A PROVEN STRATEGY
FOR DURABILITY

Our proven strategy has made us the world’s leading
storage and information management company.

Our Strategic Plan Read CEO Letter

Durable Platform

Sustaining Investments to Capture
Attractive Incremental Returns

Deliberate Growth

Targeting Continued Solid
2%–5% Growth in Revenues

Deliver Opportunity

Maintaining Consistent
Adjusted OIBDA Margins

OUR STRATEGY

Strategic Plan for Growth & Stability

Our strategy rests on three key pillars—driving continued profitable growth in our Developed Markets; extending our reach into high growth Emerging Markets; and prudently pursuing Emerging Business Opportunities that are adjacent to our core business. We have a strong and trusted brand as well as a durable high return business; our strategy is designed to preserve and extend these attributes.

Underlying the three pillars are two fundamental supporting enablers: Speed and Agility, which reflects continuous improvement, enabling us to efficiently execute on our strategy, and Organization and Culture, where we are implementing a structure to empower employees, providing them with tools, bandwidth and training to drive success.

Developed Markets Emerging Markets Emerging Businesses

Developed markets currently represent about 90% of our total revenue and include: North America, United Kingdom/Ireland, Continental Western Europe and Australia. In North America, which represents 81% of our developed market revenues, we have identified a sizeable unvended market segment within the mid-sized customer base, and we plan to tap this potential within our current base of larger enterprise customers through a segmented, vertical market approach. Outside North America, we have a plan to sustain storage rental growth and enhance our operational and support functions to maintain and improve our profitability.

Developed markets are characterized by strong and durable margins, high returns and lower growth rates. In these markets, we aim to: attract new business from customers that do not currently outsource their records and data management; gain a larger share of the vended market through innovative solutions and targeted expertise; optimize our operations to maintain profitability; and take advantage of ongoing industry consolidation by acquiring and integrating smaller competitors at attractive returns. Throughout our developed markets, we are implementing overhead optimization initiatives. As a result, we believe we can generate compound annual revenue growth of 1.8% in developed markets through 2016, with 2.4% compound annual growth in Adjusted OIBDA, excluding charges related to our restructuring in 2013.

% of Total Revenues

90% Developed

10% Emerging

% of Developed Market Revenues

81% North America

10% UK/Ireland

6% Continental Western
Europe

3% Australia

Our North American Records and Information Management (RIM) business makes up $1.8 billion of 2013 revenues and comprises a number of product lines, the largest of which is Records Management (RM) with $1.4 billion in 2013 revenues. RM includes the storage and management of paper documents and other non-digital media. Growth in this business continues to be supported by consistent incoming storage volume. Despite secular declines in paper usage, we continue to experience roughly the same amount of incoming storage volume from existing customers. Furthermore, we have invested in a customer insights platform that gives us a better view into our customers information storage needs and retention plans, driving increases in volume while reducing the level of customer terminations.

Importantly, a large market opportunity remains within RM, particularly in the un-vended private sector as well as within our existing customer base. We aim to expand our market share by: providing customers with targeted solutions through a vertical focus; implementing a sales force effectiveness program designed to increase volume—as well as investing in high-return, fold-in acquisitions. Looking forward, we are confident of our ability to maintain the high profitability and extend the durability of our RM business.

Our North American Data Management (DM) business is a $400 million revenue business predominately consisting of tape vaulting storage and services. In our 90+ facilities, we store more than 80 million tapes used for data protection and disaster recovery. Our leading presence provides unparalleled access to data center buyers; we call on 30,000 data centers in the U.S. alone. We believe these relationships will support the development of our first emerging business opportunity—data centers.

While the role of data protection tape is changing, industry experts expect continued use for archival purposes due to their high capacity, reliability and low total cost of ownership. The growth rate in this business has moderated as data protection units continue to increase in density and customers rotate tapes less frequently. To offset these trends, we have introduced complementary offerings such as secure destruction of IT assets and archival tape management systems. It is through these value-added solutions that we earn the opportunity to store our customers’ archival data and continue to grow our market share. Similar to the RIM business, DM is characterized by high margins and low growth rates, and we believe we are poised to continue to grow this business and maintain its resilience.

In our international developed markets, we provide our customers with the same storage rental offering and services provided in North America.These markets are characterized by high revenue growth rates; however, returns are modestly below the North American average. While in certain countries, such as the United Kingdom, we have a clear leadership position and returns are almost identical to those in North America, there are some countries where we have not yet established a clear leadership position that generate slightly lower returns. In these markets, we have opportunities to further invest to attain market leadership.

We seek to drive and sustain storage rental growth, the economic engine of our business, and optimize our operations to maintain and enhance profit margins in our international developed markets. We are leveraging our superior scale and geographical reach to grow storage rental revenue through: organic and new sales volume, optimum pricing strategies for each stage of customer relationships, territory planning, sales force excellence initiatives, marketing support and targeted segmentation of our customer base. We believe these initiatives will continue to drive superior returns and allow us to improve margins from these markets by improving our operations and support efficiency.

Our global footprint provides a sturdy platform for establishing and growing positions in emerging markets, primarily central and Eastern Europe, Latin America, the Asia Pacific region, and potentially Africa and the Middle East. These markets enjoy strong organic volume and revenue growth driven by fast-growing economies and first-time records outsourcing. Our goal is to continue to drive growth in these markets and enhance customer retention. In certain regions, we will invest to establish a real estate platform and expand our infrastructure to provide customers with innovative solutions.

Today, revenues from emerging markets represent about 10% of our business. We believe we can grow this to 16% of total revenue by the end of 2016 through continued strong growth in our base business and acquisitions representing another $100 to $120 million in annual revenues. Our emerging markets targets through 2016 are to deliver compound annual growth of 18% in revenue and 24% in Adjusted OIBDA. Our acquisition pipeline is robust, with potential transactions representing more than 3.5 times our goal. Acquisitions help us achieve market leadership, secure new business from locally based customers and deepen our presence with multinational customers. In addition, we have a strong track record of successful integration and driving enhanced returns over time.

Emerging Market Revenue (% of Total Revenues)

$319

$510- $550

$410- $430

2013
2016 E

Base

Acquisitions

Projected Annualized Revenues from
Emerging Market M&A Pipeline ($MM)

$55

$160

$85

$50

$30

$145

IMLA
EMEA
Asia

Current Territories

New Territories

Emerging business opportunities (EBOs) are prospective business lines that we consider investing in to grow and diversify our business. These opportunities are large enough to move the dial over a three-to-five-year period, have significant long-term growth and market leadership potential, and are sufficiently different from our core business. In short, we are seeking businesses with long-term, annuity based revenue, preferably with storage rental attributes, which are consistent with and will enhance our REIT structure. Our internal team is focused on identifying and evaluating these opportunities.

We have established a clear innovation process to ensure we cautiously and effectively develop opportunities to leverage our capabilities in novel ways. We have a deliberate and iterative process that is fact-based and fact-driven. These opportunities may leverage our brand, footprint, sales channels, or our customer base. In addition, EBOs may leverage our existing capabilities in areas such as secure logistics, secure storage or information protection. After we have proven success and met returns, we may potentially acquire to further accelerate our growth. Importantly, the EBO process includes financial hurdles and decision gates to help us evaluate whether we scale or scrap these opportunities, consistent with our disciplined approach to capital allocation.

Our data center business is one such example of an emerging business opportunity where we are assessing the potential for additional investment. We have provided data center solutions for more than 15 years in our underground facility in Pennsylvania, and we brought our first above-ground facility in Boston on line in June 2014. The total data center market is large; we plan to compete in the $10 billion multi-tenant segment, which is estimated to be growing in excess of 15% per year. We will focus on enterprise, government and healthcare customers, where about half of the potential market includes existing relationships. If we were to capture just 5% of the annual growth in this targeted segment, it would add about 1% to annual revenues.

We plan to invest approximately $40 million in 2014 on a success-based approach; we will build the data center shell in smaller increments and deploy less capital upfront. Additionally, we will leverage our existing data management sales channel, bringing average costs to a level that is comparable to larger competitors. Importantly, even if we decide not to ramp up this business, the estimated market value of our data center real estate upon full occupancy would be roughly $100 million greater than our capital investment.

*CAGR = Compounded Annual Growth Rate. Source: 451 Research