Iron Mountain (IRM) came out with quarterly funds from operations (FFO) of $1.11 per share, beating the Zacks Consensus Estimate of $1.05 per share. This compares to FFO of $0.98 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an FFO surprise of 5.71%. A quarter ago, it was expected that this real estate investment trust would post FFO of $1 per share when it actually produced FFO of $0.99, delivering a surprise of -1%.Over the last four quarters, th ...

Iron Mountain Incorporated (IRM) is slated to release fourth-quarter and full-year 2023 earnings results on Feb 22 before the opening bell. The quarterly results are likely to display year-over-year revenue growth and funds from operations (FFO) per share.In the last reported quarter, this real estate investment trust (REIT) delivered a negative surprise of 1.00% in terms of adjusted FFO (AFFO) per share. The revenue number came in lower than expected for the quarter.Over the trailing four quarters, Iron Mo ...

[Q4 Earnings Press Release](index=3&type=section&id=Section%20I%20-%20Q4%20Earnings%20Press%20Release) Iron Mountain achieved record Q4 and full-year 2023 revenue and Adjusted EBITDA, driven by data center growth and strong 2024 guidance, despite a net income decline and an updated AFFO calculation [Q4 2023 Earnings Press Release](index=3&type=section&id=Q4%202023%20Earnings%20Press%20Release) Iron Mountain reported outstanding performance for Q4 and full year 2023, achieving record revenue and Adjusted EBITDA. The company leased 124 megawatts in data centers for the full year and issued strong 2024 guidance with projected double-digit revenue growth. Net income, however, saw a significant decrease year-over-year due to higher restructuring costs and lower gains on asset recycling. The company also updated its AFFO calculation to exclude amortization of capitalized commissions, making it more comparable to data center peers - Iron Mountain achieved **record quarterly and full-year Revenue and Adjusted EBITDA** in 2023[6](index=6&type=chunk)[7](index=7&type=chunk) - Data Center business leased **124 megawatts** for the full year 2023[6](index=6&type=chunk) - Issued **strong 2024 guidance** with projected **Revenue Growth of 10-12%**[6](index=6&type=chunk) Financial Performance Highlights for Q4 and Full Year 2023 | Metric | Q4 2023 ($M) | Q4 2022 ($M) | Y/Y % Change (Reported) | Full Year 2023 ($M) | Full Year 2022 ($M) | Y/Y % Change (Reported) | | :----------------------- | :----------- | :----------- | :---------------------- | :------------------ | :------------------ | :---------------------- | | Storage Rental Revenue | $871 | $769 | 13% | $3,371 | $3,034 | 11% | | Service Revenue | $549 | $510 | 8% | $2,109 | $2,070 | 2% | | Total Revenue | $1,420 | $1,279 | 11% | $5,480 | $5,104 | 7% | | Net Income | $29 | $126 | (77)% | $187 | $562 | (67)% | | Reported EPS | $0.10 | $0.42 | (76)% | $0.63 | $1.90 | (67)% | | Adjusted EPS | $0.52 | $0.43 | 21% | $1.82 | $1.79 | 2% | | Adjusted EBITDA | $525 | $472 | 11% | $1,962 | $1,827 | 7% | | Adjusted EBITDA Margin | 37.0% | 36.9% | 10 bps | 35.8% | 35.8% | - | | AFFO (Updated) | $328 | $299 | 10% | $1,211 | $1,151 | 5% | | AFFO per share (Updated) | $1.11 | $1.02 | 9% | $4.12 | $3.93 | 5% | - Net Income for Q4 2023 decreased by **77% YoY to $29.2 million**, and full-year net income decreased by **67% to $187.3 million**, primarily due to higher levels of restructuring and other transformation costs, lower gains on asset recycling, and the negative impact from changes in foreign exchange rates[10](index=10&type=chunk) - Iron Mountain's Board of Directors declared a quarterly cash dividend of **$0.65 per share** for Q1 2024[11](index=11&type=chunk) 2024 Guidance | Metric | 2024 Guidance ($M) | Y/Y % Change at Midpoint | | :---------------- | :----------------- | :----------------------- | | Total Revenue | $6,000 - $6,150 | 11% | | Adjusted EBITDA | $2,175 - $2,225 | 12% | | AFFO | $1,300 - $1,335 | 9% | | AFFO Per Share | $4.39 - $4.51 | 8% | - Effective Q4 2023, the AFFO definition was updated to exclude amortization of capitalized commissions, resulting in an **$11.0 million increase** to AFFO in Q4 and a **$43.4 million increase** for the full year, making it more comparable to data center industry peers[16](index=16&type=chunk) [Financial Highlights and Organic Growth](index=6&type=section&id=Section%20II%20-%20Financial%20Highlights%20and%20Organic%20Growth) This section details Iron Mountain's quarterly financial and operating performance, highlighting consistent revenue and Adjusted EBITDA growth, strong organic revenue, and data center expansion [Financial and Operating Highlights](index=6&type=section&id=Financial%20and%20Operating%20Highlights) This section provides a detailed quarterly breakdown of key financial and operating metrics from Q4 2022 to Q4 2023, including revenue, profitability, EPS, FFO, AFFO, and operational indicators like organic growth, storage volume, and data center performance. It shows consistent growth in total revenues and Adjusted EBITDA, alongside an increase in data center leasable megawatts and utilization Quarterly Financial Highlights (Q4 2023 vs Q4 2022) | Metric | Q4 2023 | Q4 2022 | Y/Y % Change | | :------------------------------------------ | :-------- | :-------- | :----------- | | Storage Rental Revenue ($K) | $871,144 | $769,457 | 13.2% | | Service Revenue ($K) | $548,685 | $509,592 | 7.7% | | Total Revenues ($K) | $1,419,829 | $1,279,049 | 11.0% | | Adjusted EBITDA ($K) | $525,249 | $471,923 | 11.3% | | Adjusted EBITDA Margin | 37.0% | 36.9% | 0.1% | | Net Income (Loss) Attributable to IRM ($K) | $28,482 | $122,437 | (76.7)% | | Reported EPS - Fully Diluted | $0.10 | $0.42 | (76.2)% | | Adjusted EPS | $0.52 | $0.43 | 20.9% | | AFFO (Updated Calculation) ($K) | $327,634 | $298,523 | 9.8% | | AFFO per Share (Updated Calculation) | $1.11 | $1.02 | 8.8% | | Dividend per Share | $0.65 | $0.62 | 4.8% | Quarterly Operating Highlights (Q4 2023 vs Q4 2022) | Metric | Q4 2023 | Q4 2022 | Y/Y % Change | | :-------------------------------- | :-------- | :-------- | :----------- | | Organic Storage Rental Revenue Growth | 10.4% | 11.0% | (0.6)% | | Organic Service Revenue Growth | 6.2% | 11.8% | (5.6)% | | Total Volume - Storage (000s) | 731,541 | 729,284 | 0.3% | | Storage Facility Capacity Utilization | 79.6% | 79.3% | 0.3% | | Records Management Retention Rate | 92.9% | 93.3% | (0.4)% | | Data Center: Leasable Megawatts | 255.4 | 191.6 | 33.3% | | Data Center: Leased % - Total | 93.3% | 91.6% | 1.7% | | Data Center: Kilowatts Leased - New/Expansion | 4,535 | 13,657 | (66.8)% | [Organic Revenue Growth](index=7&type=section&id=Organic%20Revenue%20Growth) Iron Mountain reported strong organic revenue growth for Q4 and full year 2023, with total organic revenue growth at 8.7% for Q4 and 6.9% for the full year on a constant currency basis. Storage rental revenue consistently showed double-digit organic growth, while service revenue organic growth, though positive in Q4, saw a decline compared to the prior year Organic Revenue Growth (Constant Currency, excluding acquisitions/divestitures) | Metric | Q4 2023 Organic Revenue Growth | Full Year 2023 Organic Revenue Growth | | :---------------------- | :----------------------------- | :------------------------------------ | | Storage Rental | 10.4% | 10.5% | | Service | 6.2% | 1.6% | | Total Revenues | 8.7% | 6.9% | - Organic Storage Rental Revenue Growth remained **strong at 10.4%** in Q4 2023 and **10.5%** for the full year 2023[27](index=27&type=chunk) - Organic Service Revenue Growth was **6.2%** in Q4 2023, a recovery from negative growth in Q2 and Q3 2023, but lower than **11.8%** in Q4 2022[27](index=27&type=chunk)[30](index=30&type=chunk) [Operational Metrics](index=8&type=section&id=Section%20III%20-%20Operational%20Metrics) This section analyzes Iron Mountain's operational performance, detailing global storage volume growth and segment-specific revenue and Adjusted EBITDA trends for both quarterly and full-year periods [Global Storage Volume](index=8&type=section&id=Global%20Storage%20Volume) Total storage volume for Iron Mountain continued to grow, reaching 731,541 thousand cubic feet by Q4 2023, a slight increase from previous quarters. The growth was primarily driven by Global RIM and Corporate and Other segments, with some volume added through acquisitions Total Storage Volume (in thousands of cubic feet) | Metric | Q4 2023 | Q3 2023 | Q4 2022 | | :-------------------- | :-------- | :-------- | :-------- | | Global RIM | 726,048 | 725,907 | 724,480 | | Corporate and Other | 5,493 | 5,356 | 4,804 | | Total Volume - Storage | 731,541 | 731,263 | 729,284 | - Total storage volume increased slightly from **729,284 thousand cubic feet** in Q4 2022 to **731,541 thousand cubic feet** in Q4 2023[35](index=35&type=chunk) - Acquisitions contributed **5,020 thousand cubic feet** in Q2 2021 and **10,743 thousand cubic feet** in Q3 2021, and **143 thousand cubic feet** in Q2 2022. The acquisition of Clutter Intermediate, Inc. in Q2 2023 maintained consistent volume[35](index=35&type=chunk) [Quarterly Operating Performance](index=9&type=section&id=Quarterly%20Operating%20Performance) This section details the quarterly operating performance across Iron Mountain's key business segments: Global RIM, Global Data Center, and Corporate and Other. It highlights strong revenue and Adjusted EBITDA growth in Global Data Center, while Global RIM also showed solid growth. Corporate and Other experienced revenue decline but improved Adjusted EBITDA Q4 2023 Quarterly Operating Performance by Segment (Y/Y % Change) | Segment | Storage Rental Revenue | Service Revenue | Total Revenues | Adjusted EBITDA Margin | | :-------------------- | :--------------------- | :-------------- | :------------- | :--------------------- | | Global RIM Business | 10.1% | 9.7% | 10.0% | 44.7% | | Global Data Center Business | 33.8% | 1.7% | 32.2% | 42.5% | | Corporate and Other | 14.0% | (3.5)% | (0.8)% | N/A | | Total Consolidated | 13.2% | 7.7% | 11.0% | 37.0% | - Global Data Center Business showed **significant growth** in Q4 2023, with Storage Rental Revenue up **33.8%** and Total Revenues up **32.2% YoY**[38](index=38&type=chunk) - Global RIM Business maintained **strong performance** with **10.0% YoY** total revenue growth and a **healthy 44.7% Adjusted EBITDA Margin** in Q4 2023[38](index=38&type=chunk) - Corporate and Other segment's total revenues decreased by **0.8% YoY** in Q4 2023, primarily due to a **3.5% decline** in service revenue[38](index=38&type=chunk) [Full Year Operating Performance](index=10&type=section&id=Full%20Year%20Operating%20Performance) For the full year 2023, Iron Mountain's consolidated total revenues grew by 7.4%, with Adjusted EBITDA Margin remaining stable at 35.8%. The Global Data Center Business was a significant growth driver, showing strong double-digit revenue growth, while the Global RIM Business also contributed positively. The Corporate and Other segment experienced a revenue decline Full Year 2023 Operating Performance by Segment (Y/Y % Change) | Segment | Storage Rental Revenue | Service Revenue | Total Revenues | Adjusted EBITDA Margin | | :-------------------- | :--------------------- | :-------------- | :------------- | :--------------------- | | Global RIM Business | 8.7% | 8.2% | 8.5% | 43.5% | | Global Data Center Business | 27.4% | (27.5)% | 23.4% | 43.6% | | Corporate and Other | 12.9% | (25.8)% | (20.6)% | N/A | | Total Consolidated | 11.1% | 1.9% | 7.4% | 35.8% | - Global Data Center Business total revenues increased by **23.4%** for the full year 2023, driven by a **27.4% increase** in storage rental revenue, despite a **27.5% decrease** in service revenue[40](index=40&type=chunk) - Global RIM Business achieved **8.5%** total revenue growth for the full year 2023, with both storage rental and service revenues showing **solid increases**[40](index=40&type=chunk) - The Corporate and Other segment's total revenues decreased by **20.6%** for the full year 2023, primarily due to a **25.8% decline** in service revenue[40](index=40&type=chunk) [Balance Sheets, Statements of Operations and Reconciliations](index=11&type=section&id=Section%20IV%20-%20Balance%20Sheets%2C%20Statements%20of%20Operations%20and%20Reconciliations) This section presents Iron Mountain's consolidated financial statements, including balance sheets and statements of operations, alongside detailed reconciliations of net income to Adjusted EBITDA, Adjusted EPS, FFO, and AFFO for both quarterly and full-year periods [Consolidated Balance Sheets](index=11&type=section&id=Consolidated%20Balance%20Sheets) Iron Mountain's consolidated balance sheet as of December 31, 2023, shows an increase in total assets, primarily driven by growth in property, plant, and equipment. Total liabilities also increased, with a notable rise in long-term debt, while total equity decreased significantly year-over-year Consolidated Balance Sheet Highlights (as of Dec 31, 2023 vs Dec 31, 2022) | Metric | 12/31/2023 ($K) | 12/31/2022 ($K) | % Change | | :------------------------------------ | :-------------- | :-------------- | :--------- | | Total Current Assets | $1,735,545 | $1,547,145 | 12.2% | | Property, Plant and Equipment, Net | $6,314,869 | $5,115,444 | 23.4% | | Total Other Assets, Net | $9,423,388 | $9,477,925 | (0.6)% | | Total Assets | $17,473,802 | $16,140,514 | 8.3% | | Total Current Liabilities | $2,236,188 | $1,917,564 | 16.6% | | Long-term Debt, Net of Current Portion | $11,812,500 | $10,481,449 | 12.7% | | Total Liabilities | $17,262,029 | $15,503,721 | 11.3% | | Total Equity | $211,773 | $636,793 | (66.7)% | - Net Property, Plant and Equipment increased by **23.4% YoY**, indicating **significant capital investments**[43](index=43&type=chunk) - Long-term debt (net of current portion) increased by **12.7% YoY**, contributing to the overall rise in total liabilities[43](index=43&type=chunk) - Total Equity decreased **substantially by 66.7%** from **$636.8 million** in 2022 to **$211.8 million** in 2023[43](index=43&type=chunk) [Quarterly Consolidated Statements of Operations](index=12&type=section&id=Quarterly%20Consolidated%20Statements%20of%20Operations) For Q4 2023, Iron Mountain reported an 11.0% increase in total revenues year-over-year, driven by strong storage rental revenue growth. However, net income saw a significant decline of 76.8% due to higher operating expenses, particularly restructuring and other transformation costs, and increased interest expense Q4 2023 Consolidated Statements of Operations Highlights (Y/Y % Change) | Metric | Q4 2023 ($K) | Q4 2022 ($K) | Y/Y % Change | | :------------------------------------------ | :----------- | :----------- | :----------- | | Storage Rental Revenue | $871,144 | $769,457 | 13.2% | | Service Revenue | $548,685 | $509,592 | 7.7% | | Total Revenues | $1,419,829 | $1,279,049 | 11.0% | | Total Operating Expenses | $1,189,072 | $1,030,852 | 15.3% | | Operating Income (Loss) | $230,757 | $248,197 | (7.0)% | | Interest Expense, Net | $151,784 | $136,748 | 11.0% | | Net Income (Loss) | $29,194 | $125,654 | (76.8)% | | Net Income (Loss) Attributable to IRM | $28,482 | $122,437 | (76.7)% | | Diluted EPS | $0.10 | $0.42 | (76.2)% | - Restructuring and Other Transformation costs increased **significantly by 39.7% YoY** in Q4 2023, reaching **$53.8 million**[46](index=46&type=chunk) - Other Expense (Income), Net shifted from an income of **$(31.6) million** in Q4 2022 to an expense of **$40.8 million** in Q4 2023, contributing to the net income decline[46](index=46&type=chunk) [Full Year Consolidated Statements of Operations](index=13&type=section&id=Full%20Year%20Consolidated%20Statements%20of%20Operations) For the full year 2023, Iron Mountain's total revenues increased by 7.4% to $5.48 billion. However, net income decreased substantially by 66.7% to $187.3 million, primarily due to a 12.5% increase in total operating expenses, a 20.1% rise in interest expense, and a significant increase in restructuring and other transformation costs Full Year 2023 Consolidated Statements of Operations Highlights (Y/Y % Change) | Metric | Full Year 2023 ($K) | Full Year 2022 ($K) | % Change | | :------------------------------------------ | :------------------ | :------------------ | :--------- | | Storage Rental Revenue | $3,370,645 | $3,034,023 | 11.1% | | Service Revenue | $2,109,644 | $2,069,551 | 1.9% | | Total Revenues | $5,480,289 | $5,103,574 | 7.4% | | Total Operating Expenses | $4,558,511 | $4,053,703 | 12.5% | | Operating Income (Loss) | $921,778 | $1,049,871 | (12.2)% | | Interest Expense, Net | $585,932 | $488,014 | 20.1% | | Net Income (Loss) | $187,263 | $562,149 | (66.7)% | | Net Income (Loss) Attributable to IRM | $184,234 | $556,981 | (66.9)% | | Diluted EPS | $0.63 | $1.90 | (66.8)% | - Restructuring and Other Transformation costs surged to **$175.2 million** in 2023 from **$41.9 million** in 2022[50](index=50&type=chunk) - Other Expense (Income), Net shifted from an income of **$(69.8) million** in 2022 to an expense of **$108.6 million** in 2023[50](index=50&type=chunk) [Quarterly and Full Year Reconciliation of Net Income (Loss) to Adjusted EBITDA](index=14&type=section&id=Quarterly%20and%20Full%20Year%20Reconciliation%20of%20Net%20Income%20(Loss)%20to%20Adjusted%20EBITDA) This section reconciles net income to Adjusted EBITDA for both quarterly and full-year periods. Despite a significant decline in net income, Adjusted EBITDA showed healthy growth, reflecting the exclusion of non-operating and non-cash items such as interest, taxes, depreciation, amortization, and restructuring costs Adjusted EBITDA Reconciliation Highlights (Q4 2023 vs Q4 2022) | Metric | Q4 2023 ($K) | Q4 2022 ($K) | Y/Y % Change | | :-------------------------------------------------------------------------------- | :----------- | :----------- | :----------- | | Net Income | $29,194 | $125,654 | (76.8)% | | Add: Interest Expense, Net | $151,784 | $136,748 | 11.0% | | Add: Provision (Benefit) for Income Taxes | $9,018 | $17,392 | (48.1)% | | Add: Depreciation and Amortization | $199,941 | $190,649 | 4.9% | | Add: Acquisition and Integration Costs | $12,860 | $9,653 | 33.2% | | Add: Restructuring and Other Transformation | $53,853 | $38,551 | 39.7% | | Add: Other Expense (Income), Net (Excluding JV) | $40,332 | $(34,455) | N/A | | Adjusted EBITDA | $525,249 | $471,923 | 11.3% | Adjusted EBITDA Reconciliation Highlights (Full Year 2023 vs Full Year 2022) | Metric | Full Year 2023 ($K) | Full Year 2022 ($K) | % Change | | :-------------------------------------------------------------------------------- | :------------------ | :------------------ | :--------- | | Net Income | $187,263 | $562,149 | (66.7)% | | Add: Interest Expense, Net | $585,932 | $488,014 | 20.1% | | Add: Provision (Benefit) for Income Taxes | $39,943 | $69,489 | (42.5)% | | Add: Depreciation and Amortization | $776,159 | $727,595 | 6.7% | | Add: Acquisition and Integration Costs | $25,875 | $47,746 | (45.8)% | | Add: Restructuring and Other Transformation | $175,215 | $41,933 | N/A | | Add: Other Expense (Income), Net (Excluding JV) | $98,891 | $(83,268) | N/A | | Adjusted EBITDA | $1,961,677 | $1,827,057 | 7.4% | - Stock-Based Compensation Expense increased **significantly by 88.4% YoY** in Q4 2023 and **29.8%** for the full year 2023, contributing to the adjustments[53](index=53&type=chunk) [Quarterly and Full Year Reconciliation of Reported Earnings per Share to Adjusted Earnings per Share](index=15&type=section&id=Quarterly%20and%20Full%20Year%20Reconciliation%20of%20Reported%20Earnings%20per%20Share%20to%20Adjusted%20Earnings%20per%20Share) This section reconciles reported EPS to Adjusted EPS, highlighting the impact of various non-recurring and non-cash items. Adjusted EPS showed growth for both Q4 and the full year, despite the sharp decline in reported EPS, indicating underlying operational strength when excluding specific adjustments Adjusted EPS Reconciliation Highlights (Q4 2023 vs Q4 2022) | Metric | Q4 2023 | Q4 2022 | Y/Y % Change | | :-------------------------------------------------------------------------------- | :------ | :------ | :----------- | | Reported EPS - Fully Diluted | $0.10 | $0.42 | (76.2)% | | Add: Acquisition and Integration Costs | $0.04 | $0.03 | 33.3% | | Add: Restructuring and Other Transformation | $0.18 | $0.13 | 38.5% | | Add: Loss (Gain) on Disposal/Write-Down of PP&E, Net | $0.02 | $(0.09) | (122.2)% | | Add: Other Expense (Income), Net (Excluding JV) | $0.14 | $(0.12) | N/A | | Add: Stock-Based Compensation Expense | $0.07 | $0.04 | 75.0% | | Adjusted EPS - Fully Diluted | $0.52 | $0.43 | 20.9% | Adjusted EPS Reconciliation Highlights (Full Year 2023 vs Full Year 2022) | Metric | Full Year 2023 | Full Year 2022 | % Change | | :-------------------------------------------------------------------------------- | :------------- | :------------- | :--------- | | Reported EPS - Fully Diluted | $0.63 | $1.90 | (66.8)% | | Add: Acquisition and Integration Costs | $0.09 | $0.16 | (43.8)% | | Add: Restructuring and Other Transformation | $0.60 | $0.14 | N/A | | Add: (Gain) Loss on Disposal/Write-Down of PP&E, Net | $(0.04) | $(0.31) | (87.1)% | | Add: Other Expense (Income), Net (Excluding JV) | $0.34 | $(0.28) | N/A | | Add: Stock-Based Compensation Expense | $0.25 | $0.19 | 31.6% | | Adjusted EPS - Fully Diluted | $1.82 | $1.79 | 1.7% | - The **significant increase** in Restructuring and Other Transformation costs (from **$0.14 to $0.60 per share** for the full year) was a **major factor** in the difference between reported and adjusted EPS[57](index=57&type=chunk) [Quarterly Reconciliation of Net Income (Loss) to FFO and AFFO](index=16&type=section&id=Quarterly%20Reconciliation%20of%20Net%20Income%20(Loss)%20to%20FFO%20and%20AFFO) This section provides a quarterly reconciliation from Net Income to FFO (Nareit), FFO (Normalized), and AFFO. While Net Income declined significantly, FFO (Normalized) and AFFO showed positive year-over-year growth, reflecting adjustments for non-cash and non-operating items, including the updated AFFO definition Q4 2023 FFO and AFFO Reconciliation Highlights (Y/Y % Change) | Metric | Q4 2023 ($K) | Q4 2022 ($K) | Y/Y % Change | | :-------------------------------------------------------------------------------- | :----------- | :----------- | :----------- | | Net Income | $29,194 | $125,654 | (76.8)% | | FFO (Nareit) | $117,972 | $180,033 | (34.5)% | | FFO (Normalized) | $246,005 | $216,182 | 13.8% | | AFFO | $327,634 | $298,523 | 9.8% | | FFO (Nareit) per Share | $0.40 | $0.61 | (34.4)% | | FFO (Normalized) per Share | $0.83 | $0.74 | 12.2% | | AFFO Per Share | $1.11 | $1.02 | 8.8% | - Real Estate Depreciation increased by **6.4% YoY** in Q4 2023, contributing to the FFO (Nareit) calculation[61](index=61&type=chunk) - Recurring Capital Expenditures increased by **23.6% YoY** in Q4 2023, impacting the AFFO calculation[63](index=63&type=chunk) - The updated AFFO definition, effective Q4 2023, excludes amortization of capitalized commissions, which was **$11.0 million** in Q4 2023[63](index=63&type=chunk) [Full Year Reconciliation of Net Income (Loss) to FFO and AFFO](index=18&type=section&id=Full%20Year%20Reconciliation%20of%20Net%20Income%20(Loss)%20to%20FFO%20and%20AFFO) For the full year 2023, this section reconciles Net Income to FFO (Nareit), FFO (Normalized), and AFFO. Despite a significant drop in Net Income, FFO (Normalized) and AFFO demonstrated positive growth, reflecting the adjustments for non-cash and non-operating items, and the impact of the updated AFFO calculation Full Year 2023 FFO and AFFO Reconciliation Highlights (Y/Y % Change) | Metric | Full Year 2023 ($K) | Full Year 2022 ($K) | % Change | | :-------------------------------------------------------------------------------- | :------------------ | :------------------ | :--------- | | Net Income | $187,263 | $562,149 | (66.7)% | | FFO (Nareit) | $517,200 | $792,940 | (34.8)% | | FFO (Normalized) | $892,722 | $857,757 | 4.1% | | AFFO | $1,211,165 | $1,150,541 | 5.3% | | FFO (Nareit) per Share | $1.76 | $2.71 | (35.1)% | | FFO (Normalized) per Share | $3.04 | $2.93 | 3.8% | | AFFO Per Share | $4.12 | $3.93 | 4.8% | - Restructuring and Other Transformation costs were a **significant add-back** for FFO (Normalized), increasing **substantially year-over-year**[68](index=68&type=chunk) - Non-Real Estate Depreciation increased by **21.5%** for the full year 2023, impacting the AFFO calculation[69](index=69&type=chunk) - The updated AFFO definition for the full year 2023 excluded **$43.4 million** in amortization of capitalized commissions[69](index=69&type=chunk) [Reconciliation of Net Income (Loss) to FFO and AFFO (Recast to updated calculation)](index=20&type=section&id=Reconciliation%20of%20Net%20Income%20(Loss)%20to%20FFO%20and%20AFFO%20(Recast%20to%20updated%20calculation)) This section presents a detailed quarterly and full-year reconciliation of Net Income to FFO (Nareit), FFO (Normalized), and AFFO, with all figures recast to reflect the updated AFFO calculation methodology. It provides a consistent view of these non-GAAP metrics across periods, highlighting the impact of the change in calculation Full Year 2023 FFO and AFFO (Recast) | Metric | Full Year 2023 (Recast) ($K) | Full Year 2022 ($K) | | :-------------------------------------------------------------------------------- | :--------------------------- | :------------------ | | Net Income | $187,263 | $562,149 | | FFO (Nareit) | $517,200 | $792,940 | | FFO (Normalized) | $892,722 | $857,757 | | AFFO | $1,211,165 | $1,150,541 | | AFFO Per Share | $4.12 | $3.93 | - The recast calculation provides a **consistent basis for comparing AFFO** across periods, with the updated definition excluding amortization of capitalized commissions[16](index=16&type=chunk)[63](index=63&type=chunk)[69](index=69&type=chunk) - The table shows the quarterly progression of these metrics for 2023, allowing for detailed trend analysis under the new calculation method[72](index=72&type=chunk) [Storage and Service Reconciliation](index=21&type=section&id=Section%20V%20-%20Storage%20and%20Service%20Reconciliation) This section provides a detailed breakdown of Iron Mountain's storage rental and service business performance, analyzing revenue, costs, and gross profit for both quarterly and full-year periods [Quarterly Storage Rental and Service Business Detail](index=21&type=section&id=Quarterly%20Storage%20Rental%20and%20Service%20Business%20Detail) This section breaks down the quarterly performance of Iron Mountain's storage rental and service businesses. Storage rental revenue and gross profit showed solid year-over-year growth, though gross margin slightly decreased. Service revenue also grew, and service gross profit saw a significant increase, improving its gross margin Q4 2023 Storage Rental Business Detail (Y/Y % Change) | Metric | Q4 2023 ($K) | Q4 2022 ($K) | Y/Y % Change | | :------------------------------------ | :----------- | :----------- | :----------- | | Total Storage Rental Revenue | $871,144 | $769,457 | 13.2% | | Total Revenue from Adjusted Storage Rental Activities | $880,366 | $778,071 | 13.1% | | Storage Rental Cost of Sales | $266,161 | $222,479 | 19.6% | | Storage Rental Gross Profit | $614,205 | $555,591 | 10.5% | | Storage Rental Gross Margin | 69.8% | 71.4% | (160 bps) | Q4 2023 Service Business Detail (Y/Y % Change) | Metric | Q4 2023 ($K) | Q4 2022 ($K) | Y/Y % Change | | :------------------------------------ | :----------- | :----------- | :----------- | | Total Service Revenue | $548,685 | $509,592 | 7.7% | | Total Revenue from Adjusted Service Activities | $539,463 | $500,978 | 7.7% | | Service Cost of Sales | $335,167 | $317,502 | 5.6% | | Service Gross Profit | $204,296 | $183,476 | 11.3% | | Service Gross Margin | 37.9% | 36.6% | 130 bps | - All Other Storage Costs increased **significantly by 33.4% YoY** in Q4 2023, contributing to the decline in Storage Rental Gross Margin[74](index=74&type=chunk) - Service Rent expenses saw a **substantial increase of 129.1% YoY** in Q4 2023[74](index=74&type=chunk) [Full Year Storage and Service Business Detail](index=22&type=section&id=Full%20Year%20Storage%20and%20Service%20Business%20Detail) For the full year 2023, the storage rental business demonstrated strong revenue and gross profit growth, although its gross margin slightly compressed. The service business saw modest revenue growth, but its gross profit declined, leading to a decrease in service gross margin Full Year 2023 Storage Rental Business Detail (Y/Y % Change) | Metric | Full Year 2023 ($K) | Full Year 2022 ($K) | % Change | | :------------------------------------ | :------------------ | :------------------ | :--------- | | Total Storage Rental Revenue | $3,370,645 | $3,034,023 | 11.1% | | Total Revenue from Adjusted Storage Rental Activities | $3,404,086 | $3,068,190 | 10.9% | | Storage Rental Cost of Sales | $1,009,847 | $891,367 | 13.3% | | Storage Rental Gross Profit | $2,394,239 | $2,176,823 | 10.0% | | Storage Rental Gross Margin | 70.3% | 70.9% | (60 bps) | Full Year 2023 Service Business Detail (Y/Y % Change) | Metric | Full Year 2023 ($K) | Full Year 2022 ($K) | % Change | | :------------------------------------ | :------------------ | :------------------ | :--------- | | Total Service Revenue | $2,109,644 | $2,069,551 | 1.9% | | Total Revenue from Adjusted Service Activities | $2,076,203 | $2,035,384 | 2.0% | | Service Cost of Sales | $1,347,953 | $1,297,753 | 3.9% | | Service Gross Profit | $728,250 | $737,631 | (1.3)% | | Service Gross Margin | 35.1% | 36.2% | (110 bps) | - Service Rent expenses increased **significantly by 47.9%** for the full year 2023[77](index=77&type=chunk) [Real Estate Metrics](index=23&type=section&id=Section%20VI%20-%20Real%20Estate%20Metrics) This section details Iron Mountain's global real estate portfolio, including owned and leased facilities, data center assets, and the significant upcoming facility lease expirations [Global Real Estate Portfolio and Lease Obligations](index=23&type=section&id=Global%20Real%20Estate%20Portfolio%20and%20Lease%20Obligations) As of December 31, 2023, Iron Mountain's global real estate portfolio comprised 1,377 buildings totaling 98.0 million square feet, with the majority being leased facilities. The portfolio includes 12 owned and 5 leased data center facilities. The weighted-average remaining operating lease obligation is 10.4 years Global Real Estate Portfolio (as of 12/31/2023) | Type | Buildings | Sq. Ft. (000s) | % of Total Sq. Ft. | | :---------------- | :-------- | :-------------- | :----------------- | | Owned Facilities | 232 | 23,281 | 23.8% | | Leased Facilities | 1,145 | 74,732 | 76.2% | | Total | 1,377 | 98,012 | 100.0% | - The portfolio includes **12 owned data center facilities** (**2.6M Sq. Ft.**) and **5 leased data center facilities** (**0.8M Sq. Ft.**)[83](index=83&type=chunk) - The weighted-average remaining operating lease obligation is **10.4 years**[83](index=83&type=chunk) [Facility Lease Expirations](index=23&type=section&id=Facility%20Lease%20Expirations) The facility lease expiration schedule shows that a significant portion of leases, 54.2% of total square feet, are set to expire in 2024, followed by 6.6% in 2025. This indicates a substantial amount of lease renewals or new lease agreements will be required in the near term - **54.2%** of total square feet subject to lease are set to expire in 2024[82](index=82&type=chunk) - The next largest expiration year is **2025**, with **6.6%** of total square feet[82](index=82&type=chunk) [Data Center Customer and Portfolio Metrics](index=24&type=section&id=Section%20VII%20-%20Data%20Center%20Customer%20and%20Portfolio%20Metrics) This section provides a comprehensive overview of Iron Mountain's data center business, covering customer lease expirations, leasing activity, operating portfolio, total potential capacity, and ongoing expansion and development projects [Data Center Customer Lease Expiration and Leasing Activity Summary](index=24&type=section&id=Data%20Center%20Customer%20Lease%20Expiration%20and%20Leasing%20Activity%20Summary) Iron Mountain's data center portfolio has a Weighted Average Lease Expiry (WALE) of 8.0 years. While a small percentage of total MW (4.5%) expires in 2024, a larger portion of annualized GAAP TCV rent (10.9%) is due. Leasing activity in Q4 2023 included 4,535 kW in new/expansion leases and 7,903 kW in renewed leases, with a churn rate of 1.7% - Weighted Average Lease Expiry (WALE) for data center customers is **8.0 years**[86](index=86&type=chunk) Data Center Lease Expiration (2024-2028) | Year | Total MW Expiring | Percentage of Total MW | Annualized GAAP TCV Rent Expiring ($K) | Percentage of TCV Annualized Rent | | :--- | :---------------- | :--------------------- | :--------------------------------------- | :-------------------------------- | | 2024 | 19.5 | 4.5% | $65,564 | 10.9% | | 2025 | 36.4 | 8.4% | $86,659 | 14.5% | | 2026 | 23.3 | 5.4% | $52,198 | 8.7% | | 2027 | 9.7 | 2.2% | $24,459 | 4.1% | | 2028 | 58.2 | 13.4% | $74,435 | 12.4% | Q4 2023 Data Center Leasing Activity | Activity | Transaction Count | kW | | :---------------------- | :---------------- | :----- | | New/expansion leases signed | 122 | 4,535 | | Commenced leases | 122 | 30,250 | | Renewed leases | 156 | 7,903 | | Churn | N/A | 1.7% | - Full Year 2023 new/expansion leases signed totaled **124,351 kW** across **323 transactions**[87](index=87&type=chunk) [Data Center Operating Portfolio and Total Potential Capacity](index=25&type=section&id=Data%20Center%20Operating%20Portfolio%20and%20Total%20Potential%20Capacity) Iron Mountain's data center operating portfolio reached 255.4 leasable megawatts (MW) in Q4 2023, with a total leased percentage of 93.3%. The company has a substantial total potential capacity of 860.8 MW, including significant capacity under construction and held for development, indicating strong future growth potential Data Center Operating Portfolio (Q4 2023) | Category | Leaseable MW | Leased % by MW | | :-------------------------- | :----------- | :------------- | | Stabilized | 240.8 | 95.4% | | Pre-Stabilized | 14.7 | 59.1% | | Total Data Center Properties | 255.4 | 93.3% | Total Potential Capacity - Megawatts (Q4 2023 vs Q4 2022) | Category | Q4 2023 (MW) | Q4 2022 (MW) | | :----------------------- | :----------- | :----------- | | Leasable | 255.4 | 191.6 | | Under Construction | 229.7 | 172.9 | | Held for Development | 375.7 | 382.6 | | Total Data Center Portfolio | 860.8 | 747.1 | - Several key data center locations, such as AZP-1, AZP-2, AZS-1, VA-1, VA-3, LON-2, FRA-1, FRA-2, and SIN-1, are **100% leased** in their stabilized phases[90](index=90&type=chunk) [Data Center Expansion and Development Activity](index=26&type=section&id=Data%20Center%20Expansion%20and%20Development%20Activity) Iron Mountain is actively expanding its data center footprint with 229.7 MW currently under construction, of which 91.8% is pre-leased. Significant new developments are underway in Northern Virginia, London, and Frankfurt, with substantial investments planned and high pre-lease rates, indicating strong demand and strategic growth Total Data Center Development Activity (Q4 2023) | Category | MW Under Construction | MW Pre-leased | % Pre-Leased | Investment in Q4 2023 ($M) | Cumulative Investment ($M) | Total Expected Investment ($M) | | :-------------------- | :-------------------- | :------------ | :----------- | :------------------------- | :------------------------- | :----------------------------- | | Total Expansion | 19.7 | 8.8 | 44.7% | $19.4 | $67.6 | $114.3 | | Total New Development | 210.0 | 202.0 | 96.2% | $136.3 | $320.5 | $1,183.6 | | Total Development | 229.7 | 210.8 | 91.8% | $155.7 | $388.1 | $1,297.9 | - Key new developments like VA-3 Phase 2 (**34.0 MW**), VA-4 (**32.0 MW**), VA-5 (**40.0 MW**), LON-2 Phase 2 (**9.0 MW**), LON-2 Phase 3 (**9.0 MW**), FRA-1 Phase 2 (**9.0 MW**), and FRA-1 Phase 3 (**9.0 MW**) are **100% pre-leased**[93](index=93&type=chunk) - Total expected investment for new development projects is substantial, with Northern Virginia projects (VA-3, VA-4, VA-5, VA-6, VA-7) alone accounting for over **$950 million** in total expected investment[93](index=93&type=chunk) [Capitalization and Debt Maturity Profile](index=27&type=section&id=Section%20VIII%20-%20Capitalization%20and%20Debt%20Maturity%20Profile) This section details Iron Mountain's capitalization structure, including market capitalization, enterprise value, leverage ratios, and a comprehensive debt maturity profile highlighting significant upcoming obligations [Capitalization](index=27&type=section&id=Capitalization) Iron Mountain's capitalization structure as of December 31, 2023, shows a total market capitalization of $20.4 billion and a total enterprise value of $32.3 billion. The company maintains a Net Lease-Adjusted Leverage Ratio of 5.1x and an Adjusted EBITDA to Interest Expense ratio of 3.5x. The majority of its debt is fixed rate (80%), with a weighted average interest rate of 5.7% and a weighted average maturity of 6.1 years Capitalization Highlights (as of 12/31/2023) | Metric | Value | | :------------------------------------ | :------------ | | Total Market Capitalization ($K) | $20,444,149 | | Net Debt ($K) | $11,811,833 | | Total Enterprise Value ($K) | $32,255,981 | | Net Debt to Total Enterprise Value | 36.6% | | Net Lease-Adjusted Leverage Ratio | 5.1x | | Adjusted EBITDA to Interest Expense | 3.5x | - **80%** of the company's debt is fixed rate, providing **stability against interest rate fluctuations**[100](index=100&type=chunk) - The weighted average interest rate for total long-term debt is **5.7%**, with a weighted average maturity of **6.1 years**[101](index=101&type=chunk) - Credit ratings are **BB- (S&P)** and **Ba3 (Moody's)** with a **stable outlook**[101](index=101&type=chunk) [Debt Maturity Profile](index=27&type=section&id=Debt%20Maturity%20Profile) Iron Mountain's debt maturity profile shows significant maturities in 2024 ($2.2 billion) and 2025 ($2.0 billion), followed by a lower amount in 2026 ($0.048 billion) and then increasing again in 2027 ($1.3 billion). The company also has committed asset-level financing for data center construction - The **largest debt maturities** are in **2024 ($2,216 million)** and **2025 ($2,034 million)**[103](index=103&type=chunk) - The company has approximately **$363 million** of **committed asset-level financing** for the construction of three Data Center assets in Northern Virginia, which is excluded from the debt maturity profile[103](index=103&type=chunk) [Capital Expenditures](index=28&type=section&id=Section%20IX%20-%20Capital%20Expenditures) This section analyzes Iron Mountain's capital expenditures and investments for Q4 and full year 2023, highlighting significant increases in growth investments, particularly in data centers [Quarterly and Full Year Capital Expenditures and Investments](index=28&type=section&id=Quarterly%20and%20Full%20Year%20Capital%20Expenditures%20and%20Investments) Iron Mountain significantly increased its capital expenditures in Q4 and for the full year 2023, primarily driven by growth investments in Data Centers. Total growth capital expenditures surged by 43.3% YoY in Q4 and 52.1% for the full year, reflecting the company's strategic focus on expanding its data center and real estate assets. Recurring capital expenditures also increased in Q4 but slightly decreased for the full year Q4 2023 Capital Expenditures (Y/Y % Change) | Category | Q4 2023 ($K) | Q4 2022 ($K) | Y/Y % Change | | :------------------------------------ | :----------- | :----------- | :----------- | | Growth: Data Center | $310,230 | $196,860 | 57.6% | | Growth: Real Estate | $64,862 | $66,911 | (3.1)% | | Growth: Innovation and Other | $23,803 | $14,563 | 63.4% | | Total Growth Capital Expenditures | $398,895 | $278,335 | 43.3% | | Total Recurring Capital Expenditures | $44,916 | $36,340 | 23.6% | | Total Cash Paid for Growth and Recurring Capital Expenditures | $376,929 | $278,577 | 35.3% | Full Year 2023 Capital Expenditures (Y/Y % Change) | Category | Full Year 2023 ($K) | Full Year 2022 ($K) | % Change | | :------------------------------------ | :------------------ | :------------------ | :--------- | | Growth: Data Center | $964,198 | $592,875 | 62.6% | | Growth: Real Estate | $201,036 | $181,285 | 10.9% | | Growth: Innovation and Other | $81,135 | $45,371 | 78.8% | | Total Growth Capital Expenditures | $1,246,369 | $819,531 | 52.1% | | Total Recurring Capital Expenditures | $140,406 | $142,496 | (1.5)% | | Total Cash Paid for Growth and Recurring Capital Expenditures | $1,339,223 | $875,378 | 53.0% | - Data Center growth capital expenditures were the **primary driver**, increasing by **57.6%** in Q4 and **62.6%** for the full year[105](index=105&type=chunk)[106](index=106&type=chunk) - TTM Data Center Recurring CapEx as a % of Data Center Revenue increased from **2.3%** in Q4 2022 to **3.5%** in Q4 2023[108](index=108&type=chunk)[109](index=109&type=chunk) [Appendix and Definitions](index=29&type=section&id=Section%20X%20-%20Appendix%20and%20Definitions) This appendix provides comprehensive definitions for Iron Mountain's non-GAAP financial measures, business segments, capital expenditure categories, and other key financial and operational terms used throughout the report [Non-GAAP Measures and Definitions](index=29&type=section&id=Non-GAAP%20Measures%20and%20Definitions) This section provides detailed definitions for various non-GAAP financial measures used by Iron Mountain, including Adjusted EBITDA, Adjusted EPS, FFO (Nareit), FFO (Normalized), and AFFO. It clarifies how these metrics are calculated and their purpose in supplementing GAAP measures for investor analysis, noting the recent update to the AFFO definition - Non-GAAP measures like Adjusted EBITDA, Adjusted EPS, FFO (Nareit), FFO (Normalized), and AFFO are used to **enhance disclosure and provide additional information for investors**, not as substitutes for GAAP measures[111](index=111&type=chunk)[114](index=114&type=chunk)[116](index=116&type=chunk)[117](index=117&type=chunk)[120](index=120&type=chunk) - The AFFO definition was updated in Q4 2023 to exclude amortization of capitalized commissions, aiming for a **more accurate representation of funds available for growth and better comparability with data center peers**[118](index=118&type=chunk) - FFO (Nareit) excludes real estate depreciation and losses/gains on sale of real estate, providing a **clearer view of operating performance for REITs**[120](index=120&type=chunk) [Business Segments](index=30&type=section&id=Business%20Segments) Iron Mountain operates through several key business segments: Global Records and Information Management (RIM), Global Data Center Business, and Corporate and Other. Global RIM encompasses Records Management, Data Management, Global Digital Solutions, Secure Shredding, Entertainment Services, and Consumer Storage. The Global Data Center Business provides enterprise-class data center facilities, while Corporate and Other includes Fine Arts and Asset Lifecycle Management (ALM) businesses - Global RIM Business includes Records Management (**731.5 million cubic feet** of hardcopy records as of Dec 31, 2023), Data Management, Global Digital Solutions, Secure Shredding, Entertainment Services, and Consumer Storage[121](index=121&type=chunk)[122](index=122&type=chunk)[123](index=123&type=chunk) - Global Data Center Business provides **enterprise-class data center facilities and hyperscale-ready capacity**[124](index=124&type=chunk) - Corporate and Other segment primarily includes Fine Arts and Asset Lifecycle Management (ALM) businesses, which focus on **IT asset decommissioning, data erasure, and disposition**[125](index=125&type=chunk) [Capital Expenditures and Investments Definitions](index=30&type=section&id=Capital%20Expenditures%20and%20Investments%20Definitions) This section categorizes capital expenditures into Growth Investment (Data Center, Real Estate, Innovation and Other) and Recurring (Data Center, Real Estate, Non-Real Estate). Growth investments are primarily for expanding capacity and driving revenue, while recurring expenditures are for maintenance and replacement of existing assets - Growth Investment includes Data Center (expenditures for construction, land acquisition, **revenue growth**), Real Estate (investments in land, buildings, improvements), and Innovation and Other (new products, software, acquisition integration)[127](index=127&type=chunk)[128](index=128&type=chunk) - Recurring expenditures cover Data Center (replacement of components, maintenance), Real Estate (replacement of real estate asset components), and Non-Real Estate (replacement of containers, equipment, software for maintenance)[129](index=129&type=chunk)[130](index=130&type=chunk) [Other Definitions](index=31&type=section&id=Other%20Definitions) This section defines various other financial and operational terms used in the report, such as Constant Currency, Data Center Business Definitions (Leaseable MW, Leased %, MRR, WALE, Churn Rate, TCV), EBITDAR, Credit Facility Fixed Charge Coverage Ratio, Net Lease-Adjusted Leverage Ratio, Organic Revenue Growth, Records Management Retention Rate, Storage Rev/NOI per Sq. Ft., Service Profit and Margin, Storage Net Operating Income (NOI), Storage Profit and Margin, and Tax Rates - Constant Currency adjusts results to **normalize foreign exchange impacts** across comparable periods[131](index=131&type=chunk) - Data Center definitions include Leaseable MW (critical power capacity), Leased % (megawatts under contract divided by leasable megawatts), Monthly Recurring Revenue (MRR), Weighted Average Lease Expiry (WALE), and Rental Churn Rate[132](index=132&type=chunk)[133](index=133&type=chunk) - Organic Revenue Growth represents the **year-over-year growth rate of revenues excluding the impact of business acquisitions, divestitures, and foreign currency exchange rate fluctuations**[137](index=137&type=chunk) - Storage NOI (Net Operating Income) is defined as revenue from rental activities less storage rental costs, commonly used in the REIT industry to **understand and value income from real estate**[142](index=142&type=chunk)

Financial Performance and Metrics - Adjusted EBITDA for 2023 was $1,961.7 million, compared to $1,827.1 million in 2022[194] - Net income for 2023 was $187.3 million, a decrease from $562.1 million in 2022[194] - Net Income for 2023 was $187.263 million, a decrease from $562.149 million in 2022[203] - FFO (Nareit) for 2023 was $517.200 million, down from $792.940 million in 2022[203] - FFO (Normalized) for 2023 increased to $892.722 million from $857.757 million in 2022[203] - The company's reported EPS for 2023 was $0.63, with an adjusted EPS of $1.82[198] - Net income attributable to Iron Mountain Incorporated in 2023 was $184,234, compared to $556,981 in 2022 and $450,219 in 2021[486] - Total revenues for 2023 were $5,480,289 thousand, a 7.4% increase from 2022, with storage rental revenue growing 11.1% to $3,370,645 thousand[239] - Revenues increased by $376.7 million (7.4%) to $5,480.3 million in 2023 compared to 2022[237] - Operating expenses rose by $504.8 million (12.5%) to $4,558.5 million in 2023[237] - Net income decreased by $374.9 million (66.7%) to $187.3 million in 2023[237] - Adjusted EBITDA increased by $134.6 million (7.4%) to $1,961.7 million in 2023[237][260] - Storage rental revenue grew by $101.9 million (27.4%) to $474.1 million in the Global Data Center Business segment[266] - Service revenue in the Global Data Center Business segment declined by $8.0 million (27.5%) to $21.0 million in 2023[266] - Labor costs increased by $84.1 million (10.4%) to $891.4 million in 2023[242] - Facilities expenses rose by $143.8 million (16.3%) to $1,028.8 million in 2023[242] - Restructuring and other transformation costs increased by $133.3 million to $175.2 million in 2023[249] - Acquisition and integration costs decreased by $21.8 million to $25.9 million in 2023[248] - Selling, general and administrative expenses increased by $95.71 million, or 8.4%, to $1,236.287 million in 2023 compared to 2022[244] - General, Administrative and Other expenses rose by $33.351 million, or 4.0%, to $873.195 million in 2023[244] - Sales, Marketing and Account Management expenses increased by $62.359 million, or 20.7%, to $363.092 million in 2023[244] - Depreciation expense increased by $46.9 million, or 9.8%, in 2023 compared to 2022[246] - General, Administrative and Other expenses as a percentage of consolidated revenues decreased by 0.6% to 15.9% in 2023[244] - Sales, Marketing and Account Management expenses as a percentage of consolidated revenues increased by 0.7% to 6.6% in 2023[244] - Total Selling, general and administrative expenses as a percentage of consolidated revenues increased by 0.2% to 22.6% in 2023[244] - Depreciation and amortization charges are primarily related to storage systems, customer and supplier relationship intangible assets, and data center lease-based intangible assets[245] Revenue Growth and Drivers - Organic storage rental revenue growth is driven by revenue management in the Global RIM Business segment and growth in the Global Data Center Business segment, primarily due to lease commencements[184] - Organic service revenue growth is expected to benefit from new and existing digital offerings and ALM, as well as traditional services in 2024[184] - Total revenue and Adjusted EBITDA growth are expected to continue in 2024 due to new product and service offerings, innovation, customer solutions, and market expansion aligned with Project Matterhorn objectives[184] - Service revenue growth is negatively impacted by declining activity rates as stored records and tapes become less active and more archival[182] Costs and Expenses - Project Matterhorn is expected to incur approximately $150.0 million in costs annually from 2023 through 2025, including restructuring and transformation costs[180] - Labor and facility occupancy costs are the most significant components of cost of sales, excluding depreciation and amortization[183] - Depreciation and amortization expenses for 2023 were $776.2 million, up from $727.6 million in 2022[194] - Restructuring and other transformation costs for 2023 were $175.2 million, significantly higher than $41.9 million in 2022[194] Acquisitions and Investments - Acquired approximately 80% interest in ITRenew for a net purchase price of $718,126, with potential additional payments for the remaining 20% interest ranging from $200,000 to $531,000 based on performance metrics[497] - Consolidated 100% of ITRenew's revenues and expenses from January 25, 2022, with deferred purchase obligations reflected in accrued expenses and other liabilities[497] - Final investment in Web Werks JV increased company's interest to 63.39%, consolidating its financial results within the Global Data Center Business segment[493] - Acquired 100% of Clutter for $60,600, consolidating its financial results within the Global RIM Business segment, and later sold 15% equity interests for $7,500[495] - Acquired Regency Technologies for an initial purchase price of $200,000, with $125,000 paid at closing and potential performance-based contingent consideration payable in 2027[496] - Acquired XData Properties for €78,900 (approximately $78,200) to expand data center operations in Europe, with additional consideration of up to €10,000 based on power connection milestones[501] - Pro forma financial information for ITRenew shows total revenues of $5,121,548 for 2022 and $4,939,511 for 2021, with income from continuing operations of $571,381 and $391,625, respectively[500] - Operating expenditures of $59,370 incurred to complete the ITRenew Transaction, reflected in pro forma financial information as if incurred on January 1, 2021[499] - Total consideration for acquisitions in 2023 was $293.4 million, with cash paid (gross of cash acquired) amounting to $88.6 million[506] - In 2023, the company recorded goodwill of $90.6 million from acquisitions, with customer and supplier relationship intangible assets valued at $14.3 million[506] - The company deconsolidated OSG Records Management (Europe) Limited in 2022, resulting in a loss of approximately $105.8 million[509] - The Intellectual Property Management (IPM) business was sold in 2021 for $215.4 million, resulting in a gain of $179.0 million[510] - The Clutter Acquisition in 2023 led to a loss of approximately $38,000 due to the remeasurement of the previously held equity interest[512] - In 2021, the company acquired Information Fort, LLC for $90.3 million to expand records management operations in the Middle East and North Africa[502] - The company acquired assets of a Frankfurt data center in 2021 for approximately €77.9 million ($91.3 million) to enhance data center operations in Germany[503] Debt and Financing - As of December 31, 2023, the company had $520.0 million in notional value outstanding on interest rate swap agreements, with maturity dates ranging from October 2025 to February 2026[519] - The company had $509.2 million in notional value outstanding on cross-currency interest rate swaps as of December 31, 2023, with maturity dates ranging from August 2024 to February 2026[520] - The company terminated interest rate swap agreements with notional amounts totaling $350.0 million in April 2023, resulting in unrealized gains of $10.1 million[518] - Derivative assets as of December 31, 2023, include $6,359 in Other assets, $2,496 in accrued expenses and other liabilities, and $3,273 in Other long-term liabilities[522] - Cumulative net gains from interest rate swap agreements as of December 31, 2023, are $2,472, including $2,528 from terminated agreements[522] - Cumulative net gains from cross-currency swap agreements as of December 31, 2023, are $32,459, including $30,197 from the excluded component[522] - Unrealized losses from interest rate swap agreements in 2023 are $(2,454), compared to gains of $20,186 in 2022 and $13,382 in 2021[522] - Unrealized losses from cross-currency swap agreements in 2023 are $(41,382), compared to gains of $28,044 in 2022 and $38,998 in 2021[522] - The Revolving Credit Facility allows borrowing up to $2,250,000, with the Term Loan A of $250,000 borrowed on March 18, 2022, and quarterly payments of $3,125[530] - The Term Loan B due 2026 has a principal amount of $700,000, with quarterly payments of $1,750 and matures on January 2, 2026[530] - The Accounts Receivable Securitization Program's maximum borrowing capacity increased from $325,000 to $360,000 on June 8, 2023, with $358,500 outstanding as of December 31, 2023[548] - The interest rate under the Accounts Receivable Securitization Program was 6.4% as of December 31, 2023, compared to 5.4% in 2022[548] - Gains recognized in Net income from interest rate swap agreements in 2023 are $7,580, compared to $0 in 2022 and 2021[524] - Total long-term debt increased to $11,913,952 thousand in 2023 from $10,562,719 thousand in 2022, reflecting a growth of approximately 12.8%[525] - The Term Loan B due 2031 was issued in December 2023 with a principal amount of $1,200,000 thousand, issued at 99.25% of par, and matures on January 31, 2031[531] - The fair value of the Term Loan B due 2031 approximates its carrying value, with quarterly installments of $3,000 thousand starting in Q1 2024[531] - The Accounts Receivable Securitization Program increased to $358,500 thousand in 2023 from $314,700 thousand in 2022, reflecting a growth of approximately 13.9%[525] - Real estate mortgages, financing lease liabilities, and other obligations increased to $519,907 thousand in 2023 from $425,777 thousand in 2022, reflecting a growth of approximately 22.1%[528] - The weighted average interest rate for financing lease liabilities increased to 6.1% in 2023 from 5.2% in 2022[528] - The unamortized original issue discount for the AUD Term Loan decreased to $1,452 thousand in 2023 from $1,982 thousand in 2022[526] - The fair value of the GBP Notes decreased to $489,108 thousand in 2023 from $445,206 thousand in 2022, reflecting a decline of approximately 9.9%[525] - The fair value of the 5% Senior Notes due 2028 decreased to $478,750 thousand in 2023 from $450,000 thousand in 2022, reflecting a decline of approximately 6.4%[525] - The fair value of the 5% Senior Notes due 2032 decreased to $684,375 thousand in 2023 from $622,500 thousand in 2022, reflecting a decline of approximately 9.9%[525] - Outstanding borrowings under the Revolving Credit Facility as of December 31, 2023 were $0, with $2,245,179 available for borrowing[534] - Term Loan A had an outstanding principal of $228,125 with an interest rate of 7.2% as of December 31, 2023[534] - Term Loan B due 2026 had an outstanding principal of $659,750 with an interest rate of 5.2% as of December 31, 2023[534] - Term Loan B due 2031 had an outstanding principal of $1,200,000 with an interest rate of 7.6% as of December 31, 2023[534] - Virginia 3 Term Loans had outstanding borrowings of $101,218 with a weighted average interest rate of 6.2% as of December 31, 2023[535] - Virginia 4/5 Term Loans had outstanding borrowings of $16,338 with a weighted average interest rate of 6.1% as of December 31, 2023[537] - The 7% Notes due 2029 were issued with an aggregate principal amount of $1,000,000, generating net proceeds of approximately $990,000[541] - The AUD Term Loan had outstanding borrowings of 292,422 Australian dollars ($199,195) with an interest rate of 8.0% as of December 31, 2023[543] - The UK Bilateral Revolving Credit Facility was fully drawn at £140,000 thousand with an interest rate of 7.3% as of December 31, 2023[545][546] - Outstanding letters of credit totaled $38,791 thousand as of December 31, 2023, with $4,821 thousand reducing borrowing capacity under the Revolving Credit Facility[552] - Long-term debt maturities for 2024 amount to $120,670 thousand, with total long-term debt (including current portion) at $11,933,170 thousand[555] - Net total lease adjusted leverage ratio as of December 31, 2023 is 5.1, below the maximum allowable of 7.0, and the fixed charge coverage ratio is 2.4, above the minimum allowable of 1.5, indicating compliance with credit agreements[308] Tax and Valuation - Deferred tax assets increased to $154,942 thousand in 2023 from $129,806 thousand in 2022, driven by higher accrued liabilities and net operating loss carryforwards[567] - Net deferred tax liability decreased to $221,341 thousand in 2023 from $244,616 thousand in 2022, reflecting changes in deferred tax assets and liabilities[567] - Federal net operating loss carryforwards of $109,624 thousand are available indefinitely, with $88,728 thousand expected to reduce future taxable income[567] - Foreign net operating losses of $133,536 thousand are subject to a valuation allowance of approximately 73.8%[567] - Effective tax rates for 2023, 2022, and 2021 were 17.6%, 11.0%, and 28.0%, respectively, with variability expected due to income mix and tax law changes[570] - Valuation allowance increased to $103.9 million in 2023, up from $47.5 million in 2022, primarily due to foreign currency exchange rate changes and the implementation of OECD Pillar Two[569] - Net income before taxes decreased to $227.2 million in 2023 from $631.6 million in 2022, with significant declines in the U.S. and Other Foreign segments[569] - The company has federal net operating loss carryforwards of $109.6 million, with $88.7 million expected to reduce future federal taxable income[231] - The company has foreign net operating losses of $133.5 million, subject to a valuation allowance of approximately 73.8%[231] Capital Expenditures and Investments - Total capital expenditures for 2023 were $1.39 billion, with growth investment capital expenditures accounting for $1.25 billion, a 52% increase from 2022[280] - The company expects total capital expenditures of approximately $1.5 billion for 2024, with $1.35 billion allocated to growth investments[280] - Purchase commitments for 2024 totaled $76,443, with future construction costs for the Global Data Center Business estimated at $740,000[556] - Total property, plant, and equipment acquired in 2023 acquisitions was approximately $140.7 million[215] Stock and Equity - The company has 6,204,098 shares available for grant under its various stock incentive plans as of December 31, 2023[468] - RSUs generally have a vesting period of three years from the date of grant, with dividend equivalents paid upon vesting[471] - The fair value of RSUs vested in 2023 was $32,664, compared to $27,078 in 2022 and $29,332 in 2021[472] - The company issued 641,412 PUs in 2023, 435,675 in 2022, and 488,953 in 2021[477] - The fair value of earned PUs that vested in 2023 was $34,896, compared to $20,059 in 2022 and $29,701 in 2021[478] - The company has 870,857 shares available under the ESPP as of December 31, 2023[479] - Declared distributions for the year ended December 31, 2023 were $740,448, with a per-share amount of $2.54[562] - The company declared a dividend of $0.65 per share for stockholders of record as of March 15, 2024, payable on April 4, 2024[561] - Dividends paid in 2023 were classified as 98.2% nonqualified ordinary dividends, 0.8% qualified ordinary dividends, and 1.0% return of capital[564] Goodwill and Impairment - The company's goodwill impairment review as of October 1, 2023, concluded no impairment across reporting units, including North America RIM, Europe RIM, and APAC RIM[219] - Global Data Center and ALM reporting units represent $1,058.4 million (21

RiverNorthPhotography I have written eight articles on Iron Mountain (NYSE:IRM) dating all the way back to June of 2017. All eight were bullish. This will be my first bearish piece on IRM. The company has not changed. The valuation has. IRM’s market price seems to be driven by narratives which have caused mispricing in both directions. Changing narratives From 3-7 years ago, the overriding narrative on IRM was that it was risky due to its reliance on physical paper storage. The idea was that usage of pa ...

PORTSMOUTH, N.H.--(BUSINESS WIRE)--Iron Mountain Incorporated (NYSE: IRM), a global leader in information management, innovative storage, data center infrastructure and asset lifecycle management, will report its fourth quarter and full year 2023 financial results before market hours on Thursday, February 22, 2024. The Company will also host a conference call to discuss results on the same day. The earnings press release, conference call slides, and supplemental financial information will be available at: ...

Iron Mountain (IRM) recently closed the earlier announced acquisition of Regency Technologies, a leading provider of IT asset disposition services in the United States, for an initial purchase price of $200 million. The buyout boosts its IT Asset Lifecycle Management (“ALM”) business.The combined platform further enhances IRM’s extensive logistics network and establishes a market-leading position in the IT asset disposition customer solutions. With the volume of e-waste continuing to rise, the move is expec ...

PORTSMOUTH, N.H.--(BUSINESS WIRE)--Iron Mountain (NYSE: IRM), a global leader in information management, innovative storage, data center infrastructure, and asset lifecycle management today announced it has completed its acquisition of Regency Technologies, a leading provider of IT asset disposition (ITAD) services in the United States. Building on Iron Mountain's extensive logistics network, which already provides customers with leading information security in IT Asset Lifecycle Management (ALM), the combi ...

Settapongd Dee-ud/iStock via Getty Images Dear readers, Iron Mountain Incorporated (NYSE:IRM) is a data storage REIT focused on innovative solutions in data center infrastructure, asset lifecycle management, and information management services. The REIT primarily owns two distinct types of properties - paper storage facilities and data centers. While the former is likely to experience a secular decline over time, the latter has boomed lately as a result of the rise of AI. Both segment complements each o ...

MarsBars Introduction The past few weeks were fascinating, to put it mildly. For example, the Vanguard Real Estate ETF (VNQ) has rallied so hard that it is now up 11% over the past twelve months. It has erased the entire decline since July in a matter of weeks. Meanwhile, the S&P 500 is back at its all-time high, returning 25% during this period. Then there's Iron Mountain (NYSE:IRM), one of the strongest REITs this year, which is up more than 40%, including dividends. Data by YCharts In this article, w ...