Iron Mountain Incorporated (delaware) · NYSE:IRM
Iron Mountain Incorporated (delaware) — Iron Mountain — Q4 2018 Earnings Presentation
46 slides from Iron Mountain Incorporated (delaware)'s earnings presentation, Feb 14, 2019
Slide 1: Supplemental Financial Information Fourth Quarter 2018
Supplemental Financial Information Fourth Quarter 2018 Unaudited www.ironmountain.com
Slide 2: Safe Harbor Statement
Safe Harbor Statement 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-harbor
Slide 3: Table of Contents
Table of Contents Section I - Company Profile 4 Section II - Financial Highlights and Guidance 5 - 8 Section III - Operating Metrics 9 - 12 Section IV - Balance Sheets, Statements of Operations and Reconciliations 13 - 18 Section V - Storage Net Operating Income and EBITDA, and Service Business EBIT
Slide 4: Company Profile
Company Profile Iron Mountain is a global leader in enterprise storage with a high-return, Countries Served real estate-based business model, yielding annualized revenue of approximately $4.2 billion. The company provides storage and I information management services to a high-quality, diversified c
Slide 5: Financial Highlights
Financial Highlights Q4 2017 Q4 2018 % Change Full Year 2017 Full Year 2018 % Change Storage Rental $613,948 $658,894 7.3% $2,377,557 $2,622,455 10.3% I Service 377,287 402,595 6.7% 1,468,021 1,603,306 9.2% Section Total Revenues $991,235 $1,061,489 7.1% $3,845,578 $4,225,761 9.9% Gross Profit $565,
Slide 6: 2018 Performance vs. Guidance
2018 Performance vs. Guidance(1) Financial Performance Outlook $MM (except per share items) I Section Constant 2018 Guidance 2018 Actuals Y/Y % Growth Currency % Growth II Section Revenue $4,200 - $4,260 $4,226 9.9% 10.2% Adjusted EBITDA $1,425 - $1,455 $1,436 13.9% 14.0% III Adjusted EPS $1.05 - $1
Slide 7: 2019 Preliminary Guidance Summary
2019 Preliminary Guidance Summary(1) Financial Performance Outlook $MM (except per share items) I Constant Section 2018 Actuals at 2018 Actuals 2019 Guidance(2) Change YOY Currency Y/Y 2019 FX Rates Change II Revenue $4,226 $4,162 $4,200 - $4,400 (1%) - 4% 1% - 6% Section Adjusted EBITDA $1,436 $1,4
Slide 8: Year-over-Year Revenue Growth
Year-over-Year Revenue Growth Q4 2018 Full Year 2018 Storage Rental Storage Rental Service Service I Revenue Growth Rates Revenue Revenue Total Revenue Revenue Revenue Total Revenue Section Reported 7.3% 6.7% 7.1% 10.3% 9.2% 9.9% Less: Impact of FX Rate Changes (3.3)% (1.7)% (2.7)% (0.3)% (0.3)% (0.
Slide 9: Records Management Volume Growth TTM
Records Management Volume Growth TTM Total Iron Mountain (691 CuFt MM) Organic Volume Growth % Percentage of Total Cubic Volume at 12/31/18 1.9% 1.4% 1.3% 1.1% 0.6% 0.2% (0.1)% 0.0% North America Other International I 25.0% Western Europe Section 23.1% 2.4% 14% II 1.4% 1.7% 1.5% 1.3% 1.0% 3.0% 1.0%
Slide 10: Records Management Volume Growth TTM
Records Management Volume Growth TTM Percentage of Total Cubic Volume Western Europe (96 CuFt MM) at 12/31/18 49.2% I Section 11.7% 45.5% II 9.2% 14% 3.6% Section 2.0% 1.7% 5.7% 1.1% 0.5% 0.4% 0.8% 4.3% 4.0% III 3.9% 3.5% 3.1% 3.6% 3.2% Section 6.9% 5.1% 4.7% 27% 4.6% 4.4% 4.3% 4.1% 4.1% 59% IV -4.4
Slide 11: Quarterly Operating Performance
Quarterly Operating Performance(1) Q4 Results % Growth Impact of I Impact of FX Rate Constant Adjustments(1) and Organic Q4 2017 Q4 2018 Reported - = + = Section Changes Currency Acquisitions/ Growth By Reporting Segment Dispositions II NA Records and Information Management Business Section Storage
Slide 12: Full Year Operating Performance
Full Year Operating Performance(1) Full Year Results % Growth Impact of I (1) Impact of FX Rate Constant Adjustments and Organic Section Full Year 2017 Full Year 2018 Reported = = - Changes Currency + Acquisitions/ Growth By Reporting Segment Dispositions II NA Records and Information Management Bus
Slide 13: Consolidated Balance Sheets
Consolidated Balance Sheets ASSETS 12/31/2017 12/31/2018 I Current Assets: Section Cash and Cash Equivalents $925,699 $165,485 Accounts Receivable, Net 835,742 846,889 Other Current Assets 188,874 195,740 II Section Total Current Assets 1,950,315 1,208,114 Property, Plant and Equipment: Property, Pl
Slide 14: Consolidated Statements of Operations
Consolidated Statements of Operations Q4 2017 Q4 2018 % Change Full Year 2017 Full Year 2018 % Change Revenues: Storage Rental $613,948 $658,894 7.3% $2,377,557 $2,622,455 10.3% I Service 377,287 402,595 6.7% 1,468,021 1,603,306 9.2% Section Total Revenues $991,235 $1,061,489 7.1% $3,845,578 $4,225,
Slide 15: Reconciliation of Income from Continuing Operations to Adjusted EBITDA
Reconciliation of Income from Continuing Operations to Adjusted EBITDA Q4 2017 Q4 2018 % Change Full Year 2017 Full Year 2018 % Change I Income from Continuing Operations $24,349 $158,831 n/a $191,723 $376,976 96.6% Section Add / (Deduct): Interest Expense, Net 88,565 105,715 19.4% 353,575 409,289 1
Slide 16: Reconciliation of Reported EPS to Adjusted EPS
Reconciliation of Reported Earnings per Share to Adjusted Earnings per Share Q4 2017 Q4 2018 % Change Full Year 2017 Full Year 2018 % Change I Section Reported EPS - Fully Diluted from Continuing Operations $ 0.09 $ 0.55 n/a $ 0.71 $ 1.31 84.5% Add / (Deduct): II Gain on Sale of Real Estate, Net of
Slide 17: Reconciliation of Net Income to FFO & AFFO
Reconciliation of Net Income to FFO & AFFO Q4 2017 Q4 2018 % Change Full Year 2017 Full Year 2018 % Change Net Income $21,478 $158,831 n/a $185,432 $364,549 96.6% I Add / (Deduct): Section Real Estate Depreciation(1) 63,011 73,305 247,792 284,804 (Gain) Loss on Sale of Real Estate, Net of Tax(2) (64
Slide 18: Reconciliation of Cash Flow from Operations to AFFO
Reconciliation of Cash Flow from Operations to AFFO Q4 2017 Q4 2018 % Change Full Year 2017 Full Year 2018 % Change I Cash Flow from Operating Activities-Continuing Operations 201,969 311,006 54.0% 724,259 936,544 29.3% Section Adjust for: Tax on Gain from Disposition of Real Estate (641) 512 n/a -
Slide 19: Storage and Service Reconciliation
Storage and Service Reconciliation(1) Q4 2017 Q4 2018 % Change Full Year 2017 Full Year 2018 % Change I Total Storage Revenue $613,948 $658,894 7.3% $2,377,557 $2,622,455 10.3% Section Add: Permanent Withdraw al Fees 6,537 7,578 15.9% 24,238 26,958 11.2% Adjusted Storage Revenue $620,485 $666,472 7.
Slide 20: Storage Net Operating Income (NOI)
Storage Net Operating Income (NOI)(1) Q4 2017 Q4 2018 % Change Full Year 2017 Full Year 2018 % Change Revenue from Storage Rental Activities I Section Records Management $476,653 $470,997 (1.2)% $1,863,447 $1,900,027 2.0% Data Protection 89,574 87,505 (2.3)% 355,821 355,096 (0.2)% Data Center 12,289
Slide 21: Service Business Detail
Service Business Detail(1) Q4 2017 Q4 2018 % Change Full Year 2017 Full Year 2018 % Change I Service Operations Revenue by Product Line Section Records Management $174,264 $178,888 2.7% $671,195 $721,829 7.5% Data Protection 41,046 36,774 (10.4)% 164,158 157,479 (4.1)% Shredding 94,346 107,374 13.8%
Slide 22: Gross Book Value of Real Estate Assets
Gross Book Value of Real Estate Assets As of 12/31/2018 Real Estate Assets I Section Storage Operations II Land $393,841 Section Buildings & Building Improvements 2,921,104 Leasehold Improvements 663,077 Racking 1,809,799 III Construction In Progress 111,383 Section Total Storage Gross Book Value $5
Slide 23: Lease Obligations
Lease Obligations(1) Facility Lease Expirations I (% of total square feet subject to lease) Section 12/31/2018 Assuming Exercise of All Extension Options II Section III Section IV Section V Section 53.1% VI Section VII Section 7.1% 5.6% 5.1% 4.8% 4.4% 4.0% 3.3% 4.0% VIII 2.8% 2.9% 2.8% Section 2019(
Slide 24: Global Real Estate Portfolio
Global Real Estate Portfolio(1) (000s, except for number of buildings) As of 9/30/2018 Ow ned Facilities Leased Facilities Total I Top Ten Markets Owned, United States Sq. Feet Owned Section Buildings Sq. Ft. Buildings Sq. Ft. Buildings Sq. Ft. Northern New Jersey 2,086 North America 206 22,808 542
Slide 25: Revenue from Rental Activities and Storage NOI per Racked Square Foot
Revenue from Rental Activities and Storage NOI per Racked Square Foot Square Footage by Region As of December 31, 2018 I North Latin Section America Europe(1) America Asia Total Records Management Racked Space 39,656 11,087 5,111 5,537 61,392 II Section Data Protection Racked Space 757 191 59 72 1,0
Slide 26: Portfolio Utilization
Portfolio Utilization Records Management Storage Portfolio (CuFt MM) Data Protection Storage Portfolio (DPUs MM) As of 12/31/2018 As of 12/31/2018(2) I Section YoY Growth in Units Stored(1) +1.2% +4.7% II 687 695 Section 700 100 92 88 600 80 -2.2% -1.5% III 66 65 500 Section 60 423 416 +2.1% 40 +17.
Slide 27: Records Management Customer Data
Records Management Customer Data North America Q4 2018 Trailing Twelve Months Records Management Revenue by Vertical I Our top 20 records management customers have historically Energy Business Services Section represented approximately 6% of consolidated revenues. Life Sciences Customer retention is
Slide 28: Data Center Customer and Portfolio Metrics
Data Center Customer and Portfolio Metrics(1) ($ in 000) Annualized Revenue and Lease Expirations Customer Lease Expiration, As of December 31, 2018 Q4 2018 Annualized I Percentage of Section Number of Total MW Percentage of Total Annualized TCV Revenue NOI Leasable MWLeasable Sq Ft Year TCV Annuali
Slide 29: Debt Schedule
Debt Schedule Total Borrowings Maturity Schedule ($MM) I Section II Section (2) $1,774 III Section $1,007 (3), (4) $1,000 IV $946 Section $860 $825 $546(1) $417 V $297 Section $92 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Thereafter VI Section (5) VII Fixed vs. Floating Rate Debt at 12/31/18
Slide 30: Capitalization
Capitalization I Senior Subordinated and Senior Unsecured Notes (as of 12/31/2018) Section Senior Senior Senior Senior Senior Senior Senior Senior Senior Type of Note Subordinated Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Issuance Date 8/7/12 8/13/13 5/27/16 5/2
Slide 31: Capital Expenditures and Investments
Capital Expenditures and Investments Q4 2017 Q4 2018 % Change Full Year 2017 Full Year 2018 % Change Capital Expenditures (1) I Section Growth Investment: Real Estate(2) $31,061 $29,061 (6.4)% $139,822 $138,307 (1.1)% Non-Real Estate $26,105 $16,795 (35.7)% $56,297 $52,737 (6.3)% II (3) Data Center
Slide 32: Business and Customer Acquisitions
Business and Customer Acquisitions Q4 2017 Q4 2018 % Change Full Year 2017 Full Year 2018 % Change Business Acquisitions I Business Acquisitions Excluding Data Centers $36,395 $28,039 (23.0)% $161,718 $91,817 (43.2)% Section Change in Business Acquisition Accruals and Cash Acquired (10,818) 2,726 n/
Slide 33: Real Estate Investments and Development
Real Estate Investments and Development Total Expected Investment in Cumulative Investment Estimated Trailing twelve months Average Stabilization Region (1) (1) (1) (4) Investment Q4 2018 to Date CuFt / DPUs NOI/CuFt or DPU Period I (2) Racking Installations Section North America $18,812 $3,094 $16,
Slide 34: Components of Value
Components of Value Q4 2018 Annualized Components I NOI Section North America Records Management $985,360 II Data Protection 224,596 Section Other 73,020 Europe (1) 387,192 III Latin America 149,596 Section Asia 184,248 Global Data Center 139,764 Total Portfolio Storage NOI $ 2,143,776 IV Section V
Slide 35: Appendix: Non-GAAP Measures and Definitions
Appendix Non-GAAP Measures and Definitions I Non-GAAP measures are supplemental metrics designed to enhance our disclosure and to provide additional information that we believe to be Section important for investors to consider when evaluating our financial performance. These non-GAAP measures should
Slide 36: Non-GAAP Measures and Definitions (continued)
Appendix Non-GAAP Measures and Definitions (continued) Adjusted Funds From Operations, or AFFO I Section AFFO is defined as FFO (Normalized) excluding non-cash rent expense or income, plus depreciation on non-real estate assets, amortization expense of customer relationship value (CRV), intake costs
Slide 37: Non-GAAP Measures and Definitions (continued)
Appendix Non-GAAP Measures and Definitions (continued) Service Adjusted EBITDA I Section Service Adjusted EBITDA is calculated by taking service revenues excluding terminations and permanent withdrawals less direct expenses and overhead allocated to the service business. Terminations and permanent w
Slide 38: Other Definitions
Appendix Other Definitions I Average Stabilization Period – For racking projects, the stabilization period is 8 to 12 months. For new buildings it is 24 to 36 months, assuming Section phased racking installations over three years. For business acquisitions it is 12 to 24 months, depending on the siz
Slide 39: Other Definitions (continued)
Appendix Other Definitions (continued) Western European Business – Our Western European Business segment provides Records Management, Data Management and IGDS I throughout Austria, Belgium, France, Germany, Ireland, the Netherlands, Spain, Switzerland and the United Kingdom. Section Other Internatio
Slide 40: Other Definitions: Capacity Measures
Appendix Other Definitions (continued) Capacity Measures (Excluding Data Center) I Section Building Capacity – The maximum number of cubic feet of records or standard DPUs that can be stored in a given facility. II Building Capacity Utilization – The number of cubic feet of records or standard DPUs
Slide 41: Other Definitions: Capital Expenditures and Investments
Appendix Other Definitions (continued) Capital Expenditures and Investments (continued) I Section Recurring: II Real Estate – Expenditures primarily related to the replacement of components of real estate assets such as buildings, building improvements, Section leasehold improvements and racking str
Slide 42: Other Definitions: Components of Overhead
Appendix Other Definitions (continued) Components of Overhead I Allocated Overhead – Includes overhead expenses directly associated with storage and service business operations allocated as follows: Section Field Operation Costs – Allocated to storage and service operations based on percent of reven
Slide 43: Other Definitions: Data Center Business Definitions
Appendix Other Definitions (continued) Data Center Business Definitions (Continued) I Section Leasable Sq. Ft. – Represents the amount of space available for customer use, measured in square feet. Primarily includes raised floor area, office area and storage area. Excludes support spaces dedicated f
Slide 44: Other Definitions (continued)
Appendix Other Definitions (continued) Net Volume Growth – New Records Management storage volume from existing customers, plus volume from new customers and volume from I acquisitions, offset by volume related to divestments, destructions, permanent withdrawals and customer terminations. Quarterly p
Slide 45: Other Definitions: Storage Net Operating Income
Appendix Other Definitions (continued) Storage Net Operating Income, or Storage NOI I Section Storage NOI is defined as revenue from rental activities (storage rental revenue, termination fees and permanent withdrawal fees) less storage rental costs. Storage rental costs include facility costs (excl
Slide 46: Other Definitions: Total Expected Investment
Appendix Other Definitions (continued) Total Expected Investment – Is defined as follows: I Section Total Expected Investment for Racking Installations – The sum of expected investments for all approved racking projects, reported on a constant dollar basis. II Section Total Expected Investment for B