Item 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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Item 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


IRON MOUNTAIN JUNE 30, 2023 FORM 10-Q									1

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

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


	JUNE 30, 2023		DECEMBER 31, 2022
ASSETS
Current Assets:
Cash and cash equivalents	$	149,493	$	141,797

Accounts receivable (less allowances of $65,217 and $54,143 as of June 30, 2023 and December 31, 2022, respectively)	1,182,154		1,174,915

Prepaid expenses and other	279,522		230,433

Total Current Assets	1,611,169		1,547,145
Property, Plant and Equipment:
Property, plant and equipment	9,546,766		9,025,765
Less—Accumulated depreciation	(3,943,300)		(3,910,321)
Property, Plant and Equipment, Net	5,603,466		5,115,444
Other Assets, Net:
Goodwill	4,928,145		4,882,734
Customer and supplier relationships and other intangible assets	1,348,679		1,423,145
Operating lease right-of-use assets	2,671,371		2,583,704
Other	515,739		588,342
Total Other Assets, Net	9,463,934		9,477,925
Total Assets	$	16,678,569	$	16,140,514
LIABILITIES AND EQUITY
Current Liabilities:
Current portion of long-term debt	$	102,582	$	87,546
Accounts payable	482,244		469,198
Accrued expenses and other current liabilities (includes current portion of operating lease liabilities)	1,141,613		1,031,910
Deferred revenue	336,068		328,910
Total Current Liabilities	2,062,507		1,917,564
Long-term Debt, net of current portion	11,144,230		10,481,449
Long-term Operating Lease Liabilities, net of current portion	2,513,975		2,429,167
Other Long-term Liabilities	164,242		317,376
Deferred Income Taxes	273,213		263,005
Commitments and Contingencies
Redeemable Noncontrolling Interests	104,059		95,160
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 291,824,958 and 290,830,296 shares as of June 30, 2023 and December 31, 2022, respectively)	2,918		2,908
Additional paid-in capital	4,488,492		4,468,035
(Distributions in excess of earnings) Earnings in excess of distributions	(3,692,948)		(3,392,272)
Accumulated other comprehensive items, net	(382,244)		(442,003)
Total Iron Mountain Incorporated Stockholders' Equity	416,218		636,668
Noncontrolling Interests	125		125
Total Equity	416,343		636,793
Total Liabilities and Equity	$	16,678,569	$	16,140,514

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


IRON MOUNTAIN JUNE 30, 2023 FORM 10-Q									2

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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


	THREE MONTHS ENDED JUNE 30,
	2023		2022
Revenues:
Storage rental	$	830,756	$	753,126
Service	527,180		536,408

Total Revenues	1,357,936		1,289,534
Operating Expenses:
Cost of sales (excluding depreciation and amortization)	592,644		556,476

Selling, general and administrative	311,805		295,394
Depreciation and amortization	195,367		178,254
Acquisition and Integration Costs	1,511		16,878
Restructuring and other transformation	45,588		—


(Gain) Loss on disposal/write-down of property, plant and equipment, net	(1,505)		(51,249)
Total Operating Expenses	1,145,410		995,753
Operating Income (Loss)	212,526		293,781
Interest Expense, Net (includes Interest Income of $2,290 and $2,171 for the three months ended June 30, 2023 and 2022, respectively)	144,178		115,057
Other Expense (Income), Net	62,950		(41,217)
Net Income (Loss) Before Provision (Benefit) for Income Taxes	5,398		219,941
Provision (Benefit) for Income Taxes	4,255		18,083


Net Income (Loss)	1,143		201,858
Less: Net Income (Loss) Attributable to Noncontrolling Interests	1,029		1,777
Net Income (Loss) Attributable to Iron Mountain Incorporated	$	114	$	200,081
Net Income (Loss) Per Share Attributable to Iron Mountain Incorporated:


Basic	$	0.00	$	0.69



Diluted	$	0.00	$	0.68
Weighted Average Common Shares Outstanding—Basic	291,825		290,756
Weighted Average Common Shares Outstanding—Diluted	293,527		292,487

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


IRON MOUNTAIN JUNE 30, 2023 FORM 10-Q									3

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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


	SIX MONTHS ENDED JUNE 30,
	2023		2022
Revenues:
Storage rental	$	1,640,845	$	1,504,196
Service	1,031,440		1,033,384

Total Revenues	2,672,285		2,537,580
Operating Expenses:
Cost of sales (excluding depreciation and amortization)	1,164,270		1,103,098
Selling, general and administrative	606,325		576,117
Depreciation and amortization	377,461		361,869
Acquisition and Integration Costs	3,106		32,539
Restructuring and other transformation	82,501		—


(Gain) Loss on disposal/write-down of property, plant and equipment, net	(14,566)		(51,954)
Total Operating Expenses	2,219,097		2,021,669
Operating Income (Loss)	453,188		515,911
Interest Expense, Net (includes Interest Income of $5,197 and $3,819 for the six months ended June 30, 2023 and 2022, respectively)	281,347		229,499
Other Expense (Income), Net	84,150		14,684
Net Income (Loss) Before Provision (Benefit) for Income Taxes	87,691		271,728
Provision (Benefit) for Income Taxes	21,013		28,163


Net Income (Loss)	66,678		243,565
Less: Net Income (Loss) Attributable to Noncontrolling Interests	1,969		1,185
Net Income (Loss) Attributable to Iron Mountain Incorporated	$	64,709	$	242,380
Net Income (Loss) Per Share Attributable to Iron Mountain Incorporated:


Basic	$	0.22	$	0.83



Diluted	$	0.22	$	0.83
Weighted Average Common Shares Outstanding—Basic	291,633		290,542
Weighted Average Common Shares Outstanding—Diluted	293,288		292,166

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


IRON MOUNTAIN JUNE 30, 2023 FORM 10-Q									4

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(IN THOUSANDS) (UNAUDITED)


	THREE MONTHS ENDED JUNE 30,
	2023		2022
Net Income (Loss)	$	1,143	$	201,858
Other Comprehensive Income (Loss):
Foreign Currency Translation Adjustment	18,035		(187,786)
Change in Fair Value of Derivative Instruments	7,896		34,211
Reclassifications from Accumulated Other Comprehensive Items, net	(2,527)		—
Total Other Comprehensive Income (Loss):	23,404		(153,575)
Comprehensive Income (Loss)	24,547		48,283
Comprehensive Income (Loss) Attributable to Noncontrolling Interests	909		819
Comprehensive Income (Loss) Attributable to Iron Mountain Incorporated	$	23,638	$	47,464


	SIX MONTHS ENDED JUNE 30,
	2023		2022
Net Income (Loss)	$	66,678	$	243,565
Other Comprehensive Income (Loss):
Foreign Currency Translation Adjustment	58,261		(160,333)
Change in Fair Value of Derivative Instruments	4,454		50,977
Reclassifications from Accumulated Other Comprehensive Items, net	(2,527)		—
Total Other Comprehensive Income (Loss):	60,188		(109,356)
Comprehensive Income (Loss)	126,866		134,209
Comprehensive Income (Loss) Attributable to Noncontrolling Interests	2,398		457
Comprehensive Income (Loss) Attributable to Iron Mountain Incorporated	$	124,468	$	133,752

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


IRON MOUNTAIN JUNE 30, 2023 FORM 10-Q									5

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(IN THOUSANDS, EXCEPT SHARE DATA) (UNAUDITED)


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

Net Income (Loss)	114		—	—		—		114		—		—		1,029
Noncontrolling interests equity contributions	—		—	—		—		—		—		—		9,900
Noncontrolling interests dividends	—		—	—		—		—		—		—		(1,013)


Balance, June 30, 2023	$	416,343	291,824,958	$	2,918	$	4,488,492	$	(3,692,948)	$	(382,244)	$	125	$	104,059

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

Net income (loss)	64,709		—	—		—		64,709		—		—		1,969
Noncontrolling interests equity contributions	—		—	—		—		—		—		—		9,900
Noncontrolling interests dividends	—		—	—		—		—		—		—		(2,032)


Balance, June 30, 2023	$	416,343	291,824,958	$	2,918	$	4,488,492	$	(3,692,948)	$	(382,244)	$	125	$	104,059

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


IRON MOUNTAIN JUNE 30, 2023 FORM 10-Q									6

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(IN THOUSANDS, EXCEPT SHARE DATA) (UNAUDITED)


THREE MONTHS ENDED JUNE 30, 2022
			IRON MOUNTAIN INCORPORATED STOCKHOLDERS' EQUITY
			COMMON STOCK			ADDITIONAL PAID-IN CAPITAL		(DISTRIBUTIONS IN EXCESS OF EARNINGS) EARNINGS IN EXCESS OF DISTRIBUTIONS		ACCUMULATED OTHER COMPREHENSIVE ITEMS, NET		NONCONTROLLING INTERESTS		REDEEMABLE NONCONTROLLING INTERESTS
	TOTAL		SHARES	AMOUNTS
Balance, March 31, 2022	$	758,771	290,550,440	$	2,906	$	4,409,051	$	(3,359,876)	$	(294,358)	$	1,048	$	73,428
Issuance and net settlement of shares under employee stock purchase plan and option plans and stock-based compensation	24,462		129,518	1		24,461		—		—		—		—
Changes in equity related to noncontrolling interests	4,618		—	—		983		—		—		3,635		(983)
Parent cash dividends declared	(181,197)		—	—		—		(181,197)		—		—		—
Other comprehensive (loss) income	(152,708)		—	—		—		—		(152,617)		(91)		(867)

Net income (loss)	200,315		—	—		—		200,081		—		234		1,543

Noncontrolling interests equity contributions and related costs	(2,486)		—	—		(2,486)		—		—		—		21,547
Noncontrolling interests dividends	—		—	—		—		—		—		—		(711)


Balance, June 30, 2022	$	651,775	290,679,958	$	2,907	$	4,432,009	$	(3,340,992)	$	(446,975)	$	4,826	$	93,957

SIX MONTHS ENDED JUNE 30, 2022
			IRON MOUNTAIN INCORPORATED STOCKHOLDERS' EQUITY
			COMMON STOCK			ADDITIONAL PAID-IN CAPITAL		(DISTRIBUTIONS IN EXCESS OF EARNINGS) EARNINGS IN EXCESS OF DISTRIBUTIONS		ACCUMULATED OTHER COMPREHENSIVE ITEMS, NET		NONCONTROLLING INTERESTS		REDEEMABLE NONCONTROLLING INTERESTS
	TOTAL		SHARES	AMOUNTS
Balance, December 31, 2021	$	857,068	289,757,061	$	2,898	$	4,412,553	$	(3,221,152)	$	(338,347)	$	1,116	$	72,411
Issuance and net settlement of shares under employee stock purchase plan and option plans and stock-based compensation	22,960		922,897	9		22,951		—		—		—		—
Changes in equity related to noncontrolling interests	2,626		—	—		(1,009)		—		—		3,635		1,009
Parent cash dividends declared	(362,220)		—	—		—		(362,220)		—		—		—
Other comprehensive (loss) income	(108,787)		—	—		—		—		(108,628)		(159)		(569)

Net income (loss)	242,614		—	—		—		242,380		—		234		951
Noncontrolling interests equity contributions and related costs	(2,486)		—	—		(2,486)		—		—		—		21,547
Noncontrolling interests dividends	—		—	—		—		—		—		—		(1,392)
Balance, June 30, 2022	$	651,775	290,679,958	$	2,907	$	4,432,009	$	(3,340,992)	$	(446,975)	$	4,826	$	93,957

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


IRON MOUNTAIN JUNE 30, 2023 FORM 10-Q									7

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS) (UNAUDITED)


	SIX MONTHS ENDED JUNE 30,
	2023		2022
Cash Flows from Operating Activities:
Net income (loss)	$	66,678	$	243,565


Adjustments to reconcile net income (loss) to cash flows from operating activities:
Depreciation	254,395		236,496
Amortization (includes amortization of deferred financing costs and discounts of $8,095 and $9,064 for the six months ended June 30, 2023 and 2022, respectively)	131,161		134,437

Revenue reduction associated with amortization of customer inducements and above- and below-market leases	3,491		3,681
Stock-based compensation expense	34,882		31,597
Provision (benefit) for deferred income taxes	2,799		(18,491)
Loss on early extinguishment of debt	—		671
(Gain) loss on disposal/write-down of property, plant and equipment, net	(14,566)		(51,954)


Loss (gain) on divestments and deconsolidations	—		105,825

Loss (gain) associated with the Clutter transactions	38,000		(35,821)
Foreign currency transactions and other, net	69,183		(58,821)
(Increase) decrease in assets	(31,071)		(194,756)
(Decrease) increase in liabilities	(108,858)		(50,505)




Cash Flows from Operating Activities	446,094		345,924


Cash Flows from Investing Activities:
Capital expenditures	(600,758)		(330,220)
Cash paid for acquisitions, net of cash acquired	(21,465)		(718,657)

Acquisition of customer relationships	—		(148)
Customer inducements	(2,630)		(4,624)
Contract fulfillment costs	(39,989)		(33,951)

Investments in joint ventures and other investments	(15,830)		—
Proceeds from sales of property and equipment and other, net	35,390		96,497
Cash Flows from Investing Activities	(645,282)		(991,103)


Cash Flows from Financing Activities:
Repayment of revolving credit facility, term loan facilities and other debt	(10,087,033)		(5,351,720)
Proceeds from revolving credit facility, term loan facilities and other debt	9,683,880		6,255,829

Net proceeds from sale of senior note	990,000		—
Debt financing and equity contribution from noncontrolling interests	9,900		21,547

Debt repayment and equity distribution to noncontrolling interests	(2,032)		(1,392)

Parent cash dividends	(367,060)		(364,223)


Net (payments) proceeds associated with employee stock-based awards	(15,782)		(8,636)

Other, net	(2,046)		(9,405)
Cash Flows from Financing Activities	209,827		542,000


Effect of Exchange Rates on Cash and Cash Equivalents	(2,943)		(7,903)
Increase (decrease) in Cash and Cash Equivalents	7,696		(111,082)
Cash and Cash Equivalents, Beginning of Period	141,797		255,828
Cash and Cash Equivalents, End of Period	$	149,493	$	144,746
Supplemental Information:
Cash Paid for Interest	$	270,146	$	227,633
Cash Paid for Income Taxes, Net	$	46,502	$	57,135
Non-Cash Investing and Financing Activities:

Financing Leases and Other	$	61,085	$	12,878
Accrued Capital Expenditures	$	192,197	$	98,210

Deferred Purchase Obligations and Other Deferred Payments	$	9,290	$	276,017
Dividends Payable	$	192,597	$	188,556

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


IRON MOUNTAIN JUNE 30, 2023 FORM 10-Q									8

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

1. GENERAL

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

The Condensed Consolidated Financial Statements and Notes thereto, which are included herein, should be read in conjunction with the Consolidated Financial Statements and Notes thereto for the year ended December 31, 2022 included in our Annual Report on Form 10-K filed with the SEC on February 23, 2023 (our "Annual Report").

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

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

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. CASH AND CASH EQUIVALENTS

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

B. ACCOUNTS RECEIVABLE

We maintain an allowance for doubtful accounts and a credit memo reserve for estimated losses resulting from the potential inability of our customers to make required payments and potential disputes regarding billing and service issues. The rollforward of the allowance for doubtful accounts and credit memo reserves for the six months ended June 30, 2023 is as follows:



Balance as of December 31, 2022	$	54,143
Credit memos charged to revenue	46,222
Allowance for bad debts charged to expense	16,172
Deductions and other(1)	(51,320)
Balance as of June 30, 2023	$	65,217

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


IRON MOUNTAIN JUNE 30, 2023 FORM 10-Q									9

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

C. LEASES

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

Operating and financing lease right-of-use assets and lease liabilities as of June 30, 2023 and December 31, 2022 are as follows:


DESCRIPTION	JUNE 30, 2023		DECEMBER 31, 2022
Assets:
Operating lease right-of-use assets	$	2,671,371	$	2,583,704
Financing lease right-of-use assets, net of accumulated depreciation(1)	255,015		251,690
Liabilities:
Current
Operating lease liabilities	$	303,615	$	288,738
Financing lease liabilities(1)	49,148		43,857
Long-term
Operating lease liabilities	$	2,513,975	$	2,429,167
Financing lease liabilities(1)	297,190		289,048

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

The components of the lease expense for the three and six months ended June 30, 2023 and 2022 are as follows:


	THREE MONTHS ENDED JUNE 30,				SIX MONTHS ENDED JUNE 30,
DESCRIPTION	2023		2022		2023		2022
Operating lease cost(1)	$	161,241	$	139,863	$	317,114	$	283,393
Financing lease cost:
Depreciation of financing lease right-of-use assets	$	10,202	$	10,578	$	20,210	$	22,032
Interest expense for financing lease liabilities	4,416		4,359		8,757		9,037

(1)Operating lease cost, the majority of which is included in Cost of sales, includes variable lease costs of $34,418 and $65,998 for the three and six months ended June 30, 2023, respectively, and $28,788 and $59,296 for the three and six months ended June 30, 2022, respectively.

Other information: Supplemental cash flow information relating to our leases for the six months ended June 30, 2023 and 2022 is as follows:


	SIX MONTHS ENDED JUNE 30,
CASH PAID FOR AMOUNTS INCLUDED IN MEASUREMENT OF LEASE LIABILITIES:	2023		2022
Operating cash flows used in operating leases	$	220,764	$	200,958

Operating cash flows used in financing leases (interest)	8,757		9,037
Financing cash flows used in financing leases	22,010		20,084

NON-CASH ITEMS:
Operating lease modifications and reassessments	$	44,779	$	67,699
New operating leases (including acquisitions and sale-leaseback transactions)	163,326		382,890

In addition to the leases signed but not yet commenced that were disclosed in Note 2.j. to Notes to Consolidated Financial Statements included in our Annual Report, we entered into an operating lease in March 2023 that is expected to commence in July 2024, with an initial lease term of 25 years. The total undiscounted minimum lease payments for this lease are approximately $170,100.


IRON MOUNTAIN JUNE 30, 2023 FORM 10-Q									10

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

D. GOODWILL

Our reporting units as of December 31, 2022 are described in detail in Note 2.l. to Notes to Consolidated Financial Statements included in our Annual Report.

The changes in the carrying value of goodwill attributable to each reportable segment for the six months ended June 30, 2023 are as follows:


	GLOBAL RIM BUSINESS		GLOBAL DATA CENTER BUSINESS		CORPORATE AND OTHER		TOTAL CONSOLIDATED
Goodwill balance, net of accumulated amortization as of December 31, 2022	$	3,852,946	$	418,502	$	611,286	$	4,882,734


Non-tax deductible goodwill acquired during the period	22,876		—		383		23,259

Fair value and other adjustments	(80)		—		2,333		2,253
Currency translation adjustments	17,169		2,153		577		19,899
Goodwill balance, net of accumulated amortization as of June 30, 2023	$	3,892,911	$	420,655	$	614,579	$	4,928,145
Accumulated goodwill impairment balance as of June 30, 2023	$	132,409	$	—	$	26,011	$	158,420


IRON MOUNTAIN JUNE 30, 2023 FORM 10-Q									11

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

E. FAIR VALUE MEASUREMENTS

The assets and liabilities carried at fair value measured on a recurring basis as of June 30, 2023 and December 31, 2022 are as follows:


			FAIR VALUE MEASUREMENTS AT JUNE 30, 2023 USING
DESCRIPTION	TOTAL CARRYING VALUE AT JUNE 30, 2023		QUOTED PRICES IN ACTIVE MARKETS (LEVEL 1)		SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)
Money Market Funds	$	11,761	$	—	$	11,761	$	—
Time Deposits	1,127		—		1,127		—
Trading Securities	10,340		10,322		18		—
Derivative Assets	28,286		—		28,286		—
Derivative Liabilities	4,540		—		4,540		—
Deferred Purchase Obligations(1)	201,190		—		—		201,190


			FAIR VALUE MEASUREMENTS AT DECEMBER 31, 2022 USING
DESCRIPTION	TOTAL CARRYING VALUE AT DECEMBER 31, 2022		QUOTED PRICES IN ACTIVE MARKETS (LEVEL 1)		SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)
Money Market Funds	$	11,311	$	—	$	11,311	$	—
Time Deposits	1,102		—		1,102		—
Trading Securities	9,462		9,426		36		—
Derivative Assets	51,396		—		51,396		—
Derivative Liabilities	489		—		489		—
Deferred Purchase Obligations(1)	193,033		—		—		193,033

(1)Primarily relates to the fair value of the Deferred Purchase Obligation (as defined in Note 3 to Notes to Consolidated Financial Statements included in our Annual Report) associated with the ITRenew Transaction (as defined below in Note 3), which was determined utilizing a Monte-Carlo model and takes into account our forecasted projections as it relates to the underlying performance of the business. The Monte-Carlo simulation model incorporates assumptions as to expected gross profits over the applicable achievement period, including adjustments for the volatility of timing and amount of the associated revenue and costs, as well as discount rates that account for the risk of the underlying arrangement and overall market risks. Any material change to these assumptions may result in a significantly higher or lower fair value of the Deferred Purchase Obligation. The change in value of the Deferred Purchase Obligation during the three and six months ended June 30, 2023 was driven by the accretion of the obligation to present value.

There were no material items that were measured at fair value on a non-recurring basis at June 30, 2023 and December 31, 2022 other than (i) those disclosed in Note 2.p. to Notes to Consolidated Financial Statements included in our Annual Report and (ii) assets acquired and liabilities assumed through our acquisitions that occurred during the six months ended June 30, 2023, all of which are based on Level 3 inputs.


IRON MOUNTAIN JUNE 30, 2023 FORM 10-Q									12

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

F. ACCUMULATED OTHER COMPREHENSIVE ITEMS, NET

The changes in Accumulated other comprehensive items, net for the three and six months ended June 30, 2023 and 2022 are as follows:


	THREE MONTHS ENDED JUNE 30, 2023						THREE MONTHS ENDED JUNE 30, 2022
	FOREIGN CURRENCY TRANSLATION AND OTHER ADJUSTMENTS		DERIVATIVE FINANCIAL INSTRUMENTS		TOTAL		FOREIGN CURRENCY TRANSLATION AND OTHER ADJUSTMENTS		DERIVATIVE FINANCIAL INSTRUMENTS		TOTAL
Beginning of Period	$	(414,832)	$	9,064	$	(405,768)	$	(313,801)	$	19,443	$	(294,358)
Other comprehensive income (loss):
Foreign currency translation and other adjustments	18,155		—		18,155		(186,828)		—		(186,828)
Change in fair value of derivative instruments	—		7,896		7,896		—		34,211		34,211
Reclassifications from accumulated other comprehensive items, net	—		(2,527)		(2,527)		—		—		—
Total other comprehensive income (loss)	18,155		5,369		23,524		(186,828)		34,211		(152,617)
End of Period	$	(396,677)	$	14,433	$	(382,244)	$	(500,629)	$	53,654	$	(446,975)


	SIX MONTHS ENDED JUNE 30, 2023						SIX MONTHS ENDED JUNE 30, 2022
	FOREIGN CURRENCY TRANSLATION AND OTHER ADJUSTMENTS		DERIVATIVE FINANCIAL INSTRUMENTS		TOTAL		FOREIGN CURRENCY TRANSLATION AND OTHER ADJUSTMENTS		DERIVATIVE FINANCIAL INSTRUMENTS		TOTAL
Beginning of Period	$	(454,509)	$	12,506	$	(442,003)	$	(341,024)	$	2,677	$	(338,347)
Other comprehensive income (loss):
Foreign currency translation and other adjustments	57,832		—		57,832		(159,605)		—		(159,605)
Change in fair value of derivative instruments	—		4,454		4,454		—		50,977		50,977
Reclassifications from accumulated other comprehensive items, net	—		(2,527)		(2,527)		—		—		—
Total other comprehensive income (loss)	57,832		1,927		59,759		(159,605)		50,977		(108,628)
End of Period	$	(396,677)	$	14,433	$	(382,244)	$	(500,629)	$	53,654	$	(446,975)

G. REVENUES

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 (collectively, "Contract Fulfillment Costs"). Contract Fulfillment Costs as of June 30, 2023 and December 31, 2022 are as follows:


	JUNE 30, 2023						DECEMBER 31, 2022
	GROSS CARRYING AMOUNT		ACCUMULATED AMORTIZATION		NET CARRYING AMOUNT		GROSS CARRYING AMOUNT		ACCUMULATED AMORTIZATION		NET CARRYING AMOUNT
Intake Costs asset	$	75,428	$	(47,919)	$	27,509	$	68,345	$	(42,132)	$	26,213
Commissions asset	148,003		(66,431)		81,572		133,145		(58,949)		74,196


IRON MOUNTAIN JUNE 30, 2023 FORM 10-Q									13

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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


DESCRIPTION	LOCATION IN BALANCE SHEET	JUNE 30, 2023		DECEMBER 31, 2022
Deferred revenue - Current	Deferred revenue	$	336,068	$	328,910
Deferred revenue - Long-term	Other Long-term Liabilities	22,343		32,960

DATA CENTER LESSOR CONSIDERATIONS

Our Global Data Center Business features storage rental provided to customers at contractually specified rates over a fixed contractual period, which are accounted for in accordance with Accounting Standards Codification ("ASC") 842, Leases. Storage rental revenue, including revenue associated with power and connectivity, associated with our Global Data Center Business for the three and six months ended June 30, 2023 and 2022 is as follows:


	THREE MONTHS ENDED JUNE 30,				SIX MONTHS ENDED JUNE 30,
	2023		2022		2023		2022
Storage rental revenue(1)	$	110,990	$	89,768	$	218,425	$	177,219

(1)Revenue associated with power and connectivity included within storage rental revenue was $38,692 and $79,364 for the three and six months ended June 30, 2023, respectively, and $30,713 and $59,031 for the three and six months ended June 30, 2022, respectively.

H. STOCK-BASED COMPENSATION

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

STOCK-BASED COMPENSATION EXPENSE

Stock-based compensation expense for the Employee Stock-Based Awards for the three and six months ended June 30, 2023 and 2022 is as follows:


	THREE MONTHS ENDED JUNE 30,				SIX MONTHS ENDED JUNE 30,
	2023		2022		2023		2022
Stock-based compensation expense	$	22,373	$	20,256	$	34,882	$	31,597

As of June 30, 2023, unrecognized compensation cost related to the unvested portion of our Employee Stock-Based Awards is $87,880.

I. ACQUISITION AND INTEGRATION COSTS

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

Acquisition and Integration Costs for the three and six months ended June 30, 2023 and 2022 are as follows:


	THREE MONTHS ENDED JUNE 30,				SIX MONTHS ENDED JUNE 30,
	2023		2022		2023		2022
Acquisition and Integration Costs	$	1,511	$	16,878	$	3,106	$	32,539


IRON MOUNTAIN JUNE 30, 2023 FORM 10-Q									14

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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

(Gain) loss on disposal/write-down of property, plant and equipment, net for the three and six months ended June 30, 2023 and 2022 is as follows:


	THREE MONTHS ENDED JUNE 30,				SIX MONTHS ENDED JUNE 30,
	2023		2022(2)		2023(1)		2022(2)
(Gain) Loss on disposal/write-down of property, plant and equipment, net(3)	$	(1,505)	$	(51,249)	$	(14,566)	$	(51,954)

(1) The gains for the six months ended June 30, 2023 primarily consist of a gain of approximately $18,500 associated with a sale-leaseback transaction of a facility in Singapore during the first quarter of 2023.

(2) The gains for the three and six months ended June 30, 2022 primarily consist of gains of approximately $49,000 associated with sale and sale-leaseback transactions of 11 facilities and parcels of land in the United States.

(3) The gains recognized during both 2023 and 2022 are the result of our program to monetize a small portion of our industrial assets through sale and sale-leaseback transactions. The terms for these leases are consistent with the terms of our lease portfolio, which are disclosed in detail in Note 2.j. to Notes to Consolidated Financial Statements included in our Annual Report.

K. OTHER EXPENSE (INCOME), NET

Other expense (income), net for the three and six months ended June 30, 2023 and 2022 consists of the following:


	THREE MONTHS ENDED JUNE 30,				SIX MONTHS ENDED JUNE 30,
DESCRIPTION	2023		2022		2023		2022
Foreign currency transaction losses (gains), net(1)(2)	$	15,063	$	(55,039)	$	29,487	$	(68,240)
Debt extinguishment expense	—		—		—		671
Other, net(3)(4)	47,887		13,822		54,663		82,253
Other Expense (Income), Net	$	62,950	$	(41,217)	$	84,150	$	14,684

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

(2)The gains for the three and six months ended June 30, 2022 primarily consist of the impact of changes in the exchange rate of the Euro and the British pound sterling against the United States dollar on our intercompany balances with and between certain of our subsidiaries.

(3)Other, net for the six months ended June 30, 2023 consists primarily of a loss of approximately $38,000 associated with the remeasurement to fair value of our previously held equity interest in the Clutter JV (as defined and discussed in Note 4) as well as losses on our equity method investments and the change in value of the Deferred Purchase Obligation.

(4)Other, net for the six months ended June 30, 2022 consists primarily of (i) a loss of approximately $105,800 associated with the OSG Deconsolidation (as defined in Note 4 to Notes to Consolidated Financial Statements included in our Annual Report), partially offset by (ii) a gain of approximately $35,800 associated with the Clutter Transaction (as defined in Note 5 to Notes to Consolidated Financial Statements included in our Annual Report).


IRON MOUNTAIN JUNE 30, 2023 FORM 10-Q									15

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

L. INCOME TAXES

We provide for income taxes during interim periods based on our estimate of the effective tax rate for the year. Our effective tax rates for the three and six months ended June 30, 2023 and 2022 are as follows:


	THREE MONTHS ENDED JUNE 30,				SIX MONTHS ENDED JUNE 30,
	2023(1)		2022(2)		2023(1)		2022(2)
Effective Tax Rate	78.8	%	8.2	%	24.0	%	10.4	%

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

(2)The primary reconciling items between the federal statutory tax rate of 21.0% and our overall effective tax rate for the three and six months ended June 30, 2022 were the benefits derived from the dividends paid deduction and the differences in the tax rates to which our foreign earnings are subject. In addition, there were gains and losses recorded in Other expense (income), net and Gain (loss) on disposal/write-down of property, plant and equipment net, during the period for which there was an insignificant tax impact. During the first quarter of 2022, there was also a release of valuation allowances on deferred tax assets of our U.S. taxable REIT subsidiaries of approximately $9,900 as a result of our acquisition of Intercept Parent, Inc. ("ITRenew").

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

The calculations of basic and diluted income (loss) per share for the three and six months ended June 30, 2023 and 2022 are as follows:


	THREE MONTHS ENDED JUNE 30,				SIX MONTHS ENDED JUNE 30,
	2023		2022		2023		2022
Net Income (Loss)	$	1,143	$	201,858	$	66,678	$	243,565
Less: Net Income (Loss) Attributable to Noncontrolling Interests	1,029		1,777		1,969		1,185
Net Income (Loss) Attributable to Iron Mountain Incorporated (utilized in numerator of Earnings Per Share calculation)	$	114	$	200,081	$	64,709	$	242,380
Weighted-average shares—basic	291,825,000		290,756,000		291,633,000		290,542,000
Effect of dilutive potential stock options	1,322,000		1,249,262		1,269,000		1,122,444
Effect of dilutive potential RSUs and PUs	380,000		481,972		386,000		501,975
Weighted-average shares—diluted	293,527,000		292,487,234		293,288,000		292,166,419
Net Income (Loss) Per Share Attributable to Iron Mountain Incorporated:
Basic	$	0.00	$	0.69	$	0.22	$	0.83
Diluted	$	0.00	$	0.68	$	0.22	$	0.83
Antidilutive stock options, RSUs and PUs excluded from the calculation	157,132		234,085		151,431		494,833

N. RECENT ACCOUNTING PRONOUNCEMENTS

In December 2021, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") No. 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ("ASU 2021-08"). ASU 2021-08 requires that an entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, Revenue from Contracts with Customers, and for the related revenue contracts in accordance with ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), as if it had originated the contracts. We adopted ASU 2021-08 on January 1, 2023 on a prospective basis, and there was no material impact on our condensed consolidated financial statements.


IRON MOUNTAIN JUNE 30, 2023 FORM 10-Q									16

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

3. ACQUISITIONS

CLUTTER

On June 29, 2023, in order to further expand our on-demand consumer storage business, we acquired 100% of the outstanding shares of Clutter Intermediate, Inc. and control of all assets of the Clutter JV (collectively, "Clutter") for total consideration of $59,100 (the “Clutter Acquisition”). During the third quarter of 2023, we anticipate offering up to 15% equity interest in Clutter to certain former stakeholders of the Clutter JV.

PRELIMINARY PURCHASE PRICE ALLOCATION

A summary of the cumulative consideration paid and the preliminary allocation of the purchase price paid for all of our acquisitions closed during the six months ended June 30, 2023 is as follows:


	SIX MONTHS ENDED JUNE 30, 2023
Cash Paid (gross of cash acquired)(1)	$	21,215
Deferred Purchase Obligation, Purchase Price Holdbacks and Other	9,290
Fair Value of Previously Held Equity Interest	9,000
Settlement of Pre-Existing Relationships	20,122
Total Consideration	59,627
Fair Value of Identifiable Assets Acquired	56,248
Fair Value of Identifiable Liabilities Assumed	(19,880)
Total Fair Value of Identifiable Net Assets Acquired	36,368
Goodwill Initially Recorded(2)	$	23,259

(1)Cash paid for acquisitions, net in our Condensed Consolidated Statement of Cash Flows includes (i) cash acquired of $1,980 relating to acquisitions completed during the six months ended June 30, 2023 and (ii) contingent and other payments of $2,230 for the six months ended June 30, 2023 relating to acquisitions completed prior to January 1, 2023.

(2)Goodwill 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.

The preliminary purchase price allocations that are not finalized as of June 30, 2023 relate to the final assessment of the fair values of property, plant and equipment and intangible assets (primarily the customer relationship intangible asset) associated with the acquisitions we closed during the six months ended June 30, 2023. Any adjustments to our estimates of purchase price allocations will be made in the periods in which the adjustments are determined, but no later than the one year measurement period, and the cumulative effect of such adjustments will be calculated as if the adjustments had been completed as of the applicable acquisition date. Adjustments recorded during the six months ended June 30, 2023 were not material to our results from operations.


IRON MOUNTAIN JUNE 30, 2023 FORM 10-Q									17

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

3. ACQUISITIONS (CONTINUED)

ITRENEW PRO FORMA FINANCIAL INFORMATION

On January 25, 2022, in order to expand our asset lifecycle management operations, we acquired an approximately 80% interest in ITRenew at an agreed upon purchase price of $725,000, subject to certain working capital adjustments at, and subsequent to, the closing (the "ITRenew Transaction"). The unaudited consolidated pro forma financial information (the "Pro Forma Financial Information") below summarizes the combined results of Iron Mountain and ITRenew on a pro forma basis as if the ITRenew Transaction had occurred on January 1, 2021. 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, 2021. The Pro Forma Financial Information, for the periods presented, includes purchase accounting adjustments (including amortization of acquired customer and supplier intangible assets and depreciation of acquired property, plant and equipment) and related tax effects. We and ITRenew collectively incurred $59,370 of operating expenditures to complete the ITRenew 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, 2021.


	THREE MONTHS ENDED JUNE 30, 2022		SIX MONTHS ENDED JUNE 30, 2022
Total Revenues	$	1,289,534	$	2,555,554
Income from Continuing Operations	$	201,858	$	243,696

In addition to our acquisition of ITRenew, we completed certain other acquisitions in 2023 and 2022. The Pro Forma Financial Information does not reflect these acquisitions due to the insignificant impact of these acquisitions on our consolidated results of operations.

4. INVESTMENTS

CLUTTER JOINT VENTURE

In February 2022, the joint venture formed by MakeSpace Labs, Inc. and us (the "MakeSpace JV") entered into an agreement with Clutter, Inc. pursuant to which the equityholders of the MakeSpace JV contributed their ownership interests in the MakeSpace JV, and Clutter, Inc.’s shareholders contributed their ownership interests in Clutter, Inc., to create a newly formed venture (the "Clutter JV"). In exchange for our 49.99% interest in the MakeSpace JV, we received an approximate 27% interest in the Clutter JV (the "Clutter Transaction"). As a result of the Clutter Transaction, we recognized a gain related to our contributed interest in the MakeSpace JV of approximately $35,800, which was recorded to Other, net, a component of Other expense (income), net, during the first quarter of 2022.

On June 29, 2023, we completed the Clutter Acquisition. In connection with the Clutter Acquisition, our previously held approximately 27% interest in the Clutter JV was remeasured to fair value at the closing date of the Clutter Acquisition. As a result, we recognized a loss of approximately $38,000 to Other, net, a component of Other expense (income), net, during the second quarter of 2023.

WEB WERKS 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, a colocation data center provider in India. Through December 31, 2022, we made two investments totaling approximately 7,500,000 Indian rupees (or approximately $96,200, based upon the exchange rates between the United States dollar and Indian rupee on the closing date of each investment) in exchange for a noncontrolling interest in the form of convertible preference shares in the Web Werks JV. On July 7, 2023, we made our final contractual investment in the Web Werks JV of approximately 3,750,000 Indian rupees (or approximately $45,300, based upon the exchange rate between the United States dollar and Indian rupee on the closing date of this investment). After the final contractual payment, our interest in the Web Werks JV increased to 63.39% and we assumed control of its board of directors. For financial reporting periods beginning after July 7, 2023, the Web Werks JV will be consolidated within our Global Data Center Business segment.


IRON MOUNTAIN JUNE 30, 2023 FORM 10-Q									18

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

4. INVESTMENTS (CONTINUED)

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 June 30, 2023 and December 31, 2022 are as follows:


	JUNE 30, 2023				DECEMBER 31, 2022
	CARRYING VALUE		EQUITY INTEREST		CARRYING VALUE		EQUITY INTEREST
Web Werks JV	$	98,650	53.58	%	$	98,278	53.58	%
Joint venture with AGC Equity Partners (the "Frankfurt JV")	59,394		20.00	%	37,194		20.00	%
Clutter JV	—		—	%	54,172		26.73	%

5. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Derivative instruments we are party to include: (i) interest rate swap agreements (which are designated as cash flow hedges) and (ii) cross-currency swap agreements (which are designated as net investment hedges).

INTEREST RATE SWAP AGREEMENTS DESIGNATED AS CASH FLOW HEDGES

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. These forward-starting interest rate swap agreements commenced in March 2022 with a total notional amount of $350,000 and provided variable rate interest payments associated with the notional amount of each interest rate swap, based upon one-month London Interbank Offered Rate ("LIBOR"), in exchange for the payment of fixed interest rates as specified in the respective interest rate swap agreements. In April 2023, we terminated these agreements in anticipation of the discontinuance of the LIBOR reference rate on June 30, 2023. The terminated swap agreements had associated unrealized gains at the termination date of approximately $10,100. These gains are included in Accumulated other comprehensive items, net and will be reclassified into earnings as reductions to interest expense from the date of termination through March 2024, the original maturity date of the swaps.

In April 2023, we entered into interest rate swap agreements to limit our exposure to changes in interest rates on a portion of our floating rate indebtedness. Under these interest rate swap agreements, we receive variable rate interest payments associated with the notional amount of each interest rate swap, based upon one-month Secured Overnight Financing Rate, in exchange for the payment of fixed interest rates as specified in the interest rate swap agreements. As of June 30, 2023, we have $350,000 in notional value outstanding associated with these interest rate swap agreements, which expire in February 2026.

In November 2022, we entered into a forward-starting interest rate swap agreement to limit our exposure to changes in interest rates on future borrowings under our Virginia Credit Agreement (as defined in Note 7 to Notes to Consolidated Financial Statements included in our Annual Report). This forward-starting interest rate swap agreement commenced in July 2023 and expires in October 2025. As of both June 30, 2023 and December 31, 2022, we have $4,800 in notional value outstanding on this forward-starting interest rate swap agreement.

We have designated each of the interest rate swap agreements described above as cash flow hedges. These interest rate swap agreements are marked to market at the end of each reporting period, representing the fair values of the interest rate swap agreements, and any changes in fair value are recognized as a component of Accumulated other comprehensive items, net. Unrealized gains are recognized as assets, while unrealized losses are recognized as liabilities.


IRON MOUNTAIN JUNE 30, 2023 FORM 10-Q									19

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

5. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (CONTINUED)

CROSS-CURRENCY SWAP AGREEMENTS DESIGNATED AS A HEDGE OF NET INVESTMENT

We utilize cross-currency interest rate swaps to hedge the variability of exchange rate impacts between the United States dollar and the Euro. As of both June 30, 2023 and December 31, 2022, we have approximately $469,200 in notional value outstanding on cross-currency interest rate swaps, with maturity dates ranging from August 2023 through February 2026.

We have designated these cross-currency swap agreements as hedges of net investments in certain of our Euro denominated subsidiaries and they require an exchange of the notional amounts at maturity. These cross-currency swap agreements are marked to market at the end of each reporting period, representing the fair values of the cross-currency swap agreements, and any changes in fair value are recognized as a component of Accumulated other comprehensive items, net. Unrealized gains are recognized as assets while unrealized losses are recognized as liabilities. The excluded component of our cross-currency swap agreements is recorded in Accumulated other comprehensive items, net and amortized to interest expense on a straight-line basis.

The fair value of derivative instruments recognized in our Condensed Consolidated Balance Sheets at June 30, 2023 and December 31, 2022, by derivative instrument, are as follows:


	JUNE 30, 2023				DECEMBER 31, 2022
DERIVATIVE INSTRUMENTS(1)	Assets		Liabilities		Assets		Liabilities
Cash Flow Hedges(2)
Interest rate swap agreements	$	6,852	$	—	$	12,995	$	489
Net Investment Hedges(3)
Cross-currency swap agreements	21,434		4,540		38,401		—

(1)Our derivative assets are included as a component of (i) Prepaid expenses and other or (ii) Other within Other assets, net and our derivative liabilities are included as a component of (i) Accrued expenses and other current liabilities or (ii) Other long-term liabilities in our Condensed Consolidated Balance Sheets. As of June 30, 2023, $1,459 is included within Prepaid expenses and other, $26,827 is included within Other assets and $4,540 is included within Accrued expense and other current liabilities. As of December 31, 2022, $2,606 is included within Prepaid expenses and other, $48,790 is included within Other assets and $489 is included within Other long-term liabilities.

(2)As of June 30, 2023, cumulative net gains recorded within Accumulated other comprehensive items, net associated with our interest rate swap agreements are $14,433, which include $7,581 related to our terminated interest rate swap agreements.

(3)As of June 30, 2023, cumulative net gains recorded within Accumulated other comprehensive items, net associated with our cross-currency swap agreements are $37,645, which include $20,751 related to the excluded component of our cross-currency swap agreements.

Unrealized gains (losses) recognized in Accumulated other comprehensive income during the three and six months ended June 30, 2023 and 2022, by derivative instrument, are as follows:


	THREE MONTHS ENDED JUNE 30,				SIX MONTHS ENDED JUNE 30,
DERIVATIVE INSTRUMENTS	2023		2022		2023		2022
Cash Flow Hedges
Interest rate swap agreements	$	7,896	$	3,932	$	4,454	$	15,402
Net Investment Hedges
Cross-currency swap agreements	(12,704)		30,279		(21,507)		35,575
Cross-currency swap agreements (excluded component)	5,817		—		11,651		—


IRON MOUNTAIN JUNE 30, 2023 FORM 10-Q									20

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

5. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (CONTINUED)

Gains (losses) recognized in Net income during the three and six months ended June 30, 2023 and 2022, by derivative instrument, are as follows:


		THREE MONTHS ENDED JUNE 30,				SIX MONTHS ENDED JUNE 30,
DERIVATIVE INSTRUMENTS	Location of gain (loss)	2023		2022		2023		2022
Cash Flow Hedges
Interest rate swap agreements	Interest expense	$	2,527	$	—	$	2,527	$	—
Net Investment Hedges
Cross-currency swap agreements (excluded component)	Interest expense	(5,817)		—		(11,651)		—


IRON MOUNTAIN JUNE 30, 2023 FORM 10-Q									21

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

6. DEBT

Long-term debt is as follows:


	JUNE 30, 2023								DECEMBER 31, 2022
	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)	$	679,500	$	(5,332)	$	674,168	$	679,500	$	1,072,200	$	(6,790)	$	1,065,410	$	1,072,200
Term Loan A(1)	234,375		—		234,375		234,375		240,625		—		240,625		240,625
Term Loan B(1)	662,685		(3,122)		659,563		663,250		666,073		(3,747)		662,326		666,750
Australian Dollar Term Loan	196,333		(543)		195,790		198,005		202,641		(633)		202,008		204,623
UK Bilateral Revolving Credit Facility	177,277		—		177,277		177,277		169,361		—		169,361		169,361
37/8% GBP Senior Notes due 2025 (the "GBP Notes")	506,506		(2,231)		504,275		472,474		483,888		(2,589)		481,299		445,206
47/8% Senior Notes due 2027 (the "47/8% Notes due 2027")(2)	1,000,000		(6,043)		993,957		932,500		1,000,000		(6,754)		993,246		917,500
51/4% Senior Notes due 2028 (the "51/4% Notes due 2028")(2)	825,000		(5,609)		819,391		770,344		825,000		(6,200)		818,800		754,875
5% Senior Notes due 2028 (the "5% Notes due 2028")(2)	500,000		(3,678)		496,322		461,250		500,000		(4,039)		495,961		450,000
7% Senior Notes due 2029 (the "7% Notes due 2029")(2)	1,000,000		(11,853)		988,147		992,500		—		—		—		—
47/8% Senior Notes due 2029 (the "47/8% Notes due 2029")(2)	1,000,000		(9,041)		990,959		892,500		1,000,000		(9,764)		990,236		865,000
51/4% Senior Notes due 2030 (the "51/4% Notes due 2030")(2)	1,300,000		(10,655)		1,289,345		1,166,750		1,300,000		(11,407)		1,288,593		1,111,500
41/2% Senior Notes due 2031 (the "41/2% Notes")(2)	1,100,000		(9,539)		1,090,461		940,500		1,100,000		(10,161)		1,089,839		891,000
5% Senior Notes due 2032 (the "5% Notes due 2032")	750,000		(11,858)		738,142		645,000		750,000		(12,511)		737,489		622,500
55/8% Senior Notes due 2032 (the "55/8% Notes")(2)	600,000		(5,275)		594,725		535,500		600,000		(5,566)		594,434		520,500
Real Estate Mortgages, Financing Lease Liabilities and Other	457,724		(483)		457,241		457,724		425,777		(578)		425,199		425,777
Accounts Receivable Securitization Program	343,100		(426)		342,674		343,100		314,700		(531)		314,169		314,700
Total Long-term Debt	11,332,500		(85,688)		11,246,812				10,650,265		(81,270)		10,568,995
Less Current Portion	(102,582)		—		(102,582)				(87,546)		—		(87,546)
Long-term Debt, Net of Current Portion	$	11,229,918	$	(85,688)	$	11,144,230			$	10,562,719	$	(81,270)	$	10,481,449

(1)Collectively, the “Credit Agreement”. The Credit Agreement consists of a revolving credit facility (the “Revolving Credit Facility”), a term loan A (the “Term Loan A”) and a term loan B (the "Term Loan B"). The Revolving Credit Facility and the Term Loan A are scheduled to mature on March 18, 2027. The Term Loan B is scheduled to mature on January 2, 2026. The remaining amount available for borrowing under the Revolving Credit Facility as of June 30, 2023 was $1,566,061 (which amount represents the maximum availability as of such date). The weighted average interest rate in effect under the Revolving Credit Facility was 7.0% and 6.2% as of June 30, 2023 and December 31, 2022, respectively.

(2)Collectively, the "Parent Notes". IMI is the direct obligor on the Parent Notes, which are fully and unconditionally guaranteed, on a senior basis, by IMI’s United States subsidiaries that represent the substantial majority of our United States operations (the "Note Guarantors"). These guarantees are joint and several obligations of the Note Guarantors. The remainder of our subsidiaries do not guarantee the Parent Notes.


IRON MOUNTAIN JUNE 30, 2023 FORM 10-Q									22

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

6. DEBT (CONTINUED)

See Note 7 to Notes to Consolidated Financial Statements included in our Annual Report for additional information regarding our long-term debt, including the direct obligors of each of our debt instruments as well as information regarding the fair value of our debt instruments (including the levels of the fair value hierarchy used to determine the fair value of our debt instruments). The levels of the fair value hierarchy used to determine the fair value of our debt as of June 30, 2023 are consistent with the levels of the fair value hierarchy used to determine the fair value of our debt as of December 31, 2022 (which are disclosed in our Annual Report).

MAY 2023 OFFERING

On May 15, 2023, IMI completed a private offering of:


SERIES OF NOTES			AGGREGATE PRINCIPAL AMOUNT			MATURITY DATE			INTEREST PAYMENT DUE			PAR CALL DATE(1)
7% Notes due 2029			$	1,000,000		February 15, 2029			February 15 and August 15			August 15, 2025

(1)We may redeem the 7% Notes due 2029 at any time, at our option, in whole or in part. Prior to the par call date, we may redeem the 7% Notes due 2029 at the redemption price or make-whole premium specified in the indenture governing the 7% Notes due 2029, together with accrued and unpaid interest to, but excluding, the redemption date. On or after the par call date, we may redeem the 7% Notes due 2029 at a price equal to 100% of the principal amount being redeemed, together with accrued and unpaid interest to, but excluding, the redemption date.

The 7% Notes due 2029 were issued at 100% of par. The total net proceeds of approximately $990,000 from the issuance of the 7% Notes due 2029, after deducting the initial purchasers' commissions, were used to repay a portion of the outstanding borrowings under our Revolving Credit Facility.


ACCOUNTS RECEIVABLE SECURITIZATION PROGRAM On June 8, 2023, we amended the Accounts Receivable Securitization Program (as defined in Note 7 to Notes to Consolidated Financial Statements included in our Annual Report) to increase the maximum borrowing capacity from $325,000 to $360,000. All other material terms of the Accounts Receivable Securitization Program remain the same as what was disclosed in Note 7 to Notes to Consolidated Financial Statements included in our Annual Report.									MAXIMUM AMOUNT $360,000 OUTSTANDING BORROWING $343,100 INTEREST RATE 6.2% As of June 30, 2023

LETTERS OF CREDIT

As of June 30, 2023, we had outstanding letters of credit totaling $40,410, of which $4,439 reduce our borrowing capacity under the Revolving Credit Facility. The letters of credit expire at various dates between September 2023 and July 2025.

DEBT COVENANTS

The Credit Agreement, 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 net total lease adjusted leverage ratio and a fixed charge coverage 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.


IRON MOUNTAIN JUNE 30, 2023 FORM 10-Q									23

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

6. DEBT (CONTINUED)

The Credit Agreement uses earnings before interest, taxes, depreciation and amortization and rent expense ("EBITDAR") based calculations and the bond indentures use earnings before interest, taxes, depreciation and amortization ("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. We are in compliance with our leverage and fixed charge coverage ratios under the Credit Agreement, our bond indentures and other agreements governing our indebtedness as of June 30, 2023. Noncompliance with these leverage and fixed charge coverage ratios would have a material adverse effect on our financial condition and liquidity.

7. COMMITMENTS AND CONTINGENCIES

We are involved in litigation from time to time in the ordinary course of business, including litigation arising from damage to customer assets in our facilities caused by fires and other natural disasters. While the outcome of litigation is inherently uncertain, we do not believe any current litigation will have a material adverse effect on our consolidated financial condition, results of operations or cash flows.

We have estimated a reasonably possible range for all loss contingencies and believe it is reasonably possible that we could incur aggregate losses in addition to amounts currently accrued for all matters up to an additional $18,000 over the next several years, of which certain amounts would be covered by insurance or indemnity arrangement.

8. STOCKHOLDERS' EQUITY MATTERS

In fiscal year 2022 and the six months ended June 30, 2023, our board of directors declared the following dividends:


DECLARATION DATE	DIVIDEND PER SHARE		RECORD DATE	TOTAL AMOUNT		PAYMENT DATE
February 24, 2022	$	0.6185	March 15, 2022	$	179,661	April 6, 2022
April 28, 2022	0.6185		June 15, 2022	179,781		July 6, 2022
August 4, 2022	0.6185		September 15, 2022	179,790		October 4, 2022
November 3, 2022	0.6185		December 15, 2022	179,866		January 5, 2023
February 23, 2023	0.6185		March 15, 2023	180,339		April 5, 2023
May 4, 2023	0.6185		June 15, 2023	180,493		July 6, 2023

On August 3, 2023, we declared a dividend to our stockholders of record as of September 15, 2023 of $0.65 per share, payable on October 5, 2023.


IRON MOUNTAIN JUNE 30, 2023 FORM 10-Q									24

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

9. SEGMENT INFORMATION

Our reportable segments as of December 31, 2022 are described in Note 11 to Notes to Consolidated Financial Statements included in our Annual Report and are as follows:

Global RIM Business
Global Data Center Business
Corporate and Other

An analysis of our business segment information and reconciliation to the accompanying Condensed Consolidated Financial Statements for the three and six months ended June 30, 2023 and 2022 is as follows:


	THREE MONTHS ENDED JUNE 30,				SIX MONTHS ENDED JUNE 30,
	2023		2022		2023		2022
Global RIM Business
Total Revenues	$	1,159,867	$	1,070,476	$	2,286,393	$	2,119,367
Adjusted EBITDA	499,062		469,368		976,846		918,163
Global Data Center Business
Total Revenues	$	118,033	$	100,088	$	230,338	$	197,075
Adjusted EBITDA	53,809		42,307		104,444		84,284
Corporate and Other
Total Revenues	$	80,036	$	118,970	$	155,554	$	221,138
Adjusted EBITDA	(77,213)		(56,969)		(144,824)		(116,747)
Total Consolidated
Total Revenues	$	1,357,936	$	1,289,534	$	2,672,285	$	2,537,580
Adjusted EBITDA	475,658		454,706		936,466		885,700


IRON MOUNTAIN JUNE 30, 2023 FORM 10-Q									25

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

9. SEGMENT INFORMATION (CONTINUED)

Adjusted EBITDA for each segment is defined 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 •Restructuring and other transformation •(Gain) loss on disposal/write-down of property, plant and equipment, net (including real estate)			•Other expense (income), net •Stock-based compensation expense

Internally, we use Adjusted EBITDA as the basis for evaluating the performance of, and allocating resources to, our operating segments.

A reconciliation of Net Income (Loss) to Adjusted EBITDA on a consolidated basis for the three and six months ended June 30, 2023 and 2022 is as follows:


	THREE MONTHS ENDED JUNE 30,				SIX MONTHS ENDED JUNE 30,
	2023		2022		2023		2022
Net Income (Loss)	$	1,143	$	201,858	$	66,678	$	243,565
Add/(Deduct):
Interest expense, net	144,178		115,057		281,347		229,499
Provision (benefit) for income taxes	4,255		18,083		21,013		28,163
Depreciation and amortization	195,367		178,254		377,461		361,869
Acquisition and Integration Costs	1,511		16,878		3,106		32,539
Restructuring and other transformation	45,588		—		82,501		—
(Gain) loss on disposal/write-down of property, plant and equipment, net (including real estate)	(1,505)		(51,249)		(14,566)		(51,954)
Other expense (income), net, excluding our share of losses (gains) from our unconsolidated joint ventures	58,694		(46,103)		76,185		7,412
Stock-based compensation expense	22,373		20,256		34,882		31,597
Our share of Adjusted EBITDA reconciling items from our unconsolidated joint ventures	4,054		1,672		7,859		3,010
Adjusted EBITDA	$	475,658	$	454,706	$	936,466	$	885,700


IRON MOUNTAIN JUNE 30, 2023 FORM 10-Q									26

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

9. SEGMENT INFORMATION (CONTINUED)

Information as to our revenues by product and service lines by segment for the three and six months ended June 30, 2023 and 2022 is as follows:


	THREE MONTHS ENDED JUNE 30,				SIX MONTHS ENDED JUNE 30,
	2023		2022		2023		2022
Global RIM Business
Records Management(1)	$	898,634	$	818,993	$	1,766,622	$	1,621,546
Data Management(1)	130,251		124,394		259,845		258,050
Information Destruction(1)(2)	130,982		127,089		259,926		239,771
Data Center(1)	—		—		—		—


Global Data Center Business
Records Management(1)	$	—	$	—	$	—	$	—
Data Management(1)	—		—		—		—
Information Destruction(1)	—		—		—		—
Data Center(1)	118,033		100,088		230,338		197,075


Corporate and Other
Records Management(1)	$	37,409	$	36,141	$	71,757	$	68,039
Data Management(1)	—		—		—		—
Information Destruction(1)(3)	42,627		82,829		83,797		153,099
Data Center(1)	—		—		—		—








Total Consolidated
Records Management(1)	$	936,043	$	855,134	$	1,838,379	$	1,689,585
Data Management(1)	130,251		124,394		259,845		258,050
Information Destruction(1)(2)(3)	173,609		209,918		343,723		392,870
Data Center(1)	118,033		100,088		230,338		197,075

(1)Each of these offerings has a component of revenue that is storage rental related and a component that is service revenue, except for information destruction, which does not have a storage rental component.

(2)Includes secure shredding services.

(3)Includes product revenue from ITRenew.


IRON MOUNTAIN JUNE 30, 2023 FORM 10-Q									27

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

10. RELATED PARTIES

In October 2020, in connection with the formation of the Frankfurt JV, we entered into agreements whereby we earn various fees, including (i) special project revenue and (ii) property management and construction and development fees for services we are providing to the Frankfurt JV (the "Frankfurt JV Agreements").

In March 2019, in connection with the formation of the MakeSpace JV, we entered into a storage and service agreement with the MakeSpace JV to provide certain storage and related services to the MakeSpace JV (the "MakeSpace Agreement"). In February 2022, in connection with the formation of the Clutter JV, we terminated the MakeSpace Agreement and entered into a storage and service agreement with the Clutter JV to provide certain storage and related services to the Clutter JV (the "Clutter Agreement"). On June 29, 2023, we completed the Clutter Acquisition and terminated the Clutter Agreement.

Revenue recognized in the accompanying Condensed Consolidated Statements of Operations under these agreements for the three and six months ended June 30, 2023 and 2022 is as follows (approximately):


	THREE MONTHS ENDED JUNE 30,				SIX MONTHS ENDED JUNE 30,
	2023		2022		2023		2022
Frankfurt JV Agreements(1)	$	800	$	5,700	$	1,700	$	12,800
MakeSpace Agreement and Clutter Agreement(2)	7,000		7,400		13,000		14,400

(1)Revenue associated with the Frankfurt JV Agreements is presented as a component of our Global Data Center Business segment.

(2)Revenue associated with the MakeSpace Agreement and the Clutter Agreement is presented as a component of our Global RIM Business segment.

11. RESTRUCTURING AND OTHER TRANSFORMATION

PROJECT MATTERHORN

In September 2022, we announced Project Matterhorn, a global program designed to accelerate the growth of our business. Project Matterhorn investments will focus on transforming our operating model to a global operating model. Project Matterhorn will focus on the formation of a solution-based sales approach that is designed to allow us to optimize our shared services and best practices to better serve our customers' needs. We will be investing to accelerate growth and to capture a greater share of the large, global addressable markets in which we operate. We expect to incur approximately $150,000 in costs annually related to Project Matterhorn from 2023 through 2025. Costs are comprised of (1) restructuring costs, which include (i) site consolidation and other related exit costs, (ii) employee severance costs and (iii) certain professional fees associated with these activities, and (2) other transformation costs, which include professional fees such as project management costs and costs for third party consultants who are assisting in the enablement of our growth initiatives. Total costs related to Project Matterhorn during the three and six months ended June 30, 2023 were $45,588 and $82,501, respectively, and are included in Restructuring and other transformation in our Condensed Consolidated Statement of Operations. There were no Restructuring and other transformation costs related to Project Matterhorn for the three and six months ended June 30, 2022.

Restructuring and other transformation related to Project Matterhorn included in the accompanying Condensed Consolidated Statement of Operations for the three and six months ended June 30, 2023, and from the inception of Project Matterhorn through June 30, 2023, is as follows:


	THREE MONTHS ENDED JUNE 30, 2023		SIX MONTHS ENDED JUNE 30, 2023		FROM INCEPTION OF PROJECT MATTERHORN THROUGH JUNE 30, 2023
Restructuring	$	16,127	$	28,084	$	41,376
Other transformation	29,461		54,417		83,058
Restructuring and other transformation	$	45,588	$	82,501	$	124,434


IRON MOUNTAIN JUNE 30, 2023 FORM 10-Q									28

Part I. Financial Information

IRON MOUNTAIN INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

11. RESTRUCTURING AND OTHER TRANSFORMATION (CONTINUED)

Restructuring costs for Project Matterhorn, included as a component of Restructuring and other transformation in the accompanying Condensed Consolidated Statement of Operations, by segment for the three and six months ended June 30, 2023, and from the inception of Project Matterhorn through June 30, 2023, is as follows:


	THREE MONTHS ENDED JUNE 30, 2023		SIX MONTHS ENDED JUNE 30, 2023		FROM INCEPTION OF PROJECT MATTERHORN THROUGH JUNE 30, 2023
Global RIM Business	$	15,000	$	24,525	$	37,608
Global Data Center Business	—		78		78
Corporate and Other	1,127		3,481		3,690
Total restructuring costs	$	16,127	$	28,084	$	41,376

Other transformation costs for Project Matterhorn, included as a component of Restructuring and other transformation in the accompanying Condensed Consolidated Statement of Operations, by segment for the three and six months ended June 30, 2023, and from the inception of Project Matterhorn through June 30, 2023, is as follows:


	THREE MONTHS ENDED JUNE 30, 2023		SIX MONTHS ENDED JUNE 30, 2023		FROM INCEPTION OF PROJECT MATTERHORN THROUGH JUNE 30, 2023
Global RIM Business	$	4,958	$	8,443	$	12,344
Global Data Center Business	498		1,368		1,426
Corporate and Other	24,005		44,606		69,288
Total other transformation costs	$	29,461	$	54,417	$	83,058

Accrued restructuring costs and accrued other transformation costs included in the accompanying Condensed Consolidated Balance Sheet as of June 30, 2023 were approximately $7,400 and $22,200, respectively.


IRON MOUNTAIN JUNE 30, 2023 FORM 10-Q									29

Part I. Financial Information

Previous: Cover and table of contents · Next: Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS