Item 15. Exhibits and Financial Statement Schedules.

(a) Financial Statements filed as part of this report:

		Page
Iron Mountain Incorporated
Report of Independent Registered Public Accounting Firm		74
Consolidated Balance Sheets, December 31, 2019 and 2018		76
Consolidated Statements of Operations, Years Ended December 31, 2019, 2018 and 2017		77
Consolidated Statements of Comprehensive Income (Loss), Years Ended December 31, 2019, 2018 and 2017		78
Consolidated Statements of Equity, Years Ended December 31, 2019, 2018 and 2017		79
Consolidated Statements of Cash Flows, Years Ended December 31, 2019, 2018 and 2017		80
Notes to Consolidated Financial Statements		81
Financial Statement Schedule III—Schedule of Real Estate and Accumulated Depreciation		160

(b)	Exhibits filed as part of this report: As listed in the Exhibit Index following the Financial Statement Schedule III-Schedule of Real Estate and Accumulated Depreciation.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of Iron Mountain Incorporated

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Iron Mountain Incorporated and subsidiaries (the "Company") as of December 31, 2019 and 2018, the related consolidated statements of operations, comprehensive income (loss), equity, and cash flows, for each of the three years in the period ended December 31, 2019, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 13, 2020, expressed an unqualified opinion on the Company's internal control over financial reporting.

Change in Accounting Principle

As discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting for leases in 2019 due to the adoption of Accounting Standards Update No. 2016-02, Leases (Topic 842), as amended, using the modified retrospective approach.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Goodwill - Global Data Center Reporting Unit - Refer to Note 2.h. to the financial statements

Critical Audit Matter Description

The Company’s evaluation of goodwill for impairment involves the comparison of the fair value of each reporting unit to its carrying value. The Company determined the fair value of the Global Data Center reporting unit using a combined approach based on the present value of future cash flows (the "Discounted Cash Flow Model") and market multiples (the "Market Approach"). The determination of the fair value using the Discounted Cash Flow Model requires management to make significant assumptions related to future revenue growth rates, operating margins, discount rates and capital expenditures. The determination of the fair value using the Market Approach requires management to make significant assumptions related to adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") multiples. Changes in economic and operating conditions impacting these assumptions or changes in multiples could result in goodwill impairments in future periods. The goodwill balance allocated to the Global Data Center reporting unit was $421 million as of October 1, 2019 (goodwill impairment testing date). The fair value of the Global Data Center reporting unit exceeded its carrying value as of the measurement date and, therefore, no impairment was recognized.

The Global Data Center reporting unit's fair value exceeded its carrying value by less than 10%, accordingly, auditing the assumptions used in the goodwill impairment analysis for this reporting unit involved especially subjective judgment.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to future revenue growth rates, operating margins and capital expenditures (collectively, the "Forecast"), Adjusted EBITDA multiples and the selection of discount rates for the Global Data Center reporting unit included the following, among others:

•	We tested the effectiveness of controls over goodwill, including those over the Forecast and the selection of the Adjusted EBITDA multiples and discount rates.

•	We evaluated management’s ability to accurately forecast by comparing actual results to management’s historical forecasts.

•	We evaluated the reasonableness of management’s Forecast by comparing it to (1) historical results, (2) internal communications to management and the Board of Directors, and (3) forecasted information included in Company press releases and industry reports of the Company and companies in its peer group.

•	With the assistance of our fair value specialists, we evaluated the Adjusted EBITDA multiples, including testing the underlying source information and mathematical accuracy of the calculations and comparing the multiples selected by management to its guideline companies.

•	With the assistance of our fair value specialists, we evaluated the discount rates, including testing the underlying source information and the mathematical accuracy of the calculations, and developing a range of independent estimates and comparing those to the discount rates selected by management.

/s/ DELOITTE & TOUCHE LLP

Boston, Massachusetts

February 13, 2020

We have served as the Company's auditor since 2002.

IRON MOUNTAIN INCORPORATED

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

	December 31,
	2019				2018
ASSETS
Current Assets:
Cash and cash equivalents	$	193,555			$	165,485
Accounts receivable (less allowances of $42,856 and $43,584 as of December 31, 2019 and 2018, respectively)	850,701				846,889
Prepaid expenses and other	192,083				195,740
Total Current Assets	1,236,339				1,208,114
Property, Plant and Equipment:
Property, plant and equipment	8,048,906				7,600,949
Less—Accumulated depreciation	(3,425,869		)		(3,111,392		)
Property, Plant and Equipment, net	4,623,037				4,489,557
Other Assets, Net:
Goodwill	4,485,209				4,441,030
Customer relationships, customer inducements and data center lease-based intangibles	1,393,183				1,506,522
Operating lease right-of-use assets (see Note 2.m.)	1,869,101				—
Other	209,947				211,995
Total Other Assets, Net	7,957,440				6,159,547
Total Assets	$	13,816,816			$	11,857,218
LIABILITIES AND EQUITY
Current Liabilities:
Current portion of long-term debt	$	389,013			$	126,406
Accounts payable	324,708				318,765
Accrued expenses and other current liabilities (includes current portion of operating lease liabilities, see Note 2.m.)	961,752				780,781
Deferred revenue	274,036				264,823
Total Current Liabilities	1,949,509				1,490,775
Long-term Debt, net of current portion	8,275,566				8,016,417
Long-term Operating Lease Liabilities, net of current portion (see Note 2.m.)	1,728,686				—
Other Long-term Liabilities	143,018				111,331
Deferred Rent (see Note 2.m.)	—				121,864
Deferred Income Taxes	188,128				183,836
Commitments and Contingencies (see Note 10)
Redeemable Noncontrolling Interests (see Note 2.v.)	67,682				70,532
Equity:
Iron Mountain Incorporated Stockholders' 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 287,299,645 shares and 286,321,009 shares as of December 31, 2019 and 2018, respectively)	2,873				2,863
Additional paid-in capital	4,298,566				4,263,348
(Distributions in excess of earnings) Earnings in excess of distributions	(2,574,896		)		(2,139,493		)
Accumulated other comprehensive items, net	(262,581		)		(265,664		)
Total Iron Mountain Incorporated Stockholders' Equity	1,463,962				1,861,054
Noncontrolling Interests	265				1,409
Total Equity	1,464,227				1,862,463
Total Liabilities and Equity	$	13,816,816			$	11,857,218

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

IRON MOUNTAIN INCORPORATED

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

	Year Ended December 31,
	2019				2018				2017
Revenues:
Storage rental	$	2,681,087			$	2,622,455			$	2,377,557
Service	1,581,497				1,603,306				1,468,021
Total Revenues	4,262,584				4,225,761				3,845,578
Operating Expenses:
Cost of sales (excluding depreciation and amortization)	1,833,315				1,793,954				1,664,825
Selling, general and administrative	991,664				1,006,983				937,180
Depreciation and amortization	658,201				639,514				522,376
Significant Acquisition Costs (see Note 2.x.)	13,293				50,665				84,901
Restructuring Charges (see Note 14)	48,597				—				—
Intangible impairments	—				—				3,011
(Gain) Loss on disposal/write-down of property, plant and equipment, net	(63,824		)		(73,622		)		(766		)
Total Operating Expenses	3,481,246				3,417,494				3,211,527
Operating Income (Loss)	781,338				808,267				634,051
Interest Expense, Net (includes Interest Income of $6,559, $6,553 and $7,659 in 2019, 2018 and 2017, respectively)	419,298				409,648				353,645
Other Expense (Income), Net	33,898				(11,692		)		79,429
Income (Loss) from Continuing Operations Before Provision (Benefit) for Income Taxes	328,142				410,311				200,977
Provision (Benefit) for Income Taxes	59,931				42,753				22,962
Income (Loss) from Continuing Operations	268,211				367,558				178,015
Income (Loss) from Discontinued Operations, Net of Tax	104				(12,427		)		(6,291		)
Net Income (Loss)	268,315				355,131				171,724
Less: Net Income (Loss) Attributable to Noncontrolling Interests	938				1,198				1,611
Net Income (Loss) Attributable to Iron Mountain Incorporated	$	267,377			$	353,933			$	170,113
Earnings (Losses) per Share—Basic:
Income (Loss) from Continuing Operations	$	0.93			$	1.28			$	0.66
Total (Loss) Income from Discontinued Operations, Net of Tax	$	—			$	(0.04	)		$	(0.02	)
Net Income (Loss) Attributable to Iron Mountain Incorporated	$	0.93			$	1.24			$	0.64
Earnings (Losses) per Share—Diluted:
Income (Loss) from Continuing Operations	$	0.93			$	1.28			$	0.66
Total (Loss) Income from Discontinued Operations, Net of Tax	$	—			$	(0.04	)		$	(0.02	)
Net Income (Loss) Attributable to Iron Mountain Incorporated	$	0.93			$	1.23			$	0.64
Weighted Average Common Shares Outstanding—Basic	286,971				285,913				265,898
Weighted Average Common Shares Outstanding—Diluted	287,687				286,653				266,845

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

IRON MOUNTAIN INCORPORATED

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

	Year Ended December 31,
	2019				2018				2017
Net Income (Loss)	$	268,315			$	355,131			$	171,724
Other Comprehensive Income (Loss):
Foreign Currency Translation Adjustment	11,994				(164,107		)		108,564
Change in Fair Value of Derivative Instruments	(8,783		)		(973		)		—
Total Other Comprehensive Income (Loss)	3,211				(165,080		)		108,564
Comprehensive Income (Loss)	271,526				190,051				280,288
Comprehensive Income (Loss) Attributable to Noncontrolling Interests	1,066				(2,207		)		1,591
Comprehensive Income (Loss) Attributable to Iron Mountain Incorporated	$	270,460			$	192,258			$	278,697

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

IRON MOUNTAIN INCORPORATED

CONSOLIDATED STATEMENTS OF EQUITY

(In thousands, except share data)

					Iron Mountain Incorporated Stockholders' Equity
					Common Stock
	Total				Shares			Amounts				Additional Paid-in Capital				Earnings in Excess of Distributions (Distributions in Excess of Earnings)				Accumulated Other Comprehensive Items, Net				Noncontrolling Interests					Redeemable Noncontrolling Interests
Balance, December 31, 2016	$	1,936,671			263,682,670			$	2,636			$	3,489,795			$	(1,343,311	)		$	(212,573	)		$	124				$	54,697
Issuance of shares under employee stock purchase plan and option plans and stock-based compensation	43,110				1,252,823			13				43,097				—				—				—					—
Issuance of shares in connection with the Equity Offering, net of underwriting discounts and offering expenses (see Note 12)	515,952				14,500,000			145				515,807				—				—				—					—
Issuance of shares through the At The Market (ATM) Equity Program, net of underwriting discounts and offering expenses (see Note 12)	58,566				1,481,053			15				58,551				—				—				—					—
Issuance of shares in connection with the Fortrust Transaction (see Note 6)	83,014				2,193,637			22				82,992				—				—				—					—
Change in value of redeemable noncontrolling interests (see Note 2.v.)	(25,680		)		—			—				(25,680		)		—				—				—					25,680
Parent cash dividends declared	(606,476		)		—			—				—				(606,476		)		—				—					—
Foreign currency translation adjustment	108,481				—			—				—				—				108,584				(103		)			83
Net income (loss)	171,945				—			—				—				170,113				—				1,832					(221		)
Noncontrolling interests equity contributions	—				—			—				—				—				—				—					13,230
Noncontrolling interests dividends	(1,956		)		—			—				—				—				—				(1,956		)			(2,051		)
Purchase of noncontrolling interests	1,507				—			—				—				—				—				1,507					—
Balance, December 31, 2017	2,285,134				283,110,183			2,831				4,164,562				(1,779,674		)		(103,989		)		1,404					91,418
Cumulative-effect adjustment for adoption of ASU 2014-09 (see Note 2.l.)	(30,233		)		—			—				—				(30,233		)		—				—					—
Issuance of shares under employee stock purchase plan and option plans and stock-based compensation	30,020				762,340			8				30,012				—				—				—					—
Issuance of shares in connection with the Over-Allotment Option, net of underwriting discounts and offering expenses (see Note 12)	76,192				2,175,000			22				76,170				—				—				—					—
Issuance of shares through the At The Market (ATM) Equity Program, net of underwriting discounts and offering expenses (see Note 12)	8,716				273,486			2				8,714				—				—				—					—
Changes in equity related redeemable noncontrolling interests (see Note 2.v.)	(16,110		)		—			—				(16,110		)		—				—				—					(16,151		)
Parent cash dividends declared	(683,519		)		—			—				—				(683,519		)		—				—					—
Foreign currency translation adjustment	(160,548		)		—			—				—				—				(160,702		)		154					(3,559		)
Change in fair value of derivative instruments	(973		)		—			—				—				—				(973		)		—					—
Net income (loss)	353,784				—			—				—				353,933				—				(149		)			1,347
Noncontrolling interests dividends	—				—			—				—				—				—				—					(2,523		)
Balance, December 31, 2018	1,862,463				286,321,009			2,863				4,263,348				(2,139,493		)		(265,664		)		1,409					70,532
Cumulative-effect adjustment for adoption of ASU 2016-02 (see Note 2.m.)	5,781				—			—				—				5,781				—				—					—
Issuance of shares under employee stock purchase plan and option plans and stock-based compensation	36,682				978,636			10				36,672				—				—				—					—
Changes in equity related redeemable noncontrolling interests (see Note 2.v.)	(1,454		)		—			—				(1,454		)		—				—				—					(3,136		)
Parent cash dividends declared	(708,561		)		—			—				—				(708,561		)		—				—					—
Foreign currency translation adjustment	11,866				—			—				—				—				11,866				—					128
Change in fair value of derivative instruments	(8,783		)		—			—				—				—				(8,783		)		—					—
Net income (loss)	266,233				—			—				—				267,377				—				(1,144		)			2,082
Noncontrolling interests dividends	—				—			—				—				—				—				—					(1,924		)
Balance, December 31, 2019	$	1,464,227			287,299,645			$	2,873			$	4,298,566			$	(2,574,896	)		$	(262,581	)		$	265				$	67,682

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

IRON MOUNTAIN INCORPORATED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Year Ended December 31,
	2019				2018				2017
Cash Flows from Operating Activities:
Net income (loss)	$	268,315			$	355,131			$	171,724
(Income) loss from discontinued operations	(104		)		12,427				6,291
Adjustments to reconcile net income (loss) to cash flows from operating activities:
Depreciation	456,323				452,740				406,283
Amortization (includes amortization of deferred financing costs and discounts of $16,740, $15,675 and $14,962 in 2019, 2018 and 2017, respectively)	218,618				202,449				131,055
Intangible impairments	—				—				3,011
Revenue reduction associated with amortization of permanent withdrawal fees and above- and below-market leases (see Note 2.i.)	13,703				16,281				11,253
Stock-based compensation expense	35,654				31,167				30,019
(Benefit) provision for deferred income taxes	(624		)		(4,239		)		(39,355		)
Loss on early extinguishment of debt	—				—				78,368
(Gain) loss on disposal/write-down of property, plant and equipment, net	(63,824		)		(74,134		)		(766		)
Gain on Russia and Ukraine Divestment (see Note 13)	—				—				(38,869		)
Foreign currency transactions and other, net	29,838				(16,395		)		50,503
Decrease (increase) in assets	5,404				(36,054		)		(93,805		)
Increase (decrease) in liabilities	3,352				(2,829		)		8,547
Cash Flows from Operating Activities-Continuing Operations	966,655				936,544				724,259
Cash Flows from Operating Activities-Discontinued Operations	—				(995		)		(3,291		)
Cash Flows from Operating Activities	966,655				935,549				720,968
Cash Flows from Investing Activities:
Capital expenditures	(692,983		)		(460,062		)		(343,131		)
Cash paid for acquisitions, net of cash acquired (see Note 6)	(58,237		)		(1,758,557		)		(219,705		)
Acquisition of customer relationships	(46,105		)		(63,577		)		(55,126		)
Customer inducements (see Note 2.i.)	(9,371		)		(8,902		)		(20,059		)
Customer fulfillment costs and third party commissions (see Note 2.l.)	(76,171		)		(26,208		)		—
Net proceeds from divestments (see Note 13)	—				1,019				29,236
Investments in Joint Ventures (see Note 13)	(19,222		)		—				—
Proceeds from sales of property and equipment and other, net (including real estate) and proceeds from involuntary conversion of property and equipment	166,143				86,159				9,337
Cash Flows from Investing Activities-Continuing Operations	(735,946		)		(2,230,128		)		(599,448		)
Cash Flows from Investing Activities-Discontinued Operations	5,061				8,250				—
Cash Flows from Investing Activities	(730,885		)		(2,221,878		)		(599,448		)
Cash Flows from Financing Activities:
Repayment of revolving credit facilities, term loan facilities and other debt	(14,535,115		)		(14,192,139		)		(14,429,695		)
Proceeds from revolving credit facilities, term loan facilities and other debt	14,059,818				15,351,614				13,917,055
Early retirement of senior subordinated and senior notes	—				—				(1,746,856		)
Net proceeds from sales of senior notes	987,500				—				2,656,948
Debt financing and equity contribution from noncontrolling interests	—				—				13,230
Debt repayment and equity distribution to noncontrolling interests	(1,924		)		(2,523		)		(4,151		)
Parent cash dividends	(704,526		)		(673,635		)		(439,999		)
Net proceeds associated with the Equity Offering, including Over-Allotment Option	—				76,192				516,462
Net proceeds associated with the At The Market (ATM) Program	—				8,716				59,129
Net proceeds (payments) associated with employee stock-based awards	1,027				(1,142		)		13,095
Payment of debt financing and stock issuance costs and other	(5,753		)		(16,405		)		(14,793		)
Cash Flows from Financing Activities-Continuing Operations	(198,973		)		550,678				540,425
Cash Flows from Financing Activities-Discontinued Operations	—				—				—
Cash Flows from Financing Activities	(198,973		)		550,678				540,425
Effect of Exchange Rates on Cash and Cash Equivalents	(8,727		)		(24,563		)		27,270
Increase (decrease) in Cash and Cash Equivalents	28,070				(760,214		)		689,215
Cash and Cash Equivalents, including Restricted Cash, Beginning of Year	165,485				925,699				236,484
Cash and Cash Equivalents, including Restricted Cash, End of Year	$	193,555			$	165,485			$	925,699
Supplemental Information:
Cash Paid for Interest	$	394,984			$	388,440			$	368,468
Cash Paid for Income Taxes, Net	$	61,691			$	64,493			$	104,498
Non-Cash Investing and Financing Activities:
Financing Leases (see Note 2.m.)	$	32,742			$	83,948			$	166,843
Accrued Capital Expenditures	$	82,345			$	84,143			$	71,098
Accrued Purchase Price and Other Holdbacks (see Note 6)	$	4,135			$	35,218			$	20,093
Dividends Payable	$	186,021			$	181,986			$	172,102
Fair Value of Stock Issued for Fortrust Transaction (see Note 6)	$	—			$	—			$	83,014

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

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2019

(In thousands, except share and per share data)

1. Nature of Business

The accompanying financial statements represent the consolidated accounts of Iron Mountain Incorporated, a Delaware corporation (“IMI”), and its subsidiaries (“we” or “us”). We help organizations around the world protect their information, reduce storage rental costs, comply with regulations, facilitate corporate disaster recovery, and better use their information and information technology ("IT") infrastructure for business advantages, regardless of its format, location or life cycle stage. We do this by storing physical records and data backup media, offering information management solutions, and providing data center space for enterprise-class colocation and opportunistic hyperscale data center deployments. We offer comprehensive records and information management services and data management services, along with the expertise and experience to address complex storage and information management challenges such as rising storage rental costs, legal and regulatory compliance, and disaster recovery requirements. We provide secure and reliable data center facilities to protect digital information and ensure the continued operation of our customers’ IT infrastructure, with reliable and flexible deployment options.

In October 2019, we announced a global program designed to better position us for future growth and achievement of our strategic objectives (“Project Summit”). Project Summit focuses on simplifying our global structure by combining our core records and information management operations under one global leader and rebalancing our resources, streamlining managerial structures and leveraging our global and regional customer facing resources. We are also implementing systems and process changes designed to make our organization more agile and dynamic, streamline our organization and reallocate our resources to better align with our strategic goals as part of Project Summit. The activities associated with Project Summit began in the fourth quarter of 2019 and are expected to be substantially complete by the end of 2021. See Note 2.h., Note 9 and Note 14.

On January 1, 2019, we adopted Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842), as amended ("ASU 2016-02"). See Note 2.m.

On January 10, 2018, we completed the acquisition of IO Data Centers, LLC ("IODC"). See Note 6.

On January 1, 2018, we adopted ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"). See Note 2.l.

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

2. Summary of Significant Accounting Policies

a. Principles of Consolidation

The accompanying financial statements reflect our financial position, results of operations, comprehensive income (loss), equity and cash flows on a consolidated basis. All intercompany transactions and account balances have been eliminated.

b. Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires us to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of the financial statements and for the period then ended. On an ongoing basis, we evaluate the estimates used. We base our estimates on historical experience, actuarial estimates, current conditions and various other assumptions that we believe to be reasonable under the circumstances. These estimates form the basis for making judgments about the carrying values of assets and liabilities and are not readily apparent from other sources. Actual results may differ from these estimates.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

2. Summary of Significant Accounting Policies (Continued)

c. Cash, Cash Equivalents and Restricted Cash

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.

At December 31, 2019 and 2018, we had $4,865 and $15,141, respectively, of restricted cash held by certain financial institutions related to bank guarantees.

d. Foreign Currency

Local currencies are the functional currencies for our operations outside the United States, with the exception of certain foreign holding companies, whose functional currency is the United States dollar. In those instances where the local currency is the functional currency, assets and liabilities are translated at period-end exchange rates, and revenues and expenses are translated at average exchange rates for the applicable period. Resulting translation adjustments are reflected in the accumulated other comprehensive, net component of Iron Mountain Incorporated Stockholders' Equity. See Note 2.t.

e. Derivative Instruments and Hedging Activities

Every derivative instrument is required to be recorded in the balance sheet as either an asset or a liability measured at its fair value. Periodically, we acquire derivative instruments that are intended to hedge either cash flows or values that are subject to foreign exchange or other market price risk and not for trading purposes. We have formally documented our hedging relationships, including identification of the hedging instruments and the hedged items, as well as our risk management objectives and strategies for undertaking each hedge transaction. Given the recurring nature of our revenues and the long-term nature of our asset base, we have the ability and the preference to use long-term, fixed interest rate debt to finance our business, thereby preserving our long-term returns on invested capital. We target approximately 75% of our debt portfolio to be fixed with respect to interest rates. Occasionally, we may use interest rate swaps as a tool to maintain our targeted level of fixed rate debt. In addition, we may use borrowings in foreign currencies, either obtained in the United States or by our foreign subsidiaries, to hedge foreign currency risk associated with our international investments. Sometimes we enter into currency swaps to temporarily hedge an overseas investment, such as a major acquisition, while we arrange permanent financing or to hedge our exposure due to foreign currency exchange movements related to our intercompany accounts with and between our foreign subsidiaries. As of December 31, 2019 and 2018, none of our derivative instruments contained credit-risk related contingent features. See Note 3.

f. Property, Plant and Equipment

Property, plant and equipment are stated at cost and depreciated using the straight-line method with the following useful lives (in years):

	Range
Buildings and building improvements	5 to 40
Leasehold improvements	5 to 10 or life of the lease (whichever is shorter)
Racking	1 to 20 or life of the lease (whichever is shorter)
Warehouse equipment/vehicles	1 to 10
Furniture and fixtures	1 to 10
Computer hardware and software	2 to 5

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

2. Summary of Significant Accounting Policies (Continued)

Property, plant and equipment (including financing leases in the respective category), at cost, consist of the following:

	December 31,
	2019				2018
Land	$	448,566			$	400,980
Buildings and building improvements	3,029,309				2,991,307
Leasehold improvements	852,022				770,666
Racking	2,040,832				2,001,831
Warehouse equipment/vehicles	483,218				481,515
Furniture and fixtures	54,275				56,207
Computer hardware and software	689,261				680,283
Construction in progress	451,423				218,160
	$	8,048,906			$	7,600,949

Minor maintenance costs are expensed as incurred. Major improvements which extend the life, increase the capacity or improve the safety or the efficiency of property owned are capitalized and depreciated. Major improvements to leased buildings are capitalized as leasehold improvements and depreciated.

We capitalize interest expense during the active construction period of major capital projects. Capitalized interest is added to the cost of the underlying assets and is amortized over the useful lives of the assets. During the years ended December 31, 2019 and 2018, we capitalized interest of $15,980 and $3,732, respectively. The amount of capitalized interest during the year ended December 31, 2017 was insignificant.

We develop various software applications for internal use. Computer software costs associated with internal use software are expensed as incurred until certain capitalization criteria are met. Third party consulting costs, as well as payroll and related costs for employees directly associated with, and devoting time to, the development of internal use computer software projects (to the extent time is spent directly on the project) are capitalized. During the years ended December 31, 2019, 2018 and 2017, we capitalized $34,650, $29,407 and $25,166 of costs, respectively, associated with the development of internal use computer software projects. Capitalization begins when the design stage of the application has been completed and it is probable that the project will be completed and used to perform the function intended. Capitalization ends when the asset is ready for its intended use. Depreciation begins when the software is placed in service. Computer software costs that are capitalized are periodically evaluated for impairment.

Entities are required to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred. Asset retirement obligations represent the costs to replace or remove tangible long-lived assets required by law, regulatory rule or contractual agreement. Our asset retirement obligations are primarily the result of requirements under our facility lease agreements which generally have "return to original condition" clauses which would require us to remove or restore items such as shred pits, vaults, demising walls and office build-outs, among others. The significant assumptions used in estimating our aggregate asset retirement obligations are the timing of removals, the probability of a requirement to perform, estimated cost and associated expected inflation rates that are consistent with historical rates and credit-adjusted risk-free rates that approximate our incremental borrowing rate. Our asset retirement obligations at December 31, 2019 and 2018 were $30,831 and $28,256, respectively.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

2. Summary of Significant Accounting Policies (Continued)

g. Long-Lived Assets

We review long-lived assets, including all finite-lived intangible assets, for impairment whenever events or changes in circumstances indicate the carrying amount of such assets may not be recoverable. Recoverability of these assets is determined by comparing the sum of the forecasted undiscounted net cash flows of the operation to which the assets relate to their carrying amount. The operations are generally distinguished by the business segment and geographic region in which they operate. If it is determined that we are unable to recover the carrying amount of the assets, the long-lived assets are written down, on a pro rata basis, to fair value. Fair value is determined based on discounted cash flows or appraised values, depending upon the nature of the assets. Long-lived assets, including finite-lived intangible assets, are amortized over their useful lives. Annually, or more frequently if events or circumstances warrant, we assess whether a change in the lives over which long-lived assets, including finite-lived intangible assets, are amortized is necessary.

Consolidated gain on disposal/write-down of property, plant and equipment, net, for the year ended December 31, 2019 was $63,824. The gain consisted primarily of gains associated with (i) sale and sale-leaseback transactions involving the sales of facilities in the United States of approximately $67,800 and (ii) the sale of certain land and buildings in the United Kingdom of approximately $36,000. These gains were partially offset by losses primarily associated with (i) the impairment charge on the assets associated with the select offerings within our Iron Cloud portfolio (as defined and described below) and (ii) the write-down of certain property, plant and equipment in the United States of approximately $15,700.

During the second quarter of 2019, we began exploring strategic options regarding how to maintain and support the infrastructure of select offerings within our Iron Mountain Iron Cloud (“Iron Cloud”) portfolio. As a result, during the second quarter of 2019, we performed a long-lived asset impairment analysis on the assets associated with these select offerings and concluded that the associated carrying value of the long-lived assets (which consisted entirely of property, plant and equipment) was not recoverable based upon the underlying cash flows associated with these select offerings. On September 30, 2019, we entered into an agreement (the “Iron Cloud Outsourcing Agreement”) with a wholesale provider of data infrastructure and data management services to outsource the operation, infrastructure management and maintenance and delivery of select offerings within our Iron Cloud portfolio. In conjunction with the entry into the Iron Cloud Outsourcing Agreement, we also sold certain IT infrastructure assets and the rights to certain hardware and software maintenance contracts used to deliver these Iron Cloud offerings. As a result of our long-lived asset impairment analysis and sale of certain IT infrastructure assets and rights to certain hardware and software maintenance contracts, we recognized an impairment charge and a loss on sale of the assets totaling approximately $25,000 during the year ended December 31, 2019.

Consolidated gain on disposal/write-down of property, plant and equipment, net for the year ended December 31, 2018 was $73,622. The gain consisted primarily of (i) the gain on sale of real estate for the sale of buildings in the United Kingdom of approximately $63,800 and (ii) gains associated with the involuntary conversion of assets included in a facility that we own in Argentina which was partially destroyed in a fire in 2014, for which we received insurance proceeds in excess of the carrying amount of such assets during the fourth quarter of 2018. See Note 10.

h. Goodwill and Other Indefinite-Lived Intangible Assets

Goodwill and intangible assets with indefinite lives are not amortized but are reviewed annually for impairment or more frequently if impairment indicators arise. Other than goodwill, we currently have no intangible assets that have indefinite lives and which are not amortized.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

2. Summary of Significant Accounting Policies (Continued)

We have selected October 1 as our annual goodwill impairment review date. We have performed our annual goodwill impairment review as of October 1, 2019, 2018 and 2017. We concluded that as of October 1, 2019 and October 1, 2018, goodwill was not impaired. As of October 1, 2017, we determined that the fair value of the Consumer Storage reporting unit was less than its carrying value and, therefore, we recorded a $3,011 impairment charge, which represented a full write-off of all goodwill associated with this reporting unit. We concluded that the goodwill associated with each of our other reporting units was not impaired as of October 1, 2017.

Our reporting units at which level we performed our goodwill impairment analysis as of December 31, 2017 were as follows: (1) North American Records and Information Management; (2) North American Data Management; (3) Consumer Storage; (4) Fine Arts; (5) Western Europe; (6) Northern/Eastern Europe and Middle East, Africa and India ("NEE and MEAI"); (7) Latin America; (8) Australia and New Zealand; (9) Asia; and (10) Global Data Center.

The following is a discussion regarding (i) the reporting units at which level we tested goodwill for impairment as of October 1, 2018, (ii) changes to the composition of our reporting units between October 1, 2018 and December 31, 2018, (iii) the reporting units at which level we tested goodwill for impairment as of October 1, 2019 and (iv) changes to the composition of our reporting units between October 1, 2019 and December 31, 2019 (including the amount of goodwill associated with each reporting unit). When changes occur in the composition of one or more reporting units, the goodwill is reassigned to the reporting units affected based upon their relative fair values.

Goodwill Impairment Analysis - 2018

a. Reporting Units as of October 1, 2018

Our reporting units at which level we performed our goodwill impairment analysis as of October 1, 2018 were as follows: (1) North American Records and Information Management; (2) North American Data Management; (3) Consumer Storage; (4) Fine Arts; (5) Entertainment Services; (6) Western Europe; (7) Northern/Eastern Europe and Middle East and India ("NEE and MEI"); (8) Latin America; (9) Australia, New Zealand and South Africa ("ANZ SA"); (10) Asia; and (11) Global Data Center. We concluded that the goodwill associated with each of our reporting units was not impaired as of October 1, 2018.

b. Changes to Composition of Reporting Units between October 1, 2018 and December 31, 2018

During the fourth quarter of 2018, as a result of changes in the management of our Information Governance and Digital Solutions business in Sweden, we reassessed the composition of our reporting units. As part of this reassessment, we determined that our Information Governance and Digital Solutions business in Sweden (which was previously managed along with our other businesses within the Western Europe reporting unit) was at the time being managed in conjunction with our businesses included in our NEE and MEI reporting unit, which already included the remainder of our business in Sweden. We concluded that the goodwill associated with our Western Europe and NEE and MEI reporting units was not impaired following this change in reporting units.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

2. Summary of Significant Accounting Policies (Continued)

Goodwill by Reporting Unit as of December 31, 2018

The carrying value of goodwill, net for each of our reporting units described above as of December 31, 2018 is as follows:

	Carrying Value as of December 31, 2018
North American Records and Information Management(1)	$	2,251,795
North American Data Management(2)	493,491
Consumer Storage(3)	—
Fine Arts(3)	35,526
Entertainment Services(3)	34,233
Western Europe(4)	381,806
NEE and MEI(5)	169,780
Latin America(5)	136,099
ANZ SA(5)	300,204
Asia(5)	212,140
Global Data Center(6)	425,956
Total	$	4,441,030

---

(1) This reporting unit comprised our former North American Records and Information Management Business segment.

(2) This reporting unit comprised our former North American Data Management Business segment.

(3) This reporting unit was included in our Corporate and Other Business segment.

(4) This reporting unit comprised our former Western European Business segment.

(5) This reporting unit was included in our former Other International Business segment.

(6) This reporting unit comprised our Global Data Center Business segment.

Goodwill Impairment Analysis - 2019

a. Reporting Units as of October 1, 2019

Our reporting units at which level we performed our goodwill impairment analysis as of October 1, 2019 were as follows: (1) North American Records and Information Management; (2) North American Data Management; (3) Fine Arts; (4) Entertainment Services; (5) Western Europe; (6) NEE and MEI; (7) Latin America; (8) ANZ SA; (9) Asia; and (10) Global Data Center. We concluded that the goodwill associated with each of our reporting units was not impaired as of such date.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

2. Summary of Significant Accounting Policies (Continued)

b. Changes to Composition of Reporting Units between October 1, 2019 and December 31, 2019

During the fourth quarter of 2019, as a result of the realignment of our global managerial structure and changes to our internal financial reporting associated with Project Summit, we reassessed the composition of our reportable operating segments (see Note 9 for a description and definitions of our reporting operating segments) as well as our reporting units. As of December 31, 2019, we have nine reporting units. We note the following changes to our reporting units: (1) our former North American Records and Information Management (excluding our technology escrow services business) and North American Data Management reporting units are now being managed as our “North America RIM” reporting unit; (2) our former Western Europe and NEE and MEI reporting units (excluding India) and our business in Africa (which was previously managed as a component of our former ANZ SA reporting unit) is now being managed together as our “Europe RIM” reporting unit; (3) our business in India, which was previously managed as a component of our former NEE and MEI reporting unit is now being managed in conjunction with our businesses in Asia as our “Asia RIM” reporting unit; (4) our former Australia, New Zealand and South Africa reporting unit will no longer include South Africa and will be referred to as our “Australia and New Zealand RIM” (or “ANZ RIM”) reporting unit; and (5) our technology escrow services business is now being managed separately as our “Technology Escrow Services” reporting unit. There were no changes to our Global Data Center, Fine Arts, Entertainment Services and Latin America RIM reporting units. We concluded that the goodwill associated with our North America RIM, Europe RIM, ANZ RIM, Asia RIM and Technology Escrow Services reporting units were not impaired following this change in reporting units.

Goodwill by Reporting Unit as of December 31, 2019

The carrying value of goodwill, net for each of our reporting units described above as of December 31, 2019 is as follows:

	Carrying Value as of December 31, 2019
North America RIM(1)	$	2,715,550
Europe RIM(1)	572,482
Latin America RIM(1)	140,897
ANZ RIM(1)	274,913
Asia RIM(1)	239,059
Global Data Center(2)	424,568
Fine Arts(3)	37,533
Entertainment Services(3)	34,102
Technology Escrow Services(3)	46,105
Total	$	4,485,209

---

(1) This reporting unit is included in our Global RIM (as defined in Note 9) Business segment.

(2) This reporting unit comprises our Global Data Center Business segment.

(3) This reporting unit is included in our Corporate and Other Business segment.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

2. Summary of Significant Accounting Policies (Continued)

Reporting unit valuations have generally been determined using a combined approach based on the present value of future cash flows (the "Discounted Cash Flow Model") and market multiples (the "Market Approach"). The Discounted Cash Flow Model incorporates significant assumptions including future revenue growth rates, operating margins, discount rates and capital expenditures. The Market Approach requires us to make assumptions related to Adjusted EBITDA multiples. Changes in economic and operating conditions impacting these assumptions or changes in multiples could result in goodwill impairments in future periods. In conjunction with our annual goodwill impairment reviews, we reconcile the sum of the valuations of all of our reporting units to our market capitalization as of such dates.

The changes in the carrying value of goodwill attributable to each reportable operating segment for the years ended December 31, 2019 and 2018 is as follows:

	Global RIM Business				Global Data Center Business				Corporate and Other Business				Total Consolidated
Goodwill balance, net of accumulated amortization, as of December 31, 2017	$	3,964,114			$	—			$	106,153			$	4,070,267
Deductible goodwill acquired during the year	3,251				—				6,644				9,895
Non-deductible goodwill acquired during the year	34,230				429,853				3,620				467,703
Goodwill allocated to IMFS Divestment (see Note 13)	(1,202		)		—				—				(1,202		)
Fair value and other adjustments(1)	3,860				—				609				4,469
Currency effects	(105,043		)		(3,897		)		(1,162		)		(110,102		)
Goodwill balance, net of accumulated amortization, as of December 31, 2018	3,899,210				425,956				115,864				4,441,030
Deductible goodwill acquired during the year	16,450				—				—				16,450
Non-deductible goodwill acquired during the year	11,228				—				1,904				13,132
Fair value and other adjustments(2)	4,439				258				(417		)		4,280
Currency effects	11,574				(1,646		)		389				10,317
Goodwill balance, net of accumulated amortization, as of December 31, 2019	$	3,942,901			$	424,568			$	117,740			$	4,485,209
Accumulated Goodwill Impairment Balance as of December 31, 2018	$	132,409			$	—			$	3,011			$	135,420
Accumulated Goodwill Impairment Balance as of December 31, 2019	$	132,409			$	—			$	3,011			$	135,420

---

(1)	Total fair value and other adjustments primarily include net adjustments of $(2,717) primarily related to property, plant and equipment, customer relationship intangible assets and other liabilities and $7,186 of cash paid related to certain acquisitions completed in 2017.

(2)	Total fair value and other adjustments primarily include net adjustments of $4,942 primarily related to property, plant and equipment, customer relationship and data center lease-based intangible assets and deferred income taxes and other liabilities offset by $662 of net cash received related to certain acquisitions completed in 2018.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

2. Summary of Significant Accounting Policies (Continued)

i. Finite-lived Intangible Assets and Liabilities

i. Customer Relationship Intangible Assets

Customer relationship intangible assets, which are acquired through either business combinations or acquisitions of customer relationships, are amortized over periods ranging from 10 to 30 years (weighted average of 17 years at December 31, 2019) and are included in depreciation and amortization in the accompanying Consolidated Statements of Operations. The value of customer relationship intangible assets is calculated based upon estimates of their fair value.

ii. Customer Inducements

Upon the adoption of ASU 2014-09, free intake costs to transport boxes to one of our facilities, which include labor and transportation costs ("Free Move Costs"), are considered a Contract Fulfillment Cost (as defined in Note 2.l.) and, therefore, are now deferred and amortized and included in amortization expense over three years, consistent with the transfer of the performance obligation to the customer to which the asset relates. See Note 2.l. for information regarding the accounting for Free Move Costs, which are now a component of Intake Costs (as defined in Note 2.l.), following the adoption of ASU 2014-09.

Payments that are made to a customer's current records management vendor in order to terminate the customer's existing contract with that vendor, or direct payments to a customer ("Permanent Withdrawal Fees"), are amortized over periods ranging from five to 15 years (weighted average of seven years as of December 31, 2019) and are included in storage and service revenue in the accompanying Consolidated Statements of Operations. Our accounting for Permanent Withdrawal Fees did not change as a result of the adoption of ASU 2014-09.

Free Move Costs (prior to the adoption of ASU 2014-09) and Permanent Withdrawal Fees are collectively referred to as "Customer Inducements". If the customer terminates its relationship with us, the unamortized carrying value of the Customer Inducement intangible asset is charged to expense or revenue. However, in the event of such termination, we generally collect, and record as income, permanent removal fees that generally equal or exceed the amount of the unamortized Customer Inducement intangible asset.

iii. Data Center Intangible Assets and Liabilities

Finite-lived intangible assets associated with our Global Data Center Business consist of the following:

Data Center In-Place Lease Intangible Assets and Data Center Tenant Relationship Intangible Assets

Data Center In-Place Lease Intangible Assets (“Data Center In-Place Leases”) and Data Center Tenant Relationship Intangible Assets (“Data Center Tenant Relationships") are acquired through either business combinations or asset acquisitions in our Global Data Center Business. These intangible assets reflect the value associated with acquiring a data center operation with active tenants as of the date of acquisition. The value of Data Center In-Place Leases is determined based upon an estimate of the economic costs (such as lost revenues, tenant improvement costs, commissions, legal expenses and other costs to acquire new data center leases) avoided by acquiring a data center operation with active tenants that would have otherwise been incurred if the data center operation was purchased vacant. Data Center In-Place Leases are amortized over the weighted average remaining term of the acquired data center leases (weighted average of five years as of December 31, 2019) and are included in depreciation and amortization in the accompanying Consolidated Statements of Operations. The value of Data Center Tenant Relationships is determined based upon an estimate of the economic costs avoided upon lease renewal of the acquired tenants, based upon expectations of lease renewal. Data Center Tenant Relationships are amortized over the weighted average remaining anticipated life of the relationship with the acquired tenant (weighted average of eight years as of December 31, 2019) and are included in depreciation and amortization in the accompanying Consolidated Statements of Operations. Data Center In-Place Leases and Data Center Tenant Relationships are included in Customer relationships, customer inducements and data center lease-based intangibles in the accompanying Consolidated Balance Sheets.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

2. Summary of Significant Accounting Policies (Continued)

Data Center Above-Market and Below-Market In-Place Lease Intangible Assets

Data Center Above-Market In-Place Lease Intangible Assets (“Data Center Above-Market Leases”) and Data Center Below-Market In-Place Lease Intangible Assets (“Data Center Below-Market Leases”) are acquired through either business combinations or asset acquisitions in our Global Data Center Business. We record Data Center Above-Market Leases and Data Center Below-Market Leases at the net present value of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of the fair market lease rates for each corresponding in-place lease. Data Center Above-Market Leases (weighted average of four years as of December 31, 2019) and Data Center Below-Market Leases (weighted average of nine years as of December 31, 2019) are amortized over the remaining non-cancellable term of the acquired in-place lease to storage revenue in the accompanying Consolidated Statements of Operations. Data Center Above-Market Leases are included in Customer relationships, customer inducements and data center lease-based intangibles in the accompanying Consolidated Balance Sheets. Data Center Below-Market Leases are included in Other long-term liabilities in the accompanying Consolidated Balance Sheets.

The gross carrying amount and accumulated amortization of our finite-lived intangible assets as of December 31, 2019 and 2018, respectively, are as follows:

	December 31, 2019												December 31, 2018
	Gross Carrying Amount				Accumulated Amortization				Net Carrying Amount				Gross Carrying Amount				Accumulated Amortization				Net Carrying Amount
Assets:
Customer relationship intangible assets	$	1,751,848			$	(544,721	)		$	1,207,127			$	1,718,919			$	(455,705	)		$	1,263,214
Customer inducements	52,718				(29,397		)		23,321				56,478				(34,181		)		22,297
Data center lease-based intangible assets(1)	265,945				(103,210		)		162,735				271,818				(50,807		)		221,011
Third-party commissions asset(2)	31,708				(4,134		)		27,574				30,071				(1,089		)		28,982
	$	2,102,219			$	(681,462	)		$	1,420,757			$	2,077,286			$	(541,782	)		$	1,535,504
Liabilities:
Data center below-market leases	$	12,750			$	(3,937	)		$	8,813			$	12,318			$	(1,642	)		$	10,676

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(1)	Includes Data Center In-Place Leases, Data Center Tenant Relationships and Data Center Above-Market Leases.

(2)	Third-party commissions asset is included in Other, a component of Other assets, net in the accompanying Consolidated Balance Sheets as of December 31, 2019 and 2018. See Note 6 for additional information on the third-party commissions asset.

Other finite-lived intangible assets, including trade names, noncompetition agreements and trademarks, are capitalized and amortized over a weighted average of four years as of December 31, 2019, and are included in depreciation and amortization in the accompanying Consolidated Statements of Operations.

	December 31, 2019												December 31, 2018
	Gross Carrying Amount				Accumulated Amortization				Net Carrying Amount				Gross Carrying Amount				Accumulated Amortization				Net Carrying Amount
Other finite-lived intangible assets (included in Other, a component of Other assets, net)	$	19,893			$	(18,405	)		$	1,488			$	20,310			$	(14,798	)		$	5,512

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

2. Summary of Significant Accounting Policies (Continued)

Amortization expense associated with finite-lived intangible assets, revenue reduction associated with the amortization of Permanent Withdrawal Fees and net revenue reduction associated with the amortization of Data Center Above-Market Leases and Data Center Below-Market Leases for the years ended December 31, 2019, 2018 and 2017 are as follows:

		Year Ended December 31,
		2019				2018				2017
Amortization expense included in depreciation and amortization associated with:
Customer relationship and customer inducement intangible assets		$	117,972			$	113,782			$	109,563
Data center in-place leases and tenant relationships		46,696				43,061				—
Third-party commissions asset and other finite-lived intangible assets		7,957				5,713				6,530
Revenue reduction associated with amortization of:
Permanent withdrawal fees		$	9,993			$	11,408			$	11,253
Data center above-market leases and data center below-market leases		3,710				4,873				—

Estimated amortization expense for existing finite-lived intangible assets (excluding deferred financing costs, as disclosed in Note 2.j. and Contract Fulfillment Costs, as defined and disclosed in Note 2.l.) is as follows:

	Estimated Amortization
	Included in Depreciation and Amortization				Revenue Reduction Associated with the Amortization of Permanent Withdrawal Fees				Revenue Reduction (Increase) Associated with Amortization of Data Center Above-market leases and Below-market leases
2020	$	160,865			$	7,760			$	872
2021	157,647				5,207				234
2022	127,148				3,200				273
2023	121,256				2,112				(470		)
2024	116,253				1,125				(610		)
Thereafter	712,369				1,303				(3,112		)

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

2. Summary of Significant Accounting Policies (Continued)

j. Deferred Financing Costs

Deferred financing costs are amortized over the life of the related debt. If debt is retired early, the related unamortized deferred financing costs are written-off in the period the debt is retired to Other expense (income), net. As of December 31, 2019 and 2018, the gross carrying amount of deferred financing costs was $144,981 and $128,469, respectively, and accumulated amortization of those costs was $58,016 and $41,862, respectively. Unamortized deferred financing costs are included as a component of Long-term debt in our Consolidated Balance Sheets.

Estimated amortization expense for deferred financing costs, which are amortized as a component of interest expense, is as follows:

	Estimated Amortization of Deferred Financing Costs
2020	$	17,132
2021	16,002
2022	14,888
2023	11,618
2024	8,424
Thereafter	18,901

k. Prepaid Expenses and Accrued Expenses

There are no prepaid expenses with items greater than 5% of total current assets as of December 31, 2019 and 2018.

Accrued expenses, with items greater than 5% of total current liabilities are shown separately, and consist of the following:

	December 31,
	2019				2018
Interest	$	97,987			$	84,283
Incentive compensation	56,662				75,256
Sales tax and VAT payable	115,352				124,232
Dividend	186,021				181,986
Operating lease liabilities	223,249				—
Other	282,481				315,024
Accrued expenses	$	961,752			$	780,781

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

2. Summary of Significant Accounting Policies (Continued)

l. Revenues

Our revenues consist of storage rental revenues as well as service revenues and are reflected net of sales and value-added taxes. Storage rental revenues, which are considered a key driver of financial performance for the storage and information management services industry, consist primarily of recurring periodic rental charges related to the storage of materials or data (generally on a per unit basis) that are typically retained by customers for many years, technology escrow services that protect and manage source code and revenues associated with our data center operations. Service revenues include charges for related service activities, the most significant of which include: (1) the handling of records, including the addition of new records, temporary removal of records from storage, refiling of removed records and courier operations, consisting primarily of the pickup and delivery of records upon customer request; (2) destruction services, consisting primarily of secure shredding of sensitive documents and the subsequent sale of shredded paper for recycling, the price of which can fluctuate from period to period, and customer termination and permanent removal fees; (3) other services, including the scanning, imaging and document conversion services of active and inactive records and project revenues; and (4) consulting services.

In May 2014, the Financial Accounting Standards Board ("FASB") issued ASU 2014-09. ASU 2014-09 provides guidance for management to reassess revenue recognition as it relates to: (1) transfer of control, (2) variable consideration, (3) allocation of transaction price based on relative standalone selling price, (4) licenses, (5) time value of money, and (6) contract costs. We adopted ASU 2014-09 as of January 1, 2018 using the modified retrospective method for all of our customer contracts, whereby the cumulative effect of applying ASU 2014-09 is recognized at the date of initial application. At January 1, 2018, we recognized the cumulative effect of initially applying ASU 2014-09 as an adjustment to the opening balance of (Distributions in excess of earnings) Earnings in excess of distributions, resulting in a decrease of approximately $30,200 to stockholders' equity. The reduction of (Distribution in excess of earnings) Earnings in excess of distributions represents the net effect of (i) the write-off of Free Move Costs, net (which were capitalized and amortized prior to the adoption of ASU 2014-09) based upon the net book value of the Free Move Costs as of December 31, 2017, (ii) the recognition of certain Contract Fulfillment Costs, specifically Intake Costs (each as defined below) and commission assets, (iii) the recognition of deferred revenue associated with Intake Costs billed to our customers, and (iv) the deferred income tax impact of the aforementioned items. As we adopted ASU 2014-09 on a modified retrospective basis, the prior period consolidated financial statements were not restated to reflect the adoption of ASU 2014-09 and reflect our revenue policies in place at that time.

Storage rental and service revenues are recognized in the month the respective storage rental or service is provided, and customers are generally billed on a monthly basis on contractually agreed-upon terms. Amounts related to future storage rental or prepaid service contracts for customers where storage rental fees or services are billed in advance are accounted for as deferred revenue and recognized ratably over the period the applicable storage rental or service is provided or performed. Revenues from the sales of products, which are included as a component of service revenues, are recognized when products are shipped and title has passed to the customer. Revenues from the sales of products, which represented less than 2% of consolidated revenue for the year ended December 31, 2019, have historically not been significant. The performance obligation is a series of distinct services (as determined for purposes of ASU 2014-09, a “series”) that have the same pattern of transfer to the customer that is satisfied over time. For those contracts that qualify as a series, we have a right to consideration from the customer in an amount that corresponds directly with the value of the underlying performance obligation transferred to the customer to date. This concept is known as "right to invoice" and we are applying the "right to invoice" practical expedient to all revenues, with the exception of storage revenues in our Global Data Center Business.

For all of our businesses, with the exception of the storage component of our Global Data Center Business, each purchasing decision is fully in the control of the customer and, therefore, consideration beyond the current reporting period is variable and allocated to the specific period, which is consistent with the practical expedient described above. Our Global Data Center Business features storage rental provided to the customer at contractually specified rates over a fixed contractual period. The storage rental revenue related to the storage component of our Global Data Center Business is recognized on a straight-line basis over the contract term. The revenue related to the service component of our Global Data Center Business is recognized in the period the related services are provided.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

2. Summary of Significant Accounting Policies (Continued)

The costs associated with the initial movement of customer records into physical storage and certain commissions are considered costs to obtain or fulfill customer contracts (“Contract Fulfillment Costs”). The following describes each of these Contract Fulfillment Costs recognized under ASU 2014-09:

Intake Costs (and associated deferred revenue)

Upon the adoption of ASU 2014-09, all the costs of the initial intake of customer records into physical storage ("Intake Costs"), regardless of whether or not the services associated with such initial moves are billed to the customer or are provided to the customer at no charge, are deferred and amortized as a component of depreciation and amortization in our Consolidated Statements of Operations over three years, consistent with the transfer of the performance obligation to the customer to which the asset relates. Similarly, in instances where such Intake Costs are billed to the customer, the associated revenue will be deferred and recognized over the same three-year period.

Commissions

Upon the adoption of ASU 2014-09, certain commission payments that are directly associated with the fulfillment of long-term storage contracts are capitalized and amortized as a component of depreciation and amortization in our Consolidated Statements of Operations over three years, consistent with the transfer of the performance obligation to the customer to which the asset relates. Certain direct commission payments associated with contracts with a duration of one year or less are expensed as incurred under the practical expedient which allows an entity to expense as incurred an incremental cost of obtaining a contract if the amortization period of the asset that the entity otherwise would have recognized is one year or less.

The Contract Fulfillment Costs as of December 31, 2019 and 2018 are as follows:

				December 31, 2019												December 31, 2018
Description		Location in Balance Sheet		Gross Carrying Amount				Accumulated Amortization				Net Carrying Amount				Gross Carrying Amount				Accumulated Amortization				Net Carrying Amount
Intake Costs asset		Other (within Other Assets, Net)		$	41,224			$	(23,579	)		$	17,645			$	39,748			$	(24,504	)		$	15,244
Commissions asset		Other (within Other Assets, Net)		68,008				(27,178		)		40,830				58,424				(34,637		)		23,787

Amortization expense associated with the Intake Costs asset and capitalized commissions asset for the years ended December 31, 2019 and 2018 are as follows:

		Year Ended December 31,
Description		2019				2018
Intake Costs asset		$	10,144			$	10,380
Capitalized commissions asset		19,109				13,838

Estimated amortization expense for Contract Fulfillment Costs is as follows:

Year		Estimated Amortization
2020		$	28,156
2021		20,448
2022		9,871

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

2. Summary of Significant Accounting Policies (Continued)

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

				December 31,
Description		Location in Balance Sheet		2019				2018
Deferred revenue - Current		Deferred revenue		$	274,036			$	264,823
Deferred revenue - Long-term		Other Long-term Liabilities		36,029				26,401

Data Center Lessor Considerations

Our Global Data Center Business features storage rental provided to customers at contractually specified rates over a fixed contractual period. Prior to January 1, 2019, our data center revenue contracts were accounted for in accordance with Accounting Standards Codification (“ASC”) No. 840, Leases ("ASC 840"). On January 1, 2019, we adopted ASU 2016-02, as described in more detail in Note 2.m. Beginning on January 1, 2019, our data center revenue contracts are accounted for in accordance with ASU 2016-02. ASU 2016-02 provides a practical expedient which allows lessors to account for nonlease components (such as power and connectivity, in the case of our Global Data Center Business) with the related lease component if both the timing and pattern of transfer are the same for nonlease components and the lease component, and the lease component would be classified as an operating lease. The single combined component is accounted for under ASU 2016-02 if the lease component is the predominant component and is accounted for under ASU 2014-09, if the nonlease components are the predominant components. We have elected to take this practical expedient. Storage rental revenue associated with our Global Data Center Business was approximately $246,900 and $218,700 for the years ended December 31, 2019 and 2018, respectively, which includes approximately $43,300 and $38,800 of revenue associated with power and connectivity for the years ended December 31, 2019 and 2018, respectively. The revenue related to the service component of our Global Data Center Business remains unchanged from the adoption of ASU 2016-02 and is recognized in the period the related services are provided. Our accounting treatment for data center revenue was not significantly impacted by the adoption of ASU 2016-02.

The future minimum lease payments we expect to receive under non-cancellable data center operating leases, for which we are the lessor, excluding month to month leases, for the next five years are as follows:

Year		Future minimum lease payments
2020		$	202,130
2021		135,911
2022		98,797
2023		80,079
2024		68,376

m. 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. The majority of our leased facilities are classified as operating leases that, on average, have initial lease terms of five to 10 years, with one or more lease renewal options to extend the lease term. Our lease renewal option terms generally range from one to five years. The exercise of the lease renewal option is at our sole discretion and may contain fixed rent, fair market value based rent or Consumer Price Index rent escalation clauses. We include option periods in the lease term when our failure to renew the lease would result in an economic disincentive, thereby making it reasonably certain that we will renew the lease. We recognize straight line rental expense over the life of the lease and any fair market value or Consumer Price Index rent escalations are recognized as variable lease expense in the period in which the obligation is incurred. In addition, we lease certain vehicles and equipment. Vehicle and equipment leases typically have lease terms ranging from one to seven years.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

2. Summary of Significant Accounting Policies (Continued)

In February 2016, FASB issued ASU 2016-02 which requires lessees to recognize assets and liabilities on the balance sheet for the rights and the obligations created by all leases, both operating and financing (formerly referred to as capital leases under ASC 840). ASU 2016-02 requires certain qualitative and quantitative disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases.

We adopted ASU 2016-02 on January 1, 2019 on a modified retrospective basis under which we recognized and measured leases existing at, or entered into after, the beginning of the period of adoption. Therefore, we applied ASC 840 to all earlier comparative periods (prior to the adoption of ASU 2016-02), including disclosures, and recognized the effects of applying ASU 2016-02 as a cumulative-effect adjustment to (Distributions in excess of earnings) Earnings in excess of distributions as of January 1, 2019, the effective date of the standard. As such, our Consolidated Balance Sheet as of December 31, 2018 has not been restated to reflect the adoption of ASU 2016-02. Accordingly, the majority of the amount presented as deferred rent liabilities on our Consolidated Balance Sheet as of December 31, 2018 is now included in the calculation of operating lease right-of-use assets and any remaining amounts are now classified within other liability line items on our Consolidated Balance Sheet as of December 31, 2019. The transition guidance associated with ASU 2016-02 also permitted certain practical expedients. We elected the "package of 3" practical expedients permitted under the transition guidance which, among other things, allowed us to carry forward our historical lease classifications. We also adopted an accounting policy which provides that leases with an initial term of 12 months or less will not be included within the lease right-of-use assets and lease liabilities recognized on our Consolidated Balance Sheets after the adoption of ASU 2016-02. We will continue to recognize the lease payments for those leases with an initial term of 12 months or less in our Consolidated Statements of Operations on a straight-line basis over the lease term.

The lease right-of-use assets and related lease liabilities are classified as either operating or financing. Lease right-of-use assets are calculated as the net present value of future payments plus any capitalized initial direct costs less any tenant improvements or lease incentives. Lease liabilities are calculated as the net present value of future payments. In calculating the present value of the lease payments, we will utilize the rate stated in the lease (in the limited circumstances when such rate is explicitly stated) or, if no rate is explicitly stated, we have elected to utilize a rate that reflects our securitized incremental borrowing rate by geography for the lease term. In July 2018, the FASB issued ASU No. 2018-11, Leases - Targeted Improvements ("ASU 2018-11"). ASU 2018-11 provides a practical expedient which allows lessees to account for nonlease components (which include common area maintenance, taxes, and insurance) with the related lease component. Any variable nonlease components are not included within the lease right-of-use asset and lease liability on our Consolidated Balance Sheets, and instead, are reflected as an expense in the period incurred. We have elected to take this practical expedient upon adoption of ASU 2016-02.

At January 1, 2019, we recognized the cumulative effect of initially applying ASU 2016-02 as an adjustment to the opening balance of (Distributions in excess of earnings) Earnings in excess of distributions, resulting in an increase of approximately $5,800 to stockholders' equity due to certain build to suit leases that were accounted for as financing leases under ASC 840, but are accounted for as operating leases under ASU 2016-02 at January 1, 2019.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

2. Summary of Significant Accounting Policies (Continued)

Operating and financing lease right-of-use assets and lease liabilities as of December 31, 2019 and January 1, 2019 (date of adoption of ASU 2016-02) are as follows:

Description		Location in Balance Sheet		December 31, 2019				January 1, 2019 (Date of Adoption of ASU 2016-02)
Assets:
Operating lease right-of-use assets(1)		Operating lease right-of-use assets		$	1,869,101			$	1,825,721
Financing lease right-of-use assets, net of accumulated depreciation(2)		Property, Plant and Equipment, Net		327,215				361,078
Total				$	2,196,316			$	2,186,799
Liabilities:
Current
Operating lease liabilities		Accrued expenses and other current liabilities		$	223,249			$	209,911
Financing lease liabilities		Current portion of long-term debt		46,582				50,437
Total current lease liabilities				269,831				260,348
Long-term
Operating lease liabilities		Long-term Operating Lease Liabilities, net of current portion		1,728,686				1,685,771
Financing lease liabilities		Long-term Debt, net of current portion		320,600				350,263
Total long-term lease liabilities				2,049,286				2,036,034
Total				$	2,319,117			$	2,296,382

---

(1) At December 31, 2019, these assets are comprised of approximately 99% real estate related assets (which include land, buildings and racking) and 1% non-real estate related assets (which include warehouse equipment, vehicles, furniture and fixtures and computer hardware and software).

(2) At December 31, 2019, these assets are comprised of approximately 69% real estate related assets and 31% non-real estate related assets.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

2. Summary of Significant Accounting Policies (Continued)

The components of the lease expense for the year ended December 31, 2019 are as follows:

Description		Location in Statement of Operations		December 31, 2019
Operating lease cost(1)		Cost of sales and Selling, general and administrative		$	459,619
Financing lease cost:
Depreciation of financing lease right-of-use assets		Depreciation and amortization		$	59,258
Interest expense for financing lease liabilities		Interest Expense, Net		21,031
Total financing lease cost				$	80,289

---

(1) Of the $459,619 incurred for the year ended December 31, 2019, $447,194 is included within Cost of sales and $12,425 is included within Selling, general and administrative expenses. Operating lease cost includes variable lease costs of $105,922 for the year ended December 31, 2019.

We recognized total rent expense, excluding variable lease costs such as common area maintenance charges, insurance and taxes under all of our operating leases of $365,762 and $350,403 for the years ended December 31, 2018 and 2017, respectively.

We sublease certain real estate to third parties. We recognized sublease income of $6,637 for the year ended December 31, 2019.

Weighted average remaining lease terms and discount rates as of December 31, 2019 are as follows:

		Remaining Lease Term
Operating leases		11.0 Years
Financing leases		11.6 Years
		Discount Rate
Operating leases		7.1	%
Financing leases		5.7	%

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

2. Summary of Significant Accounting Policies (Continued)

The estimated minimum future lease payments as of December 31, 2019, are as follows:

Year		Operating Leases(1)				Sublease Income				Financing Leases(1)
2020		$	339,469			$	(7,695	)		$	62,271
2021		319,628				(5,282		)		54,993
2022		295,981				(4,996		)		44,886
2023		267,809				(4,885		)		39,130
2024		237,604				(3,543		)		31,849
Thereafter		1,454,918				(7,691		)		277,890
Total minimum lease payments		2,915,409				$	(34,092	)		511,019
Less amounts representing interest or imputed interest		(963,474		)						(143,837		)
Present value of lease obligations		$	1,951,935							$	367,182

The estimated minimum future lease payments as of December 31, 2018 are as follows:

Year		Operating Leases(1)				Sublease Income				Financing Leases(1)(2)
2019		$	323,454			$	(7,525	)		$	80,513
2020		293,276				(7,200		)		71,335
2021		267,379				(7,063		)		61,269
2022		246,128				(6,694		)		52,832
2023		221,808				(6,409		)		44,722
Thereafter		1,287,807				(6,279		)		377,750
Total minimum lease payments		$	2,639,852			$	(41,170	)		688,421
Less amounts representing interest										(241,248		)
Present value of lease obligations										$	447,173

---

(1)

Estimated minimum future lease payments exclude variable common area maintenance charges, insurance and taxes. Differences in estimated lease payments between December 31, 2019 and December 31, 2018 are primarily related to adjustments to account for certain build to suit leases that were accounted for as financing obligations under ASC 840 but are accounted for as operating leases under ASU 2016-02 and foreign currency exchange rate impacts.

(2)	Includes financing lease and financing obligations associated with build to suit lease transactions at December 31, 2018.

In the fourth quarter of 2019, we entered into an agreement to lease a facility in the United Kingdom that is currently under construction. The exact terms of the lease will be determined upon the completion of building construction, which is expected to occur in late 2020. We expect the rent due in the first year of the lease to be approximately $5,000, and we expect the term of the lease to be approximately 25 years.

As of December 31, 2019, we do not have any operating or financing leases with related parties that are material to our consolidated financial statements.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

2. Summary of Significant Accounting Policies (Continued)

Other information: Supplemental cash flow information relating to our leases for the year ended December 31, 2019 is as follows:

Cash paid for amounts included in measurement of lease liabilities:		Year Ended December 31, 2019
Operating cash flows used in operating leases		$	338,059
Operating cash flows used in financing leases (interest)		21,031
Financing cash flows used in financing leases		58,033
Non-cash items:
Operating lease modifications and reassessments		$	108,023
New operating leases (including acquisitions)		170,464
New financing leases, modifications and reassessments		32,742

n. Stock-Based Compensation

We record stock-based compensation expense, utilizing the straight-line method, for the cost of stock options, restricted stock units ("RSUs"), performance units ("PUs") and shares of stock issued under our employee stock purchase plan ("ESPP") (together, "Employee Stock-Based Awards").

For our Employee Stock-Based Awards made on or after February 20, 2019, we have included the following retirement provision: Upon an employee’s retirement on or after attaining age 58, if the sum of (i) the award recipient’s age at retirement and (ii) the award recipient’s years of service with the company totals at least 70, the award recipient is entitled to continued vesting of any outstanding Employee Stock-Based Awards which include the 2019 Retirement Criteria subsequent to their retirement, provided that, for awards granted in the year of retirement, their retirement occurs on or after July 1 (the “2019 Retirement Criteria”). Accordingly, (i) grants of Employee Stock-Based Awards to an employee who has met the 2019 Retirement Criteria on or before the date of grant, or will meet the Retirement Criteria before July 1 of the year of the grant, will be expensed between the date of grant and July 1 of the grant year and (ii) grants of Employee Stock-Based Awards to employees who will meet the 2019 Retirement Criteria during the award’s normal vesting period will be expensed between the date of grant and the date upon which the award recipient meets the 2019 Retirement Criteria. Stock options and RSUs granted to recipients who meet the 2019 Retirement Criteria will continue vesting on the original vesting schedule, and the stock options will remain exercisable up to three years after retirement, or the original expiration date of the stock options, if earlier. PUs granted to recipients who meet the 2019 Retirement Criteria will continue to vest and be delivered in accordance with the original vesting schedule of the applicable PU award and remain subject to the same performance conditions.

Stock-based compensation expense for Employee Stock-Based Awards included in the accompanying Consolidated Statements of Operations for the years ended December 31, 2019, 2018 and 2017 was $35,654 ($33,103 after tax or $0.12 per basic and diluted share), $31,167 ($28,998 after tax or $0.10 per basic and diluted share) and $30,019 ($26,512 after tax or $0.10 per basic and diluted share), respectively. The substantial majority of the stock-based compensation expense for Employee Stock-Based Awards is included in Selling, general and administrative expenses in the accompanying Consolidated Statements of Operations.

Stock Options

Under our various stock option plans, options are generally granted with exercise prices equal to the market price of the stock on the date of grant; however, in certain instances, options are granted at prices greater than the market price of the stock on the date of grant. The options we issue become exercisable ratably over a period of either (i) three years from the date of grant and have a contractual life of 10 years from the date of grant, unless the holder's employment is terminated sooner, or (ii) five years from the date of grant and have a contractual life of 10 years from the date of grant, unless the holder's employment is terminated sooner. Our non-employee directors are considered employees for purposes of our stock option plans and stock option reporting.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

2. Summary of Significant Accounting Policies (Continued)

A summary of our stock options outstanding as of December 31, 2019 by vesting terms is as follows:

	December 31, 2019
	Stock Options Outstanding			% of Stock Options Outstanding
Three-year vesting period (10 year contractual life)	4,691,321			97.0	%
Five-year vesting period (10 year contractual life)	144,400			3.0	%
	4,835,721			100.0	%

Our equity compensation plans generally provide that, upon a vesting change in control (as defined in each plan), any unvested options and other awards granted thereunder shall vest immediately if an employee is terminated as a result of the change in control or terminates their own employment for good reason (as defined in each plan). On January 20, 2015, our stockholders approved the adoption of the Iron Mountain Incorporated 2014 Stock and Cash Incentive Plan, as amended (the "2014 Plan"). Under the 2014 Plan, the total amount of shares of common stock reserved and available for issuance pursuant to awards granted under the 2014 Plan is 12,750,000. The 2014 Plan permits us to continue to grant awards through May 24, 2027.

A total of 48,253,839 shares of common stock have been reserved for grants of options and other rights under our various stock incentive plans, including the 2014 Plan. The number of shares available for grant under our various stock incentive plans, not including the ESPP, at December 31, 2019 was 4,095,067.

The weighted average fair value of stock options granted in 2019, 2018 and 2017 was $3.58, $3.50 and $4.28 per share, respectively. These values were estimated on the date of grant using the Black-Scholes option pricing model. The weighted average assumptions used for grants in the year ended December 31:

Weighted Average Assumptions		2019			2018			2017
Expected volatility		24.3	%		25.4	%		25.7	%
Risk-free interest rate		2.47	%		2.65	%		1.96	%
Expected dividend yield		7	%		7	%		6	%
Expected life		5.0 years			5.0 years			5.0 years

Expected volatility is calculated utilizing daily historical volatility over a period that equates to the expected life of the option. The risk-free interest rate was based on the United States Treasury interest rates whose term is consistent with the expected life (estimated period of time outstanding) of the stock options. Expected dividend yield is considered in the option pricing model and represents our current annualized expected per share dividends over the current trade price of our common stock. The expected life of the stock options granted is estimated using the historical exercise behavior of employees.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

2. Summary of Significant Accounting Policies (Continued)

A summary of stock option activity for the year ended December 31, 2019 is as follows:

	Options			Weighted Average Exercise Price				Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding at December 31, 2018	4,271,834			$	34.78
Granted	920,706			35.71
Exercised	(303,543	)		23.86
Forfeited	(23,984	)		35.21
Expired	(29,292	)		34.78
Outstanding at December 31, 2019	4,835,721			$	35.64			6.72		$	3,005
Options exercisable at December 31, 2019	3,068,945			$	35.80			5.81		$	3,005
Options expected to vest	1,648,127			$	35.34			8.47		$	—

The aggregate intrinsic value of stock options exercised for the years ended December 31, 2019, 2018 and 2017 is as follows:

	Year Ended December 31,
	2019				2018				2017
Aggregate intrinsic value of stock options exercised	$	3,148			$	2,181			$	8,485

Restricted Stock Units

Under our various equity compensation plans, we may also grant RSUs. Our RSUs generally have a vesting period of three years from the date of grant. However, RSUs granted to our non-employee directors vest immediately upon grant.

All RSUs accrue dividend equivalents associated with the underlying stock as we declare dividends. Dividends will generally be paid to holders of RSUs in cash upon the vesting date of the associated RSU and will be forfeited if the RSU does not vest. The fair value of RSUs is the excess of the market price of our common stock at the date of grant over the purchase price (which is typically zero).

Cash dividends accrued and paid on RSUs for the years ended December 31, 2019, 2018 and 2017, are as follows:

	Year Ended December 31,
	2019				2018				2017
Cash dividends accrued on RSUs	$	3,215			$	2,899			$	2,590
Cash dividends paid on RSUs	2,369				2,477				2,370

The fair value of RSUs vested during the years ended December 31, 2019, 2018 and 2017, are as follows:

	Year Ended December 31,
	2019				2018				2017
Fair value of RSUs vested	$	21,191			$	20,454			$	19,825

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

2. Summary of Significant Accounting Policies (Continued)

A summary of RSU activity for the year ended December 31, 2019 is as follows:

	RSUs			Weighted- Average Grant-Date Fair Value
Non-vested at December 31, 2018	1,196,566			$	34.33
Granted	823,508			34.72
Vested	(678,138	)		34.06
Forfeited	(138,337	)		34.75
Non-vested at December 31, 2019	1,203,599			$	34.71

Performance Units

Under our various equity compensation plans, we may also make awards of PUs. For the majority of outstanding PUs, the number of PUs earned is determined based on our performance against predefined targets of revenue and return on invested capital ("ROIC") and, with PUs granted in 2018, Adjusted EBITDA (as defined in Note 9). The number of PUs earned may range from 0% to 200% of the initial award. The number of PUs earned is determined based on our actual performance as compared to the targets at the end of a three-year performance period. Certain PUs that we grant will be earned based on a market condition associated with the total return on our common stock in relation to either (i) a subset of the Standard & Poor's 500 Index (for certain PUs granted prior to 2017), or (ii) the MSCI United States REIT Index (for certain PUs granted in 2017 and thereafter), rather than the revenue, ROIC and Adjusted EBITDA targets noted above. The number of PUs earned based on this market condition may range from 0% to 200% of the initial award.

All of our PUs will be settled in shares of our common stock and are subject to cliff vesting three years from the date of the original PU grant. As detailed above, PUs granted on or after February 20, 2019 are subject to the 2019 Retirement Criteria. PUs granted to recipients who meet the 2019 Retirement Criteria will continue to vest and be delivered in accordance with the original vesting schedule of the applicable PU award and remain subject to the same performance conditions. PUs granted prior to February 20, 2019 to employees who terminate their employment during the three-year performance period and on or after attaining age 55 and completing 10 years of qualifying service are eligible for pro-rated vesting, subject to the actual achievement against the predefined targets or a market condition as discussed above, based on the number of full years of service completed following the grant date (but delivery of the shares remains deferred). As a result, PUs are generally expensed over the three-year performance period.

All PUs accrue dividend equivalents associated with the underlying stock as we declare dividends. Dividends will generally be paid to holders of PUs in cash upon the settlement date of the associated PU and will be forfeited if the PU does not vest.

Cash dividends accrued and paid on PUs for the years ended December 31, 2019, 2018 and 2017, are as follows:

	Year Ended December 31,
	2019				2018				2017
Cash dividends accrued on PUs	$	2,260			$	1,804			$	1,290
Cash dividends paid on PUs	1,162				644				205

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

2. Summary of Significant Accounting Policies (Continued)

During the years ended December 31, 2019, 2018 and 2017, we issued 380,856, 353,507 and 229,692 PUs, respectively. We forecast the likelihood of achieving the predefined revenue, ROIC and Adjusted EBITDA targets for our PUs in order to calculate the expected PUs to be earned. We record a compensation charge based on either the forecasted PUs to be earned (during the performance period) or the actual PUs earned (at the three-year anniversary of the grant date) over the vesting period for each of the awards. The fair value of PUs based on our performance against revenue, ROIC and Adjusted EBITDA targets is the excess of the market price of our common stock at the date of grant over the purchase price (which is typically zero). For PUs earned based on a market condition, we utilize a Monte Carlo simulation to fair value these awards at the date of grant, and such fair value is expensed over the three-year performance period. As of December 31, 2019, we expected 100%, 50% and 100% achievement of the predefined revenue, ROIC and Adjusted EBITDA targets associated with the awards of PUs made in 2019, 2018 and 2017, respectively.

The fair value of earned PUs that vested during the years ended December 31, 2019, 2018 and 2017, is as follows:

	Year Ended December 31,
	2019				2018				2017
Fair value of earned PUs that vested	$	6,503			$	3,117			$	1,242

A summary of PU activity for the year ended December 31, 2019 is as follows:

	Original PU Awards			PU Adjustment(1)			Total PU Awards			Weighted- Average Grant-Date Fair Value
Non-vested at December 31, 2018	967,049			(299,948	)		667,101			$	36.54
Granted	380,856			—			380,856			36.07
Vested	(206,279	)		—			(206,279	)		37.97
Forfeited/Performance or Market Conditions Not Achieved	(27,935	)		(14,850	)		(42,785	)		26.50
Non-vested at December 31, 2019	1,113,691			(314,798	)		798,893			$	36.56

---

(1)	Represents an increase or decrease in the number of original PUs awarded based on either the final performance criteria or market condition achievement at the end of the performance period of such PUs or a change in estimated awards based on the forecasted performance against the predefined targets.

Employee Stock Purchase Plan

We offer an ESPP in which participation is available to substantially all United States and Canadian employees who meet certain service eligibility requirements. The ESPP provides a way for our eligible employees to become stockholders on favorable terms. The ESPP provides for the purchase of our common stock by eligible employees through successive offering periods. We have historically had two six-month offering periods per year, the first of which generally runs from June 1 through November 30 and the second of which generally runs from December 1 through May 31. During each offering period, participating employees accumulate after-tax payroll contributions, up to a maximum of 15% of their compensation, to pay the purchase price at the end of the offering. Participating employees may withdraw from an offering before the purchase date and obtain a refund of the amounts withheld as payroll deductions. At the end of the offering period, outstanding options under the ESPP are exercised, and each employee's accumulated contributions are used to purchase our common stock. The price for shares purchased under the ESPP is 95% of the fair market price at the end of the offering period, without a look-back feature. As a result, we do not recognize compensation expense for the ESPP shares purchased. For the years ended December 31, 2019, 2018 and 2017, there were 129,505, 119,123 and 102,826 shares, respectively, purchased under the ESPP. As of December 31, 2019, we have 376,140 shares available under the ESPP.

---

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

2. Summary of Significant Accounting Policies (Continued)

As of December 31, 2019, unrecognized compensation cost related to the unvested portion of our Employee Stock-Based Awards was $39,696 and is expected to be recognized over a weighted-average period of 1.8 years.

We issue shares of our common stock for the exercises of stock options, and the vesting of RSUs, PUs and shares of our common stock under our ESPP from unissued reserved shares.

o. Income Taxes

Accounting for income taxes requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the tax and financial reporting bases of assets and liabilities and for loss and credit carryforwards. Valuation allowances are provided when recovery of deferred tax assets does not meet the more likely than not standard as defined in GAAP. We have elected to recognize interest and penalties associated with uncertain tax positions as a component of the Provision (benefit) for income taxes in the accompanying Consolidated Statements of Operations.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

2. Summary of Significant Accounting Policies (Continued)

p. Income (Loss) Per Share—Basic and Diluted

Basic income (loss) per common share is calculated by dividing income (loss) by the weighted average number of common shares outstanding. The calculation of diluted income (loss) per share is consistent with that of basic income (loss) per share but gives effect to all potential common shares (that is, securities such as stock options, RSUs, PUs, warrants or convertible securities) that were outstanding during the period, unless the effect is antidilutive.

The calculation of basic and diluted income (loss) per share for the years ended December 31, 2019, 2018 and 2017 is as follows:

	Year Ended December 31,
	2019				2018				2017
Income (loss) from continuing operations	$	268,211			$	367,558			$	178,015
Less: Net income (loss) attributable to noncontrolling interests	938				1,198				1,611
Income (loss) from continuing operations (utilized in numerator of Earnings Per Share calculation)	267,273				366,360				176,404
Income (loss) from discontinued operations, net of tax	104				(12,427		)		(6,291		)
Net income (loss) attributable to Iron Mountain Incorporated	$	267,377			$	353,933			$	170,113
Weighted-average shares—basic	286,971,000				285,913,000				265,898,000
Effect of dilutive potential stock options	145,509				234,558				431,071
Effect of dilutive potential RSUs and PUs	570,435				505,030				509,235
Effect of Over-Allotment Option(1)	—				—				6,278
Weighted-average shares—diluted	287,686,944				286,652,588				266,844,584
Earnings (losses) per share—basic:
Income (loss) from continuing operations	$	0.93			$	1.28			$	0.66
(Loss) income from discontinued operations, net of tax	—				(0.04		)		(0.02		)
Net income (loss) attributable to Iron Mountain Incorporated(2)	$	0.93			$	1.24			$	0.64
Earnings (losses) per share—diluted:
Income (loss) from continuing operations	$	0.93			$	1.28			$	0.66
(Loss) income from discontinued operations, net of tax	—				(0.04		)		(0.02		)
Net income (loss) attributable to Iron Mountain Incorporated(2)	$	0.93			$	1.23			$	0.64
Antidilutive stock options, RSUs and PUs, excluded from the calculation	4,475,745				3,258,078				2,326,344

---

(1)	See Note 12.

(2)	Columns may not foot due to rounding.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

2. Summary of Significant Accounting Policies (Continued)

q. Allowance for Doubtful Accounts and Credit Memo Reserves

We maintain an allowance for doubtful accounts and credit memos for estimated losses resulting from the potential inability of our customers to make required payments and potential disputes regarding billing and service issues. When calculating the allowance, we consider our past loss experience, current and prior trends in our aged receivables and credit memo activity, current economic conditions and specific circumstances of individual receivable balances. If the financial condition of our customers were to significantly change, resulting in a significant improvement or impairment of their ability to make payments, an adjustment of the allowance may be required. We write-off uncollectible balances as circumstances warrant, generally, no later than one year past due.

Rollforward of allowance for doubtful accounts and credit memo reserves is as follows:

Year Ended December 31,		Balance at Beginning of the Year				Credit Memos Charged to Revenue				Allowance for Bad Debts Charged to Expense				Deductions and Other(1)				Balance at End of the Year
2019		$	43,584			$	51,846			$	19,389			$	(71,963	)		$	42,856
2018		46,648				36,329				18,625				(58,018		)		43,584
2017		44,290				38,966				14,826				(51,434		)		46,648

---

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

r. Concentrations of Credit Risk

Financial instruments that potentially subject us to credit risk consist principally of cash and cash equivalents (including money market funds and time deposits) and accounts receivable. The only significant concentrations of liquid investments as of December 31, 2019 and 2018, respectively, related to cash and cash equivalents. At December 31, 2019, we had money market funds with seven "Triple A" rated money market funds and no time deposits. At December 31, 2018, we had no money market funds and time deposits with seven global banks. As per our risk management investment policy, we limit exposure to concentration of credit risk by limiting the amount invested in any one mutual fund to a maximum of 1% of the fund total assets or in any one financial institution to a maximum of $75,000. As of December 31, 2019 and 2018, our cash and cash equivalents balance, including restricted cash, was $193,555 and $165,485, respectively. At December 31, 2019, our cash and cash equivalents included money market funds of $13,653.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

2. Summary of Significant Accounting Policies (Continued)

s. Fair Value Measurements

Entities are permitted under GAAP to elect to measure certain financial instruments and certain other items at either fair value or cost. We have elected the cost measurement option.

Our financial assets or liabilities that are carried at fair value are required to be measured using inputs from the three levels of the fair value hierarchy. A financial asset or liability's classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

The three levels of the fair value hierarchy are as follows:

Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access at the measurement date.

Level 2—Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

Level 3—Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.

The assets and liabilities carried at fair value and measured on a recurring basis as of December 31, 2019 and 2018, respectively, are as follows:

						Fair Value Measurements at December 31, 2019 Using
Description		Total Carrying Value at December 31, 2019				Quoted prices in active markets (Level 1)				Significant other observable inputs (Level 2)				Significant unobservable inputs (Level 3)
Money Market Funds(1)		$	13,653			$	—			$	13,653			$	—
Trading Securities		10,732				10,168			(2)	564			(3)	—
Derivative Liabilities(4)		9,756				—				9,756				—

						Fair Value Measurements at December 31, 2018 Using
Description		Total Carrying Value at December 31, 2018				Quoted prices in active markets (Level 1)				Significant other observable inputs (Level 2)				Significant unobservable inputs (Level 3)
Time Deposits(1)		$	956			$	—			$	956			$	—
Trading Securities		10,753				10,248			(2)	505			(3)	—
Derivative Assets(4)		93				—				93				—
Derivative Liabilities(4)		973				—				973				—

---

(1)	Money market funds and time deposits are measured based on quoted prices for similar assets and/or subsequent transactions.

(2)	Certain trading securities are measured at fair value using quoted market prices.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

2. Summary of Significant Accounting Policies (Continued)

(3)	Certain trading securities are measured based on inputs other than quoted market prices that are observable.

(4)

Derivative assets and liabilities include (i) interest rate swap agreements, including forward-starting interest rate swap agreements, to limit our exposure to changes in interest rates on a portion of our floating rate indebtedness, (ii) cross-currency swap agreements to hedge the variability of exchange rates impacts between the United States dollar and the Euro and certain of our Euro denominated subsidiaries and (iii) short-term (six months or less) foreign exchange currency forward contracts that we have entered into to hedge certain of our foreign exchange intercompany exposures. Our derivative financial instruments are measured using industry standard valuation models using market-based observable inputs, including interest rate curves, forward and spot prices for currencies and implied volatilities. Credit risk is also factored into the determination of the fair value of our derivative financial instruments. See Note 3 for additional information on our derivative financial instruments.

Disclosures are required in the financial statements for items measured at fair value on a non-recurring basis. We did not have any material items that are measured at fair value on a non-recurring basis for the years ended December 31, 2019, 2018, and 2017, with the exception of: (i) the reporting units as presented in our goodwill impairment analysis (as disclosed in Note 2.h.); (ii) the assets and liabilities acquired through acquisitions (as disclosed in Note 6); (iii) the Access Contingent Consideration (as defined and disclosed in Note 13); (iv) the redemption value of certain redeemable noncontrolling interests (as disclosed in Note 2.v.); and (v) our initial investments in the MakeSpace JV and OSG (both as defined and disclosed in Note 13), all of which are based on Level 3 inputs.

The fair value of our long-term debt, which was determined based on either Level 1 inputs or Level 3 inputs, is disclosed in Note 4. Long-term debt is measured at cost in our Consolidated Balance Sheets as of December 31, 2019 and 2018.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

2. Summary of Significant Accounting Policies (Continued)

t. Accumulated Other Comprehensive Items, Net

The changes in accumulated other comprehensive items, net for the years ended December 31, 2019, 2018 and 2017 are as follows:

	Foreign Currency Translation Adjustment				Change in Fair Value of Derivative Instruments				Total
Balance as of December 31, 2016	$	(212,573	)		$	—			$	(212,573	)
Other comprehensive (loss) income:
Foreign currency translation adjustment(1)	108,584				—				108,584
Total other comprehensive (loss) income	108,584				—				108,584
Balance as of December 31, 2017	(103,989		)		—				(103,989		)
Other comprehensive (loss) income:
Foreign currency translation adjustment	(160,702		)		—				(160,702		)
Change in fair value of derivative instruments	—				(973		)		(973		)
Total other comprehensive (loss) income	(160,702		)		(973		)		(161,675		)
Balance as of December 31, 2018	(264,691		)		(973		)		(265,664		)
Other comprehensive (loss) income:
Foreign currency translation adjustment	11,866				—				11,866
Change in fair value of derivative instruments	—				(8,783		)		(8,783		)
Total other comprehensive (loss) income	11,866				(8,783		)		3,083
Balance as of December 31, 2019	$	(252,825	)		$	(9,756	)		$	(262,581	)

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(1)	During the year ended December 31, 2017, approximately $29,100 of cumulative translation adjustment associated with our businesses in Russia and Ukraine was reclassified from accumulated other comprehensive items, net and was included in the gain on sale associated with the Russia and Ukraine Divestment (see Note 13).

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

2. Summary of Significant Accounting Policies (Continued)

u. Other Expense (Income), Net

Other expense (income), net for the years ended December 31, 2019, 2018 and 2017 consists of the following:

	Year Ended December 31,
	2019				2018				2017
Foreign currency transaction losses (gains), net(1)	$	24,852			$	(15,567	)		$	43,248
Debt extinguishment expense, net	—				—				78,368
Other, net(2)	9,046				3,875				(42,187		)
Other Expense (Income), Net	$	33,898			$	(11,692	)		$	79,429

---

(1)

The gain or loss on foreign currency transactions, calculated as the difference between the historical exchange rate and the exchange rate at the applicable measurement date, includes gains or losses primarily related to (i) borrowings in certain foreign currencies under our Revolving Credit Facility and our Former Revolving Credit Facility (each as defined in Note 4), (ii) our Euro Notes (as defined in Note 4), (iii) certain foreign currency denominated intercompany obligations of our foreign subsidiaries to us and between our foreign subsidiaries, which are not considered permanently invested and (iv) amounts that are paid or received on the net settlement amount from forward contracts (as more fully discussed in Note 3).

(2)	Other, net for the year ended December 31, 2017 includes a gain of $38,869 associated with the Russia and Ukraine Divestment (as defined in Note 13).

v. Redeemable Noncontrolling Interests

Certain unaffiliated third parties own noncontrolling interests in our consolidated subsidiaries in Chile, India and South Africa. The underlying agreements between us and our noncontrolling interest shareholders for these subsidiaries contain provisions under which the noncontrolling interest shareholders can require us to purchase their respective interests in such subsidiaries at certain times and at a purchase price as stipulated in the underlying agreements (generally at fair value). These put options make these noncontrolling interests redeemable and, therefore, these noncontrolling interests are classified as temporary equity outside of stockholders' equity. Redeemable noncontrolling interests are reported at the higher of their redemption value or the noncontrolling interest holders' proportionate share of the underlying subsidiaries net carrying value. Increases or decreases in the redemption value of the noncontrolling interest are offset against Additional Paid-in Capital.

In 2018, certain of our noncontrolling interest shareholders exercised their option to put their ownership interest back to us. Upon the exercise of the put option, this noncontrolling interest became mandatorily redeemable by us, and, therefore, is accounted for as a liability rather than a component of redeemable noncontrolling interests. We and these noncontrolling interest shareholders are currently in a dispute with respect to the fair value of the noncontrolling interest shares. We have recorded our estimate of the fair value of these noncontrolling interest shares as a component of Accrued expenses on our Consolidated Balance Sheets as of December 31, 2019 and 2018. It is possible that the value ultimately agreed upon with the noncontrolling interest shareholders could differ from our current estimate of the fair value. Subsequent to these noncontrolling interest shares becoming mandatorily redeemable, any increase or decrease in the fair value of such noncontrolling interest is included as a component of Other expense (income), net on our Consolidated Statements of Operations.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

2. Summary of Significant Accounting Policies (Continued)

w. New Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force) ("ASU 2018-15"). ASU 2018-15 aligns the accounting for costs incurred to implement a cloud computing arrangement that is a service arrangement with the guidance on capitalizing costs associated with developing or obtaining internal-use software. We adopted ASU 2018-15 on January 1, 2019. ASU 2018-15 did not have a material impact on our consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02. We adopted ASU 2016-02 on January 1, 2019 on a modified retrospective basis. See Note 2.m. for information regarding the impact of the adoption of ASU 2016-02 on our consolidated financial statements.

Other As Yet Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses-Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 changes how entities will measure credit losses on most financial assets. The standard will eliminate the probable initial recognition of estimated losses and will provide a forward-looking expected credit loss model for accounts receivables, loans and other financial instruments. Adoption of the standard will be applied using a modified retrospective approach through a cumulative adjustment to retained earnings as of the effective date to align our credit loss methodology with the new standard. ASU 2016-13 is effective for us on January 1, 2020, with early adoption permitted. Under ASU 2016-13 we will be required to use a forward-looking expected credit loss model for accounts receivable, loans and other financial instruments. We do not expect ASU 2016-13 will have a material impact on our consolidated financial statements.

x. Changes in Presentation

During 2019, we changed our presentation of Significant Acquisition Costs (as defined below) and corrected the presentation of gains on sale of real estate as presented in our Consolidated Statements of Operations.

Significant Acquisition Costs

We have historically classified our significant acquisition costs which represent operating expenditures associated with (1) the acquisition of Recall Holdings Limited ("Recall") that we completed on May 2, 2016 (the "Recall Transaction"), including: (i) advisory and professional fees to complete the Recall Transaction; (ii) costs associated with the Divestments (as defined in Note 13) required in connection with receipt of regulatory approvals (including transitional services); and (iii) costs to integrate Recall with our existing operations, including moving, severance, facility upgrade, REIT integration and system upgrade costs, as well as certain costs associated with our shared service center initiative for our finance, human resources and information technology functions; and (2) the advisory and professional fees to complete the IODC Transaction (as defined in Note 6) (collectively, "Significant Acquisition Costs"), as components of Selling, general and administrative expenses and Cost of sales. Beginning in 2019, we present Significant Acquisition Costs as its own line item within Operating Expenses in our Consolidated Statements of Operations. All prior periods have been conformed to this presentation. See Note 9 for Significant Acquisition Costs by segment.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

2. Summary of Significant Accounting Policies (Continued)

Gains on Sale of Real Estate

Subsequent to our conversion to a REIT, we have historically classified gains on sale of real estate, net of tax, as a separate line on our Consolidated Statements of Operations and excluded such amounts from our reported operating income. We presented such amounts net of tax as these gains were presented below the Provision (benefit) for income taxes in our Consolidated Statements of Operations. Beginning in 2019, we present gains on sale of real estate as a component of operating income in the line item (Gain) loss on disposal/write-down of property, plant and equipment, net. Such amounts are presented gross of tax with any tax impact presented within Provision (benefit) for income taxes in our Consolidated Statements of Operations. All prior periods have been conformed to this presentation. See Note 2.g. for details of the (Gain) loss on disposal/write-down of property, plant and equipment.

The following table sets forth the effect of the (i) change in presentation of Significant Acquisition Costs and (ii) correction in presentation of gain on sale of real estate to certain line items of our Consolidated Statements of Operations for December 31, 2018 and 2017. The effect of these items did not impact Income (Loss) from Continuing Operations or Net Income (Loss).

		Year Ended December 31,
		2018												2017
		Significant Acquisition Costs				Gain on Sale of Real Estate				Total				Significant Acquisition Costs				Gain on Sale of Real Estate				Total
Cost of sales (excluding depreciation and amortization)		$	(7,628	)		$	—			$	(7,628	)		$	(20,493	)		$	—			$	(20,493	)
Selling, general and administrative		$	(43,037	)		$	—			$	(43,037	)		$	(64,408	)		$	—			$	(64,408	)
Significant Acquisition Costs		$	50,665			$	—			$	50,665			$	84,901			$	—			$	84,901
(Gain) Loss on disposal/write-down of property, plant and equipment, net		$	—			$	(63,804	)		$	(63,804	)		$	—			$	(1,565	)		$	(1,565	)
Total Operating Expenses		$	—			$	(63,804	)		$	(63,804	)		$	—			$	(1,565	)		$	(1,565	)
Operating Income (Loss)		$	—			$	63,804			$	63,804			$	—			$	1,565			$	1,565
Income (Loss) from Continuing Operations Before Provision (Benefit) for Income Taxes		$	—			$	63,804			$	63,804			$	—			$	1,565			$	1,565
Provision (Benefit) for Income Taxes		$	—			$	8,476			$	8,476			$	—			$	—			$	—
Gain on Sale of Real Estate, Net of tax		$	—			$	55,328			$	55,328			$	—			$	1,565			$	1,565

y. Immaterial Restatement

In June 2019, we received a notification of assessment from tax and customs authorities in the Netherlands related to a value-added tax (“VAT”) liability of approximately 16,800 Euros primarily related to the years ending December 31, 2018 and 2017. We have established a reserve for this matter based upon our estimate of the amount of loss that is both probable and estimable, including interest and penalties. See Note 10 for additional information on this matter.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

2. Summary of Significant Accounting Policies (Continued)

This matter relates to periods prior to January 1, 2019, resulting in (i) an understatement of our prior years' reported selling, general and administrative expense and interest expense and (ii) an overstatement of our prior years’ reported provision for income taxes for the related tax impact. The following table sets forth the effect of the immaterial restatement to certain line items of our Consolidated Statements of Operations for the years ended December 31, 2018 and 2017:

	Year Ended December 31,
	2018				2017
Selling, general and administrative	$	11,045			$	16,623
Total Operating Expenses	$	11,045			$	16,623
Operating Income (Loss)	$	(11,045	)		$	(16,623	)
Interest Expense, Net	$	359			$	70
Income (Loss) from Continuing Operations Before Provision (Benefit) for Income Taxes	$	(11,404	)		$	(16,693	)
Provision (Benefit) for Income Taxes	$	(1,986	)		$	(2,985	)
Income (Loss) from Continuing Operations	$	(9,418	)		$	(13,708	)
Net Income (Loss)	$	(9,418	)		$	(13,708	)
Net Income (Loss) Attributable to Iron Mountain Incorporated	$	(9,418	)		$	(13,708	)
Earnings (Losses) per Share - Basic:
Income (Loss) from Continuing Operations	$	(0.03	)		$	(0.05	)
Net Income (Loss) Attributable to Iron Mountain Incorporated	$	(0.03	)		$	(0.05	)
Earnings (Losses) per Share - Diluted:
Income (Loss) from Continuing Operations	$	(0.03	)		$	(0.05	)
Net Income (Loss) Attributable to Iron Mountain Incorporated	$	(0.03	)		$	(0.05	)

We have determined that no prior period financial statement was materially misstated as a result of the previously unrecorded reserves related to this matter. As a result, we have restated ending (Distributions in excess of earnings) Earnings in excess of distributions in the amount of $(23,126) and $(13,708) as of December 31, 2018 and 2017, respectively, for the cumulative impact of the aforementioned items.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

2. Summary of Significant Accounting Policies (Continued)

Additionally, we have restated our Consolidated Balance Sheets as of December 31, 2018 and 2017, and each of our Consolidated Statements of Operations, our Consolidated Statements of Comprehensive Income (Loss), our Consolidated Statements of Equity and the related notes for the years ended December 31, 2018 and 2017 to reflect the impact of the reserve we have established for this matter in those periods. There was no change to the following lines of the Consolidated Statements of Cash Flows for the years ended December 31, 2018 and 2017: (1) cash flows from operating activities, (2) cash flows from investing activities and (3) cash flows from financing activities.

The following table sets forth the effect of the immaterial restatement to certain line items of our Consolidated Balance Sheet as of December 31, 2018:

	December 31, 2018
Total Other Assets, Net	$	4,971
Total Assets	$	4,971
Accrued expenses and other current liabilities	$	28,097
Total Current Liabilities	$	28,097
(Distribution in excess of earnings) Earnings in excess of distributions	$	(23,126	)
Total Iron Mountain Incorporated Stockholders' Equity	$	(23,126	)

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

3. Derivative Instruments and Hedging Activities (Continued)

Derivative instruments we are party to include: (i) interest rate swap agreements (which are designated as cash flow hedges), (ii) cross-currency swap agreements (which are designated as net investment hedges) and (iii) foreign exchange currency forward contracts (which are not designated as hedges).

Interest Rate Swap Agreements Designated as Cash Flow Hedges

In March 2018, we entered into interest rate swap agreements to limit our exposure to changes in interest rates on a portion of our floating rate indebtedness. As of December 31, 2019 and 2018, we had $350,000 in notional value of interest rate swap agreements outstanding, which expire in March 2022. Under the interest rate swap agreements, we receive variable rate interest payments associated with the notional amount of each interest rate swap, based upon one-month LIBOR, in exchange for the payment of fixed interest rate payments (at the fixed interest rate specified in the interest rate swap agreements).

In July 2019, we entered into forward-starting interest rate swap agreements to limit our exposure to changes in interest rates on a portion of our floating rate indebtedness once our current interest rate swap agreements expire in March 2022. The forward-starting interest rate swap agreements have $350,000 in notional value, commence in March 2022 and expire in March 2024. Under the swap agreements we will receive variable rate interest payments based upon one-month LIBOR, in exchange for the payment of fixed interest rate payments at the rates specified in the interest rate swap agreements.

We have designated these interest rate swap agreements, including the forward-starting interest rate swap agreements, as cash flow hedges. Unrealized gains are recognized as assets while unrealized losses are recognized as liabilities. At December 31, 2019 and 2018, we had a derivative liability of $8,774 and $973, respectively, which was recorded as a component of Other long-term liabilities in our Consolidated Balance Sheets. We have recorded the change in fair value of the interest rate swap agreements as a component of Accumulated other comprehensive items, net in our Consolidated Balance Sheets. We have recorded unrealized losses of $7,801 and $973 for the years ended December 31, 2019 and 2018, respectively. As of December 31, 2019, cumulative net losses of $8,774 are recorded within Accumulated other comprehensive items, net associated with these cash flow hedges.

Net Investment Hedges

a. Cross-Currency Swap Agreements Designated as a Hedge of Net Investment

In August 2019, we entered into cross-currency swap agreements to hedge the variability of exchange rate impacts between the United States dollar and the Euro. Under the terms of the cross-currency swap agreements we notionally exchanged approximately $110,000 at an interest rate of 6.0% for approximately 99,055 Euros at a weighted average interest rate of approximately 3.65%. The cross-currency swap agreements, which expire in August 2023, are designated as a hedge of net investment against certain of our Euro denominated subsidiaries and require an exchange of the notional amounts at maturity. The cross-currency swaps are marked to market at each reporting period and any changes in fair value are recognized as a component of Accumulated other comprehensive items, net. Unrealized gains are recognized as assets while unrecognized losses are recognized as liabilities. At December 31, 2019 we had a derivative liability of $982, which was recorded as a component of Other long-term liabilities in our Consolidated Balance Sheets, which represents the fair value of the cross-currency swap agreements. We have recorded unrealized losses of $982 for the year ended December 31, 2019.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

3. Derivative Instruments and Hedging Activities (Continued)

b. Euro Notes Designated as a Hedge of Net Investment

In addition, we have designated a portion of our Euro Notes (as defined in Note 4) as a hedge of net investment of certain of our Euro denominated subsidiaries. For the years ended December 31, 2019, 2018 and 2017 we designated, on average, 284,986, 224,424 and 103,682 Euros, respectively, of our Euro Notes as a hedge of net investment of certain of our Euro denominated subsidiaries. As a result, we recorded the following foreign exchange gains (losses) related to the change in fair value of such debt due to the currency translation adjustments, which is a component of Accumulated other comprehensive items, net:

	Year Ended December 31,
	2019				2018				2017
Foreign exchange gains (losses)	$	6,003			$	11,070			$	(15,015	)

As of December 31, 2019, cumulative net gains of $20,261, net of tax, are recorded in Accumulated other comprehensive items, net associated with this net investment hedge.

Foreign Exchange Currency Forward Contracts Not Designated as Hedges

We have entered into forward contracts to hedge our exposures associated with certain foreign currencies. We have not designated any of these forward contracts as hedges. Our policy is to record the fair value of each derivative instrument on a gross basis. As of December 31, 2019, we had no outstanding forward contracts. As of December 31, 2018, we had outstanding forward contracts to purchase 29,000 Euros and sell $33,374 United States dollars. At December 31, 2018, we had a derivative asset of $93 which is recorded as a component of Prepaid expenses and other in our Consolidated Balance Sheet.

Net cash payments (receipts) included in cash from operating activities related to settlements associated with foreign currency forward contracts for the years ended December 31, 2019, 2018 and 2017, are as follows:

	Year Ended December 31,
	2019				2018				2017
Net payments (receipts)	$	737			$	5,797			$	(9,073	)

Losses (gains) for our derivative instruments for the years ended December 31, 2019, 2018 and 2017 are as follows:

				Amount of Loss (Gain) Recognized in Income on Derivatives
				December 31,
Derivatives Not Designated as Hedging Instruments		Location of Loss (Gain) Recognized in Income on Derivative		2019				2018				2017
Foreign exchange contracts		Other expense (income), net		$	737			$	4,954			$	(8,292	)

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

4. Debt

Long-term debt is as follows:

		December 31, 2019																	December 31, 2018
		Debt (inclusive of discount)				Unamortized Deferred Financing Costs				Carrying Amount				Fair Value					Debt (inclusive of discount)				Unamortized Deferred Financing Costs				Carrying Amount				Fair Value
Revolving Credit Facility(1)		$	348,808			$	(12,053	)		$	336,755			$	348,808				$	793,832			$	(14,117	)		$	779,715			$	793,832
Term Loan A(1)		228,125				—				228,125				228,125					240,625				—				240,625				240,625
Term Loan B(1)(2)		686,395				(7,493		)		678,902				686,890					693,169				(8,742		)		684,427				660,013
Australian Dollar Term Loan (the "AUD Term Loan")(3)(4)		226,924				(2,313		)		224,611				228,156					233,955				(3,084		)		230,871				235,645
UK Bilateral Revolving Credit Facility (the "UK Bilateral Facility")(4)		184,601				(1,801		)		182,800				184,601					178,299				(2,357		)		175,942				178,299
43/8% Senior Notes due 2021 (the "43/8% Notes")(5)(6)(7)		500,000				(2,436		)		497,564				503,450					500,000				(4,155		)		495,845				488,750
6% Senior Notes due 2023 (the "6% Notes due 2023")(5)(6)		600,000				(4,027		)		595,973				613,500					600,000				(5,126		)		594,874				606,000
53/8% CAD Senior Notes due 2023 (the "CAD Notes due 2023")(5)(7)(8)		192,058				(2,071		)		189,987				199,380					183,403				(2,506		)		180,897				186,154
53/4% Senior Subordinated Notes due 2024 (the "53/4% Notes")(5)(6)		1,000,000				(6,409		)		993,591				1,010,625					1,000,000				(7,782		)		992,218				940,000
3% Euro Senior Notes due 2025 (the "Euro Notes")(5)(6)(7)		336,468				(3,462		)		333,006				345,660					343,347				(4,098		)		339,249				321,029
37/8% GBP Senior Notes due 2025 (the "GBP Notes due 2025")(5)(7)(9)		527,432				(5,809		)		521,623				539,892					509,425				(6,573		)		502,852				453,811
53/8% Senior Notes due 2026 (the "53/8% Notes")(5)(7)(10)		250,000				(2,756		)		247,244				261,641					250,000				(3,185		)		246,815				224,375
47/8% Senior Notes due 2027 (the "47/8% Notes due 2027")(5)(6)(7)		1,000,000				(11,020		)		988,980				1,029,475					1,000,000				(12,442		)		987,558				855,000
51/4% Senior Notes due 2028 (the "51/4% Notes")(5)(6)(7)		825,000				(9,742		)		815,258				859,598					825,000				(10,923		)		814,077				713,625
47/8% Senior Notes due 2029 (the "47/8% Notes due 2029")(5)(6)(7)		1,000,000				(14,104		)		985,896				1,015,640					—				—				—				—
Real Estate Mortgages, Financing Lease Liabilities and Other(11)		523,671				(406		)		523,265				523,671					606,702				(171		)		606,531				606,702
Accounts Receivable Securitization Program(12)		272,062				(81		)		271,981				272,062					221,673				(218		)		221,455				221,673
Mortgage Securitization Program(13)		50,000				(982		)		49,018				50,000					50,000				(1,128		)		48,872				50,000
Total Long-term Debt		8,751,544				(86,965		)		8,664,579									8,229,430				(86,607		)		8,142,823
Less Current Portion		(389,013		)		—				(389,013		)							(126,406		)		—				(126,406		)
Long-term Debt, Net of Current Portion		$	8,362,531			$	(86,965	)		$	8,275,566								$	8,103,024			$	(86,607	)		$	8,016,417

---

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

4. Debt (Continued)

(1)

The capital stock or other equity interests of most of our United States subsidiaries, and up to 66% of the capital stock or other equity interests of most of our first-tier foreign subsidiaries, are pledged to secure these debt instruments, together with all intercompany obligations (including promissory notes) of subsidiaries owed to us or to one of our United States subsidiary guarantors. In addition, Iron Mountain Canada Operations ULC ("Canada Company") has pledged 66% of the capital stock of its subsidiaries, and all intercompany obligations (including promissory notes) owed to or held by it, to secure the Canadian dollar subfacility under the Revolving Credit Facility. The fair value (Level 3 of fair value hierarchy described at Note 2.s.) of these debt instruments approximates the carrying value (as borrowings under these debt instruments are based on current variable market interest rates (plus a margin that is subject to change based on our consolidated leverage ratio), as of December 31, 2019 and 2018.

(2)	The amount of debt for the Term Loan B (as defined below) reflects an unamortized original issue discount of $1,355 and $1,581 as of December 31, 2019 and 2018, respectively.

(3)	The amount of debt for the AUD Term Loan reflects an unamortized original issue discount of $1,232 and $1,690 as of December 31, 2019 and 2018, respectively.

(4)	The fair value (Level 3 of fair value hierarchy described at Note 2.s.) of this debt instrument approximates the carrying value as borrowings under this debt instrument are based on a current variable market interest rate.

(5)	The fair values (Level 1 of fair value hierarchy described at Note 2.s.) of these debt instruments are based on quoted market prices for these notes on December 31, 2019 and 2018, respectively.

(6)

Collectively, the "Parent Notes". IMI is the direct obligor on the Parent Notes, which are fully and unconditionally guaranteed, on a senior or senior subordinated basis, as the case may be, by IMI's direct and indirect 100% owned United States subsidiaries that represent the substantial majority of our United States operations (the "Guarantors"). These guarantees are joint and several obligations of the Guarantors. The remainder of our subsidiaries do not guarantee the Parent Notes. See Note 5.

(7)

The 43/8% Notes, the CAD Notes due 2023, the Euro Notes, the GBP Notes due 2025, the 53/8% Notes, the 47/8% Notes due 2027, the 51/4% Notes and the 47/8% Notes due 2029 (collectively, the "Unregistered Notes") have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or under the securities laws of any other jurisdiction. Unless they are registered, the Unregistered Notes may be offered only in transactions that are exempt from registration under the Securities Act or the securities laws of any other jurisdiction.

(8)	Canada Company is the direct obligor on the CAD Notes due 2023, which are fully and unconditionally guaranteed, on a senior basis, by IMI and the Guarantors. These guarantees are joint and several obligations of IMI and the Guarantors. See Note 5.

(9)	Iron Mountain (UK) PLC ("IM UK") is the direct obligor on the GBP Notes due 2025, which are fully and unconditionally guaranteed, on a senior basis, by IMI and the Guarantors. These guarantees are joint and several obligations of IMI and the Guarantors. See Note 5.

(10)	Iron Mountain US Holdings, Inc. ("IM US Holdings"), one of the Guarantors, is the direct obligor on the 53/8% Notes, which are fully and unconditionally guaranteed, on a senior basis, by IMI and the other Guarantors. These guarantees are joint and several obligations of IMI and such Guarantors. See Note 5.

(11)

Includes (i) real estate mortgages of $27,036 and $18,576 as of December 31, 2019 and 2018, respectively, which bear interest at approximately 3.9% as of December 31, 2019 and 4.1% as of December 31, 2018 and are payable in various installments through 2024, (ii) financing lease liabilities of $367,182 and $447,173 as of December 31, 2019 and 2018, respectively, which bear a weighted average interest rate of 5.7% at December 31, 2019 and 2018 and (iii) other notes and other obligations, which were assumed by us as a result of certain acquisitions, of $129,453 and $140,953 as of December 31, 2019 and 2018, respectively, and bear a weighted average interest rate of 10.8% at December 31, 2019 and 11.1% at December 31, 2018, respectively. We believe the fair value (Level 3 of fair value hierarchy described at Note 2.s.) of this debt approximates its carrying value.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

4. Debt (Continued)

(12)	The Accounts Receivable Securitization Special Purpose Subsidiaries are the obligors under this program. We believe the fair value (Level 3 of fair value hierarchy described at Note 2.s.) of this debt approximates its carrying value.

(13)	The Mortgage Securitization Special Purpose Subsidiary is the obligor under this program. We believe the fair value (Level 3 of fair value hierarchy described at Note 2.s.) of this debt approximates its carrying value.

a. Credit Agreement

On August 21, 2017, we entered into a new credit agreement (the "Credit Agreement") which amended and restated our then existing credit agreement which consisted of a revolving credit facility (the "Former Revolving Credit Facility") and a term loan and was scheduled to terminate on July 6, 2019. The Credit Agreement consists of a revolving credit facility (the "Revolving Credit Facility") and a term loan (the "Term Loan A"). The maximum amount permitted to be borrowed under the Revolving Credit Facility is $1,750,000. The original principal amount of the Term Loan A was $250,000. Under the Revolving Credit Facility, we had the option to request additional commitments of up to $500,000, in the form of term loans or through increased commitments under the Revolving Credit Facility, subject to the conditions specified in the Credit Agreement. The Credit Agreement was originally scheduled to mature on August 21, 2022, at which point all obligations were to become due.

On March 22, 2018, we entered into an amendment (the “March 2018 Amendment”) to the Credit Agreement which provided us with the option to request additional commitments of up to approximately $1,260,000 under the Credit Agreement in the form of term loans or through increased commitments under the Revolving Credit Facility, subject to the conditions specified in the Credit Agreement. On June 4, 2018, we entered into another amendment (the "June 2018 Amendment") to the Credit Agreement which (i) reduced interest rate margins applicable to existing and future borrowings under the Revolving Credit Facility and Term Loan A by 0.25% and (ii) extended the maturity date of the Credit Agreement to June 4, 2023. The Term Loan A is to be paid in quarterly installments in an amount equal to $3,125 per quarter, with the remaining balance due on June 4, 2023.

On December 20, 2019, we entered into an amendment (the “December 2019 Amendment”) to the Credit Agreement. The December 2019 Amendment amended the definition of EBITDA and certain other definitions and restrictive covenants contained in the Credit Agreement.

The Revolving Credit Facility enables IMI and certain of its United States and foreign subsidiaries to borrow in United States dollars and (subject to sublimits) a variety of other currencies (including Canadian dollars, British pounds sterling and Euros, among other currencies) in an aggregate outstanding amount not to exceed $1,750,000.

IMI and the Guarantors guarantee all obligations under the Credit Agreement. The interest rate on borrowings under the Credit Agreement varies depending on our choice of interest rate and currency options, plus an applicable margin, which varies based on our consolidated leverage ratio. Additionally, the Credit Agreement requires the payment of a commitment fee on the unused portion of the Revolving Credit Facility, which fee ranges from between 0.25% to 0.4% based on our consolidated leverage ratio and fees associated with outstanding letters of credit. As of December 31, 2019, we had $348,808 and $228,125 of outstanding borrowings under the Revolving Credit Facility and the Term Loan A, respectively. Of the $348,808 of outstanding borrowings under the Revolving Credit Facility, $257,800 was denominated in United States dollars, 44,300 was denominated in Canadian dollars and 50,800 was denominated in Euros. In addition, we also had various outstanding letters of credit totaling $4,853 under the Revolving Credit Facility. The remaining amount available for borrowing under the Revolving Credit Facility as of December 31, 2019, which is based on IMI's leverage ratio, the last 12 months' earnings before interest, taxes, depreciation and amortization and rent expense ("EBITDAR"), other adjustments as defined in the Credit Agreement and current external debt, was $1,396,339 (which amount represents the maximum availability as of such date). Available borrowings under the Revolving Credit Facility are subject to compliance with our indenture covenants as described more fully in Note 4.i. The average interest rate in effect under the Credit Agreement was 3.3% as of December 31, 2019. The average interest rate in effect under the Revolving Credit Facility was 3.2% as of December 31, 2019 and the interest rate in effect under the Term Loan A as of December 31, 2019 was 3.5%.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

4. Debt (Continued)

In connection with the March 2018 Amendment, IMI's wholly owned subsidiary, Iron Mountain Information Management, LLC ("IMIM"), entered into an incremental term loan activation notice (the "Activation Notice") with certain lenders pursuant to which the lenders party to the Activation Notice agreed to provide commitments to fund an incremental term loan B in the original principal amount of $700,000 (the “Term Loan B”). On March 26, 2018, IMIM borrowed the full amount of the Term Loan B, which matures on January 2, 2026. The Term Loan B was issued at 99.75% of par. The aggregate net proceeds of approximately $689,850, after paying commissions to the joint lead arrangers and net of the original discount, were used to repay outstanding borrowings under the Revolving Credit Facility. The Term Loan B holders benefit from the same security and guarantees as other borrowings under the Credit Agreement. The Term Loan B holders also benefit from the same affirmative and negative covenants as other borrowings under the Credit Agreement; however, the Term Loan B holders are not generally entitled to the benefits of the financial covenants under the Credit Agreement.

Principal payments on the Term Loan B are to be paid in quarterly installments of $1,750 per quarter during the period June 30, 2018 through December 31, 2025, with the balance due on January 2, 2026. The Term Loan B may be prepaid without penalty at any time. The Term Loan B bears interest at a rate of LIBOR plus 1.75%. The interest rate in effect under Term Loan B as of December 31, 2019 was 3.6%.

b. Notes Issued under Indentures

As of December 31, 2019, we had 10 series of senior subordinated or senior notes issued under various indentures, seven of which are direct obligations of the parent company, IMI; one of which (the 53/8% Notes) is a direct obligation of IM US Holdings; one of which (the CAD Notes due 2023) is a direct obligation of Canada Company; and one of which (the GBP Notes due 2025) is a direct obligation of IM UK. Each series of notes shown below (i) is effectively subordinated to all of our secured indebtedness, including under the Credit Agreement, to the extent of the value of the collateral securing such indebtedness, (ii) ranks pari passu in right of payment with each other and with debt outstanding under the Credit Agreement, except the 53/4% Notes which are subordinated in right of payment to the Credit Agreement, the senior notes shown below and other "Senior Debt" as defined in, and to the extent set forth in, our indenture for the 53/4% Notes, and (iii) is structurally subordinated to all liabilities of our subsidiaries that do not guarantee such series of notes:

•	43/8% Notes: $500,000 principal amount of senior notes maturing on June 1, 2021 and bearing interest at a rate of 43/8% per annum, payable semi-annually in arrears on December 1 and June 1;

•	6% Notes due 2023: $600,000 principal amount of senior notes maturing on August 15, 2023 and bearing interest at a rate of 6% per annum, payable semi-annually in arrears on February 15 and August 15;

•	CAD Notes due 2023: 250,000 CAD principal amount of senior notes maturing on September 15, 2023 and bearing interest at a rate of 53/8% per annum, payable semi-annually in arrears on March 15 and September 15;

•	53/4% Notes: $1,000,000 principal amount of senior subordinated notes maturing on August 15, 2024 and bearing interest at a rate of 53/4% per annum, payable semi-annually in arrears on February 15 and August 15;

•	Euro Notes: 300,000 Euro principal amount of senior notes maturing on January 15, 2025 and bearing interest at a rate of 3% per annum, payable semi-annually in arrears on January 15 and July 15;

•	GBP Notes due 2025: 400,000 British pounds sterling principal amount of senior notes maturing on November 15, 2025 and bearing interest at a rate of 37/8% per annum, payable semi-annually in arrears on May 15 and November 15;

•	53/8% Notes: $250,000 principal amount of senior notes maturing on June 1, 2026 and bearing interest at a rate of 53/8% per annum, payable semi-annually in arrears on December 1 and June 1;

•	47/8% Notes due 2027: $1,000,000 principal amount of senior notes maturing on September 15, 2027 and bearing interest at a rate of 47/8% per annum, payable semi-annually in arrears on March 15 and September 15;

•	51/4% Notes: $825,000 principal amount of senior notes maturing on March 15, 2028 and bearing interest at a rate of 51/4% per annum, payable semi-annually in arrears on March 15 and September 15; and

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

4. Debt (Continued)

•	47/8% Notes due 2029: $1,000,000 principal amount of senior notes maturing on September 15, 2029 and bearing interest at a rate of 47/8% per annum, payable semi-annually in arrears on March 15 and September 15.

In May 2017, IMI completed a private offering of 300,000 Euros in aggregate principal amount of the Euro Notes, which were issued at par. The net proceeds to IMI from the Euro Notes of 296,250 Euros (or $332,683, based upon the exchange rate between the Euro and the United States dollar on May 23, 2017 (the settlement date for the Euro Notes)), after paying the initial purchasers' commissions, were used to repay outstanding borrowings under the Former Revolving Credit Facility.

In August 2017, we redeemed all of the 200,000 Canadian dollars in aggregate principal outstanding of the 61/8% CAD Senior Notes due 2021 (the "CAD Notes due 2021") (approximately $157,458, based upon the exchange rate between the Canadian dollar and the United States dollar on August 15, 2017 (the redemption date for the CAD Notes due 2021)) at 103.063% of par, plus accrued and unpaid interest to, but excluding the redemption date, utilizing borrowings under the Former Revolving Credit Facility. We recorded a charge of $6,354 to Other expense (income), net in the third quarter of 2017 related to the early extinguishment of this debt, representing the call premium associated with the early redemption, as well as a write-off of unamortized deferred financing costs.

In September 2017, IMI completed a private offering of $1,000,000 in aggregate principal amount of the 47/8% Notes due 2027, which were issued at par. The net proceeds of approximately $987,500 from the 47/8% Notes due 2027 after deducting discounts to the initial purchasers, together with borrowings under the Revolving Credit Facility, were used to fund the redemption of all of the 6% Notes due 2020. In September 2017, we redeemed all of the $1,000,000 in aggregate principal outstanding of the 6% Notes due 2020 at 103.155% of par, plus accrued and unpaid interest to, but excluding, the redemption date. We recorded a charge of $41,738 to Other expense (income), net in the third quarter of 2017 related to the early extinguishment of this debt, representing the call premium associated with the early redemption, as well as a write-off of unamortized deferred financing costs.

In November 2017, IM UK completed a private offering of 400,000 British pounds sterling in aggregate principal amount of the GBP Notes due 2025, which were issued at 100% of par. The net proceeds to IM UK of 395,000 British pounds sterling (or $522,077, based upon the exchange rate between the British pounds sterling and the United States dollar on November 13, 2017 (the settlement date for the GBP Notes due 2025)), after deducting discounts to the initial purchasers, were used, together with borrowings under the Revolving Credit Facility, to fund the redemption of all the GBP Notes due 2022. In November 2017, we redeemed all of the GBP Notes due 2022 at 104.594% of par, plus accrued and unpaid interest to, but excluding, the redemption date. We recorded a charge of $30,056 to Other expense (income), net in the fourth quarter of 2017 related to the early extinguishment of this debt, representing the call premium associated with the early redemption, as well as a write-off of unamortized deferred financing costs.

In December 2017, IMI completed a private offering of $825,000 in aggregate principal amount of the 51/4% Notes. The 51/4% Notes were issued at par. The net proceeds of approximately $814,688 from the 51/4% Notes after deducting discounts to the initial purchasers, together with the net proceeds from the Equity Offering and the Over-Allotment Option (each as defined in Note 12), were used to finance the purchase price of the IODC Transaction, which closed on January 10, 2018, and to pay related fees and expenses. At December 31, 2017, the net proceeds from the 51/4% Notes, together with the net proceeds of the Equity Offering, were used to temporarily repay borrowings under our Revolving Credit Facility and invest in money market funds.

In September 2019, IMI completed a private offering of $1,000,000 in aggregate principal amount of the 47/8% Notes due 2029. The 47/8% Notes due 2029 were issued at par. The net proceeds of approximately $987,500 from the 47/8% Notes due 2029, after paying the initial purchasers' commissions, were used to repay outstanding borrowings under the Revolving Credit Facility.

Each of the indentures for the notes provides that we may redeem the outstanding notes, in whole or in part, upon satisfaction of certain terms and conditions. In any redemption, we are also required to pay all accrued but unpaid interest on the outstanding notes.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

4. Debt (Continued)

The following table presents the various redemption dates and prices of the senior or senior subordinated notes. The redemption dates reflect the date at or after which the notes may be redeemed at our option at a premium redemption price. After these dates, the notes may be redeemed at 100% of face value:

Redemption Date		43/8% Notes June 1,			6% Notes due 2023 August 15,			CAD Notes due 2023 September 15,			53/4% Notes August 15,			Euro Notes January 15,			GBP Notes due 2025 November 15,			53/8% Notes June 1,			47/8% Notes due 2027 September 15,			51/4% Notes March 15,			47/8% Notes due 2029 September 15,
2019		101.094	%	(1)	102.000	%	(1)	104.031	%	(1)	100.958	%	(1)	—			—			—			—			—			—
2020		100.000	%		101.000	%		102.688	%		100.000	%		101.500	%	(1)	101.938	%	(1)	—			—			—			—
2021		100.000	%		100.000	%		101.344	%		100.000	%		100.750	%		100.969	%		102.688	%	(1)	—			—			—
2022		—			100.000	%		100.000	%		100.000	%		100.000	%		100.000	%		101.792	%		102.438	%	(1)	102.625	%	(1)	—
2023		—			100.000	%		100.000	%		100.000	%		100.000	%		100.000	%		100.896	%		101.625	%		101.750	%		—
2024		—			—			—			100.000	%		100.000	%		100.000	%		100.000	%		100.813	%		100.875	%		102.438	%	(1)
2025		—			—			—			—			100.000	%		100.000	%		100.000	%		100.000	%		100.000	%		101.609	%
2026		—			—			—			—			—			—			100.000	%		100.000	%		100.000	%		100.814	%
2027		—			—			—			—			—			—			—			100.000	%		100.000	%		100.000	%
2028		—			—			—			—			—			—			—			—			100.000	%		100.000	%
2029		—			—			—			—			—			—			—			—			—			100.000	%

---

(1)	Prior to this date, the relevant notes are redeemable, at our option, in whole or in part, at a specified redemption price or make-whole price, as the case may be.

Each of the indentures for the notes provides that we must repurchase, at the option of the holders, the notes at 101% of their principal amount, plus accrued and unpaid interest, upon the occurrence of a "Change of Control," which is defined in each respective indenture. Except for required repurchases upon the occurrence of a Change of Control or in the event of certain asset sales, each as described in the respective indenture, we are not required to make sinking fund or redemption payments with respect to any of the notes.

c. Australian Dollar Term Loan

On March 27, 2018, Iron Mountain Australia Group Pty, Ltd. ("IM Australia"), a wholly owned subsidiary of IMI, amended its AUD Term Loan (the "AUD Term Loan Amendment") to (i) increase the borrowings under the AUD Term Loan from 250,000 Australian dollars to 350,000 Australian dollars; (ii) increase the quarterly principal payments from 6,250 Australian dollars per year to 8,750 Australian dollars per year; and (iii) decrease the interest rate on the AUD Term Loan from BBSY (an Australian benchmark variable interest rate) plus 4.3% to BBSY plus 3.875%. The AUD Term Loan matures in September 2022.

All indebtedness associated with the AUD Term Loan was issued at 99% of par. The net proceeds associated with the AUD Term Loan Amendment of approximately 99,000 Australian dollars (or approximately $75,600, based upon the exchange rate between the Australian dollar and the United States dollar on March 29, 2018 (the closing date of the AUD Term Loan Amendment)), net of the original discount, were used to repay outstanding borrowings under the Revolving Credit Facility.

Principal payments on the AUD Term Loan are to be paid in quarterly installments in an amount equivalent to an aggregate of 8,750 Australian dollars per year, with the remaining balance due September 22, 2022. The AUD Term Loan is secured by substantially all assets of IM Australia. IMI and the Guarantors guarantee all obligations under the AUD Term Loan.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

4. Debt (Continued)

As of December 31, 2019, we had 325,313 Australian dollars ($228,156 based upon the exchange rate between the United States dollar and the Australian dollar as of December 31, 2019) outstanding on the AUD Term Loan. As of December 31, 2018, we had 334,063 Australian dollars ($235,645 based upon the exchange rate between the United States dollar and the Australian dollar as of December 31, 2018) outstanding on the AUD Term Loan. The interest rate in effect under the AUD Term Loan was 4.8% and 6.0% as of December 31, 2019 and 2018, respectively.

d. UK Bilateral Revolving Credit Facility

On September 24, 2018, IM UK and Iron Mountain (UK) Data Centre Limited entered into a 140,000 British pounds sterling Revolving Credit Facility (the "UK Bilateral Facility") with Barclays Bank PLC. The maximum amount permitted to be borrowed under the UK Bilateral Facility is 140,000 British pounds sterling, and we have the option to request additional commitments of up to 125,000 British pounds sterling, subject to the conditions specified in the UK Bilateral Facility. The UK Bilateral Facility was fully utilized on September 24, 2018 (the closing date of the UK Bilateral Facility). The initial net proceeds received under the UK Bilateral Facility of 138,250 British pounds sterling (or approximately $180,300, based upon the exchange rate between the British pound sterling and the United States dollar on September 24, 2018), net of upfront fees, were used to repay borrowings under the Revolving Credit Facility. The UK Bilateral Facility is secured by certain properties in the United Kingdom. IMI and the Guarantors guarantee all obligations under the UK Bilateral Facility. The UK Bilateral Facility is scheduled to mature on September 23, 2022, at which point all obligations become due. The UK Bilateral Facility contains an option to extend the maturity date for an additional year, subject to the conditions specified in the UK Bilateral Facility, including the lender's consent. The UK Bilateral Facility bears interest at a rate of LIBOR plus 2.25%. The interest rate in effect under the UK Bilateral Facility was 3.1% as of December 31, 2019 and 2018.

e. Accounts Receivable Securitization Program

In March 2015, we entered into a $250,000 accounts receivable securitization program (the "Accounts Receivable Securitization Program") involving several of our wholly owned subsidiaries and certain financial institutions. Under the Accounts Receivable Securitization Program, certain of our subsidiaries sell substantially all of their United States accounts receivable balances to our wholly owned special purpose entities, Iron Mountain Receivables QRS, LLC and Iron Mountain Receivables TRS, LLC (the "Accounts Receivable Securitization Special Purpose Subsidiaries"). The Accounts Receivable Securitization Special Purpose Subsidiaries use the accounts receivable balances to collateralize loans obtained from certain financial institutions. The Accounts Receivable Securitization Special Purpose Subsidiaries are consolidated subsidiaries of IMI. The Accounts Receivable Securitization Program is accounted for as a collateralized financing activity, rather than a sale of assets, and therefore: (i) accounts receivable balances pledged as collateral are presented as assets and borrowings are presented as liabilities on our Consolidated Balance Sheets, (ii) our Consolidated Statements of Operations reflect the associated charges for bad debt expense related to pledged accounts receivable (a component of selling, general and administrative expenses) and reductions to revenue due to billing and service related credit memos issued to customers and related reserves, as well as interest expense associated with the collateralized borrowings and (iii) receipts from customers related to the underlying accounts receivable are reflected as operating cash flows and borrowings and repayments under the collateralized loans are reflected as financing cash flows within our Consolidated Statements of Cash Flows. IMIM retains the responsibility of servicing the accounts receivable balances pledged as collateral for the Accounts Receivable Securitization Program and IMI provides a performance guaranty. The maximum availability allowed is limited by eligible accounts receivable, as defined under the terms of the Accounts Receivable Securitization Program.

On July 31, 2017, we amended the Accounts Receivable Securitization Program to (i) increase the maximum amount available from $250,000 to $275,000 and (ii) to extend the maturity date from March 6, 2018 to July 30, 2020, at which point all obligations become due. As the Accounts Receivable Securitization Program matures on July 30, 2020, the amount outstanding under the Accounts Receivable Securitization Program is classified within the current portion of long-term debt in our Consolidated Balance Sheet as of December 31, 2019. As of December 31, 2019 and 2018, the maximum availability allowed and amount outstanding under the Accounts Receivable Securitization Program was $272,062 and $221,673, respectively. The interest rate in effect under the Accounts Receivable Securitization Program was 2.8% and 3.0% as of December 31, 2019 and 2018, respectively. Commitment fees at a rate of 40 basis points are charged on amounts made available but not borrowed under the Accounts Receivable Securitization Program.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

4. Debt (Continued)

f. Mortgage Securitization Program

In October 2016, we entered into a $50,000 mortgage securitization program (the "Mortgage Securitization Program") involving certain of our wholly owned subsidiaries with Goldman Sachs Mortgage Company (“Goldman Sachs”). Under the Mortgage Securitization Program, IMIM contributed certain real estate assets to its wholly owned special purpose entity, Iron Mountain Mortgage Finance I, LLC (the "Mortgage Securitization Special Purpose Subsidiary"). The Mortgage Securitization Special Purpose Subsidiary then used the real estate to secure a collateralized loan obtained from Goldman Sachs. The Mortgage Securitization Special Purpose Subsidiary is a consolidated subsidiary of IMI. The Mortgage Securitization Program is accounted for as a collateralized financing activity, rather than a sale of assets, and therefore: (i) real estate assets pledged as collateral remain as assets and borrowings are presented as liabilities on our Consolidated Balance Sheets, (ii) our Consolidated Statements of Operations reflects the associated charges for depreciation expense related to the pledged real estate and interest expense associated with the collateralized borrowings and (iii) borrowings and repayments under the collateralized loans are reflected as financing cash flows within our Consolidated Statements of Cash Flows. The Mortgage Securitization Program is scheduled to terminate on November 6, 2026, at which point all obligations become due. The outstanding amount under the Mortgage Securitization Program was $50,000 at both December 31, 2019 and 2018. The interest rate in effect under the Mortgage Securitization Program was 3.5% as of December 31, 2019 and 2018.

g. Cash Pooling

Certain of our subsidiaries participate in cash pooling arrangements (the “Cash Pools”) with Bank Mendes Gans (“BMG”), an independently operated wholly owned subsidiary of ING Group, in order to help manage global liquidity requirements. Under the Cash Pools, cash deposited by participating subsidiaries with BMG is pledged as security against the debit balances of other participating subsidiaries, and legal rights of offset are provided and, therefore, amounts are presented in our Consolidated Balance Sheets on a net basis. Each subsidiary receives interest on the cash balances held on deposit or pays interest on its debit balances based on an applicable rate as defined in the Cash Pools.

During the first quarter of 2017, we significantly expanded our utilization of the Cash Pools and reduced our utilization of our financing centers in Europe for purposes of meeting our global liquidity requirements. We currently utilize two separate cash pools with BMG, one of which we utilize to manage global liquidity requirements for our qualified REIT subsidiaries (the "QRS Cash Pool") and the other for our taxable REIT subsidiaries (the "TRS Cash Pool"). During the second quarter of 2017, we executed overdraft facility agreements for the QRS Cash Pool and TRS Cash Pool, each in an amount not to exceed $10,000. Each overdraft facility permits us to cover a temporary net debit position in the applicable pool.

The approximate amount of the net cash position, gross position and outstanding debit balances for the QRS Cash Pool and TRS Cash Pool as of December 31, 2019 and 2018 were as follows:

	December 31, 2019												December 31, 2018
	Gross Cash Position				Outstanding Debit Balances				Net Cash Position				Gross Cash Position				Outstanding Debit Balances				Net Cash Position
QRS Cash Pool	$	372,100			$	(369,000	)		$	3,100			$	300,800			$	(298,800	)		$	2,000
TRS Cash Pool	319,800				(301,300		)		18,500				281,500				(279,300		)		2,200

The net cash position balances as of December 31, 2019 and 2018 are reflected as Cash and cash equivalents in our Consolidated Balance Sheets.

h. Letters of Credit

As of December 31, 2019, we had outstanding letters of credit totaling $35,251, of which $4,853 reduce our borrowing capacity under the Revolving Credit Facility (as described above). The letters of credit expire at various dates between January 2020 and January 2033.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

4. Debt (Continued)

i. Debt Covenants

The Credit Agreement, our indentures and other agreements governing our indebtedness contain certain restrictive financial and operating covenants, including covenants that restrict our ability to complete acquisitions, pay cash dividends, incur indebtedness, make investments, sell assets and take certain other corporate actions. The covenants do not contain a rating trigger. Therefore, a change in our debt rating would not trigger a default under the Credit Agreement, our indentures or other agreements governing our indebtedness. The Credit Agreement uses EBITDAR-based calculations as the primary measures of financial performance, including leverage and fixed charge coverage ratios.

Our leverage and fixed charge coverage ratios under the Credit Agreement as of December 31, 2019 and 2018, as well as our leverage ratio under our indentures as of December 31, 2019 and 2018 are as follows:

	December 31, 2019			December 31, 2018			Maximum/Minimum Allowable
Net total lease adjusted leverage ratio	5.7			5.6			Maximum allowable of 6.5
Net secured debt lease adjusted leverage ratio	2.3			2.6			Maximum allowable of 4.0
Bond leverage ratio (not lease adjusted)	5.9			5.8			Maximum allowable of 6.5-7.0(1)
Fixed charge coverage ratio	2.2			2.2			Minimum allowable of 1.5

---

(1)

The maximum allowable leverage ratio under our indentures for the GBP Notes due 2025, the 47/8% Notes due 2027, the 51/4% Notes and the 47/8% Notes due 2029 is 7.0, while the maximum allowable leverage ratio under the indentures pertaining to our remaining senior and senior subordinated notes is 6.5. In certain instances as provided in our indentures, we have the ability to incur additional indebtedness that would result in our bond leverage ratio exceeding the maximum allowable ratio under our indentures and still remain in compliance with the covenant.

j. Maturities of long-term debt (gross of discounts) are as follows:

Year		Amount
2020		$	389,013
2021		608,584
2022		487,601
2023		1,384,684
2024		1,036,688
Thereafter		4,847,561
		8,754,131
Net Discounts		(2,587		)
Net Deferred Financing Costs		(86,965		)
Total Long-term Debt (including current portion)		$	8,664,579

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

5. Selected Consolidated Financial Statements of Parent, Guarantors and Non-Guarantors

The following data summarizes the consolidating results of IMI on the equity method of accounting as of December 31, 2019 and 2018 and for the years ended December 31, 2019, 2018 and 2017 and are prepared on the same basis as the consolidated financial statements.

The Parent Notes, the CAD Notes due 2023, the GBP Notes due 2025 and the 53/8% Notes are guaranteed by the subsidiaries referred to below as the Guarantors. These subsidiaries are 100% owned by IMI. The guarantees are full and unconditional, as well as joint and several.

Additionally, IMI guarantees the CAD Notes due 2023, which were issued by Canada Company, the GBP Notes, which were issued by IM UK, and the 53/8% Notes, which were issued by IM US Holdings, which is one of the Guarantors. Canada Company and IM UK do not guarantee the Parent Notes. The subsidiaries that do not guarantee the Parent Notes, the CAD Notes due 2023, the GBP Notes and the 53/8% Notes are referred to below as the Non-Guarantors.

In the normal course of business we periodically change the ownership structure of our subsidiaries to meet the requirements of our business. In the event of such changes, we recast the prior period financial information within this footnote to conform to the current period presentation in the period such changes occur. Generally, these changes do not alter the designation of the underlying subsidiaries as Guarantors or Non-Guarantors. However, they may change whether the underlying subsidiary is owned by the Parent, a Guarantor or a Non-Guarantor. If such a change occurs, the amount of investment in subsidiaries in the below Consolidated Balance Sheets and equity in the earnings (losses) of subsidiaries, net of tax in the below Consolidated Statements of Operations and Comprehensive Income (Loss) with respect to the relevant Parent, Guarantors, Non-Guarantors and Eliminations columns also would change.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

5. Selected Consolidated Financial Statements of Parent, Guarantors and Non-Guarantors (Continued)

CONSOLIDATED BALANCE SHEETS

	December 31, 2019
	Parent				Guarantors				Non- Guarantors				Eliminations				Consolidated
ASSETS
Current Assets:
Cash and cash equivalents(1)	$	105			$	206,297			$	163,858			$	(176,705	)		$	193,555
Accounts receivable	—				45,608				805,093				—				850,701
Intercompany receivable	—				658,580				—				(658,580		)		—
Prepaid expenses and other	—				104,164				87,948				(29		)		192,083
Total Current Assets	105				1,014,649				1,056,899				(835,314		)		1,236,339
Property, Plant and Equipment, Net	597				3,051,426				1,571,014				—				4,623,037
Other Assets, Net:
Long-term notes receivable from affiliates and intercompany receivable	5,347,774				—				—				(5,347,774		)		—
Investment in subsidiaries	1,966,978				1,063,178				—				(3,030,156		)		—
Goodwill	—				2,855,424				1,629,785				—				4,485,209
Operating lease right-of-use assets	—				986,362				882,739				—				1,869,101
Other	—				911,803				691,327				—				1,603,130
Total Other Assets, Net	7,314,752				5,816,767				3,203,851				(8,377,930		)		7,957,440
Total Assets	$	7,315,454			$	9,882,842			$	5,831,764			$	(9,213,244	)		$	13,816,816
LIABILITIES AND EQUITY
Intercompany Payable	$	338,794			$	—			$	319,786			$	(658,580	)		$	—
Debit Balances Under Cash Pool	—				—				176,705				(176,705		)		—
Current Portion of Long-term Debt	—				51,868				337,174				(29		)		389,013
Total Other Current Liabilities (includes current portion of operating lease liabilities)	292,673				704,109				563,714				—				1,560,496
Long-term Debt, Net of Current Portion	5,210,269				1,482,571				1,582,726				—				8,275,566
Long-Term Operating Lease Liabilities, Net of Current Portion	—				915,840				812,846				—				1,728,686
Long-term Notes Payable to Affiliates and Intercompany Payable	—				5,347,774				—				(5,347,774		)		—
Other Long-term Liabilities	9,756				62,525				258,865				—				331,146
Commitments and Contingencies (see Note 10)
Redeemable Noncontrolling Interests (see Note 2.v.)	—				—				67,682				—				67,682
Total Iron Mountain Incorporated Stockholders' Equity	1,463,962				1,318,155				1,712,001				(3,030,156		)		1,463,962
Noncontrolling Interests	—				—				265				—				265
Total Equity	1,463,962				1,318,155				1,712,266				(3,030,156		)		1,464,227
Total Liabilities and Equity	$	7,315,454			$	9,882,842			$	5,831,764			$	(9,213,244	)		$	13,816,816

---

(1)	Included within Cash and Cash Equivalents at December 31, 2019 is approximately $198,300 and $0 of cash on deposit associated with our Cash Pools for the Guarantors and Non-Guarantors, respectively. See Note 4 for more information on our Cash Pools.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

5. Selected Consolidated Financial Statements of Parent, Guarantors and Non-Guarantors (Continued)

CONSOLIDATED BALANCE SHEETS (Continued)

	December 31, 2018
	Parent				Guarantors				Non- Guarantors				Eliminations				Consolidated
ASSETS
Current Assets:
Cash and cash equivalents(1)	$	132			$	63,407			$	169,318			$	(67,372	)		$	165,485
Accounts receivable	—				47,472				799,417				—				846,889
Intercompany receivable	—				821,324				—				(821,324		)		—
Prepaid expenses and other	93				109,480				86,196				(29		)		195,740
Total Current Assets	225				1,041,683				1,054,931				(888,725		)		1,208,114
Property, Plant and Equipment, Net	190				3,010,767				1,478,600				—				4,489,557
Other Assets, Net:
Long-term notes receivable from affiliates and intercompany receivable	4,954,686				—				—				(4,954,686		)		—
Investment in subsidiaries	1,862,048				983,018				—				(2,845,066		)		—
Goodwill	—				2,861,381				1,579,649				—				4,441,030
Other	—				982,932				735,585				—				1,718,517
Total Other Assets, Net	6,816,734				4,827,331				2,315,234				(7,799,752		)		6,159,547
Total Assets	$	6,817,149			$	8,879,781			$	4,848,765			$	(8,688,477	)		$	11,857,218
LIABILITIES AND EQUITY
Intercompany Payable	$	462,927			$	—			$	358,397			$	(821,324	)		$	—
Debit Balances Under Cash Pools	—				10,612				56,760				(67,372		)		—
Current Portion of Long-term Debt	—				63,859				62,576				(29		)		126,406
Total Other Current Liabilities	268,373				618,513				477,483				—				1,364,369
Long-term Debt, Net of Current Portion	4,223,822				1,878,079				1,914,516				—				8,016,417
Long-term Notes Payable to Affiliates and Intercompany Payable	—				4,954,686				—				(4,954,686		)		—
Other Long-term Liabilities	973				116,895				299,163				—				417,031
Commitments and Contingencies (see Note 10)
Redeemable Noncontrolling Interests (see Note 2.v.)	—				—				70,532				—				70,532
Total Iron Mountain Incorporated Stockholders' Equity	1,861,054				1,237,137				1,607,929				(2,845,066		)		1,861,054
Noncontrolling Interests	—				—				1,409				—				1,409
Total Equity	1,861,054				1,237,137				1,609,338				(2,845,066		)		1,862,463
Total Liabilities and Equity	$	6,817,149			$	8,879,781			$	4,848,765			$	(8,688,477	)		$	11,857,218

---

(1)	Included within Cash and Cash Equivalents at December 31, 2018 is approximately $58,900 and $12,700 of cash on deposit associated with our Cash Pools for the Guarantors and Non-Guarantors, respectively. See Note 4 for more information on our Cash Pools.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

5. Selected Consolidated Financial Statements of Parent, Guarantors and Non-Guarantors (Continued)

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

	Year Ended December 31, 2019
	Parent				Guarantors				Non- Guarantors				Eliminations				Consolidated
Revenues:
Storage rental	$	—			$	1,654,359			$	1,026,728			$	—			$	2,681,087
Service	—				978,227				603,270				—				1,581,497
Intercompany revenues	—				4,668				20,233				(24,901		)		—
Total Revenues	—				2,637,254				1,650,231				(24,901		)		4,262,584
Operating Expenses:
Cost of sales (excluding depreciation and amortization)	—				1,048,514				784,801				—				1,833,315
Intercompany cost of sales	—				20,233				4,668				(24,901		)		—
Selling, general and administrative	444				679,964				311,256				—				991,664
Depreciation and amortization	91				410,524				247,586				—				658,201
Significant Acquisition Costs	—				7,055				6,238				—				13,293
Restructuring Charges	—				32,218				16,379				—				48,597
(Gain) Loss on disposal/write-down of property, plant and equipment, net	—				(26,472		)		(37,352		)		—				(63,824		)
Total Operating Expenses	535				2,172,036				1,333,576				(24,901		)		3,481,246
Operating (Loss) Income	(535		)		465,218				316,655				—				781,338
Interest Expense (Income), Net	213,149				18,923				187,226				—				419,298
Other Expense (Income), Net	59				19,271				14,568				—				33,898
(Loss) Income from Continuing Operations Before Provision (Benefit) for Income Taxes	(213,743		)		427,024				114,861				—				328,142
Provision (Benefit) for Income Taxes	—				6,698				53,233				—				59,931
Equity in the (Earnings) Losses of Subsidiaries, Net of Tax	(481,120		)		(64,490		)		—				545,610				—
Income (Loss) from Continuing Operations	267,377				484,816				61,628				(545,610		)		268,211
Income (Loss) from Discontinued Operations, Net of Tax	—				120				(16		)		—				104
Net Income (Loss)	267,377				484,936				61,612				(545,610		)		268,315
Less: Net Income (Loss) Attributable to Noncontrolling Interests	—				—				938				—				938
Net Income (Loss) Attributable to Iron Mountain Incorporated	$	267,377			$	484,936			$	60,674			$	(545,610	)		$	267,377
Net Income (Loss)	$	267,377			$	484,936			$	61,612			$	(545,610	)		$	268,315
Other Comprehensive Income (Loss):
Foreign Currency Translation Adjustment	6,003				—				5,991				—				11,994
Change in Fair Value of Derivative Instruments	(8,783		)		—				—				—				(8,783		)
Equity in Other Comprehensive (Loss) Income of Subsidiaries	5,863				5,714				—				(11,577		)		—
Total Other Comprehensive Income (Loss)	3,083				5,714				5,991				(11,577		)		3,211
Comprehensive Income (Loss)	270,460				490,650				67,603				(557,187		)		271,526
Comprehensive Income (Loss) Attributable to Noncontrolling Interests	—				—				1,066				—				1,066
Comprehensive Income (Loss) Attributable to Iron Mountain Incorporated	$	270,460			$	490,650			$	66,537			$	(557,187	)		$	270,460

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

5. Selected Consolidated Financial Statements of Parent, Guarantors and Non-Guarantors (Continued)

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Continued)

	Year Ended December 31, 2018
	Parent				Guarantors				Non- Guarantors				Eliminations				Consolidated
Revenues:
Storage rental	$	—			$	1,606,346			$	1,016,109			$	—			$	2,622,455
Service	—				974,213				629,093				—				1,603,306
Intercompany revenues	—				4,759				18,439				(23,198		)		—
Total Revenues	—				2,585,318				1,663,641				(23,198		)		4,225,761
Operating Expenses:
Cost of sales (excluding depreciation and amortization)	—				1,009,890				784,064				—				1,793,954
Intercompany cost of sales	—				18,439				4,759				(23,198		)		—
Selling, general and administrative	(288		)		679,740				327,531				—				1,006,983
Depreciation and amortization	122				404,574				234,818				—				639,514
Significant Acquisition Costs	—				35,607				15,058				—				50,665
(Gain) Loss on disposal/write-down of property, plant and equipment, net	—				(2,841		)		(70,781		)		—				(73,622		)
Total Operating Expenses	(166		)		2,145,409				1,295,449				(23,198		)		3,417,494
Operating Income (Loss)	166				439,909				368,192				—				808,267
Interest Expense (Income), Net	199,955				6,392				203,301				—				409,648
Other Expense (Income), Net	2,328				17,158				(31,178		)		—				(11,692		)
(Loss) Income from Continuing Operations Before (Benefit) Provision for Income Taxes	(202,117		)		416,359				196,069				—				410,311
(Benefit) Provision for Income Taxes	—				(1,006		)		43,759				—				42,753
Equity in the (Earnings) Losses of Subsidiaries, Net of Tax	(556,050		)		(147,575		)		—				703,625				—
Income (Loss) from Continuing Operations	353,933				564,940				152,310				(703,625		)		367,558
(Loss) Income from Discontinued Operations, Net of Tax	—				(12,283		)		(144		)		—				(12,427		)
Net Income (Loss)	353,933				552,657				152,166				(703,625		)		355,131
Less: Net Income (Loss) Attributable to Noncontrolling Interests	—				—				1,198				—				1,198
Net Income (Loss) Attributable to Iron Mountain Incorporated	$	353,933			$	552,657			$	150,968			$	(703,625	)		$	353,933
Net Income (Loss)	$	353,933			$	552,657			$	152,166			$	(703,625	)		$	355,131
Other Comprehensive (Loss) Income:
Foreign Currency Translation Adjustment	11,070				—				(175,177		)		—				(164,107		)
Change in Fair Value of Derivative Instrument	(973		)		—				—				—				(973		)
Equity in Other Comprehensive (Loss) Income of Subsidiaries	(171,772		)		(139,971		)		—				311,743				—
Total Other Comprehensive (Loss) Income	(161,675		)		(139,971		)		(175,177		)		311,743				(165,080		)
Comprehensive Income (Loss)	192,258				412,686				(23,011		)		(391,882		)		190,051
Comprehensive (Loss) Income Attributable to Noncontrolling Interests	—				—				(2,207		)		—				(2,207		)
Comprehensive Income (Loss) Attributable to Iron Mountain Incorporated	$	192,258			$	412,686			$	(20,804	)		$	(391,882	)		$	192,258

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

5. Selected Consolidated Financial Statements of Parent, Guarantors and Non-Guarantors (Continued)

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Continued)

	Year Ended December 31, 2017
	Parent				Guarantors				Non- Guarantors				Eliminations				Consolidated
Revenues:
Storage rental	$	—			$	1,443,219			$	934,338			$	—			$	2,377,557
Service	—				866,318				601,703				—				1,468,021
Intercompany revenues	—				4,577				24,613				(29,190		)		—
Total Revenues	—				2,314,114				1,560,654				(29,190		)		3,845,578
Operating Expenses:
Cost of sales (excluding depreciation and amortization)	—				922,008				742,817				—				1,664,825
Intercompany cost of sales	—				24,613				4,577				(29,190		)		—
Selling, general and administrative	161				613,350				323,669				—				937,180
Depreciation and amortization	167				310,962				211,247				—				522,376
Significant Acquisition Costs	—				52,621				32,280				—				84,901
Intangible impairments	—				3,011				—				—				3,011
(Gain) Loss on disposal/write-down of property, plant and equipment, net	—				(1,001		)		235				—				(766		)
Total Operating Expenses	328				1,925,564				1,314,825				(29,190		)		3,211,527
Operating (Loss) Income	(328		)		388,550				245,829				—				634,051
Interest Expense (Income), Net	163,541				7,606				182,498				—				353,645
Other Expense (Income), Net	47,176				9,178				23,075				—				79,429
(Loss) Income from Continuing Operations Before Provision (Benefit) for Income Taxes	(211,045		)		371,766				40,256				—				200,977
Provision (Benefit) for Income Taxes	—				3,988				18,974				—				22,962
Equity in the (Earnings) Losses of Subsidiaries, Net of Tax	(381,158		)		(11,677		)		—				392,835				—
Income (Loss) from Continuing Operations	170,113				379,455				21,282				(392,835		)		178,015
(Loss) Income from Discontinued Operations, Net of Tax	—				(4,370		)		(1,921		)		—				(6,291		)
Net Income (Loss)	170,113				375,085				19,361				(392,835		)		171,724
Less: Net Income (Loss) Attributable to Noncontrolling Interests	—				—				1,611				—				1,611
Net Income (Loss) Attributable to Iron Mountain Incorporated	$	170,113			$	375,085			$	17,750			$	(392,835	)		$	170,113
Net Income (Loss)	$	170,113			$	375,085			$	19,361			$	(392,835	)		$	171,724
Other Comprehensive Income (Loss):
Foreign Currency Translation Adjustment	(15,015		)		—				123,579				—				108,564
Equity in Other Comprehensive Income (Loss) of Subsidiaries	123,599				82,127				—				(205,726		)		—
Total Other Comprehensive Income (Loss)	108,584				82,127				123,579				(205,726		)		108,564
Comprehensive Income (Loss)	278,697				457,212				142,940				(598,561		)		280,288
Comprehensive Income (Loss) Attributable to Noncontrolling Interests	—				—				1,591				—				1,591
Comprehensive Income (Loss) Attributable to Iron Mountain Incorporated	$	278,697			$	457,212			$	141,349			$	(598,561	)		$	278,697

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

5. Selected Consolidated Financial Statements of Parent, Guarantors and Non-Guarantors (Continued)

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year Ended December 31, 2019
	Parent				Guarantors				Non- Guarantors				Eliminations				Consolidated
Cash Flows from Operating Activities:
Cash Flows from Operating Activities-Continuing Operations	$	(157,162	)		$	850,840			$	272,977			$	—			$	966,655
Cash Flows from Operating Activities-Discontinued Operations	—				—				—				—				—
Cash Flows from Operating Activities	(157,162		)		850,840				272,977				—				966,655
Cash Flows from Investing Activities:
Capital expenditures	—				(412,725		)		(280,258		)		—				(692,983		)
Cash paid for acquisitions, net of cash acquired	—				(9,508		)		(48,729		)		—				(58,237		)
Intercompany loans to subsidiaries	(124,897		)		4,637				—				120,260				—
Acquisitions of customer relationships, customer inducements and data center lease-based intangibles	—				(99,610		)		(32,037		)		—				(131,647		)
Investment in joint ventures	—				(19,222		)		—				—				(19,222		)
Net proceeds from Divestments	—				—				—				—				—
Proceeds from sales of property and equipment and other, net (including real estate) and proceeds from involuntary conversion of property and equipment	—				115,775				50,368				—				166,143
Cash Flows from Investing Activities-Continuing Operations	(124,897		)		(420,653		)		(310,656		)		120,260				(735,946		)
Cash Flows from Investing Activities-Discontinued Operations	—				2,564				2,497				—				5,061
Cash Flows from Investing Activities	(124,897		)		(418,089		)		(308,159		)		120,260				(730,885		)
Cash Flows from Financing Activities:
Repayment of revolving credit and term loan facilities and other debt	—				(10,479,101		)		(4,056,014		)		—				(14,535,115		)
Proceeds from revolving credit and term loan facilities and other debt	—				10,057,145				4,002,673				—				14,059,818
Net proceeds from sales of senior notes	987,500				—				—				—				987,500
Debit (payments) balances under cash pools	—				(10,612		)		119,945				(109,333		)		—
Debt (repayment to) financing from and equity (distribution to) contribution from noncontrolling interests, net	—				—				(1,924		)		—				(1,924		)
Intercompany loans from parent	—				143,767				(23,507		)		(120,260		)		—
Parent cash dividends	(704,526		)		—				—				—				(704,526		)
Net proceeds (payments) associated with employee stock-based awards	1,027				—				—				—				1,027
Payment of debt financing and stock issuance costs and other	(1,969		)		(1,060		)		(2,724		)		—				(5,753		)
Cash Flows from Financing Activities-Continuing Operations	282,032				(289,861		)		38,449				(229,593		)		(198,973		)
Cash Flows from Financing Activities-Discontinued Operations	—				—				—				—				—
Cash Flows from Financing Activities	282,032				(289,861		)		38,449				(229,593		)		(198,973		)
Effect of exchange rates on cash and cash equivalents	—				—				(8,727		)		—				(8,727		)
Increase (Decrease) in cash and cash equivalents	(27		)		142,890				(5,460		)		(109,333		)		28,070
Cash and cash equivalents, including Restricted Cash, beginning of year	132				63,407				169,318				(67,372		)		165,485
Cash and cash equivalents, including Restricted Cash, end of year	$	105			$	206,297			$	163,858			$	(176,705	)		$	193,555

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

5. Selected Consolidated Financial Statements of Parent, Guarantors and Non-Guarantors (Continued)

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

	Year Ended December 31, 2018
	Parent				Guarantors				Non- Guarantors				Eliminations				Consolidated
Cash Flows from Operating Activities:
Cash Flows from Operating Activities-Continuing Operations	$	(217,819	)		$	880,615			$	273,748			$	—			$	936,544
Cash Flows from Operating Activities-Discontinued Operations	—				(995		)		—				—				(995		)
Cash Flows from Operating Activities	(217,819		)		879,620				273,748				—				935,549
Cash Flows from Investing Activities:
Capital expenditures	—				(313,510		)		(146,552		)		—				(460,062		)
Cash paid for acquisitions, net of cash acquired	—				(1,338,888		)		(419,669		)		—				(1,758,557		)
Intercompany loans to subsidiaries	805,799				90,569				—				(896,368		)		—
Acquisitions of customer relationships, customer inducements and data center lease-based intangibles	—				(76,388		)		(22,299		)		—				(98,687		)
Net proceeds from Divestments	—				1,019				—				—				1,019
Proceeds from sales of property and equipment and other, net (including real estate) and proceeds from involuntary conversion of property and equipment	—				299				85,860				—				86,159
Cash Flows from Investing Activities-Continuing Operations	805,799				(1,636,899		)		(502,660		)		(896,368		)		(2,230,128		)
Cash Flows from Investing Activities-Discontinued Operations	—				8,250				—				—				8,250
Cash Flows from Investing Activities	805,799				(1,628,649		)		(502,660		)		(896,368		)		(2,221,878		)
Cash Flows from Financing Activities:
Repayment of revolving credit and term loan facilities and other debt	—				(7,355,086		)		(6,837,053		)		—				(14,192,139		)
Proceeds from revolving credit and term loan facilities and other debt	—				8,445,551				6,906,063				—				15,351,614
Debit balances (payments) under cash pools	—				(45,621		)		18,267				27,354				—
Debt (repayment to) financing from and equity (distribution to) contribution from noncontrolling interests, net	—				—				(2,523		)		—				(2,523		)
Intercompany loans from parent	—				(862,425		)		(33,943		)		896,368				—
Parent cash dividends	(673,635		)		—				—				—				(673,635		)
Net payments associated with employee stock-based awards	(1,142		)		—				—				—				(1,142		)
Net proceeds associated with the Equity Offering, including Over-Allotment Option	76,192				—				—				—				76,192
Net proceeds associated with the At The Market (ATM) Program	8,716				—				—				—				8,716
Payment of debt financing and stock issuance costs and other	(412		)		(12,391		)		(3,602		)		—				(16,405		)
Cash Flows from Financing Activities-Continuing Operations	(590,281		)		170,028				47,209				923,722				550,678
Cash Flows from Financing Activities-Discontinued Operations	—				—				—				—				—
Cash Flows from Financing Activities	(590,281		)		170,028				47,209				923,722				550,678
Effect of exchange rates on cash and cash equivalents	—				—				(24,563		)		—				(24,563		)
(Decrease) Increase in cash and cash equivalents	(2,301		)		(579,001		)		(206,266		)		27,354				(760,214		)
Cash and cash equivalents, including Restricted Cash, beginning of year	2,433				642,408				375,584				(94,726		)		925,699
Cash and cash equivalents, including Restricted Cash, end of year	$	132			$	63,407			$	169,318			$	(67,372	)		$	165,485

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

5. Selected Consolidated Financial Statements of Parent, Guarantors and Non-Guarantors (Continued)

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

	Year Ended December 31, 2017
	Parent				Guarantors				Non- Guarantors				Eliminations				Consolidated
Cash Flows from Operating Activities:
Cash Flows from Operating Activities-Continuing Operations	$	(203,403	)		$	737,532			$	190,130			$	—			$	724,259
Cash Flows from Operating Activities-Discontinued Operations	—				(1,345		)		(1,946		)		—				(3,291		)
Cash Flows from Operating Activities	(203,403		)		736,187				188,184				—				720,968
Cash Flows from Investing Activities:
Capital expenditures	—				(237,004		)		(106,127		)		—				(343,131		)
Cash paid for acquisitions, net of cash acquired	—				(96,946		)		(122,759		)		—				(219,705		)
Intercompany loans to subsidiaries	(990,635		)		(344,919		)		—				1,335,554				—
Investment in subsidiaries	(16,170		)		—				—				16,170				—
Acquisitions of customer relationships and customer inducements	—				(63,759		)		(11,426		)		—				(75,185		)
Net proceeds from Divestments	—				—				29,236				—				29,236
Proceeds from sales of property and equipment and other, net (including real estate) and proceeds from involuntary conversion of property and equipment	—				12,963				(3,626		)		—				9,337
Cash Flows from Investing Activities-Continuing Operations	(1,006,805		)		(729,665		)		(214,702		)		1,351,724				(599,448		)
Cash Flows from Investing Activities-Discontinued Operations	—				—				—				—				—
Cash Flows from Investing Activities	(1,006,805		)		(729,665		)		(214,702		)		1,351,724				(599,448		)
Cash Flows from Financing Activities:
Repayment of revolving credit and term loan facilities and other debt	(262,579		)		(8,077,553		)		(6,089,563		)		—				(14,429,695		)
Proceeds from revolving credit and term loan facilities and other debt	224,660				7,650,436				6,041,959				—				13,917,055
Early retirement of senior subordinated and senior notes	(1,031,554		)		—				(715,302		)		—				(1,746,856		)
Net proceeds from sales of senior notes	2,134,870				—				522,078				—				2,656,948
Debit balances (payments) under cash pools	—				56,233				38,493				(94,726		)		—
Debt (repayment to) financing from and equity (distribution to) contribution from noncontrolling interests, net	—				—				9,079				—				9,079
Intercompany loans from parent	—				992,708				342,846				(1,335,554		)		—
Equity contribution from parent	—				—				16,170				(16,170		)		—
Parent cash dividends	(439,999		)		—				—				—				(439,999		)
Net proceeds associated with employee stock-based awards	13,095				—				—				—				13,095
Net proceeds associated with the Equity Offering, including Over-Allotment Option	516,462				—				—				—				516,462
Net proceeds associated with the At The Market (ATM) Program	59,129				—				—				—				59,129
Payment of debt financing and stock issuance costs	(3,848		)		(9,391		)		(1,554		)		—				(14,793		)
Cash Flows from Financing Activities-Continuing Operations	1,210,236				612,433				164,206				(1,446,450		)		540,425
Cash Flows from Financing Activities-Discontinued Operations	—				—				—				—				—
Cash Flows from Financing Activities	1,210,236				612,433				164,206				(1,446,450		)		540,425
Effect of exchange rates on cash and cash equivalents	—				—				27,270				—				27,270
Increase (Decrease) in cash and cash equivalents	28				618,955				164,958				(94,726		)		689,215
Cash and cash equivalents, including Restricted Cash, beginning of year	2,405				23,453				210,626				—				236,484
Cash and cash equivalents, including Restricted Cash, end of year	$	2,433			$	642,408			$	375,584			$	(94,726	)		$	925,699

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

6. Acquisitions

We account for acquisitions using the acquisition method of accounting, and, accordingly, the assets and liabilities acquired are recorded at their estimated fair values and the results of operations for each acquisition have been included in our consolidated results from their respective acquisition dates.

a. Acquisitions Completed During the Year Ended December 31, 2019

During the year ended December 31, 2019, in order to enhance our existing operations in the United States, Colombia, Germany, Hong Kong, Latvia, Slovakia, Switzerland, Thailand and the United Kingdom and to expand our operations into Bulgaria, we completed the acquisition of 10 storage and records management companies and one art storage company for total cash consideration of approximately $51,000. The individual purchase prices of these acquisitions ranged from approximately $700 to $12,500.

b. Acquisitions Completed During the Year Ended December 31, 2018

Acquisition of IO Data Centers

On January 10, 2018, we completed the acquisition of the United States operations of IODC, a leading data center colocation space and solutions provider based in Phoenix, Arizona, including the land and buildings associated with four data centers in Phoenix and Scottsdale, Arizona; Edison, New Jersey; and Columbus, Ohio (the “IODC Transaction”). At the closing of the IODC Transaction, we paid approximately $1,347,000. In February 2019, we paid approximately $31,000 in additional purchase price associated with the execution of customer contracts from the closing through the one-year anniversary of the IODC Transaction, which was accrued at December 31, 2018. This amount, net of amortization, is reported as a third-party commissions asset as a component of Other within Other assets, net, in our Consolidated Balance Sheets at December 31, 2019 and 2018.

The unaudited consolidated pro forma financial information (the "Pro Forma Financial Information") below summarizes the combined results of us and IODC on a pro forma basis as if the IODC Transaction had occurred on January 1, 2017. The Pro Forma Financial Information is presented for informational purposes and is not necessarily indicative of the results of operations that would have been achieved if the acquisition had taken place on January 1, 2017. The Pro Forma Financial Information for the period presented includes purchase accounting adjustments (including amortization expenses from acquired intangible assets and depreciation of acquired property, plant and equipment). We and IODC collectively incurred $28,064 of operating expenditures to complete the IODC Transaction (including advisory and professional fees). These operating expenditures have been reflected within the results of operations in the Pro Forma Financial Information as if they were incurred on January 1, 2017.

	(Unaudited)
	Year Ended December 31,
	2018				2017
Total Revenues	$	4,229,251			$	3,983,016
Income from Continuing Operations	$	377,510			$	110,677
Per Share Income from Continuing Operations - Basic	$	1.32			$	0.39
Per Share Income from Continuing Operations - Diluted	$	1.31			$	0.39

In addition to our IODC Transaction, we completed certain other acquisitions in 2019, 2018 and 2017. The Pro Forma Financial Information does not reflect these acquisitions due to the insignificant impact of these acquisitions on our consolidated results of operations.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

6. Acquisitions (Continued)

Other Noteworthy Acquisitions

On May 25, 2018, in order to further expand our data center operations in Europe, we acquired EvoSwitch Netherlands B.V. and EvoSwitch Global Services B.V. (collectively, "EvoSwitch"), a data center colocation space and solutions provider with a data center in Amsterdam (the "EvoSwitch Transaction"), for (i) cash consideration of 189,000 Euros (or approximately $222,000, based upon the exchange rate between the Euro and the United States dollar on the closing date of the EvoSwitch Transaction) and (ii) $25,000 of additional consideration in the form of future services we will provide to the seller, which is included in purchase price holdbacks and other in the allocation of the purchase price paid table below.

On March 8, 2018, in order to expand our data center operations into Europe and Asia, we acquired the operations of two data centers in London and Singapore from Credit Suisse International and Credit Suisse AG (together, "Credit Suisse") for a total of (i) 34,600 British pounds sterling and (ii) 81,000 Singapore dollars (or collectively, approximately $111,400, based upon the exchange rates between the United States dollar and the British pound sterling and Singapore dollar on the closing date of the Credit Suisse transaction) (the “Credit Suisse Transaction”). As part of the Credit Suisse Transaction, Credit Suisse entered into a long-term lease with us to maintain existing data center operations.

In addition to the transactions noted above, during 2018, in order to enhance our existing operations in the United States, Brazil, China, India, Ireland, Philippines, South Korea and the United Kingdom and to expand our operations into Croatia, we completed the acquisition of 11 storage and records management companies and three art storage companies for total consideration of approximately $98,100. The individual purchase prices of these acquisitions ranged from approximately $1,000 to $34,100.

c. Acquisitions Completed During the Year Ended December 31, 2017

In December 2017, we acquired the storage and information management assets and operations of Santa Fe in China (the “Santa Fe China Transaction”) for approximately $16,800. The purchase price for the Santa Fe China Transaction was not paid until January 2018 and, therefore, we accrued for the purchase price of the Santa Fe China Transaction in our Consolidated Balance Sheet as of December 31, 2017.

In September 2017, in order to expand our existing entertainment storage and services operations in the United States and to expand our entertainment storage and services operations into Canada, the United Kingdom, France, the Netherlands and Hong Kong, we completed the acquisition of Bonded Services of America, Inc. and Bonded Services Acquisition, Ltd. (together, "Bonded") (the "Bonded Transaction"), providers of media asset storage and management services for global entertainment and media companies, for approximately 62,000 British pounds sterling (or approximately $83,000, based upon the exchange rate between the British pound sterling and the United States dollar on the closing date of the Bonded Transaction).

In September 2017, in order to expand our data center operations in the United States, we acquired Mag Datacenters LLC, which operated Fortrust, a private data center business with operations in Denver, Colorado (the “Fortrust Transaction”). At the closing of the Fortrust Transaction, we paid approximately $54,500 in cash (the "Fortrust Cash Consideration") and issued 2,193,637 shares of our common stock (the "Fortrust Stock Consideration"). The shares of our common stock issued to the former owners of Fortrust in connection with the Fortrust Transaction contain certain restrictions that impact the marketability of such shares for a period of six months following the closing date of the Fortrust Transaction (the “Lack of Marketability Restriction”). The 2,193,637 shares issued as part of the Fortrust Stock Consideration were valued at approximately $37.84 per share, which reflects a discount related to the Lack of Marketability Restriction, resulting in a total purchase price (including the Fortrust Cash Consideration and the Fortrust Stock Consideration) of approximately $137,500.

In addition to the transactions noted above, during 2017, in order to enhance our existing operations in the United States, India, Greece, Peru and South Africa and to expand our operations into Cyprus, Macau, South Korea and the United Arab Emirates, we completed the acquisition of 12 records and information management companies and one art storage company for total consideration of approximately $98,200. The individual purchase prices of these acquisitions ranged from approximately $100 to $28,500.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

6. Acquisitions (Continued)

d. Purchase Price Allocation

A summary of the cumulative consideration paid and the allocation of the purchase price paid for all of our acquisitions in each respective year is as follows:

	2019				2018												2017
	Total				IODC Transaction				Other Fiscal Year 2018 Acquisitions				Total				Total
Cash Paid (gross of cash acquired)(1)	$	53,230			$	1,347,046			$	432,078			$	1,779,124			$	234,314
Purchase Price Holdbacks and Other(2)	4,135				—				35,218				35,218				20,093
Fair Value of Common Stock Issued	—				—				—				—				83,014
Fair Value of Noncontrolling Interests	—				—				—				—				1,507
Total Consideration	57,365				1,347,046				467,296				1,814,342				338,928
Fair Value of Identifiable Assets Acquired:
Cash	2,260				34,307				10,227				44,534				14,746
Accounts Receivable, Prepaid Expenses and Other Assets	3,102				7,070				17,662				24,732				24,379
Property, Plant and Equipment(3)	5,396				863,027				225,848				1,088,875				150,878
Customer Relationship Intangible Assets(4)	22,071				—				44,622				44,622				116,028
Operating Lease Right-of-Use Assets	16,956				—				—				—				—
Data Center In-Place Leases(5)	—				104,340				36,130				140,470				6,300
Data Center Tenant Relationships(6)	—				77,362				18,410				95,772				—
Data Center Above-Market Leases(7)	—				16,439				2,381				18,820				—
Other Intangible Assets	—				—				—				—				14,487
Debt Assumed	—				—				(12,312		)		(12,312		)		(5,287		)
Accounts Payable, Accrued Expenses and Other Liabilities	(3,233		)		(36,230		)		(17,206		)		(53,436		)		(24,869		)
Operating Lease Liabilities	(16,956		)		—				—				—				—
Deferred Income Taxes	(1,813		)		—				(43,218		)		(43,218		)		(18,122		)
Data Center Below-Market Leases(7)	—				(11,421		)		(694		)		(12,115		)		—
Total Fair Value of Identifiable Net Assets Acquired	27,783				1,054,894				281,850				1,336,744				278,540
Goodwill Initially Recorded(8)	$	29,582			$	292,152			$	185,446			$	477,598			$	60,388

---

(1)

Included in cash paid for acquisitions in our Consolidated Statement of Cash Flows for the year ended December 31, 2019 is net cash acquired of $2,260 and contingent and other payments, net of $7,267 related to acquisitions made in years prior to 2019. Included in cash paid for acquisitions in our Consolidated Statement of Cash Flows for the year ended December 31, 2018 is net cash acquired of $44,534 and contingent and other payments, net of $23,967 related to acquisitions made in years prior to 2018. Included in cash paid for acquisitions in our Consolidated Statement of Cash Flows for the year ended December 31, 2017 is net cash acquired of $14,746 and contingent and other payments, net of $137 related to acquisitions made in years prior to 2017.

(2)	Purchase price holdbacks and other includes $18,824 purchase price accrued for the EvoSwitch Transaction in 2018 and $16,771 purchase price accrued for the Santa Fe China Transaction in 2017.

(3)	Consists primarily of buildings, building improvements, leasehold improvements, data center infrastructure, racking structures, warehouse equipment and computer hardware and software.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

6. Acquisitions (Continued)

(4)	The weighted average lives of customer relationship intangible assets associated with acquisitions in 2019, 2018 and 2017 was 16 years, 10 years and 12 years, respectively.

(5)	The weighted average lives of data center in-place leases associated with acquisitions in 2018 was six years.

(6)	The weighted average lives of data center tenant relationships associated with acquisitions in 2018 was nine years.

(7)	The weighted average lives of data center above-market leases associated with acquisitions in 2018 was three years and the weighted average lives of data center below-market leases associated with acquisitions in 2018 was seven years.

(8)	The goodwill associated with acquisitions, including IODC, is primarily attributable to the assembled workforce, expanded market opportunities and costs and other operating synergies anticipated upon the integration of the operations of us and the acquired businesses.

Allocations of the purchase price for acquisitions made in 2019, 2018 and 2017 were based on estimates of the fair value of the net assets acquired and are subject to adjustment upon the finalization of the purchase price allocations. The accounting for business combinations requires estimates and judgments regarding expectations for future cash flows of the acquired business, and the allocations of those cash flows to identifiable tangible and intangible assets, in determining the assets acquired and liabilities assumed. The fair values assigned to tangible and intangible assets acquired and liabilities assumed, including contingent consideration, are based on management's best estimates and assumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques. The estimates and assumptions underlying the initial valuations are subject to the collection of information necessary to complete the valuations within the measurement periods, which are up to one year from the respective acquisition dates. The preliminary purchase price allocations that are not finalized as of December 31, 2019 primarily relate to the final assessment of the fair values of intangible assets (primarily customer relationship intangible assets), property, plant and equipment (primarily racking structures) and income taxes (primarily deferred income taxes) associated with the acquisitions we closed in 2019.

As the valuation of certain assets and liabilities for purposes of purchase price allocations are preliminary in nature, they are subject to adjustment as additional information is obtained about the facts and circumstances regarding these assets and liabilities that existed at the acquisition date. Any adjustments to our estimates of purchase price allocation will be made in the periods in which the adjustments are determined and the cumulative effect of such adjustments will be calculated as if the adjustments had been completed as of the acquisition dates. Adjustments recorded during the fourth quarter of 2019 were not material to our results from operations.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

7. Income Taxes

We have been organized and have operated as a REIT effective beginning with our taxable year that ended on December 31, 2014. As a REIT, we are generally permitted to deduct from our federal taxable income the dividends we pay to our stockholders. The income represented by such dividends is not subject to federal taxation at the entity level but is taxed, if at all, at the stockholder level. The income of our domestic taxable REIT subsidiaries ("TRSs"), which hold our domestic operations that may not be REIT-compliant as currently operated and structured, is subject, as applicable, to federal and state corporate income tax. In addition, we and our subsidiaries continue to be subject to foreign income taxes in other jurisdictions in which we have business operations or a taxable presence, regardless of whether assets are held or operations are conducted through subsidiaries disregarded for federal income tax purposes or TRSs. We will also be subject to a separate corporate income tax on any gains recognized on the sale or disposition of any asset previously owned by a C corporation during a five-year period after the date we first owned the asset as a REIT asset that are attributable to "built-in gains" with respect to that asset on that date. We will also be subject to a built-in gains tax on our depreciation recapture recognized into income as a result of accounting method changes in connection with our acquisition activities. If we fail to remain qualified for taxation as a REIT, we will be subject to federal income tax at regular corporate income tax rates. Even if we remain qualified for taxation as a REIT, we may be subject to some federal, state, local and foreign taxes on our income and property in addition to taxes owed with respect to our TRS operations. In particular, while state income tax regimes often parallel the federal income tax regime for REITs, many states do not completely follow federal rules and some do not follow them at all.

On December 22, 2017, legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Reform Legislation”) was enacted into law in the United States. The Tax Reform Legislation amended the Internal Revenue Code of 1986, as amended (the “Code”), to reduce tax rates and modify policies, credits and deductions for businesses and individuals. The following summarizes certain components of the Tax Reform Legislation and the impact such components of the Tax Reform Legislation. One of the primary components of the Tax Reform Legislation was a reduction in the United States corporate federal income tax rate from 35% to 21% for taxable years beginning after December 31, 2017.

a.Deemed Repatriation Transition Tax

The Tax Reform Legislation imposed a transition tax (the “Deemed Repatriation Transition Tax”) on a mandatory deemed repatriation of post-1986 undistributed foreign earnings and profits not previously subject to United States tax as of November 2, 2017 or December 31, 2017, whichever was greater (the “Undistributed E&P”) as of the last taxable year beginning before January 1, 2018. The Deemed Repatriation Transition Tax varied depending on whether the Undistributed E&P was held in liquid (as defined in the Tax Reform Legislation) or non-liquid assets. A participation deduction against the deemed repatriation resulted in a Deemed Repatriation Transition Tax on Undistributed E&P of 15.5% if held in cash and liquid assets and 8.0% if held in non-liquid assets. The Deemed Repatriation Transition Tax applied regardless of whether or not an entity had cash in its foreign subsidiaries and regardless of whether the entity actually repatriated the Undistributed E&P back to the United States.

We have completed our analysis and determined that the amount of Undistributed E&P deemed repatriated under the Tax Reform Legislation in our taxable year ending December 31, 2017 was $160,000. We opted to include the full amount of Undistributed E&P in our 2017 taxable income, rather than spread it over eight years (as permitted by the Tax Reform Legislation). After applying the participation deduction, included in our REIT taxable income for 2017 was approximately $70,900 related to the deemed repatriation of Undistributed E&P.

b. Global Intangible Low-Taxed Income

For taxable years beginning after December 31, 2017, the Tax Reform Legislation introduced new provisions intended to prevent the erosion of the United States federal income tax base through the taxation of certain global intangible low-taxed income (“GILTI”). The GILTI provisions created a new requirement that certain income earned by controlled foreign corporations (“CFCs”) must be included currently in the gross income of the CFC’s United States tax resident shareholder. Generally, GILTI is the excess of the United States shareholder’s pro rata portion of the income of its foreign subsidiaries over the net deemed tangible income return of such subsidiaries.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

7. Income Taxes (Continued)

The GILTI provisions also provide for certain deductions against the inclusion of GILTI in taxable income; however, REITs are not eligible for such deductions. Therefore, 100% of our GILTI is included in our taxable income and will increase the required minimum distribution to our stockholders. There was no GILTI included in our taxable income for the year ended December 31, 2019 and the amount included in our REIT taxable income for the year ended December 31, 2018 was $41,944. We have adopted an accounting policy such that we will recognize no deferred taxes related to basis differences resulting from GILTI.

c. Interest Deduction Limitation

The Tax Reform Legislation also limits, for certain entities, the deduction for net interest expense to the sum of business interest income plus 30% of adjusted taxable income (the “Interest Deduction Limitation”). Adjusted taxable income is defined in the Tax Reform Legislation similar to earnings before interest, taxes, depreciation and amortization for taxable years beginning after December 31, 2017 and before January 1, 2022, and is defined similar to earnings before interest and taxes for taxable years beginning after December 31, 2021.

The Interest Deduction Limitation does not apply to taxpayers that qualify, and make an election, to be treated as an “electing real property trade or business”. As a REIT, IMI, including all of our qualified REIT subsidiaries ("QRSs"), made an election to be treated as an "electing real property trade or business" beginning in our taxable year ended December 31, 2018. As such, the interest deduction limitation does not apply to IMI or our QRSs; however, IMI will be required to utilize the alternative depreciation system for its real property. This election does not have a material impact on our consolidated financial statements. We do not generally believe our TRSs are eligible for treatment as "electing real property trades or businesses".

The significant components of our deferred tax assets and deferred tax liabilities are presented below:

	December 31,
	2019				2018
Deferred Tax Assets:
Accrued liabilities and other adjustments(1)	$	53,197			$	59,477
Net operating loss carryforwards	99,240				92,952
Federal benefit of unrecognized tax benefits	3,039				2,925
Valuation allowance	(60,003		)		(55,666		)
	95,473				99,688
Deferred Tax Liabilities:
Other assets, principally due to differences in amortization	(177,645		)		(166,469		)
Plant and equipment, principally due to differences in depreciation	(67,515		)		(74,147		)
Other	(21,903		)		(26,260		)
	(267,063		)		(266,876		)
Net deferred tax liability	$	(171,590	)		$	(167,188	)

---

(1)	Amounts as of December 31, 2018 has been restated to reflect the impact of the Netherlands VAT liability (as discussed in Note 2.y.) which resulted in an increase in accrued liabilities and other adjustments of $4,971.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

7. Income Taxes (Continued)

The deferred tax assets and deferred tax liabilities are presented below:

	December 31,
	2019				2018
Noncurrent deferred tax assets (Included in Other, a component of Other assets, net)	$	16,538			$	16,648
Deferred income taxes	(188,128		)		(183,836		)

At December 31, 2019, we have federal net operating loss carryforwards of $152,743 available to reduce future federal taxable income, the majority of which expire from 2024 through 2037. Of the $152,743, we expect to utilize $39,156 and realize a federal tax benefit of $8,223. We can carry forward these net operating losses to the extent we do not utilize them in any given available year. We have state net operating loss carryforwards, which expire from 2020 through 2039, of which an insignificant state tax benefit is expected to be realized. We have assets for foreign net operating losses of $90,811, with various expiration dates (and in some cases no expiration date), subject to a valuation allowance of approximately 64%.

Rollforward of the valuation allowance is as follows:

Year Ended December 31,		Balance at Beginning of the Year				Charged (Credited) to Expense				Other Increases/(Decreases)(1)				Balance at End of the Year
2019		$	55,666			$	6,211			$	(1,874	)		$	60,003
2018		61,756				3,568				(9,658		)		55,666
2017		71,359				(4,317		)		(5,286		)		61,756

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(1)	Other increases and decreases in valuation allowances are primarily related to changes in foreign currency exchange rates and disposal of certain foreign subsidiaries.

The components of income (loss) from continuing operations before provision (benefit) for income taxes are:

	Year Ended December 31,
	2019				2018				2017
United States	$	203,225			$	203,078			$	162,763
Canada	48,326				53,779				50,019
Other Foreign	76,591				153,454				(11,805		)
	$	328,142			$	410,311			$	200,977

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

7. Income Taxes (Continued)

The provision (benefit) for income taxes consists of the following components:

	Year Ended December 31,
	2019				2018				2017
Federal—current	$	7,262			$	703			$	16,345
Federal—deferred	(3,356		)		(4,162		)		(12,655		)
State—current	3,943				918				3,440
State—deferred	(1,126		)		627				(1,276		)
Foreign—current	49,350				45,371				42,532
Foreign—deferred	3,858				(704		)		(25,424		)
Provision (Benefit) for Income Taxes	$	59,931			$	42,753			$	22,962

A reconciliation of total income tax expense and the amount computed by applying the current federal statutory tax rate of 21.0% to income from continuing operations before provision (benefit) for income taxes for the years ended December 31, 2019 and 2018 and the former federal statutory tax rate of 35.0% to income from continuing operations before provision (benefit) for income taxes for the year ended December 31, 2017 is as follows:

	Year Ended December 31,
	2019				2018				2017
Computed "expected" tax provision	$	68,910			$	86,165			$	70,342
Changes in income taxes resulting from:
Tax adjustment relating to REIT	(40,577		)		(35,165		)		(78,873		)
State taxes (net of federal tax benefit)	2,115				1,599				2,692
Increase (decrease) in valuation allowance (net operating losses)	6,211				3,568				(4,317		)
Foreign repatriation	—				—				29,476
U.S. Federal Rate Reduction	—				—				(4,685		)
Reserve (reversal) accrual and audit settlements (net of federal tax benefit)	514				(13,985		)		(9,103		)
Foreign tax rate differential	8,562				1,031				(9,639		)
Disallowed foreign interest, Subpart F income, and other foreign taxes	14,241				903				29,325
Other, net	(45		)		(1,363		)		(2,256		)
Provision (Benefit) for Income Taxes	$	59,931			$	42,753			$	22,962

Our effective tax rates for the years ended December 31, 2019, 2018 and 2017 were 18.3%, 10.4% and 11.4%, respectively. Our effective tax rate is subject to variability in the future due to, among other items: (1) changes in the mix of income between our qualified REIT subsidiaries and our TRSs, as well as among the jurisdictions in which we operate; (2) tax law changes; (3) volatility in foreign exchange gains and losses; (4) the timing of the establishment and reversal of tax reserves; and (5) our ability to utilize net operating losses that we generate.

The primary reconciling items between the federal statutory tax rate of 21.0% and our overall effective tax rate for the year ended December 31, 2019 were the benefit derived from the dividends paid deduction of $40,577 and the impact of differences in the tax rates at which our foreign earnings are subject to, resulting in a tax provision of $8,562.

The primary reconciling items between the federal statutory tax rate of 21.0% and our overall effective tax rate for the year ended December 31, 2018 were the benefit derived from the dividends paid deduction of $35,165, the impact of differences in the tax rates at which our foreign earnings are subject to, resulting in a tax provision of $1,031 and a discrete tax benefit of approximately $14,000 associated with the resolution of a tax matter (which was included as a component of Accrued expenses in our Consolidated Balance Sheet as of December 31, 2017).

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

7. Income Taxes (Continued)

The primary reconciling items between the former federal statutory tax rate of 35.0% and our overall effective tax rate for the year ended December 31, 2017 were the benefit derived from the dividends paid deduction of $78,873, the impact of differences in the tax rates at which our foreign earnings are subject to, resulting in a tax benefit of $9,639, and a release of valuation allowances on certain of our foreign net operating losses of $4,317 as a result of the merger of certain of our foreign subsidiaries, partially offset by the impact of the Tax Reform Legislation of $24,791 (reflecting the impact of the Deemed Repatriation Transition Tax, partially offset by the impact of the U.S. Federal Tax Rate Reduction).

As a REIT, we are entitled to a deduction for dividends paid, resulting in a substantial reduction of federal income tax expense. As a REIT, substantially all of our income tax expense will be incurred based on the earnings generated by our foreign subsidiaries and our domestic TRSs.

Following our conversion to a REIT in 2014, we concluded that it was not our intent to reinvest our current and future undistributed earnings of our foreign subsidiaries indefinitely outside the United States. As of December 31, 2016, we concluded that it is our intent to indefinitely reinvest our current and future undistributed earnings of certain of our unconverted foreign TRSs outside the United States. We no longer provide incremental foreign withholding taxes on the retained book earnings of these unconverted foreign TRSs, which was approximately $279,700 as of December 31, 2019. As a REIT, future repatriation of incremental undistributed earnings of our foreign subsidiaries will not be subject to federal or state income tax, with the exception of foreign withholding taxes in limited instances; however, such future repatriations will require distribution in accordance with REIT distribution rules, and any such distribution may then be taxable, as appropriate, at the stockholder level. We continue, however, to provide for incremental foreign withholding taxes on net book over outside basis differences related to the earnings of our foreign QRSs and certain other foreign TRSs (excluding unconverted foreign TRSs).

The evaluation of an uncertain tax position is a two-step process. The first step is a recognition process whereby we determine whether it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The second step is a measurement process whereby a tax position that meets the more likely than not recognition threshold is calculated to determine the amount of benefit to recognize in the financial statements. The tax position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement.

We have elected to recognize interest and penalties associated with uncertain tax positions as a component of the provision (benefit) for income taxes in the accompanying Consolidated Statements of Operations. We recorded an increase of $1,780, $1,961 and $289 for gross interest and penalties for the years ended December 31, 2019, 2018 and 2017, respectively. We had $9,282 and $7,557 accrued for the payment of interest and penalties as of December 31, 2019 and 2018, respectively.

A summary of tax years that remain subject to examination by major tax jurisdictions is as follows:

Tax Years		Tax Jurisdiction
See Below		United States—Federal and State
2015 to present		United Kingdom
2012 to present		Canada

The normal statute of limitations for United States federal tax purposes is three years from the date the tax return is filed; however, the statute of limitations may remain open for periods longer than three years in instances where a federal tax examination is in progress. The 2018, 2017 and 2016 tax years remain subject to examination for United States federal tax purposes as well as net operating loss carryforwards utilized in these years. We utilized net operating losses from 2002 through 2003 and 2010 through 2015 in our federal income tax returns for these tax years. The normal statute of limitations for state purposes is between three to five years. However, certain of our state statute of limitations remain open for periods longer than this when audits are in progress.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

7. Income Taxes (Continued)

We are subject to income taxes in the United States and numerous foreign jurisdictions. We are subject to examination by various tax authorities in jurisdictions in which we have business operations or a taxable presence. We regularly assess the likelihood of additional assessments by tax authorities and provide for these matters as appropriate. As of December 31, 2019, we had $35,068 of reserves related to uncertain tax positions, of which $31,992 and $3,076 is included in other long-term liabilities and deferred income taxes, respectively, in the accompanying Consolidated Balance Sheet. As of December 31, 2018, we had $35,320 of reserves related to uncertain tax positions, of which $32,144 and $3,176 is included in other long-term liabilities and deferred income taxes, respectively, in the accompanying Consolidated Balance Sheet. Although we believe our tax estimates are appropriate, the final determination of tax audits and any related litigation could result in changes in our estimates.

A rollforward of unrecognized tax benefits is as follows:

Gross tax contingencies—December 31, 2016	$	59,466
Gross additions based on tax positions related to the current year	4,067
Gross additions for tax positions of prior years	3,368
Gross reductions for tax positions of prior years(1)	(2,789		)
Lapses of statutes	(2,629		)
Settlements	(22,950		)
Gross tax contingencies—December 31, 2017	38,533
Gross additions based on tax positions related to the current year	3,147
Gross additions for tax positions of prior years	981
Gross reductions for tax positions of prior years	(2,865		)
Lapses of statutes	(4,462		)
Settlements	(14		)
Gross tax contingencies—December 31, 2018	35,320
Gross additions based on tax positions related to the current year	2,914
Gross additions for tax positions of prior years	1,271
Gross reductions for tax positions of prior years	(299		)
Lapses of statutes	(4,034		)
Settlements	(104		)
Gross tax contingencies—December 31, 2019	$	35,068

---

(1)	This amount includes gross additions related to the Recall Transaction.

The reversal of these reserves of $35,068 ($32,311 net of federal tax benefit) as of December 31, 2019 will be recorded as a reduction of our income tax provision, if sustained. We believe that it is reasonably possible that an amount up to approximately $7,400 ($4,587 net of federal tax benefit) of our unrecognized tax positions may be recognized by the end of 2020 as a result of a lapse of statute of limitations or upon closing and settling significant audits in various worldwide jurisdictions.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

8. Quarterly Results of Operations (Unaudited)

Quarter Ended		March 31				June 30				September 30				December 31
2019
Total revenues		$	1,053,863			$	1,066,907			$	1,062,224			$	1,079,590
Operating income (loss)		158,675				193,115				223,474				206,074
Income (loss) from continuing operations		30,476				92,347				108,284				37,104
Total (loss) income from discontinued operations		(24		)		128				—				—
Net income (loss)		30,452				92,475				108,284				37,104
Net income (loss) attributable to Iron Mountain Incorporated		29,561				92,441				107,675				37,700			(1)
Earnings (losses) per Share-Basic:
Income (loss) per share from continuing operations		0.10				0.32				0.37				0.13
Total (loss) income per share from discontinued operations		—				—				—				—
Net income (loss) per share attributable to Iron Mountain Incorporated		0.10				0.32				0.37				0.13
Earnings (losses) per Share-Diluted:
Income (loss) per share from continuing operations		0.10				0.32				0.37				0.13
Total (loss) income per share from discontinued operations		—				—				—				—
Net income (loss) per share attributable to Iron Mountain Incorporated		0.10				0.32				0.37				0.13
2018
Total revenues		$	1,042,458			$	1,060,823			$	1,060,991			$	1,061,489
Operating income (loss)		157,119				201,460				195,635				254,053
Income (loss) from continuing operations(2)		39,389				92,263				77,349				158,557
Total (loss) income from discontinued operations		(462		)		(360		)		(11,605		)		—
Net income (loss)		38,927				91,903				65,744				158,557
Net income (loss) attributable to Iron Mountain Incorporated		38,459				91,761				65,869				157,844			(3)
Earnings (losses) per Share-Basic:
Income (loss) per share from continuing operations		0.14				0.32				0.27				0.55
Total (loss) income per share from discontinued operations		—				—				(0.04		)		—
Net income (loss) per share attributable to Iron Mountain Incorporated		0.13				0.32				0.23				0.55
Earnings (losses) per Share-Diluted:
Income (loss) per share from continuing operations		0.14				0.32				0.27				0.55
Total (loss) income per share from discontinued operations		—				—				(0.04		)		—
Net income (loss) per share attributable to Iron Mountain Incorporated		0.13				0.32				0.23				0.55

---

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

8. Quarterly Results of Operations (Unaudited) (Continued)

(1)

The change in net income (loss) attributable to Iron Mountain Incorporated in the fourth quarter of 2019 compared to the third quarter of 2019 is primarily attributable to (i) an increase of approximately $63,000 in losses on foreign currency transactions in the fourth quarter of 2019 compared to the third quarter of 2019, (ii) Restructuring Charges of $48,600, which began in the fourth quarter of 2019 (as described in Note 14), partially offset by (iii) an increase in net gains on disposal/write-down of property, plant and equipment of $37,500 recorded during the fourth quarter of 2019 compared to the third quarter of 2019 and (iv) a decrease of approximately $5,100 in the provision for income taxes recorded in the fourth quarter of 2019 compared to the third quarter of 2019.

(2)	Income (loss) from continuing operations reflects the immaterial restatement described in Note 2.y., which reduced Income (loss) from continuing operations for the three month periods ended March 31, 2018, June 30, 2018, September 30, 2018 and December 31, 2018 by $6,225, $1,640, $1,279 and $274, respectively.

(3)

The change in net income (loss) attributable to Iron Mountain Incorporated in the fourth quarter of 2018 compared to the third quarter of 2018 is primarily attributable to (i) gains of approximately $62,500 recorded during the fourth quarter of 2018 associated with the sale of land and buildings in the United Kingdom (see Note 2.g.), (ii) a gain on disposal/write-down of property, plant and equipment (excluding real estate) recorded during the fourth quarter of 2018 of approximately $8,800 related to the receipt of insurance proceeds related to the involuntary conversion of certain assets in a facility we own in Argentina (see Note 2.g.), (iii) a decrease in the provision for income taxes recorded in the fourth quarter of 2018 compared to the third quarter of 2018 of approximately $11,200, (iv) an increase in gains on foreign currency transactions in the fourth quarter of 2018 compared to the third quarter of 2018 of approximately $20,000 and (v) a charge of $11,100 recorded during the third quarter of 2018 relating to the resolution of the post-closing adjustments to the Access Contingent Consideration (as defined and discussed in Note 13) that did not recur during the fourth quarter of 2018.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

9. Segment Information

During the fourth quarter of 2019, as a result of the realignment of our global managerial structure and changes to our internal financial reporting associated with Project Summit, we reassessed the composition of our reportable operating segments and reporting units. As a result of the managerial structure changes associated with Project Summit, we now have the following reportable operating segments: (i) Global Records and Information Management ("Global RIM") Business (which consists of the former North American Records and Information Management Business (excluding our technology escrow services business, which is now included as a component of our Corporate and Other Business segment), North American Data Management Business, Western European Business and Other International Business); (ii) Global Data Center Business; and (iii) Corporate and Other Business (which includes our Adjacent Businesses and our technology escrow services business). As a result of these changes, previously reported segment information has been restated to conform to the current presentation.

As of December 31, 2019, our three reportable operating segments are described as follows:

•

Global RIM Business—provides (i) storage of physical records, including media such as microfilm and microfiche, film, X-rays and blueprints, including healthcare information services, vital records services, service and courier operations, and the collection, handling and disposal of sensitive documents for customers in approximately 50 countries ("Records Management"), (ii) storage and rotation of backup computer media as part of corporate disaster recovery plans, including service and courier operations (“Data Protection & Recovery”); server and computer backup services; and related services offerings, (collectively, "Data Management"), (iii) Information Governance and Digital Solutions, which develops, implements and supports comprehensive storage and information management solutions for the complete lifecycle of our customers' information, including the management of physical records, document conversion and digital storage in the United States and Canada, (iv) the shredding of sensitive documents for customers that, in many cases, store their records with us ("Secure Shredding") and the subsequent sale of shredded paper for recycling, and (v) on-demand, valet storage for consumers across 24 markets in North America through the MakeSpace JV (as defined in Note 13).

•

Global Data Center Business—provides enterprise-class data center facilities to protect mission-critical assets and ensure the continued operation of our customers’ IT infrastructure, with secure and reliable data center options. As of December 31, 2019, our Global Data Center Business footprint spanned nine markets in the United States: Denver, Colorado; Kansas City, Missouri; Boston, Massachusetts; Boyers, Pennsylvania; Manassas, Virginia; Edison, New Jersey; Columbus, Ohio; and Phoenix and Scottsdale, Arizona and four international markets: Amsterdam, London, and Singapore, with land held for development in Frankfurt.

•

Corporate and Other Business—consists primarily of Adjacent Businesses and other corporate items. Our Adjacent Businesses is comprised of (i) helping entertainment and media industry clients store, safeguard and deliver physical media of all types, and provides digital content repository systems that house, distribute, and archive key media assets, throughout the United States, Canada, France, China - Hong Kong S.A.R., the Netherlands and the United Kingdom ("Entertainment Services") and (ii) technical expertise in the handling, installation and storing of art in the United States, Canada and Europe ("Fine Arts"). Additionally, our Corporate and Other Business segment includes costs related to executive and staff functions, including finance, human resources and IT, which benefit the enterprise as a whole, and stock-based employee compensation expense associated with all stock options, restricted stock units, performance units and shares of stock issued under our employee stock purchase plan. Additionally, our Corporate and Other Business segment includes our technology escrow services business in the United States.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

9. Segment Information (Continued)

An analysis of our business segment information and reconciliation to the accompanying Consolidated Financial Statements is as follows:

	Global RIM Business				Global Data Center Business				Corporate and Other Business				Total Consolidated
As of and for the Year Ended December 31, 2019
Total Revenues	$	3,812,433			$	257,151			$	193,000			$	4,262,584
Storage Rental	2,320,076				246,925				114,086				2,681,087
Service	1,492,357				10,226				78,914				1,581,497
Depreciation and Amortization	454,652				133,927				69,622				658,201
Depreciation	330,534				78,939				46,850				456,323
Amortization	124,118				54,988				22,772				201,878
Adjusted EBITDA	1,563,223				121,517				(247,135		)		1,437,605
Total Assets(1)	10,753,218				2,535,848				527,750				13,816,816
Expenditures for Segment Assets	398,690				427,935				56,242				882,867
Capital Expenditures	248,232				392,029				52,722				692,983
Cash Paid for Acquisitions, Net of Cash Acquired	54,717				—				3,520				58,237
Acquisitions of Customer Relationships, Customer Inducements, Contract Fulfillment Costs and third-party commissions	95,741				35,906				—				131,647
As of and for the Year Ended December 31, 2018
Total Revenues	$	3,842,600			$	228,983			$	154,178			$	4,225,761
Storage Rental	2,301,344				218,675				102,436				2,622,455
Service	1,541,256				10,308				51,742				1,603,306
Depreciation and Amortization	472,155				105,680				61,679				639,514
Depreciation	341,384				58,707				52,649				452,740
Amortization	130,771				46,973				9,030				186,774
Adjusted EBITDA	1,569,353				99,574				(244,103		)		1,424,824
Total Assets(1)	9,135,198				2,217,505				504,515				11,857,218
Expenditures for Segment Assets	443,634				1,794,386				79,286				2,317,306
Capital Expenditures	254,308				152,739				53,015				460,062
Cash Paid for Acquisitions, Net of Cash Acquired	93,217				1,639,427				25,913				1,758,557
Acquisitions of Customer Relationships, Customer Inducements and Contract Fulfillment Costs	96,109				2,220				358				98,687
As of and for the Year Ended December 31, 2017
Total Revenues	$	3,706,110			$	37,694			$	101,774			$	3,845,578
Storage Rental	2,261,831				35,839				79,887				2,377,557
Service	1,444,279				1,855				21,887				1,468,021
Depreciation and Amortization	458,634				10,224				53,518				522,376
Depreciation	351,915				8,617				45,751				406,283
Amortization	106,719				1,607				7,767				116,093
Adjusted EBITDA	1,470,579				11,275				(238,281		)		1,243,573
Total Assets(1)	9,151,755				382,198				1,441,434				10,975,387
Expenditures for Segment Assets	424,628				86,543				126,850				638,021
Capital Expenditures	262,474				32,015				48,642				343,131
Cash Paid for Acquisitions, Net of Cash Acquired(2)	86,969				54,528				78,208				219,705
Acquisitions of Customer Relationships and Customer Inducements	75,185				—				—				75,185

---

(1)

Excludes all intercompany receivables or payables and investment in subsidiary balances. Total Assets as of December 31, 2019 reflects the adoption of ASU 2016-02. Total Assets for the Corporate and Other Business segment have been restated to reflect the impact of the Netherlands VAT liability (as discussed in Note 2.y.) which resulted in an increase in total assets for this segment of $4,971 and $2,985, at December 31, 2018 and 2017, respectively.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

9. Segment Information (Continued)

The accounting policies of the reportable segments are the same as those described in Note 2. Adjusted EBITDA for each segment is defined as income (loss) from continuing operations before interest expense, net, provision (benefit) for income taxes, depreciation and amortization, and also excludes certain items that we believe are not indicative of our core operating results, specifically: (1) (gain) loss on disposal/write-down of property, plant and equipment (including real estate); (2) intangible impairments; (3) other expense (income), net (which includes foreign currency transaction (gains) losses, net); (4) Significant Acquisition Costs; and (5) Restructuring Charges. Internally, we use Adjusted EBITDA as the basis for evaluating the performance of, and allocated resources to, our operating segments.

A reconciliation of Adjusted EBITDA to income (loss) from continuing operations on a consolidated basis is as follows:

	Year Ended December 31,
	2019				2018				2017
Adjusted EBITDA	$	1,437,605			$	1,424,824			$	1,243,573
(Add)/Deduct:
Provision (Benefit) for Income Taxes	59,931				42,753				22,962
Other Expense (Income), Net	33,898				(11,692		)		79,429
Interest Expense, Net	419,298				409,648				353,645
(Gain) Loss on disposal/write-down of property, plant and equipment, net	(63,824		)		(73,622		)		(766		)
Depreciation and amortization	658,201				639,514				522,376
Significant Acquisition Costs	13,293				50,665				84,901
Restructuring Charges	48,597				—				—
Intangible impairments	—				—				3,011
Income (Loss) from Continuing Operations	$	268,211			$	367,558			$	178,015

Information as to our operations in different geographical areas is as follows:

	Year Ended December 31,
	2019				2018				2017
Revenues:
United States	$	2,632,586			$	2,579,847			$	2,310,296
United Kingdom	274,931				280,993				246,373
Canada	243,033				249,505				243,625
Australia	143,511				155,367				157,333
Remaining Countries	968,523				960,049				887,951
Total Revenues	$	4,262,584			$	4,225,761			$	3,845,578
Long-lived Assets:
United States	$	7,862,262			$	6,902,232			$	5,476,551
United Kingdom	755,859				547,768				529,233
Canada	556,591				453,398				500,396
Australia	530,755				442,755				470,432
Remaining Countries	2,875,010				2,302,951				2,048,460
Total Long-lived Assets	$	12,580,477			$	10,649,104			$	9,025,072

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

9. Segment Information (Continued)

Information as to our revenues by product and service lines by segment are as follows:

	Global RIM Business				Global Data Center Business				Corporate and Other Business				Total Consolidated
For the Year Ended December 31, 2019
Records Management(1)	$	2,866,192			$	—			$	128,954			$	2,995,146
Data Management(1)	520,082				—				64,046				584,128
Information Destruction(1)(2)	426,159				—				—				426,159
Data Center	—				257,151				—				257,151
Total Revenues	$	3,812,433			$	257,151			$	193,000			$	4,262,584
For the Year Ended December 31, 2018
Records Management(1)	$	2,871,253			$	—			$	96,669			$	2,967,922
Data Management(1)	539,035				—				57,509				596,544
Information Destruction(1)(2)	432,312				—				—				432,312
Data Center	—				228,983				—				228,983
Total Revenues	$	3,842,600			$	228,983			$	154,178			$	4,225,761
For the Year Ended December 31, 2017
Records Management(1)	$	2,778,024			$	—			$	69,667			$	2,847,691
Data Management(1)	542,148				—				32,103				574,251
Information Destruction(1)(2)	385,938				—				4				385,942
Data Center	—				37,694				—				37,694
Total Revenues	$	3,706,110			$	37,694			$	101,774			$	3,845,578

---

(1)	Each of the offerings within our product and service lines has a component of revenue that is storage rental related and a component that is service revenues, except the destruction services offering, which does not have a storage rental component.

(2)	Includes Secure Shredding services.

Significant Acquisition Costs included in the accompanying Consolidated Statements of Operations by segment are as follows:

	Year Ended December 31,
	2019				2018				2017
Global RIM Business	$	8,223			$	20,590			$	47,722
Global Data Center Business	337				11,423				—
Corporate and Other Business	4,733				18,652				37,179
Total Significant Acquisition Costs	$	13,293			$	50,665			$	84,901

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

10. Commitments and Contingencies

a. Purchase Commitments

We have certain contractual obligations related to purchase commitments which require minimum payments as follows:

Year		Purchase Commitments(1)
2020		$	134,127
2021		68,208
2022		32,480
2023		2,004
2024		1,985
Thereafter		340
		$	239,144

---

(1)	Purchase commitments (i) include obligations for future construction costs associated with the expansion of our Global Data Center Business, which represent a significant amount of the purchase commitments due in 2020 and (ii) exclude our operating and financing lease obligations (see Note 2.m.).

b. Self-Insured Liabilities

We are self-insured up to certain limits for costs associated with workers' compensation claims, vehicle accidents, property and general business liabilities, and benefits paid under employee healthcare and short-term disability programs. At December 31, 2019 and 2018 there were $43,127 and $41,328, respectively, of self-insurance accruals reflected in Accrued expenses on our Consolidated Balance Sheets. The measurement of these costs requires the consideration of historical cost experience and judgments about the present and expected levels of cost per claim. We account for these costs primarily through actuarial methods, which develop estimates of the undiscounted liability for claims incurred, including those claims incurred but not reported. These methods provide estimates of future claim costs based on claims incurred as of the balance sheet date.

c. Litigation—General

We are involved in litigation from time to time in the ordinary course of business. A portion of the defense and/or settlement costs associated with such litigation is covered by various commercial liability insurance policies purchased by us and, in limited cases, indemnification from third parties. Our policy is to establish reserves for loss contingencies when the losses are both probable and reasonably estimable. We record legal costs associated with loss contingencies as expenses in the period in which they are incurred. The matters described below represent our significant loss contingencies. We have evaluated each matter and, if both probable and estimable, accrued an amount that represents our estimate of any probable loss associated with such matter. In addition, we have estimated a reasonably possible range for all loss contingencies including those described below. We believe it is reasonably possible that we could incur aggregate losses in addition to amounts currently accrued for all matters up to an additional $6,000 over the next several years, of which certain amounts would be covered by insurance or indemnity arrangements.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

10. Commitments and Contingencies (Continued)

d. Netherlands VAT Liability

In June 2019, we received a notification of assessment from tax and customs authorities in the Netherlands related to VAT liability of approximately 16,800 Euros primarily related to the years ending December 31, 2018 and 2017. The notification of assessment is related to our customs clearing and logistics business in the Netherlands, which we acquired through the acquisition of Bonded in September 2017. As part of the import and declaration services we provide in the Netherlands, we file import declaration forms to the customs authorities for all goods imported in a particular month and calculate the amount of VAT that is due on the goods being imported. In certain instances, we remit import VAT to the Dutch tax authorities and subsequently are reimbursed by the entity on behalf of which the goods are being imported. In other instances, however, the payment of VAT may be deferred and paid upon the sale of the goods to the ultimate end customer in cases where the entity receiving the goods holds a valid license allowing for the deferment of VAT (referred to as an Article 23 license). In the notification of assessment, the Dutch tax authorities have asserted that (i) we inappropriately deferred VAT for goods imported under Article 23 for certain of our customers between March 2017 and August 2018 and (ii) we are liable for the amount of VAT related to those goods for which VAT was inappropriately deferred. We have responded to the notification of assessment and have requested additional information regarding the matter from the Dutch tax authorities.

e. Italy Fire

On November 4, 2011, we experienced a fire at a facility we leased in Aprilia, Italy. The facility primarily stored archival and inactive business records for local area businesses. Despite quick response by local fire authorities, damage to the building was extensive, and the building and its contents were a total loss. We have been sued by six customers. Four of those lawsuits have been settled and two remain pending, including a claim asserted by Azienda per i Transporti Autoferrotranviari del Comune di Roma, S.p.A, seeking 42,600 Euros for the loss of its current and historical archives. We have also received correspondence from other affected customers, including certain customers demanding payment under various theories of liability. Although our warehouse legal liability insurer has reserved its rights to contest coverage related to certain types of potential claims, we believe we carry adequate insurance. We deny any liability with respect to the fire and we have referred these claims to our warehouse legal liability insurer for an appropriate response. We do not expect that this event will have a material impact on our consolidated financial condition, results of operations or cash flows. We sold our Italian operations on April 27, 2012, and we indemnified the buyers related to certain obligations and contingencies associated with this fire. As a result of the sale of the Italian operations, any future statement of operations and cash flow impacts related to the fire will be reflected as discontinued operations.

f. Argentina Fire

On February 5, 2014, we experienced a fire at a facility we own in Buenos Aires, Argentina. As a result of the quick response by local fire authorities, the fire was contained before the entire facility was destroyed and all employees were safely evacuated; however, a number of first responders lost their lives, or in some cases, were severely injured. The cause of the fire is currently being investigated. We believe we carry adequate insurance and do not expect that this event will have a material impact to our consolidated financial condition, results of operations or cash flows. Revenues from our operations at this facility represent less than 0.5% of our consolidated revenues. In December 2018, we received insurance proceeds of approximately $13,700 related to the involuntary conversion of assets included in the facility and, as a result, we recorded a gain on disposal/write-down of property, plant and equipment, net of $8,814 during the fourth quarter of 2018.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

10. Commitments and Contingencies (Continued)

g. Brooklyn Fire (Recall)

On January 31, 2015, a former Recall leased facility located in Brooklyn, New York was completely destroyed by a fire. Approximately 900,000 cartons of customer records were lost impacting approximately 1,200 customers. No one was injured as a result of the fire. We believe we carry adequate insurance to cover any losses resulting from the fire. There is one pending customer-related lawsuit stemming from the fire, which is being defended by our warehouse legal liability insurer. We have also received correspondence from other customers, under various theories of liability. We deny any liability with respect to the fire and we have referred these claims to our insurer for an appropriate response. We do not expect that this event will have a material impact on our consolidated financial condition, results of operations or cash flows.

---

Our policy related to business interruption insurance recoveries is to record gains within Other expense (income), net in our Consolidated Statements of Operations and proceeds received within cash flows from operating activities in our Consolidated Statements of Cash Flows. Such amounts are recorded in the period the cash is received. Our policy with respect to involuntary conversion of property, plant and equipment is to record any gain or loss within (Gain) loss on disposal/write-down of property, plant and equipment, net within operating income in our Consolidated Statements of Operations and proceeds received within cash flows from investing activities within our Consolidated Statements of Cash Flows. Losses are recorded when incurred and gains are recorded in the period when the cash received exceeds the carrying value of the related property, plant and equipment.

11. Related Party Transactions

In March 2019, in connection with the Consumer Storage Transaction and the MakeSpace Investment (both as defined and described more fully in Note 13), we entered into a storage and service agreement with the MakeSpace JV (as defined in Note 13) to provide certain storage and related services to the MakeSpace JV (the "MakeSpace Agreement"). Revenues and expenses associated with the MakeSpace Agreement are presented as a component of our Global RIM Business segment. We recognized approximately $22,500 of revenue during the year ended December 31, 2019, associated with the MakeSpace Agreement.

During the years ended December 31, 2019, 2018 and 2017, the Company had no other related party transactions.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

12. Stockholders' Equity Matters

Our board of directors has adopted a dividend policy under which we have paid, and in the future intend to pay, quarterly cash dividends on our common stock. The amount and timing of future dividends will continue to be subject to the approval of our board of directors, in its sole discretion, and to applicable legal requirements.

In 2017, 2018 and 2019, our board of directors declared the following dividends:

Declaration Date		Dividend Per Share				Record Date		Total Amount				Payment Date
February 15, 2017		$	0.5500			March 15, 2017		$	145,235			April 3, 2017
May 24, 2017		0.5500				June 15, 2017		145,417				July 3, 2017
July 27, 2017		0.5500				September 15, 2017		146,772				October 2, 2017
October 24, 2017		0.5875				December 15, 2017		166,319				January 2, 2018
February 14, 2018		0.5875				March 15, 2018		167,969				April 2, 2018
May 24, 2018		0.5875				June 15, 2018		168,078				July 2, 2018
July 24, 2018		0.5875				September 17, 2018		168,148				October 2, 2018
October 25, 2018		0.6110				December 17, 2018		174,935				January 3, 2019
February 7, 2019		0.6110				March 15, 2019		175,242				April 2, 2019
May 22, 2019		0.6110				June 17, 2019		175,389				July 2, 2019
July 26, 2019		0.6110				September 16, 2019		175,434				October 2, 2019
October 31, 2019		0.6185				December 16, 2019		177,687				January 2, 2020

During the years ended December 31, 2019, 2018, and 2017, we declared distributions to our stockholders of $703,752, $679,130 and $603,743, respectively. These distributions represent approximately $2.45 per share, $2.38 per share and $2.27 per share for the years ended December 31, 2019, 2018, and 2017, respectively, based on the weighted average number of common shares outstanding during each respective year.

For federal income tax purposes, distributions to our stockholders are generally treated as nonqualified ordinary dividends (potentially eligible for the lower effective tax rates available for "qualified REIT dividends"), qualified ordinary dividends or return of capital. The United States Internal Revenue Service requires historical C corporation earnings and profits to be distributed prior to any REIT distributions, which may affect the character of each distribution to our stockholders, including whether and to what extent each distribution is characterized as a qualified or nonqualified ordinary dividend. In addition, certain of our distributions qualify as capital gain distributions. For the years ended December 31, 2019, 2018, and 2017, the dividends we paid on our common shares were classified as follows:

	Year Ended December 31,
	2019			2018			2017
Nonqualified ordinary dividends	54.8	%		83.0	%		82.1	%
Qualified ordinary dividends	4.5	%		4.8	%		17.9	%
Capital gains	14.7	%		5.8	%		—	%
Return of capital	26.0	%		6.4	%		—	%
	100.0	%		100.0	%		100.0	%

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

12. Stockholders' Equity Matters (Continued)

Dividends paid during the years ended December 31, 2019, 2018, and 2017 which were classified as qualified ordinary dividends for federal income tax purposes primarily related to the distribution of historical C corporation earnings and profits related to certain acquisitions completed during the years ended December 31, 2019, 2018, and 2017. In 2019, the percentage of our dividend that was classified as a capital gain was 14.7% and primarily related to the sale of land and buildings in the United States and United Kingdom. In 2018, the percentage of our dividend that was classified as a capital gain was 5.8% and primarily relates to the sale of land and buildings in the United Kingdom. In 2017, none of our dividends were characterized as a return of capital primarily due to the impact of the Deemed Repatriation Transition Tax. See Note 7 for further disclosure regarding the impact of the Deemed Repatriation Transition Tax.

At The Market (ATM) Equity Program

In October 2017, we entered into a distribution agreement (the “Distribution Agreement”) with a syndicate of 10 banks (the “Agents”) pursuant to which we may sell, from time to time, up to an aggregate sales price of $500,000 of our common stock through the Agents (the “At The Market (ATM) Equity Program”). Sales of our common stock made pursuant to the Distribution Agreement may be made in negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act, including sales made directly on the NYSE, or sales made to or through a market maker other than on an exchange, or as otherwise agreed between the applicable Agent and us. We intend to use the net proceeds from sales of our common stock pursuant to the At The Market (ATM) Equity Program for general corporate purposes, which may include acquisitions and investments, including acquisitions and investments in our Global Data Center Business, and repaying amounts outstanding from time to time under the Revolving Credit Facility.

During the quarter and year ended December 31, 2019, there were no shares of common stock sold under the At The Market (ATM) Equity Program. During the year ended December 31, 2018, under the At The Market (ATM) Equity Program, we sold an aggregate of 273,486 shares of common stock for gross proceeds of approximately $8,800, generating net proceeds of $8,716, after deducting commissions of $90. During the year ended December 31, 2017, under the At The Market (ATM) Equity Program, we sold an aggregate of 1,481,053 shares of common stock for gross proceeds of approximately $60,000, generating net proceeds of $59,100 after deducting commissions of $900.

As of December 31, 2019, the remaining aggregate sale price of shares of our common stock available for distribution under the At The Market (ATM) Equity Program was approximately $431,200.

Equity Offering

On December 12, 2017, we entered into an underwriting agreement (the "Underwriting Agreement") with a syndicate of 16 banks (the “Underwriters”) related to the public offering by us of 14,500,000 shares (the “Firm Shares”) of our common stock (the “Equity Offering”). The offering price to the public for the Equity Offering was $37.00 per share, and we agreed to pay the Underwriters an underwriting commission of $1.38195 per share. The net proceeds to us from the Equity Offering, after deducting underwriters' commissions, was $516,462.

Pursuant to the Underwriting Agreement, we granted the Underwriters a 30-day option to purchase from us up to an additional 2,175,000 shares of common stock (the “Option Shares”) at the public offering price, less the underwriting commission and less an amount per share equal to any dividends or distributions declared by us and payable on the Firm Shares but not payable on the Option Shares (the “Over-Allotment Option"). On January 10, 2018, the Underwriters exercised the Over-Allotment Option in its entirety. The net proceeds to us from the exercise of the Over-Allotment Option, after deducting underwriters' commissions and the per share value of the dividend we declared on our common stock on October 24, 2017 (for which the record date was December 15, 2017) which was paid on January 2, 2018, was approximately $76,200. The net proceeds of the Equity Offering and the Over-Allotment Option, together with the net proceeds from the issuance of the 51/4% Notes, were used to finance the purchase price of the IODC Transaction, and to pay related fees and expenses. At December 31, 2017, the net proceeds of the Equity Offering, together with the net proceeds from the 51/4% Notes, were used to temporarily repay borrowings under our Revolving Credit Facility and invest in money market funds.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

13. Divestments

a. Consumer Storage Transaction

On March 19, 2019, we contributed our customer contracts and certain intellectual property and other assets used by us to operate our consumer storage business in the United States and Canada (the "IM Consumer Storage Assets") and approximately $20,000 in cash (gross of certain transaction expenses) (the "Cash Contribution") to a joint venture entity, MakeSpace LLC (the "MakeSpace JV"), established by us and MakeSpace Labs, Inc. ("MakeSpace"), a consumer storage services provider (the "Consumer Storage Transaction"). Upon the closing of the Consumer Storage Transaction on March 19, 2019, the MakeSpace JV owned (i) the IM Consumer Storage Assets, (ii) the Cash Contribution and (iii) the customer contracts, intellectual property and certain other assets used by MakeSpace to operate its consumer storage business in the United States. As part of the Consumer Storage Transaction, we received an equity interest of approximately 34% in the MakeSpace JV (the "MakeSpace Investment"). In connection with the Consumer Storage Transaction and the MakeSpace Investment, we also entered into a storage and service agreement with the MakeSpace JV to provide certain storage and related services to the MakeSpace JV (see Note 11).

We have concluded that the divestment of the IM Consumer Storage Assets in the Consumer Storage Transaction does not meet the criteria to be reported as discontinued operations in our consolidated financial statements, as our decision to divest this business does not represent a strategic shift that will have a major effect on our operations and financial results. Accordingly, the revenues and expenses associated with this business are presented as a component of Income (loss) from continuing operations in our Consolidated Statements of Operations for the year ended December 31, 2019 through the closing date of the Consumer Storage Transaction and for the years ended December 31, 2018 and 2017 and the cash flows associated with this business are presented as a component of cash flows from continuing operations in our Consolidated Statements of Cash Flows for the year ended December 31, 2019 through the closing date of the Consumer Storage Transaction and for the years ended December 31, 2018 and 2017.

As a result of the Consumer Storage Transaction, we recorded a gain on sale of approximately $4,200 to Other expense (income), net, in the first quarter of 2019, representing the excess of the fair value of the consideration received over the sum of (i) the carrying value of our consumer storage operations and (ii) the Cash Contribution. At the closing date of the Consumer Storage Transaction, the fair value of the MakeSpace Investment was approximately $27,500. We account for the MakeSpace Investment as an equity method investment. The carrying value of the MakeSpace Investment at December 31, 2019 is $18,570, and is presented as a component of Other within Other assets, net in our Consolidated Balance Sheet.

b. IMFS Divestment

On September 28, 2018, Iron Mountain Fulfillment Services, Inc. ("IMFS"), a consolidated subsidiary of IMI that operated our fulfillment services business in the United States, sold substantially all of its assets for total consideration of approximately $3,000 (the "IMFS Divestment"). We have concluded that the IMFS Divestment does not meet the criteria to be reported as discontinued operations in our consolidated financial statements, as our decision to divest this business does not represent a strategic shift that will have a major effect on our operations and financial results. Accordingly, the revenues and expenses associated with this business are presented as a component of Income (loss) from continuing operations in our Consolidated Statements of Operations for the years ended December 31, 2018 and 2017 and the cash flows associated with this business are presented as a component of cash flows from continuing operations in our Consolidated Statements of Cash Flows for the years ended December 31, 2018 and 2017 through the sale date. The fair value of the consideration received as a result of the IMFS Divestment approximated the carrying value of IMFS and, therefore, during the third quarter of 2018, we recorded an insignificant loss in connection with the IMFS Divestment to Other (income) expense, net.

c. Russia and Ukraine Divestment

On May 30, 2017, IM EES sold its records and information management operations in Russia and Ukraine to OSG Records Management (Europe) Limited ("OSG") in a stock transaction (the “Russia and Ukraine Divestment”). As consideration for the Russia and Ukraine Divestment, IM EES received a 25% equity interest in OSG (the “OSG Investment”).

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

13. Divestments (Continued)

We have concluded that the Russia and Ukraine Divestment does not meet the criteria to be reported as discontinued operations in our consolidated financial statements, as our decision to divest these businesses does not represent a strategic shift that will have a major effect on our operations and financial results. Accordingly, the revenues and expenses associated with these businesses are presented as a component of Income (loss) from continuing operations in our Consolidated Statement of Operations for the year ended December 31, 2017 through the sale date and the cash flows associated with these businesses are presented as a component of cash flows from continuing operations in our Consolidated Statement of Cash Flows for the year ended December 31, 2017 through the sale date.

As a result of the Russia and Ukraine Divestment, we recorded a gain on sale of $38,869 to Other expense (income), net, in the second quarter of 2017, representing the excess of the fair value of the consideration received over the carrying value of our businesses in Russia and Ukraine. As of the closing date of the Russia and Ukraine Divestment, the fair value of the OSG Investment was approximately $18,000. We account for the OSG Investment as an equity method investment. As of the closing date of the Russia and Ukraine Divestment, the carrying value of our businesses in Russia and Ukraine was a credit balance of $20,869, which consisted of (i) a credit balance of approximately $29,100 of cumulative translation adjustment associated with our businesses in Russia and Ukraine that was reclassified from accumulated other comprehensive items, net, (ii) the carrying value of the net assets of our businesses in Russia and Ukraine, excluding goodwill, of $4,716 and (iii) $3,515 of goodwill associated with our former Northern and Eastern Europe reporting unit (of which our businesses in Russia and Ukraine were a component of prior to the Russia and Ukraine Divestment), which was allocated, on a relative fair value basis, to our businesses in Russia and Ukraine. The carrying value of the OSG Investment at December 31, 2019 and 2018 is $17,012 and $17,514, respectively, and is presented as a component of Other within Other assets, net in our Consolidated Balance Sheets.

On January 9, 2020 we acquired the remaining 75% equity interest in OSG. See Note 15.

d. Recall Divestments

In connection with the acquisition of Recall, we sought regulatory approval of the Recall Transaction from the United States Department of Justice (the "DOJ"), the Australian Competition and Consumer Commission (the "ACCC"), the Canada Competition Bureau (the "CCB") and the United Kingdom Competition and Markets Authority (the "CMA"), and as part of the regulatory approval process, we agreed to make certain divestments in the United States, Australia, Canada and the United Kingdom (the "Divestments"), which include the Recall Divestments (as defined below).

We have concluded that the following divestments (collectively, the “Recall Divestments”) meet the criteria to be reported as discontinued operations in our Consolidated Statements of Operations and Consolidated Statements of Cash Flows for the years ended December 31, 2019, 2018 and 2017 as the Recall Divestments met the criteria to be reported as assets and liabilities held for sale at, or within a short period of time following, the closing of the Recall Transaction:

•	The assets and liabilities, including all associated tangible and intangible assets and employees, related to Recall's records and information management facilities in 13 United States cities were sold to Access CIG, LLC (“Access CIG”) on May 4, 2016 (the “Access Sale”);

•	The assets and liabilities, including associated tangible and intangible assets and employees, related to Recall’s record and information management facilities in two areas of Scotland were sold to Oasis Group on December 9, 2016; and

•	The assets and liabilities, including all associated tangible and intangible assets and employees, related to certain of Recall’s records and information management facilities in two cities in the United States, and in three cities in Canada, were sold to Arkive Information Management LLC and Arkive Information Management Ltd. on December 29, 2016.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2019

(In thousands, except share and per share data)

13. Divestments (Continued)

The table below summarizes certain results of operations of the Recall Divestments included in discontinued operations for the years ended December 31, 2019, 2018 and 2017:

		Year Ended December 31,
Description		2019				2018(1)				2017
Total Revenues		$	—			$	—			$	—
Income (Loss) from Discontinued Operations Before Provision (Benefit) for Income Taxes		104				(12,574		)		(8,118		)
(Benefit) Provision for Income Taxes		—				(147		)		(1,827		)
Income (Loss) from Discontinued Operations, Net of Tax		$	104			$	(12,427	)		$	(6,291	)

---

(1)

As indicated above, on May 4, 2016, we completed the Access Sale. As part of the total consideration for the Access Sale we were entitled to receive up to $25,000 of additional cash proceeds (the "Access Contingent Consideration"). During 2018, we settled the Access Contingent Consideration with Access CIG, as well as indemnification claims Access CIG previously raised in connection with the Access Sale. Changes to the realizable value of the Access Contingent Consideration were recorded to our Consolidated Statement of Operations as a component of discontinued operations. The loss from discontinued operations during the year ended December 31, 2018 primarily relates to losses incurred due to the resolution of the post-closing adjustments to the Access Contingent Consideration in connection with our agreement with Access CIG.

14. Restructuring Charges

We estimate total costs associated with Project Summit to be approximately $240,000 which includes operating expenditures ("Restructuring Charges") and capital expenditures. During the fourth quarter of 2019, we incurred approximately $48,600 of Restructuring Charges primarily related to employee severance costs and professional fees. Our accrued liabilities for the Restructuring Charges in our Consolidated Balance Sheet at December 31, 2019 is not material.

Restructuring Charges included in the accompanying Consolidated Statement of Operations by segment for the year ended December 31, 2019 is as follows:

	Year Ended December 31, 2019
Global RIM Business	$	21,900
Global Data Center Business	306
Corporate and Other Business	26,391
Restructuring Charges	$	48,597

15. Subsequent Events

On January 9, 2020 we acquired the remaining 75% equity interest in OSG for cash consideration of 6,026,020 Russian rubles (or approximately $95,100, based upon the exchange rate between the Russian ruble and the United States dollar on the closing date of the OSG Acquisition) (the "OSG Acquisition"). The OSG Acquisition will enable us to extend our Global RIM Business in Russia, Ukraine, Kazakhstan, Belarus, and Armenia. Commencing on the date of the OSG Acquisition, we will fully consolidate the results of OSG within our consolidated financial statements.

IRON MOUNTAIN INCORPORATED

SCHEDULE III—SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION

DECEMBER 31, 2019

(Dollars in thousands)

Schedule III - Schedule of Real Estate and Accumulated Depreciation ("Schedule III") reflects the cost and associated accumulated depreciation for the real estate facilities that are owned. The gross cost included in Schedule III includes the cost for land, land improvements, buildings, building improvements and racking. Schedule III does not reflect the 1,150 leased facilities in our real estate portfolio. In addition, Schedule III does not include any value for financing leases for property that is classified as land, buildings and building improvements in our consolidated financial statements.

The following table presents a reconciliation of the gross amount of real estate assets, as presented in Schedule III below, to the sum of the historical book value of land, buildings and building improvements, racking and construction in progress as disclosed in Note 2.f. to Notes to Consolidated Financial Statements as of December 31, 2019:

Gross Amount of Real Estate Assets, As Reported on Schedule III	$	3,856,515
Add Reconciling Items:
Book value of racking included in leased facilities(1)	1,321,159
Book value of financing leases(2)	439,166
Book value of construction in progress(3)	280,108
Book value of other(4)	73,182
Total Reconciling Items	2,113,615
Gross Amount of Real Estate Assets, As Disclosed in Note 2.f.	$	5,970,130

---

(1)	Represents the gross book value of racking installed in our 1,150 leased facilities, which is included in historical book value of racking in Note 2.f., but excluded from Schedule III.

(2)	Represents the gross book value of buildings and building improvements that are subject to financing leases, which are included in the historical book value of building and building improvements in Note 2.f., but excluded from Schedule III.

(3)

Represents the gross book value of non-real estate assets that are included in the historical book value of construction in progress assets in Note 2.f., but excluded from Schedule III, as such assets are not considered real estate associated with owned buildings. The historical book value of real estate assets associated with owned buildings that were related to construction in progress as of December 31, 2019 is included in Schedule III.

(4)	Represents the gross book value of owned land that is either (i) associated with buildings that are subject to financing leases or (ii) under development, which are included in the historical book value of either land or construction in progress, respectively, in Note 2.f., but excluded from Schedule III.

IRON MOUNTAIN INCORPORATED

SCHEDULE III—SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)

DECEMBER 31, 2019

(Dollars in thousands)

The following table presents a reconciliation of the accumulated depreciation of real estate assets, as presented in Schedule III below, to the total accumulated depreciation for all property, plant and equipment presented on our Consolidated Balance Sheet as of December 31, 2019:

Accumulated Depreciation of Real Estate Assets, As Reported on Schedule III	$	1,072,013
Add Reconciling Items:
Accumulated Depreciation - non-real estate assets(1)	1,412,193
Accumulated Depreciation - racking in leased facilities(2)	817,069
Accumulated Depreciation - financing leases(3)	124,594
Total Reconciling Items	2,353,856
Accumulated Depreciation, As Reported on Consolidated Balance Sheet	$	3,425,869

---

(1)	Represents the accumulated depreciation of non-real estate assets that is included in the total accumulated depreciation of property, plant and equipment on our Consolidated Balance Sheet, but excluded from Schedule III as the assets to which this accumulated depreciation relates are not considered real estate assets associated with owned buildings.

(2)	Represents the accumulated depreciation of racking as of December 31, 2019 installed in our 1,150 leased facilities, which is included in total accumulated depreciation of property, plant and equipment on our Consolidated Balance Sheet, but excluded from Schedule III, as disclosed in Footnote 1 to Schedule III.

(3)	Represents the accumulated depreciation of buildings and building improvements as of December 31, 2019 that are subject to financing leases, which is included in the total accumulated depreciation of property, plant and equipment on our Consolidated Balance Sheet, but excluded from Schedule III, as disclosed in Footnote 1 to Schedule III.

IRON MOUNTAIN INCORPORATED

SCHEDULE III—SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)

DECEMBER 31, 2019

(Dollars in thousands)

(A)					(B)				(C)				(D)				(E)				(F)
Region/Country/State/Campus Address		Facilities(1)			Encumbrances				Initial cost to Company(1)				Cost capitalized subsequent to acquisition (1)(2)				Gross amount carried at close of current period (1)(8)				Accumulated depreciation at close of current period(1)(8)				Date of construction or acquired(3)		Life on which depreciation in latest income statement is computed
North America
United States (Including Puerto Rico)
140 Oxmoor Ct, Birmingham, Alabama		1			$	—			$	1,322			$	953			$	2,275			$	1,107			2001		Up to 40 years
1420 North Fiesta Blvd, Gilbert, Arizona		1			—				1,637				2,737				4,374				1,937				2001		Up to 40 years
4802 East Van Buren, Phoenix, Arizona		1			—				15,599				141,274				156,873				257				2019		Up to 40 years
615 North 48th Street, Phoenix, Arizona		1			—				423,107				15,322				438,429				28,395				2018	(5)	Up to 40 years
2955 S. 18th Place, Phoenix, Arizona		1			—				12,178				11,461				23,639				5,227				2007		Up to 40 years
4449 South 36th St, Phoenix, Arizona		1			—				7,305				1,045				8,350				5,002				2012		Up to 40 years
8521 E. Princess Drive, Scottsdale, Arizona		1			—				87,865				1,302				89,167				8,139				2018	(5)	Up to 40 years
13379 Jurupa Ave, Fontana, California		1			—				10,472				8,714				19,186				9,930				2002		Up to 40 years
600 Burning Tree Rd, Fullerton, California		1			—				4,762				1,897				6,659				2,969				2002		Up to 40 years
21063 Forbes St., Hayward, California		1			—				13,407				351				13,758				2,666				2019	(7)	Up to 40 years
5086 4th St, Irwindale, California		1			—				6,800				2,523				9,323				3,589				2002		Up to 40 years
6933 Preston Ave, Livermore, California		1			—				14,585				13,927				28,512				10,535				2002		Up to 40 years
1006 North Mansfield, Los Angeles, California		1			—				749				—				749				109				2014		Up to 40 years
1025 North Highland Ave, Los Angeles, California		1			—				10,168				26,191				36,359				13,914				1988		Up to 40 years
1350 West Grand Ave, Oakland, California		1			—				15,172				6,224				21,396				14,882				1997		Up to 40 years
1760 North Saint Thomas Circle, Orange, California		1			—				4,576				495				5,071				1,842				2002		Up to 40 years
8700 Mercury Lane, Pico Rivera, California		1			—				27,957				213				28,170				9,584				2012		Up to 40 years
8661 Kerns St, San Diego, California		1			—				10,512				6,821				17,333				7,352				2002		Up to 40 years
1915 South Grand Ave, Santa Ana, California		1			—				3,420				1,261				4,681				1,954				2001		Up to 40 years
2680 Sequoia Dr, South Gate, California		1			—				6,329				2,251				8,580				4,177				2002		Up to 40 years
336 Oyster Point Blvd, South San Francisco, California		1			—				15,100				18				15,118				2,168				2019	(7)	Up to 40 years
25250 South Schulte Rd, Tracy, California		1			—				3,049				1,774				4,823				2,080				2001		Up to 40 years
3576 N. Moline, Aurora, Colorado		1			—				1,583				4,390				5,973				1,810				2001		Up to 40 years
North Stone Ave, Colorado Springs, Colorado		2			—				761				2,718				3,479				1,771				2001		Up to 40 years
4300 Brighton Boulevard, Denver, Colorado		1			—				116,336				19,117				135,453				9,503				2017		Up to 40 years
11333 E 53rd Ave, Denver, Colorado		1			—				7,403				10,215				17,618				9,330				2001		Up to 40 years
5151 E. 46th Ave, Denver, Colorado		1			—				6,312				709				7,021				1,528				2014		Up to 40 years
20 Eastern Park Rd, East Hartford, Connecticut		1			—				7,417				1,891				9,308				6,125				2002		Up to 40 years
Bennett Rd, Suffield, Connecticut		2			—				1,768				933				2,701				1,373				2000		Up to 40 years
Kennedy Road, Windsor, Connecticut		2			—				10,447				31,140				41,587				20,432				2001		Up to 40 years
293 Ella Grasso Rd, Windsor Locks, Connecticut		1			—				4,021				2,019				6,040				2,846				2002		Up to 40 years
150-200 Todds Ln, Wilmington, Delaware		1			—				7,226				1,044				8,270				5,036				2002		Up to 40 years
13280 Vantage Way, Jacksonville, Florida		1			—				1,853				567				2,420				938				2001		Up to 40 years
12855 Starkey Rd, Largo, Florida		1			—				3,293				2,966				6,259				3,187				2001		Up to 40 years
7801 Riviera Blvd, Miramar, Florida		1			—				8,250				221				8,471				808				2017		Up to 40 years

IRON MOUNTAIN INCORPORATED

SCHEDULE III—SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)

DECEMBER 31, 2019

(Dollars in thousands)

(A)					(B)				(C)				(D)				(E)				(F)
Region/Country/State/Campus Address		Facilities(1)			Encumbrances				Initial cost to Company(1)				Cost capitalized subsequent to acquisition (1)(2)				Gross amount carried at close of current period (1)(8)				Accumulated depreciation at close of current period(1)(8)				Date of construction or acquired(3)		Life on which depreciation in latest income statement is computed
United States (Including Puerto Rico) (continued)
10002 Satellite Blvd, Orlando, Florida		1			$	—			$	1,927			$	295			$	2,222			$	886			2001		Up to 40 years
3501 Electronics Way, West Palm Beach, Florida		1			—				4,201				13,678				17,879				6,968				2001		Up to 40 years
1890 MacArthur Blvd, Atlanta Georgia		1			—				1,786				742				2,528				1,123				2002		Up to 40 years
3881 Old Gordon Rd, Atlanta, Georgia		1			—				1,185				326				1,511				863				2001		Up to 40 years
5319 Tulane Drive SW, Atlanta, Georgia		1			—				2,808				3,940				6,748				3,146				2002		Up to 40 years
6111 Live Oak Parkway, Norcross, Georgia		1			—				3,542				1,648				5,190				390				2017		Up to 40 years
3150 Nifda Dr, Smyrna, Georgia		1			—				463				770				1,233				731				1990		Up to 40 years
1301 S. Rockwell St, Chicago, Illinois		1			—				7,947				19,657				27,604				15,927				1999		Up to 40 years
2211 W. Pershing Rd, Chicago, Illinois		1			—				4,264				13,979				18,243				8,435				2001		Up to 40 years
2425 South Halsted St, Chicago, Illinois		1			—				7,470				1,658				9,128				4,310				2006		Up to 40 years
2604 West 13th St, Chicago, Illinois		1			—				404				2,818				3,222				2,799				2001		Up to 40 years
2255 Pratt Blvd, Elk Grove, Illinois		1			—				1,989				3,892				5,881				1,516				2000		Up to 40 years
4175 Chandler Dr Opus No. Corp, Hanover Park, Illinois		1			—				22,048				2,461				24,509				9,552				2014		Up to 40 years
2600 Beverly Drive, Lincoln, Illinois		1			—				1,378				923				2,301				254				2015		Up to 40 years
6090 NE 14th Street, Des Moines, Iowa		1			—				622				504				1,126				408				2003		Up to 40 years
South 7th St, Louisville, Kentucky		4			—				709				13,427				14,136				5,302				Various		Up to 40 years
26 Parkway Drive (fka 133 Pleasant), Scarborough, Maine		1			—				8,337				387				8,724				3,151				2015	(7)	Up to 40 years
8928 McGaw Ct, Columbia, Maryland		1			—				2,198				6,416				8,614				3,591				1999		Up to 40 years
10641 Iron Bridge Rd, Jessup, Maryland		1			—				3,782				1,337				5,119				2,618				2000		Up to 40 years
8275 Patuxent Range Rd, Jessup, Maryland		1			—				10,105				7,703				17,808				10,037				2001		Up to 40 years
96 High St, Billerica, Massachusetts		1			—				3,221				3,926				7,147				3,661				1998		Up to 40 years
120 Hampden St, Boston, Massachusetts		1			—				164				930				1,094				542				2002		Up to 40 years
32 George St, Boston, Massachusetts		1			—				1,820				5,391				7,211				5,431				1991		Up to 40 years
3435 Sharps Lot Rd, Dighton, Massachusetts		1			—				1,911				788				2,699				2,085				1999		Up to 40 years
77 Constitution Boulevard, Franklin, Massachusetts		1			—				5,413				218				5,631				713				2014		Up to 40 years
216 Canal St, Lawrence, Massachusetts		1			—				1,298				1,089				2,387				1,270				2001		Up to 40 years
Bearfoot Road, Northboro, Massachusetts		2			—				55,923				12,506				68,429				40,067				Various		Up to 40 years
38300 Plymouth Road, Livonia, Michigan		1			—				10,285				1,243				11,528				3,937				2015	(7)	Up to 40 years
6601 Sterling Dr South, Sterling Heights, Michigan		1			—				1,294				1,150				2,444				1,240				2002		Up to 40 years
1985 Bart Ave, Warren, Michigan		1			—				1,802				530				2,332				1,113				2000		Up to 40 years
Wahl Court, Warren, Michigan		2			—				3,426				2,635				6,061				3,705				Various		Up to 40 years
31155 Wixom Rd, Wixom, Michigan		1			—				4,000				1,381				5,381				2,687				2001		Up to 40 years
3140 Ryder Trail South, Earth City, Missouri		1			—				3,072				3,398				6,470				2,351				2004		Up to 40 years
Missouri Bottom Road, Hazelwood, Missouri		4			—				28,282				4,969				33,251				7,708				Various	(7)	Up to 40 years
Leavenworth St/18th St, Omaha, Nebraska		3			—				2,924				19,736				22,660				7,533				Various		Up to 40 years
4105 North Lamb Blvd, Las Vegas, Nevada		1			—				3,430				8,957				12,387				5,850				2002		Up to 40 years
17 Hydro Plant Rd, Milton, New Hampshire		1			—				6,179				4,351				10,530				6,523				2001		Up to 40 years

IRON MOUNTAIN INCORPORATED

SCHEDULE III—SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)

DECEMBER 31, 2019

(Dollars in thousands)

(A)					(B)				(C)				(D)				(E)				(F)
Region/Country/State/Campus Address		Facilities(1)			Encumbrances				Initial cost to Company(1)				Cost capitalized subsequent to acquisition (1)(2)				Gross amount carried at close of current period (1)(8)				Accumulated depreciation at close of current period(1)(8)				Date of construction or acquired(3)		Life on which depreciation in latest income statement is computed
United States (Including Puerto Rico) (continued)
Kimberly Rd, East Brunsick, New Jersey		3			$	—			$	22,105			$	5,924			$	28,029			$	14,303			Various		Up to 40 years
3003 Woodbridge Avenue, Edison, New Jersey		1			—				310,404				36,772				347,176				19,038				2018	(5)	Up to 40 years
811 Route 33, Freehold, New Jersey		3			—				38,697				55,396				94,093				52,431				Various		Up to 40 years
51-69 & 77-81 Court St, Newark, New Jersey		1			—				11,734				9,774				21,508				1,478				2015		Up to 40 years
560 Irvine Turner Blvd, Newark, New Jersey		1			—				9,522				709				10,231				858				2015		Up to 40 years
231 Johnson Ave, Newark, New Jersey		1			—				8,945				1,855				10,800				905				2015		Up to 40 years
650 Howard Avenue, Somerset, New Jersey		1			—				3,585				11,808				15,393				6,027				2006		Up to 40 years
100 Bailey Ave, Buffalo, New York		1			—				1,324				11,086				12,410				6,584				1998		Up to 40 years
64 Leone Ln, Chester, New York		1			—				5,086				1,132				6,218				3,482				2000		Up to 40 years
1368 County Rd 8, Farmington, New York		1			—				2,611				4,788				7,399				4,609				1998		Up to 40 years
County Rd 10, Linlithgo, New York		2			—				102				2,959				3,061				1,646				2001		Up to 40 years
77 Seaview Blvd, N. Hempstead New York		1			—				5,719				1,442				7,161				2,721				2006		Up to 40 years
37 Hurds Corner Road, Pawling, New York		1			—				4,323				1,285				5,608				2,271				2005		Up to 40 years
Ulster Ave/Route 9W, Port Ewen, New York		3			—				23,137				11,277				34,414				22,318				2001		Up to 40 years
Binnewater Rd, Rosendale, New York		2			—				5,142				11,664				16,806				7,062				Various		Up to 40 years
220 Wavel St, Syracuse, New York		1			—				2,929				2,712				5,641				2,924				1997		Up to 40 years
2235 Cessna Drive, Burlington, North Carolina		1			—				1,602				328				1,930				222				2015		Up to 40 years
14500 Weston Pkwy, Cary, North Carolina		1			—				1,880				2,224				4,104				1,909				1999		Up to 40 years
826 Church Street, Morrisville, North Carolina		1			—				7,087				266				7,353				1,335				2017		Up to 40 years
1275 East 40th, Cleveland, Ohio		1			—				3,129				599				3,728				2,041				1999		Up to 40 years
7208 Euclid Avenue, Cleveland, Ohio		1			—				3,336				3,268				6,604				3,185				2001		Up to 40 years
4260 Tuller Ridge Rd, Dublin, Ohio		1			—				1,030				1,881				2,911				1,483				1999		Up to 40 years
3366 South Tech Boulevard, Miamisburg, Ohio		1			—				29,092				507				29,599				2,013				2018	(5)	Up to 40 years
302 South Byrne Rd, Toledo, Ohio		1			—				602				1,081				1,683				752				2001		Up to 40 years
Partnership Drive, Oklahoma City, Oklahoma		3			—				11,437				313				11,750				3,286				2015	(7)	Up to 40 years
7530 N. Leadbetter Road, Portland, Oregon		1			—				5,187				1,874				7,061				4,170				2002		Up to 40 years
Branchton Rd, Boyers, Pennsylvania		3			—				21,166				232,609				253,775				61,886				Various		Up to 40 years
800 Carpenters Crossings, Folcroft, Pennsylvania		1			—				2,457				953				3,410				2,069				2000		Up to 40 years
36 Great Valley Pkwy, Malvern, Pennsylvania		1			—				2,397				7,076				9,473				4,420				1999		Up to 40 years
2300 Newlins Mill Road, Palmer Township, Pennsylvania		1			—				18,365				9,027				27,392				1,412				2017		Up to 40 years
Henderson Dr/Elmwood Ave, Sharon Hill, Pennsylvania		2			—				24,153				105				24,258				12,362				Various		Up to 40 years
Las Flores Industrial Park, Rio Grande, Puerto Rico		1			—				4,185				3,447				7,632				4,416				2001		Up to 40 years
24 Snake Hill Road, Chepachet, Rhode Island		1			—				2,659				2,202				4,861				2,928				2001		Up to 40 years
1061 Carolina Pines Road, Columbia, South Carolina		1			—				11,776				2,340				14,116				3,223				2016	(7)	Up to 40 years
2301 Prosperity Way, Florence, South Carolina		1			—				2,846				1,258				4,104				1,217				2016	(7)	Up to 40 years
Mitchell Street, Knoxville, Tennessee		2			—				718				4,557				5,275				2,022				Various		Up to 40 years
6005 Dana Way, Nashville, Tennessee		2			—				1,827				2,915				4,742				1,921				2000		Up to 40 years

IRON MOUNTAIN INCORPORATED

SCHEDULE III—SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)

DECEMBER 31, 2019

(Dollars in thousands)

(A)					(B)				(C)				(D)				(E)				(F)
Region/Country/State/Campus Address		Facilities(1)			Encumbrances				Initial cost to Company(1)				Cost capitalized subsequent to acquisition (1)(2)				Gross amount carried at close of current period (1)(8)				Accumulated depreciation at close of current period(1)(8)				Date of construction or acquired(3)		Life on which depreciation in latest income statement is computed
United States (Including Puerto Rico) (continued)
11406 Metric Blvd, Austin, Texas		1			$	—			$	5,489			$	2,211			$	7,700			$	4,090			2002		Up to 40 years
6600 Metropolis Drive, Austin, Texas		1			—				4,519				454				4,973				1,358				2011		Up to 40 years
Capital Parkway, Carrollton, Texas		3			—				8,299				246				8,545				2,661				2015	(7)	Up to 40 years
1800 Columbian Club Dr, Carrolton, Texas		1			—				19,673				1,179				20,852				9,438				2013		Up to 40 years
1905 John Connally Dr, Carrolton, Texas		1			—				2,174				791				2,965				1,387				2000		Up to 40 years
13425 Branchview Ln, Dallas, Texas		1			—				3,518				3,680				7,198				4,193				2001		Up to 40 years
Cockrell Ave, Dallas, Texas		1			—				1,277				1,596				2,873				1,979				2000		Up to 40 years
1819 S. Lamar St, Dallas, Texas		1			—				3,215				1,083				4,298				2,578				2000		Up to 40 years
2000 Robotics Place Suite B, Fort Worth, Texas		1			—				5,328				2,065				7,393				2,951				2002		Up to 40 years
1202 Ave R, Grand Prairie, Texas		1			—				8,354				2,173				10,527				5,947				2003		Up to 40 years
15333 Hempstead Hwy, Houston, Texas		3			—				6,327				37,648				43,975				13,034				2004		Up to 40 years
2600 Center Street, Houston, Texas		1			—				2,840				2,172				5,012				2,575				2000		Up to 40 years
3502 Bissonnet St, Houston, Texas		1			—				7,687				692				8,379				5,840				2002		Up to 40 years
5249 Glenmont Ave, Houston, Texas		1			—				3,467				2,401				5,868				2,753				2000		Up to 40 years
5707 Chimney Rock, Houston, Texas		1			—				1,032				1,189				2,221				1,089				2002		Up to 40 years
5757 Royalton Dr, Houston, Texas		1			—				1,795				994				2,789				1,300				2000		Up to 40 years
6203 Bingle Rd, Houston, Texas		1			—				3,188				11,476				14,664				8,672				2001		Up to 40 years
7800 Westpark, Houston, Texas		1			—				6,323				1,276				7,599				1,832				2015	(7)	Up to 40 years
9601 West Tidwell, Houston, Texas		1			—				1,680				2,305				3,985				1,302				2001		Up to 40 years
15300 FM 1825, Pflugerville, Texas		2			—				3,811				7,952				11,763				5,042				2001		Up to 40 years
930 Avenue B, San Antonio, Texas		1			—				393				245				638				259				1998		Up to 40 years
931 North Broadway, San Antonio, Texas		1			—				3,526				1,144				4,670				2,857				1999		Up to 40 years
1665 S. 5350 West, Salt Lake City, Utah		1			—				6,239				4,270				10,509				5,236				2002		Up to 40 years
11052 Lakeridge Pkwy, Ashland, Virginia		1			—				1,709				1,924				3,633				1,842				1999		Up to 40 years
2301 International Parkway, Fredericksburg, Virginia		1			—				20,980				30				21,010				5,777				2015	(7)	Up to 40 years
4555 Progress Road, Norfolk, Virginia		1			—				6,527				1,088				7,615				3,297				2011		Up to 40 years
3725 Thirlane Rd. N.W., Roanoke, Virginia		1			—				2,577				172				2,749				1,119				2015	(7)	Up to 40 years
7700-7730 Southern Dr, Springfield, Virginia		1			—				14,167				2,651				16,818				9,475				2002		Up to 40 years
8001 Research Way, Springfield, Virginia		1			—				5,230				2,790				8,020				3,384				2002		Up to 40 years
22445 Randolph Dr, Sterling, Virginia		1			—				7,598				3,724				11,322				6,018				2005		Up to 40 years
307 South 140th St, Burien, Washington		1			—				2,078				2,367				4,445				2,323				1999		Up to 40 years
8908 W. Hallett Rd, Cheney, Washington		1			—				510				4,259				4,769				2,066				1999		Up to 40 years
6600 Hardeson Rd, Everett, Washington		1			—				5,399				3,404				8,803				3,543				2002		Up to 40 years
19826 Russell Rd, South, Kent, Washington		1			—				14,793				9,752				24,545				10,705				2002		Up to 40 years
1201 N. 96th St, Seattle, Washington		1			—				4,496				2,112				6,608				3,556				2001		Up to 40 years
4330 South Grove Road, Spokane, Washington		1			—				3,906				850				4,756				472				2015		Up to 40 years
12021 West Bluemound Road, Wauwatosa, Wisconsin		1			—				1,307				2,124				3,431				1,445				1999		Up to 40 years
		179			—				1,908,077				1,070,345				2,978,422				791,249

IRON MOUNTAIN INCORPORATED

SCHEDULE III—SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)

DECEMBER 31, 2019

(Dollars in thousands)

(A)					(B)				(C)				(D)				(E)				(F)
Region/Country/State/Campus Address		Facilities(1)			Encumbrances				Initial cost to Company(1)				Cost capitalized subsequent to acquisition (1)(2)				Gross amount carried at close of current period (1)(8)				Accumulated depreciation at close of current period(1)(8)				Date of construction or acquired(3)		Life on which depreciation in latest income statement is computed
Canada
One Command Court, Bedford		1			$	—			$	3,847			$	4,482			$	8,329			$	4,126			2000		Up to 40 years
195 Summerlea Road, Brampton		1			—				5,403				6,479				11,882				5,357				2000		Up to 40 years
10 Tilbury Court, Brampton		1			—				5,007				17,257				22,264				7,916				2000		Up to 40 years
8825 Northbrook Court, Burnaby		1			—				8,091				2,062				10,153				4,648				2001		Up to 40 years
8088 Glenwood Drive, Burnaby		1			—				4,326				7,114				11,440				4,658				2005		Up to 40 years
5811 26th Street S.E., Calgary		1			—				14,658				8,509				23,167				11,114				2000		Up to 40 years
3905-101 Street, Edmonton		1			—				2,020				640				2,660				1,578				2000		Up to 40 years
68 Grant Timmins Drive, Kingston		1			—				3,639				660				4,299				330				2016		Up to 40 years
3005 Boul. Jean-Baptiste Deschamps, Lachine		1			—				2,751				138				2,889				1,382				2000		Up to 40 years
1655 Fleetwood, Laval		1			—				8,196				18,161				26,357				12,687				2000		Up to 40 years
4005 Richelieu, Montreal		1			—				1,800				2,531				4,331				1,699				2000		Up to 40 years
1209 Algoma Rd, Ottawa		1			—				1,059				6,899				7,958				4,019				2000		Up to 40 years
1650 Comstock Rd, Ottawa		1			—				7,478				(70		)		7,408				2,647				2017		Up to 40 years
235 Edson Street, Saskatoon		1			—				829				1,676				2,505				855				2008		Up to 40 years
640 Coronation Drive, Scarborough		1			—				1,853				1,208				3,061				1,279				2000		Up to 40 years
610 Sprucewood Ave, Windsor		1			—				1,243				667				1,910				676				2007		Up to 40 years
		16			—				72,200				78,413				150,613				64,971
		195			—				1,980,277				1,148,758				3,129,035				856,220

IRON MOUNTAIN INCORPORATED

SCHEDULE III—SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)

DECEMBER 31, 2019

(Dollars in thousands)

(A)					(B)				(C)				(D)				(E)				(F)
Region/Country/State/Campus Address		Facilities(1)			Encumbrances				Initial cost to Company(1)				Cost capitalized subsequent to acquisition (1)(2)				Gross amount carried at close of current period (1)(8)				Accumulated depreciation at close of current period(1)(8)				Date of construction or acquired(3)		Life on which depreciation in latest income statement is computed
Europe
Gewerbeparkstr. 3, Vienna, Austria		1			$	—			$	6,542			$	8,051			$	14,593			$	3,514			2010		Up to 40 years
Woluwelaan 147, Diegem, Belgium		1			—				2,541				6,309				8,850				4,218				2003		Up to 40 years
Stupničke Šipkovine 62, Zagreb, Croatia		1			—				1,408				572				1,980				33				2018		Up to 40 years
Kratitirion 9 Kokkinotrimithia Industrial District, Nicosia, Cyprus		1			—				3,136				3,227				6,363				434				2017		Up to 40 years
Karyatidon 1, Agios Sylas Industrial Area (3rd), Limassol, Cyprus		1			—				1,935				(46		)		1,889				158				2017		Up to 40 years
65 Egerton Road, Birmingham, England		1			—				6,980				1,550				8,530				4,888				2003		Up to 40 years
Corby 278, Long Croft Road, Corby, England		1			—				20,486				744				21,230				537				2018		Up to 40 years
Otterham Quay Lane, Gillingham, England		9			—				7,418				3,430				10,848				5,269				2003		Up to 40 years
Pennine Way, Hemel Hempstead, England		1			—				10,847				6,113				16,960				7,002				2004		Up to 40 years
Kemble Industrial Park, Kemble, England		2			—				5,277				6,990				12,267				8,524				2004		Up to 40 years
Gayton Road, Kings Lynn, England		3			—				3,119				1,829				4,948				2,872				2003		Up to 40 years
Cody Road, London, England		3			—				20,307				8,816				29,123				11,398				Various		Up to 40 years
17 Broadgate, Oldham, England		1			—				4,039				342				4,381				2,342				2008		Up to 40 years
Harpway Lane, Sopley, England		1			—				681				1,445				2,126				1,384				2004		Up to 40 years
Unit 1A Broadmoor Road, Swindom, England		1			—				2,636				478				3,114				1,190				2006		Up to 40 years
Jeumont-Schneider, Champagne Sur Seine, France		3			—				1,750				2,429				4,179				2,214				2003		Up to 40 years
Bat I-VII Rue de Osiers, Coignieres, France		4			—				21,318				(747		)		20,571				3,904				2016	(4)	Up to 40 years
26 Rue de I Industrie, Fergersheim, France		1			—				1,322				(80		)		1,242				235				2016	(4)	Up to 40 years
Bat A, B, C1, C2, C3 Rue Imperiale, Gue de Longroi, France		1			—				3,390				700				4,090				846				2016	(4)	Up to 40 years
Le Petit Courtin Site de Dois, Gueslin, Mingieres, France		1			—				14,141				(272		)		13,869				1,838				2016	(4)	Up to 40 years
ZI des Sables, Morangis, France		1			582				12,407				15,136				27,543				18,712				2004		Up to 40 years
45 Rue de Savoie, Manissieux, Saint Priest, France		1			—				5,546				(185		)		5,361				779				2016	(4)	Up to 40 years
Gutenbergstrabe 55, Hamburg, Germany		1			—				4,022				742				4,764				966				2016	(4)	Up to 40 years
Brommer Weg 1, Wipshausen, Germany		1			—				3,220				1,571				4,791				3,272				2006		Up to 40 years
Warehouse and Offices 4 Springhill, Cork, Ireland		1			—				9,040				2,534				11,574				4,604				2014		Up to 40 years
17 Crag Terrace, Dublin, Ireland		1			—				2,818				742				3,560				1,333				2001		Up to 40 years
Damastown Industrial Park, Dublin, Ireland		1			—				16,034				6,983				23,017				7,689				2012		Up to 40 years
Portsmuiden 46, Amsterdam, The Netherlands		1			—				1,852				1,824				3,676				2,255				2015	(7)	Up to 40 years
Schepenbergweg 1, Amsterdam, The Netherlands		1			—				1,258				(657		)		601				300				2015	(7)	Up to 40 years
Vareseweg 130, Rotterdam, The Netherlands		1			—				1,357				1,022				2,379				1,691				2015	(7)	Up to 40 years
Howemoss Drive, Aberdeen, Scotland		2			—				6,970				5,556				12,526				4,912				Various		Up to 40 years
Traquair Road, Innerleithen, Scotland		1			—				113				2,170				2,283				1,101				2004		Up to 40 years

IRON MOUNTAIN INCORPORATED

SCHEDULE III—SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)

DECEMBER 31, 2019

(Dollars in thousands)

(A)					(B)				(C)				(D)				(E)				(F)
Region/Country/State/Campus Address		Facilities(1)			Encumbrances				Initial cost to Company(1)				Cost capitalized subsequent to acquisition (1)(2)				Gross amount carried at close of current period (1)(8)				Accumulated depreciation at close of current period(1)(8)				Date of construction or acquired(3)		Life on which depreciation in latest income statement is computed
Europe (Continued)
Nettlehill Road, Houston Industrial Estate, Livingston, Scotland		1			$	—			$	11,517			$	25,433			$	36,950			$	17,916			2001		Up to 40 years
Av Madrid s/n Poligono Industrial Matillas, Alcala de Henares, Spain		1			—				186				317				503				264				2014		Up to 40 years
Calle Bronce, 37, Chiloeches, Spain		1			—				11,011				1,845				12,856				3,088				2010		Up to 40 years
Ctra M.118 , Km.3 Parcela 3, Madrid, Spain		1			—				3,981				5,719				9,700				6,460				2001		Up to 40 years
Abanto Ciervava, Spain		2			—				1,053				(75		)		978				446				Various		Up to 40 years
		57			582				231,658				122,557				354,215				138,588
Latin America
Amancio Alcorta 2396, Buenos Aires, Argentina		2			—				655				1,188				1,843				535				Various		Up to 40 years
Azara 1245, Buenos Aires, Argentina		1			—				166				(162		)		4				—				1998		Up to 40 years
Saraza 6135, Buenos Aires, Argentina		1			—				144				98				242				52				1995		Up to 40 years
Spegazzini, Ezeiza Buenos Aires, Argentina		1			—				12,773				(9,554		)		3,219				582				2012		Up to 40 years
Av Ernest de Moraes 815, Bairro Fim do Campo, Jarinu Brazil		1			—				12,562				(2,267		)		10,295				1,524				2016	(4)	Up to 40 years
Rua Peri 80, Jundiai, Brazil		2			—				8,894				(1,760		)		7,134				1,141				2016	(4)	Up to 40 years
Francisco de Souza e Melo, Rio de Janerio, Brazil		3			—				1,868				10,436				12,304				3,341				Various		Up to 40 years
Hortolandia, Sao Paulo, Brazil		1			—				24,078				1,279				25,357				3,569				2014		Up to 40 years
El Taqueral 99, Santiago, Chile		2			—				2,629				32,773				35,402				11,212				2006		Up to 40 years
Panamericana Norte 18900, Santiago, Chile		5			—				4,001				18,831				22,832				7,261				2004		Up to 40 years
Avenida Prolongacion del Colli 1104, Guadalajara, Mexico		1			—				374				1,292				1,666				1,016				2002		Up to 40 years
Privada Las Flores No. 25 (G3), Guadalajara, Mexico		1			—				905				1,278				2,183				998				2004		Up to 40 years
Tula KM Parque de Las, Huehuetoca, Mexico		2			—				19,937				(771		)		19,166				2,864				2016	(4)	Up to 40 years
Carretera Pesqueria Km2.5(M3), Monterrey, Mexico		2			—				3,537				3,691				7,228				2,636				2004		Up to 40 years
Lote 2, Manzana A, (T2& T3), Toluca, Mexico		1			—				2,204				4,790				6,994				5,167				2002		Up to 40 years
Prolongacion de la Calle 7 (T4), Toluca, Mexico		1			—				7,544				15,171				22,715				7,341				2007		Up to 40 years
Panamericana Sur, KM 57.5, Lima, Peru		7			—				1,549				893				2,442				1,203				Various		Up to 40 years
Av. Elmer Faucett 3462, Lima, Peru		2			1,232				4,112				5,314				9,426				4,656				Various		Up to 40 years
Calle Los Claveles-Seccion 3, Lima, Peru		1			—				8,179				32,720				40,899				9,227				2010		Up to 40 years
		37			1,232				116,111				115,240				231,351				64,325

IRON MOUNTAIN INCORPORATED

SCHEDULE III—SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)

DECEMBER 31, 2019

(Dollars in thousands)

(A)					(B)				(C)				(D)				(E)				(F)
Region/Country/State/Campus Address		Facilities(1)			Encumbrances				Initial cost to Company(1)				Cost capitalized subsequent to acquisition (1)(2)				Gross amount carried at close of current period (1)(8)				Accumulated depreciation at close of current period(1)(8)				Date of construction or acquired(3)		Life on which depreciation in latest income statement is computed
Asia
Warehouse No 4, Shanghai, China		1			$	—			$	1,530			$	671			$	2,201			$	373			2013		Up to 40 years
Jalan Karanggan Muda Raya No 59, Bogor Indonesia		1			—				7,897				(316		)		7,581				2,195				2017		Up to 40 years
1 Serangoon North Avenue 6, Singapore		1			—				58,637				21,633				80,270				5,058				2018	(7)	Up to 40 years
2 Yung Ho Road, Singapore		1			—				10,395				871				11,266				836				2016	(4)	Up to 40 years
26 Chin Bee Drive, Singapore		1			—				15,699				1,315				17,014				1,262				2016	(4)	Up to 40 years
IC1 69 Moo 2, Soi Wat Namdaeng, Bangkok, Thailand		2			—				13,226				6,136				19,362				2,659				2016	(4)	Up to 40 years
		7			—				107,384				30,310				137,694				12,383
Australia
8 Whitestone Drive, Austins Ferry, Australia		1			—				681				2,532				3,213				404				2012		Up to 40 years
6 Norwich Street, South Launceston, Australia		1			—				1,090				(83		)		1,007				93				2015		Up to 40 years
		2			—				1,771				2,449				4,220				497
Total		298			$	1,814			$	2,437,201			$	1,419,314			$	3,856,515			$	1,072,013

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(1)

The above information only includes the real estate facilities that are owned. The gross cost includes the cost for land, land improvements, buildings, building improvements and racking. The listing does not reflect the 1,150 leased facilities in our real estate portfolio. In addition, the above information does not include any value for financing leases for property that is classified as land, buildings and building improvements in our consolidated financial statements.

(2)	Amount includes cumulative impact of foreign currency translation fluctuations.

(3)	Date of construction or acquired represents the date we constructed the facility, acquired the facility through purchase or acquisition.

(4)	Property was acquired in connection with the Recall Transaction.

(5)	Property was acquired in connection with the IODC Transaction.

(6)	Property was acquired in connection with the Credit Suisse Transaction.

(7)	This date represents the date the categorization of the property was changed from a leased facility to an owned facility.

IRON MOUNTAIN INCORPORATED

SCHEDULE III—SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)

DECEMBER 31, 2019

(Dollars in thousands)

(8)	The following tables present the changes in gross carrying amount of real estate owned and accumulated depreciation for the years ended December 31, 2019 and 2018:

		Year Ended December 31,
Gross Carrying Amount of Real Estate		2019				2018
Gross amount at beginning of period		$	3,700,307			$	2,707,925
Additions during period:
Discretionary capital projects		278,508				155,901
Acquisitions(1)		—				918,091
Other adjustments(2)		25,077				—
Foreign currency translation fluctuations		5,978				(58,798		)
		309,563				1,015,194
Deductions during period:
Cost of real estate sold, disposed or written-down		(153,355		)		(22,812		)
Gross amount at end of period		$	3,856,515			$	3,700,307

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(1)	Includes acquisition of sites through business combinations and purchase accounting adjustments.

(2)	Includes costs associated with real estate we acquired which primarily includes building improvements and racking, which were previously subject to leases.

		Year Ended December 31,
Accumulated Depreciation		2019				2018
Gross amount of accumulated depreciation at beginning of period		$	1,011,050			$	909,092
Additions during period:
Depreciation		122,366				125,280
Other adjustments(1)		1,314				—
Foreign currency translation fluctuations		3,514				(16,016		)
		127,194				109,264
Deductions during period:
Amount of accumulated depreciation for real estate assets sold, disposed or written-down		(66,231		)		(7,306		)
Gross amount of end of period		$	1,072,013			$	1,011,050

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(1)	Includes accumulated depreciation associated with building improvements and racking, which were previously subject to leases.

The aggregate cost of our real estate assets for federal tax purposes at December 31, 2019 was approximately $3,812,000.