Iron Mountain(IRM) - 2024 Q4 - Annual Report

Financial Performance - Adjusted EBITDA for 2024 is reported at $2,236.4 million, an increase from$1,961.7 million in 2023, reflecting a focus on new product offerings and market expansion [199]. - Reported EPS for 2024 is $0.61, down from$0.63 in 2023, while adjusted EPS is $1.77 compared to$1.82 in the previous year [202]. - Net Income for 2024 was $183,666,000, a decrease from$187,263,000 in 2023 [206]. - FFO (Nareit) for 2024 was $571,464,000, compared to$517,200,000 in 2023, reflecting a 10.5% increase [206]. - FFO (Normalized) for 2024 reached $932,562,000, up from$892,722,000 in 2023, indicating a growth of 4.5% [206]. - Total revenues for the year ended December 31, 2024, were $6,149,909 thousand, representing a 12.2$5,480,289 thousand in 2023 [240]. - Operating income for 2024 was $1,009,519 thousand, reflecting a 9.5$921,778 thousand in 2023 [240]. - Net income attributable to Iron Mountain Incorporated for 2024 was $180,156 thousand, a decrease of 2.2$184,234 thousand in 2023 [240]. Revenue Growth - Organic storage rental revenue growth is driven by stable volume in the Global RIM Business segment and growth in the Global Data Center Business segment, primarily from lease commencements [190]. - The company expects continued revenue and adjusted EBITDA growth in 2025, supported by new and existing Global Digital Solutions offerings [190]. - Service revenue grew by $358,006 thousand, or 17.0$137 million increase from the acquisition of Regency Technologies [244]. - Global RIM Business segment revenue grew by $317.7 million, or 6.8$4,979.4 million in 2024, driven by organic growth in storage rental and service revenues [266]. - Storage rental revenue for the Global Data Center Business increased to $606.3 million in 2024, up 27.9$474.1 million in 2023 [270]. - Segment revenue for the Global Data Center Business reached $620.0 million, reflecting a 25.3$495.0 million in the previous year [270]. - Corporate and Other segment revenue surged by 70.2% to $550.4 million, driven by an increase in service revenue from the acquisition of Regency Technologies [274]. Costs and Expenses - Total cost of sales increased by$338.7 million, or 14.4%, to $2,696.5 million in 2024 compared to 2023, driven by higher labor, facilities, transportation, and product costs [245]. - Selling, general and administrative expenses rose by$103.3 million, or 8.4%, totaling $1,339.5 million in 2024, with general and administrative expenses accounting for the majority of the increase [247]. - Depreciation expense increased by$103.4 million, or 19.7%, totaling $630.5 million in 2024, primarily due to storage systems and acquisitions [249]. - Amortization expense rose by$21.3 million, or 8.5%, totaling $271.5 million in 2024, reflecting the impact of acquisitions [250]. - Net interest expense increased by$135.6 million to $721.6 million in 2024, attributed to higher average debt outstanding and a weighted average interest rate of 5.7$35,842,000, compared to $25,875,000 in 2023, marking a 38.5$118,138,000 in 2024, up from $73,799,000 in 2023, reflecting a significant increase of 60.0$378.5 million in restructuring and transformation costs since its inception, with an expected additional $150.0 million in costs for 2025 [186]. - Restructuring and other transformation costs for 2024 amount to$161.4 million, compared to $175.2 million in 2023 [199]. - Restructuring and other transformation costs decreased to$161,359,000 in 2024 from $175,215,000 in 2023, a decline of 7.9$(37,248,000), compared to $(35,307,000) in 2023, showing a slight increase in tax benefits [206]. - The company has federal net operating loss carryforwards of$95.5 million and disallowed interest expense carryforwards of $152.2 million, both of which can be carried forward indefinitely [310]. - A hypothetical decrease of 10$13,836.4 million, with a net amount of $13,003.977 million after accounting for the current portion [288]. - The Revolving Credit Facility has an outstanding balance of$121.0 million, with a maximum borrowing capacity of $2,621.2 million as of December 31, 2024 [291]. - The weighted average interest rates for the Revolving Credit Facility, Term Loan A, and Term Loan B due 2031 are 6.3$1,200.0 million in notes, with net proceeds of approximately $1,188.0 million used to repay a portion of the outstanding borrowings under the Revolving Credit Facility [293]. Acquisitions - The company acquired 100$200.0 million, with $125.0 million paid at closing and a contingent consideration of up to$200.0 million based on revenue targets [306]. - The company recognized a charge of approximately $29.2 million related to the acquisition of the remaining 36.61$78.4 million as of the acquisition date [306]. Capital Expenditures - Total capital expenditures for 2024 amounted to $1,900.6 million, with growth investment capital expenditures at$1,757.6 million [283]. - The company expects total capital expenditures of approximately $1,950.0 million for 2025, focusing on growth investments [283]. Cash Flow and Liquidity - Cash flows from operating activities rose by$83.1 million to $1,196.7 million, primarily due to an increase in net income [279]. - Cash and cash equivalents at the end of 2024 were$155.7 million, down from $222.8 million in 2023 [278]. - The cash and cash equivalents balance was$155.7 million as of December 31, 2024, with no significant concentrations of liquid investments [312]. Currency Risk Management - The company has adopted strategies to mitigate currency risk, including financing international subsidiaries with local currency debt [317]. - The impact of currency fluctuations on the business is unpredictable due to constantly changing currency exposure and potential volatility [320]. - The company's ability to raise prices and/or reduce expenses will influence the impact of currency devaluation on the local economy [320]. - The potential substantial volatility of currency exchange rates poses a risk to the company's financial performance [320]. - The company monitors the impact of currency changes on its equity and overall financial health [320]. - The analysis of currency effects is crucial for strategic financial planning and risk management [320].