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What changed in Iron Mountain's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Iron Mountain's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+289 added−300 removedSource: 10-K (2024-02-22) vs 10-K (2023-02-23)

Top changes in Iron Mountain's 2023 10-K

289 paragraphs added · 300 removed · 230 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeConsumer Storage, provides on-demand, valet storage for consumers ("Consumer Storage") through a strategic partnership that utilizes data analytics and machine learning to provide effective customer acquisition and a convenient and seamless consumer storage experience. 2 IRON MOUNTAIN 2022 FORM 10-K Table of Contents Part I GLOBAL DATA CENTER BUSINESS The Global Data Center Business segment provides enterprise-class data center facilities and hyperscale-ready capacity to protect mission-critical assets and ensure the continued operation of our customers’ IT infrastructure with secure, reliable and flexible data center options.
Biggest changeGLOBAL DATA CENTER BUSINESS The Global Data Center Business segment provides enterprise-class data center facilities and hyperscale-ready capacity to protect mission-critical assets and ensure the continued operation of our customers’ IT infrastructure with secure, reliable and flexible data center options.
Historically, in our Records Management business, we have seen strong customer retention (of approximately 98%) and solid physical records retention; more than 50% of physical records that entered our facilities 15 years ago are still with us today. We have also seen strong customer retention in our Global Data Center Business.
Historically, in our Records Management business, we have seen strong customer retention (of approximately 98%) and solid physical records retention; more than 50% of physical records that entered our facilities approximately 15 years ago are still with us today. We have also seen strong customer retention in our Global Data Center Business.
COMMUNITY INVOLVEMENT We are committed to integrating responsible and sustainable practices throughout our organization to help our operations to have a positive impact on the environment and the communities in which we operate. We aim to give back to the communities where we live and work, and believe that this commitment helps in our efforts to attract and retain employees.
COMMUNITY INVOLVEMENT We are committed to integrating responsible and sustainable practices throughout our organization to help our operations have a positive impact on the environment and the communities in which we operate. We aim to give back to the communities where we live and work, and believe that this commitment helps in our efforts to attract and retain employees.
GLOBAL RIM BUSINESS The Global Records and Information Management ("Global RIM") Business segment includes several distinct offerings. Records Management, stores physical records and provides healthcare information services, vital records services, courier operations, and the collection, handling and disposal of sensitive documents ("Records Management") for customers in 60 countries around the globe.
GLOBAL RIM BUSINESS The Global Records and Information Management ("Global RIM") Business segment includes several distinct offerings. Records Management, stores physical records and provides information services, vital records services, courier operations, and the collection, handling and disposal of sensitive documents ("Records Management") for customers in 60 countries around the globe.
PROJECT MATTERHORN In September 2022, we announced a global program designed to accelerate the growth of our business ("Project Matterhorn"). Project Matterhorn investments will focus on transforming our operating model to a global operating model.
PROJECT MATTERHORN In September 2022, we announced a global program designed to accelerate the growth of our business ("Project Matterhorn"). Project Matterhorn investments focus on transforming our operating model to a global operating model.
Our business has a highly diverse customer base of more than 225,000 customers - with no single customer accounting for more than approximately 1% of revenue during the year ended December 31, 2022 - and operates in 60 countries globally. This presents a significant cross-sell opportunity for our expanding solutions, including digital, data center and ALM.
Our business has a highly diverse customer base of more than 225,000 customers - with no single customer accounting for more than approximately 1% of revenue during the year ended December 31, 2023 - and operates in 60 countries globally. This presents a significant cross-sell opportunity for our expanding solutions, including digital, data center and ALM.
IRON MOUNTAIN 2022 FORM 10-K 5 Table of Contents Part I BENEFIT PROGRAMS We provide our employees with benefits that are designed to support their overall physical, financial, emotional and social well-being. These benefits vary by location but generally include health and welfare benefits, paid time off, and programs to support financial security.
IRON MOUNTAIN 2023 FORM 10-K 5 Table of Contents Part I BENEFIT PROGRAMS We provide our employees with benefits that are designed to support their overall physical, financial, emotional and social well-being. These benefits vary by location but generally include health and welfare benefits, paid time off, and programs to support financial security.
BUSINESS SEGMENTS The amount of revenues derived from our business segments and other relevant data, including financial information about geographic areas and product and service lines, for the years ended December 31, 2022, 2021 and 2020, are set forth in Note 11 to Notes to Consolidated Financial Statements included in this Annual Report.
BUSINESS SEGMENTS The amount of revenues derived from our business segments and other relevant data, including financial information about geographic areas and product and service lines, for the years ended December 31, 2023, 2022 and 2021, are set forth in Note 11 to Notes to Consolidated Financial Statements included in this Annual Report.
The world’s most heavily regulated organizations have trusted us with their data centers for over 15 years, and as of December 31, 2022, five of the top 10 global cloud providers were Iron Mountain Data Center customers. CORPORATE AND OTHER Corporate and Other consists primarily of our Fine Arts and ALM businesses and other corporate items ("Corporate and Other").
The world’s most heavily regulated organizations have trusted us with their data centers for over 15 years, and as of December 31, 2023, five of the top 10 global cloud providers were Iron Mountain Data Center customers. CORPORATE AND OTHER Corporate and Other consists primarily of our Fine Arts and ALM businesses and other corporate items ("Corporate and Other").
Copies of our corporate governance guidelines, code of ethics and the charters of our audit, compensation, finance, nominating and governance, risk and safety, and technology committees are available on the "Investors" section of our website, www.ironmountain.com , under the heading "Corporate Governance". 8 IRON MOUNTAIN 2022 FORM 10-K Table of Contents Part I
Copies of our corporate governance guidelines, code of ethics and the charters of our audit, compensation, finance, nominating and governance, risk and safety, and technology committees are available on the "Investors" section of our website, www.ironmountain.com , under the heading "Corporate Governance". 8 IRON MOUNTAIN 2023 FORM 10-K Table of Contents Part I
For example, some of our current and formerly owned or leased properties were previously used by entities other than us for industrial or other purposes, or were affected by waste generated from nearby properties, that involved the use, storage, generation and/or disposal of hazardous substances and wastes, including petroleum products.
For example, some of our currently and formerly owned or leased properties were previously used by entities other than us for industrial or other purposes, or were affected by waste generated from nearby properties, that involved the use, storage, generation and/or disposal of hazardous substances and wastes, including petroleum products.
IRON MOUNTAIN 2022 FORM 10-K 3 Table of Contents Part I BUSINESS ATTRIBUTES Our business has the following attributes: Large, Diversified, Global Business The world’s most heavily regulated organizations trust us with the storage of their records. Our mission-critical storage offerings and related services generated approximately $5.1 billion in annual revenue in 2022.
IRON MOUNTAIN 2023 FORM 10-K 3 Table of Contents Part I BUSINESS ATTRIBUTES Our business has the following attributes: Large, Diversified, Global Business The world’s most heavily regulated organizations trust us with the storage of their records. Our mission-critical storage offerings and related services generated approximately $5.5 billion in annual revenue in 2023.
As of December 31, 2022, our data centers comply with one of the most comprehensive compliance programs in the industry, including enterprise-wide certified ISO 14001 and 50001 environmental and energy management systems.
As of December 31, 2023, our data centers comply with one of the most comprehensive compliance programs in the industry, including enterprise-wide certified ISO 14001 and 50001 environmental and energy management systems.
We also provide access to numerous carriers, cloud providers and peering exchanges with migration support and IT. 100% Green Powered Data Centers As of December 31, 2022, our Global Data Center platform continues to match 100% of its consumption with renewable electricity procurement and benefits from low power usage effectiveness ("PUE").
We also provide access to numerous carriers, cloud providers and peering exchanges with migration support. 100% Green Powered Data Centers As of December 31, 2023, our Global Data Center platform continues to match 100% of its consumption with renewable electricity procurement and benefits from low power usage effectiveness ("PUE").
With total potential capacity of 747 megawatts ("MW") in land and buildings currently owned or operated by us, we are among the largest global data center operators.
With total potential capacity of 861 megawatts ("MW") in land and buildings currently owned or operated by us, we are among the largest global data center operators.
Founded in an underground facility near Hudson, New York in 1951, Iron Mountain Incorporated, a Delaware corporation, has more than 225,000 customers in a variety of industries in 60 countries around the world, as of December 31, 2022.
Founded in an underground facility near Hudson, New York in 1951, Iron Mountain Incorporated, a Delaware corporation ("IMI"), has more than 225,000 customers in a variety of industries in 60 countries around the world, as of December 31, 2023.
We are a member of the FTSE4Good Index, MSCI World ESG Index, MSCI World Climate Change Index and MSCI USA ESG Select Index, each of which include companies that meet globally recognized corporate responsibility standards. A copy of our corporate responsibility report is available on the "About Us" section of our website, www.ironmountain.com , under the heading "Corporate Responsibility".
We are a member of the FTSE4Good Index, MSCI World ESG Index, MSCI World Climate Change Index and MSCI USA ESG Select Index, each of which include companies that meet globally recognized corporate responsibility standards. A copy of our sustainability responsibility report is available on the "Who we are" section of our website, www.ironmountain.com , under the heading "Sustainability".
Similarly, in our ALM business, we compete with both hyperscalers and individual corporate clients who manage their own asset recycling and management, as well as external competitors. HUMAN CAPITAL MANAGEMENT EMPLOYEES As of December 31, 2022, we employed approximately 10,000 employees in the United States and approximately 16,000 employees outside of the United States.
Similarly, in our ALM business, we compete with both hyperscalers and individual corporate clients who manage their own asset recycling and management, as well as external competitors. HUMAN CAPITAL MANAGEMENT EMPLOYEES As of December 31, 2023, we employed approximately 10,500 employees in the United States and approximately 16,500 employees outside of the United States.
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.
Project Matterhorn focuses 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 are investing to accelerate growth and to capture a greater share of the large, global addressable markets in which we operate.
Utilizing our global scale as well as over 70 years of customer trust to deliver differentiated data center offerings • We have made significant progress in scaling our Global Data Center Business through acquisitions and organic growth, with 21 operating data centers across 19 global markets, either directly or through unconsolidated joint ventures. • As of December 31, 2022, approximately 92% of our data center capacity was leased.
Utilizing our global scale as well as over 70 years of customer trust to deliver differentiated data center offerings • We have made significant progress in scaling our Global Data Center Business through acquisitions and organic growth, with 26 operating data centers across 21 global markets, either directly or through unconsolidated joint ventures. • As of December 31, 2023, approximately 93% of our data center capacity was leased.
IRON MOUNTAIN 2022 FORM 10-K 7 Table of Contents Part I STRONG ENVIRONMENTAL FOCUS • Iron Mountain provides a Green Power Pass solution in the Data Center market to help customers manage their carbon footprint. • A part of RE100 and EV100 Initiatives - commitment to use renewable energy sources for 100% of our worldwide electricity by 2040 and convert 100% of our company cars and 50% of our vans to electric vehicles by 2030. • Founding signatory of the 24/7 Carbon Free Energy (CFE) compact.
STRONG ENVIRONMENTAL FOCUS • Iron Mountain provides a Green Power Pass solution in the Data Center market to help customers manage their carbon footprint. • A part of RE100 and EV100 Initiatives - commitment to use renewable energy sources for 100% of our worldwide electricity by 2040 and convert 100% of our company cars and 50% of our vans to electric vehicles by 2030. • Founding signatory of the 24/7 Carbon Free Energy (CFE) compact.
The analysis resulted in the identification of three strategic areas where Iron Mountain should focus its future discussions regarding climate resilience, which include physical impacts, business strategy and innovation, and reputational and societal risks.
The analysis resulted in the identification of seven strategic themes where Iron Mountain should focus its future discussions regarding climate resilience, which include physical impacts, business strategy and innovation, and reputational and societal risks.
As of December 31, 2022, we stored approximately 730 million cubic feet of hardcopy records. Data Management, provides storage and rotation of backup computer media as part of corporate disaster recovery plans, including service and courier operations, server and computer backup services and related services offerings ("Data Management").
As of December 31, 2023, we stored approximately 731.5 million cubic feet of hardcopy records. Data Management, provides storage and rotation of backup computer media as part of corporate disaster recovery plans, including service and courier operations, server and computer backup services and related services offerings ("Data Management").
Significant Owner and Operator of Real Estate We operate approximately 97 million square feet of real estate worldwide. Our owned real estate footprint spans nearly 23 million square feet. Limited Revenue Cyclicality Historically, economic downturns have not significantly affected our storage rental business.
Significant Owner and Operator of Real Estate We operate approximately 98 million square feet of real estate worldwide. Our owned real estate footprint spans to over 23 million square feet. Limited Revenue Cyclicality Historically, economic downturns have not significantly affected our storage rental business.
As of December 31, 2022, approximately 400 employees were represented by unions in North America and approximately 1,200 employees were represented by unions in Latin America. All union employees are currently under renewed labor agreements or operating under an extension agreement.
As of December 31, 2023, approximately 400 employees were represented by unions in North America and approximately 725 employees were represented by unions in Latin America. All union employees are currently under renewed labor agreements or operating under an extension agreement.
These business lines, including Global Data Center, ALM, Fine Arts, Entertainment Services and Consumer Storage, represent markets with strong secular growth. 4 IRON MOUNTAIN 2022 FORM 10-K Table of Contents Part I In addition, our Global Data Center Business has the following attributes: Large Data Center Platform with Significant Expansion Opportunity As of December 31, 2022, we had 192 MW of leasable capacity with an additional 556 MW under construction or held for development.
These business lines, including Global Data Center, ALM and Consumer Storage, represent markets with strong secular growth. 4 IRON MOUNTAIN 2023 FORM 10-K Table of Contents Part I In addition, our Global Data Center Business has the following attributes: Large Data Center Platform with Significant Expansion Opportunity As of December 31, 2023, we had 250 MW of leasable capacity with an additional 611 MW under construction or held for development.
We currently serve customers across an array of market verticals - commercial, legal, financial, healthcare, insurance, life sciences, energy, business services, entertainment and government organizations, including approximately 95% of the Fortune 1000. As of December 31, 2022, we employed approximately 26,000 people.
We currently serve customers across an array of market verticals - commercial, legal, financial, healthcare, insurance, life sciences, energy, business services, entertainment and government organizations, including more than 90% of the Fortune 1000. As of December 31, 2023, we employed approximately 27,000 people.
The investments we outlined in our plan for Project Matterhorn (as defined below) have been enabled by the success of Project Summit, which was completed in 2021, and informed by our established leadership position in the physical storage business, our expanding services such as Global Digital Solutions and ALM and our significant progress in the Global Data Center Business.
The investments we outlined in our plan for Project Matterhorn (as defined below) have been informed by our established leadership position in the physical storage business, our expanding services such as Global Digital Solutions and ALM and our significant progress in the Global Data Center Business.
Continued growth in physical storage through revenue management as well as volume growth achieved in faster growing emerging markets and consumer and complementary business growth in developed markets • We are establishing and enhancing leadership positions in higher-growth markets such as central and eastern Europe, Latin America, Asia and Africa, through both organic expansion and acquisitions in countries where GDP growth is faster and outsourcing information management is at an earlier stage. • We continue to identify, acquire, incubate and scale complementary businesses and products to support our long-term growth objectives and drive solid returns on invested capital.
Continued revenue growth in physical storage through revenue management actions as well as volume growth achieved in faster growing markets and our consumer business, as well as complementary business growth • We are establishing and enhancing leadership positions in higher-growth markets such as central and eastern Europe, Latin America, Asia, the Middle East and Africa. • We continue to identify, acquire, incubate and scale complementary businesses and products to support our long-term growth objectives and drive solid returns on invested capital.
Total costs related to Project Matterhorn during the year ended December 31, 2022 were approximately $41.9 million.
Total costs related to Project Matterhorn during the years ended December 31, 2023 and 2022 were approximately $175.2 million and $41.9 million, respectively.
We are one of the top 30 buyers of renewable energy among the Fortune 1000 and offer the Green Power Pass, which allows customers to include the power they consume at any Iron Mountain data centers as green power in their CDP, RE100, GRI, or other sustainability reporting.
We offer the Green Power Pass, which allows customers to include the power they consume at any Iron Mountain data centers as green power in their CDP, RE100, GRI or other sustainability reporting.
As of end 2022, Iron Mountain has over 100 locations across the United States with the ability to track and match renewable energy usage on an hourly basis. • 80% of our global electricity use was from renewable sources in 2021. • Reduced GHG emissions by 60% (since 2016) as part of our Science Based Target and net zero by 2040 commitment. • Received a 100% on the Human Rights Campaign Corporate Equality Index every year since 2018.
As of 2023, Iron Mountain has over 130 locations across the United States with the ability to track and match renewable energy usage on an hourly basis. • 85% of our global electricity use was from renewable sources in 2022. • Reduced Scope 1 and 2 greenhouse gas (GHG) emissions by 32% compared to our 2016 baseline as part of our net zero by 2040 commitment. • Received 90% or greater on the Human Rights Campaign Corporate Equality Index every year since 2018.
We are a different company to the one we have been in our past. The strategic journey we are on is driving this change and our focus remains on the four pillars outlined below to grow our business.
The strategic journey we are on is driving this change and our focus remains on the four pillars outlined below to continue to grow and evolve our business.
BUSINESS STRATEGY OVERVIEW Our company has been a market leader in the physical ecosystem supporting information storage and retrieval, as most businesses have relied on paper documents or computer tapes to store their valuable information. Over time, customers are increasing their digital information, with the new information storage ecosystem being a hybrid of physical and digital media.
We have been organized and have operated as a REIT beginning with our taxable year ended December 31, 2014. BUSINESS STRATEGY OVERVIEW Our company has been a market leader in the physical ecosystem supporting information storage and retrieval, as most businesses have relied on paper documents or computer tapes to store their valuable information.
We are listed on the New York Stock Exchange (the "NYSE") and are a constituent of the Standard & Poor’s 500 Index and the MSCI REIT index. As of December 31, 2022, we were number 652 on the Fortune 1000. We have been organized and have operated as a REIT beginning with our taxable year ended December 31, 2014.
We are listed on the New York Stock Exchange (the "NYSE") and are a constituent of the Standard & Poor’s 500 Index and the Morgan Stanley Capital International ("MSCI") REIT index. As of December 31, 2023, we were number 641 on the Fortune 1000.
We have publicly adopted 20 goals to address our environmental footprint, corporate philanthropy and volunteerism and DEI practices. As signatories of The Climate Pledge, we are on a path to reach net zero greenhouse gas emissions by 2040.
We have successfully achieved seven of the ambitious sustainability goals we set in 2021 to address our environmental footprint, corporate philanthropy, volunteerism and DEI practices. We are committed to reach net zero greenhouse gas emissions by 2040.
Corporate and Other also includes costs related to executive and staff functions, including finance, human resources and IT, which benefit the enterprise as a whole.
Our ALM services focus on protecting and eradicating customer data while maintaining strong, auditable and transparent chain of custody practices. Corporate and Other also includes costs related to executive and staff functions, including finance, human resources and IT, which benefit the enterprise as a whole.
Iron Mountain is committed to transparent reporting on sustainability and corporate responsibility efforts in accordance with the guidelines of the Global Reporting Initiative. Our corporate responsibility report highlights our progress against key measures of success for our efforts in the community, our environment, and for our people.
Our annual sustainability report, aligned with the Global Reporting Initiative framework, highlights our progress against key measures of success for our community, environment and people.
We also have a Global DEI Council which is comprised of the executive team and is chaired by our Chief Executive Officer. The Global DEI Council supports our DEI strategy and initiatives, monitors the progress of DEI initiatives and the enterprise goals, ensures accountability based upon identified measures and goals and communicates DEI progress to stakeholders.
The Global DEI Council supports our DEI strategy and initiatives, monitors the progress of DEI initiatives and enterprise goals, ensures accountability based on identifiable measures and goals and communicates DEI progress to stakeholders.
IRON MOUNTAIN 2022 FORM 10-K 1 Table of Contents Part I Developing and offering new products and services that allow our customers to achieve reliable and secure information management solutions in an increasingly hybrid physical and digital world • Our customers are faced with navigating a more complex regulatory environment, and one in which hybrid physical and digital solutions have become the norm.
IRON MOUNTAIN 2023 FORM 10-K 1 Table of Contents Part I Establishing and maintaining a leadership position in critical digital infrastructure as well as developing and offering new products and services that allow our customers to achieve reliable and secure information management solutions in an increasingly hybrid physical and digital world • We are positioned to take advantage of the secular growth trends of the changing nature of digital infrastructure.
Property is insured based upon the replacement cost of real and personal property, including leasehold improvements, business income loss and extra expense.
Property insurance is purchased on a comprehensive basis, including flood and earthquake (including excess coverage), subject to certain policy conditions, sublimits and deductibles. Property is insured based upon the replacement cost of real and personal property, including leasehold improvements, business income loss and extra expense.
We offer philanthropic support to our global community through our Living Legacy Initiative, which is our commitment to help preserve and make accessible cultural and historical information and artifacts. We encourage volunteerism in the communities in which we live and work through our Moving Mountains volunteer program, offering paid time off for employees to help community-based and civic-minded organizations.
We offer philanthropic support to our global community through our Living Legacy Initiative, which is our commitment to help preserve and make accessible cultural and historical information and artifacts.
Other types of insurance that we carry, which are also subject to certain policy conditions, sublimits and deductibles, include medical, workers’ compensation, general liability, umbrella, automobile, professional, cyber, warehouse legal liability and directors’ and officers’ liability policies. 6 IRON MOUNTAIN 2022 FORM 10-K Table of Contents Part I GOVERNMENT REGULATION We are required to comply with numerous laws and regulations covering a wide variety of subject matters which may have a material effect on our capital expenditures, earnings and competitive position.
Other types of insurance that we carry, which are also subject to certain policy conditions, sublimits and deductibles, include medical, workers’ compensation, general liability, umbrella, automobile, professional, cyber, warehouse legal liability and directors’ and officers’ liability policies.
ALM services are enabled by: secure logistics, chain of custody and complete asset traceability practices, environmentally-responsible asset processing and recycling, and data sanitization and asset refurbishment services that enable value recovery through asset remarketing. Our ALM services focus on protecting and eradicating customer data while maintaining strong, auditable and transparent chain of custody practices.
ALM services are enabled by: secure logistics, chain of custody and complete asset traceability practices, environmentally-responsible asset processing and recycling, and data sanitization and asset refurbishment services that enable value recovery through asset remarketing. In addition, ALM also offers workplace IT asset management services including storage, configuration, deployment, device support and end-of-life disposition for employee IT devices.
Entertainment Services, entertainment and media services which help industry clients store, safeguard and deliver physical media of all types, and provides digital content repository systems that house, distribute, and archive key media assets ("Entertainment Services").
Entertainment Services, entertainment and media services which help industry clients store, safeguard and deliver physical media of all types, and provides digital content repository systems that house, distribute, and archive key media assets ("Entertainment Services"). 2 IRON MOUNTAIN 2023 FORM 10-K Table of Contents Part I Consumer Storage, provides on-demand, valet storage for consumers ("Consumer Storage") utilizing data analytics and machine learning to provide effective customer acquisition and a convenient and seamless consumer storage experience.
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DIVERSITY, EQUITY AND INCLUSION At Iron Mountain, we believe that an inclusive environment with diverse teams produces more creative solutions, results in better, more innovative products and services and is crucial to our efforts to attract and retain key talent.
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Over time, customers are increasing their digital information, with the new information storage ecosystem being a hybrid of physical and digital media. We are a different company to the one we have been in our past.
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As one of our five core company values, Promoting Inclusion and Teamwork is a behavior all of our employees are expected to demonstrate every day. We have prioritized diversity, equity and inclusion ("DEI") as part of our corporate-wide strategic goals.
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We continue to scale our digital solutions business to complement our existing offerings in records and information management, in addition to expanding our existing leadership capabilities in our ALM, including enterprise secure IT asset disposition, and data center businesses in order to respond to our customers’ growing interest and need to react to environmental, social and corporate governance considerations.
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Steps we have taken to create and sustain a more diverse, equitable and inclusive environment include: hiring a Global Chief Diversity, Equity & Inclusion Officer with significant DEI experience to lead our cultural transformation, and to lead us on the path to creating an environment of inclusiveness and belonging.
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This full suite of complementary businesses puts Iron Mountain in a unique position to cross sell our products and services to our customers. • Our customers are faced with navigating a more complex regulatory environment, and one in which hybrid physical and digital solutions have become the norm.
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Our Global Chief Diversity, Equity & Inclusion Officer works closely with our executive team, Human Resources, Environmental, Social and Governance ("ESG") and the DEI Councils and our Employee Resource Groups, all of whom support our DEI strategy in a variety of capacities.
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As of October 2023, we are in the top 30 of the Environmental Protection Agency's National Top 100 Partners list, with green power comprising 94% of our company-wide U.S. electricity use.
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In 2021, we established the following goals: by 2025, women will represent at least 40% of global leadership roles and individuals from historically underrepresented groups will represent at least 30% of US leadership roles. The Global DEI Council is not only responsible for providing the resources to help us reach our goals but also acting aggressively to retain our talent.
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DIVERSITY, EQUITY AND INCLUSION We continue to prioritize diversity, equity, and inclusion ("DEI") as core principles of our corporate strategic goals. Our Global DEI Council is made up of the Executive Leadership Team and is chaired by Iron Mountain President and CEO Bill Meaney.
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We review and revise our systems, policies and processes to ensure that our organizational structures facilitate inclusiveness and accountability. We ensure that our recruiting efforts reflect our diversity goals and we launch, expand and support Employee Resource Groups, who meet and connect on shared characteristics and life experiences that can prove impactful to our business, our customers and our employees.
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In June 2023, we committed to investing in the growth and wellbeing of our female leaders (Directors and VPs) by funding a comprehensive development program, Women in Leadership ("WiL"). WiL is specifically designed to support women in their career progression and prepare them for critical leadership roles.
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INSURANCE For strategic risk transfer purposes, we maintain a comprehensive insurance program with insurers that we believe to be reputable and that have adequate capitalization in amounts that we believe to be appropriate. Property insurance is purchased on a comprehensive basis, including flood and earthquake (including excess coverage), subject to certain policy conditions, sublimits and deductibles.
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We also formally expanded our investment in our Employee Resource Groups ("ERGs") to elevate their impact and reach. Our ERGs support Iron Mountain’s DEI strategy by fostering a sense of belonging for their colleagues, increasing talent attraction, retention, and development efforts and being supportive partners.
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We are ranked 44th on Newsweek’s 2023 list of America’s Most Responsible Companies, and are ranked 4th within our industry. We have received a 100% score on the Human Rights Campaign Corporate Equality Index every year since 2018.
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Iron Mountain scored 90% on the Human Rights Campaign’s Corporate Equality Index for LGBTQ+ and placed as a top scorer on the 2023 Disability Equality Index.
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We also received the JPMorgan Chase Strategic Diverse Gold Supplier Award for our commitment to supplier diversity, and the contributions of our very own supplier diversity program where we exceeded our target of $70 million in supplier diversity spend during fiscal 2023.
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In July 2023, Bill Meaney was named among the best CEOs for diversity in a large company by Comparably, a ZoomInfo Technologies company that collects data on wage equity and company culture. In addition, Iron Mountain was named among Comparably's 2023 Best Companies for Women and Best Companies for Diversity.
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We encourage volunteerism in the communities in which we live and work through our Moving Mountains volunteer program, offering paid time off for employees to help community-based and civic-minded organizations. 6 IRON MOUNTAIN 2023 FORM 10-K Table of Contents Part I INSURANCE For strategic risk transfer purposes, we maintain a comprehensive insurance program with insurers that we believe to be reputable and which have adequate capitalization in amounts that we believe to be appropriate.
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GOVERNMENT REGULATION We are required to comply with numerous laws and regulations covering a wide variety of subject matters which may have a material effect on our capital expenditures, earnings and competitive position.
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In 2023, Iron Mountain received the Low Carbon Hero Award recognizing our efforts to implement social and technical practices to reduce our carbon footprint. Also in 2023, Iron Mountain joined EV100 and is committed to electrifying 100% of our company cars and 50% of our vans by 2030.
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With operations in 60 countries, Iron Mountain was recognized as the most international committed fleet in the 2023 EV100 Annual Report. IRON MOUNTAIN 2023 FORM 10-K 7 Table of Contents Part I Iron Mountain is committed to transparent reporting on our sustainability efforts and we leverage widely adopted reporting frameworks to report annually on our results.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAttacks on our internal IT systems could damage our reputation, cause us to lose revenues, and adversely affect our business, financial condition and results of operations. Our reputation for providing secure information storage to customers is critical to the success of our business.
Biggest changeFinally, emerging artificial intelligence ("AI") regulations, increasing use of AI and generative AI tools and their integration into our businesses may require additional resources and create additional compliance and cybersecurity risks. Attacks on our internal IT systems could damage our reputation, cause us to lose revenues, and adversely affect our business, financial condition and results of operations.
Such risks include: • acquisition and occupancy costs that make it difficult to meet anticipated margins and difficulty locating suitable facilities due to a relatively small number of available buildings having the desired characteristics in some real estate markets; • increases in rent expense and property taxes as a result of the increasing demand for industrial real estate; • uninsured losses or damage to our storage facilities due to an inability to obtain full coverage on a cost-effective basis for some casualties, such as fires, hurricanes and earthquakes, or any coverage for certain losses, such as losses from riots or terrorist activities; • inability to use our real estate holdings effectively and costs associated with vacating or consolidating facilities if the demand for physical storage were to diminish; • liability under environmental laws for the costs of investigation and cleanup of contaminated real estate owned or leased by us, whether or not (i) we know of, or were responsible for, the contamination, or (ii) the contamination occurred while we owned or leased the property; and • costs of complying with fire protection and safety standards.
Such risks include: • acquisition and occupancy costs that make it difficult to meet anticipated margins and difficulty locating suitable facilities due to a relatively small number of available buildings having the desired characteristics in some real estate markets; • increases in rent expense and property taxes as a result of the increasing demand for industrial real estate; • uninsured losses or damage to our facilities due to an inability to obtain full coverage on a cost-effective basis for some casualties, such as fires, hurricanes and earthquakes, or any coverage for certain losses, such as losses from riots or terrorist activities; • inability to use our real estate holdings effectively and costs associated with vacating or consolidating facilities if the demand for physical storage were to diminish; • liability under environmental laws for the costs of investigation and cleanup of contaminated real estate owned or leased by us, whether or not (i) we know of, or were responsible for, the contamination, or (ii) the contamination occurred while we owned or leased the property; and • costs of complying with fire protection and safety standards.
The global nature of our business and our growth strategy, which includes continued acquisitions and investments in countries where we do not currently operate, is subject to numerous risks, including: • fluctuations of currency exchange rates in the markets in which we operate; • the impact of laws and regulations that apply to us in countries where we operate; in particular, we are subject to sanctions and anti-corruption laws, such as the Foreign Corrupt Practices Act and the United Kingdom Bribery Act, and, although we have implemented internal controls, policies and procedures and training to deter prohibited practices, our employees, partners, contractors or agents may violate or circumvent such policies and the law; • costs and difficulties associated with managing global operations, including cross border sales; • the volatility of certain economies in which we operate; • political uncertainties and changes in the global political climate or other global events, such as trade wars or global pandemics, which may create additional risk in relation to our global operations, which may become more pronounced as we consolidate operations across countries and need to move data across borders; • the risk that business partners upon whom we depend for technical assistance or management and acquisition expertise in some markets will not perform as expected; • difficulties attracting and retaining local management and key employees to operate our business in certain countries; and • cultural differences and differences in business practices and operating standards, as well as risks and challenges in expanding into countries where we have no prior operational experience.
The global nature of our business and our growth strategy, which includes continued acquisitions and investments in countries where we do not currently operate, is subject to numerous risks, including: • fluctuations of currency exchange rates in the markets in which we operate; • the impact of laws and regulations that apply to us in countries in which we operate or have made investments; in particular, we are subject to sanctions and anti-corruption laws, such as the Foreign Corrupt Practices Act and the United Kingdom Bribery Act, and, although we have implemented internal controls, policies and procedures and training to deter prohibited practices, our employees, partners, contractors or agents may violate or circumvent such policies and the law; • costs and difficulties associated with managing global operations, including cross-border sales; • the volatility of certain economies in which we operate; • political uncertainties and changes in the global political climate or other global events, such as trade wars or global pandemics, which may create additional risk in relation to our global operations, which may become more pronounced as we consolidate operations across countries and need to move data across borders; • the risk that business partners upon whom we depend for technical assistance or management and acquisition expertise in some markets will not perform as expected; • difficulties attracting and retaining local management and key employees to operate our business in certain countries; and • cultural differences and differences in business practices and operating standards, as well as risks and challenges in expanding into countries where we have no prior operational experience.
Although we seek to prevent and detect attempts by unauthorized users to gain access to our IT systems, and incur significant costs to do so, our IT and network infrastructure has in the past been and may in the future be vulnerable to attacks by hackers, including state-sponsored organizations with significant financial and technological resources, breaches due to employee error, fraud or malice or other disruptions (including, but not limited to, computer viruses and other malware, denial of service, and ransomware), which may involve a privacy breach requiring us to notify regulators, clients or employees and enlist identity theft protection.
Although we seek to prevent and detect attempts by unauthorized users to gain access to our IT systems, and incur significant costs to do so, our IT and network infrastructure has in the past been and may in the future be vulnerable to attacks by hackers, including state-sponsored organizations with significant financial and technological resources, breaches due to employee error, fraud or malice or other disruptions (including, but not limited to, computer viruses and other malware, denial of service, and ransomware), which may involve a breach requiring us to notify regulators, clients or employees and enlist identity theft protection.
Our customers rely on us to securely store and timely retrieve their critical information, and, while we maintain disaster recovery and business continuity plans that would be implemented in these situations, these unexpected events could result in customer service disruption, physical damage to one or more key operating facilities and the information stored in those facilities, the temporary closure of one or more key operating facilities or the temporary disruption of information systems, each of which could negatively impact our reputation and results of operations.
Our customers rely on us to securely store and timely retrieve their critical information, and, while we maintain disaster recovery and business continuity plans that would be implemented in these situations, these unexpected events could result in customer service disruption, physical damage to one or more key operating facilities and the information stored in those facilities, the closure of one or more key operating facilities or the disruption of information systems, each of which could negatively impact our reputation and results of operations.
In addition, if we are successful in winning customers from competitors, the process of moving their stored records into our facilities is often costly and time consuming. We also compete, in some of our business lines, with our current and potential customers’ internal storage and information management services capabilities and their cloud-based alternatives.
In addition, if we are successful in winning record storage customers from competitors, the process of moving their stored records into our facilities is often costly and time consuming. We also compete, in some of our business lines, with our current and potential customers’ internal storage and information management services capabilities and their cloud-based alternatives.
Moreover, as we expand our operations into new businesses, including digital solutions and the storage of valuable items, and respond to customer demands for higher limitation of liability, our exposure to contracts with higher or no limitations of liability and disputes with customers over contract interpretation may increase.
Moreover, as we expand our operations into new businesses, including digital solutions, ALM, and the storage of valuable items, and respond to customer demands for higher limitation of liability, our exposure to contracts with higher or no limitations of liability and disputes with customers over contract interpretation may increase.
More favorable rates will nevertheless continue to apply to regular corporate "qualified" dividends, which may cause some investors to perceive that an investment in a REIT is less attractive than an investment in a non-REIT entity that pays dividends, thereby reducing the demand and market price of our common stock. 18 IRON MOUNTAIN 2022 FORM 10-K Table of Contents Part I The ownership and transfer restrictions contained in our certificate of incorporation may not protect our qualification for taxation as a REIT, could have unintended antitakeover effects and may prevent our stockholders from receiving a takeover premium.
More favorable rates will nevertheless continue to apply to regular corporate "qualified" dividends, which may cause some investors to perceive that an investment in a REIT is less attractive than an investment in a non-REIT entity that pays dividends, thereby reducing the demand and market price of our common stock. 18 IRON MOUNTAIN 2023 FORM 10-K Table of Contents Part I The ownership and transfer restrictions contained in our certificate of incorporation may not protect our qualification for taxation as a REIT, could have unintended antitakeover effects and may prevent our stockholders from receiving a takeover premium.
We have an established privacy compliance framework and devote substantial resources, and may in the future have to devote significant additional resources, to facilitate compliance with global laws and regulations, our customers’ data privacy and security demands, and to investigate, defend or remedy actual or alleged violations or breaches.
We have an established privacy compliance framework and devote substantial resources, and may in the future have to devote significant additional resources, to facilitate compliance with global laws and regulations, our customers’ data privacy, data residency and security demands, and to investigate, defend or remedy actual or alleged violations or breaches.
In addition, our cash flows from operations may be insufficient to fund required distributions as a result of differences in timing between the actual receipt of income and the payment of expenses and the recognition of income and expenses for federal income tax purposes, or the effect of nondeductible expenditures.
In addition, our cash flows from operations may be insufficient to fund required distributions as a result of nondeductible expenditures or as a result of differences in timing between the actual receipt of income and the payment of expenses and the recognition of income and expenses for federal income tax purposes.
The process of integrating acquired businesses, particularly in new markets or for new offerings, may involve unforeseen difficulties and may require a disproportionate amount of our management’s attention and our financial and other resources. 10 IRON MOUNTAIN 2022 FORM 10-K Table of Contents Part I For example, the success of our significant acquisitions depends, in large part, on our ability to realize the anticipated benefits, including cost savings or revenue acceleration from combining the acquired businesses with ours.
The process of integrating acquired businesses, particularly in new markets or for new offerings, may involve unforeseen difficulties and may require a disproportionate amount of our management’s attention and our financial and other resources. 10 IRON MOUNTAIN 2023 FORM 10-K Table of Contents Part I For example, the success of our significant acquisitions depends, in large part, on our ability to realize the anticipated benefits, including cost savings or revenue acceleration from combining the acquired businesses with ours.
These joint ventures can result in our holding non-controlling interests in, or having shared responsibility for managing the affairs of, a property or portfolio of properties, business, partnership, joint venture or other entity.
These ventures can result in our holding non-controlling interests in, or having responsibility for managing the affairs of, a property or portfolio of properties, business, partnership, joint venture or other entity.
While volumes in our Global RIM Business segment were relatively steady in 2022 and we expect them to remain relatively consistent in the near term, we can provide no assurance that our customers will continue to store most or a portion of their records as paper documents or as tapes, or that the paper documents or tapes they do store with us will require our storage related services at the same levels as they have in the past.
While volumes in our Global RIM Business segment were relatively steady in 2023 and we expect them to remain relatively consistent in the near term, we can provide no assurance that our customers will continue to store most or a portion of their records as paper documents or as tapes, or that the paper documents or tapes they do store with us will require our storage related services at the same levels as they have in the past.
In addition, future regulatory action and environmental laws may impose costs for environmental compliance that do not exist today. 14 IRON MOUNTAIN 2022 FORM 10-K Table of Contents Part I Unexpected events, including those resulting from climate change or geopolitical events, could disrupt our operations and adversely affect our reputation and results of operations.
In addition, future regulatory action and environmental laws may impose costs for environmental compliance that do not exist today. 14 IRON MOUNTAIN 2023 FORM 10-K Table of Contents Part I Unexpected events, including those resulting from climate change or geopolitical events, could disrupt our operations and adversely affect our reputation and results of operations.
Each of these factors may result in returns on these investments being less than we expect or in losses, and our financial and operating results may be adversely affected. 12 IRON MOUNTAIN 2022 FORM 10-K Table of Contents Part I Significant costs or disruptions at our data centers could adversely affect our business, financial condition and results of operations.
Each of these factors may result in returns on these investments being less than we expect or in losses, and our financial and operating results may be adversely affected. 12 IRON MOUNTAIN 2023 FORM 10-K Table of Contents Part I Significant costs or disruptions at our data centers could adversely affect our business, financial condition and results of operations.
These restrictions and our long-term commitment to reduce our leverage ratio may adversely affect our ability to pursue our acquisition and other growth strategies, including our strategic growth plan. We may not have the ability to raise the funds necessary to finance the repurchase of outstanding senior notes upon a change of control event as required by our indentures.
These restrictions and our long-term commitment to maintain our leverage ratio may adversely affect our ability to pursue our acquisition and other growth strategies, including our strategic growth plan. We may not have the ability to raise the funds necessary to finance the repurchase of outstanding senior notes upon a change of control event as required by our indentures.
IRON MOUNTAIN 2022 FORM 10-K 9 Table of Contents Part I Our customers may shift from paper and tape storage to alternative technologies that may shift our revenue mix away from storage revenue. We derive substantial revenues from rental fees for the storage of physical records and computer backup media and from storage related services.
IRON MOUNTAIN 2023 FORM 10-K 9 Table of Contents Part I Our customers may shift from paper and tape storage to alternative technologies that may shift our revenue mix away from storage revenue. We derive substantial revenues from rental fees for the storage of physical records and computer backup media and from storage related services.
In addition, we may be required to commit significant operational and financial resources in connection with the organic growth of our Global Data Center Business, generally 12 to 18 months in advance of securing customer contracts, and we may not have enough customer demand to support these data centers when they are built.
In addition, we may be required to commit significant operational and financial resources in connection with the organic growth of our Global Data Center Business, generally 12 to 24 months in advance of securing customer contracts, and we may not have enough customer demand to support these data centers when they are built.
IRON MOUNTAIN 2022 FORM 10-K 19 Table of Contents Part I We face competition for customers. We compete with multiple businesses in all geographic areas where we operate; our current or potential customers may choose to use those competitors instead of us.
IRON MOUNTAIN 2023 FORM 10-K 19 Table of Contents Part I We face competition for customers. We compete with multiple businesses in all geographic areas where we operate; our current or potential customers may choose to use those competitors instead of us.
Accordingly, funds available for investment and distributions to stockholders could be reduced. 16 IRON MOUNTAIN 2022 FORM 10-K Table of Contents Part I As a REIT, failure to make required distributions would subject us to federal corporate income tax.
Accordingly, funds available for investment and distributions to stockholders could be reduced. 16 IRON MOUNTAIN 2023 FORM 10-K Table of Contents Part I As a REIT, failure to make required distributions would subject us to federal corporate income tax.
IRON MOUNTAIN 2022 FORM 10-K 13 Table of Contents Part I Our ALM business may be subject to additional risks, including those related to its client and geographic concentration, government trade policies, and macroeconomic conditions.
IRON MOUNTAIN 2023 FORM 10-K 13 Table of Contents Part I Our ALM business may be subject to additional risks, including those related to its client and geographic concentration, government trade policies, and macroeconomic conditions.
IRON MOUNTAIN 2022 FORM 10-K 11 Table of Contents Part I As a global company, we are subject to the unique risks of operating in many countries. As of December 31, 2022, we operated in 60 countries.
IRON MOUNTAIN 2023 FORM 10-K 11 Table of Contents Part I As a global company, we are subject to the unique risks of operating in many countries. As of December 31, 2023, we operated in 60 countries.
This may restrict our ability to acquire certain businesses, enter into joint ventures or acquire minority interests of companies. Furthermore, acquisition opportunities in domestic and international markets may be adversely affected if we need or require the target company to comply with some REIT requirements prior to closing.
This may restrict our ability to acquire certain businesses, enter into joint ventures or co-investment vehicles, or acquire minority interests of companies. Furthermore, acquisition opportunities in domestic and international markets may be adversely affected if we need or require the target company to comply with some REIT requirements prior to closing.
As of December 31, 2022, we operated approximately 1,400 facilities worldwide, including approximately 600 in the United States, and face special risks attributable to the real estate we own or lease.
As of December 31, 2023, we operated approximately 1,400 facilities worldwide, including approximately 600 in the United States, and face special risks attributable to the real estate we own or lease.
Our Credit Agreement and our indentures contain covenants restricting or limiting our ability to, among other things: • incur additional indebtedness; • pay dividends or make other restricted payments; • make asset dispositions; • create or permit liens; • sell, transfer or exchange assets; • guarantee certain indebtedness; • make acquisitions and other investments; and • enter into partnerships and joint ventures.
Our Credit Agreement and our indentures contain covenants restricting or limiting our ability to, among other things: • incur additional indebtedness; • pay dividends or make other restricted payments; • make asset dispositions; • create or permit liens; • sell, transfer or exchange assets; • guarantee certain indebtedness; • make acquisitions and other investments; and • enter into partnerships, joint ventures and co-investment vehicles.
IRON MOUNTAIN 2022 FORM 10-K 17 Table of Contents Part I In addition, a significant amount of our income and cash flows from our TRSs is generated from our international operations.
IRON MOUNTAIN 2023 FORM 10-K 17 Table of Contents Part I In addition, a significant amount of our income and cash flows from our TRSs is generated from our international operations.
As a result, its ability to make payments on its debt obligations will be dependent upon the receipt of sufficient funds from its subsidiaries, whose ability to distribute funds may be limited by local capital requirements, joint venture structures and other applicable restrictions.
As a result, its ability to make payments on its debt obligations will be dependent upon the receipt of sufficient funds from its subsidiaries, whose ability to distribute funds may be limited by local capital requirements, joint venture and co-investment vehicle structures and other applicable restrictions.
IRON MOUNTAIN 2022 FORM 10-K 15 Table of Contents Part I Restrictive debt covenants may limit our ability to pursue our growth strategy.
IRON MOUNTAIN 2023 FORM 10-K 15 Table of Contents Part I Restrictive debt covenants may limit our ability to pursue our growth strategy.
If we are not able to continue and effectively manage pricing, our results of operations could be adversely affected and we may not be able to execute on our strategic growth plan. Our customer contracts may not always limit our liability and may sometimes contain terms that could lead to disputes in contract interpretation.
If we are not able to continue and effectively manage pricing, our results of operations could be adversely affected and we may not be able to execute on our strategic growth plan. Our customer contracts may not always limit our liability and may sometimes contain terms that could subject us to significant liability or lead to disputes in contract interpretation.
As part of our growth strategy, particularly in connection with our international and data center expansion, we currently, and may in the future, co-invest with third parties using joint ventures.
As part of our growth strategy, particularly in connection with our international and data center expansion, we currently, and may in the future, co-invest with third parties using joint ventures or other co-investment vehicles.
Additional or unexpected disruptions to our supply chain or continued inflationary pressures could significantly affect the cost or timing of our planned expansion projects and interfere with our ability to meet commitments to customers who have contracted for space in new data centers under construction.
Additional or unexpected disruptions to our supply chain, continued inflationary pressures or high interest rates, or changes in customer requirements could significantly affect the cost or timing of our planned expansion projects and interfere with our ability to meet commitments to customers who have contracted for space in new data centers under construction.
As a result, in connection with our pursuit or entrance into any such joint venture, we may be subject to additional risks, including: • our ability to sell our interests in the joint venture may be limited by the joint venture agreement; • we may not have the right to exercise sole decision-making authority regarding the properties, business, partnership, joint venture or other entity; • if our partners become bankrupt or fail to fund their share of required capital contributions, we may choose or be required to contribute unplanned capital; and • our partners may have economic, tax or other interests or goals that are inconsistent with our interests or goals, and that could affect our ability to negotiate satisfactory joint venture terms, to operate the property or business or maintain our qualification for taxation as a REIT.
In connection with our pursuit or entrance into any such venture, we may be subject to additional risks, including: • our ability to sell our interests in the venture may be limited by the venture agreement; • we may not have the right to exercise sole decision-making authority regarding the properties, business, partnership, venture or other entity; • we may be liable for the venture's failure to comply with applicable law despite only having a non-controlling interest in the venture; • if our partners become bankrupt or fail to fund their share of required capital contributions, we may choose or be required to contribute unplanned capital; and • our partners may have economic, tax or other interests or goals that are inconsistent with our interests or goals, and that could affect our ability to negotiate satisfactory venture terms, to operate the property or business or maintain our qualification for taxation as a REIT.
Our use of joint ventures could expose us to additional risks and liabilities, including our reliance on joint venture partners who may have economic and business interests that are inconsistent with our business interests, our lack of sole decision-making authority, and disputes between us and our joint venture partners.
Our use of joint ventures or other co-investment vehicles could expose us to additional risks and liabilities, including our reliance on joint venture or other co-investment vehicles partners who may have economic and business interests that are inconsistent with our business interests and our lack of sole decision-making authority.
All construction related data center projects require us to carefully select and rely on the experience of one or more design firms, general contractors, and associated subcontractors during the design and construction process.
All construction-related data center projects require us to carefully select, manage, and rely on the experience of one or more design firms, general contractors, and associated subcontractors during the design and construction process, and to obtain critical government permits and authorizations.
We have outsourced, and expect to continue to outsource, certain support services, including cloud storage systems and cloud computing services, to third parties, which has in the past and may in the future subject our IT and other sensitive information to additional risk.
We utilize remote work arrangements and outsource certain support services, including cloud storage systems and cloud computing services, to third parties, which has in the past and may in the future subject our IT and other sensitive information to additional risk.
Our reputation or brand, and specifically, the trust our customers place in us, could be negatively impacted in the event of perceived or actual failures by us to store information securely.
Our reputation for providing secure information storage to customers is critical to the success of our business. Our reputation or brand, and specifically, the trust our customers place in us, could be negatively impacted in the event of perceived or actual failures by us to store information securely.
RISKS RELATED TO OUR INDEBTEDNESS Our indebtedness could adversely affect our financial health and prevent us from fulfilling our obligations under our various debt instruments. As of December 31, 2022, our total long-term debt was approximately $10,650.3 million, stockholders equity was approximately $636.7 million and we had cash and cash equivalents of approximately $141.8 million.
RISKS RELATED TO OUR INDEBTEDNESS Our indebtedness could adversely affect our financial health and prevent us from fulfilling our obligations under our various debt instruments. As of December 31, 2023, our total long-term debt was approximately $12,034.6 million, stockholders equity was approximately $211.6 million and we had cash and cash equivalents of approximately $222.8 million.
However, we can provide no assurance that we will remain qualified for taxation as a REIT. We also have invested in a subsidiary that intends to elect to be taxed as a REIT and therefore must independently satisfy all REIT qualification requirements.
However, we can provide no assurance that we will remain qualified for taxation as a REIT. We also have invested in a subsidiary that has elected to be taxed as a REIT and therefore must independently satisfy all REIT qualification requirements, and we may in the future invest in other such subsidiaries.
Any failure by us to comply with, or remedy any violations or breaches of, laws and regulations or customer requirements could negatively impact our operations, result in the imposition of fines and penalties, contractual liability and litigation, significant costs and expenses and reputational harm.
Any failure by us to comply with, or remedy any violations or breaches of, laws and regulations or customer requirements could negatively impact our operations, result in the imposition of fines and penalties, contractual liability and litigation, significant costs and expenses and reputational harm. Expansion into Digital and ALM services means that our privacy and security risk profile is increasing.
Should a design firm, general contractor, significant subcontractor, or key supplier experience financial or operational problems during the design or construction process, fail to perform properly or at all, we could experience significant delays, increased costs to complete the project, and other negative impacts to the expected return on our committed capital.
Should a design firm, general contractor, significant subcontractor, or key supplier experience financial or operational problems during the design or construction process or fail to perform properly, or should we be unable to obtain, or experience delays in obtaining, all necessary zoning, land-use, building, occupancy and other governmental permits and authorizations, we could experience significant delays, increased costs to complete the project, penalties under customer preleases and other negative impacts to the expected return on our committed capital.
Federal, state and local tax laws are constantly under review by persons involved in the legislative process, the IRS, the United States Department of the Treasury ("Treasury") and state and local taxing authorities. Changes to the tax laws, regulations and administrative interpretations or local laws governing our international operations, which may have retroactive application, could adversely affect us.
Changes to the tax laws, regulations and administrative interpretations or local laws governing our international operations, which may have retroactive application, could adversely affect us.
Certain important corporate events, however, such as leveraged recapitalizations that would increase the level of our indebtedness, would not constitute a "change of control" under our indentures.
Certain important corporate events, however, such as leveraged recapitalizations that would increase the level of our indebtedness, would not constitute a "change of control" under our indentures. IMI is a holding company, and, therefore, its ability to make payments on its various debt obligations depends in large part on the operations of its subsidiaries.
Removed
In addition, the continuation of remote work arrangements following the COVID-19 pandemic has increased and could further increase our cybersecurity risks.
Added
In particular, we are hosting increasing volumes of customer digital data, including sensitive and confidential data, and disposing of customer data-bearing devices. This may result in increased regulatory exposure, contractual liability and security expectations from customers.
Removed
Iron Mountain Incorporated ( " IMI " ) is a holding company, and, therefore, its ability to make payments on its various debt obligations depends in large part on the operations of its subsidiaries.
Added
Federal, state and local tax laws are constantly under review by persons involved in the legislative process, the United States Internal Revenue Service, the United States Department of the Treasury and state and local taxing authorities.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeA breakdown of owned and leased facilities by country (and by state within the United States) is listed below: 20 IRON MOUNTAIN 2022 FORM 10-K Table of Contents Part I LEASED OWNED TOTAL COUNTRY/STATE NUMBER SQUARE FEET NUMBER SQUARE FEET NUMBER SQUARE FEET North America United States (Including Puerto Rico) Alabama 3 305,168 — — 3 305,168 Arizona 7 458,816 6 1,207,281 13 1,666,097 Arkansas 2 63,604 — — 2 63,604 California 74 7,038,267 9 942,356 83 7,980,623 Colorado 7 426,051 4 484,490 11 910,541 Connecticut 5 312,797 3 527,666 8 840,463 Delaware 3 239,640 1 120,921 4 360,561 District of Columbia 1 1,670 — — 1 1,670 Florida 36 2,853,687 1 119,374 37 2,973,061 Georgia 12 940,981 2 129,611 14 1,070,592 Idaho 1 45,000 — — 1 45,000 Illinois 15 1,332,038 7 1,309,975 22 2,642,013 Indiana 6 344,516 — — 6 344,516 Iowa 3 148,902 1 14,200 4 163,102 Kansas 4 569,161 — — 4 569,161 Kentucky 2 64,000 4 418,760 6 482,760 Louisiana 4 388,475 — — 4 388,475 Maine — — 1 95,000 1 95,000 Maryland 21 2,115,409 1 19,001 22 2,134,410 Massachusetts 9 636,776 6 933,102 15 1,569,878 Michigan 16 1,008,556 1 39,502 17 1,048,058 Minnesota 11 878,128 — — 11 878,128 Mississippi 3 201,300 — — 3 201,300 Missouri 13 1,598,233 1 25,120 14 1,623,353 Montana 3 38,548 — — 3 38,548 Nebraska 1 34,560 2 266,733 3 301,293 Nevada 11 294,248 1 107,041 12 401,289 New Hampshire — — 1 146,467 1 146,467 New Jersey 28 3,194,278 8 2,476,635 36 5,670,913 New Mexico 2 114,473 — — 2 114,473 New York 19 1,016,433 10 970,800 29 1,987,233 North Carolina 21 1,031,135 1 97,000 22 1,128,135 Ohio 12 1,004,283 4 250,291 16 1,254,574 Oklahoma 4 196,044 — — 4 196,044 Oregon 12 438,586 — — 12 438,586 Pennsylvania 22 2,258,440 3 2,062,761 25 4,321,201 Puerto Rico 4 237,969 1 54,352 5 292,321 Rhode Island 1 70,159 1 12,748 2 82,907 South Carolina 5 261,011 2 214,238 7 475,249 Tennessee 5 256,743 4 63,909 9 320,652 Texas 36 2,145,170 19 1,838,880 55 3,984,050 Utah 2 78,148 1 90,553 3 168,701 Vermont 1 35,200 — — 1 35,200 Virginia 17 1,533,701 4 375,791 21 1,909,492 Washington 9 820,825 4 180,228 13 1,001,053 West Virginia 2 105,502 — — 2 105,502 Wisconsin 5 379,857 1 10,655 6 390,512 Total United States 480 37,516,488 115 15,605,441 595 53,121,929 Canada 44 3,036,929 15 1,713,060 59 4,749,989 Total North America 524 40,553,417 130 17,318,501 654 57,871,918 IRON MOUNTAIN 2022 FORM 10-K 21 Table of Contents Part I LEASED OWNED TOTAL COUNTRY/STATE NUMBER SQUARE FEET NUMBER SQUARE FEET NUMBER SQUARE FEET International Argentina 2 134,753 4 298,864 6 433,617 Australia 41 2,990,138 1 13,885 42 3,004,023 Austria 3 65,924 1 58,771 4 124,695 Bahrain 2 33,659 — — 2 33,659 Belgium 4 202,106 1 104,391 5 306,497 Brazil 38 2,594,240 6 291,280 44 2,885,520 Bulgaria 1 68,889 — — 1 68,889 Chile 3 7,115 17 667,790 20 674,905 China Mainland (including China - Hong Kong S.A.R., China-Taiwan and China-Macau S.A.R.) 48 1,970,749 1 20,518 49 1,991,267 Colombia 17 784,395 — — 17 784,395 Croatia 1 26,049 1 36,447 2 62,496 Cyprus 2 51,118 2 46,246 4 97,364 Czech Republic 7 152,889 — — 7 152,889 Denmark 3 161,361 — — 3 161,361 Egypt 1 54,304 1 163,611 2 217,915 England 66 4,577,247 18 598,009 84 5,175,256 Estonia 1 38,861 — — 1 38,861 Eswatini 3 6,997 — — 3 6,997 Finland 3 95,896 — — 3 95,896 France 31 2,126,805 12 936,486 43 3,063,291 Germany 16 894,412 3 308,504 19 1,202,916 Greece 6 608,081 — — 6 608,081 Hungary 7 350,898 — — 7 350,898 India 66 3,211,105 — — 66 3,211,105 Indonesia 16 487,101 2 58,965 18 546,066 Ireland 4 345,962 3 158,558 7 504,520 Jordan 1 107,639 — — 1 107,639 Kuwait 2 11,626 — — 2 11,626 Latvia 2 50,681 — — 2 50,681 Lesotho 2 4,736 — — 2 4,736 Lithuania 2 60,543 — — 2 60,543 Malaysia 10 495,755 — — 10 495,755 Mexico 10 478,471 8 585,885 18 1,064,356 Morocco 9 665,554 — — 9 665,554 The Netherlands 7 522,687 1 37,355 8 560,042 New Zealand 6 413,959 — — 6 413,959 Northern Ireland 3 129,083 — — 3 129,083 Norway 5 194,321 — — 5 194,321 Oman 2 60,202 — — 2 60,202 Peru 2 47,265 10 433,770 12 481,035 Philippines 10 349,132 — — 10 349,132 Poland 19 801,189 — — 19 801,189 Romania 8 451,954 — — 8 451,954 Saudi Arabia 7 400,687 — — 7 400,687 Scotland 3 139,722 3 324,751 6 464,473 Serbia 3 118,380 — — 3 118,380 Singapore 7 305,223 3 345,056 10 650,279 Slovakia 5 172,769 — — 5 172,769 South Africa 15 464,345 — — 15 464,345 South Korea 8 257,233 — — 8 257,233 Spain 28 655,746 6 220,199 34 875,945 Sweden 8 1,049,181 — — 8 1,049,181 Switzerland 12 283,857 — — 12 283,857 Thailand 4 267,989 2 105,487 6 373,476 22 IRON MOUNTAIN 2022 FORM 10-K Table of Contents Part I LEASED OWNED TOTAL COUNTRY/STATE NUMBER SQUARE FEET NUMBER SQUARE FEET NUMBER SQUARE FEET International (continued) Turkey 9 683,641 — — 9 683,641 Ukraine 10 208,050 — — 10 208,050 United Arab Emirates 7 702,524 1 434,442 8 1,136,966 Vietnam 1 54,767 — — 1 54,767 Total International 619 32,649,965 107 6,249,270 726 38,899,235 Total 1,143 73,203,382 237 23,567,771 1,380 96,771,153 The leased facilities typically have initial lease terms of five to 10 years with one or more renewal options.
Biggest changeA breakdown of owned and leased facilities by country (and by state within the United States) is listed below: IRON MOUNTAIN 2023 FORM 10-K 21 Table of Contents Part I LEASED OWNED TOTAL COUNTRY/STATE NUMBER SQUARE FEET NUMBER SQUARE FEET NUMBER SQUARE FEET North America United States (Including Puerto Rico) Alabama 3 305,168 — — 3 305,168 Arizona 7 436,657 6 1,207,281 13 1,643,938 Arkansas 2 63,604 — — 2 63,604 California 76 7,339,160 9 942,356 85 8,281,516 Colorado 5 274,461 4 484,490 9 758,951 Connecticut 5 312,797 3 527,666 8 840,463 Delaware 2 197,840 2 162,721 4 360,561 District of Columbia 1 1,670 — — 1 1,670 Florida 34 2,814,690 1 119,374 35 2,934,064 Georgia 12 940,981 2 129,611 14 1,070,592 Idaho 1 45,000 — — 1 45,000 Illinois 13 1,210,705 7 1,309,975 20 2,520,680 Indiana 5 328,516 — — 5 328,516 Iowa 2 145,138 1 14,200 3 159,338 Kansas 4 569,161 — — 4 569,161 Kentucky 2 64,000 4 418,760 6 482,760 Louisiana 4 388,475 — — 4 388,475 Maine — — 1 95,000 1 95,000 Maryland 19 1,996,017 1 19,001 20 2,015,018 Massachusetts 10 572,979 6 933,102 16 1,506,081 Michigan 15 953,486 1 39,502 16 992,988 Minnesota 9 788,916 — — 9 788,916 Mississippi 3 201,300 — — 3 201,300 Missouri 13 1,598,233 1 25,120 14 1,623,353 Montana 3 38,548 — — 3 38,548 Nebraska 1 34,560 2 266,733 3 301,293 Nevada 9 227,840 1 107,041 10 334,881 New Hampshire 1 2,188 1 146,467 2 148,655 New Jersey 30 3,510,808 8 2,476,635 38 5,987,443 New Mexico 2 114,473 — — 2 114,473 New York 20 1,066,410 10 970,800 30 2,037,210 North Carolina 20 958,889 1 97,000 21 1,055,889 Ohio 12 893,853 3 242,087 15 1,135,940 Oklahoma 4 196,044 — — 4 196,044 Oregon 12 438,586 — — 12 438,586 Pennsylvania 21 2,629,959 3 2,062,761 24 4,692,720 Puerto Rico 4 223,089 1 54,352 5 277,441 Rhode Island 1 94,968 — — 1 94,968 South Carolina 4 168,636 2 214,238 6 382,874 Tennessee 5 256,743 4 63,909 9 320,652 Texas 39 2,654,205 19 1,838,880 58 4,493,085 Utah 2 78,148 1 90,553 3 168,701 Vermont 1 35,200 — — 1 35,200 Virginia 16 1,346,372 4 375,791 20 1,722,163 Washington 8 716,411 4 180,228 12 896,639 West Virginia 2 105,502 — — 2 105,502 Wisconsin 5 379,857 1 10,655 6 390,512 Total United States 469 37,720,243 114 15,626,289 583 53,346,532 Canada 40 2,846,203 15 1,713,060 55 4,559,263 Total North America 509 40,566,446 129 17,339,349 638 57,905,795 22 IRON MOUNTAIN 2023 FORM 10-K Table of Contents Part I LEASED OWNED TOTAL COUNTRY/STATE NUMBER SQUARE FEET NUMBER SQUARE FEET NUMBER SQUARE FEET International Argentina 2 134,753 4 298,864 6 433,617 Australia 41 3,010,051 1 13,885 42 3,023,936 Austria 1 2,691 1 58,771 2 61,462 Bahrain 2 33,659 — — 2 33,659 Belgium 4 234,635 — — 4 234,635 Brazil 38 2,699,755 6 291,280 44 2,991,035 Bulgaria 1 68,889 — — 1 68,889 Chile 2 3,692 17 667,790 19 671,482 China Mainland (including China - Hong Kong S.A.R., China-Taiwan and China-Macau S.A.R.) 53 2,044,506 1 20,721 54 2,065,227 Colombia 18 783,980 — — 18 783,980 Croatia 1 26,049 1 36,447 2 62,496 Cyprus 2 51,118 2 46,246 4 97,364 Czech Republic 7 138,788 — — 7 138,788 Denmark 3 161,361 — — 3 161,361 Egypt 3 113,506 1 163,611 4 277,117 England 68 5,128,168 18 598,009 86 5,726,177 Estonia 1 38,861 — — 1 38,861 Eswatini 3 6,997 — — 3 6,997 Finland 4 96,956 — — 4 96,956 France 27 2,094,071 12 936,486 39 3,030,557 Germany 17 852,231 3 308,504 20 1,160,735 Greece 9 771,863 — — 9 771,863 Hungary 7 350,590 — — 7 350,590 India 81 3,702,063 — — 81 3,702,063 Indonesia 18 527,746 2 58,965 20 586,711 Ireland 4 345,962 3 158,558 7 504,520 Jordan 1 107,639 — — 1 107,639 Kuwait 2 11,626 — — 2 11,626 Latvia 2 37,868 — — 2 37,868 Lesotho 1 2,583 — — 1 2,583 Lithuania 2 70,041 — — 2 70,041 Malaysia 11 507,622 — — 11 507,622 Mexico 10 454,982 8 585,885 18 1,040,867 Morocco 8 705,230 — — 8 705,230 The Netherlands 6 474,559 — — 6 474,559 New Zealand 6 413,959 — — 6 413,959 Northern Ireland 3 129,083 — — 3 129,083 Norway 4 155,323 — — 4 155,323 Oman 2 77,758 — — 2 77,758 Peru 2 47,265 10 433,770 12 481,035 Philippines 12 422,919 — — 12 422,919 Poland 19 802,133 — — 19 802,133 Romania 8 490,155 — — 8 490,155 Saudi Arabia 7 400,687 — — 7 400,687 Scotland 3 139,722 3 324,751 6 464,473 Serbia 2 106,540 — — 2 106,540 Singapore 8 489,049 2 186,956 10 676,005 Slovakia 5 172,769 — — 5 172,769 South Africa 15 462,543 — — 15 462,543 South Korea 8 257,233 — — 8 257,233 Spain 20 511,793 5 211,954 25 723,747 Sweden 8 1,047,265 — — 8 1,047,265 Switzerland 12 283,857 — — 12 283,857 Thailand 4 319,645 2 105,487 6 425,132 IRON MOUNTAIN 2023 FORM 10-K 23 Table of Contents Part I LEASED OWNED TOTAL COUNTRY/STATE NUMBER SQUARE FEET NUMBER SQUARE FEET NUMBER SQUARE FEET International (continued) Turkey 9 683,641 — — 9 683,641 Ukraine 10 208,050 — — 10 208,050 United Arab Emirates 7 695,118 1 434,442 8 1,129,560 Vietnam 2 54,829 — — 2 54,829 Total International 636 34,166,427 103 5,941,382 739 40,107,809 Total 1,145 74,732,873 232 23,280,731 1,377 98,013,604 The leased facilities typically have initial lease terms of five to 10 years with one or more renewal options.
The following table sets forth a summary of the lease expirations for leases in place related to our Global Data Center Business, for which we are the lessor, as of December 31, 2022. The information set forth in the table assumes that tenants exercise no renewal options and all early termination rights.
The following table sets forth a summary of the lease expirations for leases in place related to our Global Data Center Business, for which we are the lessor, as of December 31, 2023. The information set forth in the table assumes that tenants exercise no renewal options and all early termination rights.
Our total building utilization and total racking utilization as of December 31, 2022 in Records Management and Data Management are as follows: RECORDS MANAGEMENT (1) DATA MANAGEMENT BUILDING UTILIZATION RACKING UTILIZATION BUILDING UTILIZATION RACKING UTILIZATION 81% 89% 44% 61% (1) Total building utilization and total racking utilization for Records Management includes the utilization for Global Digital Solutions and Consumer Storage.
Our total building utilization and total racking utilization as of December 31, 2023 in Records Management and Data Management are as follows: RECORDS MANAGEMENT (1) DATA MANAGEMENT BUILDING UTILIZATION RACKING UTILIZATION BUILDING UTILIZATION RACKING UTILIZATION 77% 83% 41% 62% (1) Total building utilization and total racking utilization for Records Management includes the utilization for Global Digital Solutions and Consumer Storage.
ITEM 2. PROPERTIES. As of December 31, 2022, we conducted operations through 1,143 leased facilities and 237 owned facilities. Our facilities are divided among our reportable segments and Corporate and Other as follows: Global RIM Business (1,303), Global Data Center Business (20) and Corporate and Other (57). These facilities contain a total of approximately 96.8 million square feet of space.
ITEM 2. PROPERTIES. As of December 31, 2023, we conducted operations through 1,145 leased facilities and 232 owned facilities. Our facilities are divided among our reportable segments and Corporate and Other as follows: Global RIM Business (1,287), Global Data Center Business (30) and Corporate and Other (60). These facilities contain a total of approximately 98.0 million square feet of space.
YEAR NUMBER OF LEASES EXPIRING TOTAL MEGAWATTS EXPIRING PERCENTAGE OF TOTAL MEGAWATTS EXPIRING ANNUALIZED TOTAL CONTRACT RENT EXPIRING (IN THOUSANDS) PERCENTAGE OF TOTAL CONTRACT VALUE ANNUALIZED RENT 2023 582 22.3 7.0 % $ 65,831 15.7 % 2024 331 17.7 5.6 % 48,342 11.5 % 2025 251 28.9 9.1 % 65,643 15.7 % 2026 88 21.8 6.9 % 38,298 9.1 % 2027 31 8.2 2.6 % 17,655 4.2 % 2028 28 47.8 15.1 % 57,131 13.6 % 2029 6 22.3 7.0 % 19,605 4.7 % Thereafter 17 147.9 46.7 % 106,713 25.5 % Total 1,334 316.9 100.0 % $ 419,218 100.0 % IRON MOUNTAIN 2022 FORM 10-K 23 Table of Contents Part I
YEAR NUMBER OF LEASES EXPIRING TOTAL MEGAWATTS EXPIRING PERCENTAGE OF TOTAL MEGAWATTS EXPIRING ANNUALIZED TOTAL CONTRACT RENT EXPIRING (IN THOUSANDS) PERCENTAGE OF TOTAL CONTRACT VALUE ANNUALIZED RENT 2024 935 19.5 4.5 % $ 65,564 10.9 % 2025 346 36.4 8.4 % 86,659 14.5 % 2026 242 23.3 5.4 % 52,198 8.7 % 2027 59 9.7 2.2 % 24,459 4.1 % 2028 64 58.2 13.4 % 74,435 12.4 % 2029 15 24.6 5.7 % 24,250 4.0 % 2030 5 48.6 11.2 % 53,808 9.0 % Thereafter 23 213.5 49.2 % 217,790 36.4 % Total 1,689 433.8 100.0 % $ 599,163 100.0 % 24 IRON MOUNTAIN 2023 FORM 10-K Table of Contents Part I

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Our common stock is traded on the NYSE under the symbol "IRM". The closing price of our common stock on the NYSE on February 17, 2023 was $52.60. As of February 17, 2023, there were 3,653 holders of record of our common stock.
Biggest changeITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Our common stock is traded on the NYSE under the symbol "IRM". The closing price of our common stock on the NYSE on February 16, 2024 was $67.98. As of February 16, 2024, there were 3,083 holders of record of our common stock.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS We did not sell any unregistered equity securities during the three months ended December 31, 2022, nor did we repurchase any shares of our common stock during the three months ended December 31, 2022. ITEM 6. [RESERVED.]
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS We did not sell any unregistered equity securities during the three months ended December 31, 2023, nor did we repurchase any shares of our common stock during the three months ended December 31, 2023. ITEM 6. [RESERVED.]

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeIRON MOUNTAIN 2022 FORM 10-K 41 Table of Contents Part II OPERATING EXPENSES COST OF SALES Cost of sales (excluding depreciation and amortization) consists of the following expenses (in thousands): YEAR ENDED DECEMBER 31, PERCENTAGE CHANGE % OF CONSOLIDATED REVENUES PERCENTAGE CHANGE (FAVORABLE)/ UNFAVORABLE 2022 2021 DOLLAR CHANGE ACTUAL CONSTANT CURRENCY 2022 2021 Labor $ 807,220 $ 769,617 $ 37,603 4.9 % 8.2 % 15.8 % 17.1 % (1.3) % Facilities 884,930 795,802 89,128 11.2 % 14.8 % 17.3 % 17.7 % (0.4) % Transportation 157,298 136,792 20,506 15.0 % 18.5 % 3.1 % 3.0 % 0.1 % Product Cost of Sales and Other 339,672 185,018 154,654 83.6 % 91.0 % 6.7 % 4.1 % 2.6 % Total Cost of sales $ 2,189,120 $ 1,887,229 $ 301,891 16.0 % 19.8 % 42.9 % 41.9 % 1.0 % Primary factors influencing the change in reported Cost of sales for the year ended December 31, 2022 compared to the year ended December 31, 2021 include the following: • an increase in labor costs driven by an increase in service activity and the impact of recent acquisitions, 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 years ended December 31, 2021 and 2022, as well as increases in utilities and building maintenance costs; • an increase in product cost of sales and other driven by the acquisition of ITRenew; and • a decrease of $59.4 million due to foreign currency exchange rate fluctuations. 42 IRON MOUNTAIN 2022 FORM 10-K Table of Contents Part II SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Selling, general and administrative expenses consists of the following expenses (in thousands): YEAR ENDED DECEMBER 31, PERCENTAGE CHANGE % OF CONSOLIDATED REVENUES PERCENTAGE CHANGE (FAVORABLE)/ UNFAVORABLE DOLLAR CHANGE 2022 2021 ACTUAL CONSTANT CURRENCY 2022 2021 General, Administrative and Other $ 839,844 $ 760,346 $ 79,498 10.5 % 13.0 % 16.5 % 16.9 % (0.4) % Sales, Marketing and Account Management 300,733 262,213 38,520 14.7 % 18.1 % 5.9 % 5.8 % 0.1 % Total Selling, general and administrative expenses $ 1,140,577,000 $ 1,022,559,000 $ 118,018 11.5 % 14.3 % 22.4 % 22.7 % (0.3) % Primary factors influencing the change in reported Selling, general and administrative expenses for the year ended December 31, 2022 compared to the year ended December 31, 2021 include the following: • an increase in general, administrative and other expenses, driven by recent acquisitions, higher wages and benefits, employee related costs, information technology costs and professional fees, partially offset by benefits from Project Summit; • an increase in sales, marketing and account management expenses, driven by higher compensation expense, primarily reflecting increased wages and benefits and recent acquisitions; and • a decrease of $24.5 million due to foreign currency exchange rate fluctuations.
Biggest changeSERVICE REVENUE • organic service revenue growth driven by increased service activity levels in our Global RIM Business, partially offset by service revenue declines in our ALM business as a result of component price declines, partially offset by increased volume; and • a decrease of $6.1 million due to foreign currency exchange rate fluctuations. 40 IRON MOUNTAIN 2023 FORM 10-K Table of Contents Part II OPERATING EXPENSES COST OF SALES Cost of sales (excluding depreciation and amortization) consists of the following expenses (in thousands): YEAR ENDED DECEMBER 31, PERCENTAGE CHANGE % OF CONSOLIDATED REVENUES PERCENTAGE CHANGE (FAVORABLE)/ UNFAVORABLE 2023 2022 DOLLAR CHANGE ACTUAL CONSTANT CURRENCY 2023 2022 Labor $ 891,351 $ 807,220 $ 84,131 10.4 % 10.6 % 16.3 % 15.8 % 0.5 % Facilities 1,028,765 884,930 143,835 16.3 % 16.3 % 18.8 % 17.3 % 1.5 % Transportation 158,737 157,298 1,439 0.9 % 1.5 % 2.9 % 3.1 % (0.2) % Product Cost of Sales and Other 278,947 339,672 (60,725) (17.9) % (17.5) % 5.1 % 6.7 % (1.6) % Total Cost of sales $ 2,357,800 $ 2,189,120 $ 168,680 7.7 % 7.9 % 43.0 % 42.9 % 0.1 % Primary factors influencing the change in reported Cost of sales for the year ended December 31, 2023 compared to the year ended December 31, 2022 include the following: • an increase in labor costs driven by an increase in service activity, primarily within our Global RIM Business; • an increase in facilities expenses driven by increases in rent expense, reflecting the impact from our sale-leaseback activity during the years ended December 31, 2022 and 2023, as well as increases in utilities costs; • a decrease in product cost of sales in our ALM business as a result of component price declines, partially offset by increased volume; and • a decrease of $4.0 million due to foreign currency exchange rate fluctuations.
Storage rental revenues, which are considered a key driver of financial performance for the storage and information management services industry, consist primarily of recurring periodic rental charges related to the storage of materials or data (generally on a per unit basis) that are typically retained by customers for many years and revenues associated with our data center operations.
Storage rental revenues, which are considered a key driver of financial performance for the storage and information management services industry, consist primarily of recurring periodic rental charges related to the storage of materials or data (generally on a per unit basis) that are typically retained by customers for many years and of revenues associated with our data center operations.
(2) Includes foreign currency transaction (gains) losses, net, debt extinguishment expense and other, net. See Note 2.v. to Notes to Consolidated Financial Statements included in this Annual Report for additional information regarding the components of Other (income) expense, net.
(2) Includes foreign currency transaction losses (gains), net, debt extinguishment expense and other, net. See Note 2.v. to Notes to Consolidated Financial Statements included in this Annual Report for additional information regarding the components of Other expense (income), net.
RECURRING CAPITAL EXPENDITURES: • Real Estate: Expenditures primarily related to the replacement of components of real estate assets such as buildings, building improvements, leasehold improvements and racking structures. • Non-Real Estate: Expenditures primarily related to the replacement of containers and shred bins, warehouse equipment, fixtures, computer hardware, or third-party or internally-developed software assets that support the maintenance of existing revenues or avoidance of an increase in costs. • Data Center: Expenditures related to the replacement of equivalent components and overall maintenance of existing data center assets.
RECURRING CAPITAL EXPENDITURES: • Data Center: Expenditures related to the replacement of equivalent components and overall maintenance of existing data center assets. • Real Estate: Expenditures primarily related to the replacement of components of real estate assets such as buildings, building improvements, leasehold improvements and racking structures. • Non-Real Estate: Expenditures primarily related to the replacement of containers and shred bins, warehouse equipment, fixtures, computer hardware, or third-party or internally-developed software assets that support the maintenance of existing revenues or avoidance of an increase in costs.
The Revolving Credit Facility enables IMI and certain of its subsidiaries to borrow in United States dollars and (subject to sublimits) Canadian dollars in an aggregate outstanding amount not to exceed $2,250.0 million.
The Revolving Credit Facility enables IMI and certain of its subsidiaries to borrow an aggregate outstanding amount not to exceed $2,250.0 million in United States dollars and (subject to sublimits) Canadian dollars.
VIRGINIA CREDIT AGREEMENT On October 31, 2022, Iron Mountain Data Centers Virginia 4/5 Subsidiary, LLC, a wholly owned subsidiary of Iron Mountain Data Centers Virginia 4/5 JV, LP, entered into a credit agreement (the "Virginia Credit Agreement") in order to finance the construction of two data center facilities in Virginia.
VIRGINIA 4/5 CREDIT AGREEMENT On October 31, 2022, Iron Mountain Data Centers Virginia 4/5 Subsidiary, LLC, a wholly-owned subsidiary of Iron Mountain Data Centers Virginia 4/5 JV, LP, entered into a credit agreement (the "Virginia 4/5 Credit Agreement") in order to finance the construction of two data center facilities in Virginia.
The UK Bilateral Revolving Credit Facility is secured by certain properties in the United Kingdom. IMI and subsidiaries of IMI that represent the substantial majority of our operations in the United States and the United Kingdom guarantee all obligations under the UK Revolving Credit Bilateral Facility.
IMI and subsidiaries of IMI that represent the substantial majority of our operations in the United States and the United Kingdom guarantee all obligations under the UK Bilateral Revolving Credit Facility. The UK Bilateral Revolving Credit Facility is secured by certain properties in the United Kingdom.
Our depreciation and amortization charges result primarily from depreciation related to storage systems, which include racking structures, buildings, building and leasehold improvements and computer systems hardware and software. Amortization relates primarily to customer and supplier relationship intangible assets, contract fulfillment costs and data center lease-based intangible assets. Both depreciation and amortization are impacted by the timing of acquisitions.
DEPRECIATION AND AMORTIZATION Our depreciation and amortization charges result primarily from depreciation related to storage systems, which include racking structures, buildings, building and leasehold improvements and computer systems hardware and software. Amortization relates primarily to customer and supplier relationship intangible assets, Contract Costs and data center lease-based intangible assets. Both depreciation and amortization are impacted by the timing of acquisitions.
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).
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.
Under each of the Cash Pools, cash deposited by participating subsidiaries with certain financial institutions is pledged as security against the debit balances of other participating subsidiaries with legal rights of offset provided to the financial institutions, and, therefore, such amounts are presented in our Consolidated Balance Sheets on a net basis.
Under each of the Cash Pools, cash deposited by participating subsidiaries with certain financial institutions is pledged as security against the debit balances of other participating subsidiaries with legal rights of offset provided to the financial institutions. Therefore, such amounts are presented in our Consolidated Balance Sheets on a net basis.
The Discounted Cash Flow Model incorporates significant assumptions including future revenue growth rates, operating margins, discount rates and capital expenditures. The Market Approach requires us to make assumptions related to Adjusted EBITDA multiples. Changes in economic and operating conditions impacting these assumptions or changes in multiples could result in goodwill impairments in future periods.
The Discounted Cash Flow Model incorporates significant assumptions including future revenue growth rates, operating margins, discount rates and capital expenditures. The Market Approach requires us to make assumptions related to EBITDA multiples. Changes in economic and operating conditions impacting these assumptions or changes in multiples could result in goodwill impairments in future periods.
Due to the inherent uncertainty of future events, actual values of net assets acquired could be different from our estimated fair values and could have a material impact on our financial statements. 34 IRON MOUNTAIN 2022 FORM 10-K Table of Contents Part II Of the net assets acquired in our acquisitions, the fair value of owned buildings, including building improvements, customer and supplier relationship and data center lease-based intangible assets, racking structures and operating leases are generally the most common and most significant.
Due to the inherent uncertainty of future events, actual values of net assets acquired could be different from our estimated fair values and could have a material impact on our financial statements. 34 IRON MOUNTAIN 2023 FORM 10-K Table of Contents Part II Of the net assets acquired in our acquisitions, the fair value of owned buildings, including building improvements, customer and supplier relationship and data center lease-based intangible assets, racking structures and operating leases are generally the most common and most significant.
(4) Represents the tax impact of (i) the reconciling items above, which impacts our reported net income (loss) before provision (benefit) for income taxes but has an insignificant impact on our reported provision (benefit) for income taxes and (ii) other discrete tax items.
(4) Represents the tax impact of (i) the reconciling items above, which impact our reported net income (loss) before provision (benefit) for income taxes but has an insignificant impact on our reported provision (benefit) for income taxes and (ii) other discrete tax items.
(3) Columns may not foot due to rounding. 32 IRON MOUNTAIN 2022 FORM 10-K Table of Contents Part II FFO (NAREIT) AND FFO (NORMALIZED) Funds from operations ("FFO") is defined by the National Association of Real Estate Investment Trusts 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 ("FFO (Nareit)").
(3) Columns may not foot due to rounding. 32 IRON MOUNTAIN 2023 FORM 10-K Table of Contents Part II FFO (NAREIT) AND FFO (NORMALIZED) Funds from operations ("FFO") is defined by the National Association of Real Estate Investment Trusts 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 ("FFO (Nareit)").
In order to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency fluctuations, we compare the percentage change in the results from one period to another period in this report using constant currency presentation. The constant currency growth rates are calculated by translating the 2021 results at the 2022 average exchange rates.
In order to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency fluctuations, we compare the percentage change in the results from one period to another period in this report using constant currency presentation. The constant currency growth rates are calculated by translating the 2022 results at the 2023 average exchange rates.
Our leverage and fixed charge coverage ratios under the Credit Agreement as of December 31, 2022 are as follows: DECEMBER 31, 2022 MAXIMUM/MINIMUM ALLOWABLE Net total lease adjusted leverage ratio 5.1 Maximum allowable of 7.0 Fixed charge coverage ratio 2.4 Minimum allowable of 1.5 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 December 31, 2022.
Our leverage and fixed charge coverage ratios under the Credit Agreement as of December 31, 2023 are as follows: DECEMBER 31, 2023 MAXIMUM/MINIMUM ALLOWABLE Net total lease adjusted leverage ratio 5.1 Maximum allowable of 7.0 Fixed charge coverage ratio 2.4 Minimum allowable of 1.5 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 December 31, 2023.
The maximum amount permitted to be borrowed under the UK Bilateral Revolving Credit Facility is 140.0 million British pounds sterling, which was fully drawn as of December 31, 2022. We have the option to request additional commitments of up to 125.0 million British pounds sterling, subject to the conditions specified in the UK Bilateral Revolving Credit Facility.
The maximum amount permitted to be borrowed under the UK Bilateral Revolving Credit Facility is 140.0 million British pounds sterling, which was fully drawn as of December 31, 2023. We have the option to request additional commitments of up to 125.0 million British pounds sterling, subject to conditions specified in the UK Bilateral Revolving Credit Facility.
Selling, general and administrative expenses consist primarily of wages and benefits for management, administrative, IT, sales, account management and marketing personnel, as well as expenses related to communications and data processing, travel, professional fees, bad debts, training, office equipment and supplies. 28 IRON MOUNTAIN 2022 FORM 10-K Table of Contents Part II Cost of sales (excluding depreciation and amortization) and Selling, general and administrative expenses for the year ended December 31, 2022 consists of the following: COST OF SALES SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Trends in facility occupancy costs are impacted by: • the total number of facilities we occupy; • the mix of properties we own versus properties we lease; • fluctuations in per square foot occupancy costs ; and • the levels of utilization of these properties.
Selling, general and administrative expenses consist primarily of wages and benefits for management, administrative, IT, sales, account management and marketing personnel, as well as expenses related to communications, travel, professional fees, bad debts, training, office equipment and supplies. 28 IRON MOUNTAIN 2023 FORM 10-K Table of Contents Part II Cost of sales (excluding depreciation and amortization) and Selling, general and administrative expenses for the year ended December 31, 2023 consists of the following: COST OF SALES SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Trends in facility occupancy costs are impacted by: • the total number of facilities we occupy; • the mix of properties we own versus properties we lease; • fluctuations in per square foot occupancy costs; and • the levels of utilization of these properties.
IRON MOUNTAIN 2022 FORM 10-K 31 Table of Contents Part II ADJUSTED EPS Adjusted EPS is defined 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 and other transformation • Amortization related to the write-off of certain customer relationship intangible assets • (Gain) loss on disposal/write-down of property, plant and equipment, net (including real estate) • Other (income) expense, net • Stock-based compensation expense • Non-cash amortization related to derivative instruments • 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.
IRON MOUNTAIN 2023 FORM 10-K 31 Table of Contents Part II 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 and other transformation • Amortization related to the write-off of certain customer relationship intangible assets • (Gain) loss on disposal/write-down of property, plant and equipment, net (including real estate) • Other expense (income), net • Stock-based compensation expense • Non-cash amortization related to derivative instruments • 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.
IRON MOUNTAIN 2022 FORM 10-K 35 Table of Contents Part II GOODWILL AND OTHER INDEFINITE-LIVED INTANGIBLE ASSETS NOT SUBJECT TO AMORTIZATION Goodwill and intangible assets with indefinite lives are not amortized but are reviewed annually for impairment, or more frequently if impairment indicators arise.
IRON MOUNTAIN 2023 FORM 10-K 35 Table of Contents Part II GOODWILL AND OTHER INDEFINITE-LIVED INTANGIBLE ASSETS NOT SUBJECT TO AMORTIZATION Goodwill and intangible assets with indefinite lives are not amortized but are reviewed annually for impairment, or more frequently if impairment indicators arise.
The expansion of our international businesses has impacted the major cost of sales components and selling, general and administrative expenses. • Our international operations are more labor intensive relative to revenue than our operations in North America and, therefore, labor costs are a higher percentage of international operational revenue. • The overhead structure of our expanding international operations has generally not achieved the same level of overhead leverage as our North American operations, which may result in an increase in selling, general and administrative expenses as a percentage of revenue as our international operations become a larger percentage of our consolidated results.
The expansion of our international businesses has impacted the major cost of sales components and selling, general and administrative expenses. • Our international operations are more labor intensive relative to revenue than our operations in North America and, therefore, labor costs are a higher percentage of international operational revenue. • The overhead structure of our expanding international operations has generally not achieved the same level of overhead leverage as our North American operations, which has resulted in an increase in selling, general and administrative expenses as a percentage of revenue as our international operations become a larger percentage of our consolidated results.
IRON MOUNTAIN 2022 FORM 10-K 33 Table of Contents Part II CRITICAL ACCOUNTING ESTIMATES Our discussion and analysis of our financial condition and results of operations are based upon our Consolidated Financial Statements, which have been prepared in accordance with GAAP.
IRON MOUNTAIN 2023 FORM 10-K 33 Table of Contents Part II CRITICAL ACCOUNTING ESTIMATES Our discussion and analysis of our financial condition and results of operations are based upon our Consolidated Financial Statements, which have been prepared in accordance with GAAP.
The increase is primarily due to higher average debt outstanding during the year ended December 31, 2022 compared to the prior year period as well as an increase in our weighted average interest rate.
The increase is primarily due to higher average debt outstanding during the year ended December 31, 2023 compared to the prior year period as well as an increase in our weighted average interest rate.
Our reporting units at which level we performed our goodwill impairment analysis as of October 1, 2022 were as follows: • North American Records and Information Management reporting unit ("North America RIM") • Europe and South Africa Records and Information Management reporting unit ("ESA RIM") • Middle East, North Africa and Turkey Records and Information Management reporting unit ("MENAT RIM") • Latin America Records and Information Management reporting unit ("Latin America RIM") • Asia, Australia and New Zealand Records and Information Management reporting unit ("APAC RIM") • Entertainment Services • Global Data Center • Fine Arts • ALM See Note 2.l. to Notes to Consolidated Financial Statements included in this Annual Report for a description of our reporting units.
Our reporting units at which level we performed our goodwill impairment analysis as of October 1, 2023 were as follows: • North American Records and Information Management reporting unit ("North America RIM") • Europe Records and Information Management reporting unit ("Europe RIM") • Middle East, North Africa, Turkey and South Africa Records Information Management reporting unit ("MENATSA RIM") • Latin America Records and Information Management reporting unit ("Latin America RIM") • Asia, Australia and New Zealand Records and Information Management reporting unit ("APAC RIM") • Entertainment Services • Global Data Center • Fine Arts • ALM See Note 2.l. to Notes to Consolidated Financial Statements included in this Annual Report for a description of our reporting units.
We did not record impairment charges for any of our long-lived assets or finite-lived intangibles during the years ended December 31, 2022 and 2021.
We did not record impairment charges for any of our long-lived assets or finite-lived intangibles during the years ended December 31, 2023 and 2022.
IMI’s wholly owned subsidiary, Iron Mountain Information Management, LLC ("IMIM"), is the borrower under the Term Loan B, which has a principal amount of $700.0 million. The Term Loan B, which matures on January 2, 2026, was issued at 99.75% of par.
Iron Mountain Information Management, LLC ("IMIM"), a wholly-owned subsidiary of IMI, is the borrower under the Term Loan B due 2026, which has a principal amount of $700.0 million. The Term Loan B due 2026, which matures on January 2, 2026, was issued at 99.75% of par.
Our weighted average interest rate, inclusive of the fees associated with our outstanding letters of credit, was 5.1% and 4.7% at December 31, 2022 and 2021, respectively. See Note 7 to Notes to Consolidated Financial Statements included in this Annual Report for additional information regarding our indebtedness.
Our weighted average interest rate, inclusive of the fees associated with our outstanding letters of credit, was 5.6% and 5.1% at December 31, 2023 and 2022, respectively. See Note 7 to Notes to Consolidated Financial Statements included in this Annual Report for additional information regarding our indebtedness.
(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, but including the impact of acquisitions of customer relationships.
(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.
We have performed our annual goodwill impairment review as of October 1, 2022 and 2021. We concluded that as of October 1, 2022 and 2021, goodwill was not impaired.
We have performed our annual goodwill impairment review as of October 1, 2023 and 2022. We concluded that as of October 1, 2023 and 2022, goodwill was not impaired.
The following table presents our capital spend for 2022 and 2021 organized by the type of the spending as described above.
The following table presents our capital spend for 2023 and 2022 organized by the type of the spending as described above.
This discussion contains "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995 and in other securities laws. See "Cautionary Note Regarding Forward-Looking Statements" on page iii of this Annual Report and "Item 1A.
This discussion contains "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995 and in other securities laws. See "Cautionary Note Regarding Forward-Looking Statements" on page iii of this Annual Report and "Item 1A. Risk Factors" beginning on page 9 of this Annual Report.
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.
Project Matterhorn focuses 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 are investing to accelerate growth and to capture a greater share of the large, global addressable markets in which we operate.
IRON MOUNTAIN 2022 FORM 10-K 29 Table of Contents Part II The following table is a comparison of underlying average exchange rates of the foreign currencies that had the most significant impact on our United States dollar-reported revenues and expenses: PERCENTAGE OF UNITED STATES DOLLAR- REPORTED REVENUE FOR THE YEAR ENDED DECEMBER 31, AVERAGE EXCHANGE RATES FOR THE YEAR ENDED DECEMBER 31, PERCENTAGE STRENGTHENING / (WEAKENING) OF FOREIGN CURRENCY 2022 2021 2022 2021 Australian dollar 2.8 % 3.3 % $ 0.695 $ 0.751 (7.5) % Brazilian real 1.8 % 1.8 % $ 0.194 $ 0.186 4.3 % British pound sterling 6.5 % 6.6 % $ 1.237 $ 1.376 (10.1) % Canadian dollar 5.3 % 5.6 % $ 0.769 $ 0.798 (3.6) % Euro 7.0 % 7.7 % $ 1.054 $ 1.183 (10.9) % The percentage of United States dollar-reported revenues for all other foreign currencies was 12.7% and 14.6% for the years ended December 31, 2022 and 2021, respectively. 30 IRON MOUNTAIN 2022 FORM 10-K Table of Contents Part II NON-GAAP MEASURES ADJUSTED EBITDA Adjusted EBITDA 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 (as defined below) • Restructuring and other transformation • (Gain) loss on disposal/write-down of property, plant and equipment, net (including real estate) • Other (income) expense, net • Stock-based compensation expense Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by total revenues.
IRON MOUNTAIN 2023 FORM 10-K 29 Table of Contents Part II The following table is a comparison of underlying average exchange rates of the foreign currencies that had the most significant impact on our United States dollar-reported revenues and expenses: PERCENTAGE OF UNITED STATES DOLLAR- REPORTED REVENUE FOR THE YEAR ENDED DECEMBER 31, AVERAGE EXCHANGE RATES FOR THE YEAR ENDED DECEMBER 31, PERCENTAGE STRENGTHENING / (WEAKENING) OF FOREIGN CURRENCY 2023 2022 2023 2022 Australian dollar 2.6 % 2.8 % $ 0.664 $ 0.695 (4.5) % Brazilian real 1.8 % 1.8 % $ 0.200 $ 0.194 3.1 % British pound sterling 7.2 % 6.5 % $ 1.243 $ 1.237 0.5 % Canadian dollar 5.1 % 5.3 % $ 0.741 $ 0.769 (3.6) % Euro 6.6 % 7.0 % $ 1.081 $ 1.054 2.6 % The percentage of United States dollar-reported revenues for all other foreign currencies was 12.7% for both of the years ended December 31, 2023 and 2022. 30 IRON MOUNTAIN 2023 FORM 10-K Table of Contents Part II 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) • 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 Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by total revenues.
We have assessed the sensitivity of these assumptions on each of our reporting units as of October 1, 2022.
We have assessed the sensitivity of these assumptions on each of our reporting units as of October 1, 2023.
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: YEAR ENDED DECEMBER 31, 2022 2021 Reported EPS—Fully Diluted from Net Income (Loss) Attributable to Iron Mountain Incorporated $ 1.90 $ 1.55 Add/(Deduct): Acquisition and Integration Costs 0.16 0.04 Restructuring and other transformation 0.14 0.71 Amortization related to the write-off of certain customer relationship intangible assets 0.02 — (Gain) loss on disposal/write-down of property, plant and equipment, net (including real estate) (0.31) (0.59) Other (income) expense, net, excluding our share of losses (gains) from our unconsolidated joint ventures (0.28) (0.71) Stock-based compensation expense 0.19 0.21 Non-cash amortization related to derivative instruments (1) 0.03 — Tax impact of reconciling items and discrete tax items (2) (0.08) 0.28 Income (loss) Attributable to Noncontrolling Interests 0.02 0.01 Adjusted EPS—Fully Diluted from Net Income (Loss) Attributable to Iron Mountain Incorporated (3) $ 1.79 $ 1.51 (1) Relates to the amortization of the excluded component of our cross-currency swap agreements, which is recognized on a straight-line basis as a component of Interest expense, net in our Consolidated Statements of Operations.
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: YEAR ENDED DECEMBER 31, 2023 2022 Reported EPS—Fully Diluted from Net Income (Loss) Attributable to Iron Mountain Incorporated $ 0.63 $ 1.90 Add/(Deduct): Acquisition and Integration Costs 0.09 0.16 Restructuring and other transformation 0.60 0.14 Amortization related to the write-off of certain customer relationship intangible assets — 0.02 (Gain) loss on disposal/write-down of property, plant and equipment, net (including real estate) (0.04) (0.31) Other expense (income), net, excluding our share of losses (gains) from our unconsolidated joint ventures 0.34 (0.28) Stock-based compensation expense 0.25 0.19 Non-cash amortization related to derivative instruments (1) 0.07 0.03 Tax impact of reconciling items and discrete tax items (2) (0.12) (0.08) Income (Loss) Attributable to Noncontrolling Interests 0.01 0.02 Adjusted EPS—Fully Diluted from Net Income (Loss) Attributable to Iron Mountain Incorporated (3) $ 1.82 $ 1.79 (1) Relates to the amortization of the excluded component of our cross-currency swap agreements, which is recognized on a straight-line basis as a component of Interest expense, net in our Consolidated Statements of Operations.
The remaining amount available for borrowing under the Revolving Credit Facility as of December 31, 2022, which is based on IMI’s leverage ratio, the last 12 months' earnings before interest, taxes, depreciation and amortization and rent expense ("EBITDAR"), other adjustments as defined in the Credit Agreement and current external debt, was $1,174.0 million (which amount represents the maximum availability as of such date).
The remaining amount available for borrowing under the Revolving Credit Facility as of December 31, 2023, which is based on IMI’s leverage ratio, the last 12 months' earnings before interest, taxes, depreciation and amortization and rent expense ("EBITDAR"), other adjustments as defined in the Credit Agreement and current external debt, was $2,245.2 million (which amount represents the maximum availability as of such date).
In 2022, we incurred approximately $41.9 million of Restructuring and other transformation costs related to Project Matterhorn which 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 our growth initiatives.
During the years ended December 31, 2023 and 2022, we incurred approximately $175.2 million and $41.9 million, respectively, of Restructuring and other transformation costs related to Project Matterhorn, which 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 our growth initiatives.
("JPM"), one of which we use to manage liquidity requirements for our QRSs in the Asia Pacific region and the other for our TRSs in the Asia Pacific region; and (iii) two Cash Pools with JPM, which we entered into in the third quarter of 2022, one of which we use to manage liquidity requirements for our QRSs in the Europe, Middle East, and Africa regions and the other for our TRSs in the Europe, Middle East, and Africa regions.
("JPM"), one of which we use to manage liquidity requirements for our QRSs in the Asia Pacific region and the other for our TRSs in the Asia Pacific region and (iii) two Cash Pools with JPM, one of which we use to manage liquidity requirements for our QRSs in the Europe, Middle East, and Africa regions and the other for our TRSs in the Europe, Middle East, and Africa regions.
(2) The difference between our effective tax rate and our structural tax rate (or adjusted effective tax rate) for the years ended December 31, 2022 and 2021 is primarily due to (i) the reconciling items above, which impact our reported net income (loss) before provision (benefit) for income taxes but have an insignificant impact on our reported provision (benefit) for income taxes and (ii) other discrete tax items.
(2) The differences between our effective tax rates and our structural tax rate (or adjusted effective tax rates) for the years ended December 31, 2023 and 2022 are primarily due to (i) the reconciling items above, which impact our reported net income (loss) before provision (benefit) for income taxes but have an insignificant impact on our reported provision (benefit) for income taxes and (ii) other discrete tax items.
As a result of the Clutter Transaction, we recognized a gain related to our contributed interest in the MakeSpace JV of approximately $35.8 million, which was recorded to Other, net, a component of Other expense (income), net during the year ended December 31, 2022.
As a result of the Clutter Transaction, we recognized a gain related to our contributed interest in the MakeSpace JV of approximately $35.8 million, which was recorded to Other, net, a component of Other expense (income), net, during the year ended December 31, 2022. On June 29, 2023, we completed the Clutter Acquisition.
The only significant concentration of liquid investments as of December 31, 2022 is related to cash and cash equivalents held in money market funds. See Note 2.g. to Notes to the Consolidated Financial Statements included in this Annual Report for information on our money market funds.
The only significant concentrations of liquid investments as of December 31, 2023 are related to cash and cash equivalents held in money market funds. See Note 2.g. to Notes to the Consolidated Financial Statements included in this Annual Report for information on our money market funds.
Under the March 2024 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 March 2024 Interest Rate Swap Agreements.
Under our interest rate swap agreements, we receive variable rate interest payments associated with the notional amount of each interest rate swap, based upon the one-month SOFR, in exchange for the payment of fixed interest rates as specified in the interest rate swap agreements.
We are subject to income taxes in the United States and numerous foreign jurisdictions. We are subject to examination by various tax authorities in jurisdictions in which we have business operations or a taxable presence. We regularly assess the likelihood of additional assessments by tax authorities and provide for these matters as appropriate.
We are subject to examination by various tax authorities in jurisdictions in which we have business operations or a taxable presence. We regularly assess the likelihood of additional assessments by tax authorities and provide for these matters as appropriate.
LETTERS OF CREDIT As of December 31, 2022, we had outstanding letters of credit totaling $39.8 million, of which $3.8 million reduce our borrowing capacity under the Revolving Credit Facility (as described above). The letters of credit expire at various dates between January 2023 and March 2025.
LETTERS OF CREDIT As of December 31, 2023, we had outstanding letters of credit totaling $38.8 million, of which $4.8 million reduce our borrowing capacity under the Revolving Credit Facility (as described above). The letters of credit expire at various dates between January 2024 and March 2025.
The success of these businesses and the achievement of certain key assumptions developed by management and used in the Discounted Cash Flow Model are contingent upon various factors including, but not limited to, (i) achieving growth from existing customers, (ii) sales to new customers, (iii) increased market penetration and (iv) accurately timing the capital investments related to expansions. 36 IRON MOUNTAIN 2022 FORM 10-K Table of Contents Part II GLOBAL DATA CENTER Our Global Data Center Business operates in 21 data centers across 19 global markets, either directly or through unconsolidated joint ventures.
The success of these businesses and the achievement of certain key assumptions developed by management and used in the Discounted Cash Flow Model are contingent upon various factors including, but not limited to, (i) achieving growth from existing customers, (ii) sales to new customers, (iii) increased market penetration, (iv) accuracy in the timing and costs of capital investments related to expansions and (v) market pricing trends of IT hardware and component assets. 36 IRON MOUNTAIN 2023 FORM 10-K Table of Contents Part II GLOBAL DATA CENTER Our Global Data Center Business operates 26 data centers across 21 global markets, either directly or through unconsolidated joint ventures.
As of both December 31, 2022 and 2021, we had approximately $27.8 million of reserves related to uncertain tax positions. The reversal of these reserves will be recorded as a reduction of our income tax provision if sustained.
As of December 31, 2023 and 2022, we had approximately $23.6 million and $27.8 million, respectively, of reserves related to uncertain tax positions. The reversal of these reserves will be recorded as a reduction of our income tax provision if sustained.
The primary reconciling items between the federal statutory tax rate of 21.0% and our overall effective tax rate were: YEAR ENDED DECEMBER 31, 2022 2021 The benefits derived from the dividends paid deduction of $82.6 million and the differences in the tax rates to which our foreign earnings are subject of $22.2 million.
The primary reconciling items between the federal statutory tax rate of 21.0% and our overall effective tax rate were: YEAR ENDED DECEMBER 31, 2023 2022 The benefits derived from the dividends paid deduction of $39.3 million and the differences in the tax rates to which our foreign earnings are subject of $6.9 million.
Our consolidated revenues and expenses are subject to the net effect of foreign currency translation related to our operations outside the United States. It is difficult to predict the future fluctuations of foreign currency exchange rates and how those fluctuations will impact our Consolidated Statements of Operations.
Both depreciation and amortization are impacted by the timing of acquisitions. Our consolidated revenues and expenses are subject to the net effect of foreign currency translation related to our operations outside the United States. It is difficult to predict the future fluctuations of foreign currency exchange rates and how those fluctuations will impact our Consolidated Statements of Operations.
DEPRECIATION AND AMORTIZATION Our depreciation and amortization charges result primarily from depreciation related to storage systems, which include racking structures, buildings, building and leasehold improvements and computer systems hardware and software. Amortization relates primarily to customer and supplier relationship intangible assets, contract fulfillment costs and data center lease-based intangible assets.
Our depreciation and amortization charges result primarily from depreciation related to storage systems, which include racking structures, buildings, building and leasehold improvements and computer systems hardware and software. Amortization relates primarily to customer and supplier relationship intangible assets, Contract Costs (as defined below in Critical Accounting Estimates ) and data center lease-based intangible assets.
("IM Australia"), a wholly owned subsidiary of IMI, has an AUD term loan with an original principal balance of 350.0 million Australian dollars ("AUD Term Loan"). All indebtedness associated with the AUD Term Loan was issued at 99% of par.
AUSTRALIAN DOLLAR TERM LOAN Iron Mountain Australia Group Pty, Ltd., a wholly owned subsidiary of IMI, has an AUD term loan with an original principal balance of 350.0 million Australian dollars ("AUD Term Loan"). All indebtedness associated with the AUD Term Loan was issued at 99% of par.
Discrete tax items resulted in a (benefit) provision for income taxes of $(11.9) million and $19.2 million for the years ended December 31, 2022 and 2021, respectively.
Discrete tax items resulted in a (benefit) provision for income taxes of $(18.1) million and $(11.9) million for the years ended December 31, 2023 and 2022, respectively.
STORAGE RENTAL REVENUES AND SERVICE REVENUES Primary factors influencing the change in reported storage rental revenue and reported service revenue for the year ended December 31, 2022 compared to the year ended December 31, 2021 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 0.4% increase in total global volume excluding deconsolidations (also excluding acquisitions, total global volume increased 0.4%); and • a decrease of $81.5 million due to foreign currency exchange rate fluctuations.
STORAGE RENTAL REVENUE AND SERVICE REVENUE Primary factors influencing the change in reported storage rental revenue and reported service revenue for the year ended December 31, 2023 compared to the year ended December 31, 2022 include the following: STORAGE RENTAL REVENUE • organic storage rental revenue growth driven by increased volume in faster growing markets and our Global Data Center Business segment and revenue management; and • a decrease of $2.5 million due to foreign currency exchange rate fluctuations.
We have assets for foreign net operating losses of $81.9 million, with various expiration dates (and in some cases no expiration date), subject to a valuation allowance of approximately 56.0%. IRON MOUNTAIN 2022 FORM 10-K 57 Table of Contents Part II
We have assets for foreign net operating losses of $133.5 million, with various expiration dates (and in some cases no expiration date), subject to a valuation allowance of approximately 73.8%. 56 IRON MOUNTAIN 2023 FORM 10-K Table of Contents Part II
Our structural tax rate for purposes of the calculation of Adjusted EPS for the years ended December 31, 2022 and 2021 was 15.2% and 17.7%, respectively.
Our structural tax rate for purposes of the calculation of Adjusted EPS for the years ended December 31, 2023 and 2022 was 12.3% and 15.2%, respectively.
We have assets for foreign net operating losses of $81.9 million, with various expiration dates (and in some cases no expiration date), subject to a valuation allowance of approximately 56.0%.
We have assets for foreign net operating losses of $133.5 million, with various expiration dates (and in some cases no expiration date), subject to a valuation allowance of approximately 73.8%.
The following is a summary of the Global Data Center and ALM reporting units including the goodwill balance (in thousands), the percentage by which the fair value of the reporting units exceeded their carrying values and certain key assumptions used by us in determining the fair value of the reporting units as of October 1, 2022: REPORTING UNIT GOODWILL BALANCE AT OCTOBER 1, 2022 PERCENTAGE BY WHICH THE FAIR VALUE OF THE REPORTING UNIT EXCEEDED THE REPORTING UNIT CARRYING VALUE AS OF OCTOBER 1, 2022 KEY ASSUMPTIONS IN THE FAIR VALUE OF REPORTING UNIT MEASUREMENT AS OF OCTOBER 1, 2022 DISCOUNT RATE AVERAGE ANNUAL ADJUSTED EBITDA MARGIN USED IN DISCOUNTED CASH FLOW AVERAGE ANNUAL CAPITAL EXPENDITURES AS PERCENTAGE OF REVENUE (1) TERMINAL GROWTH RATE (2) Global Data Center $407,787 20.4% 8.5% 38.7% 19.2% 3.5% ALM 616,897 28.0% 15.5% 11.2% 2.0% 3.5% (1) For purposes of our goodwill impairment analysis, the term "capital expenditures" includes both growth investment and recurring capital expenditures.
The following is a summary of the Global Data Center and ALM reporting units including the goodwill balance (in thousands), the percentage by which the fair value of the reporting units exceeded their carrying values and certain key assumptions used by us in determining the fair value of the reporting units as of October 1, 2023: REPORTING UNIT GOODWILL BALANCE AT OCTOBER 1, 2023 PERCENTAGE BY WHICH THE FAIR VALUE OF THE REPORTING UNIT EXCEEDED THE REPORTING UNIT CARRYING VALUE AS OF OCTOBER 1, 2023 KEY ASSUMPTIONS IN THE FAIR VALUE OF REPORTING UNIT MEASUREMENT AS OF OCTOBER 1, 2023 DISCOUNT RATE AVERAGE ANNUAL ADJUSTED EBITDA MARGIN USED IN DISCOUNTED CASH FLOW AVERAGE ANNUAL CAPITAL EXPENDITURES AS PERCENTAGE OF REVENUE (1) TERMINAL GROWTH RATE (2) Global Data Center $447,931 31.2% 9.0% 45.0% 19.7% 4.0% ALM 579,054 37.7% 16.5% 13.6% 1.2% 3.5% (1) For purposes of our goodwill impairment analysis, the term "capital expenditures" includes both growth investment and recurring capital expenditures.
See Note 6 to Notes to Consolidated Financial Statements included in this Annual Report for additional information on our derivative instruments. ACQUISITIONS See Note 3 to Notes to Consolidated Financial Statements included in this Annual Report for information regarding our 2022 acquisitions.
ACQUISITIONS See Note 3 to Notes to Consolidated Financial Statements included in this Annual Report for information regarding our acquisitions.
The fair value of the Deferred Purchase Obligation associated with the ITRenew Transaction (each as defined below) was determined utilizing a Monte-Carlo simulation model and takes into account our forecasted projections as it relates to the underlying performance of the business.
The fair value of the Deferred Purchase Obligation associated with the ITRenew Transaction (each as defined in Note 3 to Notes to Consolidated Financial Statements included in this Annual Report) was determined utilizing a Monte-Carlo simulation model and takes into account our forecasted projections as it relates to the underlying performance of the business.
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA (IN THOUSANDS): YEAR ENDED DECEMBER 31, 2022 2021 Net Income (Loss) $ 562,149 $ 452,725 Add/(Deduct): Interest expense, net 488,014 417,961 Provision (benefit) for income taxes 69,489 176,290 Depreciation and amortization 727,595 680,422 Acquisition and Integration Costs (1) 47,746 12,764 Restructuring and other transformation 41,933 206,426 (Gain) loss on disposal/write-down of property, plant and equipment, net (including real estate) (93,268) (172,041) Other (income) expense, net, excluding our share of losses (gains) from our unconsolidated joint ventures (2) (83,268) (205,746) Stock-based compensation expense 56,861 61,001 Our share of Adjusted EBITDA reconciling items from our unconsolidated joint ventures 9,806 4,897 Adjusted EBITDA $ 1,827,057 $ 1,634,699 (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 and system integration costs (collectively, "Acquisition and Integration Costs").
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA (IN THOUSANDS): YEAR ENDED DECEMBER 31, 2023 2022 Net Income (Loss) $ 187,263 $ 562,149 Add/(Deduct): Interest expense, net 585,932 488,014 Provision (benefit) for income taxes 39,943 69,489 Depreciation and amortization 776,159 727,595 Acquisition and Integration Costs (1) 25,875 47,746 Restructuring and other transformation 175,215 41,933 (Gain) loss on disposal/write-down of property, plant and equipment, net (including real estate) (12,825) (93,268) Other expense (income), net, excluding our share of losses (gains) from our unconsolidated joint ventures (2) 98,891 (83,268) Stock-based compensation expense 73,799 56,861 Our share of Adjusted EBITDA reconciling items from our unconsolidated joint ventures 11,425 9,806 Adjusted EBITDA $ 1,961,677 $ 1,827,057 (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 and system integration costs (collectively, "Acquisition and Integration Costs").
We expect organic service revenue growth in 2023 to benefit from our new and existing digital offerings, as well as our traditional services. • We expect continued total revenue and Adjusted EBITDA growth in 2023 as a result of our focus on new product and service offerings, innovation, customer solutions and market expansion in line with our Project Matterhorn objectives. • We expect the impact of a stronger US dollar to create headwinds on reported total revenue and Adjusted EBITDA growth in 2023 against prior periods.
We expect organic service revenue growth in 2024 to benefit from our new and existing digital offerings and ALM, as well as our traditional services. • We expect continued total revenue and Adjusted EBITDA growth in 2024 as a result of our focus on new product and service offerings, innovation, customer solutions and market expansion in line with our Project Matterhorn objectives.
Risk Factors" beginning on page 9 of this Annual Report. 26 IRON MOUNTAIN 2022 FORM 10-K Table of Contents Part II OVERVIEW PROJECT MATTERHORN In September 2022, we announced Project Matterhorn, our 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.
IRON MOUNTAIN 2023 FORM 10-K 27 Table of Contents Part II OVERVIEW PROJECT MATTERHORN In September 2022, we announced Project Matterhorn, a global program designed to accelerate the growth of our business. Project Matterhorn investments focus on transforming our operating model to a global operating model.
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 and other transformation • (Gain) loss on disposal/write-down of property, plant and equipment, net (excluding real estate) • Other (income) expense, net • Stock-based compensation expense • Non-cash amortization related to derivative instruments • 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): YEAR ENDED DECEMBER 31, 2022 2021 Net Income (Loss) $ 562,149 $ 452,725 Add/(Deduct): Real estate depreciation (1) 307,895 307,717 (Gain) loss on sale of real estate, net of tax (2) (94,059) (142,892) Data center lease-based intangible assets amortization (3) 16,955 42,333 FFO (Nareit) 792,940 659,883 Add/(Deduct): Acquisition and Integration Costs 47,746 12,764 Restructuring and other transformation 41,933 206,426 Loss (gain) on disposal/write-down of property, plant and equipment, net (excluding real estate) 1,564 (3,751) Other (income) expense, net, excluding our share of losses (gains) from our unconsolidated joint ventures (83,268) (205,746) Stock-based compensation expense 56,861 61,001 Non-cash amortization related to derivative instruments 9,100 — Real estate financing lease depreciation 13,197 14,635 Tax impact of reconciling items and discrete tax items (4) (25,190) 56,822 Our share of FFO (Normalized) reconciling items from our unconsolidated joint ventures 2,874 (38) FFO (Normalized) $ 857,757 $ 801,996 (1) Includes depreciation expense related to owned real estate assets (land improvements, buildings, building improvements, leasehold improvements and racking), excluding depreciation related to real estate financing leases.
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 and other transformation • (Gain) loss on disposal/write-down of property, plant and equipment, net (excluding real estate) • Other expense (income), net • Stock-based compensation expense • Non-cash amortization related to derivative instruments • 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): YEAR ENDED DECEMBER 31, 2023 2022 Net Income (Loss) $ 187,263 $ 562,149 Add/(Deduct): Real estate depreciation (1) 322,045 307,895 (Gain) loss on sale of real estate, net of tax (2) (16,656) (94,059) Data center lease-based intangible assets amortization (3) 22,322 16,955 Our share of FFO (Nareit) reconciling items from our unconsolidated joint ventures 2,226 — FFO (Nareit) 517,200 792,940 Add/(Deduct): Acquisition and Integration Costs 25,875 47,746 Restructuring and other transformation 175,215 41,933 Loss (gain) on disposal/write-down of property, plant and equipment, net (excluding real estate) 4,307 1,564 Other expense (income), net, excluding our share of losses (gains) from our unconsolidated joint ventures 98,891 (83,268) Stock-based compensation expense 73,799 56,861 Non-cash amortization related to derivative instruments 21,097 9,100 Real estate financing lease depreciation 12,019 13,197 Tax impact of reconciling items and discrete tax items (4) (35,307) (25,190) Our share of FFO (Normalized) reconciling items from our unconsolidated joint ventures (374) 2,874 FFO (Normalized) $ 892,722 $ 857,757 (1) Includes depreciation expense related to owned real estate assets (land improvements, buildings, building improvements, leasehold improvements and racking), excluding depreciation related to real estate financing leases.
CASH FLOWS FROM OPERATING ACTIVITIES For the year ended December 31, 2022, net cash flows provided by operating activities increased by $168.8 million compared to the prior year period primarily due to an increase in net income (excluding non-cash charges) of $289.6 million, partially offset by a decrease in cash from working capital of $120.8 million, primarily related to the timing of accounts receivable collections and timing of accrued expenses.
CASH FLOWS FROM OPERATING ACTIVITIES For the year ended December 31, 2023, net cash flows provided by operating activities increased by $185.9 million compared to the prior year period primarily due to an increase in cash from working capital of $211.9 million, primarily related to the timing of accounts receivable collections, partially offset by a decrease in net income (excluding non-cash charges) of $26.0 million.
CREDIT AGREEMENT Our 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").
CREDIT AGREEMENT Our credit agreement (the "Credit Agreement") consists of a revolving credit facility (the "Revolving Credit Facility"), a term loan A facility (the "Term Loan A") and two term loan B facilities (the "Term Loan B due 2026" and the "Term Loan B due 2031").
For a discussion of our results for the year ended December 31, 2021 compared to the year ended December 31, 2020, see "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" included in Exhibit 99.1 of our Current Report on Form 8-K filed with the SEC on August 4, 2022.
For a discussion of our results for the year ended December 31, 2022 compared to the year ended December 31, 2021, see "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our Annual Report on Form 10-K filed with the SEC on February 23, 2023.
Our estimates of fair value are based upon assumptions believed to be reasonable at that time but which are inherently uncertain and unpredictable. Assumptions may be incomplete or inaccurate, and unanticipated events and circumstances may occur, which may affect the accuracy of such assumptions. Total customer and supplier relationship intangible assets acquired in our 2022 acquisitions were approximately $491.3 million.
Our estimates of fair value are based upon assumptions believed to be reasonable at that time but which are inherently uncertain and unpredictable. Assumptions may be incomplete or inaccurate, and unanticipated events and circumstances may occur, which may affect the accuracy of such assumptions. Total property, plant and equipment acquired in our 2023 acquisitions was approximately $140.7 million.
TOTAL REVENUES For the year ended December 31, 2022, the increase in revenue was driven by organic storage rental revenue growth, organic service revenue growth and our acquisition of ITRenew. Foreign currency exchange rate fluctuations decreased our reported revenue growth rate by 3.4% in the year ended December 31, 2022 compared to the prior year period.
TOTAL REVENUES For the year ended December 31, 2023, the increase in reported revenue was primarily driven by organic storage rental revenue growth. Foreign currency exchange rate fluctuations decreased our reported revenue growth rate by 0.2% in the year ended December 31, 2023 compared to the prior year period.
On September 22, 2022, the UK Borrowers exercised their option to extend the maturity date from September 24, 2023 to September 24, 2024. The interest rate in effect under the UK Bilateral Revolving Credit Facility was 5.5% as of December 31, 2022.
On September 19, 2023, the UK Borrowers amended the UK Bilateral Revolving Credit Facility to extend the maturity date from September 24, 2024 to September 24, 2025. The interest rate in effect under the UK Bilateral Revolving Credit Facility was 7.3% as of December 31, 2023.
Principal payments on the AUD Term Loan are to be paid in quarterly installments in an aggregate amount of 7.7 million Australian dollars per year.
Principal payments on the AUD Term Loan are to be paid in quarterly installments in an aggregate amount of 7.7 million Australian dollars per year. The AUD Term Loan bears interest at BBSY (an Australian benchmark variable interest rate) plus 3.625%.
The assumptions we used in determining fair value reflect the ongoing and anticipated expansion of these services, the timing of reopening of supply chains due to closures associated with border restrictions, particularly in mainland China, in connection with the COVID-19 pandemic, the maintenance and further development of the supplier relationships required to expand this business and meet customer demand and decommissioning schedules of our supplier's IT hardware and component assets, as well as associated market pricing and demand for such assets at that time.
The assumptions we used in determining fair value reflect the ongoing and anticipated expansion of these services, the maintenance and further development of the supplier relationships required to expand this business and meet customer demand and decommissioning schedules of our supplier's IT hardware and component assets, as well as demand for such assets at that time.
The income of our domestic TRSs, which hold our domestic operations that may not be REIT-compliant as currently operated and structured, is subject, as applicable, to federal and state corporate income tax.
The income represented by such dividends is not subject to federal taxation at the entity level but is taxed, if at all, at the stockholder level. The income of our domestic TRSs, which hold our domestic operations that may not be REIT-compliant as currently operated and structured, is subject, as applicable, to federal and state corporate income tax.
In addition, there were gains and losses recorded in Other (income) expense, net and Gain (loss) on disposal/write-down of property, plant and equipment, net during the period for which there were insignificant tax impacts.
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 were insignificant tax impacts. As a REIT, we are entitled to a deduction for dividends paid, resulting in a substantial reduction of federal income tax expense.
CASH FLOWS The following is a summary of our cash balances and cash flows (in thousands) as of and for the years ended December 31, 2022 2021 Cash Flows from Operating Activities $ 927,695 $ 758,902 Cash Flows from Investing Activities (1,660,423) (473,313) Cash Flows from Financing Activities 639,207 (220,806) Cash and Cash Equivalents, End of Year 141,797 255,828 A.
CASH FLOWS The following is a summary of our cash balances and cash flows (in thousands) as of and for the years ended December 31, 2023 2022 Cash Flows from Operating Activities $ 1,113,567 $ 927,695 Cash Flows from Investing Activities (1,444,356) (1,660,423) Cash Flows from Financing Activities 425,666 639,207 Cash and Cash Equivalents, End of Year 222,789 141,797 A.
Adjusted EBITDA also 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.
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.
The following includes supplemental information to the table above for the Global Data Center and ALM reporting units where the estimated fair value exceeded its carrying value by approximately 20.4% and 28.0%, respectively, as of October 1, 2022.
The following includes supplemental information to the table above for the Global Data Center and ALM reporting units where the estimated fair value exceeded their respective carrying values by approximately 31.2% and 37.7% as of October 1, 2023.
IRON MOUNTAIN 2022 FORM 10-K 37 Table of Contents Part II North America RIM, MENAT RIM, ESA RIM, Latin America RIM, APAC RIM, Fine Arts and Entertainment Services We noted that, based on the estimated fair value of these reporting units determined as of October 1, 2022: • a hypothetical decrease of 10% in the expected annual future cash flows of these reporting units, with all other assumptions unchanged, would have decreased the estimated fair value of these reporting units as of October 1, 2022 by a range of approximately 9.8% to 10.4% but would not, however, have resulted in the carrying value of any of these reporting units exceeding their estimated fair value; • a hypothetical increase of 100 basis points in the discount rate, with all other assumptions unchanged, would have decreased the estimated fair value of these reporting units as of October 1, 2022 by a range of approximately 3.7% to 10.1% but would not, however, have resulted in the carrying value of any of these reporting units exceeding their estimated fair value.
We noted that, based on the estimated fair value of all of our reporting units determined as of October 1, 2023: • a hypothetical decrease of 10% in the expected annual future cash flows of these reporting units, with all other assumptions unchanged, would have decreased the estimated fair value of our reporting units as of October 1, 2023 by a range of approximately 7.7% to 11.5% but would not, however, have resulted in the carrying value of any of our reporting units exceeding their estimated fair value; and • a hypothetical increase of 100 basis points in the discount rate, with all other assumptions unchanged, would have decreased the estimated fair value of our reporting units as of October 1, 2023 by a range of approximately 2.7% to 15.4% but would not, however, have resulted in the carrying value of any of our reporting units exceeding their estimated fair value.
As a REIT, we are entitled to a deduction for dividends paid, resulting in a substantial reduction of federal income tax expense. As a REIT, substantially all of our income tax expense will be incurred based on the earnings generated by our foreign subsidiaries and our domestic TRSs.
As a REIT, substantially all of our income tax expense will be incurred based on the earnings generated by our foreign subsidiaries and our domestic TRSs. We are subject to income taxes in the United States and numerous foreign jurisdictions.
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.
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.
IRON MOUNTAIN 2022 FORM 10-K 53 Table of Contents Part II ACCOUNTS RECEIVABLE SECURITIZATION PROGRAM We participate in an accounts receivable securitization program (the "Accounts Receivable Securitization Program") involving several of our wholly owned subsidiaries and certain financial institutions.
ACCOUNTS RECEIVABLE SECURITIZATION PROGRAM We participate in an accounts receivable securitization program (the "Accounts Receivable Securitization Program") involving several of our wholly-owned subsidiaries and certain financial institutions.
Revenue for all our lines of business, with the exception of storage revenues in our Global Data Center Business (which is subject to leasing guidance), is recognized in accordance with Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers ("ASC 606"), the application of which requires that we make estimates and judgements that may affect the amount and timing of revenue we recognize.
Revenue for all our lines of business, with the exception of storage revenues in our Global Data Center Business (which is subject to Accounting Standards Codification ("ASC") Topic 842, Leases ), is recognized in accordance with ASC 606, Revenue from Contracts with Customers ("ASC 606"), the application of which requires that we make significant judgments related to performance obligations and the transfer of control to the customer.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

7 edited+1 added−0 removed13 unchanged
Biggest changeSee Note 6 to Notes to Consolidated Financial Statements included in this Annual Report for a discussion on our cross-currency swap agreements. 58 IRON MOUNTAIN 2022 FORM 10-K Table of Contents Part II The impact of devaluation or depreciating currency on an entity depends on the residual effect on the local economy and the ability of an entity to raise prices and/or reduce expenses.
Biggest changeIRON MOUNTAIN 2023 FORM 10-K 57 Table of Contents Part II The impact of devaluation or depreciating currency on an entity depends on the residual effect on the local economy and the ability of an entity to raise prices and/or reduce expenses.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. CREDIT RISK Financial instruments that potentially subject us to credit risk consist principally of cash and cash equivalents (including money market funds and time deposits) and accounts receivable. The only significant concentrations of liquid investments as of December 31, 2022 related to cash and cash equivalents held in money market funds.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. CREDIT RISK Financial instruments that potentially subject us to credit risk consist principally of cash and cash equivalents (including money market funds and time deposits) and accounts receivable. The only significant concentrations of liquid investments as of December 31, 2023 related to cash and cash equivalents held in money market funds.
See Note 6 to Notes to Consolidated Financial Statements included in this Annual Report for a discussion on our interest rate swaps and Note 7 to Notes to Consolidated Financial Statements included in this Annual Report for a discussion of our long-term indebtedness, including the fair values of such indebtedness as of December 31, 2022.
See Note 6 to Notes to Consolidated Financial Statements included in this Annual Report for a discussion on our interest rate swaps and Note 7 to Notes to Consolidated Financial Statements included in this Annual Report for a discussion of our long-term indebtedness, including the fair values of such indebtedness as of December 31, 2023.
A 10% depreciation in year-end 2022 functional currencies, relative to the United States dollar, would result in a reduction in our equity of approximately $377.4 million. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. The information required by this item is included in Item 15(a) of this Annual Report.
A 10% depreciation in year-end 2023 functional currencies, relative to the United States dollar, would result in a reduction in our equity of approximately $422.0 million. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. The information required by this item is included in Item 15(a) of this Annual Report.
As of December 31, 2022, approximately 78% of our total debt outstanding was fixed. If the weighted average variable interest rate on our variable rate debt had increased by 1%, our net income for the year ended December 31, 2022 would have been reduced by approximately $17.3 million.
As of December 31, 2023, approximately 79.6% of our total debt outstanding was fixed. If the weighted average variable interest rate on our variable rate debt had increased by 1%, our net income for the year ended December 31, 2023 would have been reduced by approximately $20.7 million.
As of December 31, 2022, our cash and cash equivalents balance was $141.8 million.
As of December 31, 2023, our cash and cash equivalents balance was $222.8 million.
Occasionally, we may use interest rate swaps as a tool to maintain our targeted level of fixed rate debt. As of December 31, 2022, we had $2,341.4 million of variable rate debt outstanding with a weighted average variable interest rate of approximately 5.8%, and $8,308.9 million of fixed rate debt outstanding.
Occasionally, we may use interest rate swaps as a tool to maintain our targeted level of fixed rate debt. As of December 31, 2023, we had $2,459.6 million of variable rate debt outstanding with a weighted average variable interest rate of approximately 7.8%, and $9,575.0 million of fixed rate debt outstanding.
Added
See Note 6 to Notes to Consolidated Financial Statements included in this Annual Report for a discussion on our cross-currency swap agreements.

Other IRM 10-K year-over-year comparisons