05/19/2015

A Strategy
to Extend Durability

Continuing to execute on a proven strategy to extend
the durability of our storage rental business

View Our Strategic Plan

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 to Extend Durability

We continue to execute and make progress on our strategic plan to drive higher profits through improved revenue growth in our Developed Markets; expand our footprint in high growth Emerging Markets; and generate momentum in our Emerging Business Opportunities segment. The pillars of our strategic plan support the durability of our business and trusted brand, the sustainability of our cash flow and our fit as a Real Estate Investment Trust (REIT). Our successful conversion to a REIT in 2014 complements our strategy and supports attractive shareholder returns.

Through our Speed and Agility initiatives, we are driving continuous improvement to efficiently operate our business and continue to move forward with our strategic plan. Our focus on Organization and Culture positions our employees for success through a structure that provides training and tools to help them help us to achieve our goals.

Developed Markets Emerging Markets Emerging Businesses

Developed markets represent about 86% of our total revenue and include: North America, United Kingdom/Ireland, Continental Western Europe and Australia. North America represents the largest region with approximately 70% of our total revenues.

We continue to advance our strategic plan in these markets to achieve our goals. In 2014, we attracted new customers that previously stored their records internally, by providing innovative solutions and targeted expertise, improved our customer retention through enhanced business intelligence, and improved the efficiency of our operations through our speed and agility efforts. In addition, we continue to acquire and integrate smaller competitors and customers at attractive returns. Our goal is to sustain our storage rental growth and enhance our operational and support functions to maintain strong profits.

We further sharpened our focus in these markets with the sale of our shred operations in the UK, Ireland and Australia. We divested these businesses because they were much smaller than our North American operations and we did not benefit from the same scale. At the same time, we acquired Secure-It Records Management in Canada, which added nine facilities and three million cubic feet of records to our portfolio. We are continuing to work toward our goals to deliver compound annual revenue growth of 1.8% in developed markets by 2016, with 2.4% compound annual growth in Adjusted OIBDA, excluding charges related to our restructuring in 2013 and the impact of foreign currency translation.

% of Total Revenues

86% Developed Markets

14% Emerging Markets

Based on Q4 2014 results

% of Developed Market Revenues

80% North America

11% UK/Ireland

6% Continental Western
Europe

3% Australia

Based on Q4 2014 results

Our North American Records and Information Management (RIM) business makes up $1.8 billion of 2014 revenues and comprises a number of product lines, the largest of which is Records Management (RM). Despite foreign exchange headwinds in Canada, we had strong results for the year. Incoming storage volume from our existing customers remained consistent with prior years and we attracted new customers through our vertical market focus and implementation of a new sales force effectiveness program. Finally, we improved customer retention through our customer insights platform, which provides intelligence on customers’ information storage needs and retention plans.

In RM during 2014, we added more than 18 million cubic feet of net storage volume worldwide to an existing base of 500 million cubic feet. The growth was in part achieved as a result of the significant turnaround in North America from negative to positive internal volume growth, or before volume related to acquisitions. North America represented more than 20% of this internal volume growth for the year, or before volume related to acquisitions. In addition, we held customer losses to less than 2%, which represents a 30% improvement over the level of customer losses experienced two years ago. These results drove the steady improvement in total internal storage rental revenue in 2014. Importantly, we continue to focus on investing in high-return, fold-in acquisitions in this space to continue to drive further growth and extend the durability of our RM business.

$1.8B in Total North American RIM Revenue

$1.1B in Storage Rental Revenue

$700M in Service Revenue

Net Volume Growth Rate
(Records Management)

Our North American Data Management (DM) business is a $390 million revenue business predominately consisting of tape vaulting storage and services. Although the role of data protection tapes is changing, industry experts continue to expect an increase in the use of tapes for archival purposes due to their high capacity, reliability, low cost and improved protection against cyber crime.

For 2014, our DM internal storage rental growth was 2.3%, which represents solid growth in the storage of data protection tapes. Similar to the RIM business, DM is characterized by high margins and declining service revenue due to the archival nature of the business. While service revenue declines began moderating in RIM, we believe service declines in DM are in an earlier part of the cycle. To partially offset these trends, we introduced complementary offerings such as secure destruction of IT assets. Early in 2015, we announced several strategic relationships, including a Restoration Assurance Program, a joint global managed service solution with Trusted Data Solutions. In addition, we are partnering with EMC to deliver cloud backup and replication services, which help customers optimize their on-premise and off-premise data protection strategy. Also, Google named us as the preferred provider to assist its Cloud customers in uploading all the data saved in legacy storage formats that predated cloud storage. 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. Looking forward, we believe we are poised to continue to maintain the profitability and resiliency of our DM storage rental business.

$390M in Total Revenue

$250M in Storage Revenue

$140M in Service Revenue

% of Data Management

95% Tape Vaulting

5% Other*

*Other includes Entertainment Services, Digital Records Center Medical Imaging and Tech Services

In our Western European markets, we provide the same storage rental offering and services provided in North America. Revenue growth rates in these markets are similar to those of North America; however, returns are modestly below the North American average. While in certain countries, such as the UK, we have a leadership position and returns identical to those in North America, there are some countries such as Germany, Spain and France where we have not yet established leadership positions to generate U.S.-like returns. In these markets, we have selective opportunities to further invest to attain market leadership.

Our objective in these markets is to continue to grow both top and bottom lines through considered and continued optimization. Similar to our goals for growth in our North American developed markets, we seek to drive and sustain storage rental growth and optimize our operations to maintain and enhance profit margins. In 2014, we leveraged our scale and geographical reach to grow storage rental revenue through: improved volume growth, optimum pricing strategies, territory planning, sales force excellence initiatives, marketing support and targeted segmentation of our customer base. We believe these initiatives will continue to improve our operations, support efficiency and enhance our margins enabling us to invest in new products to enhance customer service.

Similiar Business Fundamentals Globally


Continuous Improvement in Operational Efficiency and in Support Cost Efficiency


Sustain Storage Revenue Growth and Maintain Attractive Returns

% of Western Europe Market Revenues

63% UK/Ireland

37% Continental Western Europe

Continental Western Europe includes: Norway, Austria, Belgium, France, Germany, Netherlands, Spain and Switzerland

Based on Q4 2014 results

Our goal is to expand our footprint primarily in Central and Eastern Europe, Latin America, the Asia Pacific region, and potentially Africa and the Middle East.

We are making good progress toward our goal of 16% of total revenue from emerging markets by the end of 2016. These markets represented 14% of our total revenues in 2014 on a constant dollar basis. We continue to see attractive growth potential in both storage and services in emerging markets. Growth in both totalnternal revenue and internal storage rental growth in these markets was more than 10% for the year.

We are confident about our expansion in these markets, since we have the benefit of investing in US dollars overseas during this part of the currency cycle. Also, we are in a unique position to invest in markets early in the growth cycle, as many of these countries are just beginning to embrace outsourced records management. Our intent is to expand through acquisitions as they help us achieve market leadership and secure new business from locally based customers. In addition, we have a strong track record of successful integration and our pipeline of potential acquisition opportunities represents more than four times the coverage needed to achieve our goals. Our emerging markets targets through 2016 are to deliver compound annual growth of 18% in revenue and 24% in Adjusted OIBDA.

Emerging Market Revenue (%)

*Based on Q4 2014 results

Projected Annualized Revenues from
Emerging Market M&A Pipeline

  • LA : Latin America
  • EMEA: Europe, Middle East and Africa

Emerging business opportunities (EBOs) are prospective businesses we will consider investing in to grow and diversify our business. We continue to evaluate other emerging business opportunities that leverage our unique platform as a leader in enterprise storage. We see the potential to extend our brand strengths in chain of custody and logistics to a broader range of offerings. Many of these opportunities are customer-driven, where they’ve asked for our assistance in solving an enterprise storage need, whether it be upstream in their supply chain, or downstream to support distribution. We are seeking businesses with long-term, recurring revenue, preferably with storage rental attributes, which are consistent with and may 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 effectively develop opportunities to leverage our capabilities in novel ways. We have a deliberate and iterative process that is fact-based and fact-driven. After we have proven success and met returns, we may potentially acquire businesses in an EBO 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.

Demonstrated Ability to Leverage Customer Relationships and Platform


Large Enough to Move the Dial in 3 to 5 Years Scalable to $100 M+


Have Significant Long-term Growth and Market Leadership Potential

Within our emerging business opportunities, we continue to make progress in our data center operations. 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 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.

We invested $35 million in 2014 to expand our capacity in the underground facility and deliver our first phase in Boston. While absorption in our Boston data center is just beginning to pick up, on a blended basis, we have achieved a stabilized unlevered return on invested capital in this business of 9% and believe that these returns can reach 11% to 12% on a fully utilized basis. Our plan for 2015 is to invest roughly the same amount on a success-based approach. Importantly, even if we decide not to ramp up this business, we believe the estimated market value of our data center real estate when fully stabilized would be roughly $100 million greater than our capital investment.

Long Relationship of Trust, Compliance and Security


Capturing 5% Market Share of New Market Growth Adds ~1% to IRM Growth


Wholesale/Retail

Multi-tenant
Colocation

Managed Services
Cloud

$10B+

$5B+

$5B+

Enterprise Segment is $5B 2012—2016 CAGR* of 15%

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

On April 28th, 2015, Iron Mountain announced that it reached an agreement in principle with Recall Holdings Limited to acquire Recall by way of a recommended court approved Scheme of Arrangement for 0.1722 of an Iron Mountain common share for each Recall share. In addition, Recall shareholders will be offered the option to elect to receive alternative consideration of A$8.50 per Recall share in cash, subject to a proration mechanism that will cap the total amount of cash consideration to be paid to Recall shareholders at A$225 million. The proposed transaction between the companies is contingent on Iron Mountain and Recall conducting confirmatory due diligence and negotiating and executing mutually acceptable merger documentation and other terms and conditions. This agreement in principle does not assure that a definitive agreement regarding the proposed transaction will be reached or that any transaction between the companies will actually occur.

An acquisition of Recall will accelerate Iron Mountain’s already successful strategy. The combined company’s broader footprint, stronger infrastructure and increased economies of scale will enable us to better serve our customers and address unmet document storage and information management needs around the globe. In addition, both companies’ shareholders stand to benefit from potential significant synergies currently estimated at $125 million to $140 million, which will drive significant earnings growth.