Iron Mountain Incorporated (Delaware) · NYSE:IRM
Iron Mountain Incorporated (Delaware) — Iron Mountain — Q4 2016 Earnings Presentation
49 slides from Iron Mountain Incorporated (Delaware)'s earnings presentation, Feb 23, 2017
Slide 1: Supplemental Financial Information Fourth Quarter 2016
www.ironmountain.com Supplemental Financial Information Fourth Quarter 2016 Unaudited
Slide 2: Safe Harbor Statement
www.ironmountain.com Selected metric definitions are available in the Appendix 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 Litigati
Slide 3: Table of Contents
www.ironmountain.com Selected metric definitions are available in the Appendix 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, 617-53
Slide 4: Company Profile
www.ironmountain.com Selected metric definitions are available in the Appendix Product Company Profile Iron Mountain is a global leader in enterprise storage with a high-return, real estate-based business model, yielding annualized revenue of over $3.7 billion. The company provides storage and infor
Slide 5: Financial Highlights
www.ironmountain.com Selected metric definitions are available in the Appendix Financial Highlights 5 (1) Please see slide 24 for Storage Net Operating Income reconciliation. (2) We changed the name of the Adjusted OIBDA metric to Adjusted EBITDA. The metric results in the same number as the prior m
Slide 6: 2016 Performance vs. Guidance
www.ironmountain.com Selected metric definitions are available in the Appendix 2016 Performance vs. Guidance 6 (1) The 2016 C$ Budget Rate was set in January 2016. (2) Based on full year weighted average 247mm shares outstanding. (3) Excludes $7.4mm of Recall Integration CapEx. (4) Excludes $9.7mm o
Slide 7: 2017 Guidance Summary
www.ironmountain.com Selected metric definitions are available in the Appendix 2017 Guidance Summary(1) 7 (1) Iron Mountain does not provide a reconciliation of non-GAAP measures that it discusses as part of its annual guidance or long term outlook because certain significant information required fo
Slide 8: Year-over-Year Revenue Growth
www.ironmountain.com Selected metric definitions are available in the Appendix Year-over-Year Revenue Growth 8 61.0% 39.0% Service Storage Rental 82.1% 17.9% Service Storage Rental FY 2016 Revenue FY 2016 Gross Profit S e c t i o n V I I I S e c t i o n I X S e c t i o n V I I S e c t i o n V I S e
Slide 9: Records Management Volume Growth
www.ironmountain.com Selected metric definitions are available in the Appendix Records Management Volume Growth 9 ‐4.4% ‐4.4% ‐4.5% ‐4.6% ‐4.8% ‐4.8% ‐4.9% ‐5.0% ‐2.0% ‐2.1% ‐2.1% ‐2.1% ‐2.0% ‐2.1% ‐2.2% ‐2.3% 5.9% 5.9% 5.7% 5.8% 5.8% 6.0% 6.2% 6.3% 2.4% 2.3% 2.4% 2.6% 2.6% 2.7% 2.8%2.5% 1.6%1.6% 24
Slide 10: Records Management Volume Growth
www.ironmountain.com Selected metric definitions are available in the Appendix Records Management Volume Growth 10 3.6% ‐2.7% ‐5.8% 6.3% 4.9% 45.7% Q3‐16A 49.3% ‐2.7% ‐4.3% 5.8% 4.4% 46.1% Q2‐16A 37.8% ‐2.6% ‐3.9% 5.5% 34.1% 4.8% Q4‐16A 48.4% Q1‐16A 3.0% ‐2.3% ‐4.1% 5.0% 4.4% Q4‐15A 3.1% ‐2.1% ‐4.4%
Slide 11: Quarterly Operating Performance
www.ironmountain.com Selected metric definitions are available in the Appendix Quarterly Operating Performance 11 S e c t i o n V I I I S e c t i o n I X S e c t i o n V I I S e c t i o n V I S e c t i o n V S e c t i o n X S e c t i o n I V S e c t i o n I I I S e c t i o n I I S e c t i o n I Q4 R
Slide 12: Full Year Operating Performance
www.ironmountain.com Selected metric definitions are available in the Appendix 12 Full Year Operating Performance S e c t i o n V I I I S e c t i o n I X S e c t i o n V I I S e c t i o n V I S e c t i o n V S e c t i o n X S e c t i o n I V S e c t i o n I I I S e c t i o n I I S e c t i o n I (1)
Slide 13: Consolidated Balance Sheets
www.ironmountain.com Selected metric definitions are available in the Appendix Consolidated Balance Sheets 13 S e c t i o n V I I I S e c t i o n I X S e c t i o n V I I S e c t i o n V I S e c t i o n V S e c t i o n I I I S e c t i o n X S e c t i o n I S e c t i o n I I S e c t i o n I V ASSETS 1
Slide 14: Consolidated Statements of Operations
www.ironmountain.com Selected metric definitions are available in the Appendix Consolidated Statements of Operations 14 (1) Includes $7.2mm and $12.0mm of Recall Costs in Q4 2016 and full year 2016, respectively. (2) Includes $26.7mm and $21.9mm of Recall Costs in Q4 2015 and Q4 2016, respectively.
Slide 15: Reconciliation of Income from Continuing Operations to Adjusted EBITDA
www.ironmountain.com Selected metric definitions are available in the Appendix 15 Reconciliation of Income (Loss) from Continuing Operations to Adjusted EBITDA (1) Net of tax provision of $0.2mm and $0.1mm in full year 2015 and full year 2016, respectively. (2) Includes realized and unrealized FX (g
Slide 16: Reconciliation of Reported EPS to Adjusted EPS
www.ironmountain.com Selected metric definitions are available in the Appendix 16 Reconciliation of Reported Earnings per Share to Adjusted Earnings per Share (1) Reflects additional 50.2mm shares of common stock issued in connection with the Recall acquisition in Q2 2016. (2) The difference between
Slide 17: Reconciliation of Net Income to FFO (Normalized) & AFFO
www.ironmountain.com Selected metric definitions are available in the Appendix 17 Reconciliation of Net Income to FFO (Normalized) & AFFO (1) Net of tax provision of $0.2mm and $0.1mm full year 2015 and full year 2016, respectively. (2) Includes realized and unrealized FX (gains) losses. (3) Include
Slide 18: Reconciliation of Cash Flow from Operations to AFFO
www.ironmountain.com Selected metric definitions are available in the Appendix 18 Reconciliation of Cash Flow from Operations to AFFO (1) Includes actual cash taxes less current tax provision and other one-time cash tax items. (2) In 2016, we revised the reconciliation of AFFO to adjust for normaliz
Slide 19: Revenue Growth Bridge
www.ironmountain.com Selected metric definitions are available in the Appendix 19 Revenue Growth Bridge ($mm) 24% Reported R$ 26% C$ Normalized $194 Q4 2016 Revenue ‐ Reported $ $934 IRM and REC Revenue Growth Q4 2015 Revenue at Q4 2016 FX Rates $740 FX Impact at Q4 2016 FX Rates $12 Q4 2015 Revenue
Slide 20: Quarterly Normalized Adjusted EBITDA Bridge
www.ironmountain.com Selected metric definitions are available in the Appendix 20 Quarterly Normalized Adjusted EBITDA Bridge ($mm) 26% C$ Normalized $24 $38 Q4 2016 Adjusted EBITDA ‐ Reported $ $297 REC and IRM Adjusted EBITDA Growth, Net of Divestitures Recall Gross Synergies Q4 2015 Adjusted EBIT
Slide 21: Full Year Normalized Adjusted EBITDA Bridge
www.ironmountain.com Selected metric definitions are available in the Appendix 21 Full Year Normalized Adjusted EBITDA Bridge ($mm) 20% C$ Normalized $15 $50 $39 $83 FY 2016 Adjusted EBITDA ‐ Reported $ $1,087 REC and IRM Adjusted EBITDA Growth, Net Recall Gross Synergies Transformation Benefits FY
Slide 22: Normalized Adjusted EPS Bridge
www.ironmountain.com Selected metric definitions are available in the Appendix 22 Normalized Adjusted EPS Bridge Normalized Comparison Q4 2015 Adjusted EPS $0.33 Q4 2015 Adjusted EPS ‐ Normalized $0.06 Impact of Higher Share Count $0.26 Recall Gross Synergies and Business Growth $0.26 $0.18 Tax Rate
Slide 23: Storage and Service Reconciliation
www.ironmountain.com Selected metric definitions are available in the Appendix 23 Storage and Service Reconciliation S e c t i o n V I I I S e c t i o n I X S e c t i o n V I I S e c t i o n V I S e c t i o n X S e c t i o n I I I S e c t i o n I I S e c t i o n I S e c t i o n V S e c t i o n I V Q
Slide 24: Storage Net Operating Income (NOI)
www.ironmountain.com Selected metric definitions are available in the Appendix 24 Storage Net Operating Income (NOI) (1) Includes Data Center, Fine Art Storage, Consumer Storage, Technology Escrow Services, Digital Storage, Fulfillment Services, Information Governance and Digital Solutions, Entertai
Slide 25: Service Business Detail
www.ironmountain.com Selected metric definitions are available in the Appendix Service Business Detail 25 (1) Includes Fulfillment Services, Information Governance and Digital Solutions, Technology Escrow Services, Data Center, Consulting, Entertainment Services, Fine Art Storage, Consumer Storage a
Slide 26: Gross Book Value of Real Estate Assets
www.ironmountain.com Selected metric definitions are available in the Appendix Gross Book Value of Real Estate Assets 26 (1) Includes warehouse equipment, vehicles, furniture, fixtures, computer hardware and software. To be updated S e c t i o n V I I I S e c t i o n I X S e c t i o n V I I S e c t
Slide 27: Lease Obligations
www.ironmountain.com Selected metric definitions are available in the Appendix Lease Obligations(1) (1) Includes capital and operating lease obligations (2) Reflects month to month leases and predominantly short term occupancies Weighted Average Remaining Lease Obligations (no exercise of extension
Slide 28: Global Real Estate Portfolio
www.ironmountain.com Selected metric definitions are available in the Appendix Global Real Estate Portfolio(1) 28 (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 si
Slide 29: Revenue from Rental Activities and Storage NOI per Racked Square Foot
www.ironmountain.com Selected metric definitions are available in the Appendix Revenue from Rental Activities and Storage NOI per Racked Square Foot 29 (1) Includes loading docks, unracked space, office space, common areas, as well as space in service-related facilities. (2) Excludes Revenue and NOI
Slide 30: Portfolio Utilization
www.ironmountain.com Selected metric definitions are available in the Appendix Portfolio Utilization Records Management Storage Portfolio (CuFt MM) As of 12/31/2016 2144 92 5466 131 700 600 500 400 100 0 +49.8% Total IRM +24.4% +10.1% +42.5% +152.5% 676 543 Asia PacificLatin AmericaEuropeNorth Ameri
Slide 31: Customer Data
www.ironmountain.com Selected metric definitions are available in the Appendix Customer Data 31 (1) No single vertical within ‘Other’ comprises greater than 1% of North America Revenue. (2) Customer acquisition costs include the acquisition of customer relationships and customer inducements such as
Slide 32: Debt Schedule
www.ironmountain.com Selected metric definitions are available in the Appendix Debt Schedule 32 $179 $494 Thereafter2026 $300 20252024 $1,000 2023 $786 2022 $673 2021 $649 2020 $1,016 2019 $1,188 2018 $247 2017 28% 72% Fixed vs. Floating Rate Debt at 12/31/16(4) Debt Maturity Schedule ($MM) Floating
Slide 33: Capitalization
www.ironmountain.com Selected metric definitions are available in the Appendix Capitalization 33 (1) Total debt net of cash is calculated as current portion of long-term debt of $173mm plus long-term debt net of current portion of $6,078mm plus $68mm of deferred financing costs less cash and cash eq
Slide 34: Capital Expenditures and Investments
www.ironmountain.com Selected metric definitions are available in the Appendix Capital Expenditures and Investments 34 (1) Includes Recall CapEx of $10.0mm in Q4 2016 and $18.3 full year 2016. (2) Includes $10.9mm and $70.7mm for data centers in Q4 2016 and full year 2016, respectively. (3) Includes
Slide 35: Investments
www.ironmountain.com Selected metric definitions are available in the Appendix Investments(1) 35 (1) Based on 2016 C$ Budgeted FX Rates. (2) Racking Installations exclude consolidation spend in Total Expected Investment, Investment in Current Period and Cumulative Investment to Date of $39.7mm, $1.2
Slide 36: Components of Value
www.ironmountain.com Selected metric definitions are available in the Appendix Components of Value 36 (1) Includes South Africa. (2) Trailing four quarter prior to rental expense. (3) Annualization of four months of Recall Service EBITDAR. (4) Includes Cash, Cash Equivalents, Restricted Cash, Accoun
Slide 37: Q3 2016 and Q3 YTD 2016 Internal Growth
www.ironmountain.com Selected metric definitions are available in the Appendix Appendix 37 Q3 2016 and Q3 YTD 2016 Internal Growth During the fourth quarter of 2016, we determined that our internal revenue growth rates for the three and nine months ended September 30, 2016 were incorrectly calculate
Slide 38: Reconciliation of Net Income to FFO (Normalized) & AFFO New Definition
www.ironmountain.com Selected metric definitions are available in the Appendix 38 Reconciliation of Net Income to FFO (Normalized) & AFFO New Definition (1) Net of tax provision of $0.2mm and $0.1mm full year 2015 and full year 2016, respectively. (2) Includes realized and unrealized FX (gains) loss
Slide 39: Non-GAAP Measures
www.ironmountain.com Selected metric definitions are available in the Appendix Appendix 39 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 o
Slide 40: Non-GAAP Measures (continued)
www.ironmountain.com Selected metric definitions are available in the Appendix Appendix Non-GAAP Measures (continued) Adjusted EBITDA and Adjusted EBITDA Margin Adjusted EBITDA is defined as income (loss) from continuing operations before interest expense, net, provision (benefit) for income taxes,
Slide 41: Non-GAAP Measures (continued)
www.ironmountain.com Selected metric definitions are available in the Appendix Appendix Non-GAAP Measures (continued) Funds From Operations, or FFO (NAREIT), and FFO (Normalized) Funds from operations (“FFO”) is defined by the National Association of Real Estate Investment Trusts ("NAREIT") and us a
Slide 42: Non-GAAP Measures (continued)
www.ironmountain.com Selected metric definitions are available in the Appendix Appendix Non-GAAP Measures (continued) Service Adjusted EBITDAR Service Adjusted EBITDA as defined above, excluding rent expense associated with the service business. This is provided to enable valuation of Service Adjust
Slide 43: Definitions
www.ironmountain.com Selected metric definitions are available in the Appendix 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 bu
Slide 44: Definitions (continued)
www.ironmountain.com Selected metric definitions are available in the Appendix Appendix Definitions (continued) Other International Business – Our Other International Business segment provides records and information management services throughout the remaining European countries in which we operate
Slide 45: Definitions (continued)
www.ironmountain.com Selected metric definitions are available in the Appendix Appendix 45 Definitions (continued) Capital Expenditures and Investments – Our business requires capital expenditures to support our expected storage rental revenue and service revenue growth and ongoing operations, new p
Slide 46: Definitions (continued)
www.ironmountain.com Selected metric definitions are available in the Appendix Appendix 46 Definitions (continued) Capital Expenditures and Investments (continued) Components of Overhead Allocated Overhead – Includes overhead expenses directly associated with storage and service business operations
Slide 47: Definitions (continued)
www.ironmountain.com Selected metric definitions are available in the Appendix Appendix 47 Definitions (continued) Internal Revenue Growth – Our internal revenue growth rate, which is a non-GAAP measure, represents the weighted average year-over-year growth rate of our revenues excluding the impact
Slide 48: Definitions (continued)
www.ironmountain.com Selected metric definitions are available in the Appendix Appendix 48 Definitions (continued) Service Profit and Margin – The Gross Profit and Margin attributable to the worldwide service business. Calculated as follows: Services Adj. EBITDA + Allocated Overhead Expenses + Termi
Slide 49: Definitions (continued)
www.ironmountain.com Selected metric definitions are available in the Appendix Appendix 49 Definitions (continued) Total Expected Investment – Is defined as follows: Total Expected Investment for Racking Installations – The sum of expected investments for all approved racking projects, reported on a