Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations for the three and nine months ended September 30, 2021 should be read in conjunction with our Condensed Consolidated Financial Statements and Notes thereto for the three and nine months ended September 30, 2021, included herein, and our Consolidated Financial Statements and Notes thereto for the year ended December 31, 2020, included in our Annual Report on Form 10-K filed with the United States Securities and Exchange Commission (“SEC”) on February 24, 2021 (our “Annual Report”).

FORWARD-LOOKING STATEMENTS

We have made statements in this Quarterly Report on Form 10-Q (this “Quarterly Report”) that constitute “forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995 and other securities laws. These forward-looking statements concern our operations, economic performance, financial condition, goals, beliefs, future growth strategies, investment objectives, plans and current expectations, such as our (1) expectations and assumptions regarding the impact of the COVID-19 (as defined below) pandemic on us and our customers, including on our businesses, financial position, results of operations and cash flows, (2) commitment to future dividend payments, (3) expected change in volume of records stored with us, (4) expected organic revenue growth, including 2021 consolidated organic storage rental revenue growth rate and consolidated organic total revenue growth rate, (5) expectations that profits will increase in our growth portfolio, including our higher-growth markets, and that our growth portfolio will become a larger part of our business over time, (6) expectations related to our revenue management programs and continuous improvement initiatives, (7) expectations related to monetizing our owned industrial real estate assets as part of our capital recycling program, (8) expected ability to identify and complete acquisitions and other investments, including joint ventures, and drive returns on invested capital, (9) anticipated capital expenditures, (10) expected benefits, costs and actions related to, and timing of, Project Summit (as defined below), and (11) other forward-looking statements related to our business, results of operations and financial condition. These forward-looking statements are subject to various known and unknown risks, uncertainties and other factors, and you should not rely upon them except as statements of our present intentions and of our present expectations, which may or may not occur. When we use words such as “believes,” “expects,” “anticipates,” “estimates”, “plans", “intends" or similar expressions, we are making forward-looking statements. Although we believe that our forward-looking statements are based on reasonable assumptions, our expected results may not be achieved, and actual results may differ materially from our expectations. In addition, important factors that could cause actual results to differ from expectations include, among others:

• the severity and duration of the COVID-19 pandemic and its effects on the global economy, including its effects on us, the markets we serve and our customers and the third parties with whom we do business within those markets;

• our ability to execute on Project Summit and the potential impacts of Project Summit on our ability to retain and recruit employees;

• our ability to remain qualified for taxation as a real estate investment trust for United States federal income tax purposes (“REIT”);

• changes in customer preferences and demand for our storage and information management services, including as a result of the shift from paper and tape storage to alternative technologies that require less physical space;

• our ability or inability to execute our strategic growth plan, including our ability to invest according to plan, incorporate new digital information technologies into our offerings, achieve satisfactory returns on new product offerings, continue our revenue management, expand internationally, complete acquisitions on satisfactory terms, integrate acquired companies efficiently and grow our business through joint ventures;

• changes in the amount of our capital expenditures;

• our ability to raise debt or equity capital and changes in the cost of our debt;

• the costs of complying with, and our ability to comply with, laws, regulations and customer demands, including those relating to data security and privacy issues, as well as fire and safety and environmental standards;

• the impact of litigation or disputes that may arise in connection with incidents in which we fail to protect our customers’ information or our internal records or information technology (“IT”) systems and the impact of such incidents on our reputation and ability to compete;

• changes in the price for our storage and information management services relative to the cost of providing such storage and information management services;

• changes in the political and economic environments in the countries in which our international subsidiaries operate and changes in the global political climate, particularly as we consolidate operations and move records and data across borders;

30									IRON MOUNTAIN SEPTEMBER 30, 2021 FORM 10-Q

Part I. Financial Information

• our ability to comply with our existing debt obligations and restrictions in our debt instruments;

• the impact of service interruptions or equipment damage and the cost of power on our data center operations;

• the cost or potential liabilities associated with real estate necessary for our business;

• failures in our adoption of new IT systems;

• unexpected events, including those resulting from climate change, could disrupt our operations and adversely affect our reputation and results of operations;

• other trends in competitive or economic conditions affecting our financial condition or results of operations not presently contemplated; and

• the other risks described in our periodic reports filed with the SEC, including under the caption “Risk Factors” in Part I, Item 1A of our Annual Report.

Except as required by law, we undertake no obligation to update any forward-looking statements appearing in this report.

IRON MOUNTAIN SEPTEMBER 30, 2021 FORM 10-Q									31

Part I. Financial Information

OVERVIEW

The following discussions set forth, for the periods indicated, management's discussion and analysis of financial condition and results of operations. Significant trends and changes are discussed for the three and nine months ended September 30, 2021 within each section. Trends and changes that are consistent for both the three and nine month periods are not repeated and are discussed on a year to date basis only.

COVID-19 In March 2020, the World Health Organization declared a novel strain of coronavirus (“COVID-19”) a pandemic. The preventative and protective actions that governments have ordered, or we or our customers have implemented, have resulted in a period of reduced service operations and business disruption for us, our customers and other third parties with which we do business. While we have broad geographic and customer diversification with operations in 63 countries and no single customer accounting for a significant portion of our revenue during the nine months ended September 30, 2021, COVID-19 is a global pandemic impacting numerous industries and geographies. While our service operations have increased from the reductions we experienced during the peak of the COVID-19 pandemic, future service revenues remain uncertain and will be dependent on the severity of the COVID-19 pandemic, including new variants of COVID-19 that may emerge.

PROJECT SUMMIT

Compelling Adjusted EBITDA Benefits			Implementation Details
~$375M Expected annual run-rate benefits realized exiting 2021			•Project Summit began in Q4 2019 and is expected to be substantially complete by the end of 2021 •Cost to implement is estimated to be ~$450M

In October 2019, we announced our global program designed to better position us for future growth and achievement of our strategic objectives (“Project Summit”). As a result of the program, we expect to reduce the number of positions at vice president and above by approximately 45%. The total program is expected to reduce our total managerial and administrative workforce by approximately 700 positions by the end of 2021. We have also reduced our services and operations workforce. As of September 30, 2021, we have completed approximately 95% of our planned workforce reductions.

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. We expect the total program benefits associated with Project Summit to be fully realized exiting 2021. We expect that Project Summit will improve annual Adjusted EBITDA (as defined below) by approximately $375.0 million exiting 2021. We will continue to evaluate our overall operating model, as well as various opportunities and initiatives, including those associated with real estate consolidation, system implementation and process changes, which could result in the identification and implementation of additional actions associated with Project Summit and incremental costs and benefits.

Exiting 2021						$375 million (expected)

32									IRON MOUNTAIN SEPTEMBER 30, 2021 FORM 10-Q

Part I. Financial Information

We estimate that the implementation of Project Summit will result in total operating expenditures (“Restructuring Charges”) of approximately $450.0 million that primarily consist of: (1) employee severance costs; (2) internal costs associated with the development and implementation of Project Summit initiatives; (3) professional fees, primarily related to third party consultants who are assisting with the design and execution of various initiatives as well as project management activities and (4) system implementation and data conversion costs. The following table presents total Restructuring Charges related to Project Summit primarily related to employee severance costs, internal costs associated with the development and implementation of Project Summit initiatives and professional fees from the inception of Project Summit through September 30, 2021, and for the three and nine months ended September 30, 2021:

															TOTAL
From the Inception of Project Summit through September 30, 2021
			$372,679									$372.7 million

For the Three Months Ended September 30, 2021
			$50,432									$50.4 million

For the Nine Months Ended September 30, 2021
			$129,686									$129.7 million

We have also incurred approximately $6.6 million and $16.6 million in capital expenditures related to Project Summit during the three and nine months ended September 30, 2021 and approximately $26.7 million from the inception of Project Summit through September 30, 2021.

See Note 11 to Notes to Condensed Consolidated Financial Statements included in this Quarterly Report for more information on the Restructuring Charges.

DIVESTMENTS

On June 7, 2021, as disclosed in Note 4 to Notes to Condensed Consolidated Financial Statements included in this Quarterly Report, we sold our Intellectual Property Management ("IPM") business, also known as our technology escrow services business, which we predominantly operated in the United States, for total gross consideration of approximately $216.6 million (the “IPM Divestment”). As described in Note 4 to Notes to Condensed Consolidated Financial Statements included in this Quarterly Report, the IPM Divestment does not meet the criteria to be reported as discontinued operations in our condensed consolidated financial statements. Our IPM business represented approximately $0.0 million and $14.2 million of total revenues and approximately $0.0 million and $6.8 million of total net income for the three and nine months ended September 30, 2021, respectively. Our IPM business represented approximately $8.2 million and $24.7 million of total revenues and approximately $4.4 million and $14.1 million of total net income for the three and nine months ended September 30, 2020, respectively.

CHANGES IMPACTING COMPARABILITY WITH PRIOR YEAR

During the fourth quarter of 2020, we made changes to the definitions of the following non-GAAP measures: Adjusted EBITDA, Adjusted EPS, FFO (Nareit) and FFO (Normalized) (each as defined below). These changes were implemented to align our definitions more closely with our peers. All prior periods have been recast to conform to these changes.

IRON MOUNTAIN SEPTEMBER 30, 2021 FORM 10-Q									33

Part I. Financial Information

GENERAL

RESULTS OF OPERATIONS - KEY TRENDS

• In spite of the COVID-19 pandemic, we have experienced relatively steady volume in our Global RIM Business segment, with organic storage rental revenue growth driven primarily by revenue management. We expect organic storage rental revenue growth to benefit from revenue management and volume, which we expect will be flat to slightly positive when compared to the prior year. We expect low single digit organic storage rental revenue growth for the remainder of 2021.

• Our organic service revenue growth is primarily due to increases in our service activity, particularly in regions where governments have lifted or eased restrictions on our customers’ non-essential business operations. While our service operations have increased from the reductions we experienced during the peak of the COVID-19 pandemic, future service revenues remain uncertain and will be dependent on the severity of the COVID-19 pandemic, including new variants of COVID-19 that may emerge.

Cost of sales (excluding depreciation and amortization) and Selling, general and administrative expenses for the nine months ended September 30, 2021 consists of the following:

COST OF SALES						SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

NON-GAAP MEASURES

ADJUSTED EBITDA

We define Adjusted EBITDA as net income (loss) before interest expense, net, provision (benefit) for income taxes, depreciation and amortization (inclusive of our share of Adjusted EBITDA from our unconsolidated joint ventures), and excluding certain items we do not believe to be indicative of our core operating results, specifically:

EXCLUDED
•Acquisition and Integration Costs (as defined below)						•Other (income) expense, net
•Restructuring Charges						•Stock-based compensation expense
•Intangible impairments						•COVID-19 Costs (as defined below)
•(Gain) loss on disposal/write-down of property, plant and equipment, net (including real estate)

Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by total revenues. We also show Adjusted EBITDA and Adjusted EBITDA Margin for each of our reportable operating segments under “Results of Operations – Segment Analysis” below.

34									IRON MOUNTAIN SEPTEMBER 30, 2021 FORM 10-Q

Part I. Financial Information

Adjusted EBITDA excludes both interest expense, net and the provision (benefit) for income taxes. These expenses are associated with our capitalization and tax structures, which we do not consider when evaluating the operating profitability of our core operations. Adjusted EBITDA does not include depreciation and amortization expenses, in order to eliminate the impact of capital investments, which we evaluate by comparing capital expenditures to incremental revenue generated and as a percentage of total revenues. Adjusted EBITDA and Adjusted EBITDA Margin should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with accounting principles generally accepted in the United States of America (“GAAP”), such as operating income, net income (loss) or cash flows from operating activities (as determined in accordance with GAAP).

RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA (IN THOUSANDS):

			THREE MONTHS ENDED SEPTEMBER 30,												NINE MONTHS ENDED SEPTEMBER 30,
			2021						2020						2021						2020
Net Income (Loss)			$	68,111					$	38,562					$	391,264					$	96,341
Add/(Deduct):
Interest expense, net			103,809						104,303						313,451						313,408
Provision (benefit) for income taxes			28,017						13,934						153,073						33,304
Depreciation and amortization			174,818						157,252						507,145						483,686
Acquisition and Integration Costs(1)			1,138						—						3,415						—
Restructuring Charges			50,432						48,371						129,686						128,715
Intangible impairments			—						—						—						23,000
(Gain) loss on disposal/write-down of property, plant and equipment, net (including real estate)			(935)						(75,840)						(134,321)						(78,170)
Other (income) expense, net, excluding our share of losses (gains) from our unconsolidated joint ventures			(21,517)						81,190						(209,001)						59,398
Stock-based compensation expense(2)			12,644						8,065						45,913						32,056
COVID-19 Costs(3)			—						—						—						9,285
Our share of Adjusted EBITDA reconciling items from our unconsolidated joint ventures			1,252						175						3,340						450
Adjusted EBITDA			$	417,769					$	376,012					$	1,203,965					$	1,101,473

(1) Represent operating expenditures directly associated with the closing and integration activities of our business acquisitions that have closed, or are highly probable of closing, and include (i) advisory, legal and professional fees to complete business acquisitions and (ii) costs to integrate acquired businesses into our existing operations, including move, severance, facility upgrade and system integration costs (collectively, "Acquisition and Integration Costs"). Acquisition and Integration Costs do not include costs associated with the formation of joint ventures or costs associated with the acquisition of customer relationships.

(2) Stock-based compensation expense related to Project Summit is included within Restructuring Charges for the three and nine months ended September 30, 2021 and 2020.

(3) Costs that are incremental and directly attributable to the COVID-19 pandemic which are not expected to recur once the pandemic ends ("COVID-19 Costs"). These costs include the purchase of personal protective equipment for our employees and incremental cleaning costs of our facilities, among other direct costs.

IRON MOUNTAIN SEPTEMBER 30, 2021 FORM 10-Q									35

Part I. Financial Information

ADJUSTED EPS

We define Adjusted EPS as reported earnings per share fully diluted from net income (loss) attributable to Iron Mountain Incorporated (inclusive of our share of adjusted losses (gains) from our unconsolidated joint ventures) and excluding certain items, specifically:

EXCLUDED
•Acquisition and Integration Costs •Restructuring Charges •Intangible impairments •(Gain) loss on disposal/write-down of property, plant and equipment, net (including real estate)						•Other (income) expense, net •Stock-based compensation expense •COVID-19 Costs •Tax impact of reconciling items and discrete tax items

We do not believe these excluded items to be indicative of our ongoing operating results, and they are not considered when we are forecasting our future results. We believe Adjusted EPS is of value to our current and potential investors when comparing our results from past, present and future periods.

RECONCILIATION OF REPORTED EPS—FULLY DILUTED FROM NET INCOME (LOSS) ATTRIBUTABLE TO IRON MOUNTAIN INCORPORATED TO ADJUSTED EPS—FULLY DILUTED FROM NET INCOME (LOSS) ATTRIBUTABLE TO IRON MOUNTAIN INCORPORATED:

			THREE MONTHS ENDED SEPTEMBER 30,												NINE MONTHS ENDED SEPTEMBER 30,
			2021						2020						2021						2020
Reported EPS—Fully Diluted from Net Income (Loss) Attributable to Iron Mountain Incorporated			$	0.23					$	0.13					$	1.34					$	0.33
Add/(Deduct):
Acquisition and Integration Costs			—						—						0.01						—
Restructuring Charges			0.17						0.17						0.45						0.45
Intangible impairments			—						—						—						0.08
(Gain) loss on disposal/write-down of property, plant and equipment, net (including real estate)			(0.01)						(0.26)						(0.46)						(0.27)
Other (income) expense, net, excluding our share of losses (gains) from our unconsolidated joint ventures			(0.07)						0.28						(0.72)						0.21
Stock-based compensation expense			0.04						0.03						0.16						0.11
COVID-19 Costs			—						—						—						0.03
Tax impact of reconciling items and discrete tax items(1)			0.02						(0.02)						0.31						(0.06)
Income (Loss) Attributable to Noncontrolling Interests			—						—						0.01						—
Adjusted EPS—Fully Diluted from Net Income (Loss) Attributable to Iron Mountain Incorporated(2)			$	0.40					$	0.33					$	1.09					$	0.88

(1)The difference between our effective tax rates and our structural tax rate (or adjusted effective tax rates) for the three and nine months ended September 30, 2021 and 2020 is primarily due to (i) the reconciling items above, which impact our reported net income (loss) before provision (benefit) for income taxes and (ii) other discrete tax items. Our structural tax rate for purposes of the calculation of Adjusted EPS for the three and nine months ended September 30, 2021 and 2020 was 16.5% and 16.3%, respectively.

(2)Columns may not foot due to rounding.

36									IRON MOUNTAIN SEPTEMBER 30, 2021 FORM 10-Q

Part I. Financial Information

FFO (NAREIT) AND FFO (NORMALIZED)

Funds from operations (“FFO”) is defined by the National Association of Real Estate Investment Trusts (“Nareit”) as net income (loss) excluding depreciation on real estate assets, losses and gains on sale of real estate, net of tax, and amortization of data center leased-based intangibles and adjusting for our share of reconciling items from our unconsolidated joint ventures from FFO (“FFO (Nareit)”). FFO (Nareit) does not give effect to real estate depreciation because these amounts are computed, under GAAP, to allocate the cost of a property over its useful life. Because values for well-maintained real estate assets have historically increased or decreased based upon prevailing market conditions, we believe that FFO (Nareit) provides investors with a clearer view of our operating performance. Our most directly comparable GAAP measure to FFO (Nareit) is net income (loss).

Although Nareit has published a definition of FFO, we modify FFO (Nareit), as is common among REITs seeking to provide financial measures that most meaningfully reflect their particular business (“FFO (Normalized)”). Our definition of FFO (Normalized) excludes certain items included in FFO (Nareit) that we believe are not indicative of our core operating results, specifically:

EXCLUDED
•Acquisition and Integration Costs •Restructuring Charges •Intangible impairments •(Gain) loss on disposal/write-down of property, plant and equipment, net (excluding real estate) •Other (income) expense, net						•Stock-based compensation expense •COVID-19 Costs •Real estate financing lease depreciation •Tax impact of reconciling items and discrete tax items

RECONCILIATION OF NET INCOME (LOSS) TO FFO (NAREIT) AND FFO (NORMALIZED) (IN THOUSANDS):

			THREE MONTHS ENDED SEPTEMBER 30,												NINE MONTHS ENDED SEPTEMBER 30,
			2021						2020						2021						2020
Net Income (Loss)			$	68,111					$	38,562					$	391,264					$	96,341
Add/(Deduct):
Real estate depreciation			79,463						72,019						230,294						224,325
Loss (gain) on sale of real estate, net of tax			748						(75,880)						(106,033)						(77,461)
Data center lease-based intangible assets amortization			10,458						10,441						31,423						32,173
FFO (Nareit)			158,780						45,142						546,948						275,378
Add/(Deduct):
Acquisition and Integration Costs			1,138						—						3,415						—
Restructuring Charges			50,432						48,371						129,686						128,715
Intangible impairments			—						—						—						23,000
(Gain) loss on disposal/write-down of property, plant and equipment, net (excluding real estate)			(1,668)						40						(2,890)						(359)
Other (income) expense, net, excluding our share of losses (gains) from our unconsolidated joint ventures(1)			(21,517)						81,190						(209,001)						59,398
Stock-based compensation expense			12,644						8,065						45,913						32,056
COVID-19 Costs			—						—						—						9,285
Real estate financing lease depreciation			3,740						3,501						10,791						10,095
Tax impact of reconciling items and discrete tax items(2)			5,304						(4,648)						65,120						(16,464)
Our share of FFO (Normalized) reconciling items from our unconsolidated joint ventures			(17)						(1)						(30)						(31)
FFO (Normalized)			$	208,836					$	181,660					$	589,952					$	521,073

(1)Includes foreign currency transaction (gains) losses, net and other, net. See Note 2.m. to Notes to Condensed Consolidated Financial Statements included in this Quarterly Report for additional information regarding the components of Other (income) expense, net.

(2)Represents the tax impact of (i) the reconciling items above, which impact our reported net income (loss) before provision (benefit) for income taxes and (ii) other discrete tax items. Discrete tax items resulted in a provision (benefit) for income taxes of $5.0 million and $19.4 million for the three and nine months ended September 30, 2021, respectively, and $(3.9) million and $(2.7) million for the three and nine months ended September 30, 2020, respectively.

IRON MOUNTAIN SEPTEMBER 30, 2021 FORM 10-Q									37

Part I. Financial Information

CRITICAL ACCOUNTING ESTIMATES

Our discussion and analysis of our financial condition and results of operations are based upon our Condensed Consolidated Financial Statements, which have been prepared in accordance with GAAP. The preparation of these financial statements 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. Our critical accounting estimates include the following, which are listed in no particular order:

• Revenue Recognition

• Accounting for Acquisitions

• Impairment of Tangible and Intangible Assets

• Income Taxes

Further detail regarding our critical accounting estimates can be found in “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report, and the Consolidated Financial Statements and the Notes included therein. We have determined that no material changes concerning our critical accounting estimates have occurred since December 31, 2020.

RESULTS OF OPERATIONS

COMPARISON OF THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 TO THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020 (IN THOUSANDS):

			THREE MONTHS ENDED SEPTEMBER 30,												DOLLAR CHANGE						PERCENTAGE CHANGE
			2021						2020
Revenues			$	1,130,148					$	1,036,647					$	93,501					9.0		%
Operating Expenses			948,712						796,383						152,329						19.1		%
Operating Income			181,436						240,264						(58,828)						(24.5)		%
Other Expenses, Net			113,325						201,702						(88,377)						(43.8)		%
Net Income (Loss)			68,111						38,562						29,549						76.6		%
Net Income (Loss) Attributable to Noncontrolling Interests			428						168						260						154.8		%
Net Income (Loss) Attributable to Iron Mountain Incorporated			$	67,683					$	38,394					$	29,289					76.3		%
Adjusted EBITDA(1)			$	417,769					$	376,012					$	41,757					11.1		%
Adjusted EBITDA Margin(1)			37.0		%				36.3		%

			NINE MONTHS ENDED SEPTEMBER 30,												DOLLAR CHANGE						PERCENTAGE CHANGE
			2021						2020
Revenues			$	3,331,944					$	3,087,617					$	244,327					7.9		%
Operating Expenses			2,674,174						2,578,125						96,049						3.7		%
Operating Income			657,770						509,492						148,278						29.1		%
Other Expenses, Net			266,506						413,151						(146,645)						(35.5)		%
Net Income (Loss)			391,264						96,341						294,923						306.1		%
Net Income (Loss) Attributable to Noncontrolling Interests			2,693						1,058						1,635						154.5		%
Net Income (Loss) Attributable to Iron Mountain Incorporated			$	388,571					$	95,283					$	293,288					307.8		%
Adjusted EBITDA(1)			$	1,203,965					$	1,101,473					$	102,492					9.3		%
Adjusted EBITDA Margin(1)			36.1		%				35.7		%

(1)See “Non-GAAP Measures—Adjusted EBITDA” in this Quarterly Report for the definitions of Adjusted EBITDA and Adjusted EBITDA Margin, reconciliation of Net Income (Loss) to Adjusted EBITDA and a discussion of why we believe these non-GAAP measures provide relevant and useful information to our current and potential investors.

38									IRON MOUNTAIN SEPTEMBER 30, 2021 FORM 10-Q

Part I. Financial Information

REVENUES

Consolidated revenues consist of the following (in thousands):

			THREE MONTHS ENDED SEPTEMBER 30,																		PERCENTAGE CHANGE
			2021						2020						DOLLAR CHANGE						ACTUAL						CONSTANT CURRENCY**(1)**						ORGANIC GROWTH**(2)**						IMPACT OF ACQUISITIONS
Storage Rental			$	718,614					$	696,294					$	22,320					3.2		%				2.2		%				2.3		%				(0.1)		%
Service			411,534						340,353						71,181						20.9		%				19.7		%				17.7		%				2.0		%
Total Revenues			$	1,130,148					$	1,036,647					$	93,501					9.0		%				7.9		%				7.4		%				0.5		%

			NINE MONTHS ENDED SEPTEMBER 30,																		PERCENTAGE CHANGE
			2021						2020						DOLLAR CHANGE						ACTUAL						CONSTANT CURRENCY**(1)**						ORGANIC GROWTH**(2)**						IMPACT OF ACQUISITIONS
Storage Rental			$	2,144,942					$	2,056,797					$	88,145					4.3		%				2.2		%				2.2		%				—		%
Service			1,187,002						1,030,820						156,182						15.2		%				12.7		%				11.6		%				1.1		%
Total Revenues			$	3,331,944					$	3,087,617					$	244,327					7.9		%				5.7		%				5.4		%				0.3		%

(1)Constant currency growth rates, which are a non-GAAP measure, are calculated by translating the 2020 results at the 2021 average exchange rates.

(2)Our organic revenue growth rate, which is a non-GAAP measure, represents the year-over-year growth rate of our revenues excluding the impact of business acquisitions, divestitures and foreign currency exchange rate fluctuations. Our organic revenue growth rate includes the impact of acquisitions of customer relationships.

TOTAL REVENUES

For the nine months ended September 30, 2021, the increase in reported consolidated revenue was driven by reported storage rental revenue growth and reported service revenue growth. Foreign currency exchange rate fluctuations increased our reported consolidated revenue growth rate for the nine months ended September 30, 2021 by 2.2% compared to the prior year period.

STORAGE RENTAL REVENUES AND SERVICE REVENUES

Primary factors influencing the change in reported consolidated storage rental revenue and reported service revenues for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020 include the following:

STORAGE RENTAL REVENUES						•organic storage rental revenue growth driven by increased volume in faster growing markets and our Global Data Center Business segment and revenue management; •a 2.4% increase in total global volume (excluding acquisitions, total global volume increased 0.3%); and •an increase of $41.1 million due to foreign currency exchange rate fluctuations.
SERVICE REVENUES						•an increase in service activity levels, particularly in regions where governments have lifted or eased COVID-19 related restrictions on our customers' non-essential business operations; •organic service revenue growth reflecting increased service activity levels; and •an increase of $22.3 million due to foreign currency exchange rate fluctuations.

IRON MOUNTAIN SEPTEMBER 30, 2021 FORM 10-Q									39

Part I. Financial Information

OPERATING EXPENSES

COST OF SALES

Consolidated Cost of sales (excluding depreciation and amortization) consists of the following expenses (in thousands):

			THREE MONTHS ENDED SEPTEMBER 30,																		PERCENTAGE CHANGE												% OF CONSOLIDATED REVENUES												PERCENTAGE CHANGE (FAVORABLE)/ UNFAVORABLE
			2021						2020						DOLLAR CHANGE						ACTUAL						CONSTANT CURRENCY						2021						2020
Labor			$	190,285					$	183,878					$	6,407					3.5		%				2.6		%				16.8		%				17.7		%				(0.9)		%
Facilities			202,426						179,031						23,395						13.1		%				11.7		%				17.9		%				17.3		%				0.6		%
Transportation			33,314						30,890						2,424						7.8		%				7.0		%				2.9		%				3.0		%				(0.1)		%
Product Cost of Sales and Other			55,638						40,706						14,932						36.7		%				35.5		%				4.9		%				3.9		%				1.0		%
Total Cost of sales			$	481,663					$	434,505					$	47,158					10.9		%				9.7		%				42.6		%				41.9		%				0.7		%

			NINE MONTHS ENDED SEPTEMBER 30,																		PERCENTAGE CHANGE												% OF CONSOLIDATED REVENUES												PERCENTAGE CHANGE (FAVORABLE)/ UNFAVORABLE
			2021						2020						DOLLAR CHANGE						ACTUAL						CONSTANT CURRENCY						2021						2020
Labor			$	578,765					$	552,396					$	26,369					4.8		%				2.8		%				17.4		%				17.9		%				(0.5)		%
Facilities			593,487						537,181						56,306						10.5		%				8.0		%				17.8		%				17.4		%				0.4		%
Transportation			101,241						97,990						3,251						3.3		%				0.8		%				3.0		%				3.2		%				(0.2)		%
Product Cost of Sales and Other			134,658						112,904						21,754						19.3		%				16.6		%				4.0		%				3.7		%				0.3		%
COVID-19 Costs			—						7,648						(7,648)						(100.0)		%				(100.0)		%				—		%				0.2		%				(0.2)		%
Total Cost of sales			$	1,408,151					$	1,308,119					$	100,032					7.6		%				6.0		%				42.3		%				42.4		%				(0.1)		%

Primary factors influencing the change in reported consolidated Cost of sales for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020 include the following:

*•*an increase in labor costs driven by an increase in service activity, particularly in regions where governments have lifted or eased COVID-19 related restrictions on our customers' non-essential business operations, partially offset by benefits from Project Summit;

*•*an increase in facilities expenses driven by increases in rent expense, reflecting the impact from our sale-leaseback activity during the second half of 2020 and first nine months of 2021 (which we expect to continue for the remainder of 2021 as we continue to look for future opportunities to monetize a small portion of our owned industrial real estate assets as part of our ongoing capital recycling program), as well as increases in property taxes, insurance and building maintenance costs;

• an increase in product cost of sales and other driven by an increase in project activity; and

*•*an increase of $28.4 million due to foreign currency exchange rate fluctuations.

40									IRON MOUNTAIN SEPTEMBER 30, 2021 FORM 10-Q

Part I. Financial Information

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Consolidated Selling, general and administrative expenses consists of the following expenses (in thousands):

			THREE MONTHS ENDED SEPTEMBER 30,																		PERCENTAGE CHANGE												% OF CONSOLIDATED REVENUES												PERCENTAGE CHANGE (FAVORABLE)/ UNFAVORABLE
			2021						2020						DOLLAR CHANGE						ACTUAL						CONSTANT CURRENCY						2021						2020
General, Administrative and Other			$	183,476					$	176,801					$	6,675					3.8		%				3.1		%				16.2		%				17.1		%				(0.9)		%
Sales, Marketing and Account Management			58,120						55,294						2,826						5.1		%				4.1		%				5.1		%				5.3		%				(0.2)		%
Total Selling, general and administrative expenses			$	241,596					$	232,095					$	9,501					4.1		%				3.3		%				21.4		%				22.4		%				(1.0)		%

			NINE MONTHS ENDED SEPTEMBER 30,																		PERCENTAGE CHANGE												% OF CONSOLIDATED REVENUES												PERCENTAGE CHANGE (FAVORABLE)/ UNFAVORABLE
			2021						2020						DOLLAR CHANGE						ACTUAL						CONSTANT CURRENCY						2021						2020
General, Administrative and Other			$	561,686					$	544,000					$	17,686					3.3		%				1.8		%				16.9		%				17.6		%				(0.7)		%
Sales, Marketing and Account Management			198,412						167,138						31,274						18.7		%				16.3		%				6.0		%				5.4		%				0.6		%
COVID-19 Costs			—						1,637						(1,637)						(100.0)		%				(100.0)		%				—		%				0.1		%				(0.1)		%
Total Selling, general and administrative expenses			$	760,098					$	712,775					$	47,323					6.6		%				5.0		%				22.8		%				23.1		%				(0.3)		%

Primary factors influencing the change in reported consolidated Selling, general and administrative expenses for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020 include the following:

*•*an increase in general, administrative and other expenses, driven by higher wages and benefits and stock-based compensation expense, partially offset by other employee related costs, reflecting ongoing cost containment measures and benefits from Project Summit, as well as lower professional fees and bad debt expense;

• an increase in sales, marketing and account management expenses, driven by higher compensation expense, primarily reflecting increased salaries and sales commissions, as well as increased marketing costs; and

• an increase of $11.4 million due to foreign currency exchange rate fluctuations.

DEPRECIATION AND AMORTIZATION

Depreciation expense increased by $12.5 million, or 3.7%, for the nine months ended September 30, 2021 compared to the prior year period. See Note 2.h. to Notes to Consolidated Financial Statements included in our Annual Report for additional information regarding the useful lives over which our property, plant and equipment is depreciated.

Amortization expense increased by $11.0 million, or 7.4%, for the nine months ended September 30, 2021 compared to the prior year period.

ACQUISITION AND INTEGRATION COSTS

Acquisition and Integration Costs for the nine months ended September 30, 2021 were approximately $3.4 million and primarily consist of legal and professional fees.

RESTRUCTURING CHARGES

Restructuring Charges for the nine months ended September 30, 2021 and 2020 were approximately $129.7 million and $128.7 million, respectively, and primarily consist of employee severance costs and professional fees associated with Project Summit.

IRON MOUNTAIN SEPTEMBER 30, 2021 FORM 10-Q									41

Part I. Financial Information

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

Consolidated gain on disposal/write-down of property, plant and equipment, net for the nine months ended September 30, 2021 was approximately $134.3 million, which primarily consisted of gains of approximately $127.4 million associated with the sale-leaseback transactions of five facilities in the United Kingdom during the second quarter of 2021.

Consolidated gain on disposal/write-down of property, plant and equipment, net for the nine months ended September 30, 2020 was approximately $78.2 million, which primarily consisted of gains of approximately $76.4 million associated with the sale-leaseback transactions of two facilities in the United States during the third quarter of 2020.

Consolidated gain on disposal/write-down of property, plant and equipment recognized during both 2021 and 2020 are a result of our program to monetize a small portion of our industrial assets.

OTHER EXPENSES, NET

INTEREST EXPENSE, NET

Consolidated interest expense, net increased by $0.1 million, to $313.5 million in the nine months ended September 30, 2021 from $313.4 million in the prior year period. See Note 6 to Notes to Condensed Consolidated Financial Statements included in this Quarterly Report for additional information regarding our indebtedness.

OTHER (INCOME) EXPENSE, NET

Consolidated other (income) expense, net consists of the following (in thousands):

						THREE MONTHS ENDED SEPTEMBER 30,												DOLLAR CHANGE						NINE MONTHS ENDED SEPTEMBER 30,												DOLLAR CHANGE
DESCRIPTION						2021						2020									2021						2020
Foreign currency transaction losses (gains), net						$	(23,200)					$	29,635					$	(52,835)					$	(16,157)					$	(6,293)					$	(9,864)
Debt extinguishment expense						—						51,260						(51,260)						—						68,300						(68,300)
Other, net(1)						4,699						2,570						2,129						(183,861)						4,432						(188,293)
Other (Income) Expense, Net						$	(18,501)					$	83,465					$	(101,966)					$	(200,018)					$	66,439					$	(266,457)

(1)Other, net for the nine months ended September 30, 2021 is primarily comprised of (a) a gain of approximately $180.6 million associated with our IPM Divestment and (b) a gain of approximately $20.3 million associated with the loss of control and related deconsolidation, as of May 18, 2021, of one of our wholly owned Netherlands subsidiaries, for which we had value-added tax liability exposure that was recorded in 2019.

PROVISION FOR INCOME TAXES

We provide for income taxes during interim periods based on our estimate of the effective tax rate for the year.

Our effective tax rates for the three and nine months ended September 30, 2021 and 2020 are as follows:

			THREE MONTHS ENDED SEPTEMBER 30,												NINE MONTHS ENDED SEPTEMBER 30,
			2021						2020						2021						2020
Effective Tax Rate(1)			29.1		%				26.5		%				28.1		%				25.7		%

(1)The primary reconciling items between the federal statutory tax rate of 21.0% and our overall effective tax rate for the three and nine months ended September 30, 2021 and 2020 were the impacts of differences in the tax rates at which our foreign earnings are subject, partially offset by the benefits derived from the dividends paid deduction. The costs associated with Project Summit are more heavily weighted to our United States qualified REIT subsidiaries ("QRSs"), and, therefore, provide no tax benefit. Additionally, the nine months ended September 30, 2021,reflects a discrete tax expense of approximately $12.0 million primarily resulting from a tax law change in the United Kingdom.

At December 31, 2020, we concluded that it was our intent to indefinitely reinvest our current and future undistributed earnings of certain of our unconverted foreign taxable REIT subsidiaries (“TRSs”) outside the United States, with the exception of certain limited instances. During 2021, as a result of the enactment of a tax law and the closing of various acquisitions, we reassessed this intention and concluded that it is no longer our intention to reinvest our undistributed earnings of our foreign TRSs indefinitely outside the United States. 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. However, such future repatriations may require distribution to our stockholders in accordance with REIT distribution rules, and any such distribution may then be taxable, as appropriate, at the stockholder level. We expect to provide for foreign withholding taxes on the current and future earnings of all of our foreign subsidiaries as the result of such reassessment.

42									IRON MOUNTAIN SEPTEMBER 30, 2021 FORM 10-Q

Part I. Financial Information

NET INCOME (LOSS) AND ADJUSTED EBITDA

The following table reflects the effect of the foregoing factors on our consolidated Net Income (Loss) and Adjusted EBITDA (in thousands):

			THREE MONTHS ENDED SEPTEMBER 30,												DOLLAR CHANGE						PERCENTAGE CHANGE
			2021						2020
Net Income (Loss)			$	68,111					$	38,562					$	29,549					76.6		%
Net Income (Loss) as a percentage of Consolidated Revenue			6.0		%				3.7		%
Adjusted EBITDA			$	417,769					$	376,012					$	41,757					11.1		%
Adjusted EBITDA Margin			37.0		%				36.3		%

			NINE MONTHS ENDED SEPTEMBER 30,												DOLLAR CHANGE						PERCENTAGE CHANGE
			2021						2020
Net Income (Loss)			$	391,264					$	96,341					$	294,923					306.1		%
Net Income (Loss) as a percentage of Consolidated Revenue			11.7		%				3.1		%
Adjusted EBITDA			$	1,203,965					$	1,101,473					$	102,492					9.3		%
Adjusted EBITDA Margin			36.1		%				35.7		%

Consolidated Adjusted EBITDA Margin for the nine months ended September 30, 2021 increased by 40 basis points compared to the same prior year period, reflecting improved service revenue trends, benefits from Project Summit, revenue management and ongoing cost containment measures, partially offset by higher compensation expense and sales commissions.			↑ INCREASED BY $102.5 MILLION OR 9.3% Consolidated Adjusted EBITDA

IRON MOUNTAIN SEPTEMBER 30, 2021 FORM 10-Q									43

Part I. Financial Information

SEGMENT ANALYSIS

See Note 9 to Notes to Consolidated Financial Statements included in our Annual Report for a description of our reportable operating segments.

GLOBAL RIM BUSINESS (IN THOUSANDS)

			THREE MONTHS ENDED SEPTEMBER 30,																		PERCENTAGE CHANGE
						DOLLAR CHANGE						ACTUAL						CONSTANT CURRENCY						ORGANIC GROWTH						IMPACT OF ACQUISITIONS
			2021						2020
Storage Rental			$	621,615					$	598,949					$	22,666					3.8		%				2.7		%				1.8		%				0.9		%
Service			373,962						322,824						51,138						15.8		%				14.6		%				13.8		%				0.8		%
Segment Revenue			$	995,577					$	921,773					$	73,804					8.0		%				6.9		%				6.0		%				0.9		%
Segment Adjusted EBITDA			$	442,798					$	393,883					$	48,915
Segment Adjusted EBITDA Margin			44.5		%				42.7		%

			NINE MONTHS ENDED SEPTEMBER 30,																		PERCENTAGE CHANGE
						DOLLAR CHANGE						ACTUAL						CONSTANT CURRENCY						ORGANIC GROWTH						IMPACT OF ACQUISITIONS
			2021						2020
Storage Rental			$	1,849,387					$	1,773,364					$	76,023					4.3		%				2.1		%				1.7		%				0.4		%
Service			1,106,416						981,930						124,486						12.7		%				10.3		%				10.0		%				0.3		%
Segment Revenue			$	2,955,803					$	2,755,294					$	200,509					7.3		%				5.0		%				4.6		%				0.4		%
Segment Adjusted EBITDA			$	1,281,668					$	1,169,671					$	111,997
Segment Adjusted EBITDA Margin			43.4		%				42.5		%

NINE MONTHS ENDED YEAR OVER YEAR SEGMENT ANALYSIS: GLOBAL RIM BUSINESS (IN MILLIONS)

Storage Rental Revenue						Service Revenue						Segment Revenue						Segment Adjusted EBITDA

Primary factors influencing the change in revenue and Adjusted EBITDA Margin in our Global RIM Business segment for the nine months ended September 30, 2021 compared to the prior year period include the following:

• organic storage rental revenue growth driven by revenue management and volume;

• organic service revenue growth mainly driven by increased traditional service activity levels, particularly in regions where governments have lifted or eased COVID-19 related restrictions on our customers' non-essential business operations, and growth in our Global Digital Solutions and Secure Information Technology Asset Disposition businesses;

*•*an increase in revenue of $58.9 million due to foreign currency exchange rate fluctuations;

*•*a 2.3% increase in global records management volume (excluding acquisitions, global records management volume increased 0.1%); and

*•*a 90 basis point increase in Adjusted EBITDA Margin primarily driven by benefits from Project Summit, revenue management, ongoing cost containment measures and lower bad debt expense, partially offset by increases in compensation, benefits, sales commissions and rent expense.

44									IRON MOUNTAIN SEPTEMBER 30, 2021 FORM 10-Q

Part I. Financial Information

GLOBAL DATA CENTER BUSINESS (IN THOUSANDS)

			THREE MONTHS ENDED SEPTEMBER 30,																		PERCENTAGE CHANGE
						DOLLAR CHANGE						ACTUAL						CONSTANT CURRENCY						ORGANIC GROWTH						IMPACT OF ACQUISITIONS
			2021						2020
Storage Rental			$	72,411					$	68,416					$	3,995					5.8		%				5.4		%				5.4		%				—		%
Service			16,176						4,398						11,778						267.8		%				266.1		%				266.1		%				—		%
Segment Revenue			$	88,587					$	72,814					$	15,773					21.7		%				21.2		%				21.2		%				—		%
Segment Adjusted EBITDA			$	35,097					$	33,359					$	1,738
Segment Adjusted EBITDA Margin			39.6		%				45.8		%

			NINE MONTHS ENDED SEPTEMBER 30,																		PERCENTAGE CHANGE
						DOLLAR CHANGE						ACTUAL						CONSTANT CURRENCY						ORGANIC GROWTH						IMPACT OF ACQUISITIONS
			2021						2020
Storage Rental			$	210,805					$	196,823					$	13,982					7.1		%				5.8		%				5.8		%				—		%
Service			25,867						10,116						15,751						155.7		%				152.4		%				152.4		%				—		%
Segment Revenue			$	236,672					$	206,939					$	29,733					14.4		%				13.0		%				13.0		%				—		%
Segment Adjusted EBITDA			$	98,961					$	94,812					$	4,149
Segment Adjusted EBITDA Margin			41.8		%				45.8		%

NINE MONTHS ENDED YEAR OVER YEAR SEGMENT ANALYSIS: GLOBAL DATA CENTER BUSINESS (IN MILLIONS)

Storage Rental Revenue						Service Revenue						Segment Revenue						Segment Adjusted EBITDA

Primary factors influencing the change in revenue, Adjusted EBITDA and Adjusted EBITDA Margin in our Global Data Center Business segment for the nine months ended September 30, 2021 compared to the prior year period include the following:

• organic storage rental revenue growth from leases signed during the first nine months of 2021 and in prior periods, and service revenue growth from project revenue, partially offset by churn of 810 basis points;

*•*an increase in Adjusted EBITDA primarily driven by organic storage rental revenue growth; and

*•*a 400 basis point decrease in Adjusted EBITDA Margin reflecting a change in revenue mix due to lower margin project revenue during the period, which is expected to have a temporary impact on segment margins.

IRON MOUNTAIN SEPTEMBER 30, 2021 FORM 10-Q									45

Part I. Financial Information

CORPORATE AND OTHER BUSINESS (IN THOUSANDS)

			THREE MONTHS ENDED SEPTEMBER 30,																		PERCENTAGE CHANGE
						DOLLAR CHANGE						ACTUAL						CONSTANT CURRENCY						ORGANIC GROWTH						IMPACT OF ACQUISITIONS
			2021						2020
Storage Rental			$	24,588					$	28,929					$	(4,341)					(15.0)		%				(15.5)		%				8.7		%				(24.2)		%
Service			21,396						13,131						8,265						62.9		%				61.9		%				29.6		%				32.3		%
Segment Revenue			$	45,984					$	42,060					$	3,924					9.3		%				8.6		%				16.8		%				(8.2)		%
Segment Adjusted EBITDA			$	(60,126)					$	(51,230)					$	(8,896)
Segment Adjusted EBITDA as a percentage of Consolidated Revenue			(5.3)		%				(4.9)		%

			NINE MONTHS ENDED SEPTEMBER 30,																		PERCENTAGE CHANGE
						DOLLAR CHANGE						ACTUAL						CONSTANT CURRENCY						ORGANIC GROWTH						IMPACT OF ACQUISITIONS
			2021						2020
Storage Rental			$	84,750					$	86,610					$	(1,860)					(2.1)		%				(3.1)		%				5.5		%				(8.6)		%
Service			54,719						38,774						15,945						41.1		%				37.1		%				15.2		%				21.9		%
Segment Revenue			$	139,469					$	125,384					$	14,085					11.2		%				9.5		%				8.8		%				0.7		%
Segment Adjusted EBITDA			$	(176,664)					$	(163,010)					$	(13,654)
Segment Adjusted EBITDA as a percentage of Consolidated Revenue			(5.3)		%				(5.3)		%

Primary factors influencing the change in revenue and Adjusted EBITDA in our Corporate and Other Business segment for the nine months ended September 30, 2021 compared to the prior year period include the following:

• organic service revenue growth mainly driven by increased service activity levels in our Fine Arts business, particularly in regions where governments have lifted or eased COVID-19 related restrictions on our customers' non-essential business operations; and

*•*a decrease in Adjusted EBITDA driven by higher wages and benefits, partially offset by benefits from Project Summit and ongoing cost containment measures.

46									IRON MOUNTAIN SEPTEMBER 30, 2021 FORM 10-Q

Part I. Financial Information

LIQUIDITY AND CAPITAL RESOURCES

GENERAL

We expect to meet our short-term and long-term cash flow requirements through cash generated from operations, cash on hand, borrowings under our Credit Agreement (as defined below) and proceeds from monetizing a small portion of our total industrial real estate assets in the future, as well as other potential financings (such as the issuance of debt or equity). Our cash flow requirements, both in the near and long term, include, but are not limited to, capital expenditures, the repayment of outstanding debt, shareholder dividends, Project Summit initiatives, potential and pending business acquisitions and investments and normal business operation needs.

PROJECT SUMMIT

As disclosed above, in October 2019, we announced Project Summit. We estimate that the implementation of Project Summit will result in total Restructuring Charges of $450.0 million. From the inception of Project Summit through September 30, 2021, we have incurred approximately $372.7 million of Restructuring Charges related to Project Summit, primarily related to employee severance costs, internal costs associated with the development and implementation of Project Summit initiatives and professional fees. From the inception of Project Summit through September 30, 2021, we have also incurred $26.7 million of capital expenditures.

CASH FLOWS

The following is a summary of our cash balances and cash flows (in thousands) as of and for the nine months ended September 30,

			2021						2020
Cash Flows from Operating Activities			$	463,337					$	627,218
Cash Flows from Investing Activities			(319,785)						(360,131)
Cash Flows from Financing Activities			(177,587)						(307,174)
Cash and Cash Equivalents, including Restricted Cash, End of Period			161,439						151,972

A. CASH FLOWS FROM OPERATING ACTIVITIES

For the nine months ended September 30, 2021, net cash flows provided by operating activities decreased by $163.9 million compared to the prior year period, primarily due to a decrease in cash from working capital of $185.9 million, primarily related to the timing of accounts payable and accrued expenses and collections of accounts receivable, partially offset by an increase in net income (including non-cash charges) of $22.0 million.

B. CASH FLOWS FROM INVESTING ACTIVITIES

Our significant investing activity during the nine months ended September 30, 2021 is highlighted below:

• We paid cash for capital expenditures of $419.0 million. Additional details of our capital spending are included in the “Capital Expenditures" section below.

• We paid cash for acquisitions (net of cash acquired) of $203.8 million, primarily funded by cash on hand and borrowings under our Revolving Credit Facility (as defined in Note 6 to Notes to Condensed Consolidated Financial Statements included in this Quarterly Report).

• We received $214.9 million in proceeds from sales of property, plant and equipment, primarily related to proceeds from sale-leaseback transactions of five facilities in the United Kingdom during the second quarter of 2021.

• We received $213.9 million in net proceeds from the IPM Divestment.

C. CASH FLOWS FROM FINANCING ACTIVITIES

Our significant financing activities during the nine months ended September 30, 2021 included:

• Net proceeds of $414.9 million primarily associated with borrowings under the Revolving Credit Facility and the Accounts Receivable Securitization Program.

• Repurchase of noncontrolling interest of $75.0 million.

• Payment of dividends in the amount of $538.9 million on our common stock.

IRON MOUNTAIN SEPTEMBER 30, 2021 FORM 10-Q									47

Part I. Financial Information

CAPITAL EXPENDITURES

During 2020, a portion of what was previously categorized as Non-Real Estate Growth Capital Expenditures was recategorized as Real Estate Growth Capital Expenditures and the remaining portion was recategorized as Recurring Capital Expenditures. In addition, capital expenditures associated with restructuring (including Project Summit) and integration of acquisitions, which was previously categorized as recurring capital expenditures, have been recategorized as Innovation and Other. We have reclassified the categorization of our prior year capital expenditures to conform with our current presentation.

The following table presents our capital spend for the nine months ended September 30, 2021 and 2020, organized by the type of the spending as described in our Annual Report (in thousands):

						NINE MONTHS ENDED SEPTEMBER 30,
NATURE OF CAPITAL SPEND						2021						2020
Growth Investment Capital Expenditures:
Data Center						$	209,097					$	151,692
Real Estate						60,558						45,888
Innovation and Other						15,445						5,670
Total Growth Investment Capital Expenditures						285,100						203,250
Recurring Capital Expenditures:
Real Estate						$	43,398					$	28,242
Non-Real Estate						52,153						43,196
Data Center						6,936						8,083
Total Recurring Capital Expenditures						102,487						79,521
Total Capital Spend (on accrual basis)						$	387,587					$	282,771
Net increase (decrease) in prepaid capital expenditures						279						2,221
Net decrease (increase) in accrued capital expenditures						31,110						24,170
Total Capital Spend (on cash basis)						$	418,976					$	309,162

Excluding capital expenditures associated with potential future acquisitions, we expect total capital expenditures of approximately $550.0 million for the year ending December 31, 2021. Of this, we expect our capital expenditures for growth investment to be approximately $410.0 million, and our recurring capital expenditures to be approximately $140.0 million. Our capital expenditures for growth investment includes Global Data Center Business development spend of approximately $300.0 million.

DIVIDENDS

See Note 8 to Notes to Condensed Consolidated Financial Statements included in this Quarterly Report for a listing of dividends that we declared during the first nine months of 2021 and fiscal year 2020.

On November 4, 2021, we declared a dividend to our stockholders of record as of December 15, 2021 of $0.6185 per share, payable on January 6, 2022.

48									IRON MOUNTAIN SEPTEMBER 30, 2021 FORM 10-Q

Part I. Financial Information

FINANCIAL INSTRUMENTS AND DEBT

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 concentration of liquid investments as of September 30, 2021 is related to cash and cash equivalents. See Note 2.f. to Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report for information on our money market funds and time deposits.

Long-term debt as of September 30, 2021 is as follows (in thousands):

			SEPTEMBER 30, 2021
			DEBT (INCLUSIVE OF DISCOUNT)						UNAMORTIZED DEFERRED FINANCING COSTS						CARRYING AMOUNT
Revolving Credit Facility			$	310,000					$	(6,034)					$	303,966
Term Loan A			206,250						—						206,250
Term Loan B			674,540						(5,308)						669,232
Australian Dollar Term Loan			223,109						(881)						222,228
UK Bilateral Revolving Credit Facility			188,431						(874)						187,557
37/8% GBP Senior Notes due 2025 (the “GBP Notes”)			538,374						(4,151)						534,223
47/8% Senior Notes due 2027 (the “47/8% Notes due 2027”)(1)			1,000,000						(8,532)						991,468
51/4% Senior Notes due 2028 (the “51/4% Notes due 2028”)(1)			825,000						(7,676)						817,324
5% Senior Notes due 2028 (the “5% Notes”)(1)			500,000						(4,944)						495,056
47/8% Senior Notes due 2029 (the “47/8% Notes due 2029”)(1)			1,000,000						(11,573)						988,427
51/4% Senior Notes due 2030 (the “51/4 Notes due 2030”)(1)			1,300,000						(13,287)						1,286,713
41/2% Senior Notes due 2031 (the “41/2 Notes”)(1)			1,100,000						(11,715)						1,088,285
55/8% Senior Notes due 2032 (the “55/8% Notes”)(1)			600,000						(6,292)						593,708
Real Estate Mortgages, Financing Lease Liabilities and Other			483,934						(905)						483,029
Accounts Receivable Securitization Program			266,400						(449)						265,951
Total Long-term Debt			9,216,038						(82,621)						9,133,417
Less Current Portion			(319,025)						881						(318,144)
Long-term Debt, Net of Current Portion			$	8,897,013					$	(81,740)					$	8,815,273

(1)Collectively, the “Parent Notes".

See Note 6 to Notes to Consolidated Financial Statements included in our Annual Report and Note 6 to Notes to Condensed Consolidated Financial Statements included in this Quarterly Report for additional information regarding our long-term debt.

UK BILATERAL REVOLVING CREDIT FACILITY

On May 25, 2021, Iron Mountain (UK) PLC and Iron Mountain (UK) Data Centre Limited (collectively, the "UK Borrowers") entered into an amendment to the UK Bilateral Facility with Barclays Bank PLC to (i) modify the interest rate from LIBOR plus 2.25% to LIBOR plus 2.0% (with flexibility built in for the expected transition away from LIBOR) and (ii) add an additional option to extend the maturity date by one year. After this amendment, the UK Bilateral Facility contains two one-year options that allow us to extend the maturity date beyond the September 23, 2022 expiration date, subject to certain conditions specified in the UK Bilateral Facility, including the lender's consent. On September 23, 2021, the UK Borrowers executed the one-year option to extend the maturity date to September 24, 2023. There were no other changes to the terms of the UK Bilateral Revolving Credit Facility described in Note 6 to Notes to Consolidated Financial Statements included in our Annual Report.

ACCOUNTS RECEIVABLE SECURITIZATION PROGRAM

On June 28, 2021, we entered into an amendment to the Accounts Receivable Securitization Program to extend the maturity date from July 30, 2021 to July 1, 2023, at which point all obligations become due. The interest rate under the amended Accounts Receivable Securitization Program is LIBOR plus 1.0%. The full amount outstanding under the Accounts Receivable Securitization Program is classified within long-term debt, net of current portion at September 30, 2021 and within current portion of long-term debt at December 31, 2020 in our Condensed Consolidated Balance Sheets. There were no other changes to the terms of the Accounts Receivable Securitization Program described in Note 6 to Notes to Consolidated Financial Statements included in our Annual Report.

IRON MOUNTAIN SEPTEMBER 30, 2021 FORM 10-Q									49

Part I. Financial Information

CASH POOLING

During the third quarter of 2021, certain of our subsidiaries in the Asia Pacific region began to participate in two cash pooling arrangements with JP Morgan Chase Bank, N.A. (“JPM”), one of which we utilize to manage global liquidity requirements for our QRSs in the Asia Pacific region (the “JPM QRS Cash Pool") and the other for our TRSs in the Asia Pacific region (the "JPM TRS Cash Pool") (collectively, the “JPM Cash Pools”). Under the JPM Cash Pools, cash deposited by participating subsidiaries with JPM 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 Condensed 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 JPM Cash Pools. We have executed overdraft facility agreements for the JPM QRS Cash Pool and the JPM TRS Cash Pool in amounts not to exceed $12.0 million and $10.0 million, respectively. Each overdraft facility permits us to cover a temporary net debit position in the applicable pool.

In addition to the JPM Cash Pools, we also utilize two separate cash pooling arrangements with Bank Mendes Gans ("BMG"), one of which we utilize to manage global liquidity requirements for our QRSs (the “BMG QRS Cash Pool”) and the other for our TRSs (the “BMG TRS Cash Pool”), each as described in more detail in Note 6 to Notes to Consolidated Financial Statements included in our Annual Report.

LETTERS OF CREDIT

As of September 30, 2021, we had outstanding letters of credit totaling $36.5 million, of which $3.1 million reduce our borrowing capacity under the Revolving Credit Facility. The letters of credit expire at various dates between October 2021 and March 2025.

DEBT COVENANTS

The Credit Agreement (as defined in Note 6 to Notes of Condensed Consolidated Financial Statements included in this Quarterly Report), our bond 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 other specified 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 bond indentures or other agreements governing our indebtedness. The Credit Agreement requires that we satisfy a fixed charge coverage ratio, a net total lease adjusted leverage ratio and a net secured debt lease adjusted leverage ratio on a quarterly basis and our bond indentures require that, among other things, we satisfy a leverage ratio (not lease adjusted) or a fixed charge coverage ratio (not lease adjusted), as a condition to taking actions such as paying dividends and incurring indebtedness.

The Credit Agreement uses EBITDAR-based calculations and the bond indentures use EBITDA-based calculations as the primary measures of financial performance for purposes of calculating leverage and fixed charge coverage ratios. The EBITDAR- and EBITDA-based leverage calculations include our consolidated subsidiaries, other than those we have designated as “Unrestricted Subsidiaries” as defined in the Credit Agreement and bond indentures. Generally, the Credit Agreement and the bond indentures use a trailing four fiscal quarter basis for purposes of the relevant calculations and require certain adjustments and exclusions for purposes of those calculations which make the calculation of financial performance for purposes of those calculations under the Credit Agreement and bond indentures not directly comparable to Adjusted EBITDA as presented herein. These adjustments can be significant. For example, the calculation of financial performance under the Credit Agreement and certain of our bond indentures (subject to specified exceptions and caps) adjustments for non-cash charges and for expected benefits associated with (i) completed acquisitions, (ii) certain executed lease agreements associated with our data center business that have yet to commence, and (iii) restructuring and other strategic initiatives, such as Project Summit. The calculation of financial performance under our other bond indentures includes, for example, adjustments (i) for non-cash charges and for expected benefits associated with completed acquisitions, and (ii) to exclude the effects of events that are extraordinary, unusual or non-recurring, such as the COVID-19 pandemic.

Our leverage and fixed charge coverage ratios under the Credit Agreement and our indentures as of September 30, 2021 are as follows:

			SEPTEMBER 30, 2021												MAXIMUM/MINIMUM ALLOWABLE
Net total lease adjusted leverage ratio			5.4												Maximum allowable of 6.5
Net secured debt lease adjusted leverage ratio			2.1												Maximum allowable of 4.0
Fixed charge coverage ratio			2.3												Minimum allowable of 1.5
Bond leverage ratio (not lease adjusted)			5.8												Maximum allowable of 7.0(1)
Bond fixed charge coverage ratio (not lease adjusted)			3.3												Minimum allowable of 2.0(1)

(1)The indentures for the GBP Notes, the 47/8% Notes due 2027, the 51/4% Notes due 2028 and the 47/8% Notes due 2029 include a maximum leverage ratio covenant. The indentures for the 5% Notes, the 51/4% Notes due 2030, the 41/2% Notes and the 55/8% Notes do not include a maximum leverage ratio covenant; the indentures for these notes instead require us to maintain a minimum fixed charge coverage ratio. In certain instances as provided in our indentures, we have the ability to incur additional indebtedness that would result in our bond leverage ratio or bond fixed charge coverage ratio exceeding or falling below the maximum or minimum permitted ratio under our indentures and still remain in compliance with the applicable covenant.

50									IRON MOUNTAIN SEPTEMBER 30, 2021 FORM 10-Q

Part I. Financial Information

Noncompliance with these leverage and fixed charge coverage ratios would have a material adverse effect on our financial condition and liquidity.

Our ability to pay interest on or to refinance our indebtedness depends on our future performance, working capital levels and capital structure, which are subject to general economic, financial, competitive, legislative, regulatory and other factors which may be beyond our control. There can be no assurance that we will generate sufficient cash flow from our operations or that future financings will be available on acceptable terms or in amounts sufficient to enable us to service or refinance our indebtedness or to make necessary capital expenditures.

DERIVATIVE INSTRUMENTS

A. INTEREST RATE SWAP AGREEMENTS

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 September 30, 2021, we had $350.0 million 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 rates as 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 $350.0 million in notional value, commence in March 2022 and expire in March 2024. Under the forward-starting interest rate swap agreements, we will receive variable rate interest payments based upon one-month LIBOR, in exchange for the payment of fixed interest rates as 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.

B. CROSS-CURRENCY SWAP AGREEMENTS

We enter into cross-currency swap agreements to hedge the variability of exchange rate impacts between the United States dollar and the Euro. The cross-currency swap agreements 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.

In August 2019, we entered into cross-currency swap agreements whereby we notionally exchanged approximately $110.0 million at an interest rate of 6.0% for approximately 99.1 million Euros at a weighted average interest rate of approximately 3.65%. These cross-currency swap agreements expire in August 2023.

In September 2020, we entered into cross-currency swap agreements whereby we notionally exchanged approximately $359.2 million at an interest rate of 4.5% for approximately 300.0 million Euros at a weighted average interest rate of approximately 3.4%. These cross-currency swap agreements expire in February 2026.

See Note 5 to Notes to Condensed Consolidated Financial Statements included in this Quarterly Report for additional information on our derivative instruments.

EQUITY FINANCING

In 2017, we entered into a distribution agreement pursuant to which we may sell, from time to time, up to an aggregate sales price of $500.0 million of our common stock through the agents under the agreement (the “At The Market (ATM) Equity Program”). During the nine months ended September 30, 2021, there were no shares of common stock sold under the At The Market (ATM) Equity Program. As of September 30, 2021, the remaining aggregate sale price of shares of our common stock available for distribution under the At The Market (ATM) Equity Program was approximately $431.2 million.

ACQUISITIONS

INFOFORT ACQUISITION

On September 15, 2021, in order to further expand our records management operations in the Middle East and North Africa, we acquired Information Fort, LLC, a records and information management provider, for approximately $90.3 million.

FRANKFURT DATA CENTER ACQUISITION

On September 23, 2021, in order to further enhance our data center operations in Germany, we acquired a Frankfurt data center for approximately 77.9 million Euros (or approximately $91.3 million, based upon the exchange rate between the Euro and the United States dollar on the closing date of this acquisition).

IRON MOUNTAIN SEPTEMBER 30, 2021 FORM 10-Q									51

Part I. Financial Information

OTHER 2021 ACQUISITIONS

In addition to the transactions noted above, during the nine months ended September 30,2021, in order to enhance our existing operations in the United Kingdom and Indonesia and to expand our operations into Morocco, we completed the acquisition of two records management companies and one art storage company for total cash consideration of approximately $45.1 million.

INVESTMENTS

2021 NEWLY FORMED JOINT VENTURE

In April 2021, we closed on an agreement to form a joint venture (the "Web Werks JV") with the shareholders of Web Werks India Private Limited ("Web Werks"), a colocation data center provider in India. In connection with the formation of the Web Werks JV, we made an initial investment of approximately 3,750.0 million Indian rupees (or approximately $50.1 million, based upon the exchange rate between the United States dollar and Indian rupee as of the closing date of the initial investment) in exchange for a noncontrolling interest in the form of convertible preference shares in the Web Werks JV (the “Initial Web Werks JV Investment”). These shares are convertible into a to-be-determined amount of common shares based upon the achievement of EBITDA targets for the Web Werks JV's fiscal year ending March 31, 2022.

Under the terms of the Web Werks JV shareholder agreement, we are required to make additional investments over a period ending May 2023 totaling approximately 7,500.0 million Indian rupees (or approximately $100.0 million, based upon the current exchange rate between the United States dollar and Indian rupee), and, over time, we expect to acquire a majority interest in the Web Werks JV.

JOINT VENTURE SUMMARY

The following joint ventures are accounted for as equity method investments and are presented as a component of Other within Other assets, net in our Condensed Consolidated Balance Sheets. The carrying values and equity interests in our joint ventures at September 30, 2021 and December 31, 2020 are as follows (in thousands):

						SEPTEMBER 30, 2021												DECEMBER 31, 2020
						CARRYING VALUE						EQUITY INTEREST						CARRYING VALUE						EQUITY INTEREST
Web Werks JV						$	51,257					38		%				$	—					—		%
Joint venture with AGC Equity Partners						26,272						20		%				26,500						20		%
Joint venture with MakeSpace Labs, Inc.(1)						27,419						48		%				16,924						39		%

(1) During the first, second and third quarters of 2021, we made capital contributions of $6.5 million to this joint venture.

See Note 2.e. to Notes to Condensed Consolidated Financial Statements included in this Quarterly Report for information regarding our 2021 joint ventures.

52									IRON MOUNTAIN SEPTEMBER 30, 2021 FORM 10-Q

Part I. Financial Information