IRON MOUNTAIN INC [IRM] Filings

10-Q 1 irm-20240630.htm 10-Q irm-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q


(Mark One)
☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2024


OR

☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from to

Commission file number 1-13045

IRON MOUNTAIN INCORPORATED

(Exact Name of Registrant as Specified in Its Charter)


Delaware			23-2588479
(State or other Jurisdiction of Incorporation or Organization)			(I.R.S. Employer Identification No.)

85 New Hampshire Avenue, Suite 150, Portsmouth, New Hampshire 03801

(Address of Principal Executive Offices, Including Zip Code)

(617) 535-4766

(Registrant's Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $.01 par value

IRM

NYSE

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 26, 2024, the registrant had 293,335,826 outstanding shares of common stock, $.01 par value.

Table of Contents

IRON MOUNTAIN INCORPORATED

2024 FORM 10-Q QUARTERLY REPORT

TABLE OF CONTENTS


PART I—FINANCIAL INFORMATION

	1	ITEM 1.	Unaudited Condensed Consolidated Financial Statements
		2	Condensed Consolidated Balance Sheets at June 30, 2024 and December 31, 2023
		3	Condensed Consolidated Statements of Operations for the Three Months Ended June 30, 2024 and 2023
		4	Condensed Consolidated Statements of Operations for the Six Months Ended June 30, 2024 and 2023
		5	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2024 and 2023
		6	Condensed Consolidated Statements of (Deficit) Equity for the Three and Six Months Ended June 30, 2024
		7	Condensed Consolidated Statements of Equity for the Three and Six Months Ended June 30, 2023
		8	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023
		9	Notes to Condensed Consolidated Financial Statements
	29	ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations
	49	ITEM 4.	Controls and Procedures

PART II—OTHER INFORMATION
	51	ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds
	51	ITEM 5.	Other Information
	51	ITEM 6.	Exhibits
	52	Signatures

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


IRON MOUNTAIN JUNE 30, 2024 FORM 10-Q									1

Table of Contents

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) (UNAUDITED)


	JUNE 30, 2024		DECEMBER 31, 2023
ASSETS
Current Assets:
Cash and cash equivalents	$	144,256	$	222,789

Accounts receivable (less allowances of $78,513 and $74,762 as of June 30, 2024 and December 31, 2023, respectively)	1,273,900		1,259,826

Prepaid expenses and other	295,583		252,930

Total Current Assets	1,713,739		1,735,545
Property, Plant and Equipment:
Property, plant and equipment	10,976,919		10,373,989
Less—Accumulated depreciation	(4,183,895)		(4,059,120)
Property, Plant and Equipment, Net	6,793,024		6,314,869
Other Assets, Net:
Goodwill	5,099,772		5,017,912
Customer and supplier relationships and other intangible assets	1,284,339		1,279,800
Operating lease right-of-use assets	2,593,461		2,696,024
Other	482,599		429,652
Total Other Assets, Net	9,460,171		9,423,388
Total Assets	$	17,966,934	$	17,473,802
LIABILITIES AND EQUITY
Current Liabilities:
Current portion of long-term debt	$	125,409	$	120,670
Accounts payable	527,968		539,594
Accrued expenses and other current liabilities (includes current portion of operating lease liabilities)	1,174,979		1,250,259
Deferred revenue	329,718		325,665
Total Current Liabilities	2,158,074		2,236,188
Long-term Debt, net of current portion	12,814,166		11,812,500
Long-term Operating Lease Liabilities, net of current portion	2,453,935		2,562,394
Other Long-term Liabilities	257,497		237,590
Deferred Income Taxes	231,150		235,410
Commitments and Contingencies
Redeemable Noncontrolling Interests	184,861		177,947
(Deficit) Equity:
Iron Mountain Incorporated Stockholders' (Deficit) Equity:
Preferred stock (par value $0.01; authorized 10,000,000 shares; none issued and outstanding)	—		—
Common stock (par value $0.01; authorized 400,000,000 shares; issued and outstanding 293,298,465 and 292,142,739 shares as of June 30, 2024 and December 31, 2023, respectively)	2,933		2,921
Additional paid-in capital	4,555,883		4,533,691
(Distributions in excess of earnings) Earnings in excess of distributions	(4,230,599)		(3,953,808)
Accumulated other comprehensive items, net	(461,091)		(371,156)
Total Iron Mountain Incorporated Stockholders' (Deficit) Equity	(132,874)		211,648
Noncontrolling Interests	125		125
Total (Deficit) Equity	(132,749)		211,773
Total Liabilities and (Deficit) Equity	$	17,966,934	$	17,473,802

The accompanying notes are an integral part of these condensed consolidated financial statements.


IRON MOUNTAIN JUNE 30, 2024 FORM 10-Q									2

Table of Contents

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)


	THREE MONTHS ENDED JUNE 30,
	2024		2023
Revenues:
Storage rental	$	919,746	$	830,756
Service	614,663		527,180

Total Revenues	1,534,409		1,357,936
Operating Expenses:
Cost of sales (excluding depreciation and amortization)	675,971		592,644

Selling, general and administrative	344,838		311,805
Depreciation and amortization	224,501		195,367
Acquisition and Integration Costs	9,502		1,511
Restructuring and other transformation	46,513		45,588


Loss (Gain) on disposal/write-down of property, plant and equipment, net	2,790		(1,505)
Total Operating Expenses	1,304,115		1,145,410
Operating Income (Loss)	230,294		212,526
Interest Expense, Net (includes Interest Income of $0 and $2,290 for the three months ended June 30, 2024 and 2023, respectively)	176,521		144,178
Other Expense (Income), Net	5,833		62,950
Net Income (Loss) Before Provision (Benefit) for Income Taxes	47,940		5,398
Provision (Benefit) for Income Taxes	13,319		4,255


Net Income (Loss)	34,621		1,143
Less: Net (Loss) Income Attributable to Noncontrolling Interests	(1,162)		1,029
Net Income (Loss) Attributable to Iron Mountain Incorporated	$	35,783	$	114
Net Income (Loss) Per Share Attributable to Iron Mountain Incorporated:


Basic	$	0.12	$	0.00



Diluted	$	0.12	$	0.00
Weighted Average Common Shares Outstanding—Basic	293,340		291,825
Weighted Average Common Shares Outstanding—Diluted	295,838		293,527

The accompanying notes are an integral part of these condensed consolidated financial statements.


IRON MOUNTAIN JUNE 30, 2024 FORM 10-Q									3

Table of Contents

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)


	SIX MONTHS ENDED JUNE 30,
	2024		2023
Revenues:
Storage rental	$	1,804,588	$	1,640,845
Service	1,206,684		1,031,440

Total Revenues	3,011,272		2,672,285
Operating Expenses:
Cost of sales (excluding depreciation and amortization)	1,329,226		1,164,270

Selling, general and administrative	664,303		606,325
Depreciation and amortization	434,056		377,461
Acquisition and Integration Costs	17,311		3,106
Restructuring and other transformation	87,280		82,501


Loss (Gain) on disposal/write-down of property, plant and equipment, net	3,179		(14,566)
Total Operating Expenses	2,535,355		2,219,097
Operating Income (Loss)	475,917		453,188
Interest Expense, Net (includes Interest Income of $3,425 and $5,197 for the six months ended June 30, 2024 and 2023, respectively)	341,040		281,347
Other (Income) Expense, Net	(6,697)		84,150
Net Income (Loss) Before Provision (Benefit) for Income Taxes	141,574		87,691
Provision (Benefit) for Income Taxes	29,928		21,013


Net Income (Loss)	111,646		66,678
Less: Net Income (Loss) Attributable to Noncontrolling Interests	1,802		1,969
Net Income (Loss) Attributable to Iron Mountain Incorporated	$	109,844	$	64,709
Net Income (Loss) Per Share Attributable to Iron Mountain Incorporated:


Basic	$	0.37	$	0.22



Diluted	$	0.37	$	0.22
Weighted Average Common Shares Outstanding—Basic	293,043		291,633
Weighted Average Common Shares Outstanding—Diluted	295,529		293,288

The accompanying notes are an integral part of these condensed consolidated financial statements.


IRON MOUNTAIN JUNE 30, 2024 FORM 10-Q									4

Table of Contents

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(IN THOUSANDS) (UNAUDITED)


	THREE MONTHS ENDED JUNE 30,
	2024		2023
Net Income (Loss)	$	34,621	$	1,143
Other Comprehensive (Loss) Income:
Foreign Currency Translation Adjustment	(31,579)		18,035
Change in Fair Value of Derivative Instruments	(488)		7,896
Reclassifications from Accumulated Other Comprehensive Items, net	—		(2,527)
Total Other Comprehensive (Loss) Income:	(32,067)		23,404
Comprehensive Income (Loss)	2,554		24,547
Comprehensive (Loss) Income Attributable to Noncontrolling Interests	(935)		909
Comprehensive Income (Loss) Attributable to Iron Mountain Incorporated	$	3,489	$	23,638


	SIX MONTHS ENDED JUNE 30,
	2024		2023
Net Income (Loss)	$	111,646	$	66,678
Other Comprehensive (Loss) Income:
Foreign Currency Translation Adjustment	(98,848)		58,261
Change in Fair Value of Derivative Instruments	10,900		4,454
Reclassifications from Accumulated Other Comprehensive Items, net	(2,528)		(2,527)
Total Other Comprehensive (Loss) Income:	(90,476)		60,188
Comprehensive Income (Loss)	21,170		126,866
Comprehensive Income (Loss) Attributable to Noncontrolling Interests	1,261		2,398
Comprehensive Income (Loss) Attributable to Iron Mountain Incorporated	$	19,909	$	124,468

The accompanying notes are an integral part of these condensed consolidated financial statements.


IRON MOUNTAIN JUNE 30, 2024 FORM 10-Q									5

Table of Contents

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF (DEFICIT) EQUITY

(IN THOUSANDS, EXCEPT SHARE DATA) (UNAUDITED)


THREE MONTHS ENDED JUNE 30, 2024
			IRON MOUNTAIN INCORPORATED STOCKHOLDERS' (DEFICIT) EQUITY
			COMMON STOCK			ADDITIONAL PAID-IN CAPITAL		(DISTRIBUTIONS IN EXCESS OF EARNINGS) EARNINGS IN EXCESS OF DISTRIBUTIONS		ACCUMULATED OTHER COMPREHENSIVE ITEMS, NET		NONCONTROLLING INTERESTS		REDEEMABLE NONCONTROLLING INTERESTS
	TOTAL		SHARES	AMOUNTS
Balance, March 31, 2024	$	18,660	293,085,683	$	2,931	$	4,518,644	$	(4,074,243)	$	(428,797)	$	125	$	179,222
Issuance and net settlement of shares under employee stock purchase and option plans and stock-based compensation	37,241		212,782	2		37,239		—		—		—		—
Changes in equity related to redeemable noncontrolling interests	—		—	—		—		—		—		—		7,284
Parent cash dividends declared	(192,139)		—	—		—		(192,139)		—		—		—
Other comprehensive (loss) income	(32,294)		—	—		—		—		(32,294)		—		227

Net income (loss)	35,783		—	—		—		35,783		—		—		(1,162)

Noncontrolling interests dividends	—		—	—		—		—		—		—		(710)


Balance, June 30, 2024	$	(132,749)	293,298,465	$	2,933	$	4,555,883	$	(4,230,599)	$	(461,091)	$	125	$	184,861

SIX MONTHS ENDED JUNE 30, 2024
			IRON MOUNTAIN INCORPORATED STOCKHOLDERS' (DEFICIT) EQUITY
			COMMON STOCK			ADDITIONAL PAID-IN CAPITAL		(DISTRIBUTIONS IN EXCESS OF EARNINGS) EARNINGS IN EXCESS OF DISTRIBUTIONS		ACCUMULATED OTHER COMPREHENSIVE ITEMS, NET		NONCONTROLLING INTERESTS		REDEEMABLE NONCONTROLLING INTERESTS
	TOTAL		SHARES	AMOUNTS
Balance, December 31, 2023	$	211,773	292,142,739	$	2,921	$	4,533,691	$	(3,953,808)	$	(371,156)	$	125	$	177,947
Issuance and net settlement of shares under employee stock purchase and option plans and stock-based compensation	21,782		1,155,726	12		21,770		—		—		—		—
Changes in equity related to redeemable noncontrolling interests	422		—	—		422		—		—		—		6,862
Parent cash dividends declared	(386,635)		—	—		—		(386,635)		—		—		—
Other comprehensive (loss) income	(89,935)		—	—		—		—		(89,935)		—		(541)
Net income (loss)	109,844		—	—		—		109,844		—		—		1,802
Noncontrolling interests dividends	—		—	—		—		—		—		—		(1,209)

Balance, June 30, 2024	$	(132,749)	293,298,465	$	2,933	$	4,555,883	$	(4,230,599)	$	(461,091)	$	125	$	184,861

The accompanying notes are an integral part of these condensed consolidated financial statements.


IRON MOUNTAIN JUNE 30, 2024 FORM 10-Q									6

Table of Contents

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(IN THOUSANDS, EXCEPT SHARE DATA) (UNAUDITED)


THREE MONTHS ENDED JUNE 30, 2023
			IRON MOUNTAIN INCORPORATED STOCKHOLDERS' EQUITY
			COMMON STOCK			ADDITIONAL PAID-IN CAPITAL		(DISTRIBUTIONS IN EXCESS OF EARNINGS) EARNINGS IN EXCESS OF DISTRIBUTIONS		ACCUMULATED OTHER COMPREHENSIVE ITEMS, NET		NONCONTROLLING INTERESTS		REDEEMABLE NONCONTROLLING INTERESTS
	TOTAL		SHARES	AMOUNTS
Balance, March 31, 2023	$	545,589	291,584,999	$	2,916	$	4,459,265	$	(3,510,949)	$	(405,768)	$	125	$	95,630
Issuance and net settlement of shares under employee stock purchase and option plans and stock-based compensation	27,862		239,959	2		27,860		—		—		—		—
Changes in equity related to redeemable noncontrolling interests	1,367		—	—		1,367		—		—		—		(1,367)
Parent cash dividends declared	(182,113)		—	—		—		(182,113)		—		—		—
Other comprehensive income (loss)	23,524		—	—		—		—		23,524		—		(120)
Net Income (Loss)	114		—	—		—		114		—		—		1,029
Noncontrolling interests equity contributions	—		—	—		—		—		—		—		9,900
Noncontrolling interests dividends	—		—	—		—		—		—		—		(1,013)
Balance, June 30, 2023	$	416,343	291,824,958	$	2,918	$	4,488,492	$	(3,692,948)	$	(382,244)	$	125	$	104,059

SIX MONTHS ENDED JUNE 30, 2023
			IRON MOUNTAIN INCORPORATED STOCKHOLDERS' EQUITY
			COMMON STOCK			ADDITIONAL PAID-IN CAPITAL		(DISTRIBUTIONS IN EXCESS OF EARNINGS) EARNINGS IN EXCESS OF DISTRIBUTIONS		ACCUMULATED OTHER COMPREHENSIVE ITEMS, NET		NONCONTROLLING INTERESTS		REDEEMABLE NONCONTROLLING INTERESTS
	TOTAL		SHARES	AMOUNTS
Balance, December 31, 2022	$	636,793	290,830,296	$	2,908	$	4,468,035	$	(3,392,272)	$	(442,003)	$	125	$	95,160
Issuance and net settlement of shares under employee stock purchase and option plans and stock-based compensation	19,100		994,662	10		19,090		—		—		—		—
Changes in equity related to redeemable noncontrolling interests	1,367		—	—		1,367		—		—		—		(1,367)
Parent cash dividends declared	(365,385)		—	—		—		(365,385)		—		—		—
Other comprehensive income (loss)	59,759		—	—		—		—		59,759		—		429
Net income (loss)	64,709		—	—		—		64,709		—		—		1,969
Noncontrolling interests equity contributions	—		—	—		—		—		—		—		9,900
Noncontrolling interests dividends	—		—	—		—		—		—		—		(2,032)
Balance, June 30, 2023	$	416,343	291,824,958	$	2,918	$	4,488,492	$	(3,692,948)	$	(382,244)	$	125	$	104,059

The accompanying notes are an integral part of these condensed consolidated financial statements.


IRON MOUNTAIN JUNE 30, 2024 FORM 10-Q									7

Table of Contents

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS) (UNAUDITED)


	SIX MONTHS ENDED JUNE 30,
	2024		2023
Cash Flows from Operating Activities:
Net income (loss)	$	111,646	$	66,678


Adjustments to reconcile net income (loss) to cash flows from operating activities:
Depreciation	302,562		254,395
Amortization (includes amortization of deferred financing costs and discounts of $12,243 and $8,095 for the six months ended June 30, 2024 and 2023, respectively)	143,737		131,161

Revenue reduction associated with amortization of customer inducements and above- and below-market leases	2,798		3,491
Stock-based compensation expense	43,928		34,882
(Benefit) provision for deferred income taxes	(442)		2,799

Loss (gain) on disposal/write-down of property, plant and equipment, net	3,179		(14,566)



Loss associated with the Clutter Acquisition	—		38,000
Foreign currency transactions and other, net	12,655		69,183
(Increase) decrease in assets	(86,117)		(31,071)
(Decrease) increase in liabilities	(21,731)		(108,858)




Cash Flows from Operating Activities	512,215		446,094


Cash Flows from Investing Activities:
Capital expenditures	(777,901)		(600,758)
Cash paid for acquisitions, net of cash acquired	(123,323)		(21,465)


Customer inducements	(3,457)		(2,630)
Contract costs	(50,800)		(39,989)

Investments in joint ventures and other investments, net	(10,190)		(15,830)
Proceeds from sales of property and equipment and other, net	5,923		35,390
Cash Flows from Investing Activities	(959,748)		(645,282)


Cash Flows from Financing Activities:
Repayment of revolving credit facility, term loan facilities and other debt	(4,896,450)		(10,087,033)
Proceeds from revolving credit facility, term loan facilities and other debt	5,843,362		9,683,880

Net proceeds from sale of senior note	—		990,000
Debt financing and equity contribution from noncontrolling interests	—		9,900
Equity distribution to noncontrolling interests	(1,209)		(2,032)

Parent cash dividends	(388,709)		(367,060)
Payment of deferred purchase obligation	(158,677)		—

Net (payments) proceeds associated with employee stock-based awards	(22,146)		(15,782)

Other, net	(6,880)		(2,046)
Cash Flows from Financing Activities	369,291		209,827


Effect of Exchange Rates on Cash and Cash Equivalents	(291)		(2,943)
(Decrease) increase in Cash and Cash Equivalents	(78,533)		7,696
Cash and Cash Equivalents, Beginning of Period	222,789		141,797
Cash and Cash Equivalents, End of Period	$	144,256	$	149,493
Supplemental Information:
Cash Paid for Interest	$	382,823	$	270,146
Cash Paid for Income Taxes, Net	$	43,099	$	46,502
Non-Cash Investing and Financing Activities:

Financing Leases and Other	$	67,996	$	61,085
Accrued Capital Expenditures	$	213,636	$	192,197
Deferred Purchase Obligations and Other Deferred Payments	$	133,813	$	9,290
Dividends Payable	$	200,318	$	192,597

The accompanying notes are an integral part of these condensed consolidated financial statements.


IRON MOUNTAIN JUNE 30, 2024 FORM 10-Q									8

Table of Contents

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data) (Unaudited)

1. GENERAL

The unaudited condensed consolidated financial statements of Iron Mountain Incorporated, a Delaware corporation, and its subsidiaries ("we" or "us"), have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission (the "SEC"). Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to those rules and regulations, but we believe that the disclosures included herein are adequate to make the information presented not misleading. The interim condensed consolidated financial statements are presented herein and, in the opinion of management, reflect all adjustments of a normal recurring nature necessary for a fair presentation. Interim results are not necessarily indicative of results for a full year.

The Condensed Consolidated Financial Statements and Notes thereto, which are included herein, should be read in conjunction with the Consolidated Financial Statements and Notes thereto for the year ended December 31, 2023 included in our Annual Report on Form 10-K filed with the SEC on February 22, 2024 (our "Annual Report").

In September 2022, we announced a global program designed to accelerate the growth of our business ("Project Matterhorn"). See Note 11.

We have been organized and have operated as a real estate investment trust for United States federal income tax purposes beginning with our taxable year ended December 31, 2014.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash on hand and cash invested in highly liquid short-term securities, which have remaining maturities at the date of purchase of less than 90 days. Cash and cash equivalents are carried at cost, which approximates fair value.

B. ACCOUNTS RECEIVABLE

We maintain an allowance for doubtful accounts and a credit memo reserve for estimated losses resulting from the potential inability of our customers to make required payments and potential disputes regarding billing and service issues. The rollforward of the allowance for doubtful accounts and credit memo reserves for the six months ended June 30, 2024 is as follows:



Balance as of December 31, 2023	$	74,762
Credit memos charged to revenue	44,137
Allowance for bad debts charged to expense	24,233
Deductions and other(1)	(64,619)
Balance as of June 30, 2024	$	78,513

(1)Primarily consists of the issuance of credit memos, the write-off of accounts receivable and the impact associated with currency translation adjustments.


IRON MOUNTAIN JUNE 30, 2024 FORM 10-Q									9

Table of Contents

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(In thousands, except share and per share data) (Unaudited)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

C. LEASES

We lease facilities for certain warehouses, data centers and office space. We also have land leases, including those on which certain facilities are located.

Operating and financing lease right-of-use assets and lease liabilities as of June 30, 2024 and December 31, 2023 are as follows:


DESCRIPTION	JUNE 30, 2024		DECEMBER 31, 2023
Assets:
Operating lease right-of-use assets	$	2,593,461	$	2,696,024
Financing lease right-of-use assets, net of accumulated depreciation(1)	340,842		304,600
Liabilities:
Current
Operating lease liabilities	$	302,234	$	291,795
Financing lease liabilities(1)	42,260		39,089
Long-term
Operating lease liabilities	$	2,453,935	$	2,562,394
Financing lease liabilities(1)	336,653		310,776

(1)Financing lease right-of-use assets, current financing lease liabilities and long-term financing lease liabilities are included within Property, plant and equipment, net, Current portion of long-term debt and Long-term debt, net of current portion, respectively, within our Condensed Consolidated Balance Sheets.

The components of the lease expense for the three and six months ended June 30, 2024 and 2023 are as follows:


	THREE MONTHS ENDED JUNE 30,				SIX MONTHS ENDED JUNE 30,
DESCRIPTION	2024		2023		2024		2023
Operating lease cost(1)	$	172,735	$	161,241	$	344,481	$	317,114
Financing lease cost:
Depreciation of financing lease right-of-use assets	$	12,078	$	10,202	$	23,022	$	20,210
Interest expense for financing lease liabilities	5,217		4,416		10,438		8,757

(1)Operating lease cost, the majority of which is included in Cost of sales, includes variable lease costs of $39,594 and $77,688 for the three and six months ended June 30, 2024, respectively, and $34,418 and $65,998 for the three and six months ended June 30, 2023, respectively.

Other information: Supplemental cash flow information relating to our leases for the six months ended June 30, 2024 and 2023 is as follows:


	SIX MONTHS ENDED JUNE 30,
CASH PAID FOR AMOUNTS INCLUDED IN MEASUREMENT OF LEASE LIABILITIES:	2024		2023
Operating cash flows used in operating leases	$	235,030	$	220,764

Operating cash flows used in financing leases (interest)	10,438		8,757
Financing cash flows used in financing leases	21,536		22,010

NON-CASH ITEMS:
Operating lease modifications and reassessments	$	573	$	44,779
New operating leases (including acquisitions and sale-leaseback transactions)	80,474		163,326


IRON MOUNTAIN JUNE 30, 2024 FORM 10-Q									10

Table of Contents

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(In thousands, except share and per share data) (Unaudited)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

D. GOODWILL

Our reporting units as of December 31, 2023 are described in detail in Note 2.l. to Notes to Consolidated Financial Statements included in our Annual Report.

The changes in the carrying value of goodwill attributable to each reportable segment and Corporate and Other (as defined in Note 9) for the six months ended June 30, 2024 are as follows:


	GLOBAL RIM BUSINESS		GLOBAL DATA CENTER BUSINESS		CORPORATE AND OTHER		TOTAL CONSOLIDATED
Goodwill balance, net of accumulated amortization, as of December 31, 2023	$	3,911,945	$	478,930	$	627,037	$	5,017,912
Tax deductible goodwill acquired during the period	—		—		131,790		131,790



Fair value and other adjustments	963		(186)		(186)		591
Currency effects	(45,888)		(3,928)		(705)		(50,521)
Goodwill balance, net of accumulated amortization, as of June 30, 2024	$	3,867,020	$	474,816	$	757,936	$	5,099,772
Accumulated goodwill impairment balance as of June 30, 2024	$	132,409	$	—	$	26,011	$	158,420


IRON MOUNTAIN JUNE 30, 2024 FORM 10-Q									11

Table of Contents

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(In thousands, except share and per share data) (Unaudited)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

E. FAIR VALUE MEASUREMENTS

The assets and liabilities carried at fair value measured on a recurring basis as of June 30, 2024 and December 31, 2023 are as follows:


			FAIR VALUE MEASUREMENTS AT JUNE 30, 2024 USING
DESCRIPTION	TOTAL CARRYING VALUE AT JUNE 30, 2024		QUOTED PRICES IN ACTIVE MARKETS (LEVEL 1)		SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)(2)
Money Market Funds	$	10,218	$	—	$	10,218	$	—
Time Deposits	20,762		—		20,762		—
Trading Securities	8,841		7,166		1,675		—
Derivative Assets	25,607		—		25,607		—
Derivative Liabilities	2,670		—		2,670		—
Deferred Purchase Obligations(1)	114,703		—		—		114,703


			FAIR VALUE MEASUREMENTS AT DECEMBER 31, 2023 USING
DESCRIPTION	TOTAL CARRYING VALUE AT DECEMBER 31, 2023		QUOTED PRICES IN ACTIVE MARKETS (LEVEL 1)		SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)(2)
Money Market Funds	$	66,008	$	—	$	66,008	$	—
Time Deposits	15,913		—		15,913		—
Trading Securities	9,952		6,149		3,803		—
Derivative Assets	6,359		—		6,359		—
Derivative Liabilities	5,769		—		5,769		—
Deferred Purchase Obligations(1)	208,265		—		—		208,265

(1)Primarily relates to the fair values of the deferred purchase obligations associated with the ITRenew Transaction (as defined in Note 3 to Notes to Consolidated Financial Statements included in our Annual Report) and the Regency Transaction (as defined in Note 3).

(2)The following is a rollforward of the Level 3 liabilities presented above for December 31, 2023 through June 30, 2024:



Balance as of December 31, 2023	$	208,265
Additions	63,700
Payments	(158,677)
Other changes, including accretion	1,415
Balance as of June 30, 2024	$	114,703

The level 3 valuations of the deferred purchase obligations were determined utilizing Monte-Carlo models and take into account our forecasted projections as they relate to the underlying performance of the respective businesses. The Monte-Carlo simulation model applied in assessing the fair value of the deferred purchase obligation associated with the ITRenew Transaction incorporates assumptions as to expected gross profits over the achievement period, including adjustments for the volatility of timing and amount of the associated revenue and costs, as well as discount rates that account for the risk of the arrangement and overall market risks. The Monte-Carlo simulation model applied in assessing the fair value of the deferred purchase obligation associated with the Regency Transaction incorporates assumptions as to expected revenue over the achievement period, including adjustments for volatility and timing, as well as discount rates that account for the risk of the arrangement and overall market risks. Any material change to these assumptions may result in a significantly higher or lower fair value of the related deferred purchase obligation.

There were no material items that were measured at fair value on a non-recurring basis at June 30, 2024 and December 31, 2023 other than (i) those disclosed in Note 2.p. to Notes to Consolidated Financial Statements included in our Annual Report and (ii) assets acquired and liabilities assumed through our acquisitions that occurred during the six months ended June 30, 2024 (see Note 3), both of which are based on Level 3 inputs.


IRON MOUNTAIN JUNE 30, 2024 FORM 10-Q									12

Table of Contents

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(In thousands, except share and per share data) (Unaudited)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

F. ACCUMULATED OTHER COMPREHENSIVE ITEMS, NET

The changes in Accumulated other comprehensive items, net for the three and six months ended June 30, 2024 and 2023 are as follows:


	THREE MONTHS ENDED JUNE 30, 2024						THREE MONTHS ENDED JUNE 30, 2023
	FOREIGN CURRENCY TRANSLATION AND OTHER ADJUSTMENTS		DERIVATIVE FINANCIAL INSTRUMENTS		TOTAL		FOREIGN CURRENCY TRANSLATION AND OTHER ADJUSTMENTS		DERIVATIVE FINANCIAL INSTRUMENTS		TOTAL
Beginning of Period	$	(440,129)	$	11,332	$	(428,797)	$	(414,832)	$	9,064	$	(405,768)
Other comprehensive (loss) income:
Foreign currency translation and other adjustments	(31,806)		—		(31,806)		18,155		—		18,155
Change in fair value of derivative instruments	—		(488)		(488)		—		7,896		7,896
Reclassifications from accumulated other comprehensive items, net	—		—		—		—		(2,527)		(2,527)
Total other comprehensive (loss) income	(31,806)		(488)		(32,294)		18,155		5,369		23,524
End of Period	$	(471,935)	$	10,844	$	(461,091)	$	(396,677)	$	14,433	$	(382,244)


	SIX MONTHS ENDED JUNE 30, 2024						SIX MONTHS ENDED JUNE 30, 2023
	FOREIGN CURRENCY TRANSLATION AND OTHER ADJUSTMENTS		DERIVATIVE FINANCIAL INSTRUMENTS		TOTAL		FOREIGN CURRENCY TRANSLATION AND OTHER ADJUSTMENTS		DERIVATIVE FINANCIAL INSTRUMENTS		TOTAL
Beginning of Period	$	(373,628)	$	2,472	$	(371,156)	$	(454,509)	$	12,506	$	(442,003)
Other comprehensive (loss) income:
Foreign currency translation and other adjustments	(98,307)		—		(98,307)		57,832		—		57,832
Change in fair value of derivative instruments	—		10,900		10,900		—		4,454		4,454
Reclassifications from accumulated other comprehensive items, net	—		(2,528)		(2,528)		—		(2,527)		(2,527)
Total other comprehensive (loss) income	(98,307)		8,372		(89,935)		57,832		1,927		59,759
End of Period	$	(471,935)	$	10,844	$	(461,091)	$	(396,677)	$	14,433	$	(382,244)

G. REVENUES

The costs associated with the initial movement of customer records into physical storage and certain commissions are considered costs to fulfill or obtain customer contracts (collectively, "Contract Costs"). Contract Costs as of June 30, 2024 and December 31, 2023 are as follows:


	JUNE 30, 2024						DECEMBER 31, 2023
	GROSS CARRYING AMOUNT		ACCUMULATED AMORTIZATION		NET CARRYING AMOUNT		GROSS CARRYING AMOUNT		ACCUMULATED AMORTIZATION		NET CARRYING AMOUNT
Intake Costs asset	$	77,922	$	(38,683)	$	39,239	$	76,150	$	(39,617)	$	36,533
Commissions asset	178,289		(67,801)		110,488		156,639		(64,279)		92,360


IRON MOUNTAIN JUNE 30, 2024 FORM 10-Q									13

Table of Contents

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(In thousands, except share and per share data) (Unaudited)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Deferred revenue liabilities are reflected in our Condensed Consolidated Balance Sheets as follows:


DESCRIPTION	LOCATION IN BALANCE SHEET	JUNE 30, 2024		DECEMBER 31, 2023
Deferred revenue - Current	Deferred revenue	$	329,718	$	325,665
Deferred revenue - Long-term	Other Long-term Liabilities	95,605		100,770

DATA CENTER LESSOR CONSIDERATIONS

Our Global Data Center Business features storage rental provided to customers at contractually specified rates over a fixed contractual period, which are accounted for in accordance with Accounting Standards Codification 842, Leases. Storage rental revenue associated with our Global Data Center Business for the three and six months ended June 30, 2024 and 2023 is as follows:


	THREE MONTHS ENDED JUNE 30,				SIX MONTHS ENDED JUNE 30,
	2024		2023		2024		2023
Storage rental revenue	$	147,397	$	110,990	$	287,425	$	218,425

H. STOCK-BASED COMPENSATION

Our stock-based compensation expense includes the cost of stock options, restricted stock units ("RSUs") and performance units ("PUs") (together, the "Employee Stock-Based Awards").

STOCK-BASED COMPENSATION EXPENSE

Stock-based compensation expense for the Employee Stock-Based Awards for the three and six months ended June 30, 2024 and 2023 is as follows:


	THREE MONTHS ENDED JUNE 30,				SIX MONTHS ENDED JUNE 30,
	2024		2023		2024		2023
Stock-based compensation expense	$	29,889	$	22,373	$	43,928	$	34,882

During the six months ended June 30, 2024, we granted approximately 83,100 stock options, 644,200 RSUs and 450,700 PUs under the 2014 Plan (as defined in Note 2.t to Notes to Consolidated Financial Statements included in our Annual Report).

As of June 30, 2024, unrecognized compensation cost related to the unvested portion of our Employee Stock-Based Awards, inclusive of our estimated achievement of the performance metrics, is $111,128.


IRON MOUNTAIN JUNE 30, 2024 FORM 10-Q									14

Table of Contents

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(In thousands, except share and per share data) (Unaudited)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

I. ACQUISITION AND INTEGRATION COSTS

Acquisition and integration costs represent operating expenditures directly associated with the closing and integration activities of our business acquisitions that have closed, or are highly probable of closing, and include (i) advisory, legal and professional fees to complete business acquisitions and (ii) costs to integrate acquired businesses into our existing operations, including move, severance and system integration costs (collectively, "Acquisition and Integration Costs").

Acquisition and Integration Costs for the three and six months ended June 30, 2024 and 2023 are as follows:


	THREE MONTHS ENDED JUNE 30,				SIX MONTHS ENDED JUNE 30,
	2024		2023		2024		2023
Acquisition and Integration Costs	$	9,502	$	1,511	$	17,311	$	3,106

J. LOSS (GAIN) ON DISPOSAL/WRITE-DOWN OF PROPERTY, PLANT AND EQUIPMENT, NET

Loss (gain) on disposal/write-down of property, plant and equipment, net for the three and six months ended June 30, 2024 and 2023 is as follows:


	THREE MONTHS ENDED JUNE 30,				SIX MONTHS ENDED JUNE 30,
	2024		2023		2024		2023(1)
Loss (gain) on disposal/write-down of property, plant and equipment, net	$	2,790	$	(1,505)	$	3,179	$	(14,566)

(1) The gains for the six months ended June 30, 2023 primarily consist of a gain of approximately $18,500 associated with a sale-leaseback transaction of a facility in Singapore during the first quarter 2023. The gains recognized during 2023 are the result of our program to monetize a small portion of our industrial assets through sale and sale-leaseback transactions. The terms for these leases are consistent with the terms of our lease portfolio, which are disclosed in detail in Note 2.j. to Notes to Consolidated Financial Statements included in our Annual Report.

K. OTHER EXPENSE (INCOME), NET

Other expense (income), net for the three and six months ended June 30, 2024 and 2023 consists of the following:


	THREE MONTHS ENDED JUNE 30,				SIX MONTHS ENDED JUNE 30,
DESCRIPTION	2024		2023		2024		2023
Foreign currency transaction losses (gains), net(1)	$	1,013	$	15,063	$	(15,366)	$	29,487
Other, net(2)	4,820		47,887		8,669		54,663
Other Expense (Income), Net	$	5,833	$	62,950	$	(6,697)	$	84,150

(1)The losses for the three and six months ended June 30, 2023 primarily consist of the impact of changes in the exchange rate of the British pound sterling against the United States dollar on our intercompany balances with and between certain of our subsidiaries.

(2)Other, net for the six months ended June 30, 2023 consists primarily of a loss of approximately $38,000 associated with the remeasurement to fair value of our previously held equity interest in the Clutter JV (as defined and discussed in Note 10) as well as losses on our equity method investments and the change in value of the Deferred Purchase Obligation (as defined in Note 3 to Notes to Consolidated Financial Statements included in our Annual Report).


IRON MOUNTAIN JUNE 30, 2024 FORM 10-Q									15

Table of Contents

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(In thousands, except share and per share data) (Unaudited)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

L. INCOME TAXES

We provide for income taxes during interim periods based on our estimate of the effective tax rate for the year. Our effective tax rates for the three and six months ended June 30, 2024 and 2023 are as follows:


	THREE MONTHS ENDED JUNE 30,				SIX MONTHS ENDED JUNE 30,
	2024(1)		2023(2)		2024		2023(2)
Effective Tax Rate	27.8	%	78.8	%	21.1	%	24.0	%

(1)The primary reconciling items between the federal statutory tax rate of 21.0% and our overall effective tax rate for the three months ended June 30, 2024 were the lack of tax benefits recognized for the year to date ordinary losses of certain entities, the benefits derived from the dividends paid deduction and the differences in the tax rates to which our foreign earnings are subject.

(2)The primary reconciling items between the federal statutory tax rate of 21.0% and our overall effective tax rate for the three and six months ended June 30, 2023 were (i) the loss of approximately $38,000 recorded in Other, net a component of Other expense (income), net during the second quarter of 2023 to reflect the remeasurement of our previously held equity interest in the Clutter JV to fair value, for which there was no tax impact, (ii) the benefits derived from the dividends paid deduction and (iii) the differences in the tax rates to which our foreign earnings are subject.

M. INCOME (LOSS) PER SHARE—BASIC AND DILUTED

The calculations of basic and diluted income (loss) per share for the three and six months ended June 30, 2024 and 2023 are as follows:


	THREE MONTHS ENDED JUNE 30,				SIX MONTHS ENDED JUNE 30,
	2024		2023		2024		2023
Net Income (Loss)	$	34,621	$	1,143	$	111,646	$	66,678
Less: Net (Loss) Income Attributable to Noncontrolling Interests	(1,162)		1,029		1,802		1,969
Net Income (Loss) Attributable to Iron Mountain Incorporated (utilized in numerator of Earnings Per Share calculation)	$	35,783	$	114	$	109,844	$	64,709
Weighted-average shares—basic	293,340,000		291,825,000		293,043,000		291,633,000
Effect of dilutive potential stock options