Iron Mountain Incorporated (delaware) · NYSE:IRM
Iron Mountain Incorporated (delaware) — Iron Mountain — Q2 2015 Earnings Presentation
40 slides from Iron Mountain Incorporated (delaware)'s earnings presentation, Jul 30, 2015
Slide 1: Earnings Commentary and Supplemental Information Second Quarter 2015
Earnings Commentary and Supplemental Information Second Quarter 2015 Unaudited
Slide 2: Safe Harbor Statement
Safe Harbor Statement 2 Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: This presentation contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws and is subject to the safe-harb
Slide 3: Table of Contents
All figures except per share and facility counts in 000s unless noted All figures in reported dollars unless noted Figures may not foot due to rounding Table of Contents 3 Investor Relations Contacts: Faten Freiha, 617-535-8404 Director, Investor Relations faten.freiha@ironmountain.com Melissa Marsd
Slide 4: Earnings Commentary
Earnings Commentary 4 Reconciliation of Non - GAAP Measures: Throughout this document, Iron Mountain will discuss (1) Adjusted Operating Income Before Depreciation, Amortization , Intangible Impairments , (Gain) Loss on Disposal / Write - down of Property, Plant and Equipment , Net (Excluding Real E
Slide 5: Earnings Commentary
Earnings Commentary 5 · Expanded r evenue from Emerging Markets (now Other International excluding Australia) to 14.1 % of total revenue in the second quarter on a 2014 constant dollar basis , demonstrating progress toward the company’s goal to increase revenue from these markets to 16% by the end o
Slide 6: Earnings Commentary: Financial Review
Earnings Commentary 6 Financial Review Consolidated Adjusted OIBDA margin for the quarter w as 29. 4 % , reflecting continued strong Adjusted OIBDA margin s of 39.4 % in North American RIM , 50.8 % in North American DM , 27 . 9 % in Western Europe and 18.8 % in Other International . Year - to - date
Slide 7: Company Profile
Company Profile Iron Mountain is a global leader in enterprise storage with a high-return, real estate-based, business model, yielding revenues over $3 billion per annum. The company provides storage and information management services to a high-quality, diversified customer base across numerous ind
Slide 8: Financial Highlights
Financial Highlights 8 (1) Excludes $1.4 million of CapEx in Q2 2014 and $3.5 million YTD 2014 related to the company’s conversion to a REIT (2) Includes Land, Buildings, Improvements, and Racking Structures (3) Includes CapEx related to service-related businesses, as well as corporate overhead supp
Slide 9: Year-over-Year Revenue Growth
Year-over-Year Revenue Growth 9 Revenue Growth Rates Reported (1.2)% (6.7)% (3.5)% (0.6)% (6.7)% (3.1)% Less: Impact of FX Rate Changes and Adjustments (5.3)% (6.1)% (5.7)% (4.9)% (5.7)% (5.3)% Constant Currency 4.1% (0.6)% 2.2% 4.3% (1.0)% 2.2% Less: Impact of Acquisitions and Dispositions 1.4% (0.
Slide 10: Records Management Volume Growth
Records Management Volume Growth 10 2.0% Q2-15 2.8% -2.1% -4.3% -4.4% 5.9% 2.4% Q3-14 5.5% -1.9% -4.5% 6.1% 2.4% 3.4% Q2-14 7.6% 5.9% 2.3% 1.0% Q1-15 3.5% -2.0% -4.4% 5.9% 2.4% 1.6% Q4-14 3.6% -1.9% 6.7% -2.3% -4.5% 6.2% 2.3% 5.0% Q4-13 5.8% -2.5% -4.6% 6.3% 2.4% -2.0% -4.7% 6.1% 2.5% 5.5% Q1-14 4.2
Slide 11: Records Management Volume Growth
Records Management Volume Growth 11 3.6% -3.0% -4.1% -2.4% -4.2% 5.5% 4.6% 1.8% Q2-14 6.2% -2.6% -3.9% 5.4% 5.5% 1.8% Q1-14 4.4% -2.6% -4.0% 5.7% 4.3% 1.0% Q4-13 4.7% -2.6% -4.1% 5.9% 4.7% 0.8% Q3-13 3.6% 6.0% Q2-15 3.0% -2.1% -4.6% 5.4% 3.6% 0.7% Q1-15 5.4% 4.6% -4.5% 5.6% 4.9% 1.6% Q4-14 5.6% -2.3
Slide 12: Guidance Summary
Guidance Summary 12 Financial Performance Outlook (1) YOY growth compared to 2014 constant dollar (C$) budget rates; includes 0% - 2% internal revenue growth (2) Assumes 212 million shares outstanding (3) AFFO (New Definition) is defined in the appendix (page 35) and deducts Non-Real Estate Investme
Slide 13: Quarterly Operating Performance
Quarterly Operating Performance 13 (1) 2014 results exclude certain costs and expenditures associated with the company’s conversion to a REIT, and 2015 results exclude Recall Costs Q2 Results (1) % Growth Q2 2014 Q2 2015 Reported - Impact of FX Rate Changes and Adjustments = Constant Currency - Impa
Slide 14: Year-to-Date Operating Performance
Year-to-Date Operating Performance 14 (1) 2014 results exclude certain costs and expenditures associated with the company’s conversion to a REIT, and 2015 results exclude Recall Costs YTD Results (1) % Growth YTD 2014 YTD 2015 Reported - Impact of FX Rate Changes and Adjustments = Constant Currency
Slide 15: Consolidated Balance Sheets
Consolidated Balance Sheets 15 ASSETS 12/31/2014 6/30/2015 Current Assets: Cash and Cash Equivalents $125,933 $117,098 Restricted Cash 33,860 - Accounts Receivable, Net 604,265 596,252 Other Current Assets 153,661 161,377 Total Current Assets 917,719 874,727 Property, Plant and Equipment: Property,
Slide 16: Consolidated Statements of Operations
Consolidated Statements of Operations 16 Q2 2014 Q2 2015 % Change YTD 2014 YTD 2015 % Change Revenues: Storage Rental $466,889 $461,209 (1.2)% $925,778 $920,081 (0.6)% Service 320,003 298,525 (6.7)% 631,240 588,939 (6.7)% Total Revenues $786,892 $759,734 (3.5)% $1,557,018 $1,509,020 (3.1)% Operating
Slide 17: Reconciliation of Operating Income to Adjusted OIBDA
17 Reconciliation of Operating Income to Adjusted OIBDA (1) Includes realized and unrealized FX (gains) losses (2) Excludes realized and unrealized FX (gains) losses Q2 2014 Q2 2015 % Change YTD 2014 YTD 2015 % Change Net Income (Loss) Attributable to Iron Mountain Incorporated $271,637 $53,330 (80.
Slide 18: Reconciliation of Reported EPS to Adjusted EPS
18 Reconciliation of Reported Earnings per Share to Adjusted Earnings per Share(1) (1) Adjusted EPS for 2015 reflects a structural tax rate of 13.9%, while 2014 results have been restated to reflect a structural tax rate of 15.0% for comparability with 2014, the year in which the company’s conversio
Slide 19: Reconciliation of Net Income to FFO & AFFO
19 Reconciliation of Net Income Attributable to IRM to FFO & AFFO (1) Includes realized and unrealized FX (gains) losses (2) Excludes realized and unrealized FX (gains) losses (3) Includes repatriation, recapture (including amended return impact) and other current tax expenses; excludes normalized c
Slide 20: Quarterly Revenue Growth Bridge
20 Quarterly Revenue Growth Bridge $744 $787 Q2 2015 Revenue - Reported $ Q2 2014 Revenue - Reported $ $760 FX Impact at Q2 2015 FX Rate YoY Growth Excluding FX Impact Q2 2014 Revenue at Q2 2015 FX Rates $16 $44
Slide 21: Quarterly Normalized Adjusted EPS Bridge
22 Quarterly Normalized Adjusted EPS Bridge Write-off in Bad Debt Expense Increase in Interest Service Gross Margin Decline Data Management New Product Offerings Restructuring Charge from Q2 2014 $0.38 Normalized Q2 2014 Adj. EPS Normalized Q2 2015 Adj. EPS Reported Q2 2015 Adj. EPS <$0.01 Impact of
Slide 22: Reported $ Storage Net Operating Income (NOI)
23 Reported $ Storage Net Operating Income (NOI) (1) Includes Fulfillment Services, Document Management Services, Intellectual Property Management, Data Center, Entertainment Services and other ancillary services (2) Includes Rent Expense, Building Maintenance, Property Taxes, Utilities and Insuranc
Slide 23: Global Real Estate Portfolio
Global Real Estate Portfolio(1) 24 (1) Includes real estate held in joint ventures (2) Adjustments to previous periods due to refinements to real estate basis and reclassification of multiple adjoining facilities into single buildings (3) Out of the 20 leased building additions and expansions, 3 wer
Slide 24: Revenue from Rental Activities and Storage NOI per Racked Square Foot
Revenue from Rental Activities and Storage NOI per Racked Square Foot 25 (1) Includes loading docks, unracked space, office space, common areas, as well as space in service-related facilities (2) Excludes Revenue and NOI associated with Intellectual Property Management, Fulfillment Services, Data Ce
Slide 25: Portfolio Utilization
Portfolio Utilization Records Management Storage Portfolio (CuFt MM) As of 6/30/2015 450 400 50 0 500 550 +2.9% +1.4% 535 Total IRM +10.1% +10.8% 381 +5.0% 386 North America Europe Latin America Asia Pacific 520 650 600 450 50 100 550 500 0 639 584 84% 91% Asia Pacific 21 18 78% 92% Latin America 54
Slide 26: Gross Book Value of Real Estate Assets
Gross Book Value of Real Estate Assets 27 (1) Includes warehouse equipment, vehicles, furniture, fixtures, computer hardware and software Real Estate Assets Storage Operations Land $199,383 Buildings & Building Improvements 1,412,329 Leasehold Improvements 441,405 Racking 1,459,108 Construction In P
Slide 27: Service Business Detail
Service Business Detail 28 (1) Includes Fulfillment Services, Document Management Services, Intellectual Property Management, Data Center, Consulting, Entertainment Services and other ancillary services (2) Includes Building Maintenance, Property Taxes, Utilities and Insurance costs for shredding, i
Slide 28: Customer Data
Customer Data 29 (1) No single vertical within ‘Other’ comprises greater than 1% of North America Revenue Federal Healthcare Financial Legal Insurance Life Sciences Energy Business Services 38% Other 18% 3% 9% 15% 8% 3% 3% 3% North America Q2 2015 Trailing Twelve Months Revenue by Vertical Iron Moun
Slide 29: Debt Schedule
Debt Schedule 30 (1) Includes letters of credit of $34 million and FX related variances of $2 million; also, the revolving credit facility was refinanced in July 2015. As a result, the new maturity date is July 2019, with a one-year extension option solely at the company’s discretion (subject to cus
Slide 30: Capitalization
Capitalization 31 6.0 5.0 0.0 5.4x 5.0x 5.7x Net Lease Adjusted Leverage Ratio Debt net of cash is calculated as current portion of long-term debt of $70 million plus long-term debt net of current portion of $4,719 million less cash and equivalents of $117 million. Debt net of cash excludes letters
Slide 31: Lease Obligations
Lease Obligations(1) (1) Includes capital and operating lease obligations Weighted Average Remaining Lease Obligations (no exercise of extension options): 5.4 years Weighted Average Remaining Lease Obligations (exercise of all extension options): 12.3 years 2015 5.6% 12.3% Thereafter 7.5% 2026 0.9%
Slide 32: Investments
Investments (at C$ Budgeted Fx Rates) 33 (1) Racking Installations excludes consolidation spend in Total Expected Investment, Investment in Current Period and Cumulative Investment to Date of $43.1 million, $6.6 million and $31.1 million respectively (2) Building Development Projects excludes consol
Slide 33: Components of Value
Components of Value 34 (1) Trailing four quarter prior to rental expense (2) Includes Cash, Cash Equivalents, Restricted Cash, Accounts Receivable, Other Tangible Current Assets, Deferred Income Taxes and Prepaid Expenses (3) Includes Storage and Service (4) Includes Recall Costs Components Annualiz
Slide 34: Appendix: Non-GAAP Measures
Appendix 35 Non-GAAP Measures Non-GAAP measures are supplemental metrics designed to enhance our disclosure and to provide additional information that we believe to be important for investors to consider when evaluating our financial performance. These non-GAAP measures should be considered in addit
Slide 35: Appendix: Non-GAAP Measures (continued)
Appendix Non-GAAP Measures (continued) Funds From Operations Applicable to Iron Mountain, or FFO (NAREIT), and FFO (Normalized) FFO is a non-GAAP financial measure commonly used in the REIT industry. FFO is defined by the National Association of Real Estate Investment Trusts (“NAREIT”) and us as net
Slide 36: Appendix: Definitions
Appendix Definitions Average Stabilization Period – For racking projects, the stabilization period is 8 to 12 months. For new buildings it is 24 to 36 months, assuming phased racking installations over three years. For business acquisitions it is 12 to 24 months, depending on the size of the transac
Slide 37: Appendix: Definitions (continued)
Appendix 38 Definitions (continued) Capacity Measures Building Capacity – The maximum number of cubic feet of records or standard DPUs that can be stored in a given facility. Building Capacity Utilization – The number of cubic feet of records or standard DPUs in storage divided by the Building Capac
Slide 38: Appendix: Definitions (continued)
Appendix 39 Definitions (continued) Capital Expenditures and Investments (continued) Non-Real Estate: Investment – These expenditures support either (i) the growth of our business and/or increase our profitability by investing in either supporting assets such as carton storage systems, tape storage
Slide 39: Appendix: Definitions (continued)
Appendix 40 Definitions (continued) Destruction Rate – Calculated by dividing the total number of cubic feet of records removed from inventory due to destructions in a one-year period divided by the total number of cubic feet of records in storage at the beginning of the period. DPUs – Data protecti
Slide 40: Appendix: Definitions (continued)
Appendix 41 Definitions (continued) REIT Costs – Includes costs associated with our 2011 proxy contest, the previous work of the former Strategic Review Special Committee of the board of directors and costs associated with the Company’s conversion to a REIT, excluding REIT compliance costs beginning