Iron Mountain Incorporated (delaware) · NYSE:IRM
Iron Mountain Incorporated (delaware) — Iron Mountain — Q2 2018 Earnings Presentation
48 slides from Iron Mountain Incorporated (delaware)'s earnings presentation, Jul 27, 2018
Slide 1: Supplemental Financial Information Second Quarter 2018
Supplemental Financial Information Second 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 - 6 Section III - Operating Metrics 7 - 11 Section IV - Balance Sheets, Statements of Operations and Reconciliations 12 - 19 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 Q2 2017 Q2 2018 % Change YTD 2017 YTD 2018 % Change Storage Rental $590,239 $655,439 11.0% $1,162,518 $1,306,588 12.4% I Service 359,567 405,384 12.7% 726,164 796,693 9.7% Section Total Revenues $949,806 $1,060,823 11.7% $1,888,682 $2,103,281 11.4% Gross Profit $535,522 $609,359
Slide 6: 2018 Guidance Summary
2018 Guidance Summary(1) Financial Performance Outlook $MM (except per share items) I C$ 2018 Section C$ Change YOY Guidance(2) II Revenue $4,160 - $4,260 7% - 9% Section Adjusted EBITDA $1,435 - $1,485 12% - 16% Adjusted EPS $1.00 - $1.20 (15%) - 2% III (2) AFFO $805 - $865 5% - 13% Section IV Sect
Slide 7: Year-over-Year Revenue Growth
Year-over-Year Revenue Growth Q2 2018 YTD 2018 Storage Rental Service Total Storage Rental Service Total I Revenue Growth Rates Revenue Revenue Revenue Revenue Revenue Revenue Section Reported 11.0% 12.7% 11.7% 12.4% 9.7% 11.4% (1) Less: Impact of FX Rate Changes and Adjustments 0.3% 3.0% 1.4% 1.3%
Slide 8: Records Management Volume Growth
Records Management Volume Growth Total Iron Mountain (687 CuFt MM) Internal Growth % Percentage of Total Cubic Volume at 6/30/18 1.8% 1.7% 1.9% 1.4% 1.3% 1.1% 0.6% 0.2% North America Other International I 29.2% Western Europe Section 26.3% 25.0% II 27.4% 24.6% 13.8% 23.1% Section 2.4% 1.4% 1.7% 1.5%
Slide 9: Records Management Volume Growth
Records Management Volume Growth Percentage of Total Cubic Volume Western Europe (95 CuFt MM) at 6/30/18 49.2% I 49.3% 48.4% Section 11.7% 45.5% 45.7% II 46.1% 13.8% 9.2% 3.6% Section 5.7% 2.0% 1.7% 4.9% 1.1% 0.5% 4.4% 4.3% III 4.0% 3.9% 3.5% 3.1% Section 6.3% 6.9% 25.9% 5.8% 5.1% 4.7% 4.6% 4.4% 4.3
Slide 10: Quarterly Operating Performance
Quarterly Operating Performance(1) Q2 Results % Growth Impact of FX Rate Impact of I Constant Internal Q2 2017 Q2 2018 Reported Changes and = Acquisitions and = Section - Currency - Growth By Reporting Segment Adjustments (1) Dispositions NA Records and Information Management Business II Storage Ren
Slide 11: Year-to-Date Operating Performance
Year-to-Date Operating Performance(1) Year-to-Date Results % Growth Impact of FX Rate Impact of I Constant Internal YTD 2017 YTD 2018 Reported Changes and = Acquisitions and = Section - Currency - Growth By Reporting Segment Adjustments Dispositions NA Records and Information Management Business II
Slide 12: Consolidated Balance Sheets
Consolidated Balance Sheets ASSETS 12/31/2017 6/30/2018 Current Assets: I Cash and Cash Equivalents $925,699 $188,192 Section Accounts Receivable, Net 835,742 867,041 Other Current Assets 188,874 189,101 Total Current Assets 1,950,315 1,244,334 II Section Property, Plant and Equipment: Property, Pla
Slide 13: Consolidated Statements of Operations
Consolidated Statements of Operations Q2 2017 Q2 2018 % Change YTD 2017 YTD 2018 % Change Revenues: Storage Rental $590,239 $655,439 11.0% $1,162,518 $1,306,588 12.4% I Service 359,567 405,384 12.7% 726,164 796,693 9.7% Section Total Revenues $949,806 $1,060,823 11.7% $1,888,682 $2,103,281 11.4% Ope
Slide 14: Reconciliation of Income from Continuing Operations to Adjusted EBITDA
Reconciliation of Income from Continuing Operations to Adjusted EBITDA Q2 2017 Q2 2018 % Change YTD 2017 YTD 2018 % Change I Income from Continuing Operations $83,148 $93,903 12.9% $141,992 $139,517 (1.7)% Section Add / (Deduct): Interest Expense, Net 89,966 102,107 13.5% 176,021 199,733 13.5% Provi
Slide 15: Reconciliation of Reported EPS to Adjusted EPS
Reconciliation of Reported Earnings per Share to Adjusted Earnings per Share Q2 2017 Q2 2018 % Change YTD 2017 YTD 2018 % Change I Reported EPS - Fully Diluted from Continuing Operations $ 0.30 $ 0.33 10.0% $ 0.53 $ 0.49 (7.5)% Section Add (Deduct): Gain on Sale of Real Estate, Net of Tax (0.01) - (
Slide 16: Reconciliation of Net Income to FFO & AFFO
Reconciliation of Net Income to FFO & AFFO Q2 2017 Q2 2018 % Change YTD 2017 YTD 2018 % Change I Net Income $81,122 $93,543 15.3% $139,629 $138,695 (0.7%) Add / (Deduct): Section Real Estate Depreciation 65,913 73,411 128,869 146,390 (Gain) Loss on Sale of Real Estate, Net of Tax (1,563) - (1,563) -
Slide 17: Reconciliation of Cash Flow from Operations to AFFO
Reconciliation of Cash Flow from Operations to AFFO Q2 2017 Q2 2018 % Change YTD 2017 YTD 2018 % Change I Cash Flow from from Operating Activities-Continuing Operations 199,865 302,238 51.2% 322,040 393,806 22.3% Section Adjust for: Tax Impact of Reconciling Items and Discrete Tax Items Net of Defer
Slide 18: Quarterly Revenue Growth Bridge
Quarterly Revenue Growth Bridge ($mm) 12% Reported R$ I Section 11% C$ II Section III $56 Section $3 IV Section $47 $8 $3 V Section VI Section $1,061 VII Section $950 $958 VIII Section Section IX Section X Section Q2 2017 Revenue FX Impact at Q2 Q2 2017 Revenue at Russia/Ukraine Impact of Data Reven
Slide 19: Quarterly Adjusted EBITDA Bridge
Quarterly Adjusted EBITDA Bridge ($mm) Second Quarter I 16% Reported R$ Section 15% C$ II Section $14 III Section $8 IV Section $26 $4 $0 V Section VI Section $369 VII $322 Section $318 VIII Section Section IX Section X Section Q2 2017 EBITDA FX Impact at Q2 Q2 2017 EBITDA at Russia/Ukraine Impact o
Slide 20: Storage and Service Reconciliation
Storage and Service Reconciliation(1) Q2 2017 Q2 2018 % Change YTD 2017 YTD 2018 % Change I Total Storage Revenue $590,239 $655,439 11.0% $1,162,518 $1,306,588 12.4% Section Add: Permanent Withdraw al Fees 6,016 5,830 (3.1%) 11,294 12,016 6.4% Adjusted Storage Revenue $596,255 $661,269 10.9% $1,173,
Slide 21: Storage Net Operating Income (NOI)
Storage Net Operating Income (NOI)(1) Q2 2017 Q2 2018 % Change YTD 2017 YTD 2018 % Change Revenue from Storage Rental Activities I Section Records Management $462,873 $477,182 3.1% $913,345 $956,750 4.8% Data Protection 88,252 89,221 1.1% 175,711 179,924 2.4% II Data Center 9,931 51,942 n/a 15,789 9
Slide 22: Service Business Detail
Service Business Detail(1) Q2 2017 Q2 2018 % Change YTD 2017 YTD 2018 % Change Service Operations Revenue by Product Line I Records Management $163,395 $183,270 12.2% $331,575 $362,925 9.5% Section Data Protection 40,665 40,499 (0.4)% 82,058 82,387 0.4% Shredding 93,526 106,613 14.0% 188,159 207,393
Slide 23: Gross Book Value of Real Estate Assets
Gross Book Value of Real Estate Assets As of 6/30/2018 Real Estate Assets I Section Storage Operations Land $394,305 Buildings & Building Improvements 2,804,598 II Leasehold Improvements 623,899 Section Racking 1,783,117 Construction In Progress 107,647 Total Storage Gross Book Value $5,713,567 III
Slide 24: Lease Obligations
Lease Obligations(1) Facility Lease Expirations I (% of total square feet subject to lease) Section 6/30/2018 Assuming Exercise of All Extension Options II Section III Section IV Section V Section 55.1% VI Section VII Section 5.7% 5.5% 4.7% 4.7% 4.1% 3.8% 3.7% 3.7% 3.0% 3.2% 2.7% VIII Section Sectio
Slide 25: Global Real Estate Portfolio
Global Real Estate Portfolio(1) As of 3/31/2018 (000s, except for number of buildings) Ow ned Facilities Leased Facilities Total I Top Ten Markets Owned, United States Sq. Feet Owned Buildings Sq. Ft. Buildings Sq. Ft. Buildings Sq. Ft. Northern New Jersey 2,851 Section North America 207 23,426 543
Slide 26: Revenue from Rental Activities and Storage NOI per Racked Square Foot
Revenue from Rental Activities and Storage NOI per Racked Square Foot Square Footage by Region As of June 30, 2018 I North Latin Section America Europe (1) America Asia Total Records Management Racked Space 39,894 11,219 5,330 5,556 61,998 II Data Protection Racked Space 713 148 60 64 985 Section Da
Slide 27: Portfolio Utilization
Portfolio Utilization Records Management Storage Portfolio (CuFt MM) Data Protection Storage Portfolio (DPUs MM) As of 6/30/2018 As of 6/30/2018(2) I Section YoY Growth in Units Stored(1) +2.9% II +3.5% 693 Section 700 674 100 87 90 600 80 -3.0% -0.9% III 67 65 500 Section 60 424 420 +4.8% 40 +26.3%
Slide 28: Customer Data North America
Customer Data North America Q2 2018 Trailing Twelve Months Records Management Revenue by Vertical Our top 20 records management customers have historically Energy I Business Services Section represented approximately 6% of consolidated revenues. Life Sciences Customer retention is consistently high
Slide 29: Data Center Customer and Portfolio Metrics
Data Center Customer and Portfolio Metrics(1) ($ in 000) Annualized Revenue and Lease Expirations Customer Lease Expiration, As of June 30, 2018 Q2 2018 Annualized I Number of Annualized Percentage of Revenue NOI Leasable MW Leasable Sq Ft Section Total MW Percentage of Year Leases TCV Rent TCV Annu
Slide 30: Debt Schedule
Debt Schedule Total Borrowings Maturity Schedule ($MM) I Section II $1,805 Section III Section $1,007 $946(3) $1,000 $886 $825 IV Section $547 (1) (2) $314 $259 V Section $54 $30 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Thereafter VI Section (4) VII Fixed vs. Floating Rate Debt at 6/30/18 S
Slide 31: Capitalization
Capitalization Senior Subordinated and Senior Unsecured Notes (as of 6/30/2018) Senior Senior Senior Senior Senior Senior Senior Senior Senior Type of Note Subordinated Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured I Issuance Date 8/7/12 8/13/13 5/27/16 5/27/16 9/15
Slide 32: Capital Expenditures and Investments
Capital Expenditures and Investments Q2 2017 Q2 2018 % Change YTD 2017 YTD 2018 % Change Capital Expenditures (1) I Real Estate: Section Investment(2) $48,041 $52,286 8.8% $72,172 $73,493 1.8% Maintenance 14,017 14,616 4.3% 22,071 23,615 7.0% $62,059 $66,901 7.8% $94,243 $97,108 3.0% II Non-Real Est
Slide 33: Business and Customer Acquisitions
Business and Customer Acquisitions Q2 2017 Q2 2018 % Change YTD 2017 YTD 2018 % Change Business Acquisitions I Business Acquisitions Excluding Data Centers $42,705 $4,467 (89.5)% $59,768 12,228 (79.5)% Section Change in Business Acquisition Accruals and Cash Acquired (16,669) (1,572) (90.6)% (21,545
Slide 34: Real Estate Investments
Real Estate Investments(1) Total Expected Investment in Cumulative Estimated Historical Average Average Stabilization Region Investment Q2 2018 Investment to Date CuFt / DPUs NOI/CuFt or DPU(4) Period I Racking Installations(2) Section North America $17,722 $5,744 $13,004 4,577 $2.53 Europe(3) 58,16
Slide 35: Acquisitions and Disposals
Acquisitions and Disposals(1) Purchase Expected Region Total Sq Ft I Price IRRs Section 2018 Building Acquisitions North America - - - II Europe(2) 19,393 279 17% Section Latin America - - - Asia - - - III Worldwide 19,393 279 17% Section IV Section V Section 2018 Data Centers, Business and Customer
Slide 36: Components of Value
Components of Value Q2 2018 Annualized Components NOI I Section North America Records Management $985,706 Data Protection 235,669 II Other 62,078 Section Europe (1) 375,099 Latin America 158,497 III Asia 188,624 Section Proforma Global Data Center (2) 134,883 Total Portfolio Storage NOI 2,140,557 IV
Slide 37: Appendix: 2017 Quarterly Results Based on New Reporting Segments
Appendix 2017 Quarterly Results Based on New Reporting Segments I Q1 2017 Q2 2017 Q3 2017 Q4 2017 Full Year 2017 Section By Reporting Segment NA Records and Information Management Business II Section Storage Rental $298,183 $305,168 $308,822 $309,322 $1,221,495 Service 209,414 204,429 204,745 210,26
Slide 38: 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 39: 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 40: Non-GAAP Measures and Definitions (continued)
Appendix Non-GAAP Measures and Definitions (continued) Service Adjusted EBITDAR I Section Service Adjusted EBITDA as defined above, excluding rent expense associated with the service business. This is provided to enable valuation of Service Adjusted EBITDA irrespective of whether the company’s prope
Slide 41: Other Definitions
Appendix Other 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 I phased racking installations over three years. For business acquisitions it is 12 to 24 months, depending on the size of the
Slide 42: Other Definitions (continued)
Appendix Other Definitions (continued) Other International Business – Our Other International Business segment provides records and information management services throughout I the remaining European countries in which we operate, Latin America, Asia and Africa. Our European operations included in t
Slide 43: Other Definitions (continued)
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 44: Other Definitions (continued)
Appendix Other Definitions (continued) Capital Expenditures and Investments (continued) I Section Non-Real Estate: II Investment – Non-real estate assets that either (i) support the growth of our business, and/or increase our profitability, such as customer- Section inventory technology systems, and
Slide 45: Other Definitions (continued)
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 46: Other Definitions (continued)
Appendix Other Definitions (continued) Data Center Business Definitions (Continued) I Section TCV – “Total Contract Value” represents total revenue contracted for active contracts through the contract term, not including renewals or extensions, but including fixed power charges. II Total MW - Total
Slide 47: Other Definitions (continued)
Appendix Other Definitions (continued) Non-Cash Rent Expense – Calculated as rent expense less cash paid for rent. I Section Permanent Withdrawal Rate – Calculated by dividing the total number of cubic feet of records removed from inventory due to permanent withdrawals in a one-year period divided b
Slide 48: Other Definitions (continued)
Appendix Other Definitions (continued) Storage Profit and Margin – The Gross Profit and Margin attributable to the worldwide storage business. Calculated as follows: I Storage Net Operating Income Section + Allocated Overhead Expenses - Storage Rent - Termination and Permanent Withdrawal Fees II Sec