:
YEAR ENDED DECEMBER 31,
2022
2021
2020
BALANCE AT
BEGINNING OF
THE YEAR
(CREDITED)
CHARGED TO
EXPENSE
OTHER
(DECREASES)/
INCREASES(1)
BALANCE
AT END OF
THE YEAR
$
51,744 $
(1,333) $
(2,897) $
46,938
60,003
8,406
(8,337)
(3,600)
(4,728)
47,514
51,744
46,938
(1) Other decreases and increases in valuation allowances are primarily related to changes in foreign currency exchange rates.
The components of net income (loss) before provision (benefit) for income taxes for the years ended December 31, 2022, 2021
and 2020 are as follows:
United States
Canada
Other Foreign
Net income (loss) before provision (benefit) for income taxes
YEAR ENDED DECEMBER 31,
2022
2021
2020
$
$
449,241 $
212,460 $
103,826
78,571
78,780
337,775
631,638 $
629,015 $
276,145
52,332
44,228
372,705
The provision (benefit) for income taxes for the years ended December 31, 2022, 2021 and 2020 consist of the following
components:
Federal—current
Federal—deferred
State—current
State—deferred
Foreign—current
Foreign—deferred
YEAR ENDED DECEMBER 31,
2022
2021
2020
$
24,331 $
54,867 $
(10,424)
(30,581)
8,553
(3,728)
92,525
(21,611)
14,322
9,566
(526)
83,154
14,907
8,834
2,956
(625)
50,063
(21,195)
29,609
Provision (Benefit) for Income Taxes
$
69,489 $
176,290 $
118
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Part IV
IRON MOUNTAIN INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
10. 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
net income (loss) before provision (benefit) for income taxes for the years ended December 31, 2022, 2021 and 2020, 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)
Withholding taxes
Reserve (reversal) accrual and audit settlements (net of federal tax benefit)
Remeasurement of the Deferred Purchase Obligation
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,
2022
2021
2020
$
132,644 $
132,093 $
78,268
(82,620)
4,043
(1,333)
10,600
40
(19,656)
22,227
2,820
724
(8,203)
8,027
8,406
23,654
3,072
—
9,856
(3,437)
2,822
$
69,489 $
176,290 $
(60,378)
2,258
(8,337)
6,835
(7,409)
—
9,472
13,407
(4,507)
29,609
Our effective tax rates for the years ended December 31, 2022, 2021 and 2020 were 11.0%, 28.0% and 7.9%, respectively. Our
effective tax rate is subject to variability in the future due to, among other items: (i) changes in the mix of income between our
QRSs and our TRSs, as well as among the jurisdictions in which we operate; (ii) tax law changes; (iii) volatility in foreign exchange
gains and losses; (iv) the timing of the establishment and reversal of tax reserves; (v) our ability to utilize net operating losses that
we generate and (vi) the taxability or deductibility of significant transactions.
The primary reconciling items between the federal statutory tax rate of 21.0% and our overall effective tax rate were:
2022
The benefits derived from the dividends paid
deduction of $82,620 and the differences in
the tax rates to which our foreign earnings
are subject of $22,227. In addition, there
were gains and losses recorded in Other
(income) expense, net and Gain (loss) on
disposal/write-down of property, plant and
equipment, net during the period for which
there were insignificant tax impacts.
YEAR ENDED DECEMBER 31,
2021
The benefit derived from the dividends paid
deduction of $8,203 which was offset by (i)
the impact of differences in the tax rates at
which our foreign earnings are subject to,
resulting in a tax provision of $9,856, and (ii)
foreign withholding taxes of $23,654, which
were either paid during the year or accrued,
for the deferred tax liability for the U.S. tax
impact of undistributed earnings of foreign
TRSs that are no longer intended to be
permanently reinvested outside the United
States.
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.
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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Part IV
IRON MOUNTAIN INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
10. INCOME TAXES (CONTINUED)
During 2021, as a result of the enactment of a tax law and the closing of various acquisitions, we concluded that it is no longer our
intention to reinvest our undistributed earnings of our foreign TRSs indefinitely outside the United States. 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. However, such future repatriations may require distributions to our stockholders in
accordance with REIT distribution rules, and any such distribution may then be taxable, as appropriate, at the stockholder level. We
expect to provide for foreign withholding taxes on the current and future earnings of all of our foreign subsidiaries as the result of
such reassessment.
The Organization for Economic Co-operation and Development (the "OECD"), an international association comprised of 38
countries, including the United States, has issued proposals that change long-standing tax principles including on a global
minimum tax initiative. On December 12, 2022, the European Union member states agreed to implement the OECD’s Base Erosion
and Profit Shifting ("BEPS") 2.0 Pillar Two global corporate minimum tax rate of 15% on companies with revenues of at least
$790,000, which would go into effect in 2024. Other countries are also actively considering changes to their tax laws to adopt
certain parts of the OECD’s proposals. In December 2022, South Korea enacted new global minimum tax rules to align with OECD
BEPS 2.0 Pillar Two. We will continue to monitor regulatory developments to assess potential impacts of OECD proposals on us.
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 increases of $90 and $823
for gross interest and penalties for the years ended December 31, 2022 and 2021, respectively. We recorded a decrease of $1,499
for gross interest and penalties for the years ended December 31, 2020. We had $6,635 and $6,805 accrued for the payment of
interest and penalties as of December 31, 2022 and 2021, respectively.
A summary of tax years that remain subject to examination by major tax jurisdictions is as follows:
TAX YEARS
See Below
2019 to present
2015 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 2021, 2020 and 2019 tax years remain subject to examination for United States federal tax purposes as well as net
operating loss carryforwards utilized in these 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, 2022, we had $27,753
of reserves related to uncertain tax positions, of which $24,671 and $3,082 is included in other long-term liabilities and deferred
income taxes, respectively, in the accompanying Consolidated Balance Sheet. As of December 31, 2021, we had $27,772 of
reserves related to uncertain tax positions, of which $24,627 and $3,145 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.
120
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IRON MOUNTAIN INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
10. INCOME TAXES (CONTINUED)
A rollforward of unrecognized tax benefits is as follows:
Gross tax contingencies—January 1, 2020
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
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, 2021
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
Acquired unrecognized tax benefits
Lapses of statutes
Gross tax contingencies—December 31, 2022
$
$
Part IV
35,068
2,907
80
(5,617)
(4,480)
(1,989)
25,969
3,893
344
(536)
(1,663)
(235)
27,772
2,271
723
(1,866)
1,354
(2,501)
27,753
The reversal of these reserves of $27,753 as of December 31, 2022 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 $5,977 of our unrecognized tax positions
may be recognized by the end of 2023 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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121
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Part IV
IRON MOUNTAIN INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
11. SEGMENT INFORMATION
As of December 31, 2022, our two reportable segments are described as follows:
(1) Global Records and Information Management ("Global RIM") Business includes several 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 ("Records Management") for
customers in 60 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, server and computer backup services and related services offerings
("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.
(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. 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.
(v) Entertainment Services, entertainment and media services which help 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.
(vi) Consumer Storage, which provides on-demand, valet storage for consumers through a strategic partnership that 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.
The remaining activities of our business consist primarily of our Fine Arts and ALM businesses and other corporate items
("Corporate and Other").
(i) Fine Arts provides technical expertise in the handling, installation and storing of art.
(ii) ALM provides hyperscale and corporate IT infrastructure managers with services and solutions that enable the
decommissioning, data erasure, processing and disposition or sale of IT hardware and component assets. ALM services
are enabled by: secure logistics, chain of custody and complete asset traceability practices, environmentally-responsible
asset processing and recycling, and data sanitization and asset refurbishment services that enable value recovery through
asset remarketing. Our ALM services focus on protecting and eradicating customer data while maintaining strong,
auditable and transparent chain of custody practices.
(iii) Corporate and Other also includes costs related to executive and staff functions, including finance, human resources and
IT, which benefit the enterprise as a whole.
122
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IRON MOUNTAIN INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
11. SEGMENT INFORMATION (CONTINUED)
An analysis of our business segment information and reconciliation to the accompanying Consolidated Financial Statements is as
follows:
As of and for the Year Ended December 31, 2022
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
As of and for the Year Ended December 31, 2021
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
As of and for the Year Ended December 31, 2020
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
GLOBAL RIM
BUSINESS
GLOBAL
DATA CENTER
BUSINESS
CORPORATE
AND OTHER
TOTAL
CONSOLIDATED
$
$
$
4,295,115 $
2,606,721
1,688,394
469,419
308,207
161,212
1,887,589
10,654,650
303,342
246,216
(23)
401,125 $
372,208
28,917
140,028
103,953
36,075
175,622
3,752,088
650,534
551,232
78,103
407,334 $
55,094
352,240
118,148
66,824
51,324
(236,154)
1,733,776
803,733
77,930
725,610
5,103,574
3,034,023
2,069,551
727,595
478,984
248,611
1,827,057
16,140,514
1,757,609
875,378
803,690
57,149
21,199
193
78,541
3,994,988 $
2,517,208
1,477,780
477,713
320,451
157,262
1,709,525
11,101,557
369,749
213,395
97,044
326,898 $
289,592
37,306
148,023
93,679
54,344
137,349
2,911,823
422,274
320,768
88,998
169,645 $
63,319
106,326
54,686
50,942
3,744
(212,175)
436,651
94,875
76,919
17,956
4,491,531
2,870,119
1,621,412
680,422
465,072
215,350
1,634,699
14,450,031
886,898
611,082
203,998
59,310
12,508
—
71,818
3,748,604 $
2,416,147
1,332,457
464,745
316,575
148,170
1,565,941
11,015,684
352,745
164,914
118,581
279,312 $
263,695
15,617
134,844
83,106
51,738
126,576
2,727,654
249,459
243,699
—
119,354 $
74,249
45,105
52,480
47,881
4,599
(216,796)
405,929
29,650
29,650
—
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
69,250
5,760
—
75,010
(1) Excludes all intercompany receivables or payables and investment in subsidiary balances.
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123
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Part IV
IRON MOUNTAIN INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
11. SEGMENT INFORMATION (CONTINUED)
The accounting policies of the reportable segments are the same as those described in Note 2. Adjusted EBITDA for each segment
is defined as net income (loss) 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
• Acquisition and Integration Costs
• Other (income) expense, net
• Restructuring and other transformation
• Stock-based compensation expense
•
•
Intangible impairments
• COVID-19 Costs (as defined below)
(Gain) loss on disposal/write-down of property, plant and
equipment, net (including real estate)
Internally, we use Adjusted EBITDA as the basis for evaluating the performance of, and allocated resources to, our operating
segments.
A reconciliation of Net Income (Loss) to Adjusted EBITDA on a consolidated basis for the years ended December 31, 2022, 2021
and 2020 is as follows:
Net Income (Loss)
Add/(Deduct):
Interest expense, net
Provision (benefit) for income taxes
Depreciation and amortization
Acquisition and Integration Costs
Restructuring and other transformation
Intangible impairments
(Gain) loss on disposal/write-down of property, plant and equipment, net
(including real estate)
Other (income) expense, net, excluding our share of losses (gains) from our
unconsolidated joint ventures(1)
Stock-based compensation expense
COVID-19 Costs(2)
Our share of Adjusted EBITDA reconciling items from our unconsolidated joint
ventures
YEAR ENDED DECEMBER 31,
2022
2021
2020
$
562,149 $
452,725 $
343,096
488,014
69,489
727,595
47,746
41,933
—
417,961
176,290
680,422
12,764
206,426
—
418,535
29,609
652,069
—
194,396
23,000
(93,268)
(172,041)
(363,537)
(83,268)
56,861
—
9,806
(205,746)
61,001
—
4,897
133,611
34,272
9,285
1,385
Adjusted EBITDA
$
1,827,057 $
1,634,699 $
1,475,721
(1)
Includes foreign currency transaction (gains) losses, net, debt extinguishment expense and other, net.
(2) 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, in 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.
124
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IRON MOUNTAIN INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
11. SEGMENT INFORMATION (CONTINUED)
Information as to our operations in different geographical areas for the years ended December 31, 2022, 2021 and 2020 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,
2022
2021
2020
$
3,262,755 $
2,713,147 $
2,577,084
332,556
270,836
144,840
294,675
252,385
148,431
1,092,587
1,082,893
247,667
224,860
133,815
963,844
$
8,925,643 $
7,867,841 $
7,818,059
1,062,641
514,777
490,172
914,732
562,911
528,703
838,491
556,120
575,862
3,600,136
3,134,577
3,090,948
Information as to our revenues by product and service lines by segment for the years ended December 31, 2022, 2021 and 2020 is
as follows:
For the Year Ended December 31, 2022
Records Management(1)
Data Management(1)
Information Destruction(1)(2)(3)
Data Center(1)
For the Year Ended December 31, 2021
Records Management(1)
Data Management(1)
Information Destruction(1)(2)(3)
Data Center(1)
For the Year Ended December 31, 2020
Records Management(1)
Data Management(1)
Information Destruction(1)(2)(3)
Data Center(1)
GLOBAL RIM
BUSINESS
GLOBAL
DATA CENTER
BUSINESS
CORPORATE
AND OTHER
TOTAL
CONSOLIDATED
$
3,287,237 $
— $
137,845 $
3,425,082
510,107
497,771
—
—
—
401,125
185
269,304
—
510,292
767,075
401,125
$
3,074,605 $
— $
125,571 $
3,200,176
529,416
390,967
—
—
—
326,898
—
44,074
—
529,416
435,041
326,898
$
2,852,296 $
— $
101,975 $
2,954,271
554,901
341,407
—
—
—
279,312
—
17,379
—
554,901
358,786
279,312
(1) Each of these offerings has a component of revenue that is storage rental related and a component that is service revenue, except for information destruction, which
does not have a storage rental component.
(2)
(3)
Information destruction revenue for our Global RIM Business includes secure shredding services.
Information destruction revenue for Corporate and Other includes product revenue from ITRenew.
IRON MOUNTAIN 2022 FORM 10-K
125
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Part IV
IRON MOUNTAIN INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
12. RELATED PARTY TRANSACTIONS
In October 2020, in connection with the Frankfurt JV Transaction, we entered into agreements whereby we earn various fees,
including (i) special project revenue and (ii) property management and construction and development fees for services we are
providing to the Frankfurt JV (the "Frankfurt JV Agreements").
In March 2019, in connection with the formation of the MakeSpace JV, 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"). In February
2022, in connection with the formation of the Clutter JV, we terminated the MakeSpace Agreement and entered into a storage and
service agreement with the Clutter JV to provide certain storage and related services to the Clutter JV (the "Clutter Agreement").
Revenue recognized in the accompanying Consolidated Statements of Operations under these agreements for the years ended
December 31, 2022, 2021 and 2020 is as follows (approximately):
Frankfurt JV Agreements(1)
MakeSpace Agreement and Clutter Agreement(2)
YEAR ENDED DECEMBER 31,
2022
2021
2020
$
15,000 $
28,500
19,600 $
34,700
400
33,600
(1) Revenues and expenses associated with the Frankfurt JV Agreements are presented as a component of our Global Data Center Business segment.
(2) Revenues and expenses associated with the MakeSpace Agreement and Clutter Agreement are presented as a component of our Global RIM Business segment.
During the years ended December 31, 2022, 2021 and 2020, the Company had no other related party transactions.
13. RESTRUCTURING AND OTHER TRANSFORMATION
PROJECT MATTERHORN
In September 2022, we announced Project Matterhorn, our global program designed to accelerate the growth of our business.
Project Matterhorn investments will focus on transforming our operating model to a global operating model. Project Matterhorn will
focus on the formation of a solution-based sales approach that is designed to allow us to optimize our shared services and best
practices to better serve our customers' needs. We will be investing to accelerate growth and to capture a greater share of the
large, global addressable markets in which we operate. We expect to incur approximately $150,000 in costs annually related to
Project Matterhorn from 2023 through 2025. Costs are comprised of (1) restructuring costs, which include (i) site consolidation and
other related exit costs, (ii) employee severance costs and (iii) certain professional fees associated with these activities, and (2)
other transformation costs, which include professional fees such as project management costs and costs for third party consultants
who are assisting in the enablement our growth initiatives. Total costs related to Project Matterhorn during the year ended
December 31, 2022 were approximately $41,933 and are included in Restructuring and other transformation in our Consolidated
Statement of Operations. There were no Restructuring and other transformation costs related to Project Matterhorn for the years
ended December 31, 2021 or 2020.
Restructuring and other transformation related to Project Matterhorn included in the accompanying Consolidated Statement of
Operations for the year ended December 31, 2022, is as follows:
Restructuring
Other transformation
Restructuring and other transformation
126
IRON MOUNTAIN 2022 FORM 10-K
YEAR ENDED
DECEMBER 31, 2022
$
$
13,292
28,641
41,933
Table of Contents
Part IV
IRON MOUNTAIN INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
13. RESTRUCTURING AND OTHER TRANSFORMATION (CONTINUED)
Restructuring costs for Project Matterhorn, included as a component of Restructuring and other transformation in the
accompanying Consolidated Statement of Operations, by segment for the year ended December 31, 2022 are as follows:
Global RIM Business
Global Data Center Business
Corporate and Other
Total restructuring costs
PROJECT SUMMIT
YEAR ENDED
DECEMBER 31, 2022
$
$
13,083
—
209
13,292
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. As of December 31, 2021, we completed Project Summit. As a result of the program, we simplified our global structure,
rebalanced resources to focus on higher growth areas, realigned our management structure to create a more dynamic, agile
organization, made investments to enhance the customer experience and leveraged new technology solutions that enabled us to
modernize our service delivery model and more efficiently utilize our fleet, labor and real estate.
The implementation of Project Summit resulted in total restructuring costs of approximately $450,000 that primarily consisted of: (i)
employee severance costs; (ii) internal costs associated with the development and implementation of Project Summit initiatives; (iii)
professional fees, primarily related to third party consultants who assisted with the design and execution of various initiatives as
well as project management activities and (iv) system implementation and data conversion costs.
Restructuring costs for Project Summit are included as a component of Restructuring and other transformation in the
accompanying Consolidated Statements of Operations for the years ended December 31, 2021 and 2020, and from the inception
of Project Summit through December 31, 2021 is as follows:
Employee severance
Professional fees and other
Total restructuring costs
YEAR ENDED
DECEMBER 31, 2021
YEAR ENDED
DECEMBER 31, 2020
FROM INCEPTION OF
PROJECT SUMMIT
THROUGH
DECEMBER 31, 2021
$
$
22,809 $
183,617
206,426 $
47,349 $
147,047
194,396 $
91,008
358,411
449,419
As Project Summit was completed as of December 31, 2021, there were no restructuring costs for Project Summit for the year
ended December 31, 2022.
IRON MOUNTAIN 2022 FORM 10-K
127
Table of Contents
Part IV
IRON MOUNTAIN INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2022
(In thousands, except share and per share data)
13. RESTRUCTURING AND OTHER TRANSFORMATION (CONTINUED)
Restructuring costs for Project Summit included in the accompanying Consolidated Statements of Operations by segment for the
years ended December 31, 2021, and 2020 are as follows:
Global RIM Business
Global Data Center Business
Corporate and Other
Total restructuring costs
YEAR ENDED
DECEMBER 31, 2021
YEAR ENDED
DECEMBER 31, 2020
FROM INCEPTION OF
PROJECT SUMMIT
THROUGH
DECEMBER 31, 2021
$
$
59,033 $
67,140 $
3,062
144,331
1,632
125,624
206,426 $
194,396 $
148,073
5,000
296,346
449,419
A rollforward of the accrued restructuring costs, which is included as a component of Accrued expenses and other current liabilities
in our Consolidated Balance Sheets for December 31, 2021 through December 31, 2022, is as follows:
Balance as of December 31, 2020
Amounts accrued
Payments
Other, including currency translation adjustments
Balance as of December 31, 2021
Payments
Balance as of December 31, 2022
EMPLOYEE
SEVERANCE
PROFESSIONAL
FEES AND OTHER
TOTAL ACCRUED
RESTRUCTURING
COSTS
$
$
$
16,278 $
23,775 $
22,809
(29,956)
2,858
11,989 $
(11,989)
— $
183,617
(199,664)
—
7,728 $
(7,728)
— $
40,053
206,426
(229,620)
2,858
19,717
(19,717)
—
128
IRON MOUNTAIN 2022 FORM 10-K
Table of Contents
Part IV
IRON MOUNTAIN INCORPORATED
SCHEDULE III—SCHEDULE OF REAL ESTATE AND
ACCUMULATED DEPRECIATION
DECEMBER 31, 2022
(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 1,143 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.i. to Notes to Consolidated Financial Statements as of December 31, 2022:
Gross Amount of Real Estate Assets, As Reported on Schedule III
Add (Deduct) Reconciling Items:
Book value of racking included in leased facilities(1)
Book value of financing leases(2)
Book value of construction in progress(3)
Book value of other
Total Reconciling Items
Gross Amount of Real Estate Assets, As Disclosed in Note 2.i.
$
4,461,195
1,513,279
338,874
513,297
(8,829)
2,356,621
$
6,817,816
(1) Represents the gross book value of racking installed in our 1,143 leased facilities, which is included in historical book value of racking in Note 2.i., 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.i., 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.i. The historical
book value of real estate assets associated with owned buildings that were related to construction in progress as of December 31, 2022 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, 2022:
Accumulated Depreciation of Real Estate Assets, As Reported on Schedule III
$
1,187,390
Add (Deduct) Reconciling Items:
Accumulated Depreciation - non-real estate assets(1)
Accumulated Depreciation - racking in leased facilities(2)
Accumulated Depreciation - financing leases(3)
Accumulated Depreciation - other
Total Reconciling Items
Accumulated Depreciation, As Reported on Consolidated Balance Sheet
1,479,074
1,119,364
129,311
(4,818)
2,722,931
$
3,910,321
(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, 2022 installed in our 1,143 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, 2022 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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Part IV
IRON MOUNTAIN INCORPORATED
SCHEDULE III—SCHEDULE OF REAL ESTATE AND
ACCUMULATED DEPRECIATION (CONTINUED)
DECEMBER 31, 2022
(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)(11)
ACCUMULATED
DEPRECIATION
AT CLOSE OF
CURRENT
PERIOD(1)(2)(11)
DATE OF
CONSTRUCTION
OR ACQUIRED(3)
LIFE ON WHICH
DEPRECIATION IN
LATEST INCOME
STATEMENT IS
COMPUTED
United States
(Including Puerto Rico)
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
3576 N. Moline,
Aurora, Colorado
5151 E. 46th Ave,
Denver, Colorado
11333 E
53rd Ave, Denver,
Colorado
4300 Brighton
Boulevard,
Denver, Colorado
1 $
— $
1,637 $
2,833 $
4,470 $
2,470
2001
Up to 40 years
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
15,599
416,451
432,050
10,662
2019
Up to 40 years
423,107
36,832
459,939
75,026
2018 (5)
Up to 40 years
12,178
14,819
26,997
7,900
2007
Up to 40 years
7,305
1,146
8,451
5,527
2012
Up to 40 years
87,865
3,222
91,087
21,085
2018 (5)
Up to 40 years
4,762
3,211
7,973
3,334
2002
Up to 40 years
13,407
530
13,937
3,421
2019 (10) Up to 40 years
10,168
28,266
38,434
17,640
1988
Up to 40 years
749
6
755
165
2014
Up to 40 years
15,172
7,630
22,802
16,199
1997
Up to 40 years
4,576
900
5,476
2,205
2002
Up to 40 years
3,420
1,864
5,284
2,190
2001
Up to 40 years
6,329
3,286
9,615
4,563
2002
Up to 40 years
15,100
253
15,353
2,954
2019 (10) Up to 40 years
1,583
6,312
7,403
4,532
724
6,115
7,036
2,444
2001
Up to 40 years
2,189
2014
Up to 40 years
10,349
17,752
11,186
2001
Up to 40 years
116,336
26,321
142,657
23,693
2017
Up to 40 years
130
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Table of Contents
Part IV
IRON MOUNTAIN INCORPORATED
SCHEDULE III—SCHEDULE OF REAL ESTATE AND
ACCUMULATED DEPRECIATION (CONTINUED)
DECEMBER 31, 2022
(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)(11)
ACCUMULATED
DEPRECIATION
AT CLOSE OF
CURRENT
PERIOD(1)(2)(11)
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)
20 Eastern Park
Rd, East
Hartford,
Connecticut
Kennedy Road,
Windsor,
Connecticut
150-200 Todds
Ln, Wilmington,
Delaware
3501 Electronics
Way, West Palm
Beach, Florida
5319 Tulane
Drive SW,
Atlanta, Georgia
6111 Live Oak
Parkway,
Norcross,
Georgia
2425 South
Halsted St,
Chicago, Illinois
1301 S. Rockwell
St, Chicago,
Illinois
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
1 $
— $
7,417 $
2,103 $
9,520 $
6,731
2002
Up to 40 years
2
1
1
1
1
1
1
1
1
1
1
1
1
4
1
1
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
10,447
32,187
42,634
24,976
2001
Up to 40 years
7,226
1,210
8,436
5,538
2002
Up to 40 years
4,201
14,624
18,825
8,899
2001
Up to 40 years
2,808
3,972
6,780
4,392
2002
Up to 40 years
3,542
2,910
6,452
876
2017
Up to 40 years
7,470
1,856
9,326
4,849
2006
Up to 40 years
7,947
23,792
31,739
17,946
1999
Up to 40 years
404
2,973
3,377
3,008
2001
Up to 40 years
4,264
14,273
18,537
10,210
2001
Up to 40 years
1,989
4,057
6,046
2,016
2000
Up to 40 years
22,048
4,272
26,320
11,712
2014
Up to 40 years
1,378
949
2,327
446
2015
Up to 40 years
622
545
1,167
513
2003
Up to 40 years
709
14,978
15,687
7,086
Various
Up to 40 years
8,337
603
8,940
3,846
2015 (10) Up to 40 years
—
2,198
6,636
8,834
4,530
1999
Up to 40 years
IRON MOUNTAIN 2022 FORM 10-K
131
Table of Contents
Part IV
IRON MOUNTAIN INCORPORATED
SCHEDULE III—SCHEDULE OF REAL ESTATE AND
ACCUMULATED DEPRECIATION (CONTINUED)
DECEMBER 31, 2022
(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)(11)
ACCUMULATED
DEPRECIATION
AT CLOSE OF
CURRENT
PERIOD(1)(2)(11)
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)
120 Hampden St,
Boston,
Massachusetts
32 George St,
Boston,
Massachusetts
3435 Sharps Lot
Rd, Dighton,
Massachusetts
77 Constitution
Boulevard,
Franklin,
Massachusetts
Bearfoot Road,
Northboro,
Massachusetts
6601 Sterling
Dr South, Sterling
Heights, Michigan
3140 Ryder Trail
South, Earth City,
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
1 $
— $
164 $
945 $
1,109 $
643
2002
Up to 40 years
1
1
1
2
1
1
2
1
1
1
3
1
1
1
1
1
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,820
5,535
7,355
5,890
1991
Up to 40 years
1,911
5,413
854
395
2,765
2,220
1999
Up to 40 years
5,808
1,156
2014
Up to 40 years
55,923
15,622
71,545
45,994
Various
Up to 40 years
1,294
1,255
2,549
1,387
2002
Up to 40 years
3,072
3,497
6,569
2,969
2004
Up to 40 years
2,924
19,623
22,547
9,292
Various
Up to 40 years
3,430
9,926
13,356
7,127
2002
Up to 40 years
6,179
4,587
10,766
7,639
2001
Up to 40 years
310,404
83,246
393,650
50,472
2018 (5)
Up to 40 years
38,697
61,427
100,124
61,889
Various
Up to 40 years
11,734
11,884
23,618
3,620
2015
Up to 40 years
9,522
4,624
14,146
1,632
2015
Up to 40 years
8,945
3,229
12,174
1,774
2015
Up to 40 years
3,585
11,948
15,533
7,612
2006
Up to 40 years
1,324
11,456
12,780
8,000
1998
Up to 40 years
132
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Table of Contents
Part IV
IRON MOUNTAIN INCORPORATED
SCHEDULE III—SCHEDULE OF REAL ESTATE AND
ACCUMULATED DEPRECIATION (CONTINUED)
DECEMBER 31, 2022
(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)(11)
ACCUMULATED
DEPRECIATION
AT CLOSE OF
CURRENT
PERIOD(1)(2)(11)
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)
1368 County Rd
8, Farmington,
New York
County Rd 10,
Linlithgo, New
York
Ulster Ave/Route
9W, Port Ewen,
New York
Binnewater Rd,
Rosendale, New
York
220 Wavel St,
Syracuse, New
York
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
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
6005 Dana Way,
Nashville,
Tennessee
1 $
— $
2,611 $
5,336 $
7,947 $
5,378
1998
Up to 40 years
2
3
2
1
1
1
1
1
1
2
1
1
1
1
1
2
2
—
—
—
—
—
—
—
—
—
—
—
—
—
102
3,255
3,357
2,042
2001
Up to 40 years
23,137
12,371
35,508
25,530
2001
Up to 40 years
5,142
12,029
17,171
8,899
Various
Up to 40 years
2,929
2,847
5,776
3,433
1997
Up to 40 years
7,087
332
7,419
2,010
2017
Up to 40 years
3,129
3,336
606
4,144
3,735
7,480
2,330
1999
Up to 40 years
4,066
2001
Up to 40 years
1,030
1,901
2,931
1,720
1999
Up to 40 years
29,092
1,409
30,501
5,298
2018 (5)
Up to 40 years
21,166
267,940
289,106
88,962
Various
Up to 40 years
2,457
1,055
3,512
2,341
2000
Up to 40 years
4,185
3,811
7,996
5,209
2001
Up to 40 years
2,659
2,254
4,913
3,464
2001
Up to 40 years
—
11,776
2,643
14,419
4,715
2016 (10) Up to 40 years
—
—
—
2,846
1,356
4,202
1,768
2016 (10) Up to 40 years
718
4,598
5,316
2,647
Various
Up to 40 years
1,827
10,383
12,210
2,478
2000
Up to 40 years
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IRON MOUNTAIN INCORPORATED
SCHEDULE III—SCHEDULE OF REAL ESTATE AND
ACCUMULATED DEPRECIATION (CONTINUED)
DECEMBER 31, 2022
(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)(11)
ACCUMULATED
DEPRECIATION
AT CLOSE OF
CURRENT
PERIOD(1)(2)(11)
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)
Capital Parkway,
Carrollton, Texas
1800 Columbian
Club Dr,
Carrolton, Texas
1905 John
Connally Dr,
Carrolton, Texas
13425
Branchview Ln,
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
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
1665 S. 5350
West, Salt Lake
City, Utah
11052 Lakeridge
Pkwy, Ashland,
Virginia
11660 Hayden
Road, Manassas,
Virginia
3725 Thirlane Rd.
N.W., Roanoke,
Virginia
22445 Randolph
Dr, Sterling,
Virginia
3 $
— $
8,299 $
1,518 $
9,817 $
3,130
2015 (10) Up to 40 years
1
1
1
1
1
1
1
1
1
1
3
1
1
1
1
1
1
1
1
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
19,673
2,162
21,835
11,303
2013
Up to 40 years
2,174
997
3,171
1,635
2000
Up to 40 years
3,518
3,708
7,226
4,605
2001
Up to 40 years
3,215
5,328
2,198
3,180
5,413
8,508
2,962
2000
Up to 40 years
3,595
2002
Up to 40 years
8,354
2,270
10,624
6,783
2003
Up to 40 years
3,188
12,308
15,496
9,798
2001
Up to 40 years
2,840
2,743
5,583
2,995
2000
Up to 40 years
1,032
1,251
2,283
1,252
2002
Up to 40 years
3,467
2,486
5,953
3,302
2000
Up to 40 years
6,327
38,415
44,742
18,226
2004
Up to 40 years
1,795
1,067
2,862
1,528
2000
Up to 40 years
1,680
2,536
4,216
1,644
2001
Up to 40 years
6,323
1,360
7,683
2,335
2015 (10) Up to 40 years
6,239
5,262
11,501
6,333
2002
Up to 40 years
1,709
1,962
3,671
2,238
1999
Up to 40 years
104,824
424,462
529,286
34,901
2020
Up to 40 years
2,577
287
2,864
1,393
2015 (10) Up to 40 years
7,598
4,463
12,061
6,935
2005
Up to 40 years
134
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Table of Contents
Part IV
IRON MOUNTAIN INCORPORATED
SCHEDULE III—SCHEDULE OF REAL ESTATE AND
ACCUMULATED DEPRECIATION (CONTINUED)
DECEMBER 31, 2022
(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)(11)
ACCUMULATED
DEPRECIATION
AT CLOSE OF
CURRENT
PERIOD(1)(2)(11)
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)
307 South
140th St, Burien,
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 $
— $
2,078 $
2,869 $
4,947 $
2,776
1999
Up to 40 years
1
1
1
1
—
—
—
—
5,399
4,252
9,651
4,247
2002
Up to 40 years
4,496
2,655
7,151
4,109
2001
Up to 40 years
3,906
888
4,794
886
2015
Up to 40 years
1,307
2,143
3,450
1,737
1999
Up to 40 years
115 $
— $
1,654,931 $
1,810,880 $
3,465,811 $
864,681
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IRON MOUNTAIN INCORPORATED
SCHEDULE III—SCHEDULE OF REAL ESTATE AND
ACCUMULATED DEPRECIATION (CONTINUED)
DECEMBER 31, 2022
(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)(11)
ACCUMULATED
DEPRECIATION
AT CLOSE OF
CURRENT
PERIOD(1)(2)(11)
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
610 Sprucewood
Ave, Windsor
1 $
— $
3,847 $
4,424 $
8,271 $
4,739
2000
Up to 40 years
1
1
1
1
1
1
1
1
1
1
1
1
1
1
—
—
—
—
—
—
—
—
—
—
—
—
—
—
5,403
5,007
8,091
4,326
14,658
2,020
3,639
2,751
8,196
1,800
1,059
7,478
829
1,243
6,530
11,933
6,480
2000
Up to 40 years
17,510
22,517
10,069
2000
Up to 40 years
2,176
6,834
9,009
975
516
705
10,267
11,160
5,212
2001
Up to 40 years
5,572
2005
Up to 40 years
23,667
12,540
2000
Up to 40 years
2,995
4,155
3,456
1,751
2000
Up to 40 years
664
2016
Up to 40 years
1,592
2000
Up to 40 years
19,092
27,288
14,990
2000
Up to 40 years
2,516
7,132
(359)
1,596
659
4,316
8,191
7,119
2,425
1,902
2,076
2000
Up to 40 years
4,713
2000
Up to 40 years
3,051
2017
Up to 40 years
1,047
2008
Up to 40 years
897
2007
Up to 40 years
15 $
130 $
— $
70,347 $
79,315 $
149,662 $
75,393
— $
1,725,278 $
1,890,195 $
3,615,473 $
940,074
136
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Table of Contents
Part IV
IRON MOUNTAIN INCORPORATED
SCHEDULE III—SCHEDULE OF REAL ESTATE AND
ACCUMULATED DEPRECIATION (CONTINUED)
DECEMBER 31, 2022
(Dollars in thousands)
(A)
(B)
(C)
(D)
(E)
(F)
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
G2-B,
Engineering
Square IDG
Developer’s Area,
6th Oct City
Giza, Egypt
65 Egerton Road,
Birmingham,
England
Otterham Quay
Lane, Gillingham,
England
Kemble Industrial
Park, Kemble,
England
Gayton Road,
Kings Lynn,
England
17 Broadgate,
Oldham, England
Harpway Lane,
Sopley, England
Unit 1A
Broadmoor Road,
Swindon,
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
Le Petit Courtin
Site de Dois,
Gueslin,
Mingieres,
France
ZI des Sables,
Morangis, France
FACILITIES(1)
ENCUMBRANCES
INITIAL COST
TO COMPANY(1)
COST
CAPITALIZED
SUBSEQUENT TO
ACQUISITION(1)(2)
GROSS AMOUNT
CARRIED AT
CLOSE OF
CURRENT
PERIOD(1)(11)
ACCUMULATED
DEPRECIATION
AT CLOSE OF
CURRENT
PERIOD(1)(2)(11)
DATE OF
CONSTRUCTION
OR ACQUIRED(3)
LIFE ON WHICH
DEPRECIATION IN
LATEST INCOME
STATEMENT IS
COMPUTED
1 $
— $
6,542 $
12,010 $
18,552 $
5,988
2010
Up to 40 years
1
1
1
1
1
1
9
2
3
1
1
1
3
4
1
1
1
1
—
—
—
—
2,541
1,408
5,852
1,451
8,393
2,859
4,897
2003
Up to 40 years
364
2003
Up to 40 years
3,136
2,602
5,738
972
2003
Up to 40 years
1,935
(131)
1,804
292
2018
Up to 40 years
—
8,984
(2,736)
6,248
225
2021 (7)
Up to 40 years
—
—
—
—
—
—
—
—
6,980
1,787
8,767
5,143
2003
Up to 40 years
7,418
2,591
10,009
5,328
2004
Up to 40 years
5,277
6,022
11,299
8,248
2003
Up to 40 years
3,119
1,293
4,412
2,791
2003
Up to 40 years
4,039
681
2,636
(4)
1,280
221
4,035
1,961
2,857
2,355
2008
Up to 40 years
1,385
2004
Up to 40 years
1,258
2006
Up to 40 years
1,750
2,312
4,062
2,532
2003
Up to 40 years
—
21,318
(1,314)
20,004
6,718
2016 (4)
Up to 40 years
—
—
1,322
(75)
1,247
408
2016 (4)
Up to 40 years
3,390
569
3,959
1,440
2016 (4)
Up to 40 years
—
14,141
(777)
13,364
3,199
2016 (4)
Up to 40 years
—
12,407
14,281
26,688
19,182
2004
Up to 40 years
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Part IV
IRON MOUNTAIN INCORPORATED
SCHEDULE III—SCHEDULE OF REAL ESTATE AND
ACCUMULATED DEPRECIATION (CONTINUED)
DECEMBER 31, 2022
(Dollars in thousands)
(A)
(B)
(C)
(D)
(E)
(F)
REGION/COUNTRY/
STATE/CAMPUS
ADDRESS
Europe (continued)
45 Rue de
Savoie,
Manissieux, Saint
Priest, France
Heinrich Lanz
Alee 47,
Frankfurt,
Germany
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
Vareseweg 130,
Rotterdam, The
Netherlands
Howemoss Drive,
Aberdeen,
Scotland
Nettlehill Road,
Houston
Industrial Estate,
Livingston,
Scotland
Av Madrid s/n
Poligono
Industrial
Matillas, Alcala
de Henares,
Spain
Calle Bronce, 37,
Chiloeches,
Spain
Calle del Mar
Egeo, 4, 28830,
San Fernando de
Hanares, Madrid,
Spain
Ctra M.118 ,
Km.3 Parcela 3,
Madrid, Spain
Plot No. S10501
& S10506 Jebel
Ali Free Zone
Authority, United
Arab Emirates
Abanto Ciervava,
Spain
FACILITIES(1)
ENCUMBRANCES
INITIAL COST
TO COMPANY(1)
COST
CAPITALIZED
SUBSEQUENT TO
ACQUISITION(1)(2)
GROSS AMOUNT
CARRIED AT
CLOSE OF
CURRENT
PERIOD(1)(11)
ACCUMULATED
DEPRECIATION
AT CLOSE OF
CURRENT
PERIOD(1)(2)(11)
DATE OF
CONSTRUCTION
OR ACQUIRED(3)
LIFE ON WHICH
DEPRECIATION IN
LATEST INCOME
STATEMENT IS
COMPUTED
1 $
— $
5,546 $
(410) $
5,136 $
1,330
2016 (4)
Up to 40 years
1
1
1
1
1
1
1
2
1
1
1
1
1
1
2
—
80,951
3,330
84,281
4,257
2021 (8)
Up to 40 years
—
—
—
—
—
—
—
—
—
—
—
—
—
4,022
538
4,560
1,623
2016 (4)
Up to 40 years
3,220
1,602
4,822
3,490
2006
Up to 40 years
9,040
2,222
11,262
5,680
2014
Up to 40 years
2,818
16,034
638
3,456
1,533
2001
Up to 40 years
6,367
22,401
9,732
2012
Up to 40 years
1,357
893
2,250
1,730
2015 (10) Up to 40 years
6,970
4,649
11,619
5,263
Various
Up to 40 years
11,517
24,085
35,602
18,720
2001
Up to 40 years
186
212
398
337
2014
Up to 40 years
11,011
3,679
14,690
4,083
2010
Up to 40 years
93,370
(14,100)
79,270
78
2022 (9)
Up to 40 years
3,981
5,476
9,457
6,879
2001
Up to 40 years
17,000
(3,775)
13,225
808
2021 (7)
Up to 40 years
—
1,053
(124)
929
528
Various
Up to 40 years
53 $
— $
377,100 $
82,516 $
459,616 $
138,796
138
IRON MOUNTAIN 2022 FORM 10-K
Table of Contents
Part IV
IRON MOUNTAIN INCORPORATED
SCHEDULE III—SCHEDULE OF REAL ESTATE AND
ACCUMULATED DEPRECIATION (CONTINUED)
DECEMBER 31, 2022
(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)(11)
ACCUMULATED
DEPRECIATION
AT CLOSE OF
CURRENT
PERIOD(1)(2)(11)
DATE OF
CONSTRUCTION
OR ACQUIRED(3)
LIFE ON WHICH
DEPRECIATION IN
LATEST INCOME
STATEMENT IS
COMPUTED
2 $
— $
655 $
318 $
973 $
288
Various
Up to 40 years
1
1
1
1
3
1
10
7
1
1
2
2
1
1
7
2
1
—
—
—
—
—
—
—
—
166
(166)
—
—
1998
Up to 40 years
12,773
(11,583)
1,190
347
2012
Up to 40 years
12,562
(4,582)
7,980
2,109
2016 (4)
Up to 40 years
8,894
1,868
(3,405)
8,081
5,489
9,949
1,606
2016 (4)
Up to 40 years
3,941
Various
Up to 40 years
24,078
(4,714)
19,364
4,403
2014
Up to 40 years
2,629
4,001
28,743
31,372
12,767
Various
Up to 40 years
15,430
19,431
8,089
Various
Up to 40 years
374
1,654
2,028
1,514
2002
Up to 40 years
—
905
1,299
2,204
1,154
2004
Up to 40 years
—
19,937
1,383
21,320
5,763
2016 (4)
Up to 40 years
—
3,537
4,867
8,404
4,307
2004
Up to 40 years
—
—
—
—
—
2,204
6,696
8,900
6,175
2002
Up to 40 years
7,544
14,356
21,900
8,561
2007
Up to 40 years
1,549
584
2,133
1,215
Various
Up to 40 years
4,112
8,179
4,657
8,769
7,338
Various
Up to 40 years
28,401
36,580
9,095
2010
Up to 40 years
45 $
— $
115,967 $
92,019 $
207,986 $
78,672
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Table of Contents
Part IV
IRON MOUNTAIN INCORPORATED
SCHEDULE III—SCHEDULE OF REAL ESTATE AND
ACCUMULATED DEPRECIATION (CONTINUED)
DECEMBER 31, 2022
(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
Jl. Amd Projakal
KM 5.5 Rt 46,
Kel. Graha Indah,
Kec. Balikpapan
Utara, 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
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)(11)
ACCUMULATED
DEPRECIATION
AT CLOSE OF
CURRENT
PERIOD(1)(2)(11)
DATE OF
CONSTRUCTION
OR ACQUIRED(3)
LIFE ON WHICH
DEPRECIATION IN
LATEST INCOME
STATEMENT IS
COMPUTED
1 $
— $
1,530 $
693 $
2,223 $
593
2013
Up to 40 years
1
1
1
1
1
2
—
—
—
—
—
—
7,897
5,142
13,039
2,999
2017
Up to 40 years
125
—
125
5
2021
Up to 40 years
58,637
55,773
114,410
15,847
2018 (6)
Up to 40 years
10,395
15,699
13,226
1,780
2,655
1,445
12,175
18,354
14,671
2,884
2016 (4)
Up to 40 years
2,279
2016 (4)
Up to 40 years
4,651
2016 (4)
Up to 40 years
8 $
— $
107,509 $
67,488 $
174,997 $
29,258
1
—
681
2,442
3,123
590
2012
Up to 40 years
1 $
237 $
— $
681 $
2,442 $
3,123 $
590
— $
2,326,535 $
2,134,660 $
4,461,195 $
1,187,390
(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 1,143 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 our acquisition of IO Data Centers, LLC.
(6) Property was acquired in connection with our acquisition of Credit Suisse International and Credit Suisse AG.
(7) Property was acquired in connection with our acquisition of Information Fort, LLC.
(8) Property was acquired in connection with the Frankfurt data center acquisition.
(9) Property was acquired in connection with our acquisition of XData Properties, S.L.U.
(10) This date represents the date the categorization of the property was changed from a leased facility to an owned facility.
140
IRON MOUNTAIN 2022 FORM 10-K
Table of Contents
Part IV
IRON MOUNTAIN INCORPORATED
SCHEDULE III—SCHEDULE OF REAL ESTATE AND
ACCUMULATED DEPRECIATION (CONTINUED)
DECEMBER 31, 2022
(Dollars in thousands)
(11) The following tables present the changes in gross carrying amount of real estate owned and accumulated depreciation for the years ended December 31, 2022 and
2021:
GROSS CARRYING AMOUNT OF REAL ESTATE
Gross amount at beginning of period
Additions during period:
Acquisitions
Discretionary capital projects
Foreign currency translation fluctuations
Deductions during period:
Cost of real estate sold, disposed or written-down
Other adjustments(1)
YEAR ENDED DECEMBER 31,
2022
2021
$
4,129,251 $
3,830,489
93,370
434,395
(28,295)
499,470
(123,633)
(43,893)
(167,526)
120,307
386,752
(51,363)
455,696
(119,154)
(37,780)
(156,934)
Gross amount at end of period
$
4,461,195 $
4,129,251
(1) For the years ended December 31, 2022 and 2021, 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
Foreign currency translation fluctuations
Deductions during period:
Amount of accumulated depreciation for real estate assets sold, disposed or written-down
Other adjustments(1)
YEAR ENDED DECEMBER 31,
2022
2021
$
1,160,490 $
1,097,616
121,428
(14,664)
106,764
(41,674)
(38,190)
(79,864)
147,134
(15,135)
131,999
(41,376)
(27,749)
(69,125)
Gross amount of end of period
$
1,187,390 $
1,160,490
(1) For the years ended December 31, 2022 and 2021, 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, 2022 was approximately $4,191,073.
ITEM 16. FORM 10-K SUMMARY.
Not applicable.
IRON MOUNTAIN 2022 FORM 10-K
141
Table of Contents
Part IV
INDEX TO EXHIBITS
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
4.11
10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.8
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 Current Report on Form 8-K dated May
17,2021)
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.)
Senior Indenture, dated as of December 28, 2021, among the Issuer, the Company, the Subsidiary Guarantors
named therein and Computershare Trust Company, N.A. as trustee, relating to the 5.00% Senior Notes due 2032.
(Incorporated by reference to the Company's Current Report on Form 8-K dated December 28, 2021.)
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.)
142
IRON MOUNTAIN 2022 FORM 10-K
Table of Contents
Part IV
EXHIBIT
10.9
10.10
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
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 Incorporated 2013 Employee Stock Purchase Plan. (#) (Incorporated by reference to Appendix A to the
Company's Proxy Statement for the Annual Meeting of Stockholders, filed with the SEC on April 24, 2013.)
First Amendment to the Iron Mountain Incorporated 2013 Employee Stock Purchase Plan. (#) (Incorporated by
reference to the Company's Current Report on Form 8-K dated May 17, 2021.)
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.)
Third 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 17, 2021.)
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 Restricted Stock Unit 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, 2021.)
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.)
IRON MOUNTAIN 2022 FORM 10-K
143
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
10.54
10.55
10.56
10.57
ITEM
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 Stock Option Agreement pursuant to the Iron Mountain Incorporated 2014 Stock and Cash Incentive Plan
(version 5). (#) (Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended
December 31, 2021.)
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.)
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).
Form of Performance Unit Agreement pursuant to the Iron Mountain Incorporated 2014 Stock and Cash Incentive
Plan (version 5). (#) (Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended
December 31, 2021.)
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.)
Ernest Cloutier Separation Agreement, dated August 6, 2021. (#) (Incorporated by reference to the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30, 2021.)
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.)
144
IRON MOUNTAIN 2022 FORM 10-K
Table of Contents
EXHIBIT
10.58
ITEM
Part IV
10.60
10.59
10.61
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.)
Fifth Amendment, dated as of December 12, 2021, to Credit Agreement, dated as of June 27, 2011, as amended and
restated, 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 JP Morgan Chase Bank, N.A., as Administrative Agent.
(Incorporated by reference to the Company's Current Report on Form 8-K dated December 16, 2021.)
Amendment and Restatement Agreement, dated as of March 18, 2022, to the Credit Agreement dated as of June 27,
2011, as amended and restated as of March 18, 2022, among the Company, certain other subsidiaries of the
Company party thereto, the lenders and other financial institutions party thereto, JPMorgan Chase Bank, N.A., as
Administrative Agent, and JPMorgan Chase Bank, N.A., Toronto Branch, as Canadian Administrative Agent.
(Incorporated by reference to the Company's Current Report on Form 8-K dated March 18, 2022.)
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.)
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.
21.1
23.1
31.1
31.2
32.1
32.2
101.INS
10.62
104
Cover Page Interactive Data File. (Formatted as Inline XBRL and contained in Exhibit 101.)
IRON MOUNTAIN 2022 FORM 10-K
145
Table of Contents
Part IV
SIGNATURES
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 23, 2023
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 23, 2023
Executive Vice President and Chief Financial
Officer (Principal Financial Officer)
February 23, 2023
Senior Vice President, Chief Accounting
Officer (Principal Accounting Officer)
February 23, 2023
/s/ JENNIFER M. ALLERTON
Director
February 23, 2023
Jennifer M. Allerton
/s/ PAMELA M. ARWAY
Director
February 23, 2023
Pamela M. Arway
/s/ CLARKE H. BAILEY
Director
February 23, 2023
Clarke H. Bailey
/s/ KENT P. DAUTEN
Director
February 23, 2023
Kent P. Dauten
/s/ MONTE E. FORD
Director
February 23, 2023
Monte E. Ford
/s/ ROBIN L. MATLOCK
Director
February 23, 2023
Robin L. Matlock
146
IRON MOUNTAIN 2022 FORM 10-K
Table of Contents
Part IV
NAME
TITLE
DATE
/s/ WENDY J. MURDOCK
Director
February 23, 2023
Wendy J. Murdock
/s/ WALTER C. RAKOWICH
Director
February 23, 2023
Walter. C. Rakowich
/s/ DOYLE R. SIMONS
Director
February 23, 2023
Doyle R. Simons
/s/ ALFRED J. VERRECCHIA
Director
February 23, 2023
Alfred J. Verrecchia
IRON MOUNTAIN 2022 FORM 10-K
147
(cid:139)(cid:140)(cid:141)(cid:142)(cid:143)(cid:144)(cid:145)(cid:146)(cid:147)(cid:143)(cid:141)(cid:148)(cid:149)(cid:147)(cid:148)(cid:149)(cid:141)(cid:150)(cid:148)(cid:145)(cid:151)(cid:151)(cid:152)(cid:143)(cid:151)(cid:147)(cid:153)(cid:149)(cid:143)(cid:154)(cid:151)(cid:145)(cid:148)(cid:155)(cid:156)
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fl(cid:176)–†‡·(cid:181)¶•‡–‚„•‚„–”‚(cid:181)»»…‡»•‰„‡(cid:190)»(cid:181)‚¿(cid:192)
`´ˆ˜´ˆ¯˘˙¨(cid:201)˚ˆ˙`˘´ˆ¸¨¯(cid:204)(cid:201)¨´˝˝˚`˙ˆ¸
˛ˇ—(cid:209)(cid:210)(cid:211)(cid:209)(cid:212)(cid:213)(cid:214)(cid:212)(cid:215)(cid:214)(cid:216)(cid:213)(cid:217)
(cid:201)˚ˆ˙`˘´ˆ¸
˛(cid:216)(cid:217)(cid:228)˛(cid:213)(cid:217)(cid:228)˛(cid:229)(cid:217)
(cid:209)
(cid:218)(cid:219)(cid:220)(cid:221)(cid:222)(cid:219)(cid:209)(cid:223)(cid:224)(cid:209)ˇÆ(cid:226)(cid:219)ª
(cid:230)(cid:231)(cid:219)ŁÆØ(cid:221)Æ—(cid:210)Œ(cid:209)(cid:210)(cid:211)(cid:209)º(cid:231)(cid:221)(cid:209)(cid:236)(cid:210)(cid:219)Æ(cid:237)(cid:209)(cid:210)(cid:211)(cid:209)(cid:238)ŁÆ(cid:221)(cid:239)º(cid:210)Æ—(cid:209)
(cid:240)Æ(cid:210)Œ(cid:209)(cid:223)(cid:210)挺(cid:219)ŁŒ(cid:209)(cid:240)Œ(cid:239)(cid:210)ÆØ(cid:210)Æ(cid:219)º(cid:221)(cid:237)(cid:209)
(cid:242)(cid:221)(cid:226)(cid:209)(cid:243)(cid:210)Æ(cid:244)(cid:228)(cid:209)(cid:242)(cid:243)
˛(cid:215)(cid:217)(cid:228)˛(cid:246)(cid:217)
(cid:209)
ı(cid:221)ŒŒŁ(cid:211)(cid:221)Æ(cid:209)ˇ(cid:222)(cid:222)(cid:221)ƺ(cid:210)Œ
(cid:247)(cid:221)ºŁÆ(cid:221)(cid:237)(cid:209)łø(cid:221)(cid:239)æºŁœ(cid:221)(cid:209)(cid:209)
ß(cid:210)(cid:211)(cid:211)(cid:220)(cid:219)ŒŒ(cid:209)(cid:252)(cid:219)(cid:209)(cid:247)(cid:210)(cid:239)(cid:231)(cid:221)(cid:209)(cid:252)º(cid:237)(cid:209)
(cid:236)(cid:219)—(cid:221)(cid:222)(cid:228)(cid:209)(cid:253)(cid:226)Łº(cid:254)(cid:221)Æ(cid:222)(cid:219)Œ(cid:237)
˛(cid:215)(cid:217)(cid:228)˛(cid:213)(cid:217)(cid:228)˛(cid:246)(cid:217)
(cid:209)
(cid:230)(cid:222)(cid:219)Æ(cid:244)(cid:221)(cid:209)ß(cid:224)(cid:209)(cid:236)(cid:219)Ł(cid:222)(cid:221)ª
(cid:247)(cid:221)ºŁÆ(cid:221)(cid:237)(cid:209)łø(cid:221)(cid:239)æºŁœ(cid:221)(cid:209)
ł(cid:238)(cid:230)(cid:240)(cid:209)ß(cid:210)(cid:222)(cid:237)ŁŒ
(cid:242)(cid:221)(cid:226)(cid:209)(cid:243)(cid:210)Æ(cid:244)(cid:228)(cid:209)(cid:242)(cid:243)
(cid:0)
—(cid:228)(cid:209)(cid:240)Œ(cid:239)(cid:224)(cid:209)
˛(cid:215)(cid:217)(cid:228)˛(cid:213)(cid:217)(cid:228)˛(cid:2)(cid:217)
(cid:209)
(cid:0)(cid:221)Œº(cid:209)(cid:218)(cid:224)(cid:209)(cid:238)(cid:219)æº(cid:221)Œ
(cid:230)(cid:231)(cid:219)ŁÆ(cid:220)(cid:219)Œ(cid:209)
(cid:0)(cid:221)ª—º(cid:210)Œ(cid:221)(cid:209)(cid:230)(cid:219)ØŁº(cid:219)(cid:222)(cid:228)(cid:209)(cid:240)Œ(cid:239)(cid:224)(cid:209)
(cid:238)(cid:221)(cid:221)Æ(cid:211)Ł(cid:221)(cid:222)(cid:237)(cid:228)(cid:209)(cid:240)(cid:252)
˛(cid:216)(cid:217)(cid:228)˛(cid:246)(cid:217)(cid:209)
(cid:223)(cid:210)Œº(cid:221)(cid:209)ł(cid:224)(cid:209)(cid:3)(cid:210)Æ(cid:237)
(cid:218)ÆŁŒ(cid:239)ŁØ(cid:219)(cid:222)(cid:209)(cid:218)(cid:219)ƺŒ(cid:221)Æ(cid:209)
(cid:230)(cid:240)(cid:4)(cid:209)(cid:253)ºÆ(cid:219)º(cid:221)
(cid:5)(cid:221)—º(cid:222)(cid:219)(cid:244)(cid:221)(cid:228)(cid:209)(cid:6)(cid:7)
(cid:0)
(cid:0)
ª(cid:209)łø(cid:239)(cid:231)(cid:219)Œ
(cid:221)(cid:209)
˛(cid:215)(cid:217)(cid:228)˛(cid:213)(cid:217)(cid:228)˛(cid:2)(cid:217)
(cid:209)
(cid:5)(cid:219)(cid:222)º(cid:221)Æ(cid:209)(cid:230)(cid:224)(cid:209)(cid:247)(cid:219)(cid:244)(cid:210)(cid:226)Ł(cid:239)(cid:231)
(cid:247)(cid:221)ºŁÆ(cid:221)(cid:237)(cid:209)łø(cid:221)(cid:239)æºŁœ(cid:221)(cid:209)(cid:209)
(cid:3)(cid:210)Æ(cid:220)(cid:221)Æ(cid:209)(cid:230)ł(cid:4)(cid:209)(cid:210)(cid:211)(cid:209)(cid:218)Æ(cid:210)(cid:222)(cid:210)
(cid:253)(cid:219)Œ(cid:209)(cid:3)Æ(cid:219)Œ(cid:239)Ł—(cid:239)(cid:210)(cid:228)(cid:209)(cid:230)ˇ
(cid:0)
Ł—(cid:209)(cid:209)
˛(cid:216)(cid:217)(cid:228)˛(cid:246)(cid:217)
(cid:209)(cid:209)
(cid:247)(cid:210)(cid:8)ŁŒ(cid:209)(cid:252)(cid:224)(cid:209)(cid:223)(cid:219)º(cid:222)(cid:210)(cid:239)(cid:244)
(cid:247)(cid:221)ºŁÆ(cid:221)(cid:237)(cid:209)łø(cid:221)(cid:239)æºŁœ(cid:221)(cid:209)
(cid:9)(cid:223)(cid:226)(cid:219)Æ(cid:221)(cid:228)(cid:209)(cid:240)Œ(cid:239)(cid:224)(cid:209)
(cid:218)(cid:219)(cid:222)(cid:210)(cid:209)ˇ(cid:222)º(cid:210)(cid:228)(cid:209)(cid:230)ˇ
(cid:5)Ł(cid:222)(cid:222)Ł(cid:219)(cid:220)(cid:209)(cid:252)(cid:224)(cid:209)(cid:223)(cid:221)(cid:219)Œ(cid:221)ª(cid:209)
(cid:218)Æ(cid:221)—Ł(cid:237)(cid:221)Œº(cid:209)(cid:219)Œ(cid:237)(cid:209)(cid:230)(cid:231)Ł(cid:221)(cid:211)(cid:209)łø(cid:221)(cid:239)æºŁœ(cid:221)(cid:209)(cid:4)(cid:211)(cid:211)Ł(cid:239)(cid:221)Æ(cid:209)
(cid:240)Æ(cid:210)Œ(cid:209)(cid:223)(cid:210)挺(cid:219)ŁŒ(cid:209)(cid:240)Œ(cid:239)(cid:210)ÆØ(cid:210)Æ(cid:219)º(cid:221)(cid:237)(cid:209)
(cid:236)(cid:210)—º(cid:210)Œ(cid:228)(cid:209)(cid:223)ˇ
˛(cid:216)(cid:217)(cid:228)˛(cid:2)(cid:217)
(cid:209)
(cid:5)(cid:221)Œ(cid:237)ª(cid:209)(cid:223)æÆ(cid:237)(cid:210)(cid:239)(cid:244)
(cid:247)(cid:221)ºŁÆ(cid:221)(cid:237)(cid:209)łø(cid:221)(cid:239)æºŁœ(cid:221)(cid:209)
(cid:223)(cid:219)—º(cid:221)Æ(cid:230)(cid:219)Æ(cid:237)(cid:209)(cid:5)(cid:210)Æ(cid:222)(cid:237)(cid:226)Ł(cid:237)(cid:221)(cid:209)(cid:209)
(cid:242)(cid:221)(cid:226)(cid:209)(cid:243)(cid:210)Æ(cid:244)(cid:228)(cid:209)(cid:242)(cid:243)
˛(cid:216)(cid:217)(cid:228)˛(cid:2)(cid:217)
(cid:209)
(cid:238)(cid:210)ª(cid:222)(cid:221)(cid:209)(cid:247)(cid:224)(cid:209)(cid:253)Ł(cid:220)(cid:210)Œ—
(cid:247)(cid:221)ºŁÆ(cid:221)(cid:237)(cid:209)łø(cid:221)(cid:239)æºŁœ(cid:221)(cid:209)
(cid:3)(cid:210)Æ(cid:220)(cid:221)Æ(cid:209)(cid:230)ł(cid:4)(cid:209)(cid:210)(cid:211)(cid:209)(cid:5)(cid:221)ª(cid:221)Æ(cid:231)(cid:219)(cid:221)æ—(cid:221)Æ(cid:209)
(cid:253)(cid:221)(cid:219)ºº(cid:222)(cid:221)(cid:228)(cid:209)(cid:5)ˇ
˛(cid:213)(cid:217)
(cid:209)
ˇ(cid:222)(cid:211)Æ(cid:221)(cid:237)(cid:209)ı(cid:224)(cid:209)(cid:9)(cid:221)ÆÆ(cid:221)(cid:239)(cid:239)(cid:231)Ł(cid:219)
(cid:247)(cid:221)ºŁÆ(cid:221)(cid:237)(cid:209)łø(cid:221)(cid:239)æºŁœ(cid:221)(cid:209)
(cid:3)(cid:210)Æ(cid:220)(cid:221)Æ(cid:209)(cid:230)ł(cid:4)(cid:209)(cid:210)(cid:211)(cid:209)ß(cid:219)—(cid:8)Æ(cid:210)(cid:209)(cid:209)
(cid:218)(cid:219)(cid:226)ºæ(cid:239)(cid:244)(cid:221)º(cid:228)(cid:209)(cid:247)(cid:240)
(cid:238)(cid:221)(cid:8)(cid:210)Æ(cid:219)(cid:231)(cid:209)(cid:223)(cid:219)Æ—(cid:210)Œ(cid:209)
łø(cid:221)(cid:239)æºŁœ(cid:221)(cid:209)(cid:9)Ł(cid:239)(cid:221)(cid:209)(cid:218)Æ(cid:221)—Ł(cid:237)(cid:221)Œº(cid:228)(cid:209)
(cid:13)(cid:221)Œ(cid:221)Æ(cid:219)(cid:222)(cid:209)(cid:230)(cid:210)挗(cid:221)(cid:222)(cid:209)(cid:219)Œ(cid:237)(cid:209)(cid:253)(cid:221)(cid:239)Æ(cid:221)º(cid:219)ƪ
(cid:0)
(cid:13)Æ(cid:221)
(cid:210)ƪ(cid:209)(cid:223)(cid:239)(cid:240)Œº(cid:210)—(cid:231)(cid:209)(cid:209)
łø(cid:221)(cid:239)æºŁœ(cid:221)(cid:209)(cid:9)Ł(cid:239)(cid:221)(cid:209)(cid:218)Æ(cid:221)—Ł(cid:237)(cid:221)Œº(cid:228)(cid:209)
(cid:230)(cid:231)Ł(cid:221)(cid:211)(cid:209)(cid:230)(cid:210)(cid:220)(cid:220)(cid:221)Æ(cid:239)Ł(cid:219)(cid:222)(cid:209)(cid:4)(cid:211)(cid:211)Ł(cid:239)(cid:221)Æ(cid:209)(cid:219)Œ(cid:237)(cid:209)(cid:209)
(cid:0)
(cid:13)(cid:221)Œ(cid:221)Æ(cid:219)(cid:222)(cid:209)(cid:223)(cid:219)Œ(cid:219)
(cid:13)(cid:222)(cid:210)(cid:8)(cid:219)(cid:222)(cid:209)(cid:247)(cid:221)(cid:239)(cid:210)Æ(cid:237)—(cid:209)(cid:219)Œ(cid:237)(cid:209)
(cid:240)Œ(cid:211)(cid:210)Æ(cid:220)(cid:219)ºŁ(cid:210)Œ(cid:209)(cid:223)(cid:219)Œ(cid:219)
(cid:221)(cid:220)(cid:221)μ
(cid:221)Æ(cid:228)(cid:209)(cid:209)
(cid:0)
ı(cid:210)(cid:231)Œ(cid:209)(cid:6)(cid:210)(cid:220)(cid:210)œ(cid:239)—Ł(cid:244)(cid:209)
łø(cid:221)(cid:239)æºŁœ(cid:221)(cid:209)(cid:9)Ł(cid:239)(cid:221)(cid:209)(cid:218)Æ(cid:221)—Ł(cid:237)(cid:221)Œº(cid:209)
(cid:219)Œ(cid:237)(cid:209)(cid:230)(cid:231)Ł(cid:221)(cid:211)(cid:209)(cid:4)Ø(cid:221)Æ(cid:219)ºŁŒ
(cid:209)(cid:4)(cid:211)(cid:211)Ł(cid:239)(cid:221)Æ
(cid:0)
˙(cid:10)˙`(cid:11)˘˚(cid:12)˙¨´˝˝˚`˙ˆ¸
(cid:5)Ł(cid:222)(cid:222)Ł(cid:219)(cid:220)(cid:209)(cid:252)(cid:224)(cid:209)(cid:223)(cid:221)(cid:219)Œ(cid:221)ª(cid:209)
(cid:218)Æ(cid:221)—Ł(cid:237)(cid:221)Œº(cid:209)(cid:219)Œ(cid:237)(cid:209)(cid:230)(cid:231)Ł(cid:221)(cid:211)(cid:209)łø(cid:221)(cid:239)æºŁœ(cid:221)(cid:209)(cid:4)(cid:211)(cid:211)Ł(cid:239)(cid:221)Æ
ł(cid:237)(cid:226)(cid:219)Æ(cid:237)(cid:209)ł(cid:224)(cid:209)(cid:13)Æ(cid:221)(cid:221)Œ(cid:221)(cid:209)
łø(cid:221)(cid:239)æºŁœ(cid:221)(cid:209)(cid:9)Ł(cid:239)(cid:221)(cid:209)(cid:218)Æ(cid:221)—Ł(cid:237)(cid:221)Œº(cid:228)(cid:209)
(cid:230)(cid:231)Ł(cid:221)(cid:211)(cid:209)ßæ(cid:220)(cid:219)Œ(cid:209)(cid:247)(cid:221)—(cid:210)æÆ(cid:239)(cid:221)—(cid:209)(cid:4)(cid:211)(cid:211)Ł(cid:239)(cid:221)Æ
(cid:236)(cid:219)Æƪ(cid:209)ˇ(cid:224)(cid:209)ߪºŁŒ(cid:221)Œ(cid:209)
łø(cid:221)(cid:239)æºŁœ(cid:221)(cid:209)(cid:9)Ł(cid:239)(cid:221)(cid:209)(cid:218)Æ(cid:221)—Ł(cid:237)(cid:221)Œº(cid:209)(cid:219)Œ(cid:237)(cid:209)(cid:209)
(cid:230)(cid:231)Ł(cid:221)(cid:211)(cid:209)(cid:3)ŁŒ(cid:219)Œ(cid:239)Ł(cid:219)(cid:222)(cid:209)(cid:4)(cid:211)(cid:211)Ł(cid:239)(cid:221)Æ
(cid:223)(cid:219)Æ(cid:244)(cid:209)(cid:0)Ł(cid:237)(cid:237)(cid:209)
łø(cid:221)(cid:239)æºŁœ(cid:221)(cid:209)(cid:9)Ł(cid:239)(cid:221)(cid:209)(cid:218)Æ(cid:221)—Ł(cid:237)(cid:221)Œº(cid:209)(cid:219)Œ(cid:237)(cid:209)(cid:209)
(cid:0)
(cid:13)(cid:221)Œ(cid:221)Æ(cid:219)(cid:222)(cid:209)(cid:223)(cid:219)Œ(cid:219)
(cid:219)Œ(cid:237)(cid:209)ˇ(cid:252)(cid:223)
(cid:221)Æ(cid:228)(cid:209)(cid:238)(cid:219)º(cid:219)(cid:209)(cid:230)(cid:221)Œº(cid:221)Æ—(cid:209)(cid:209)
˛(cid:215)(cid:217)
(cid:209)(cid:223)(cid:221)(cid:220)(cid:8)(cid:221)Æ(cid:209)(cid:210)(cid:211)(cid:209)ˇæ(cid:237)Łº(cid:209)(cid:230)(cid:210)(cid:220)(cid:220)Łºº(cid:221)(cid:221)(cid:209)˛(cid:223)Æ(cid:224)(cid:209)(cid:247)(cid:219)(cid:244)(cid:210)(cid:226)Ł(cid:239)(cid:231)(cid:209)Ł—(cid:209)(cid:230)(cid:231)(cid:219)ŁÆØ(cid:221)Æ—(cid:210)Œ(cid:217)
˛(cid:216)(cid:217)
˛(cid:213)(cid:217)
(cid:209)(cid:223)(cid:221)(cid:220)(cid:8)(cid:221)Æ(cid:209)(cid:210)(cid:211)(cid:209)º(cid:231)(cid:221)(cid:209)(cid:230)(cid:210)(cid:220)Ø(cid:221)Œ—(cid:219)ºŁ(cid:210)Œ(cid:209)(cid:230)(cid:210)(cid:220)(cid:220)Łºº(cid:221)(cid:221)(cid:209)˛(cid:223)—(cid:224)(cid:209)(cid:223)æÆ(cid:237)(cid:210)(cid:244)(cid:209)Ł—(cid:209)(cid:230)(cid:231)(cid:219)ŁÆØ(cid:221)Æ—(cid:210)Œ(cid:217)
(cid:0)
(cid:209)(cid:223)(cid:221)(cid:220)(cid:8)(cid:221)Æ(cid:209)(cid:210)(cid:211)(cid:209)º(cid:231)(cid:221)(cid:209)(cid:242)(cid:210)(cid:220)ŁŒ(cid:219)ºŁŒ
(cid:209)(cid:219)Œ(cid:237)(cid:209)(cid:13)(cid:210)œ(cid:221)ÆŒ(cid:219)Œ(cid:239)(cid:221)(cid:209)(cid:230)(cid:210)(cid:220)(cid:220)Łºº(cid:221)(cid:221)(cid:209)˛(cid:223)Æ(cid:224)(cid:209)(cid:236)(cid:219)Ł(cid:222)(cid:221)ª(cid:209)Ł—(cid:209)(cid:230)(cid:231)(cid:219)ŁÆØ(cid:221)Æ—(cid:210)Œ(cid:217)
˛(cid:2)(cid:217)
(cid:209)(cid:223)(cid:221)(cid:220)(cid:8)(cid:221)Æ(cid:209)(cid:210)(cid:211)(cid:209)º(cid:231)(cid:221)(cid:209)(cid:3)ŁŒ(cid:219)Œ(cid:239)(cid:221)(cid:209)(cid:230)(cid:210)(cid:220)(cid:220)Łºº(cid:221)(cid:221)(cid:209)˛(cid:223)Æ(cid:224)(cid:209)(cid:253)Ł(cid:220)(cid:210)Œ—(cid:209)Ł—(cid:209)(cid:230)(cid:231)(cid:219)ŁÆØ(cid:221)Æ—(cid:210)Œ(cid:217)
˛(cid:246)(cid:217)
(cid:209)(cid:223)(cid:221)(cid:220)(cid:8)(cid:221)Æ(cid:209)(cid:210)(cid:211)(cid:209)º(cid:231)(cid:221)(cid:209)(cid:247)Ł—(cid:244)(cid:209)(cid:219)Œ(cid:237)(cid:209)(cid:253)(cid:219)(cid:211)(cid:221)ºª(cid:209)(cid:230)(cid:210)(cid:220)(cid:220)Łºº(cid:221)(cid:221)(cid:209)˛(cid:223)Æ(cid:224)(cid:209)(cid:3)(cid:210)Æ(cid:237)(cid:209)Ł—(cid:209)(cid:230)(cid:231)(cid:219)ŁÆØ(cid:221)Æ—(cid:210)Œ(cid:217)
˛(cid:229)(cid:217)
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(cid:229)(cid:215)(cid:29)(cid:31)(cid:216)(cid:28)(cid:229)(cid:31)(cid:2)(cid:28)(cid:28)(cid:215)
(cid:0)
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