UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q



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

For the Quarterly Period Ended ~~September 30, 2016~~March 31, 2017

OR

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

For the Transition Period from to

Commission file number 1-13045

IRON MOUNTAIN INCORPORATED

(Exact Name of Registrant as Specified in Its Charter)



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

One Federal Street, Boston, Massachusetts 02110

(Address of Principal Executive Offices, Including Zip Code)

(617) 535-4766

(Registrant's Telephone Number, Including Area Code)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No o

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



Large accelerated filer ý	Accelerated filer o	Non-accelerated filer o ~~(Do~~(Do not check if a smaller reporting company)	Smaller reporting company o	Emerging growth company o

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

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

Number of shares of the registrant's Common Stock outstanding at ~~October 28, 2016: 263,447,840~~April 21, 2017: 264,116,522

IRON MOUNTAIN INCORPORATED

Index



	Page
PART I—FINANCIAL INFORMATION
Item 1—Unaudited Consolidated Financial Statements	3

Consolidated Balance Sheets at December 31, ~~2015~~2016 and ~~September 30, 2016~~March 31, 2017 (Unaudited)	3

Consolidated Statements of Operations for the Three Months Ended ~~September 30, 2015~~March 31, 2016 and ~~2016~~2017 (Unaudited)	4

~~Consolidated Statements of Operations for the Nine Months Ended September 30, 2015 and 2016 (Unaudited)~~	5

Consolidated Statements of Comprehensive Income (Loss) for the Three ~~and Nine~~ Months Ended ~~September 30, 2015~~March 31, 2016 and 2017 (Unaudited)	5

Consolidated Statements of Equity for the Three Months Ended March 31, 2016 and 2017 (Unaudited)	6

Consolidated Statements of ~~Equity~~Cash Flows for the ~~Nine~~Three Months Ended ~~September 30, 2015~~March 31, 2016 and ~~2016~~2017 (Unaudited)	7

~~Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2015 and 2016 (Unaudited)~~	8

Notes to Consolidated Financial Statements (Unaudited)	98

Item 2—Management's Discussion and Analysis of Financial Condition and Results of Operations	5845

Item 4—Controls and Procedures	8971

PART II—OTHER INFORMATION

Item 2—Unregistered Sales of Equity Securities and Use of Proceeds	8971

Item 6—Exhibits	9072

Signatures	9173

Part I. Financial Information

Item 1. Unaudited Consolidated Financial Statements

IRON MOUNTAIN INCORPORATED

CONSOLIDATED BALANCE SHEETS

(In Thousands, except Share and Per Share Data)

(Unaudited)


	December 31, 2015			September 30, 2016			December 31, 2016			March 31, 2017
ASSETS
Current Assets:
Cash and cash equivalents	$	128,381		$	458,128		$	236,484		$	295,628
Accounts receivable (less allowances of $31,447 and $41,636 as of December 31, 2015 and September 30, 2016, respectively)	564,401			700,238
Deferred income taxes	22,179			11,075
Accounts receivable (less allowances of $44,290 and $40,690 as of December 31, 2016 and March 31, 2017, respectively)							691,249			721,030
Prepaid expenses and other	142,951			169,988			184,374			181,979
Assets held for sale (see Note 10)	—			127,912
Total Current Assets	857,912			1,467,341			1,112,107			1,198,637
Property, Plant and Equipment:
Property, plant and equipment	4,744,236			5,574,805			5,535,783			5,662,272
Less—Accumulated depreciation	(2,247,078		)	(2,408,277		)	(2,452,457		)	(2,550,532		)
Property, Plant and Equipment, Net	2,497,158			3,166,528			3,083,326			3,111,740
Other Assets, Net:
Goodwill	2,360,978			3,861,810			3,905,021			3,957,058
Customer relationships and customer inducements	603,314			1,306,011			1,252,523			1,276,929
Other	31,225			103,226			133,823			127,770
Total Other Assets, Net	2,995,517			5,271,047			5,291,367			5,361,757
Total Assets	$	6,350,587		$	9,904,916		$	9,486,800		$	9,672,134
LIABILITIES AND EQUITY
Current Liabilities:
Current portion of long-term debt	$	88,068		$	121,203		$	172,975		$	421,227
Accounts payable	219,590			233,971			222,197			239,894
Accrued expenses	351,061			447,413			450,257			533,647
Deferred revenue	183,112			202,171			201,128			223,701
Liabilities held for sale (see Note 10)	—			19,269
Total Current Liabilities	841,831			1,024,027			1,046,557			1,418,469
Long-term Debt, Net of Current Portion	4,757,610			6,338,024
Long-term Debt, net of current portion							6,078,206			5,922,748
Other Long-term Liabilities	71,844			88,794			99,540			86,583
Deferred Rent	95,693			111,035			119,834			121,938
Deferred Income Taxes	55,002			192,782			151,295			151,314
Commitments and Contingencies (see Note 8)
Redeemable Noncontrolling Interests							54,697			67,308
Equity:
Iron Mountain Incorporated Stockholders' Equity:
Preferred stock (par value $0.01; authorized 10,000,000 shares; none issued and outstanding)	—			—			—			—
Common stock (par value $0.01; authorized 400,000,000 shares; issued and outstanding 211,340,296 shares and 263,425,012 shares as of December 31, 2015 and September 30, 2016, respectively)	2,113			2,634
Common stock (par value $0.01; authorized 400,000,000 shares; issued and outstanding 263,682,670 shares and 264,110,388 shares as of December 31, 2016 and March 31, 2017, respectively)							2,636			2,641
Additional paid-in capital	1,623,863			3,506,913			3,489,795			3,491,936
(Distributions in excess of earnings) Earnings in excess of distributions	(942,218		)	(1,246,408		)	(1,343,311		)	(1,430,613		)
Accumulated other comprehensive items, net	(174,917		)	(138,446		)	(212,573		)	(161,239		)
Total Iron Mountain Incorporated Stockholders' Equity	508,841			2,124,693			1,936,547			1,902,725
Noncontrolling Interests	19,766			25,561			124			1,049
Total Equity	528,607			2,150,254			1,936,671			1,903,774
Total Liabilities and Equity	$	6,350,587		$	9,904,916		$	9,486,800		$	9,672,134

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

IRON MOUNTAIN INCORPORATED

CONSOLIDATED STATEMENTS OF OPERATIONS

(In Thousands, except Per Share Data)

(Unaudited)


	Three Months Ended September 30,						Three Months Ended March 31,
	2015			2016			2016			2017
Revenues:
Storage rental	$	460,052		$	576,465		$	461,211		$	572,279
Service	286,477			366,357			289,479			366,597
Total Revenues	746,529			942,822			750,690			938,876
Operating Expenses:
Cost of sales (excluding depreciation and amortization)	317,663			429,808			326,105			426,707
Selling, general and administrative	215,693			252,944			207,766			240,166
Depreciation and amortization	86,492			124,670			87,204			124,707
(Gain) Loss on disposal/write-down of property, plant and equipment (excluding real estate), net	(141		)	(54		)	(451		)	(459		)
Total Operating Expenses	619,707			807,368			620,624			791,121
Operating Income (Loss)	126,822			135,454			130,066			147,755
Interest Expense, Net (includes Interest Income of $1,132 and $2,118 for the three months ended September 30, 2015 and 2016, respectively)	65,135			83,300
Other Expense (Income), Net	35,246			23,302
Income (Loss) from Continuing Operations Before Provision (Benefit) for Income Taxes and Gain on Sale of Real Estate	26,441			28,852
Interest Expense, Net (includes Interest Income of $1,287 and $2,293 for the three months ended March 31, 2016 and 2017, respectively)							67,062			86,055
Other (Income) Expense, Net							(11,937		)	(6,364		)
Income (Loss) from Continuing Operations Before Provision (Benefit) for Income Taxes							74,941			68,064
Provision (Benefit) for Income Taxes	3,774			23,418			11,900			9,220
Gain on Sale of Real Estate, Net of Tax	(850		)	(325		)
Income (Loss) from Continuing Operations	23,517			5,759			63,041			58,844
Income (Loss) from Discontinued Operations, Net of Tax	—			2,041
(Loss) Income from Discontinued Operations, Net of Tax							—			(337		)
Net Income (Loss)	23,517			7,800			63,041			58,507
Less: Net Income (Loss) Attributable to Noncontrolling Interests	407			720			267			382
Net Income (Loss) Attributable to Iron Mountain Incorporated	$	23,110		$	7,080		$	62,774		$	58,125
Earnings (Losses) per Share—Basic:
Income (Loss) from Continuing Operations	$	0.11		$	0.02		$	0.30		$	0.22
Total Income (Loss) from Discontinued Operations, Net of Tax	$	—		$	0.01		$	—		$	—
Net Income (Loss) Attributable to Iron Mountain Incorporated	$	0.11		$	0.03		$	0.30		$	0.22
Earnings (Losses) per Share—Diluted:
Income (Loss) from Continuing Operations	$	0.11		$	0.02		$	0.30		$	0.22
Total Income (Loss) from Discontinued Operations, Net of Tax	$	—		$	0.01		$	—		$	—
Net Income (Loss) Attributable to Iron Mountain Incorporated	$	0.11		$	0.03		$	0.30		$	0.22
Weighted Average Common Shares Outstanding—Basic	210,912			263,269			211,526			263,855
Weighted Average Common Shares Outstanding—Diluted	211,917			264,502			212,471			264,810
Dividends Declared per Common Share	$	0.4751		$	0.4852		$	0.4853		$	0.5504

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

~~IRON MOUNTAIN INCORPORATED~~

~~CONSOLIDATED STATEMENTS OF OPERATIONS~~

~~(In Thousands, except Per Share Data)~~

~~(Unaudited)~~

Nine Months Ended
September 30,
2015 2016
Revenues:

Storage rental $ 1,380,133
$ 1,576,358
Service 875,416
1,000,902
Total Revenues 2,255,549
2,577,260
Operating Expenses:

Cost of sales (excluding depreciation and amortization) 965,600
1,151,562
Selling, general and administrative 627,992
737,787
Depreciation and amortization 259,992
326,896
Loss (Gain) on disposal/write-down of property, plant and equipment (excluding real estate), net 707
(1,131 )
Total Operating Expenses 1,854,291
2,215,114
Operating Income (Loss) 401,258
362,146
Interest Expense, Net (includes Interest Income of $2,777 and $5,549 for the nine months ended September 30, 2015 and 2016, respectively) 196,120
225,228
Other Expense (Income), Net 59,599
37,006
Income (Loss) from Continuing Operations Before Provision (Benefit) for Income Taxes and Gain on Sale of Real Estate 145,539
99,912
Provision (Benefit) for Income Taxes 27,126
46,157
Gain on Sale of Real Estate, Net of Tax (850 ) (325 )
Income (Loss) from Continuing Operations 119,263
54,080
Income (Loss) from Discontinued Operations, Net of Tax —
3,628
Net Income (Loss) 119,263
57,708
Less: Net Income (Loss) Attributable to Noncontrolling Interests 1,727
1,822
Net Income (Loss) Attributable to Iron Mountain Incorporated $ 117,536
$ 55,886
Earnings (Losses) per Share—Basic:

Income (Loss) from Continuing Operations $ 0.57
$ 0.22
Total Income (Loss) from Discontinued Operations, Net of Tax $ —
$ 0.02
Net Income (Loss) Attributable to Iron Mountain Incorporated $ 0.56
$ 0.23
Earnings (Losses) per Share—Diluted:

Income (Loss) from Continuing Operations $ 0.56
$ 0.22
Total Income (Loss) from Discontinued Operations, Net of Tax $ —
$ 0.02
Net Income (Loss) Attributable to Iron Mountain Incorporated $ 0.55
$ 0.23
Weighted Average Common Shares Outstanding—Basic 210,616
240,394
Weighted Average Common Shares Outstanding—Diluted 212,081
241,520
Dividends Declared per Common Share $ 1.4250
$ 1.4886

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

IRON MOUNTAIN INCORPORATED

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In Thousands)

(Unaudited)

Three Months Ended
September 30,
2015 2016
Net Income (Loss) $ 23,517
$ 7,800
Other Comprehensive (Loss) Income:

Foreign Currency Translation Adjustments (34,594 ) 11,304
Market Value Adjustments for Securities (134 ) —
Total Other Comprehensive (Loss) Income (34,728 ) 11,304
Comprehensive (Loss) Income (11,211 ) 19,104
Comprehensive (Loss) Income Attributable to Noncontrolling Interests (384 ) 1,181
Comprehensive (Loss) Income Attributable to Iron Mountain Incorporated $ (10,827 ) $ 17,923



	Three Months Ended March 31,
	2016			2017
Net Income (Loss)	$	63,041		$	58,507
Other Comprehensive Income (Loss):
Foreign Currency Translation Adjustments	23,978			50,784
Market Value Adjustments for Securities	(734		)	—
Total Other Comprehensive Income (Loss)	23,244			50,784
Comprehensive Income (Loss)	86,285			109,291
Comprehensive Income (Loss) Attributable to Noncontrolling Interests	754			(168		)
Comprehensive Income (Loss) Attributable to Iron Mountain Incorporated	$	85,531		$	109,459

Nine Months Ended
September 30,
2015 2016
Net Income (Loss) $ 119,263
$ 57,708
Other Comprehensive (Loss) Income:

Foreign Currency Translation Adjustments (89,769 ) 38,071
Market Value Adjustments for Securities (111 ) (734 )
Total Other Comprehensive (Loss) Income (89,880 ) 37,337
Comprehensive Income (Loss) 29,383
95,045
Comprehensive Income (Loss) Attributable to Noncontrolling Interests 503
2,688
Comprehensive Income (Loss) Attributable to Iron Mountain Incorporated $ 28,880
$ 92,357

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

IRON MOUNTAIN INCORPORATED

CONSOLIDATED STATEMENTS OF EQUITY

(In Thousands, except Share Data)

(Unaudited)


				Iron Mountain Incorporated Stockholders' Equity																					Iron Mountain Incorporated Stockholders' Equity

				Common Stock			Additional Paid-in Capital				(Distributions in Excess of Earnings) Earnings in Excess of Distributions							Noncontrolling Interests							Common Stock				Additional Paid-in Capital			(Distributions in Excess of Earnings) Earnings in Excess of Distributions								Noncontrolling Interests
	Total			Shares	Amounts					Accumulated Other Comprehensive Items, Net				Total				Noncontrolling Interests			Shares			Amounts				Accumulated Other Comprehensive Items, Net							Redeemable Noncontrolling Interests					Noncontrolling Interests
Balance, December 31, 2014	$	869,955		209,818,812	$	2,098	Additional Paid-in Capital		$	1,588,841					$	(659,553	)	$	(75,031	)		$	13,600
Issuance of shares under employee stock purchase plan and option plans and stock-based compensation, including tax benefit of $323	24,627			1,264,935	13		24,614				—				—			—
Balance, December 31, 2015																					$	528,607			211,340,296	$	2,113		Additional Paid-in Capital	$	1,623,863			$	(942,218	)		$	(174,917	)		$	19,766			$	—
Issuance of shares under employee stock purchase plan and option plans and stock-based compensation																					5,114				552,458	6			5,108			—				—				—				—
Parent cash dividends declared	(302,658		)	—	—		—				(302,658		)		—			—			(103,088		)		—	—			—			(103,088		)		—				—				—
Foreign currency translation adjustments	(89,769		)	—	—		—				—				(88,545		)	(1,224		)
Foreign currency translation adjustment																					23,978				—	—			—			—				23,491				487				—
Market value adjustments for securities	(111		)	—	—		—				—				(111		)	—			(734		)		—	—			—			—				(734		)		—				—
Net income (loss)	119,263			—	—		—				117,536				—			1,727			63,041				—	—			—			62,774				—				267				—
Noncontrolling interests equity contributions																					1,299				—	—			—			—				—				1,299				—
Noncontrolling interests dividends	(1,530		)	—	—		—				—				—			(1,530		)	(579		)		—	—			—			—				—				(579		)		—
Balance, September 30, 2015	$	619,777		211,083,747	$	2,111	$	1,613,455			$	(844,675	)		$	(163,687	)	$	12,573
Purchase of noncontrolling interests																					3,506				—	—			—			—				—				3,506				—
Balance, March 31, 2016																					$	521,144			211,892,754	$	2,119		$	1,628,971		$	(982,532	)		$	(152,160	)		$	24,746			$	—

Iron Mountain Incorporated Stockholders' Equity

Common Stock
Additional
Paid-in Capital
(Distributions in Excess of Earnings) Earnings in Excess of Distributions
Noncontrolling
Interests
Total Shares Amounts Accumulated
Other
Comprehensive
Items, Net
Balance, December 31, 2015 $ 528,607
211,340,296
$ 2,113
$ 1,623,863
$ (942,218 ) $ (174,917 ) $ 19,766
Issuance of shares under employee stock purchase plan and option plans and stock-based compensation, including tax benefit of $91 48,545
1,851,304
19
48,526
—
—
—
Issuance of shares in connection with the acquisition of Recall Holdings Limited (see Note 4) 1,835,026
50,233,412
502
1,834,524
—
—
—
Parent cash dividends declared (360,076 ) —
—
—
(360,076 ) —
—
Foreign currency translation adjustments 38,071
—
—
—
—
37,205
866
Market value adjustments for securities (734 ) —
—
—
—
(734 ) —
Net income (loss) 57,708
—
—
—
55,886
—
1,822
Noncontrolling interests equity contributions 1,299
—
—
—
—
—
1,299
Noncontrolling interests dividends (1,698 ) —
—
—
—
—
(1,698 )
Purchase of noncontrolling interests 3,506
—
—
—
—
—
3,506
Balance, September 30, 2016 $ 2,150,254
263,425,012
$ 2,634
$ 3,506,913
$ (1,246,408 ) $ (138,446 ) $ 25,561



				Iron Mountain Incorporated Stockholders' Equity

				Common Stock			Additional Paid-in Capital			(Distributions in Excess of Earnings) Earnings in Excess of Distributions						Noncontrolling Interests
	Total			Shares	Amounts		Additional Paid-in Capital						Accumulated Other Comprehensive Items, Net			Noncontrolling Interests			Redeemable Noncontrolling Interests
Balance, December 31, 2016	$	1,936,671		263,682,670	$	2,636	$	3,489,795		$	(1,343,311	)	$	(212,573	)	$	124		$	54,697
Issuance of shares under employee stock purchase plan and option plans and stock-based compensation	2,453			427,718	5		2,448			—			—			—			—
Change in value of redeemable noncontrolling interests	(307		)	—	—		(307		)	—			—			—			307
Parent cash dividends declared	(145,427		)	—	—		—			(145,427		)	—			—			—
Foreign currency translation adjustment	51,405			—	—		—			—			51,334			71			(621		)
Net income (loss)	58,350			—	—		—			58,125			—			225			157
Noncontrolling interests equity contributions	—			—	—		—			—			—			—			13,230
Noncontrolling interests dividends	(214		)	—	—		—			—			—			(214		)	(462		)
Purchase of noncontrolling interests	843			—	—		—			—			—			843			—
Balance, March 31, 2017	$	1,903,774		264,110,388	$	2,641	$	3,491,936		$	(1,430,613	)	$	(161,239	)	$	1,049		$	67,308

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

IRON MOUNTAIN INCORPORATED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

(Unaudited)


	Nine Months Ended September 30,						Three Months Ended March 31,
	2015			2016			2016			2017
Cash Flows from Operating Activities:
Net income (loss)	$	119,263		$	57,708		$	63,041		$	58,507
(Income) loss from discontinued operations	—			(3,628		)
Loss (Income) from discontinued operations							—			337
Adjustments to reconcile net income (loss) to cash flows from operating activities:
Depreciation	226,497			267,280			75,390			99,592
Amortization (includes deferred financing costs and bond discount of $6,443 and $9,241, for the nine months ended September 30, 2015 and 2016, respectively)	39,938			68,857
Amortization (includes amortization of deferred financing costs and discount of $2,749 and $3,907 for the three months ended March 31, 2016 and 2017, respectively)							14,563			29,022
Revenue reduction associated with amortization of permanent withdrawal fees							2,943			3,158
Stock-based compensation expense	20,936			21,870			6,885			6,549
(Benefit) Provision for deferred income taxes	(10,317		)	(22,196		)	(6,012		)	(7,386		)
Loss on early extinguishment of debt, net	2,156			9,283
(Gain) Loss on disposal/write-down of property, plant and equipment, net (including real estate)	(352		)	(1,490		)	(451		)	(459		)
Anticipated loss on disposal of assets held for sale	—			14,000
Foreign currency transactions and other, net	39,006			24,006			(11,477		)	(786		)
Changes in Assets and Liabilities (exclusive of acquisitions):
Accounts receivable	11,096			(6,996		)	(8,151		)	(8,971		)
Prepaid expenses and other	2,687			(642		)	30,297			(24,826		)
Accounts payable	(23,977		)	(39,073		)	(30,934		)	5,869
Accrued expenses and deferred revenue	(105,538		)	39,553			(55,494		)	(36,112		)
Other assets and long-term liabilities	(1,300		)	(9,580		)	518			(2,320		)
Cash Flows from Operating Activities - Continuing Operations	320,095			418,952			81,118			122,174
Cash Flows from Operating Activities - Discontinued Operations	—			3,640			—			(337		)
Cash Flows from Operating Activities	320,095			422,592			81,118			121,837
Cash Flows from Investing Activities:
Capital expenditures	(202,581		)	(246,029		)	(80,852		)	(73,202		)
Cash paid for acquisitions, net of cash acquired	(27,975		)	(276,371		)	(19,340		)	(12,187		)
Decrease in restricted cash	33,860			—
Acquisition of customer relationships	(20,208		)	(24,756		)	(6,132		)	(17,132		)
Customer inducements	(14,955		)	(16,099		)	(1,126		)	(4,271		)
Net proceeds from divestments (see Note 10)	—			53,950
Net proceeds from Iron Mountain Divestments (see Note 10)							—			2,423
Proceeds from sales of property and equipment and other, net (including real estate)	2,032			2,197			169			66
Cash Flows from Investing Activities - Continuing Operations	(229,827		)	(507,108		)	(107,281		)	(104,303		)
Cash Flows from Investing Activities - Discontinued Operations	—			(12		)	—			—
Cash Flows from Investing Activities	(229,827		)	(507,120		)	(107,281		)	(104,303		)
Cash Flows from Financing Activities:
Repayment of revolving credit, term loan and bridge facilities and other debt	(8,539,577		)	(11,560,385		)
Proceeds from revolving credit, term loan and bridge facilities and other debt	8,142,443			11,427,389
Net proceeds from sales of senior notes	985,000			925,443
Repayment of revolving credit and term loan facilities and other debt							(2,384,215		)	(2,682,348		)
Proceeds from revolving credit and term loan facilities and other debt							2,509,845			2,714,783
Debt financing and equity contribution from noncontrolling interests	—			1,299			1,299			13,230
Debt repayment and equity distribution to noncontrolling interests	(1,260		)	(1,305		)	(414		)	(2,562		)
Parent cash dividends	(303,712		)	(360,462		)	(104,931		)	(2,060		)
Net proceeds (payments) associated with employee stock-based awards	13,988			26,374
Excess tax benefit (deficiency) from stock-based compensation	323			91
Net (payments) proceeds associated with employee stock-based awards							(1,975		)	(4,308		)
Excess tax (deficiency) benefits from stock-based compensation							(348		)	—
Payment of debt financing and stock issuance costs	(11,665		)	(17,107		)	—			(73		)
Cash Flows from Financing Activities - Continuing Operations	285,540			441,337			19,261			36,662
Cash Flows from Financing Activities - Discontinued Operations	—			—			—			—
Cash Flows from Financing Activities	285,540			441,337			19,261			36,662
Effect of Exchange Rates on Cash and Cash Equivalents	(8,842		)	(27,062		)	(3,534		)	4,948
Increase (Decrease) in Cash and Cash Equivalents	366,966			329,747
(Decrease) Increase in Cash and Cash Equivalents							(10,436		)	59,144
Cash and Cash Equivalents, Beginning of Period	125,933			128,381			128,381			236,484
Cash and Cash Equivalents, End of Period	$	492,899		$	458,128		$	117,945		$	295,628
Supplemental Information:
Cash Paid for Interest	$	218,863		$	226,770		$	83,942		$	99,022
Cash Paid for Income Taxes, Net	$	33,411		$	49,776
(Refund Received) Cash Paid for Income Taxes, Net							$	(3,211	)	$	30,422
Non-Cash Investing and Financing Activities:
Capital Leases	$	28,598		$	45,997		$	18,005		$	24,395
Accrued Capital Expenditures	$	29,626		$	47,900		$	42,205		$	63,655
Dividends Payable	$	5,123		$	5,193		$	3,736		$	148,992
Fair Value of Stock Issued for Recall Transaction (see Note 4)	$	—		$	1,835,026

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

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Share and Per Share Data)

(Unaudited)

(1) General

The interim consolidated financial statements are presented herein and, in the opinion of management, reflect all adjustments of a normal recurring nature necessary for a fair presentation. Interim results are not necessarily indicative of results for a full year. Iron Mountain Incorporated, a Delaware corporation ("IMI"), and its subsidiaries ("we" or "us") store records, primarily physical records and data backup media, and provide information management services in various locations throughout North America, Europe, Latin America, Asia ~~Pacific~~ and Africa. We have a diversified customer base consisting of commercial, legal, ~~banking,~~financial, healthcare, ~~accounting,~~ insurance, life sciences, energy, business services, entertainment and government organizations.

The unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission (the "SEC"). Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been omitted pursuant to those rules and regulations, but we believe that the disclosures included herein are adequate to make the information presented not misleading. The Consolidated Financial Statements and Notes thereto, which are included herein, should be read in conjunction with the Consolidated Financial Statements and Notes thereto for the year ended December 31, ~~2015~~2016 included in our Annual Report on Form 10-K filed with the SEC on February ~~26, 2016~~23, 2017 (our "Annual Report").

We have been organized and ~~have operated~~operating as a real estate investment trust for United States federal income tax purposes ("REIT") effective for our taxable year beginning January 1, 2014.

On May 2, 2016 (Sydney, Australia time), we completed the acquisition of Recall Holdings Limited ("Recall") pursuant to the Scheme Implementation Deed, as amended, with Recall (the "Recall Transaction"). At the closing of the Recall Transaction, we paid approximately $331,800 and issued 50,233,412 shares of our common stock which, based on the closing price of our common stock as of April 29, 2016 (the last day of trading on the New York Stock Exchange ("NYSE") prior to the closing of the Recall Transaction) of $36.53 per share, resulted in a total purchase price to Recall shareholders of approximately $2,166,900. See Note 4.

(2) Summary of Significant Accounting Policies

This Note 2 to Notes to Consolidated Financial Statements provides information and disclosure regarding certain of our significant accounting policies and should be read in conjunction with Note 2 to Notes to Consolidated Financial Statements included in our Annual Report, which may provide additional information with regard to the accounting policies set forth herein and other of our significant accounting policies.

a. Foreign Currency

Local currencies are the functional currencies for our operations outside the United States, with the exception of certain foreign holding companies and our financing centers in Europe, whose functional currency is the United States dollar. In those instances where the local currency is the functional currency, assets and liabilities are translated at period-end exchange rates, and revenues and expenses are translated at average exchange rates for the applicable period. Resulting translation adjustments are reflected in the accumulated other comprehensive items, net component of Iron Mountain Incorporated Stockholders' Equity, Redeemable Noncontrolling Interests and Noncontrolling Interests in the accompanying Consolidated Balance Sheets. The gain or loss on foreign currency transactions, calculated as the difference between the historical exchange rate and the exchange rate at the applicable measurement date, including those related to ~~(1) our previously outstanding 6~~³/₄~~% Euro Senior Subordinated Notes due 2018 (the "6~~³/₄~~% Notes"), (2)~~(i) borrowings in certain foreign currencies under our Revolving Credit Facility (as defined in Note 5) and ~~(3)~~(ii) certain foreign currency denominated intercompany obligations of our foreign subsidiaries to us and between our foreign subsidiaries, which are not considered permanently invested, are included in Other (Income) Expense, ~~(Income),~~ Net, in the accompanying Consolidated Statements of Operations.

Total (gain) loss on foreign currency transactions for the three months ended March 31, 2016 and 2017 is as follows:



	Three Months Ended March 31,
	2016			2017
Total (gain) loss on foreign currency transactions	$	(12,542	)	$	(4,164	)

Table of Contents

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In Thousands, Except Share and Per Share Data)

(Unaudited)

(2) Summary of Significant Accounting Policies (Continued)

~~Total loss on foreign currency transactions for the three and nine months ended September 30, 2015 and 2016 is as follows:~~

Three Months Ended
September 30, Nine Months Ended
September 30,
2015 2016 2015 2016
Total loss on foreign currency transactions $ 32,539
$ 10,685
$ 56,461
$ 15,336

b. Goodwill and Other Intangible Assets

Goodwill ~~and indefinite-lived intangible assets~~

Goodwill is not amortized but is reviewed annually for impairment, or more frequently if impairment indicators arise. We have selected October 1 as our annual goodwill impairment review date. We performed our most recent annual goodwill impairment review as of October 1, ~~2015~~2016 and concluded there was no impairment of goodwill at such date. As of December 31, ~~2015,~~2016 and March 31, 2017, no factors were identified that would alter our October 1, ~~2015~~2016 goodwill ~~analysis. While several of our reporting units were impacted by our acquisition of Recall, no factors were identified as of September 30, 2016 that would indicate an~~ impairment ~~of goodwill.~~analysis. In making this assessment, we considered a number of factors including operating results, business plans, anticipated future cash flows, transactions and marketplace data. There are inherent uncertainties related to these factors and our judgment in applying them to the analysis of goodwill impairment. When changes occur in the composition of one or more reporting units, the goodwill is reassigned to the reporting units affected based on their relative fair values.

~~Refer to our Annual Report for information regarding the composition of our~~Our reporting units as of December 31, ~~2015. The carrying value of goodwill, net for each of our reporting units as of December 31, 2015 was as follows:~~

Carrying Value
as of
December 31, 2015
North American Records and Information Management(1) $ 1,342,723
North American Secure Shredding(1) 73,021
North American Data Management(2) 369,907
Adjacent Businesses - Data Centers(3) —
Adjacent Businesses - Consumer Storage(3) 4,636
Adjacent Businesses - Fine Arts(3) 21,550
UKI(4) 260,202
Continental Western Europe(4) 63,442
Emerging Markets - Europe(5) 87,378
Latin America(5) 78,537
Australia(5) 47,786
Southeast Asia(5) 5,683
India(5) 6,113
Total $ 2,360,978


~~(1)~~	~~This reporting unit is included in the North American Records and Information Management Business segment.~~


~~(2)~~	~~This reporting unit is included in the North American Data Management Business segment.~~


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


~~(4)~~	~~This reporting unit is included in the Western European Business segment.~~


~~(5)~~	~~This reporting unit is included in the Other International Business segment.~~

~~Table of Contents~~

~~IRON MOUNTAIN INCORPORATED~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(In Thousands, Except Share and Per Share Data)~~

~~(Unaudited)~~

~~(2) Summary of Significant Accounting Policies (Continued)~~

~~In the third quarter of~~ 2016 ~~as a result of changes~~are described in ~~the management of our businesses~~detail in Note 2.h. to Notes to Consolidated Financial Statements included in our ~~Western European Business segment, we reassessed~~Annual Report. During the first three months of 2017, there were no changes to the composition of our reporting units. As a result of this reassessment, we determined that the businesses included in our former UKI reporting unit were now being managed in conjunction with the businesses included in our former Continental Western Europe reporting unit. As a result, as of September 30, 2016, we have concluded that our Western European Business segment consists of one reporting unit, which is referred to herein as the Western Europe reporting unit.

The ~~acquisition of Recall, which is more fully disclosed in Note 4, impacted our reporting units as of September 30, 2016 as follows:~~

~~North American Records and Information Management - includes the~~ goodwill associated with acquisitions completed during the ~~records and information management businesses~~first three months of ~~Recall in the United States and Canada.~~

~~North American Secure Shredding - includes the goodwill associated with the secure shredding businesses of Recall in the United States and Canada.~~

~~North American Data Management - includes the goodwill associated with the data management businesses of Recall in the United States and Canada.~~

Western Europe - includes the goodwill associated with the operations of Recall in Belgium, France, Germany, Spain, Switzerland and the United Kingdom as well as the goodwill associated with the document management solutions (“DMS”) operations of Recall in Sweden.

~~Northern and Eastern Europe - this reporting unit consists of our former Emerging Markets - Europe reporting unit (as~~2017 (which are described in our Annual Report), and includes the goodwill associated with the operations of Recall in Denmark, Finland and Norway, as well as the goodwill associated with the records and information management operations of Recall in Sweden. This reporting unit is included in the Other International Business segment.

~~Latin America - includes the goodwill associated with the operations of Recall in Brazil and Mexico.~~

~~Australia and New Zealand - this reporting unit consists of the goodwill associated with the Australia Retained Business (as defined in~~ Note 4)~~, which was a component of~~ has been incorporated into our ~~former Australia~~existing reporting ~~unit, as well as the operations of Recall in Australia and New Zealand. This reporting unit is included in the Other International Business segment.~~

~~Southeast Asia - includes the goodwill associated with the operations of Recall in China, Hong Kong, Malaysia, Singapore, Taiwan and Thailand.~~

~~Africa and India - includes the goodwill associated with the operations of Recall in India.~~units.

~~Table of Contents~~

~~IRON MOUNTAIN INCORPORATED~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(In Thousands, Except Share and Per Share Data)~~

~~(Unaudited)~~

~~(2) Summary of Significant Accounting Policies (Continued)~~

~~The carrying value of goodwill, net for each of our reporting units as of September 30, 2016 is as follows:~~

Carrying Value
as of
September 30, 2016
North American Records and Information Management $ 2,058,150
North American Secure Shredding 148,905
North American Data Management 499,644
Adjacent Businesses - Data Centers —
Adjacent Businesses - Consumer Storage 4,636
Adjacent Businesses - Fine Arts 22,911
Western Europe 454,531
Northern and Eastern Europe(1) 142,285
Latin America 180,664
Australia and New Zealand 152,387
Southeast Asia 177,512
Africa and India(2) 20,185
Total $ 3,861,810

~~(1) Included in this reporting unit at September 30, 2016 is the goodwill associated with our March 2016 acquisition of Archyvu Sistemos as more fully disclosed in Note 4.~~

~~(2) Included in this reporting unit at September 30, 2016 is the goodwill associated with our March 2016 acquisition of Docufile Holdings Proprietary Limited as more fully disclosed in Note 4.~~

129

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IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In Thousands, Except Share and Per Share Data)

(Unaudited)

(2) Summary of Significant Accounting Policies (Continued)

The changes in the carrying value of goodwill attributable to each reportable operating segment for the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 are as follows:

North American
Records and Information
Management
Business North American
Data
Management
Business
Western
European Business
Other International Business Corporate and Other Business Total
Consolidated
Gross Balance as of December 31, 2015 $ 1,620,425
$ 423,606
$ 381,149
$ 225,626
$ 26,186
$ 2,676,992
Deductible goodwill acquired during the year —
—
—
—
—
—
Non-deductible goodwill acquired during the year 790,250
128,669
161,005
474,576
215
1,554,715
Goodwill reclassified as assets held for sale (see Note 10) (3,332 ) —
—
(40,089 ) —
(43,421 )
Fair value and other adjustments(1) (157 ) —
—
(486 ) 1,146
503
Currency effects 4,921
1,161
(30,939 ) 13,462
—
(11,395 )
Gross Balance as of September 30, 2016 $ 2,412,107
$ 553,436
$ 511,215
$ 673,089
$ 27,547
$ 4,177,394
Accumulated Amortization Balance as of December 31, 2015 $ 204,681
$ 53,699
$ 57,505
$ 129
$ —
$ 316,014
Currency effects 371
93
(821 ) (73 ) —
(430 )
Accumulated Amortization Balance as of September 30, 2016 $ 205,052
$ 53,792
$ 56,684
$ 56
$ —
$ 315,584
Net Balance as of December 31, 2015 $ 1,415,744
$ 369,907
$ 323,644
$ 225,497
$ 26,186
$ 2,360,978
Net Balance as of September 30, 2016 $ 2,207,055
$ 499,644
$ 454,531
$ 673,033
$ 27,547
$ 3,861,810
Accumulated Goodwill Impairment Balance as of December 31, 2015 $ 85,909
$ —
$ 46,500
$ —
$ —
$ 132,409
Accumulated Goodwill Impairment Balance as of September 30, 2016 $ 85,909
$ —
$ 46,500
$ —
$ —
$ 132,409



	North American Records and Information Management Business		North American Data Management Business		Western European Business		Other International Business		Corporate and Other Business		Total Consolidated
Gross Balance as of December 31, 2016	$	2,485,806	$	559,443	$	405,571	$	743,126	$	25,922	$	4,219,868
Deductible goodwill acquired during the year	672		—		—		387		717		1,776
Non-deductible goodwill acquired during the year	—		—		—		4,311		—		4,311
Fair value and other adjustments(1)	5,548		525		2,818		2,802		—		11,693
Currency effects	1,569		448		4,649		27,801		—		34,467
Gross Balance as of March 31, 2017	$	2,493,595	$	560,416	$	413,038	$	778,427	$	26,639	$	4,272,115
Accumulated Amortization Balance as of December 31, 2016	$	204,895	$	53,753	$	56,150	$	49	$	—	$	314,847
Currency effects	58		15		125		12		—		210
Accumulated Amortization Balance as of March 31, 2017	$	204,953	$	53,768	$	56,275	$	61	$	—	$	315,057
Net Balance as of December 31, 2016	$	2,280,911	$	505,690	$	349,421	$	743,077	$	25,922	$	3,905,021
Net Balance as of March 31, 2017	$	2,288,642	$	506,648	$	356,763	$	778,366	$	26,639	$	3,957,058
Accumulated Goodwill Impairment Balance as of December 31, 2016	$	85,909	$	—	$	46,500	$	—	$	—	$	132,409
Accumulated Goodwill Impairment Balance as of March 31, 2017	$	85,909	$	—	$	46,500	$	—	$	—	$	132,409

(1)

Total fair value and other adjustments ~~primarily~~ include $11,693 in net adjustments ~~of $685~~primarily related to property, plant and equipment and customer relationship intangible assets ~~partially offset by $182 of cash received related~~(which represent adjustments within the applicable measurement period to ~~certain acquisitions completed~~provisional amounts recognized in ~~2015.~~purchase accounting).

1310

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IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In Thousands, Except Share and Per Share Data)

(Unaudited)

(2) Summary of Significant Accounting Policies (Continued)

Finite-lived intangible assets

Customer relationship intangible assets, which are acquired through either business combinations or acquisitions of customer relationships, are amortized over periods ranging from 10eight to 30 ~~years.~~years and are included in depreciation and amortization in the accompanying Consolidated Statements of Operations. The value of customer relationship intangible assets is calculated based upon estimates of their fair value utilizing an income approach based on the present value of expected future cash flows.

Costs related to the acquisition of large volume accounts are capitalized. Free intake costs to transport boxes to one of our facilities, which include labor and transportation ~~charges~~costs ("Move Costs"), are amortized over periods ranging from ~~one~~eight to 30 years and are included in depreciation and amortization in the accompanying Consolidated Statements of Operations. Payments that are made to a customer's current records management vendor in order to terminate the customer's existing contract with that vendor, or direct payments to a customer ("Permanent Withdrawal Fees"), are amortized over periods ranging from ~~one~~three to 15 years and are included in storage and service revenue in the accompanying Consolidated Statements of Operations. Move Costs and Permanent Withdrawal Fees are collectively referred to as "Customer Inducements". If the customer terminates its relationship with us, the unamortized carrying value of the Customer Inducement intangible asset is charged to expense or revenue. However, in the event of such termination, we generally collect, and record as income, permanent removal fees that generally equal or exceed the amount of the unamortized Customer Inducement intangible asset.

Other finite-lived intangible assets, including trade names, noncompetition agreements and trademarks, are capitalized and amortized over periods ranging from ~~five~~three to 10 ~~years.~~years and are included in depreciation and amortization in the accompanying Consolidated Statements of Operations.

The components of our finite-lived intangible assets as of December 31, ~~2015~~2016 and ~~September 30, 2016~~March 31, 2017 are as follows:

December 31, 2015 September 30, 2016
Gross Carrying
Amount Accumulated
Amortization Net Carrying
Amount Gross Carrying
Amount Accumulated
Amortization Net Carrying
Amount
Customer relationship intangible assets and Customer Inducements $ 937,174
$ (333,860 ) $ 603,314
$ 1,684,891
$ (378,880 ) $ 1,306,011
Core Technology(1) 3,370
(3,370 ) —
1,625
(1,625 ) —
Trademarks and Non-Compete Agreements(1) 7,741
(4,955 ) 2,786
24,448
(6,985 ) 17,463
Total $ 948,285
$ (342,185 ) $ 606,100
$ 1,710,964
$ (387,490 ) $ 1,323,474


~~(1)~~	~~Included in Other, a component of Other Assets, Net in the accompanying Consolidated Balance Sheets.~~



	December 31, 2016							March 31, 2017
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer relationship intangible assets and Customer Inducements	$	1,604,020	$	(351,497	)	$	1,252,523	$	1,650,854	$	(373,925	)	$	1,276,929
Other finite-lived intangible assets (included in other assets, net)	24,788		(7,989		)	16,799		24,225		(10,478		)	13,747
Total	$	1,628,808	$	(359,486	)	$	1,269,322	$	1,675,079	$	(384,403	)	$	1,290,676

Amortization expense associated with finite-lived intangible assets and ~~deferred financing costs~~revenue reduction associated with the amortization of Permanent Withdrawal Fees for the three ~~and nine~~ months ended ~~September 30, 2015~~March 31, 2016 and ~~2016 is~~2017 are as follows:

Three Months Ended
September 30, Nine Months Ended
September 30,
2015 2016 2015 2016
Amortization expense associated with finite-lived intangible assets and deferred financing costs $ 13,094
$ 29,899
$ 39,939
$ 68,857



	Three Months Ended March 31,
	2016		2017
Amortization expense associated with finite-lived intangible assets	$	11,814	$	25,115
Revenue reduction associated with amortization of Permanent Withdrawal Fees	2,943		3,158

1411

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IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In Thousands, Except Share and Per Share Data)

(Unaudited)

(2) Summary of Significant Accounting Policies (Continued)

c. Stock-Based Compensation

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

Stock-based compensation expense for Employee Stock-Based Awards included in the accompanying Consolidated Statements of Operations for the three ~~and nine~~ months ended ~~September 30, 2015~~March 31, 2016 and 2017 was ~~$6,159~~$6,885 ($~~4,502~~4,914 after tax or $0.02 per basic and diluted share) and ~~$20,936~~$6,549 ($~~14,915~~4,585 after tax or $0.07 per basic and diluted share), respectively. Stock-based compensation expense for Employee Stock-Based Awards for the three and nine months ended September 30, 2016 was $5,957 ($4,245 after tax or $0.02 ~~per basic and diluted share) and $21,870 ($16,170 after tax or $0.07~~ per basic and diluted share), respectively.

Stock-based compensation expense for Employee Stock-Based Awards included in the accompanying Consolidated Statements of Operations is as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
	2015		2016		2015		2016		2016		2017
Cost of sales (excluding depreciation and amortization)	$	65	$	28	$	156	$	80	$	27	$	28
Selling, general and administrative expenses	6,094		5,929		20,780		21,790		6,858		6,521
Total stock-based compensation	$	6,159	$	5,957	$	20,936	$	21,870	$	6,885	$	6,549

The benefits associated with the tax deductions in excess of recognized compensation cost are required to be reported as financing activities in the accompanying Consolidated Statements of Cash Flows. This requirement impacts reported operating cash flows and reported financing cash flows. As a result, net financing cash flows included $323 and $91 for the nine months ended September 30, 2015 and 2016, respectively, from the benefit of tax deductions compared to recognized compensation cost. The tax benefit of any resulting excess tax deduction increases the Additional Paid-in Capital ("APIC") pool. Any resulting tax deficiency is deducted from the APIC pool.

Stock Options

A summary of our stock options outstanding as of ~~September 30, 2016~~March 31, 2017 by vesting terms is as follows:

September 30, 2016
Stock Options Outstanding
% of
Stock Options Outstanding
Three-year vesting period (10 year contractual life) 2,826,698
76.3 %
Five-year vesting period (10 year contractual life) 622,057
16.8 %
Ten-year vesting period (12 year contractual life) 255,255
6.9 %
3,704,010

~~Table of Contents~~

~~IRON MOUNTAIN INCORPORATED~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(In Thousands, Except Share and Per Share Data)~~

~~(Unaudited)~~

~~(2) Summary of Significant Accounting Policies (Continued)~~



	March 31, 2017
	Stock Options Outstanding	% of Stock Options Outstanding
Three-year vesting period (10 year contractual life)	3,597,671	83.4	%
Five-year vesting period (10 year contractual life)	626,204	14.5	%
Ten-year vesting period (12 year contractual life)	90,754	2.1	%
	4,314,629	100.0	%

The weighted average fair value of stock options granted for the ~~nine~~three months ended ~~September 30, 2015~~March 31, 2016 and ~~2016~~2017 was ~~$4.88~~$2.49 and ~~$2.55~~$4.26 per share, respectively. These values were estimated on the date of grant using the Black-Scholes ~~stock~~ option pricing model. The weighted average assumptions used for grants in the respective ~~period~~periods are as follows:


	Nine Months Ended September 30,				Three Months Ended March 31,
Weighted Average Assumptions	2015		2016		2016		2017
Expected volatility	28.4	%	27.2	%	27.2	%	25.8	%
Risk-free interest rate	1.70	%	1.32	%	1.32	%	1.96	%
Expected dividend yield	5	%	7	%	7	%	6	%
Expected life	5.5 years		5.6 years		5.6 years		5.0 years

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

Table of Contents

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In Thousands, Except Share and Per Share Data)

(Unaudited)

(2) Summary of Significant Accounting Policies (Continued)

A summary of stock option activity for the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 is as follows:


	Stock Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Average Intrinsic Value		Stock Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Average Intrinsic Value
Outstanding at December 31, 2015	3,688,814		$	27.79
Outstanding at December 31, 2016								3,451,698		$	31.79
Granted	1,435,879		34.02					1,007,224		36.89
Exercised	(1,373,290	)	24.12					(136,739	)	22.24
Forfeited	(35,927	)	32.43					(5,773	)	28.21
Expired	(11,466	)	30.50					(1,781	)	38.83
Outstanding at September 30, 2016	3,704,010		$	31.51	7.08	$	26,628
Options exercisable at September 30, 2016	1,553,980		$	26.08	4.54	$	19,208
Outstanding at March 31, 2017								4,314,629		$	33.29	7.57	$	17,780
Options exercisable at March 31, 2017								2,126,229		$	30.09	5.84	$	15,685
Options expected to vest	2,025,402		$	35.44	8.91	$	7,020	2,022,212		$	36.41	9.24	$	1,955

The aggregate intrinsic value of stock options exercised for the three ~~and nine~~ months ended ~~September 30, 2015~~March 31, 2016 and ~~2016~~2017 is as follows:

Three Months Ended
September 30, Nine Months Ended
September 30,
2015 2016 2015 2016
Aggregate intrinsic value of stock options exercised $ 1,985
$ 5,433
$ 7,868
$ 16,792



	Three Months Ended March 31,
	2016		2017
Aggregate intrinsic value of stock options exercised	$	1,433	$	1,912

Restricted Stock Units

Under our various equity compensation plans, we may also grant RSUs. Our RSUs generally have a vesting period of between three and five years from the date of grant. However, RSUs granted to our non-employee directors ~~in 2015 and thereafter~~ vest immediately upon grant.

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

Cash dividends accrued and paid on RSUs for the three months ended March 31, 2016 and 2017 are as follows:



	Three Months Ended March 31,
	2016		2017
Cash dividends accrued on RSUs	$	631	$	683
Cash dividends paid on RSUs	1,635		1,855

The fair value of RSUs vested during the three months ended March 31, 2016 and 2017 is as follows:



	Three Months Ended March 31,
	2016		2017
Fair value of RSUs vested	$	14,978	$	14,026

1613

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IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In Thousands, Except Share and Per Share Data)

(Unaudited)

(2) Summary of Significant Accounting Policies (Continued)

~~Cash dividends accrued and paid on RSUs for the three and nine months ended September 30, 2015 and 2016 are as follows:~~

Three Months Ended
September 30, Nine Months Ended
September 30,
2015 2016 2015 2016
Cash dividends accrued on RSUs $ 616
$ 620
$ 1,917
$ 1,867
Cash dividends paid on RSUs 270
129
2,570
1,960

~~The fair value of RSUs vested during the three and nine months ended September 30, 2015 and 2016 is as follows:~~

Three Months Ended
September 30, Nine Months Ended
September 30,
2015 2016 2015 2016
Fair value of RSUs vested $ 2,377
$ 1,486
$ 21,561
$ 19,271

A summary of RSU activity for the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 is as follows:


	RSUs		Weighted- Average Grant-Date Fair Value		RSUs		Weighted- Average Grant-Date Fair Value
Non-vested at December 31, 2015	1,217,597		$	33.68
Non-vested at December 31, 2016					1,163,393		$	33.21
Granted	671,385		32.36		525,328		36.90
Vested	(575,875	)	33.47		(438,091	)	32.02
Forfeited	(59,627	)	33.74		(11,597	)	34.65
Non-vested at September 30, 2016	1,253,480		$	33.07
Non-vested at March 31, 2017					1,239,033		$	35.18

Performance Units

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

All of our PUs will be settled in shares of our common stock and are subject to cliff vesting three years from the date of the original PU grant. PUs awarded to employees who terminate their employment during the three-year performance period and on or after attaining age 55 and completing 10 years of qualifying service are eligible for pro-rated vesting, subject to the actual achievement against the predefined targets or a market condition as discussed above, based on the number of full years of service completed following the grant date (but delivery of the shares remains deferred). As a result, PUs are generally expensed over the three-year performance period.

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

Cash dividends accrued and paid on PUs for the three months ended March 31, 2016 and 2017 are as follows:



	Three Months Ended March 31,
	2016		2017
Cash dividends accrued on PUs	$	262	$	324
Cash dividends paid on PUs	645		205

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IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In Thousands, Except Share and Per Share Data)

(Unaudited)

(2) Summary of Significant Accounting Policies (Continued)

~~Cash dividends accrued and paid on PUs for~~During the three ~~and nine~~ months ended ~~September 30, 2015 and 2016 are as follows:~~

Three Months Ended
September 30, Nine Months Ended
September 30,
2015 2016 2015 2016
Cash dividends accrued on PUs $ 222
$ 264
$ 647
$ 789
Cash dividends paid on PUs —
—
1,015
645

~~During the nine months ended September 30, 2016,~~March 31, 2017, we issued ~~230,052~~229,692 PUs. The majority of our PUs are earned based on our performance against revenue and ROIC targets during their applicable performance period; therefore, we forecast the likelihood of achieving the predefined revenue and ROIC targets in order to calculate the expected PUs to be earned. We record a compensation charge based on either the forecasted PUs to be earned (during the performance period) or the actual PUs earned (at the three-year anniversary of the grant date) over the vesting period for each of the awards. The fair value of PUs based on our performance against revenue and ROIC targets is the excess of the market price of our common stock at the date of grant over the purchase price (which is typically zero). For PUs earned based on a market condition, we utilize a Monte Carlo simulation to fair value these awards at the date of grant, and such fair value is expensed over the three-year performance period. As of ~~September 30, 2016,~~March 31, 2017, we expected 0%25%, ~~50%~~100% and 100% achievement of the predefined revenue and ROIC targets associated with the awards of PUs made in ~~2014,~~ 2015, 2016 and ~~2016,~~2017, respectively.

The fair value of earned PUs that vested during the three ~~and nine~~ months ended ~~September 30, 2015~~March 31, 2016 and ~~2016~~2017 is as follows:

Three Months Ended
September 30, Nine Months Ended
September 30,
2015 2016 2015 2016
Fair value of earned PUs that vested $ —
$ 17
$ 2,107
$ 5,272



	Three Months Ended March 31,
	2016		2017
Fair value of earned PUs that vested	$	4,081	$	905

A summary of PU activity for the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 is as follows:


	Original PU Awards		PU Adjustment(1)		Total PU Awards		Weighted- Average Grant-Date Fair Value		Original PU Awards		PU Adjustment(1)		Total PU Awards		Weighted- Average Grant-Date Fair Value
Non-vested at December 31, 2015	520,764		(86,959	)	433,805		$	34.11
Non-vested at December 31, 2016									559,340		(121,038	)	438,302		$	33.67
Granted	230,052		—		230,052		35.84		229,692		—		229,692		41.93
Vested	(148,855	)	—		(148,855	)	35.42		(32,776	)	—		(32,776	)	27.60
Forfeited/Performance or Market Conditions Not Achieved	(7,690	)	(34,079	)	(41,769	)	42.87		(3,480	)	(129,029	)	(132,509	)	28.57
Non-vested at September 30, 2016	594,271		(121,038	)	473,233		$	33.77
Non-vested at March 31, 2017									752,776		(250,067	)	502,709		$	39.18


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

Employee Stock Purchase Plan

We offer an ESPP in which participation is available to substantially all United States and Canadian employees who meet certain service eligibility requirements. The price for shares purchased under the ESPP is 95% of the market price of our common stock at the end of the offering period, without a look-back feature. As a result, we do not recognize compensation expense for the ESPP shares purchased. ~~For the nine months ended September 30, 2015 and 2016, there were 59,569 shares and 56,662 shares, respectively, purchased under the ESPP.~~ As of ~~September 30, 2016,~~March 31, 2017, we had ~~781,767~~727,594 shares available under the ESPP.

As of March 31, 2017, unrecognized compensation cost related to the unvested portion of our Employee Stock-Based Awards was $61,990 and is expected to be recognized over a weighted-average period of 2.4 years.

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

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IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In Thousands, Except Share and Per Share Data)

(Unaudited)

(2) Summary of Significant Accounting Policies (Continued)

As of September 30, 2016, unrecognized compensation cost related to the unvested portion of our Employee Stock-Based Awards was $43,137 and is expected to be recognized over a weighted-average period of 2.0 years.

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

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

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

The calculation of basic and diluted income (loss) per share for the three ~~and nine~~ months ended ~~September 30, 2015~~March 31, 2016 and ~~2016~~2017 is as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
	2015		2016		2015		2016		2016		2017
Income (loss) from continuing operations	$	23,517	$	5,759	$	119,263	$	54,080	$	63,041	$	58,844
Less: Net income (loss) attributable to noncontrolling interests	407		720		1,727		1,822		267		382
Income (loss) from continuing operations (utilized in numerator of Earnings Per Share calculation)	$	23,110	$	5,039	$	117,536	$	52,258	$	62,774	$	58,462
Income (loss) from discontinued operations, net of tax	$	—	$	2,041	$	—	$	3,628
(Loss) income from discontinued operations, net of tax									$	—	$	(337	)
Net income (loss) attributable to Iron Mountain Incorporated	$	23,110	$	7,080	$	117,536	$	55,886	$	62,774	$	58,125

Weighted-average shares—basic	210,912,000		263,269,000		210,616,000		240,394,000		211,526,000		263,855,000
Effect of dilutive potential stock options	621,615		640,202		934,553		628,263		482,388		461,761
Effect of dilutive potential RSUs and PUs	382,995		592,773		530,252		497,658		463,053		492,905
Weighted-average shares—diluted	211,916,610		264,501,975		212,080,805		241,519,921		212,471,441		264,809,666

Earnings (losses) per share—basic:
Income (loss) from continuing operations	$	0.11	$	0.02	$	0.57	$	0.22	$	0.30	$	0.22
Income (loss) from discontinued operations, net of tax	—		0.01		—		0.02
(Loss) income from discontinued operations, net of tax									—		—
Net income (loss) attributable to Iron Mountain Incorporated(1)	$	0.11	$	0.03	$	0.56	$	0.23	$	0.30	$	0.22

Earnings (losses) per share—diluted:
Income (loss) from continuing operations	$	0.11	$	0.02	$	0.56	$	0.22	$	0.30	$	0.22
Income (loss) from discontinued operations, net of tax	—		0.01		—		0.02
(Loss) income from discontinued operations, net of tax									—		—
Net income (loss) attributable to Iron Mountain Incorporated(1)	$	0.11	$	0.03	$	0.55	$	0.23	$	0.30	$	0.22

Antidilutive stock options, RSUs and PUs, excluded from the calculation	2,262,827		759,478		1,318,811		1,725,249		2,821,795		2,494,255

(1) Columns may not foot due to rounding.

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IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In Thousands, Except Share and Per Share Data)

(Unaudited)

(2) Summary of Significant Accounting Policies (Continued)

e. Income Taxes

We provide for income taxes during interim periods based on our estimate of the effective tax rate for the year. Discrete items and changes in our estimate of the annual effective tax rate are recorded in the period they occur. Our effective tax rate is subject to variability in the future due to, among other items: (1) changes in the mix of income between our qualified REIT subsidiaries ("QRSs") and our domestic taxable REIT subsidiaries ("TRSs"), as well as among the jurisdictions in which we operate; (2) tax law changes; (3) volatility in foreign exchange gains and losses; (4) the timing of the establishment and reversal of tax reserves; and (5) our ability to utilize net operating losses that we generate.

Our effective tax ~~rates~~rate for the three ~~and nine~~ months ended ~~September 30, 2015 were 14.3%~~March 31, 2016 and ~~18.6%, respectively. Our effective tax rates for the three~~2017 was 15.9% and ~~nine months ended September 30, 2016 were 81.2% and 46.2%~~13.5%, respectively. The primary reconciling items between the federal statutory tax rate of 35.0% and our overall effective tax ~~rates~~rate in the three ~~and nine~~ months ended ~~September 30, 2015~~March 31, 2016 were the benefit derived from the dividends paid deduction and differences in the rates of tax at which our foreign earnings are subject, including foreign exchange gains and losses in different jurisdictions with different tax rates, and state income taxes (net of federal tax benefit). In the third quarter of 2015, we recorded a tax benefit of $4,100 related to the expiration of certain statutes of limitations and an out-of-period tax adjustment ($9,000 tax benefit) to correct the valuation of certain deferred tax assets associated with the REIT conversion that occurred in 2014.rates. The primary reconciling items between the federal statutory tax rate of 35.0% and our overall effective tax ~~rates~~rate in the three ~~and nine~~ months ended ~~September 30, 2016~~March 31, 2017 were the benefit derived from the dividends paid deduction, a release of valuation allowances on certain of our foreign net operating losses of $7,511 as a result of the merger of certain of our foreign subsidiaries and differences in the rates of tax at which our foreign earnings are subject, including foreign exchange gains and losses in different jurisdictions with different tax ~~rates, and~~rates. These benefits were partially offset by the impact of a legislative change enacted in the ~~$14,000 charge (described in Note 2.i.) recorded during the third~~first quarter of 2017 in the United Kingdom which eliminated the deductibility of certain interest expense and increased our tax provision for the first quarter of 2017 by $1,764, or 2.5%.

During 2016, as a result of the closing of the Recall Transaction and the subsequent integration of Recall's operations into our operations, we reassessed our intentions regarding the indefinite reinvestment of current and future undistributed earnings of our foreign subsidiaries outside the United States (the "2016 Indefinite Reinvestment Assessment"). As a result of the 2016 Indefinite Reinvestment Assessment, we concluded that it is our intent to indefinitely reinvest our current and future undistributed earnings of our unconverted foreign TRSs outside the United States. Accordingly, we no longer provide incremental foreign withholding taxes on the retained book earnings of these unconverted foreign TRSs. As a REIT, future repatriation of incremental undistributed earnings of our foreign subsidiaries will not be subject to federal or state income tax, with the exception of foreign withholding taxes in limited instances; however, such future repatriations will require distribution in accordance with REIT distribution rules, and any such distribution may then be taxable, as appropriate, at the stockholder level. We continue, however, to provide for incremental foreign withholding taxes on net book over outside basis differences related to the ~~anticipated loss on disposal~~earnings of ~~the Australia Divestment Business (as defined in Note 4), which had no associated tax benefit.~~our foreign QRSs and certain of our converted TRSs.

f. Concentrations of Credit Risk

Financial instruments that potentially subject us to credit risk consist principally of cash and cash equivalents (including ~~money market funds and~~ time deposits) and accounts receivable. The only significant concentrations of liquid investments as of December 31, ~~2015~~2016 and ~~September 30, 2016 relate~~March 31, 2017, respectively, related to cash and cash equivalents. At December 31, ~~2015, we had time deposits with four global banks. At September 30,~~ 2016 and March 31, 2017, we had time deposits with six global ~~banks. We consider the~~banks and seven global banks, ~~to be large, highly-rated investment-grade institutions.~~respectively. As of December 31, ~~2015~~2016 and ~~September 30, 2016,~~March 31, 2017, our cash and cash equivalents ~~were $128,381~~was $236,484 and ~~$458,128,~~$295,628, respectively, including time deposits ~~amounting to $18,645~~of $22,240 and ~~$18,687,~~$25,739, respectively.

g. Fair Value Measurements

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

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

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

Table of Contents

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In Thousands, Except Share and Per Share Data)

(Unaudited)

(2) Summary of Significant Accounting Policies (Continued)

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

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

~~Table of Contents~~

~~IRON MOUNTAIN INCORPORATED~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(In Thousands, Except Share and Per Share Data)~~

~~(Unaudited)~~

~~(2) Summary of Significant Accounting Policies (Continued)~~

The assets and liabilities carried at fair value measured on a recurring basis as of December 31, ~~2015~~2016 and ~~September 30, 2016,~~March 31, 2017, respectively, are as follows:


			Fair Value Measurements at December 31, 2015 Using										Fair Value Measurements at December 31, 2016 Using
Description	Total Carrying Value at December 31, 2015		Quoted prices in active markets (Level 1)			Significant other observable inputs (Level 2)			Significant unobservable inputs (Level 3)		Total Carrying Value at December 31, 2016		Quoted prices in active markets (Level 1)			Significant other observable inputs (Level 2)			Significant unobservable inputs (Level 3)
Time Deposits(1)	$	18,645	$	—		$	18,645		$	—	$	22,240	$	—		$	22,240		$	—
Trading Securities	10,371		9,514		(2)	857		(1)	—		10,659		10,181		(2)	478		(1)	—
Available-for-Sale Securities	624		624		(2)	—			—


			Fair Value Measurements at September 30, 2016 Using										Fair Value Measurements at March 31, 2017 Using
Description	Total Carrying Value at September 30, 2016		Quoted prices in active markets (Level 1)			Significant other observable inputs (Level 2)			Significant unobservable inputs (Level 3)		Total Carrying Value at March 31, 2017		Quoted prices in active markets (Level 1)			Significant other observable inputs (Level 2)			Significant unobservable inputs (Level 3)
Time Deposits(1)	$	18,687	$	—		$	18,687		$	—	$	25,739	$	—		$	25,739		$	—
Trading Securities	10,708		10,225		(2)	483		(1)	—		10,342		9,958		(2)	384		(1)	—
Derivative Assets(3)											114		—			114			—


(1)	Time deposits and certain trading securities (included in Prepaid expenses and other in our Consolidated Balance Sheets) are measured based on quoted prices for similar assets and/or subsequent ~~transactions and are included in Prepaid expenses and other in our Consolidated Balance Sheets.~~transactions.


(2)	~~Available-for-sale securities and certain~~Certain trading securities are measured at fair value using quoted market prices.

(3)

Derivative assets relate to short-term (six months or less) foreign currency contracts that we have entered into to hedge certain of our foreign exchange intercompany exposures, as more fully disclosed at Note 3. We calculate the value of such forward contracts by adjusting the spot rate utilized at the balance sheet date for translation purposes by an estimate of the forward points observed in active markets.

Disclosures are required in the financial statements for items measured at fair value on a non-recurring basis. We did not have any material items that are measured at fair value on a non-recurring basis at December 31, ~~2015~~2016 and ~~September 30, 2016,~~March 31, 2017, with the exception of: (i) goodwill (as disclosed in Note 2.b.); (ii) the assets and liabilities acquired through acquisitions (as disclosed in Note 6 to Notes to Consolidated Financial Statements included in our Annual Report and Note 4); (iii) the Access Contingent Consideration (as defined and disclosed in Note 4)10); and (iv) ~~assets and liabilities held for sale~~the redemption value of certain redeemable noncontrolling interests (as disclosed in Note ~~10)~~2.x. in Notes to Consolidated Financial Statements included in our Annual Report), all of which are based on Level 3 inputs.

The fair value of our long-term debt, which was determined based on either Level 1 inputs or Level 3 inputs, is disclosed in Note 5. Long-term debt is measured at cost in our Consolidated Balance Sheets as of December 31, ~~2015~~2016 and ~~September 30, 2016.~~March 31, 2017.

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IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In Thousands, Except Share and Per Share Data)

(Unaudited)

(2) Summary of Significant Accounting Policies (Continued)

h. Accumulated Other Comprehensive Items, Net

The changes in accumulated other comprehensive items, net for the three months ended ~~September 30, 2015~~March 31, 2016 and ~~2016, respectively, are as follows:~~

Foreign
Currency
Translation
Adjustments Market Value
Adjustments for
Securities Total
Balance as of June 30, 2015 $ (130,752 ) $ 1,002
$ (129,750 )
Other comprehensive (loss) income:

Foreign currency translation adjustments (33,803 ) —
(33,803 )
Market value adjustments for securities —
(134 ) (134 )
Total other comprehensive (loss) income (33,803 ) (134 ) (33,937 )
Balance as of September 30, 2015 $ (164,555 ) $ 868
$ (163,687 )

Foreign
Currency
Translation
Adjustments Market Value
Adjustments for
Securities Total
Balance as of June 30, 2016 $ (149,289 ) $ —
$ (149,289 )
Other comprehensive income (loss):

Foreign currency translation adjustments 10,843
—
10,843
Total other comprehensive income (loss) 10,843
—
10,843
Balance as of September 30, 2016 $ (138,446 ) $ —
$ (138,446 )

~~The changes in accumulated other comprehensive items, net for the nine months ended September 30, 2015 and 2016,~~2017, respectively, are as follows:

Foreign
Currency
Translation
Adjustments Market Value
Adjustments for
Securities Total
Balance as of December 31, 2014 $ (76,010 ) $ 979
$ (75,031 )
Other comprehensive (loss) income:

Foreign currency translation adjustments (88,545 ) —
(88,545 )
Market value adjustments for securities —
(111 ) (111 )
Total other comprehensive (loss) income (88,545 ) (111 ) (88,656 )
Balance as of September 30, 2015 $ (164,555 ) $ 868
$ (163,687 )

~~Table of Contents~~

~~IRON MOUNTAIN INCORPORATED~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(In Thousands, Except Share and Per Share Data)~~

~~(Unaudited)~~

~~(2) Summary of Significant Accounting Policies (Continued)~~



	Foreign Currency Translation Adjustments			Market Value Adjustments for Securities			Total
Balance as of December 31, 2015	$	(175,651	)	$	734		$	(174,917	)
Other comprehensive income (loss):
Foreign currency translation adjustments	23,491			—			23,491
Market value adjustments for securities	—			(734		)	(734		)
Total other comprehensive income (loss)	23,491			(734		)	22,757
Balance as of March 31, 2016	$	(152,160	)	$	—		$	(152,160	)


	Foreign Currency Translation Adjustments			Market Value Adjustments for Securities			Total			Foreign Currency Translation Adjustments			Market Value Adjustments for Securities		Total
Balance as of December 31, 2015	$	(175,651	)	$	734		$	(174,917	)
Balance as of December 31, 2016										$	(212,573	)	$	—	$	(212,573	)
Other comprehensive income (loss):
Foreign currency translation adjustments	37,205			—			37,205			51,334			—		51,334
Market value adjustments for securities	—			(734		)	(734		)	—			—		—
Total other comprehensive income (loss)	37,205			(734		)	36,471			51,334			—		51,334
Balance as of September 30, 2016	$	(138,446	)	$	—		$	(138,446	)
Balance as of March 31, 2017										$	(161,239	)	$	—	$	(161,239	)

i. Other (Income) Expense, ~~(Income),~~ Net

Other (income) expense, ~~(income),~~ net for the three ~~and nine~~ months ended ~~September 30, 2015~~March 31, 2016 and ~~2016 are as follows:~~2017 consists of the following:

Three Months Ended
September 30, Nine Months Ended
September 30,
2015 2016 2015 2016
Foreign currency transaction losses (gains), net $ 32,539
$ 10,685
$ 56,461
$ 15,336
Debt extinguishment expense 2,156
—
2,156
9,283
Other, net 551
12,617
982
12,387
$ 35,246
$ 23,302
$ 59,599
$ 37,006



	Three Months Ended March 31,
	2016			2017
Foreign currency transaction (gains) losses, net	$	(12,542	)	$	(4,164	)
Other, net	605			(2,200		)
	$	(11,937	)	$	(6,364	)

Other, net for the three and nine months ended September 30, 2016 includes a charge of $14,000 associated with the anticipated loss on disposal of the Australia Divestment Business. As disclosed in Note 10, we have determined that the Australia Divestment Business met the criteria to be reported as held for sale beginning in the second quarter of 2016. Accordingly, the Australia Divestment Business is reflected in our Consolidated Balance Sheet at the lower of its carrying value or its fair value (less costs to sell). This charge represents the excess of the carrying value of the Australia Divestment Business compared to its fair value (less costs to sell) as of September 30, 2016, based upon the sale price of the business described more fully in Note 13.

j. Property, Plant and Equipment and Long-Lived Assets

During the three ~~and nine~~ months ended ~~September 30, 2015,~~March 31, 2016 and 2017, we capitalized ~~$6,844~~$3,403 and $19,279 of costs, respectively, associated with the development of internal use computer software projects. During the three and nine months ended September 30, 2016, we capitalized $3,601 and $12,139$5,283 of costs, respectively, associated with the development of internal use computer software projects.

Consolidated ~~(gain) loss~~gain on disposal/write-down of property, plant and equipment (excluding real estate), net for the three ~~and nine~~ months ended ~~September 30, 2015~~March 31, 2016 and 2017 was ~~$(141)~~$451 and ~~$707,~~$459, respectively. Losses in the nine months ended September 30, 2015 consisted primarily of the write-off of certain property associated with our North American Records and Information Management Business segment. ConsolidatedThese gains ~~on disposal/write-down of property, plant and equipment (excluding real estate), net for the three and nine months ended September 30, 2016 was $54 and $1,131, respectively, which were~~are primarily associated with the retirement of leased vehicles accounted for as capital lease assets within our North American Records and Information Management Business segment.

Consolidated gain on sale of real estate was $850, net of tax of $209, for the three and nine months ended September 30, 2015, which was associated with the sale of a building in the United Kingdom. Consolidated gain on sale of real estate for the three and nine months ended September 30, 2016 was $325, net of tax of $34, associated with the sale of land in North America.

2319

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IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In Thousands, Except Share and Per Share Data)

(Unaudited)

(2) Summary of Significant Accounting Policies (Continued)

k. New Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In ~~May 2014,~~January 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ("ASU 2017-04"). ASU 2017-04 modifies the process by which entities will test goodwill for impairment. Under existing GAAP, when the carrying value of a reporting unit exceeds the reporting unit’s fair value, an entity would then proceed to a “Step 2” goodwill impairment analysis, which requires calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities, as if that reporting unit had been acquired in a business combination. Under ASU 2017-04, a goodwill impairment will be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying value of the reporting unit’s goodwill. We adopted ASU 2017-04 in the first quarter of 2017 and it did not impact our consolidated financial statements.

As Yet Adopted Accounting Pronouncements

a. ASU 2014-09

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"). ASU 2014-09 provides guidance for management to reassess revenue recognition as it relates to: (1) transfer of control, (2) variable consideration, (3) allocation of transaction price based on relative standalone selling price, (4) licenses, (5) time value of money, and (6) contract costs. ~~Further disclosures~~

ASU 2014-09 will ~~be required~~replace the current revenue recognition criteria under GAAP, including industry-specific requirements, and provide companies with a single revenue recognition model for recognizing revenue from contracts with customers. The core principle of ASU 2014-09 is that a company should recognize revenue to ~~provide a better understanding~~depict the transfer of ~~revenue~~promised goods or services to customers in an amount that ~~has been recognized and revenue that is expected~~reflects the consideration to which the company expects to be entitled in exchange for such goods or services. The two permitted transition methods under ASU 2014-09 are: (i) the full retrospective method, whereby ASU 2014-09 would be applied to each prior reporting period presented and the cumulative effect of adoption would be recognized inat the ~~future from existing contracts.~~earliest period shown, or (ii) the modified retrospective method, whereby the cumulative effect of applying ASU 2014-09 would be recognized at the date of initial application. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date ~~("ASU 2015-14"). ASU 2015-14~~, which deferred the effective date of ASU 2014-09 for one year, making itASU 2014-09 effective for us on January 1, 2018, with early adoption permitted as of January 1, 2017. We will adopt ASU 2014-09 as of January 1, ~~2018.~~2018 using the modified retrospective method.

During 2015, we established a project team responsible for the assessment and implementation of ASU 2014-09. We utilized a bottoms-up approach to analyze the impact of ASU 2014-09 on our contracts with customers by reviewing our current accounting policies and practices to identify potential differences that would result from applying the requirements of ASU 2014-09 to our contracts with customers. We are currently ~~evaluating~~in the ~~impact~~process of designing and implementing appropriate changes to our business processes, systems and controls to support the accounting and the financial disclosure requirements under ASU ~~2014-09 will~~2014-09. We have ~~on our consolidated financial statements.~~

~~In August 2014,~~been closely monitoring the FASB ~~issued~~activity related to specific interpretative issues pertaining to ASU ~~No. 2014-15,~~ ~~Presentation~~2014-09. During the second half of ~~Financial Statements Going Concern (Subtopic 205-40)~~ (“ASU 2014-15”). ASU 2014-15 requires management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles of current United States auditing standards. Specifically, the amendments (1) provide a definition2016, we substantially completed our evaluation of the term “substantial doubt”, (2) require an evaluation every reporting period, including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is still present, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). ASU 2014-15 is effective for us on January 1, 2017, with early adoption permitted. We will adopt ASU 2014-15 as of January 1, 2017. We do not believe thatpotential changes resulting from the adoption of ASU ~~2014-15 will have an impact~~2014-09 on our ~~consolidated~~accounting and the financial ~~statements.~~disclosure requirements and are now moving into the more detailed quantification of the impacts of adopting ASU 2014-09, the more significant of which are discussed below. Based on our analysis to date, we expect that the most significant impacts associated with adopting ASU 2014-09 compared to current GAAP will relate to (i) the deferral of certain commissions on our long-term storage contracts (“Accounting for Commissions”) and (ii) certain policy changes related to initial moves of physical storage, which will be subject to new cost guidance (“Accounting for Initial Moves”).

Table of Contents

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In ~~February 2015,~~Thousands, Except Share and Per Share Data)

(Unaudited)

(2) Summary of Significant Accounting Policies (Continued)

i. Accounting for Commissions

Under current GAAP, commissions that we pay related to our long-term storage contracts are expensed as incurred. Under ASU 2014-09, however, certain commissions will be capitalized and amortized over the ~~FASB issued~~period of expected earned revenue. In the year of adoption, this will result in increased intangible contract assets on our Consolidated Balance Sheet, a reduction in selling, general and administrative expenses and a corresponding increase in amortization expense (assuming consistent levels of spending up through the adoption date) on our Consolidated Statement of Operations and an increase in cash flows from operating activities and a corresponding increase in cash used for investing activities on our Consolidated Statement of Cash Flows.

ii. Accounting for Initial Moves

Under current GAAP, intake costs not charged to transport boxes to one of our facilities, which include labor and transportation costs, are capitalized and amortized as a component of depreciation and amortization in our Consolidated Statements of Operations. Under ASU ~~No. 2015-02,~~ ~~Consolidation (Topic 810): Amendments~~2014-09, however, the revenue and costs associated with all initial moves of physical storage, regardless of whether or not the services associated with such initial moves are provided to the ~~Consolidation Analysis~~ ~~(“ASU 2015‑02”). ASU 2015-02 affects reporting entities that are required~~customer at no charge, will be deferred and recognized over the period consistent with the transfer of the service to ~~evaluate whether they should consolidate certain legal entities. We adopted ASU 2015-02~~the customer to which the asset relates. In the year of adoption, this will result in decreased intangible assets and increased deferred revenue on ~~January 1, 2016. The~~our Consolidated Balance Sheet, a reduction in cost of sales and a corresponding increase in amortization expense (assuming consistent levels of spending up through the adoption date) on our Consolidated Statement of ~~ASU 2015-02 did not impact~~Operations and an increase in cash flows from operating activities and a corresponding increase in cash used for investing activities on our ~~consolidated financial statements.~~Consolidated Statement of Cash Flows.

~~In November 2015, the FASB issued ASU No. 2015-17,~~ ~~Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes~~ ("ASU 2015-17"). ASU No. 2015-17 eliminates the requirement for reporting entities to present deferred tax liabilities and assets as current and noncurrent in a classified balance sheet. Instead, reporting entities will be required to classify all deferred tax assets and liabilities as noncurrent. The amendments in ASU 2015-17 may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. ASU 2015-17 is effective for us on January 1, 2017, with early adoption permitted. We are currently evaluating the impact ASU 2015-17 will have on our consolidated financial statements.b. Other As Yet Adopted Accounting Pronouncements

In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities ("ASU 2016-01"). ASU 2016-01 requires that most equity investments be measured at fair value, with subsequent changes in fair value recognized in net income. ~~The pronouncement~~ASU 2016-01 also impacts financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. ASU 2016-01 is effective for us on January 1, 2018. We do not believe that the adoption of ASU 2016-01 will have a material impact on our consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) ("ASU 2016-02"). ASU 2016-02 requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months. ASU 2016-02 also will require certain qualitative and quantitative disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. ASU 2016-02 will be effective for us on January 1, 2019, with early adoption permitted. We will adopt ASU 2016-02 on January 1, 2019 and are currently evaluating the impact ASU 2016-02 will have on our consolidated financial statements.

~~Table of Contents~~

~~IRON MOUNTAIN INCORPORATED~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(In Thousands, Except Share and Per Share Data)~~

~~(Unaudited)~~

~~(2) Summary of Significant Accounting Policies (Continued)~~

In ~~March~~November 2016, the FASB issued ASU No. ~~2016-07,~~2016-18, ~~Simplifying the Transition to the Equity Method~~Statement of ~~Accounting~~Cash Flows (Topic 230): Restricted Cash ("("ASU ~~2016-07"~~2016-18"). ASU ~~2016-07 eliminates~~2016-18 provides guidance on the ~~requirement~~classification of restricted cash in the statement of cash flows. ASU 2016-18 is effective for us on January 1, 2018, with early adoption permitted and is required to be adopted on a ~~reporting entity to apply~~retrospective basis. We do not believe that the equity method of accounting retrospectively when they obtain significant influence over a previously held investment. Furthermore, under ASU 2016-07, for any available-for-sale securities that become eligible for the equity method of accounting, the unrealized gain or loss recorded within other comprehensive income (loss) associated with the securities should be recognized in earnings at the date the investment initially qualifies for the use of the equity method. We adopted ASU 2016-07 on April 1, 2016. The adoption of ASU ~~2016-07 did not~~2016-18 will have a material impact on our consolidated financial statements.

In ~~March 2016,~~January 2017, the FASB issued ASU No. ~~2016-09,~~2017-01, ~~Compensation-Stock Compensation-Improvements to Employee Share-Based Payment Accounting~~ Business Combinations (Topic 805): Clarifying the Definition of a Business(" ("ASU ~~2016-09"~~2017-01"). ASU 2016-09 involves several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification2017-01 provides greater clarity on the ~~statement~~definition of ~~cash flows. Under ASU 2016-09, income tax benefits and deficiencies are~~a business to ~~be recognized as income tax expense or benefit~~assist entities in ~~the statement of operations and the tax effects of exercised or vested awards~~evaluating whether transactions should be ~~treated as discrete items in the reporting period in which they occur. Additionally, under ASU 2016-09, excess tax benefits should be classified along with other income tax cash flows~~accounted for as an ~~operating activity.~~acquisition or disposal of assets or businesses. ASU ~~2016-09 will be~~2017-01 is effective for us on January 1, ~~2017,~~2018, with early adoption permitted. We are currently evaluating the impact ASU ~~2016-09~~2017-01 will have on our consolidated financial statements.

~~In August 2016, the FASB issued ASU No. 2016-15,~~ ~~Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments~~ ~~(“ASU 2016-15”)~~. ~~ASU 2016-15~~addresses eight specific cash flow changes with the objective of reducing the existing diversity in the practice of how certain cash receipts and cash payments are presented and classified in the statement of cash flows. We adopted ASU 2016-15 during the third quarter of 2016. ~~ASU 2016-15 did not have an impact on our consolidated financial statements.~~

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IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In Thousands, Except Share and Per Share Data)

(Unaudited)

(3) Derivative Instruments and Hedging Activities

Historically, we have entered into forward contracts to hedge our exposures in ~~Euros, British pounds sterling~~certain foreign currencies. At the maturity of the forward contracts, we may enter into new forward contracts to hedge movements in the underlying currencies. At the time of settlement, we either pay or receive the net settlement amount from the forward contract and ~~Australian dollars.~~recognize this amount in other expense (income), net in the Consolidated Statements of Operations as a realized foreign exchange gain or loss. At the end of each month, we mark the outstanding forward contracts to market and record an unrealized foreign exchange gain or loss for the mark-to-market valuation. We have not designated any of the forward contracts we have entered into as hedges. Our policy is to record the fair value of each derivative instrument on a gross basis. As of December 31, ~~2015 and September 30,~~ 2016, ~~however,~~ we had no forward contracts outstanding.

~~Net~~ As of March 31, 2017, we had outstanding forward contracts to purchase 46,000 Canadian dollars and sell $34,439 to hedge our foreign exchange exposures associated with the Canadian dollar. As of March 31, 2017, we recorded a derivative asset of $114 which is a component of Prepaid expenses and other on our Consolidated Balance Sheet. During the three months ended March 31, 2016 and 2017, there were no cash ~~(receipts)~~receipts or payments included in cash from operating activities from continuing operations related to settlements associated with foreign currency forward ~~contracts for the three and nine months ended September 30, 2015 and 2016 are as follows:~~contracts.

Three Months Ended
September 30, Nine Months Ended
September 30,
2015 2016 2015 2016
Net cash (receipts) payments $ (7,024 ) $ —
$ 22,164
$ —

~~(Gains) losses for our derivative instruments for the three and nine months ended September 30, 2015 and 2016 are as follows:~~

Amount of (Gain) Loss Recognized in
Income on Derivatives
Three Months Ended September 30, Nine Months Ended September 30,
Derivatives Not Designated as
Hedging Instruments Location of (Gain) Loss
Recognized in Income
on Derivative 2015 2016 2015 2016
Foreign exchange contracts Other expense (income), net $ (301 ) $ —
$ 20,113
$ —

We have designated a portion of our ~~previously outstanding 6~~³/₄~~% Notes and~~ Euro denominated borrowings by IMI under our Revolving Credit Facility (discussed more fully in Note 5) as a hedge of net investment of certain of our Euro denominated subsidiaries. For the ~~nine~~three months ended ~~September 30, 2015~~March 31, 2016 and ~~2016,~~2017, we designated, on average, ~~35,151~~30,218 and ~~29,858~~49,600 Euros, respectively, of ~~the previously outstanding 6~~³/₄~~% Notes and~~our Euro denominated borrowings by IMI under our Revolving Credit Facility as a hedge of net investment of certain of our Euro denominated subsidiaries. As a result, we recorded the following foreign exchange (losses) gains, net of tax, related to the change in fair value of such debt due to currency translation adjustments, which is a component of accumulated other comprehensive items, net:


	Three Months Ended September 30,						Nine Months Ended September 30,					Three Months Ended March 31,
	2015			2016			2015		2016			2016			2017
Foreign exchange (losses) gains	$	(85	)	$	(313	)	$	3,381	$	(901	)	$	(1,342	)	$	(1,072	)
Less: Tax (benefit) expense on foreign exchange (losses) gains	—			—			—		—			—			—
Foreign exchange (losses) gains, net of tax	$	(85	)	$	(313	)	$	3,381	$	(901	)	$	(1,342	)	$	(1,072	)

As of ~~September 30, 2016,~~March 31, 2017, cumulative net gains of ~~$16,195,~~$17,131, net of tax, are recorded in accumulated other comprehensive items, net associated with this net investment hedge.

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IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In Thousands, Except Share and Per Share Data)

(Unaudited)

(4) Acquisitions

We account for acquisitions using the acquisition method of accounting, and, accordingly, the assets and liabilities acquired are recorded at their estimated fair values and the results of operations for each acquisition have been included in our consolidated results from their respective acquisition dates. Cash consideration for our various acquisitions in ~~2016~~2017 was primarily provided through ~~borrowings under our Revolving Credit Facility~~cash flows from operating activities and ~~Bridge Facility (each as defined in Note 5),~~borrowings, as well as cash and cash equivalents on-hand.

a. Acquisition of Recall in 2016

On May 2, 2016 (Sydney, Australia time), we completed the Recall Transaction. At the closing of the Recall Transaction, we paid approximately $331,800 in cash and issued 50,233,412 shares of our common stock which, based on the closing price of our common stock as of April 29, 2016 (the last day of trading on the ~~NYSE~~New York Stock Exchange prior to the closing of the Recall Transaction) of $36.53 per share, resulted in a total purchase price to Recall shareholders of approximately $2,166,900.

~~Regulatory Approvals~~

In connection with the acquisition of Recall, we sought regulatory approval of the Recall Transaction from the United States Department of Justice (the “DOJ”), the Australian Competition and Consumer Commission (the “ACCC”), the Canada Competition Bureau (the “CCB”), and the United Kingdom Competition and Markets Authority (the “CMA”).

As part of the regulatory approval process, we agreed to make certain divestments ~~which are described below in greater detail,~~ in order to address competition concerns raised by the DOJ, the ACCC, the CCB and the CMA in respect of the Recall Transaction (the “Divestments”).

~~See~~ The Divestments, all of which were completed during the year ended December 31, 2016, are defined in Note 6 to Notes to Consolidated Financial Statements included in our Annual Report and are described in greater detail within that note, as well as within Note 10 ~~for additional information regarding the Divestments, including the presentation of the Divestments~~ in ~~our Consolidated Balance Sheet~~this Quarterly Report, were as of September 30, 2016, our Consolidated Statements of Operations for the three and nine months ended September 30, 2015 and 2016, respectively, and our Consolidated Statements of Cash Flows for the nine months ended September 30, 2015 and 2016, respectively.follows:

~~Divestments and Management Pending Sales~~

~~i. United States~~


i.	United States

The ~~DOJ’s approval of the Recall Transaction was subject to the following divestments being made by us following the closing of the Recall Transaction:~~

Recall’s records and information management facilities, including all associated tangible and intangible assets, in the following 13 United States cities: Buffalo, New York; Charlotte, North Carolina; Detroit, Michigan; Durham, North Carolina; Greenville/Spartanburg, South Carolina; Kansas City, Kansas/Missouri; Nashville, Tennessee; Pittsburgh, Pennsylvania; Raleigh, North Carolina; Richmond, Virginia; San Antonio, Texas; Tulsa, Oklahoma; and San Diego, California (the “Initial United States Divestments”); and

Recall’s records and information management facility in Seattle, Washington and certain of Recall’s records and information management facilities in Atlanta, Georgia, including in each case associated tangible and intangible assets (the “Seattle/Atlanta Divestments”).

~~Table of Contents~~

~~IRON MOUNTAIN INCORPORATED~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(In Thousands, Except Share and Per Share Data)~~

~~(Unaudited)~~

~~(4) Acquisitions (Continued)~~

~~On May 4, 2016, we completed the sale of the~~ Initial United States Divestments to Access CIG, LLC, a privately held provider of information management services throughout the United States (“Access CIG”), for total consideration of approximately $80,000, subject to adjustments (the “Access Sale”). Of the total consideration, we received $55,000 in cash proceeds upon closing of the Access Sale, and we are entitled to receive up to $25,000 of additional cash proceeds on the 27-month anniversary of the closing of the Access Sale (the "Access Contingent Consideration"). Our estimate of the fair value of the Access Contingent Consideration is approximately $21,400 (which reflects a fair value adjustment of approximately $2,200 and a present value adjustment of approximately $1,400), and accordingly, we have recognized a non-trade receivable included in Other, a component of Other Assets, Net in our Consolidated Balance Sheet as of September 30, 2016 for this amount.

The assets subject to the Access Sale were acquired in the Recall Transaction and, therefore, the estimated fair value of the Access Contingent Consideration has been reflected in the allocation of the purchase price for Recall as a component of “Fair Value of Divestments”. Our policy related to the recognition of contingent consideration (from a seller’s perspective) is to recognize contingent consideration at its estimated fair value upon closing of the transaction. Our policy related to the subsequent measurement of contingent consideration (from a seller’s perspective) is (i) to recognize contingent consideration in excess of our original estimate of fair value upon cash receipt of such consideration and (ii) to recognize any impairment of the contingent consideration compared to our original estimate in the period in which we determine such an impairment exists.

The Seattle/Atlanta Divestments will be effected by way of a sale of the tangible and intangible assets associated with the relevant facilities, which include warehouse space as well as customer contracts. We have agreed to place the assets and employees subject to the Seattle/Atlanta Divestments in a hold separate arrangement until the Seattle/Atlanta Divestments are completed.


ii.	Australia

In October 2016, we entered into an agreement with a potential buyer that provides for the sale of the Seattle/Atlanta Divestments and the Canadian Divestments (as described and defined below) to such potential buyer. This agreement remains subject to approval by the DOJ and the CCB as well as customary closing conditions and, therefore, we can provide no assurances that the DOJ and the CCB will approve the agreement, or that even with such approval that we will complete the sale on the terms agreed, or at all.

~~ii. Australia~~

The ~~ACCC approved the Recall Transaction after accepting an undertaking from us pursuant to section 87B of the~~ ~~Australian Competition and Consumer Act 2010~~ (Cth) (the “ACCC Undertaking”). Pursuant to the ACCC Undertaking, we agreed to divest the majority of our Australian operations as they existed prior to the closing of the Recall Transaction by way of a share sale, which effectively involves the sale of our Australian business (as it existed prior to the closing of the Recall Transaction) other than our data management business throughout Australia and our records and information management business in the Northern Territory of Australia, except in relation to customers who have holdings in other Australian states or territories (the “Australia Divestment Business” and, with respect to the portion of our Australia business that is not subject to divestment, the “Australia Retained Business”).

~~Pursuant to the ACCC Undertaking, any prospective purchaser of the~~ Australia Divestment Business is subject to ACCC approval. On October 24, 2016, we received the requisite clearance from the ACCC to sell the Australia Divestment Business and, on October 31, 2016, we completed the sale of the Australia Divestment Business. See Note 13.

~~Table of Contents~~

~~IRON MOUNTAIN INCORPORATED~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(In Thousands, Except Share and Per Share Data)~~

~~(Unaudited)~~

~~(4) Acquisitions (Continued)~~

~~iii. Canada~~

~~The CCB approved the Recall Transaction on the basis of the registration of a consent agreement with us pursuant to sections 92 and 105 of the~~ ~~Competition Act~~ ~~(R.S.C., 1985, c. C-34) (the “CCB Consent Agreement”). The CCB Consent Agreement requires us to divest the following assets:~~

Recall’s record and information management facilities, including associated tangible and intangible assets and employees, in Edmonton, Alberta and Montreal (Laval), Quebec and certain of Recall’s record and information management facilities, including all associated tangible and intangible assets and employees, in Calgary, Alberta and Toronto, Ontario, (the “Recall Canadian Divestments”); and

One of our records and information management facilities in Vancouver (Burnaby), British Columbia and one of our records and information management facilities in Ottawa, Ontario, including associated tangible and intangible assets and employees (the “Iron Mountain Canadian Divestments”).


iii.	Canada

The Recall Canadian Divestments ~~and the~~

The Iron Mountain Canadian Divestments (or collectively, the “Canadian Divestments”) will be affected by way of a sale of only the tangible and intangible assets associated with the relevant facilities, which include warehouse space as well as customer contracts. Under the CCB Consent Agreement, the assets subject of the Canadian Divestments will be acquired by a single buyer to be approved by the Commissioner of Competition (the “Commissioner”).


iv.	United Kingdom

Pursuant to the terms of the CCB Consent Agreement, in order to preserve the businesses of the Canadian Divestments, pending completion of a sale of the Canadian Divestments, we must maintain the economic viability and marketability of the businesses of the Canadian Divestments, and we are required to hold the Recall Canadian Divestments separate from those of our other operations. In addition, the business of the Recall Canadian Divestments is being managed by an independent manager selected by us and approved by the Commissioner.

In October 2016, we entered into an agreement with a potential buyer that provides for the sale of the Seattle/Atlanta Divestments and the Canadian Divestments to such potential buyer. This agreement remains subject to approval by the DOJ and the CCB as well as customary closing conditions and, therefore, we can provide no assurances that the DOJ and the CCB will approve the agreement, or that even with such approval that we will complete the sale, on the terms agreed or at all.

~~iv. United Kingdom~~

In January 2016, the CMA referred the Recall Transaction for further investigation and report by a group of CMA panel members who were responsible for determining whether the Recall Transaction would result in a substantial lessening of competition within the relevant United Kingdom markets (the “CMA Review”). On March 30, 2016, the CMA announced its conditional consent for the Recall Transaction prior to the CMA’s issuance of its final decision following the CMA Review (the “CMA Consent”). On June 16, 2016, the CMA completed the CMA Review and published its findings. The findings concluded that the Recall Transaction is not expected to result in any substantial lessening of competition outside of North East Scotland, but that the Recall Transaction may result in a substantial lessening of competition in the supply of records management and information management services (including records management and physical offsite data protection services) in the Aberdeen and Dundee areas of Scotland (the “Scotland Affected Areas”). As a result of the CMA’s decision, we will divest Recall’s record and information management facilities, including associated tangible and intangible assets and employees, in the Scotland Affected Areas (the “UK Divestments”).

~~Table of Contents~~

~~IRON MOUNTAIN INCORPORATED~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(In Thousands, Except Share and Per Share Data)~~

~~(Unaudited)~~

~~(4) Acquisitions (Continued)~~

~~Pursuant to the CMA Consent, in order to preserve the business of the~~ UK Divestments pending completion of the sale of the UK Divestments, we must maintain the economic viability and marketability of the business of the UK Divestments, and we are required to hold the UK Divestments separate from those of our other operations. In addition, the CMA concluded that a monitoring trustee should be appointed, at our sole expense and subject to CMA approval, to monitor compliance with the CMA’s findings and to ensure a prompt sale of the UK Divestments. We are in discussions with potential buyers for the UK Divestments. Aside from the CMA’s eventual approval of the purchaser of the UK Divestments, this decision marks the completion of the CMA Review.

The unaudited consolidated pro forma financial information (the "Pro Forma Financial Information") below summarizes the combined results of us and Recall on a pro forma basis as if the Recall Transaction had occurred on January 1, 2015. The Pro Forma Financial Information is presented for informational purposes and is not necessarily indicative of the results of operations that would have been achieved if the acquisition had taken place on January 1, 2015. The Pro Forma Financial Information, for all periods presented, includes adjustments to convert Recall's historical results from International Financial Reporting Standards to GAAP, our current estimates of purchase accounting adjustments (including amortization expenses from acquired intangible assets, depreciation of acquired property, plant and equipment and amortization of favorable and unfavorable operating leases), stock-based compensation and related tax effects. Through ~~September 30, 2016,~~March 31, 2017, we and Recall have collectively incurred ~~$137,652~~$140,661 of operating expenditures to complete the Recall Transaction (including advisory and professional fees and costs to complete the Divestments ~~required in connection with receipt of regulatory approval~~ and to provide transitional services required to support the divested businesses during a transition period). These operating expenditures have been reflected within the results of operations in the Pro Forma Financial Information as if they were incurred on January 1, 2015. The costs we have incurred to integrate Recall with our existing operations, including moving, severance, facility upgrade, REIT conversion and system upgrade costs are reflected in the Pro Forma Financial Information in the period in which they were incurred.

Table of Contents

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In Thousands, Except Share and Per Share Data)

(Unaudited)

(4) Acquisitions (Continued)

The Pro Forma Financial Information, for all periods presented, ~~exclude~~excludes from income (loss) from continuing operations the results of operations of the Initial United States Divestments, the Seattle/Atlanta Divestments, the Recall Canadian Divestments and the UK Divestments, as these businesses are presented as discontinued operations. See Note 10 for information regarding our conclusion with respect to the presentation of these divestments as discontinued operations. The results of the Australia Divestment Business and the Iron Mountain Canadian Divestments are included within the results from continuing operations in the Pro Forma Financial Information ~~for all periods presented,~~through the closing date of the Australia Sale (as defined in Note 10), in the case of the Australia Divestment Business, and through the closing date of the ARKIVE Sale (as defined in Note 10), in the case of the Iron Mountain Canadian Divestments, as these businesses do not qualify for discontinued operations. See Note 10 for information regarding our conclusion that these divestments do not meet the criteria to be reported as discontinued operations. The Australia Divestment Business and the Iron Mountain Canadian Divestments, collectively, represent ~~$23,317 and $50,759~~$13,376 of total revenues and ~~$3,595 and $5,146~~$806 of total income from continuing operations for the three ~~and nine~~ months ended ~~September 30, 2015, respectively,~~March 31, 2016.



	Three Months Ended March 31, 2016
Total Revenues	$	937,952
Income from Continuing Operations	$	58,058
Per Share Income from Continuing Operations - Basic	$	0.22
Per Share Income from Continuing Operations - Diluted	$	0.22

In addition to our acquisition of Recall, we completed certain other acquisitions during 2016 and ~~$15,803~~2017. The Pro Forma Financial Information does not reflect these acquisitions due to the insignificant impact of these acquisitions on our consolidated results of operations.

b. Other Noteworthy Acquisitions

In November 2016, we entered into a binding agreement to acquire the information management assets and ~~$42,954~~operations of ~~total revenues~~Santa Fe Group A/S ("Santa Fe") in ten regions within Europe and ~~$1,986~~Asia in order to expand our presence in southeast Asia and ~~$2,741~~western Europe. In December 2016, we acquired the information management assets and operations of ~~total income from continuing operations~~Santa Fe in Hong Kong, Malaysia, Singapore, Spain and Taiwan (the “2016 Santa Fe Transaction”) for approximately 15,200 Euros (approximately $16,000, based upon the ~~three~~exchange rate between the United States dollar and ~~nine months ended September~~the Euro as of December 30, 2016, ~~respectively.~~

Three Months Ended
September 30, Nine Months Ended
September 30,
2015 2016 2015 2016
Total Revenues $ 927,622
$ 942,822
$ 2,811,211
$ 2,828,033
Income (Loss) from Continuing Operations $ 14,530
$ 8,935
$ (15,654 ) $ 89,036
Per Share Income (Loss) from Continuing Operations - Basic $ 0.05
$ 0.03
$ (0.07 ) $ 0.33
Per Share Income (Loss) from Continuing Operations - Diluted $ 0.05
$ 0.03
$ (0.07 ) $ 0.33

~~The amount~~the closing date of ~~revenue~~the 2016 Santa Fe Transaction). Of the total purchase price, 13,500 Euros (or approximately $14,200, based upon the exchange rate between the United States dollar and ~~earnings in our Consolidated Statements~~the Euro on the closing date of ~~Operations for~~ the ~~three~~2016 Santa Fe Transaction) was paid during the year ended December 31, 2016, and ~~nine months ended September 30, 2016 related to Recall~~the remaining balance is ~~impracticable for us to determine. Subsequent to~~due on the 18-month anniversary of the closing of the ~~Recall~~2016 Santa Fe Transaction. During the first quarter of 2017, we acquired the information management assets and operations of Santa Fe in Macau and South Korea (the "2017 Santa Fe Transaction") for approximately 925 Euros (or approximately $1,000, based upon the exchange rate between the United States dollar and the Euro on the closing date of the 2017 Santa Fe Transaction). We expect to acquire Santa Fe's information management assets and operations in India, Indonesia and the Philippines by the end of the second quarter of 2017.

In addition to the 2017 Santa Fe Transaction ~~we began integrating Recall and~~noted above, during 2017, in order to enhance our existing operations in ~~order~~the United States and Greece and to ~~achieve operational synergies. As a result,~~expand our operations into the ~~revenue generated by Recall, as well as the underlying costs of sales and selling, general and administrative expenses to support Recall's business, are now integrated with the revenue~~United Arab Emirates, we ~~generate, as well as the costs of sales and selling, general and administrative expenses that supported our business, prior to~~completed the acquisition of ~~Recall.~~three storage and records management companies and one art storage company for total consideration of approximately $13,700. The individual purchase prices of these acquisitions ranged from approximately $2,000 to approximately $4,400.

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IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In Thousands, Except Share and Per Share Data)

(Unaudited)

(4) Acquisitions (Continued)

In addition to our acquisition of Recall, we completed certain other acquisitions during 2016. The unaudited pro forma results of operations (including revenue and earnings) for the current and prior periods reflecting these acquisitions and certain acquisitions in 2015 are not presented due to the insignificant impact of these acquisitions on our consolidated results of operations.

~~b. Other 2016 Acquisitions~~

In March 2016, we acquired a controlling interest in Docufile Holdings Proprietary Limited ("Docufile"), a storage and records management company with operations in South Africa, for approximately $15,000. The acquisition of Docufile represents our entrance into Africa.

In March 2016, in order to expand our presence in the Baltic region, we acquired the stock of Archyvu Sistemos, a storage and records management company with operations in Lithuania, Latvia and Estonia, for approximately $5,100.

In August 2016, we reached an agreement in principle under a non-binding memorandum of understanding to acquire the information management operations of Santa Fe Group A/S (“Santa Fe”) in ten regions within Europe and Asia (the “Santa Fe Transaction”) for approximately 27,000 Euro, or approximately $30,300, based upon the exchange rate between the United States dollar and the Euro as of September 30, 2016. Santa Fe operates its information management business in Spain, India, Hong Kong, Macau, Indonesia, the Philippines, Singapore, Malaysia, South Korea and Taiwan. The memorandum of understanding between us and Santa Fe is non-binding and any binding agreement we enter into with Santa Fe will be subject to closing conditions; accordingly, we can provide no assurance that we will complete this acquisition, that the acquisition will not be delayed or that the terms of the acquisition will not change.

A summary of the cumulative consideration paid and the preliminary allocation of the purchase price paid for all of our ~~2016~~2017 acquisitions is as follows:


	Recall			Other Fiscal 2016 Year Acquisitions (excluding Recall)			Total
Cash Paid (gross of cash acquired)(1)	$	331,834		$	21,817		$	353,651		$	13,736
Fair Value of Common Stock Issued	1,835,026			—			1,835,026
Fair Value of Noncontrolling Interests	—			3,506			3,506			843
Total Consideration	2,166,860			25,323			2,192,183			14,579
Fair Value of Identifiable Assets Acquired:
Cash	76,531			567			77,098			1,631
Accounts Receivable and Prepaid Expenses	204,610			2,582			207,192			1,771
Fair Value of Divestments(2)	122,978			—			122,978
Other Assets	47,574			541			48,115			692
Property, Plant and Equipment(3)	677,509			8,409			685,918
Customer Relationship Intangible Assets(4)	729,514			10,614			740,128
Debt Assumed	(789,264		)	—			(789,264		)
Property, Plant and Equipment(2)										2,845
Customer Relationship Intangible Assets(3)										8,222
Accounts Payable, Accrued Expenses and Other Liabilities	(258,937		)	(8,450		)	(267,387		)	(6,208		)
Deferred Income Taxes	(184,590		)	(2,720		)	(187,310		)	(461		)
Total Fair Value of Identifiable Net Assets Acquired	625,925			11,543			637,468			8,492
Goodwill Initially Recorded(5)	$	1,540,935		$	13,780		$	1,554,715
Goodwill Initially Recorded(4)										$	6,087

~~Table of Contents~~

~~IRON MOUNTAIN INCORPORATED~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(In Thousands, Except Share and Per Share Data)~~

~~(Unaudited)~~

~~(4) Acquisitions (Continued)~~


(1)	Included in cash paid for acquisitions in the Consolidated Statement of Cash Flows for the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 is net cash acquired of ~~$77,098~~$1,631 and ~~cash received~~contingent and other payments, net of ~~$182~~$82 related to acquisitions made in previous years.


(2)	~~Represents the fair value, less costs to sell, of the Initial United States Divestments, the Seattle/Atlanta Divestments, the Recall Canadian Divestments and the UK Divestments.~~


~~(3)~~	Consists primarily of ~~buildings,~~ racking structures ~~leasehold improvements~~ and ~~computer hardware and software.~~warehouse equipment. These assets are depreciated using the straight-line method with the useful lives as noted in Note 2.f. to Notes to Consolidated Financial Statements included in our Annual Report.


~~(4)~~(3)	The weighted average lives of customer relationship intangible assets associated with acquisitions in ~~2016~~2017 was ~~14 years, primarily related to the customer relationship intangible assets associated with the Recall Transaction.~~


~~(5)~~	The goodwill associated with Recall is primarily attributable to the assembled workforce, expanded market opportunities and costs and other operating synergies anticipated upon the integration of the operations of us and Recall.20 years.

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

Allocations of the purchase price for acquisitions made in 2016 and 2017 were based on estimates of the fair value of the net assets acquired and are subject to adjustment upon the finalization of the purchase price allocations. The accounting for business combinations requires estimates and judgments as to expectations for future cash flows of the acquired business, and the allocations of those cash flows to identifiable tangible and intangible assets, in determining the assets acquired and liabilities assumed. The fair values assigned to tangible and intangible assets acquired and liabilities assumed, including contingent consideration, are based on management's best estimates and assumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques. The estimates and assumptions underlying the initial valuations are subject to the collection of information necessary to complete the valuations within the measurement periods, which are up to one year from the respective acquisition dates. Assets and liabilities that were acquired and classified as held for sale immediately following the Recall Transaction were valued based on the estimated fair value of the divestment, less costs to sell. The preliminary purchase price allocations that are not finalized as of ~~September 30, 2016~~March 31, 2017 primarily relate to the final assessment of the fair values of intangible assets (primarily customer relationship intangible ~~assets and trademarks)~~assets), property, plant and equipment (primarily ~~building and~~ racking structures), operating leases, contingencies and income taxes (primarily deferred income taxes), primarily associated with the Recall ~~Transaction.~~Transaction and the Santa Fe Transaction, as well as other acquisitions which closed in 2017.

Table of Contents

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In Thousands, Except Share and Per Share Data)

(Unaudited)

(4) Acquisitions (Continued)

As the valuation of certain assets and liabilities for purposes of purchase price allocations are preliminary in nature, they are subject to adjustment as additional information is obtained about the facts and circumstances regarding these assets and liabilities that existed at the acquisition date. Any adjustments to our estimates of purchase price allocation will be made in the periods in which the adjustments are determined and the cumulative effect of such adjustments will be calculated as if the adjustments had been completed as of the acquisition dates. Adjustments recorded during the three months ended ~~September 30, 2016~~March 31, 2017 were not material to our results from operations.

3226

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IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In Thousands, Except Share and Per Share Data)

(Unaudited)

(5) Debt

Long-term debt is as follows:

December 31, 2015
Debt Unamortized Deferred Financing Costs Carrying Amount Fair
Value
Revolving Credit Facility(1) $ 784,438
$ (9,410 ) $ 775,028
$ 784,438
Term Loan(1) 243,750
—
243,750
243,750
6% Senior Notes due 2020 (the "6% Notes due 2020")(2)(3)(4) 1,000,000
(16,124 ) 983,876
1,052,500
6¹/₈% CAD Senior Notes due 2021 (the "CAD Notes due 2021")(2)(5)
144,190
(1,924 ) 142,266
147,074
6¹/₈% GBP Senior Notes due 2022 (the "GBP Notes")(2)(4)(6)
592,140
(8,757 ) 583,383
606,944
6% Senior Notes due 2023 (the "6% Notes due 2023")(2)(3) 600,000
(8,420 ) 591,580
618,000
5³/₄% Senior Subordinated Notes due 2024 (the "5³/₄% Notes")(2)(3)
1,000,000
(11,902 ) 988,098
961,200
Real Estate Mortgages, Capital Leases and Other(7) 333,559
(1,070 ) 332,489
333,559
Accounts Receivable Securitization Program(8) 205,900
(692 ) 205,208
205,900
Total Long-term Debt 4,903,977
(58,299 ) 4,845,678

Less Current Portion (88,068 ) —
(88,068 )
Long-term Debt, Net of Current Portion $ 4,815,909
$ (58,299 ) $ 4,757,610


	September 30, 2016											December 31, 2016											March 31, 2017
	Debt (inclusive of discount)			Unamortized Deferred Financing Costs			Carrying Amount			Fair Value		Debt (inclusive of discount)			Unamortized Deferred Financing Costs			Carrying Amount			Fair Value		Debt (inclusive of discount)				Unamortized Deferred Financing Costs			Carrying Amount			Fair Value
Revolving Credit Facility~~(1)~~	$	1,240,761		$	(8,166	)	$	1,232,595		$	1,240,761	$	953,548		$	(7,530	)	$	946,018		$	953,548	$	988,327			$	(6,800	)	$	981,527		$	988,327
Term Loan~~(1)~~	234,375			—			234,375			234,375		234,375			—			234,375			234,375		228,125				—			228,125			228,125
Australian Dollar Term Loan (the "AUD Term Loan")~~(9)~~	188,967			(3,713		)	185,254			190,876		177,198			(3,774		)	173,424			178,923		186,963				(3,832		)	183,131			188,715
6% Notes due 2020(2)(3)(4)	1,000,000			(13,578		)	986,422			1,055,000
CAD Notes due 2021(2)(5)	152,179			(1,762		)	150,417			158,837
4³/₈% Senior Notes due 2021 (the "4³/₈% Notes")(2)(3)(4)	500,000			(8,051		)	491,949			515,000
GBP Notes(2)(4)(6)	518,808			(6,816		)	511,992			544,748
6% Notes due 2023(2)(3)	600,000			(7,597		)	592,403			642,000
6% Senior Notes due 2020 (the "6% Notes due 2020")(1)(2)												1,000,000			(12,730		)	987,270			1,052,500		1,000,000				(11,881		)	988,119			1,046,250
4³/₈% Senior Notes due 2021 (the "4³/₈% Notes")(1)(2)												500,000			(7,593		)	492,407			511,250		500,000				(7,163		)	492,837			512,500
6¹/₈% CAD Senior Notes due 2021 (the "CAD Notes due 2021")(3)												148,792			(1,635		)	147,157			155,860		150,045				(1,561		)	148,484			155,859
6¹/₈% GBP Senior Notes due 2022 (the "GBP Notes")(2)												493,648			(6,214		)	487,434			527,562		499,508				(6,012		)	493,496			529,478
6% Senior Notes due 2023 (the "6% Notes due 2023")(1)												600,000			(7,322		)	592,678			637,500		600,000				(7,048		)	592,952			632,280
5³/₈% CAD Senior Notes due 2023 (the "CAD Notes due 2023")~~(5)~~(3)	190,223			(3,370		)	186,853			191,412		185,990			(3,498		)	182,492			188,780		187,557				(3,405		)	184,152			193,418
5³/₄% Notes(2)(3)	1,000,000			(10,872		)	989,128			1,032,500
5³/₈% Senior Notes due 2026 (the "5³/₈% Notes")(2)(4)(10)	250,000			(4,159		)	245,841			249,375
5³/₄% Senior Subordinated Notes due 2024 (the "5³/₄% Notes")(1)												1,000,000			(10,529		)	989,471			1,027,500		1,000,000				(10,186		)	989,814			1,017,500
5³/₈% Senior Notes due 2026 (the "5³/₈% Notes")(2)												250,000			(4,044		)	245,956			242,500		250,000				(3,937		)	246,063			248,750
Real Estate Mortgages, Capital Leases and Other~~(7)~~	444,772			(1,113		)	443,659			444,772		478,565			(1,277		)	477,288			478,565		518,191				(1,239		)	516,952			518,191
Accounts Receivable Securitization Program~~(8)~~(4)	208,800			(461		)	208,339			208,800		247,000			(384		)	246,616			247,000		250,000				(308		)	249,692			250,000
Mortgage Securitization Program												50,000			(1,405		)	48,595			50,000		50,000				(1,369		)	48,631			50,000
Total Long-term Debt	6,528,885			(69,658		)	6,459,227					6,319,116			(67,935		)	6,251,181					6,408,716			—	(64,741		)	6,343,975
Less Current Portion	(121,203		)	—			(121,203		)			(172,975		)	—			(172,975		)			(421,535		)		308			(421,227		)
Long-term Debt, Net of Current Portion	$	6,407,682		$	(69,658	)	$	6,338,024				$	6,146,141		$	(67,935	)	$	6,078,206				$	5,987,181			$	(64,433	)	$	5,922,748

~~Table of Contents~~

~~IRON MOUNTAIN INCORPORATED~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(In Thousands, Except Share and Per Share Data)~~

~~(Unaudited)~~

~~(5) Debt (Continued)~~

(1)

~~The capital stock or other equity interests of most of our United States subsidiaries, and up to 66% of~~Collectively, the capital stock or other equity interests of most of our first-tier foreign subsidiaries, are pledged to secure these debt instruments, together with all intercompany obligations (including promissory notes) of subsidiaries owed to us or to one of our United States subsidiary guarantors. In addition, Iron Mountain Canada Operations ULC ("Canada Company") has pledged 66% of the capital stock of its subsidiaries, and all intercompany obligations (including promissory notes) owed to or held by it, to secure the Canadian dollar subfacility under the Revolving Credit Facility (defined below)"Parent Notes". The fair value (Level 3 of fair value hierarchy described at Note 2.g.) of these debt instruments approximates the carrying value (as borrowings under these debt instruments are based on current variable market interest rates (plus a margin that is subject to change based on our consolidated leverage ratio)), as of December 31, 2015 and September 30, 2016, respectively.


(2)	The fair values (Level 1 of fair value hierarchy described at Note 2.g.) of these debt instruments are based on quoted market prices for these notes on December 31, 2015 and September 30, 2016, respectively.Collectively, the "Unregistered Notes".

(3)

Collectively, the "Parent Notes." IMI is the direct obligor on the Parent Notes, which are fully and unconditionally guaranteed, on a senior or senior subordinated basis, as the case may be, by its direct and indirect 100% owned United States subsidiaries that represent the substantial majority of our United States operations (the "Guarantors")"CAD Notes". These guarantees are joint and several obligations of the Guarantors. Canada Company, Iron Mountain Europe PLC ("IME"), the Special Purpose Subsidiaries (as defined below) and the remainder of our subsidiaries do not guarantee the Parent Notes. See Note 6.

(4)

~~The 6% Notes due 2020,~~Because the 4³/₈~~% Notes, the GBP Notes, the CAD Notes due 2023 and the 5~~³/₈~~% Notes (collectively, the "Unregistered Notes") have not been registered~~Accounts Receivable Securitization Program terminates on March 6, 2018, at which point all obligations under the Securities Act of 1933, as amended (the “Securities Act”), or under the securities laws of any other jurisdiction. Unless they are registered, the Unregistered Notes may be offered only in transactions that are exempt from registration under the Securities Act or the securities laws of any other jurisdiction.


~~(5)~~	~~Canada Company is the direct obligor on the CAD Notes~~program become due, 2021 and the CAD Notes due 2023 (collectively, the "CAD Notes"), which are fully and unconditionally guaranteed, on a senior basis, by IMI and the Guarantors. These guarantees are joint and several obligations of IMI and the Guarantors. See Note 6.


~~(6)~~	IME is the direct obligor on the GBP Notes, which are fully and unconditionally guaranteed, on a senior basis, by IMI and the Guarantors. These guarantees are joint and several obligations of IMI and the Guarantors. See Note 6.


~~(7)~~	~~We believe the fair value (Level 3 of fair value hierarchy described at Note 2.g.) of~~ this debt ~~approximates its carrying value.~~


~~(8)~~	~~The Special Purpose Subsidiaries are~~is classified within the ~~obligors under this program. We believe the fair value (Level 3~~current portion of ~~fair value hierarchy described at Note 2.g.) of this~~long-term debt ~~approximates its carrying value.~~


~~(9)~~	The fair value (Level 3 of fair value hierarchy described at Note 2.g.) of this debt instrument approximates the carrying value as borrowings under this debt instrument are based on a current variable market interest rate. The amount of debt for the AUD Term Loan reflects an unamortized original issue discount of $1,909in our Consolidated Balance Sheet as of ~~September 30, 2016.~~March 31, 2017.

~~(10) Iron Mountain US Holdings, Inc. ("IM US Holdings"), a 100% owned subsidiary of IMI and one of the Guarantors, is the direct obligor on the 5~~³/₈~~% Notes, which are fully and unconditionally guaranteed, on a senior basis, by IMI and the other Guarantors. These guarantees are joint and several obligations of IMI and such Guarantors. See Note 6.~~

3427

Table of Contents

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In Thousands, Except Share and Per Share Data)

(Unaudited)

(5) Debt (Continued)

See Note 4 to Notes to Consolidated Financial Statements included in our Annual Report for additional information regarding our long-term debt, including the direct obligors of each of our debt instruments as well as information regarding the fair value of our debt instruments (including the levels of the fair value hierarchy used to determine the fair value of our debt instruments). The levels of the fair value hierarchy used to determine the fair value of our debt as of March 31, 2017 are consistent with the levels of the fair value hierarchy used to determine the fair value of our debt as of December 31, 2016 (which are disclosed in our Annual Report). Additionally, see Note 6 for information regarding which of our consolidated subsidiaries guarantee certain of our debt instruments.

a. Credit Agreement

On July 2, 2015, we entered into a new credit agreement (the "Credit Agreement") to refinance our then existing credit ~~agreement~~agreement. The Credit Agreement terminates on July 6, 2019, at which ~~consisted of a revolving credit facility (the "Former Revolving~~point all obligations become due, but may be extended by one year at our option, subject to the conditions set forth in the Credit ~~Facility") and a term loan and was scheduled to terminate on June 27, 2016.~~Agreement. Borrowings under the Credit Agreement may be prepaid without penalty or premium, in whole or in part, at any time. The Credit Agreement consists of a revolving credit facility (the "Revolving Credit Facility") and a term loan (the "Term Loan"). We recorded a charge of $2,156 to other expense (income), net in the third quarter of 2015 related to the refinancing of the Credit Agreement, representing a write-off of unamortized deferred financing costs.

~~On June 24, 2016, Iron Mountain Information Management, LLC (“IMIM”) entered into a commitment increase supplement (the “Commitment Increase Supplement”), pursuant to which we increased the~~The maximum amount permitted to be borrowed under the Revolving Credit Facility ~~from $1,500,000 to~~is $1,750,000. ~~After entering into~~The original amount of the ~~Commitment Increase Supplement, the maximum amount available for borrowing under the Credit Agreement is $2,000,000 (consisting of a Revolving Credit Facility of $1,750,000 and a~~ Term Loan ~~of $250,000).~~was $250,000. We ~~continue to~~ have the option to request additional commitments of up to $250,000, in the form of term loans or through increased commitments under the Revolving Credit Facility, subject to the conditions specified in the Credit Agreement.

The Revolving Credit Facility is supported by a group of 25 banks and enables IMI and certain of its United States and foreign subsidiaries to borrow in United States dollars and (subject to sublimits) a variety of other currencies (including Canadian dollars, British pounds sterling, Euros and Australian dollars, among other currencies) in an aggregate outstanding amount not to exceed $1,750,000. The Term Loan is to be paid in quarterly installments in an amount equal to $3,125 per quarter, with the remaining balance due on July 3, 2019. The Credit Agreement terminates on July 6, 2019, at which point all obligations become due, but may be extended by one year at our option, subject to the conditions set forth in the Credit Agreement. Borrowings under the Credit Agreement may be prepaid without penalty or premium, in whole or in part, at any time.

~~IMI and the Guarantors guarantee all obligations under the Credit Agreement.~~ The interest rate on borrowings under the Credit Agreement varies depending on our choice of interest rate and currency options, plus an applicable margin, which varies based on our consolidated leverage ratio. Additionally, the Credit Agreement requires the payment of a commitment fee on the unused portion of the Revolving Credit Facility, which fee ranges from between 0.25% to 0.4% based on our consolidated leverage ratio and fees associated with outstanding letters of credit. As of ~~September 30, 2016,~~March 31, 2017, we had ~~$1,240,761~~$988,327 and ~~$234,375~~$228,125 of outstanding borrowings under the Revolving Credit Facility and the Term Loan, respectively. Of the ~~$1,240,761~~$988,327 of outstanding borrowings under the Revolving Credit Facility, ~~$718,800~~$741,000 was denominated in United States dollars ~~6,000~~and 231,530 was denominated in ~~Canadian dollars, 255,150 was denominated in Euros and 303,000 was denominated in Australian dollars.~~Euros. In addition, we also had various outstanding letters of credit totaling ~~$55,392.~~$53,649. The remaining amount available for borrowing under the Revolving Credit Facility as of ~~September 30, 2016,~~March 31, 2017, 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 ~~$453,847~~$708,024 (which amount represents the maximum availability as of such date). The average interest rate in effect under the Credit Agreement was ~~2.9%~~3.0% as of ~~September 30, 2016.~~March 31, 2017. The average interest rate in effect under the Revolving Credit Facility was ~~2.9%~~3.0% and ranged from 2.3% to ~~4.8%~~5.0% as of ~~September 30, 2016~~March 31, 2017 and the interest rate in effect under the Term Loan as of ~~September 30, 2016~~March 31, 2017 was ~~2.8%~~3.2%.

The capital stock or other equity interests of most of our United States subsidiaries, and up to 66% of the capital stock or other equity interests of most of our first-tier foreign subsidiaries, are pledged to secure borrowings under the Credit Agreement, together with all intercompany obligations (including promissory notes) of subsidiaries owed to us or to one of our United States subsidiary guarantors. In addition, Iron Mountain Canada Operations ULC ("Canada Company") has pledged 66% of the capital stock of its subsidiaries, and all intercompany obligations (including promissory notes) owed to or held by it, to secure the Canadian dollar subfacility under the Revolving Credit Facility.

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

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IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In Thousands, Except Share and Per Share Data)

(Unaudited)

(5) Debt (Continued)

Our leverage and fixed charge coverage ratios under the Credit Agreement as of December 31, ~~2015~~2016 and ~~September 30, 2016,~~March 31 2017, respectively, and our leverage ratio under our indentures as of December 31, ~~2015~~2016 and ~~September 30, 2016,~~March 31, 2017, respectively, are as follows:


	December 31, 2015	September 30, 2016	Maximum/Minimum Allowable	December 31, 2016	March 31, 2017	Maximum/Minimum Allowable
Net total lease adjusted leverage ratio	5.6	5.7	Maximum allowable of 6.5	5.7	5.8	Maximum allowable of 6.5
Net secured debt lease adjusted leverage ratio	2.6	2.6	Maximum allowable of 4.0	2.7	2.7	Maximum allowable of 4.0
Bond leverage ratio (not lease adjusted)	5.5	5.4	Maximum allowable of 6.5	5.2	5.5	Maximum allowable of 6.5
Fixed charge coverage ratio	2.4	2.5	Minimum allowable of 1.5	2.4	2.3	Minimum allowable of 1.5

As noted in the table above, our maximum allowable net total lease adjusted leverage ratio under the Credit Agreement is 6.5. The Credit Agreement also contains a provision which limits, in certain circumstances, our dividends in any four consecutive fiscal quarters to 95% of Funds From Operations (as defined in the Credit Agreement) for such four fiscal quarters or, if greater, the amount that we would be required to pay in order to continue to be qualified for taxation as a REIT or to avoid the imposition of income or excise taxes on IMI. This limitation only ~~is applicable~~applies when our net total lease adjusted leverage ratio exceeds 6.0 as measured as of the end of the most recently completed fiscal quarter.

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

Commitment fees and letters of credit fees, which are based on the unused balances under the Former Revolving Credit Facility, the Revolving Credit Facility and the Accounts Receivable Securitization Program (as defined below) for the three and nine months ended September 30, 2015 and 2016 are as follows:

Three Months Ended
September 30, Nine Months Ended
September 30,
2015 2016 2015 2016
Commitment fees and letters of credit fees $ 883
$ 428
$ 2,741
$ 1,457

b. ~~Bridge Facility~~

On April 19, 2016, in order to provide a portion of the financing necessary to close the Recall Transaction, we entered into a commitment letter with JPMorgan Chase Bank, N.A., as a lender and administrative agent, and the other lenders party thereto (the "Lenders"), pursuant to which the Lenders committed to provide us an unsecured bridge term loan facility of up to $850,000 (the "Bridge Facility"). On April 29, 2016, we entered into a bridge credit agreement (the “Bridge Credit Agreement”) with the Lenders and borrowed the full amount of the Bridge Facility. We used the proceeds from the Bridge Facility, together with borrowings under the Revolving Credit Facility, to finance a portion of the cost of the Recall Transaction, including refinancing Recall’s existing indebtedness and to pay costs we incurred in connection with the Recall Transaction.

On May 31, 2016, we used the proceeds from the issuance of the 4 ⅜% Notes and the 5 ⅜% Notes, together with cash on hand and borrowings under the Revolving Credit Facility, to repay the Bridge Facility, and effective May 31, 2016, we terminated the commitments of the lenders under the Bridge Credit Agreement. We recorded a charge to other expense (income), net of $9,283 during the second quarter of 2016 related to the early extinguishment of the Bridge Credit Agreement. This charge primarily consisted of the write-off of unamortized deferred financing costs.

~~Table of Contents~~

~~IRON MOUNTAIN INCORPORATED~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(In Thousands, Except Share and Per Share Data)~~

~~(Unaudited)~~

~~(5) Debt (Continued)~~

~~c. Issuance of 4~~³/₈~~% Notes, 5~~³/₈~~% Notes and CAD Notes due 2023~~

~~In May 2016, IMI completed a private offering of $500,000 in aggregate principal amount of the 4~~³/₈~~% Notes and IM US Holdings completed a private offering of $250,000 in aggregate principal amount of the 5~~³/₈~~% Notes. The 4~~³/₈~~% Notes and 5~~³/₈~~% Notes were issued at par. The aggregate net proceeds of $738,750 from the 4~~³/₈~~% Notes and 5~~³/₈% Notes, after paying the initial purchasers' commissions, were used, together with cash on hand and borrowings under the Revolving Credit Facility, for the repayment of all outstanding borrowings under the Bridge Credit Agreement.

On September 15, 2016, Canada Company completed a private offering of 250,000 Canadian dollars in aggregate principal amount of the CAD Notes due 2023. The CAD Notes due 2023 were issued at par. The aggregate net proceeds from the CAD Notes due 2023 of 246,250 Canadian dollars (or $186,693, based upon the exchange rate between the Canadian dollar and the United States dollar on September 15, 2016 (the settlement date for the CAD Notes due 2023)), after paying the initial purchasers’ commissions, were used to repay outstanding borrowings under the Revolving Credit Facility.

d. Australian Dollar Term Loan

On September 28, 2016, Iron Mountain Australia Group Pty, Ltd., a wholly owned subsidiary of IMI, entered into a 250,000 Australian dollar Syndicated Term Loan B Facility (the ~~“AUD~~"AUD Term ~~Loan”~~Loan"), which matures in September 2022. The AUD Term Loan was issued at 99% of par. The net proceeds of approximately 243,750 Australian dollars (or approximately $185,800, based upon the exchange rate between the Australian dollar and the United States dollar on September 28, 2016 (the settlement date for the AUD Term Loan)), after paying commissions to the joint lead arrangers and net of the original discount, were used to repay outstanding borrowings onunder the Revolving Credit Facility ~~in October 2016~~ and for general corporate purposes.

Principal payments on the AUD Term Loan are to be paid in quarterly installments in an amount equivalent to an aggregate of 6,250 Australian dollars per year, with the remaining balance due on September 28, 2022. The AUD Term Loan is secured by substantially all assets of Iron Mountain Australia Group Pty. Ltd. IMI and the Guarantors guarantee all obligations under the AUD Term Loan. The interest rate on ~~borrowings under~~ the AUD Term Loan is based upon BBSY (an Australian benchmark variable interest rate) plus 4.3%. As of ~~September 30, 2016,~~March 31, 2017, we had ~~250,000~~246,875 Australian dollars ($188,715 based upon the exchange rate between the United States dollar and the Australian dollar as of March 31, 2017) outstanding on the AUD Term Loan and the interest rate in effect under the AUD Term Loan was 6.1%.

The amount of debt for the AUD Term Loan reflects an unamortized original issue discount of $1,725 and $1,752 as of December 31, 2016 and March 31, 2017, respectively.

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IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In Thousands, Except Share and Per Share Data)

(Unaudited)

(5) Debt (Continued)

e.c. Accounts Receivable Securitization Program

In March 2015, we entered into a $250,000 accounts receivable securitization program (the "Accounts Receivable Securitization Program") involving several of our wholly owned subsidiaries and certain financial institutions. Under the Accounts Receivable Securitization Program, certain of our subsidiaries sell substantially all of their United States accounts receivable balances to our wholly owned special purpose entities, Iron Mountain Receivables QRS, LLC and Iron Mountain Receivables TRS, LLC (the ~~"Special~~"Accounts Receivable Securitization Special Purpose Subsidiaries"). The Accounts Receivable Securitization Special Purpose Subsidiaries use the accounts receivable balances to collateralize loans obtained from certain financial institutions. The Accounts Receivable Securitization Special Purpose Subsidiaries are consolidated subsidiaries of IMI. The Accounts Receivable Securitization Program is accounted for as a collateralized financing activity, rather than a sale of assets, and therefore: (i) accounts receivable balances pledged as collateral are presented as assets and borrowings are presented as liabilities on our Consolidated Balance Sheets, (ii) our Consolidated Statements of Operations reflect the associated charges for bad debt expense related to pledged accounts receivable (a component of selling, general and administrative expenses) and reductions to revenue due to billing and service related credit memos issued to customers and related reserves, as well as interest expense associated with the collateralized borrowings and (iii) receipts from customers related to the underlying accounts receivable are reflected as operating cash flows and borrowings and repayments under the collateralized loans are reflected as financing cash flows within our Consolidated Statements of Cash Flows. ~~IMIM~~Iron Mountain Information Management, LLC ("IMIM") retains the responsibility of servicing the accounts receivable balances pledged as collateral in this transaction and IMI provides a performance guaranty. The Accounts Receivable Securitization Program terminates on March 6, 2018, at which point all obligations become due. The maximum availability allowed is limited by eligible accounts receivable, as defined under the terms of the Accounts Receivable Securitization Program. As of ~~September 30, 2016,~~March 31, 2017, the maximum availability allowed and amount outstanding under the Accounts Receivable Securitization Program was ~~$208,800.~~$250,000. The interest rate in effect under the Accounts Receivable Securitization Program was ~~1.4%~~1.9% as of ~~September 30, 2016. Commitment fees at~~March 31, 2017.

d. Mortgage Securitization Program

In October 2016, we entered into a ~~rate of 40 basis points are charged on amounts made available but not borrowed under the Accounts Receivable~~$50,000 mortgage securitization program (the "Mortgage Securitization ~~Program.~~

~~f. Cash Pooling~~

~~Subsequent to the closing of the Recall Transaction,~~Program") involving certain of our ~~international~~wholly owned subsidiaries ~~began participating~~with Goldman Sachs Mortgage Company (“Goldman Sachs”). Under the Mortgage Securitization Program, IMIM contributed certain real estate assets to its wholly owned special purpose entity, Iron Mountain Mortgage Finance I, LLC (the "Mortgage Securitization Special Purpose Subsidiary"). The Mortgage Securitization Special Purpose Subsidiary then used the real estate to secure a collateralized loan obtained from Goldman Sachs. The Mortgage Securitization Special Purpose Subsidiary is a consolidated subsidiary of IMI. The Mortgage Securitization Program is accounted for as a collateralized financing activity, rather than a sale of assets and therefore: (i) real estate assets pledged as collateral remain as assets and borrowings are presented as liabilities on our Consolidated Balance Sheets, (ii) our Consolidated Statement of Operations reflects the associated charges for depreciation expense related to the pledged real estate and interest expense associated with the collateralized borrowings and (iii) borrowings and repayments under the collateralized loans are reflected as financing cash flows within our Consolidated Statement of Cash Flows. The Mortgage Securitization Program is scheduled to terminate on November 6, 2026, at which point all obligations become due. As of March 31, 2017, the outstanding amount under the Mortgage Securitization Program was $50,000. The interest rate in aeffect under the Mortgage Securitization Program was 3.5% as of March 31, 2017.

Table of Contents

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In Thousands, Except Share and Per Share Data)

(Unaudited)

(5) Debt (Continued)

e. Cash Pooling

Certain of our subsidiaries participate in cash pooling ~~arrangement~~arrangements (the “Cash ~~Pool”~~Pools”) with Bank Mendes Gans (“BMG”), an independently operated fully-owned subsidiary of ING Group, in order to help manage global liquidity requirements. ~~The~~Under the Cash ~~Pool allows~~Pools, cash deposited by participating subsidiaries ~~to borrow funds from BMG against amounts held on deposit~~ with BMG byis pledged as security against the drawings of other participating ~~subsidiaries. The Cash Pool has a~~subsidiaries, and legal ~~right~~rights of offset are provided and, therefore, amounts are presented in our Consolidated Balance ~~Sheet~~Sheets on a net basis. Each subsidiary receives interest on the cash balances held on deposit or pays interest on the amounts owed based on an applicable rate as defined in the Cash ~~Pool agreement.~~Pools. At ~~September 30,~~December 31, 2016, we had a net cash position of approximately ~~$18,900 (consisting~~$1,700 (which consisted of a gross cash position of approximately ~~$50,700~~$69,500 less outstanding borrowings of approximately ~~$31,800~~$67,800 by participating subsidiaries),.

During the first quarter of 2017, we significantly expanded our utilization of the Cash Pools and reduced our utilization of our financing centers in Europe for purposes of meeting our global liquidity requirements. As of March 31, 2017, we utilize two separate cash pools with BMG, one of which iswe utilize to manage global liquidity requirements for our QRSs (the "QRS Cash Pool") and one pool for our TRSs (the "TRS Cash Pool"). As of March 31, 2017, we had a net cash position of approximately $5,400 in the QRS Cash Pool (which consisted of a gross cash position of approximately $478,200 less outstanding borrowings of approximately $472,800 by participating subsidiaries) and we had a net cash position of approximately $11,100 in the TRS Cash Pool (which consisted of a gross cash position of approximately $217,300 less outstanding borrowings of approximately $206,200 by participating subsidiaries). The net cash position balances as of December 31, 2016 and March 31, 2017, respectively, are reflected as cash and cash equivalents in the Consolidated Balance ~~Sheet.~~Sheets.

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IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In Thousands, Except Share and Per Share Data)

(Unaudited)

(6) Selected Consolidated Financial Statements of Parent, Guarantors, Canada Company and Non-Guarantors

The following data summarizes the consolidating results of IMI on the equity method of accounting as of December 31, ~~2015~~2016 and ~~September 30, 2016~~March 31, 2017 and for the three ~~and nine~~ months ended ~~September 30, 2015~~March 31, 2016 and ~~2016~~2017 and are prepared on the same basis as the consolidated financial statements.

The Parent Notes, ~~the~~ CAD Notes, GBP Notes and the 5³/₈% Notes are guaranteed by the ~~subsidiaries referred to below as the Guarantors. These subsidiaries are~~direct and indirect 100% owned ~~by IMI.~~United States subsidiaries of IMI, that represent the substantial majority of our United States operations (the "Guarantors"). The guarantees are full and unconditional, as well as joint and several.

Additionally, IMI guarantees the CAD Notes, which were issued by Canada Company, the GBP Notes, which were issued by ~~IME,~~Iron Mountain Europe PLC ("IME"), and the 5³/₈% Notes, which were issued by IMIron Mountain US ~~Holdings.~~Holdings, Inc. which is one of the Guarantors. Canada Company and IME do not guarantee the Parent Notes. The subsidiaries that do not guarantee the Parent Notes, the CAD Notes, the GBP Notes and the 5³/₈% Notes, including IME, ~~and~~ the Accounts Receivable Securitization Special Purpose Subsidiaries and the Mortgage Securitization Special Purpose Subsidiary, but excluding Canada Company, are referred to below as the ~~Non-Guarantors.~~"Non-Guarantors".

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

In July 2016, certain Non-Guarantor subsidiaries which were originally established at the time of our acquisition of Crozier Fine Arts ~~(“Crozier”)~~ in December 2015 (the “Crozier Entities”), were merged into IMIM, a Guarantor and a substantive operating entity (the “Crozier Merger”). As a result of the Crozier Merger, ~~(i) the assets, liabilities and equity of the Crozier Entities are now reported in the Guarantor column of~~we have recast the accompanying Consolidated ~~Balance Sheet as of September 30, 2016; (ii) the revenues and expenses of the Crozier Entities are now reported in the Guarantor column in the accompanying Consolidated Statements~~Statement of Operations and Comprehensive Income (Loss) for the three ~~and nine~~ months ended ~~September 30, 2016;~~March 31, 2016 and ~~(iii)~~ the ~~cash flows of the Crozier Entities are now reported in the Guarantor column in the accompanying~~ Consolidated Statement of Cash Flows for the ~~nine~~three months ended ~~September 30, 2016. We have recast the accompanying Consolidated Balance Sheet as of December~~March 31, ~~2015~~2016 to conform to the current period presentation of the Crozier Entities. We acquired Crozier in December 2015; therefore, the Crozier Merger had no impact on the accompanying Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended September 30, 2015 and the accompanying Consolidated Statement of Cash Flows for the nine months ended September 30, 2015.

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IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In Thousands, Except Share and Per Share Data)

(Unaudited)

(6) Selected Consolidated Financial Statements of Parent, Guarantors, Canada Company and Non-Guarantors (Continued)

CONSOLIDATED BALANCE SHEETS


	December 31, 2015													December 31, 2016
	Parent		Guarantors		Canada Company		Non- Guarantors		Eliminations			Consolidated		Parent		Guarantors		Canada Company		Non- Guarantors		Eliminations			Consolidated
Assets
Current Assets:
Cash and cash equivalents	$	151	$	7,803	$	13,182	$	107,245	$	—		$	128,381
Cash and Cash Equivalents:														$	2,405	$	23,380	$	17,110	$	193,589	$	—		$	236,484
Accounts receivable	—		18,917		30,428		515,056		—			564,401		—		53,364		37,781		600,104		—			691,249
Intercompany receivable	—		1,038,141		—		—		(1,038,141		)	—		—		653,008		21,114		—		(674,122		)	—
Other current assets	898		107,235		2,305		54,721		(29		)	165,130
Prepaid expenses and other														—		70,660		4,967		108,776		(29		)	184,374
Total Current Assets	1,049		1,172,096		45,915		677,022		(1,038,170		)	857,912		2,405		800,412		80,972		902,469		(674,151		)	1,112,107
Property, Plant and Equipment, Net	661		1,633,885		137,100		725,512		—			2,497,158		483		1,804,991		159,391		1,118,461		—			3,083,326
Other Assets, Net:
Long-term notes receivable from affiliates and intercompany receivable	3,325,005		1,869		—		—		(3,326,874		)	—		4,014,330		1,000		—		—		(4,015,330		)	—
Investment in subsidiaries	727,710		459,429		27,731		2,862		(1,217,732		)	—		1,659,518		699,411		35,504		77,449		(2,471,882		)	—
Goodwill	—		1,640,130		152,975		567,873		—			2,360,978		—		2,602,784		217,422		1,084,815		—			3,905,021
Other	623		414,407		22,637		196,872		—			634,539		—		765,698		49,570		571,078		—			1,386,346
Total Other Assets, Net	4,053,338		2,515,835		203,343		767,607		(4,544,606		)	2,995,517		5,673,848		4,068,893		302,496		1,733,342		(6,487,212		)	5,291,367
Total Assets	$	4,055,048	$	5,321,816	$	386,358	$	2,170,141	$	(5,582,776	)	$	6,350,587	$	5,676,736	$	6,674,296	$	542,859	$	3,754,272	$	(7,161,363	)	$	9,486,800
Liabilities and Equity
Intercompany Payable	$	879,649	$	—	$	5,892	$	152,600	$	(1,038,141	)	$	—	$	558,492	$	—	$	—	$	115,630	$	(674,122	)	$	—
Current Portion of Long-Term Debt	—		41,159		—		46,938		(29		)	88,068		—		51,456		—		121,548		(29		)	172,975
Total Other Current Liabilities	56,740		463,556		26,804		206,663		—			753,763		58,478		488,194		40,442		286,468		—			873,582
Long-Term Debt, Net of Current Portion	2,608,818		674,798		284,798		1,189,196		—			4,757,610		3,093,388		1,055,642		335,410		1,593,766		—			6,078,206
Long-Term Notes Payable to Affiliates and Intercompany Payable	1,000		3,325,005		869		—		(3,326,874		)	—		1,000		4,014,330		—		—		(4,015,330		)	—
Other Long-term Liabilities	—		119,454		37,402		65,683		—			222,539		—		127,715		54,054		188,900		—			370,669
Commitments and Contingencies (See Note 8)
Redeemable Noncontrolling Interests														28,831		—		—		25,866		—			54,697
Total Iron Mountain Incorporated Stockholders' Equity	508,841		697,844		30,593		489,295		(1,217,732		)	508,841		1,936,547		936,959		112,953		1,421,970		(2,471,882		)	1,936,547
Noncontrolling Interests	—		—		—		19,766		—			19,766		—		—		—		124		—			124
Total Equity	508,841		697,844		30,593		509,061		(1,217,732		)	528,607		1,936,547		936,959		112,953		1,422,094		(2,471,882		)	1,936,671
Total Liabilities and Equity	$	4,055,048	$	5,321,816	$	386,358	$	2,170,141	$	(5,582,776	)	$	6,350,587	$	5,676,736	$	6,674,296	$	542,859	$	3,754,272	$	(7,161,363	)	$	9,486,800

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IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In Thousands, Except Share and Per Share Data)

(Unaudited)

(6) Selected Consolidated Financial Statements of Parent, Guarantors, Canada Company and Non-Guarantors (Continued)

CONSOLIDATED BALANCE SHEETS (Continued)


	September 30, 2016													March 31, 2017
	Parent		Guarantors		Canada Company		Non- Guarantors		Eliminations			Consolidated		Parent		Guarantors		Canada Company		Non- Guarantors		Eliminations			Consolidated
Assets
Current Assets:
Cash and cash equivalents(1)	$	1,710	$	26,044	$	14,792	$	415,582	$	—		$	458,128	$	470	$	64,550	$	5,763	$	410,667	$	(185,822	)	$	295,628
Accounts receivable	—		94,358		38,707		567,173		—			700,238		—		36,545		36,215		648,270		—			721,030
Intercompany receivable	562,568		546,766		—		—		(1,109,334		)	—		—		904,316		33,923		—		(938,239		)	—
Other current assets	—		66,893		685		113,514		(29		)	181,063
Assets held for sale (see Note 10)	—		22,429		25,533		79,950		—			127,912
Prepaid expenses and other														114		79,337		6,325		96,232		(29		)	181,979
Total Current Assets	564,278		756,490		79,717		1,176,219		(1,109,363		)	1,467,341		584		1,084,748		82,226		1,155,169		(1,124,090		)	1,198,637
Property, Plant and Equipment, Net	527		1,852,010		158,011		1,155,980		—			3,166,528		438		1,810,787		157,814		1,142,701		—			3,111,740
Other Assets, Net:
Long-term notes receivable from affiliates and intercompany receivable	3,948,530		1,000		—		—		(3,949,530		)	—		4,214,179		1,000		—		—		(4,215,179		)	—
Investment in subsidiaries	761,272		537,305		34,620		81,194		(1,414,391		)	—		1,750,210		785,770		35,948		85,456		(2,657,384		)	—
Goodwill	—		2,511,380		232,052		1,118,378		—			3,861,810		—		2,584,712		217,837		1,154,509		—			3,957,058
Other	—		829,635		54,148		525,454		—			1,409,237		—		762,098		49,211		593,390		—			1,404,699
Total Other Assets, Net	4,709,802		3,879,320		320,820		1,725,026		(5,363,921		)	5,271,047		5,964,389		4,133,580		302,996		1,833,355		(6,872,563		)	5,361,757
Total Assets	$	5,274,607	$	6,487,820	$	558,548	$	4,057,225	$	(6,473,284	)	$	9,904,916	$	5,965,411	$	7,029,115	$	543,036	$	4,131,225	$	(7,996,653	)	$	9,672,134
Liabilities and Equity
Intercompany Payable	$	—	$	—	$	8,451	$	1,100,883	$	(1,109,334	)	$	—	$	698,066	$	—	$	—	$	240,173	$	(938,239	)	$	—
Borrowings under cash pools														—		138,693		—		47,129		(185,822		)	—
Current Portion of Long-Term Debt	—		46,749		—		74,483		(29		)	121,203		—		45,837		—		375,419		(29		)	421,227
Total Other Current Liabilities	55,378		495,255		32,535		300,387		—			883,555		199,038		454,823		41,747		301,634		—			997,242
Liabilities held for sale (see Note 10)	—		—		—		19,269		—			19,269
Long-Term Debt, Net of Current Portion	3,093,536		1,063,324		347,719		1,833,445		—			6,338,024		3,159,864		1,014,038		338,456		1,410,390		—			5,922,748
Long-Term Notes Payable to Affiliates and Intercompany Payable	1,000		3,948,530		—		—		(3,949,530		)	—		1,000		4,214,179		—		—		(4,215,179		)	—
Other Long-term Liabilities	—		159,109		54,029		179,473		—			392,611		—		138,228		41,429		180,178		—			359,835
Commitments and Contingencies (See Note 8)
Redeemable Noncontrolling Interests														4,718		—		—		62,590		—			67,308
Total Iron Mountain Incorporated Stockholders' Equity	2,124,693		774,853		115,814		523,724		(1,414,391		)	2,124,693		1,902,725		1,023,317		121,404		1,512,663		(2,657,384		)	1,902,725
Noncontrolling Interests	—		—		—		25,561		—			25,561		—		—		—		1,049		—			1,049
Total Equity	2,124,693		774,853		115,814		549,285		(1,414,391		)	2,150,254		1,902,725		1,023,317		121,404		1,513,712		(2,657,384		)	1,903,774
Total Liabilities and Equity	$	5,274,607	$	6,487,820	$	558,548	$	4,057,225	$	(6,473,284	)	$	9,904,916	$	5,965,411	$	7,029,115	$	543,036	$	4,131,225	$	(7,996,653	)	$	9,672,134


(1)	Included within Cash and Cash Equivalents at March 31, 2017 is approximately $58,200 and $144,100 of cash on deposit associated with our Cash Pools for the Guarantor and Non-Guarantors, respectively. See Note 5 for more information on our Cash Pools.

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IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In Thousands, Except Share and Per Share Data)

(Unaudited)

(6) Selected Consolidated Financial Statements of Parent, Guarantors, Canada Company and Non-Guarantors (Continued)

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)


	Three Months Ended September 30, 2015																		Three Months Ended March 31, 2016
	Parent			Guarantors			Canada Company			Non- Guarantors			Eliminations			Consolidated			Parent			Guarantors			Canada Company			Non- Guarantors			Eliminations			Consolidated
Revenues:
Storage rental	$	—		$	308,336		$	29,164		$	122,552		$	—		$	460,052		$	—		$	313,619		$	27,605		$	119,987		$	—		$	461,211
Service	—			181,230			14,558			90,689			—			286,477			—			188,908			14,642			85,929			—			289,479
Intercompany service	—			1,042			—			16,243			(17,285		)	—
Intercompany revenues																			—			1,013			—			17,345			(18,358		)	—
Total Revenues	—			490,608			43,722			229,484			(17,285		)	746,529			—			503,540			42,247			223,261			(18,358		)	750,690
Operating Expenses:
Cost of sales (excluding depreciation and amortization)	—			196,060			6,008			115,595			—			317,663			—			208,154			6,790			111,161			—			326,105
Selling, general and administrative	19			154,202			3,565			57,907			—			215,693			72			150,019			3,373			54,302			—			207,766
Intercompany service charges	—			3,257			12,986			1,042			(17,285		)	—
Intercompany cost of sales																			—			3,354			13,991			1,013			(18,358		)	—
Depreciation and amortization	45			56,145			3,089			27,213			—			86,492			45			56,926			3,079			27,154			—			87,204
(Gain) Loss on disposal/write-down of property, plant and equipment (excluding real estate), net	—			(197		)	34			22			—			(141		)	—			(570		)	6			113			—			(451		)
Total Operating Expenses	64			409,467			25,682			201,779			(17,285		)	619,707			117			417,883			27,239			193,743			(18,358		)	620,624
Operating (Loss) Income	(64		)	81,141			18,040			27,705			—			126,822			(117		)	85,657			15,008			29,518			—			130,066
Interest Expense (Income), Net	39,302			(7,281		)	7,784			25,330			—			65,135			39,984			(8,509		)	10,034			25,553			—			67,062
Other Expense (Income), Net	686			1,577			(98		)	33,081			—			35,246			886			3,456			(20		)	(16,259		)	—			(11,937		)
(Loss) Income from Continuing Operations Before (Benefit) Provision for Income Taxes and Gain on Real Estate	(40,052		)	86,845			10,354			(30,706		)	—			26,441
(Benefit) Provision for Income Taxes	—			(5,210		)	3,041			5,943			—			3,774
Gain on Sale of Real Estate, Net of Tax	—			—			—			(850		)	—			(850		)
(Loss) Income from Continuing Operations Before Provision (Benefit) for Income Taxes																			(40,987		)	90,710			4,994			20,224			—			74,941
Provision (Benefit) for Income Taxes																			—			9,070			1,866			964			—			11,900
Equity in the (Earnings) Losses of Subsidiaries, Net of Tax	(63,162		)	28,343			(605		)	(7,313		)	42,737			—			(103,761		)	(22,374		)	(1,371		)	(3,128		)	130,634			—
Net Income (Loss)	23,110			63,712			7,918			(28,486		)	(42,737		)	23,517			62,774			104,014			4,499			22,388			(130,634		)	63,041
Less: Net Income (Loss) Attributable to Noncontrolling Interests	—			—			—			407			—			407			—			—			—			267			—			267
Net Income (Loss) Attributable to Iron Mountain Incorporated	$	23,110		$	63,712		$	7,918		$	(28,893	)	$	(42,737	)	$	23,110		$	62,774		$	104,014		$	4,499		$	22,121		$	(130,634	)	$	62,774
Net Income (Loss)	$	23,110		$	63,712		$	7,918		$	(28,486	)	$	(42,737	)	$	23,517		$	62,774		$	104,014		$	4,499		$	22,388		$	(130,634	)	$	63,041
Other Comprehensive Income (Loss):
Foreign Currency Translation Adjustments	(85		)	—			(7,709		)	(26,800		)	—			(34,594		)	(1,342		)	—			1,789			23,531			—			23,978
Market Value Adjustments for Securities	—			(134		)	—			—			—			(134		)	—			(734		)	—			—			—			(734		)
Equity in Other Comprehensive (Loss) Income of Subsidiaries	(33,852		)	(33,637		)	(1,805		)	(7,709		)	77,003			—
Total Other Comprehensive (Loss) Income	(33,937		)	(33,771		)	(9,514		)	(34,509		)	77,003			(34,728		)
Comprehensive (Loss) Income	(10,827		)	29,941			(1,596		)	(62,995		)	34,266			(11,211		)
Equity in Other Comprehensive Income (Loss) of Subsidiaries																			24,099			24,099			661			1,789			(50,648		)	—
Total Other Comprehensive Income (Loss)																			22,757			23,365			2,450			25,320			(50,648		)	23,244
Comprehensive Income (Loss)																			85,531			127,379			6,949			47,708			(181,282		)	86,285
Comprehensive Income (Loss) Attributable to Noncontrolling Interests	—			—			—			(384		)	—			(384		)	—			—			—			754			—			754
Comprehensive (Loss) Income Attributable to Iron Mountain Incorporated	$	(10,827	)	$	29,941		$	(1,596	)	$	(62,611	)	$	34,266		$	(10,827	)
Comprehensive Income (Loss) Attributable to Iron Mountain Incorporated																			$	85,531		$	127,379		$	6,949		$	46,954		$	(181,282	)	$	85,531

4235

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IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In Thousands, Except Share and Per Share Data)

(Unaudited)

(6) Selected Consolidated Financial Statements of Parent, Guarantors, Canada Company and Non-Guarantors (Continued)

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


	Three Months Ended September 30, 2016																		Three Months Ended March 31, 2017
	Parent			Guarantors			Canada Company			Non- Guarantors			Eliminations			Consolidated			Parent			Guarantors			Canada Company			Non- Guarantors			Eliminations			Consolidated
Revenues:
Storage rental	$	—		$	347,174		$	33,102		$	196,189		$	—		$	576,465		$	—		$	349,351		$	32,006		$	190,922		$	—		$	572,279
Service	—			212,640			16,344			137,373			—			366,357			—			218,209			16,050			132,338			—			366,597
Intercompany service	—			981			—			20,561			(21,542		)	—
Intercompany revenues																			—			1,097			—			22,342			(23,439		)	—
Total Revenues	—			560,795			49,446			354,123			(21,542		)	942,822			—			568,657			48,056			345,602			(23,439		)	938,876
Operating Expenses:
Cost of sales (excluding depreciation and amortization)	—			234,791			7,942			187,075			—			429,808			—			239,329			7,550			179,828			—			426,707
Selling, general and administrative	28			163,997			5,084			83,835			—			252,944			79			162,705			3,561			73,821			—			240,166
Intercompany service charges	—			4,104			16,457			981			(21,542		)	—
Intercompany cost of sales																			—			6,606			15,736			1,097			(23,439		)	—
Depreciation and amortization	45			73,284			4,266			47,075			—			124,670			46			76,161			4,238			44,262			—			124,707
(Gain) Loss on disposal/write-down of property, plant and equipment (excluding real estate), net	—			101			—			(155		)	—			(54		)	—			(548		)	2			87			—			(459		)
Total Operating Expenses	73			476,277			33,749			318,811			(21,542		)	807,368			125			484,253			31,087			299,095			(23,439		)	791,121
Operating (Loss) Income	(73		)	84,518			15,697			35,312			—			135,454			(125		)	84,404			16,969			46,507			—			147,755
Interest Expense (Income), Net	21,689			(4,074		)	11,929			53,756			—			83,300			42,784			(3,279		)	11,670			34,880			—			86,055
Other Expense (Income), Net	(6,962		)	2,815			8,872			18,577			—			23,302			81			2,519			(27		)	(8,937		)	—			(6,364		)
(Loss) Income from Continuing Operations Before Provision (Benefit) for Income Taxes and Gain on Sale of Real Estate	(14,800		)	85,777			(5,104		)	(37,021		)	—			28,852
(Loss) Income from Continuing Operations Before Provision (Benefit) for Income Taxes																			(42,990		)	85,164			5,326			20,564			—			68,064
Provision (Benefit) for Income Taxes	—			22,326			786			306			—			23,418			—			12,744			(3,488		)	(36		)	—			9,220
Gain on Sale of Real Estate, Net of Tax	—			(266		)	(59		)	—			—			(325		)
Equity in the (Earnings) Losses of Subsidiaries, Net of Tax	(21,880		)	10,144			(675		)	5,182			7,229			—			(101,115		)	(23,413		)	(157		)	(8,814		)	133,499			—
(Loss) Income from Continuing Operations	7,080			53,573			(5,156		)	(42,509		)	(7,229		)	5,759
Income (Loss) from Continuing Operations																			58,125			95,833			8,971			29,414			(133,499		)	58,844
Income (Loss) from Discontinued Operations, Net of Tax	—			1,464			649			(72		)	—			2,041			—			198			—			(535		)	—			(337		)
Net (Loss) Income	7,080			55,037			(4,507		)	(42,581		)	(7,229		)	7,800
Net Income (Loss)																			58,125			96,031			8,971			28,879			(133,499		)	58,507
Less: Net Income (Loss) Attributable to Noncontrolling Interests	—			—			—			720			—			720			—			—			—			382			—			382
Net (Loss) Income Attributable to Iron Mountain Incorporated	$	7,080		$	55,037		$	(4,507	)	$	(43,301	)	$	(7,229	)	$	7,080
Net (Loss) Income	$	7,080		$	55,037		$	(4,507	)	$	(42,581	)	$	(7,229	)	$	7,800
Net Income (Loss) Attributable to Iron Mountain Incorporated																			$	58,125		$	96,031		$	8,971		$	28,497		$	(133,499	)	$	58,125
Net Income (Loss)																			$	58,125		$	96,031		$	8,971		$	28,879		$	(133,499	)	$	58,507
Other Comprehensive Income (Loss):
Foreign Currency Translation Adjustments	(313		)	—			(2,803		)	14,420			—			11,304			(1,072		)	—			635			51,221			—			50,784
Equity in Other Comprehensive Income (Loss) of Subsidiaries	11,156			12,378			(152		)	(2,803		)	(20,579		)	—			52,406			28,540			287			635			(81,868		)	—
Total Other Comprehensive Income (Loss)	10,843			12,378			(2,955		)	11,617			(20,579		)	11,304			51,334			28,540			922			51,856			(81,868		)	50,784
Comprehensive (Loss) Income	17,923			67,415			(7,462		)	(30,964		)	(27,808		)	19,104
Comprehensive Income (Loss) Attributable to Noncontrolling Interests	—			—			—			1,181			—			1,181
Comprehensive (Loss) Income Attributable to Iron Mountain Incorporated	$	17,923		$	67,415		$	(7,462	)	$	(32,145	)	$	(27,808	)	$	17,923
Comprehensive Income (Loss)																			109,459			124,571			9,893			80,735			(215,367		)	109,291
Comprehensive (Loss) Income Attributable to Noncontrolling Interests																			—			—			—			(168		)	—			(168		)
Comprehensive Income (Loss) Attributable to Iron Mountain Incorporated																			$	109,459		$	124,571		$	9,893		$	80,903		$	(215,367	)	$	109,459

4336

Table of Contents

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In Thousands, Except Share and Per Share Data)

(Unaudited)

(6) Selected Consolidated Financial Statements of Parent, Guarantors, Canada Company and Non-Guarantors (Continued)

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

Nine Months Ended September 30, 2015
Parent Guarantors Canada
Company Non-
Guarantors Eliminations Consolidated
Revenues:

Storage rental $ —
$ 918,841
$ 90,836
$ 370,456
$ —
$ 1,380,133
Service —
551,363
47,223
276,830
—
875,416
Intercompany service —
2,449
—
54,788
(57,237 ) —
Total Revenues —
1,472,653
138,059
702,074
(57,237 ) 2,255,549
Operating Expenses:

Cost of sales (excluding depreciation and amortization) —
588,801
19,815
356,984
—
965,600
Selling, general and administrative 116
435,445
11,527
180,904
—
627,992
Intercompany service charges —
9,657
45,131
2,449
(57,237 ) —
Depreciation and amortization 136
167,908
9,306
82,642
—
259,992
Loss (Gain) on disposal/write-down of property, plant and equipment (excluding real estate), net —
565
34
108
—
707
Total Operating Expenses 252
1,202,376
85,813
623,087
(57,237 ) 1,854,291
Operating (Loss) Income (252 ) 270,277
52,246
78,987
—
401,258
Interest Expense (Income), Net 117,694
(20,373 ) 24,329
74,470
—
196,120
Other (Income) Expense, Net (225 ) 6,099
(235 ) 53,960
—
59,599
(Loss) Income from Continuing Operations Before Provision (Benefit) for Income Taxes and Gain on Real Estate (117,721 ) 284,551
28,152
(49,443 ) —
145,539
Provision (Benefit) for Income Taxes —
3,455
10,900
12,771
—
27,126
Gain on Sale of Real Estate, Net of Tax —
—
—
(850 ) —
(850 )
Equity in the (Earnings) Losses of Subsidiaries, Net of Tax (235,257 ) 46,440
(2,538 ) (17,252 ) 208,607
—
Net Income (Loss) 117,536
234,656
19,790
(44,112 ) (208,607 ) 119,263
Less: Net Income (Loss) Attributable to Noncontrolling Interests —
—
—
1,727
—
1,727
Net Income (Loss) Attributable to Iron Mountain Incorporated $ 117,536
$ 234,656
$ 19,790
$ (45,839 ) $ (208,607 ) $ 117,536
Net Income (Loss) $ 117,536
$ 234,656
$ 19,790
$ (44,112 ) $ (208,607 ) $ 119,263
Other Comprehensive (Loss) Income:

Foreign Currency Translation Adjustments 3,381
—
(14,612 ) (78,538 ) —
(89,769 )
Market Value Adjustments for Securities —
(111 ) —
—
—
(111 )
Equity in Other Comprehensive (Loss) Income of Subsidiaries (92,037 ) (91,626 ) (3,270 ) (14,612 ) 201,545
—
Total Other Comprehensive (Loss) Income (88,656 ) (91,737 ) (17,882 ) (93,150 ) 201,545
(89,880 )
Comprehensive Income (Loss) 28,880
142,919
1,908
(137,262 ) (7,062 ) 29,383
Comprehensive Income (Loss) Attributable to Noncontrolling Interests —
—
—
503
—
503
Comprehensive Income (Loss) Attributable to Iron Mountain Incorporated $ 28,880
$ 142,919
$ 1,908
$ (137,765 ) $ (7,062 ) $ 28,880

~~Table of Contents~~

~~IRON MOUNTAIN INCORPORATED~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(In Thousands, Except Share and Per Share Data)~~

~~(Unaudited)~~

~~(6) Selected Consolidated Financial Statements of Parent, Guarantors, Canada Company and Non-Guarantors (Continued)~~

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

Nine Months Ended September 30, 2016
Parent Guarantors Canada
Company Non-
Guarantors Eliminations Consolidated
Revenues:

Storage rental $ —
$ 995,206
$ 93,038
$ 488,114
$ —
$ 1,576,358
Service —
604,414
47,893
348,595
—
1,000,902
Intercompany service —
3,007
—
57,809
(60,816 ) —
Total Revenues —
1,602,627
140,931
894,518
(60,816 ) 2,577,260
Operating Expenses:

Cost of sales (excluding depreciation and amortization) —
665,207
21,661
464,694
—
1,151,562
Selling, general and administrative 621
506,987
13,052
217,127
—
737,787
Intercompany service charges —
11,267
46,542
3,007
(60,816 ) —
Depreciation and amortization 134
198,749
11,307
116,706
—
326,896
(Gain) Loss on disposal/write-down of property, plant and equipment (excluding real estate), net —
(1,311 ) 6
174
—
(1,131 )
Total Operating Expenses 755
1,380,899
92,568
801,708
(60,816 ) 2,215,114
Operating (Loss) Income (755 ) 221,728
48,363
92,810
—
362,146
Interest Expense (Income), Net 89,742
(18,654 ) 33,311
120,829
—
225,228
Other Expense (Income), Net 44,769
6,987
8,916
(23,666 ) —
37,006
(Loss) Income from Continuing Operations Before Provision (Benefit) for Income Taxes and Gain on Sale of Real Estate (135,266 ) 233,395
6,136
(4,353 ) —
99,912
Provision (Benefit) for Income Taxes —
39,327
4,826
2,004
—
46,157
Gain on Sale of Real Estate, Net of Tax —
(266 ) (59 ) —
—
(325 )
Equity in the (Earnings) Losses of Subsidiaries, Net of Tax (191,152 ) (43,724 ) (3,361 ) (2,653 ) 240,890
—
Income (Loss) from Continuing Operations 55,886
238,058
4,730
(3,704 ) (240,890 ) 54,080
Income (Loss) from Discontinued Operations, Net of Tax —
2,354
1,284
(10 ) —
3,628
Net Income (Loss) 55,886
240,412
6,014
(3,714 ) (240,890 ) 57,708
Less: Net Income (Loss) Attributable to Noncontrolling Interests —
—
—
1,822
—
1,822
Net Income (Loss) Attributable to Iron Mountain Incorporated $ 55,886
$ 240,412
$ 6,014
$ (5,536 ) $ (240,890 ) $ 55,886
Net Income (Loss) $ 55,886
$ 240,412
$ 6,014
$ (3,714 ) $ (240,890 ) $ 57,708
Other Comprehensive Income (Loss):

Foreign Currency Translation Adjustments (901 ) —
(5,908 ) 44,880
—
38,071
Market Value Adjustments for Securities —
(734 ) —
—
—
(734 )
Equity in Other Comprehensive Income (Loss) of Subsidiaries 37,372
33,908
461
(5,908 ) (65,833 ) —
Total Other Comprehensive Income (Loss) 36,471
33,174
(5,447 ) 38,972
(65,833 ) 37,337
Comprehensive Income (Loss) 92,357
273,586
567
35,258
(306,723 ) 95,045
Comprehensive Income (Loss) Attributable to Noncontrolling Interests —
—
—
2,688
—
2,688
Comprehensive Income (Loss) Attributable to Iron Mountain Incorporated $ 92,357
$ 273,586
$ 567
$ 32,570
$ (306,723 ) $ 92,357

~~Table of Contents~~

~~IRON MOUNTAIN INCORPORATED~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(In Thousands, Except Share and Per Share Data)~~

~~(Unaudited)~~

~~(6) Selected Consolidated Financial Statements of Parent, Guarantors, Canada Company and Non-Guarantors (Continued)~~

CONSOLIDATED STATEMENTS OF CASH FLOWS


	Nine Months Ended September 30, 2015																		Three Months Ended March 31, 2016
	Parent			Guarantors			Canada Company			Non- Guarantors			Eliminations			Consolidated			Parent			Guarantors			Canada Company			Non- Guarantors			Eliminations			Consolidated
Cash Flows from Operating Activities:
Cash Flows from Operating Activities	$	(130,151	)	$	365,002		$	27,249		$	57,995		$	—		$	320,095		$	(48,737	)	$	121,636		$	6,477		$	1,742		$	—		$	81,118
Cash Flows from Investing Activities:
Capital expenditures	—			(128,461		)	(11,341		)	(62,779		)	—			(202,581		)	—			(61,886		)	(1,007		)	(17,959		)	—			(80,852		)
Cash paid for acquisitions, net of cash acquired	—			(9,871		)	(5,260		)	(12,844		)	—			(27,975		)	—			—			130			(19,470		)	—			(19,340		)
Intercompany loans to subsidiaries	(290,254		)	136,995			—			—			153,259			—			166,442			31,987			—			—			(198,429		)	—
Investment in subsidiaries	(16,000		)	(16,000		)	—			—			32,000			—			(1,585		)	(1,585		)	—			—			3,170			—
Decrease in restricted cash	33,860			—			—			—			—			33,860
Acquisitions of customer relationships and customer inducements	—			(26,920		)	(677		)	(7,566		)	—			(35,163		)	—			(4,733		)	—			(2,525		)	—			(7,258		)
Proceeds from sales of property and equipment and other, net (including real estate)	—			475			32			1,525			—			2,032			—			50			—			119			—			169
Cash Flows from Investing Activities	(272,394		)	(43,782		)	(17,246		)	(81,664		)	185,259			(229,827		)	164,857			(36,167		)	(877		)	(39,835		)	(195,259		)	(107,281		)
Cash Flows from Financing Activities:
Repayment of revolving credit and term loan facilities and other debt	—			(6,732,070		)	(510,109		)	(1,297,398		)	—			(8,539,577		)	(8,463		)	(1,422,545		)	(383,896		)	(569,311		)	—			(2,384,215		)
Proceeds from revolving credit and term loan facilities and other debt	—			6,169,400			507,741			1,465,302			—			8,142,443			—			1,500,499			370,816			638,530			—			2,509,845
Net proceeds from sales of senior notes	985,000			—			—			—			—			985,000
Debt (repayment to) financing from and equity (distribution to) contribution from noncontrolling interests, net	—			—			—			(1,260		)	—			(1,260		)
Debt financing from (repayment to) and equity contribution from (distribution to) noncontrolling interests, net																			—			—			—			885			—			885
Intercompany loans from parent	—			298,690			(636		)	(144,795		)	(153,259		)	—			—			(167,514		)	(1,111		)	(29,804		)	198,429			—
Equity contribution from parent	—			16,000			—			16,000			(32,000		)	—			—			1,585			—			1,585			(3,170		)	—
Parent cash dividends	(303,712		)	—			—			—			—			(303,712		)	(104,931		)	—			—			—			—			(104,931		)
Net proceeds (payments) associated with employee stock-based awards	13,988			—			—			—			—			13,988
Excess tax benefit (deficiency) from stock-based compensation	323			—			—			—			—			323
Payment of debt financing and stock issuance costs	(29		)	(10,661		)	—			(975		)	—			(11,665		)
Net (payments) proceeds associated with employee stock-based awards																			(1,975		)	—			—			—			—			(1,975		)
Excess tax (deficiency) benefit from stock-based compensation																			(348		)	—			—			—			—			(348		)
Cash Flows from Financing Activities	695,570			(258,641		)	(3,004		)	36,874			(185,259		)	285,540			(115,717		)	(87,975		)	(14,191		)	41,885			195,259			19,261
Effect of exchange rates on cash and cash equivalents	—			(67		)	(802		)	(7,973		)	—			(8,842		)	—			—			(608		)	(2,926		)	—			(3,534		)
Increase (Decrease) in cash and cash equivalents	293,025			62,512			6,197			5,232			—			366,966			403			(2,506		)	(9,199		)	866			—			(10,436		)
Cash and cash equivalents, beginning of period	2,399			4,713			4,979			113,842			—			125,933			151			7,803			13,182			107,245			—			128,381
Cash and cash equivalents, end of period	$	295,424		$	67,225		$	11,176		$	119,074		$	—		$	492,899		$	554		$	5,297		$	3,983		$	108,111		$	—		$	117,945

4637

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IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In Thousands, Except Share and Per Share Data)

(Unaudited)

(6) Selected Consolidated Financial Statements of Parent, Guarantors, Canada Company and Non-Guarantors (Continued)

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)


	Nine Months Ended September 30, 2016																		Three Months Ended March 31, 2017
	Parent			Guarantors			Canada Company			Non- Guarantors			Eliminations			Consolidated			Parent			Guarantors			Canada Company			Non- Guarantors			Eliminations			Consolidated
Cash Flows from Operating Activities:
Cash Flows from Operating Activities—Continuing Operations	$	(122,725	)	$	426,082		$	31,171		$	84,424		$	—		$	418,952		$	(41,288	)	$	136,411		$	5,291		$	21,760		$	—		$	122,174
Cash Flows from Operating Activities—Discontinued Operations	—			2,213			1,443			(16		)	—			3,640			—			198			(535		)	—			—			(337		)
Cash Flows from Operating Activities	(122,725		)	428,295			32,614			84,408			—			422,592			(41,288		)	136,609			4,756			21,760			—			121,837
Cash Flows from Investing Activities:
Capital expenditures	—			(151,785		)	(6,219		)	(88,025		)	—			(246,029		)	—			(53,175		)	(2,555		)	(17,472		)	—			(73,202		)
Cash paid for acquisitions, net of cash acquired	—			4,057			(2,381		)	(278,047		)	—			(276,371		)	—			(6,380		)	—			(5,807		)	—			(12,187		)
Intercompany loans to subsidiaries	(11,220		)	(183,281		)	—			—			194,501			—			(1,187		)	(72,807		)	—			(478		)	74,472			—
Investment in subsidiaries	(1,585		)	(1,585		)	—			—			3,170			—			(16,170		)	—			—			—			16,170			—
Acquisitions of customer relationships and customer inducements	—			(32,989		)	—			(7,866		)	—			(40,855		)	—			(20,653		)	(271		)	(479		)	—			(21,403		)
Net proceeds from divestments (see Note 10)	—			53,950			—						—			53,950
Net proceeds from Iron Mountain Divestments (see Note 10)																			—			—			—			2,423			—			2,423
Proceeds from sales of property and equipment and other, net (including real estate)	—			161			—			2,036			—			2,197			—			93			2			(29		)	—			66
Cash Flows from Investing Activities—Continuing Operations	(12,805		)	(311,472		)	(8,600		)	(371,902		)	197,671			(507,108		)	(17,357		)	(152,922		)	(2,824		)	(21,842		)	90,642			(104,303		)
Cash Flows from Investing Activities—Discontinued Operations	—			(12		)	—			—			—			(12		)	—			—			—			—			—			—
Cash Flows from Investing Activities	(12,805		)	(311,484		)	(8,600		)	(371,902		)	197,671			(507,120		)	(17,357		)	(152,922		)	(2,824		)	(21,842		)	90,642			(104,303		)
Cash Flows from Financing Activities:
Repayment of revolving credit, term loan and bridge facilities and other debt	(1,130,020		)	(5,721,732		)	(1,269,696		)	(3,438,937		)	—			(11,560,385		)
Proceeds from revolving credit, term loan and bridge facilities and other debt	1,116,995			5,366,524			1,130,193			3,813,677			—			11,427,389
Net proceeds from sales of senior notes	492,500			246,250			186,693			—			—			925,443
Repayment of revolving credit and term loan facilities and other debt																			(31,733		)	(1,495,558		)	(71		)	(1,154,986		)	—			(2,682,348		)
Proceeds from revolving credit and term loan facilities and other debt																			94,811			1,423,653			—			1,196,319			—			2,714,783
Borrowings (payments) under cash pools																			—			138,693			—			47,129			(185,822		)	—
Debt financing from (repayment to) and equity contribution from (distribution to) noncontrolling interests, net	—			—			—			(6		)	—			(6		)	—			—			—			10,668			—			10,668
Intercompany loans from parent	—			13,303			(67,169		)	248,367			(194,501		)	—			—			(9,305		)	(12,680		)	96,457			(74,472		)	—
Equity contribution from parent	—			1,585			—			1,585			(3,170		)	—			—			—			—			16,170			(16,170		)	—
Parent cash dividends	(360,462		)	—			—			—			—			(360,462		)	(2,060		)	—			—			—			—			(2,060		)
Net proceeds (payments) associated with employee stock-based awards	26,374			—			—			—			—			26,374
Excess tax benefit (deficiency) from stock-based compensation	91			—			—			—			—			91
Net payments associated with employee stock-based awards																			(4,308		)	—			—			—			—			(4,308		)
Payment of debt financing and stock issuance costs	(8,389		)	(4,500		)	(531		)	(3,687		)	—			(17,107		)	—			—			(73		)	—			—			(73		)
Cash Flows from Financing Activities—Continuing Operations	137,089			(98,570		)	(20,510		)	620,999			(197,671		)	441,337			56,710			57,483			(12,824		)	211,757			(276,464		)	36,662
Cash Flows from Financing Activities—Discontinued Operations	—			—			—			—			—			—			—			—			—			—			—			—
Cash Flows from Financing Activities	137,089			(98,570		)	(20,510		)	620,999			(197,671		)	441,337			56,710			57,483			(12,824		)	211,757			(276,464		)	36,662
Effect of exchange rates on cash and cash equivalents	—			—			(1,894		)	(25,168		)	—			(27,062		)	—			—			(455		)	5,403			—			4,948
Increase (Decrease) in cash and cash equivalents	1,559			18,241			1,610			308,337			—			329,747
(Decrease) Increase in cash and cash equivalents																			(1,935		)	41,170			(11,347		)	217,078			(185,822		)	59,144
Cash and cash equivalents, beginning of period	151			7,803			13,182			107,245			—			128,381			2,405			23,380			17,110			193,589			—			236,484
Cash and cash equivalents, end of period	$	1,710		$	26,044		$	14,792		$	415,582		$	—		$	458,128		$	470		$	64,550		$	5,763		$	410,667		$	(185,822	)	$	295,628

4738

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IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In Thousands, Except Share and Per Share Data)

(Unaudited)

(7) Segment Information

During the fourth quarter of 2015, as a result of changes in the senior management of our business in Norway, we determined that our Norway operations are now being managed as a component of our Other International Business segment rather than as a component of our Western European Business segment. As a result of this change, previously reported segment information has been restated to conform to the current presentation. There were no changes to our operating segments or our reportable operating segments as a result of the Recall Transaction.

Our five reportable operating segments as of December 31, 2016 are described in Note 9 to Notes to Consolidated Financial Statements included in our Annual Report and are as follows:

North American Records and Information Management Business—provides records and information management services, including the storage of physical records, including media such as microfilm and microfiche, master audio and videotapes, film, X-rays and blueprints, including healthcare information services, vital records services, service and courier operations, and the collection, handling and disposal of sensitive documents for corporate customers (“Records Management”); information destruction services (“Destruction”); and DMS throughout the United States and Canada; as well as fulfillment services and technology escrow services in the United States.Business

North American Data Management Business—provides storage and rotation of backup computer media as part of corporate disaster recovery plans, including service and courier operations (“Data Protection & Recovery”); server and computer backup services; digital content repository systems to house, distribute, and archive key media assets; and storage, safeguarding and electronic or physical delivery of physical media of all types, primarily for entertainment and media industry clients, throughout the United States and Canada.Business

Western European Business—provides records and information management services, including Records Management, Data Protection & Recovery and DMS throughout Austria, Belgium, France, Germany, Ireland, Netherlands, Spain, Switzerland and the United Kingdom, as well as DMS in Sweden.Business

Other International Business—provides records and information management services throughout the remaining European countries in which we operate, Latin America, Asia Pacific and Africa, including Records Management, Data Protection & Recovery and DMS. Our European operations provide records and information management services, including Records Management, Data Protection & Recovery and DMS throughout the Czech Republic, Denmark, Finland, Greece, Hungary, Norway, Poland, Romania, Russia, Serbia, Slovakia, Turkey and Ukraine; Records Management and DMS in Estonia, Latvia and Lithuania; and Records Management in Sweden. Our Latin America operations provide records and information management services, including Records Management, Data Protection & Recovery, Destruction and DMS throughout Argentina, Brazil, Chile, Colombia, Mexico and Peru. Our Asia Pacific operations provide records and information management services, including Records Management, Data Protection & Recovery and DMS throughout Australia and New Zealand, with Records Management and Data Protection & Recovery also provided in certain markets in China, Hong Kong-SAR, India, Malaysia, Singapore, Taiwan and Thailand. Our African operations provide Records Management, Data Protection & Recovery, and DMS in South Africa.Business

Corporate and Other ~~Business—primarily consists~~Business

There have been no changes made to our reportable operating segments since December 31, 2016. The operations associated with acquisitions completed during the first three months of 2017 (which are described in Note 4) have been incorporated into our existing reportable operating segments.

An analysis of our ~~data center~~business segment information and ~~fine art storage businesses~~reconciliation to the accompanying Consolidated Financial Statements is as follows:



	North American Records and Information Management Business			North American Data Management Business		Western European Business		Other International Business		Corporate and Other Business			Total Consolidated
For the Three Months Ended March 31, 2016
Total Revenues	$	444,681		$	96,343	$	93,876	$	101,341	$	14,449		$	750,690
Depreciation and Amortization	45,350			5,670		11,251		14,286		10,647			87,204
Depreciation	40,255			5,422		8,671		10,902		10,140			75,390
Amortization	5,095			248		2,580		3,384		507			11,814
Adjusted EBITDA	176,557			53,460		31,946		21,576		(48,393		)	235,146
Expenditures for Segment Assets	46,666			4,827		6,060		32,156		17,741			107,450
Capital Expenditures	42,088			4,827		4,059		12,162		17,716			80,852
Cash (Received) Paid for Acquisitions, Net of Cash Acquired	(130		)	—		—		19,470		—			19,340
Acquisitions of Customer Relationships and Customer Inducements	4,708			—		2,001		524		25			7,258
For the Three Months Ended March 31, 2017
Total Revenues	507,597			106,950		120,072		189,241		15,016			938,876
Depreciation and Amortization	60,535			8,933		14,297		27,676		13,266			124,707
Depreciation	51,952			6,673		10,888		19,305		10,774			99,592
Amortization	8,583			2,260		3,409		8,371		2,492			25,115
Adjusted EBITDA	209,530			55,912		34,142		55,347		(62,357		)	292,574
Expenditures for Segment Assets	51,888			8,737		5,025		18,620		22,522			106,792
Capital Expenditures	26,578			8,737		4,898		12,467		20,522			73,202
Cash Paid (Received) for Acquisitions, Net of Cash Acquired	4,379			—		—		5,808		2,000			12,187
Acquisitions of Customer Relationships and Customer Inducements	20,931			—		127		345		—			21,403

The accounting policies of the reportable segments are the same as those described in ~~the United States, the primary product offerings~~Note 2 and in our Annual Report. Adjusted EBITDA for each segment is defined as income (loss) from continuing operations before interest expense, net, provision (benefit) for income taxes, depreciation and amortization, and also excludes certain items that we believe are not indicative of our ~~Adjacent Businesses~~core operating ~~segment,~~results, specifically: (i) (gain) loss on disposal/write-down of property, plant and equipment (excluding real estate), net; (ii) intangible impairments; (iii) other (income) expense, net; (iv) gain on sale of real estate, net of tax; and (v) Recall Costs (as defined below). Internally, we use Adjusted EBITDA as ~~well as costs related~~the basis for evaluating the performance of, and allocating resources to, executive and staff functions, including finance, human resources and information technology, which benefit the enterprise as a whole. These costs are primarily related to the general management of these functions on a corporate level and the design and development of programs, policies and procedures that are then implemented in the individual segments, with each segment bearing its own cost of implementation. Our Corporate and Other Business segment also includes stock-based employee compensation expense associated with all Employee Stock-Based Awards.

our operating segments.

4839

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IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In Thousands, Except Share and Per Share Data)

(Unaudited)

(7) Segment Information (Continued)

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

North American
Records and
Information
Management
Business North American
Data
Management
Business Western European Business Other International Business
Corporate
and Other
Business
Total
Consolidated
For the Three Months Ended September 30, 2015

Total Revenues $ 441,237
$ 97,385
$ 99,003
$ 103,327
$ 5,577
$ 746,529
Depreciation and Amortization 45,985
5,389
11,126
14,399
9,593
86,492
Depreciation 41,034
5,142
9,631
9,991
9,684
75,482
Amortization 4,951
247
1,495
4,408
(91 ) 11,010
Adjusted OIBDA 175,331
50,268
30,789
21,267
(49,820 ) 227,835
Expenditures for Segment Assets 42,670
1,891
7,138
17,809
10,934
80,442
Capital Expenditures 32,026
1,891
3,417
14,957
10,934
63,225
Cash Paid (Received) for Acquisitions, Net of Cash Acquired 3,986
—
—
2,275
—
6,261
Acquisitions of Customer Relationships and Customer Inducements 6,658
—
3,721
577
—
10,956
For the Three Months Ended September 30, 2016

Total Revenues 499,977
107,477
122,785
197,084
15,499
942,822
Depreciation and Amortization 55,256
9,680
14,409
30,279
15,046
124,670
Depreciation 47,634
5,822
10,657
20,615
13,632
98,360
Amortization 7,622
3,858
3,752
9,664
1,414
26,310
Adjusted OIBDA 199,559
59,714
37,546
53,844
(56,460 ) 294,203
Expenditures for Segment Assets 48,135
9,391
13,057
16,320
19,388
106,291
Capital Expenditures 29,061
9,391
8,266
16,258
19,388
82,364
Cash (Received) Paid for Acquisitions, Net of Cash Acquired 17
—
225
(424 ) —
(182 )
Acquisitions of Customer Relationships and Customer Inducements 19,057
—
4,566
486
—
24,109
As of and for the Nine Months Ended September 30, 2015

Total Revenues 1,332,811
294,220
296,337
317,378
14,803
2,255,549
Depreciation and Amortization 137,581
16,231
34,022
43,553
28,605
259,992
Depreciation 122,705
15,726
29,590
29,922
28,554
226,497
Amortization 14,876
505
4,432
13,631
51
33,495
Adjusted OIBDA 533,598
152,178
87,146
63,143
(153,784 ) 682,281
Total Assets (1)(2) 3,610,618
645,832
892,798
866,138
588,568
6,603,954
Expenditures for Segment Assets 129,512
15,879
19,676
61,111
39,541
265,719
Capital Expenditures 96,135
8,837
11,967
48,500
37,142
202,581
Cash Paid (Received) for Acquisitions, Net of Cash Acquired 12,764
(21 ) 2,510
10,323
2,399
27,975
Acquisitions of Customer Relationships and Customer Inducements 20,613
7,063
5,199
2,288
—
35,163
As of and for the Nine Months Ended September 30, 2016

Total Revenues 1,426,128
307,090
334,859
464,094
45,089
2,577,260
Depreciation and Amortization 158,071
21,427
40,729
70,462
36,207
326,896
Depreciation 135,756
17,076
31,026
49,840
33,582
267,280
Amortization 22,315
4,351
9,703
20,622
2,625
59,616
Adjusted OIBDA 565,254
170,255
102,765
117,351
(164,842 ) 790,783
Total Assets (1) 5,021,015
867,181
1,231,580
2,134,678
650,462
9,904,916
Expenditures for Segment Assets 114,673
17,968
17,959
330,065
82,590
563,255
Capital Expenditures 85,883
16,520
18,303
43,800
81,523
246,029
Cash (Received) Paid for Acquisitions, Net of Cash Acquired (3) (2,659 ) (59 ) (6,878 ) 284,925
1,042
276,371
Acquisitions of Customer Relationships and Customer Inducements 31,449
1,507
6,534
1,340
25
40,855

~~Table of Contents~~

~~IRON MOUNTAIN INCORPORATED~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(In Thousands, Except Share and Per Share Data)~~

~~(Unaudited)~~

~~(7) Segment Information (Continued)~~


~~(1)~~	~~Excludes all intercompany receivables or payables and investment in subsidiary balances.~~

~~(2)~~

~~During the fourth quarter of 2015, we adopted ASU No. 2015-03,~~ ~~Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs~~ (“ASU 2015-03”). ASU 2015-03 requires debt issuance costs to be presented in the balance sheet as a reduction of the related debt liability rather than an asset. Total assets as of September 30, 2015 for the Western European Business, Other International Business and Corporate and Other Business segments have been reduced by $9,215, $548, and $56,105, respectively, to reflect the adoption of ASU 2015-03.

~~(3)~~

Cash paid for acquisitions, net of cash acquired for the Other International Business segment for the nine months ended September 30, 2016 primarily consists of the cash component of the purchase price for the Recall Transaction, as the IMI entity that made the cash payment was an Australian subsidiary. However, the Recall Transaction also benefited the North American Records and Information Management Business, North American Data Management Business and Western European Business segments.

The accounting policies of the reportable segments are the same as those described in Note 2 in Notes to Consolidated Financial Statements included in this Quarterly Report on Form 10-Q and in our Annual Report. Adjusted OIBDA for each segment is defined as operating income before depreciation, amortization, intangible impairments, (gain) loss on disposal/write-down of property, plant and equipment (excluding real estate), net, costs associated with our conversion to a REIT, excluding REIT compliance costs beginning January 1, 2014 which we expect to recur in future periods ("REIT Costs") and Recall Costs (as defined below) directly attributable to the segment. Internally, we use Adjusted OIBDA as the basis for evaluating the performance of, and allocating resources to, our operating segments.

A reconciliation of Adjusted ~~OIBDA~~EBITDA to income (loss) from continuing operations ~~before provision (benefit) for income taxes and gain~~ on ~~sale of real estate~~a consolidated basis is as follows:

Three Months Ended
September 30, Nine Months Ended
September 30,
2015 2016 2015 2016
Adjusted OIBDA $ 227,835
$ 294,203
$ 682,281
$ 790,783
Less: Depreciation and Amortization 86,492
124,670
259,992
326,896
(Gain) Loss on Disposal/Write-Down of Property, Plant and Equipment (Excluding Real Estate), Net (141 ) (54 ) 707
(1,131 )
Recall Costs(1) 14,662
34,133
20,324
102,872
Interest Expense, Net 65,135
83,300
196,120
225,228
Other Expense (Income), Net 35,246
23,302
59,599
37,006
Income (Loss) from Continuing Operations before Provision (Benefit) for Income Taxes and Gain on Sale of Real Estate $ 26,441
$ 28,852
$ 145,539
$ 99,912



	Three Months Ended March 31,
	2016			2017
Adjusted EBITDA	$	235,146		$	292,574
(Add)/Deduct:
(Gain) Loss on Disposal/Write-Down of Property, Plant and Equipment (Excluding Real Estate), Net	(451		)	(459		)
Provision (Benefit) for Income Taxes	11,900			9,220
Other (Income) Expense, Net	(11,937		)	(6,364		)
Interest Expense, Net	67,062			86,055
Depreciation and Amortization	87,204			124,707
Recall Costs(1)	18,327			20,571
Income (Loss) from Continuing Operations	$	63,041		$	58,844

(1)

~~Includes operating expenditures associated with our acquisition of Recall, including~~Represents operating expenditures to complete the Recall Transaction, including advisory and professional fees and costs to complete the Divestments required in connection with receipt of regulatory approval, ~~and to provide~~including transitional services required to support the divested businesses during a transition period ~~("Recall Deal Close & Divestment Costs"), as well as~~and operating expenditures to integrate Recall with our existing operations, including moving, severance, facility upgrade, REIT conversion and system upgrade costs ("Recall ~~Integration Costs" and, collectively with Recall Deal Close & Divestment Costs, "Recall~~ Costs").

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In Thousands, Except Share and Per Share Data)

(Unaudited)

(8) Commitments and Contingencies

a. Litigation—General

We are involved in litigation from time to time in the ordinary course of business. A portion of the defense and/or

settlement costs associated with such litigation is covered by various commercial liability insurance policies purchased by us

and, in limited cases, indemnification from third parties. Our policy is to establish reserves for loss contingencies when the

losses are both probable and reasonably able to be estimated. We record legal costs associated with loss contingencies as expenses in the period in which they are incurred. The matters described below represent our significant loss contingencies. We have evaluated each matter and, if both probable and ~~estimable,~~reasonably able to be estimated, accrued an amount that represents our estimate of any probable loss associated with such matter. In addition, we have estimated a reasonably possible range for all loss contingencies including those described below. We believe it is reasonably possible that we could incur aggregate losses in addition to amounts currently accrued for all matters up to an additional ~~$21,000~~$20,000 over the next several years, of which certain amounts would be covered by insurance or indemnity arrangements.

b. Italy Fire

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

c. Argentina Fire

On February 5, 2014, we experienced a fire at a facility we own in Buenos Aires, Argentina. As a result of the quick response by local fire authorities, the fire was contained before the entire facility was destroyed and all employees were safely evacuated; however, a number of first responders lost their lives, or in some cases, were severely injured. The cause of the fire is currently being investigated. We believe we carry adequate insurance and do not expect that this event will have a material impact to our consolidated financial condition, results of operations or cash flows. Revenues from our operations at this facility represent less than 0.5% of our consolidated revenues.

d. Brooklyn Fire (Recall)

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In Thousands, Except Share and Per Share Data)

(Unaudited)

(8) Commitments and Contingencies (Continued)

e. Roye Fire (Recall)

On January 28, 2002, a former leased Recall records management facility located in Roye, France was destroyed by a fire.

Local French authorities conducted an investigation relating to the fire and issued a charge of criminal negligence for non-compliance with security regulations against ~~us.~~the Recall entity that leased the facility. We intend to defend this matter

vigorously. We are currently corresponding with various customers impacted by the fire who are seeking payment under various

theories of liability. There is also pending civil litigation with the owner of the destroyed facility, who is demanding payment

for lost rental income and other items. Based on known and expected claims and our expectation of the ultimate outcome of

those claims, we believe we carry adequate insurance coverage. We do not expect that this event will have a material impact on

our consolidated financial condition, results of operations or cash flows.

(9) Stockholders' Equity Matters

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

In fiscal year ~~2015~~2016 and in the first ~~nine~~three months of ~~2016,~~2017, our board of directors declared the following dividends:

Declaration Date Dividend
Per Share Record Date Total
Amount Payment Date
February 19, 2015 $ 0.4750
March 6, 2015 $ 99,795
March 20, 2015
May 28, 2015 0.4750
June 12, 2015 100,119
June 26, 2015
August 27, 2015 0.4750
September 11, 2015 100,213
September 30, 2015
October 29, 2015 0.4850
December 1, 2015 102,438
December 15, 2015
February 18, 2016 0.4850
March 7, 2016 102,651
March 21, 2016
May 25, 2016 0.4850
June 6, 2016 127,469
June 24, 2016
July 27, 2016 0.4850
September 12, 2016 127,737
September 30, 2016



Declaration Date	Dividend Per Share	Record Date	Total Amount		Payment Date
February 17, 2016	0.4850	March 7, 2016	$	102,651	March 21, 2016
May 25, 2016	0.4850	June 6, 2016	127,469		June 24, 2016
July 27, 2016	0.4850	September 12, 2016	127,737		September 30, 2016
October 31, 2016	0.5500	December 15, 2016	145,006		December 30, 2016
February 15, 2017	0.5500	March 15, 2017	145,235		April 3, 2017

(10) Divestments

As disclosed in Note 4, in connection with the acquisition of Recall, we sought regulatory approval of the Recall Transaction from the DOJ, the ACCC, the CCB and the CMA and, as part of the regulatory approval process, we agreed to make the Divestments.

~~The assets~~On May 4, 2016, we completed the sale of the Initial United States Divestments to Access CIG, LLC, a privately held provider of information management services throughout the United States (“Access CIG”), for total consideration of approximately $80,000, subject to adjustments (the “Access Sale”). Of the total consideration, we received $55,000 in cash proceeds upon closing of the Access Sale, and ~~liabilities related~~we are entitled to receive up to $25,000 of additional cash proceeds on the ~~Seattle/Atlanta Divestments,~~27-month anniversary of the ~~Australia Divestment Business,~~closing of the ~~Canadian Divestments~~Access Sale (the "Access Contingent Consideration"). Our estimate of the fair value of the Access Contingent Consideration is approximately $21,400 (which reflects a fair value adjustment of approximately $2,200 and ~~the UK Divestments are~~a present value adjustment of approximately $1,400). We have a non-trade receivable amounting to $22,000 included in Other, a component of Other Assets, Net in our Consolidated Balance Sheet as of ~~September 30, 2016. The assets and liabilities~~March 31, 2017 related to the ~~Initial United States Divestments were sold to~~ Access ~~CIG in~~Contingent Consideration.

On December 29, 2016, we completed the ~~Access Sale on May 4, 2016.~~

~~The following provides additional information regarding (a) the assets and liabilities related to~~sale of the Seattle/Atlanta Divestments, the ~~Australia Divestment Business, the~~Recall Canadian Divestments and the UKIron Mountain Canadian Divestments ~~(collectively,~~to ARKIVE, Inc., an information management company (“ARKIVE”), for total consideration of approximately $50,000, subject to adjustments (the “ARKIVE Sale”). Of the ~~“Divestments Held for Sale”), each of which are classified as held for sale on our Consolidated Balance Sheet beginning~~total consideration, we received approximately $45,000 in cash proceeds upon the ~~second quarter of 2016; and (b) the presentation~~closing of the ~~Divestments~~ARKIVE Sale and the remaining consideration is held in ~~our Consolidated Statements~~escrow. ARKIVE may be entitled to receive from us, on the 24-month anniversary of ~~Operations for~~ the ~~three and nine months ended September 30, 2015 and 2016, respectively, and our Consolidated Statements~~closing of ~~Cash Flows for~~ the ~~nine months ended September 30, 2015 and 2016, respectively.~~ARKIVE Sale, cash payments, up to the total consideration paid by ARKIVE, based on lost revenues attributable to the acquired customer base.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In Thousands, Except Share and Per Share Data)

(Unaudited)

(10) Divestments (Continued)

a.~~Assets and Liabilities Held for Sale~~

~~We have concluded that, as of September 30,~~On October 31, 2016, ~~the assets and liabilities related to the Divestments Held for Sale meet the criteria to be reported as held for sale on our Consolidated Balance Sheet as of September 30, 2016.~~

~~Our assets and liabilities held for sale as of September 30, 2016 are comprised~~after receiving approval of the ~~following:~~

Description Seattle/Atlanta Divestments Australia Divestment Business Recall Canadian Divestments Iron Mountain Canadian Divestments UK Divestments Total
Assets held for sale:
Accounts receivable $ —
$ 8,508
$ ��
$ —
$ —
$ 8,508
Deferred income taxes —
1,107
—
—
—
1,107
Prepaid expenses and other —
613
—
—
—
613
Property, plant and equipment, net —
24,253
—
1,641
—
25,894
Goodwill —
27,130
—
3,288
—
30,418
Estimated fair value of assets held for sale, less costs to sell 22,429
—
20,642
—
3,507
46,578
Customer relationships and customer inducements —
14,359
—
—
—
14,359
Other —
435
—
—
—
435
$ 22,429
$ 76,405
$ 20,642
$ 4,929
$ 3,507
$ 127,912

Liabilities held for sale:
Accounts payable $ —
$ 2,211
$ —
$ —
$ —
$ 2,211
Accrued expenses —
5,601
—
—
—
5,601
Deferred revenue —
1,366
—
—
—
1,366
Other long-term liabilities —
7,390
—
—
—
7,390
Deferred rent —
2,701
—
—
—
2,701
$ —
$ 19,269
$ —
$ —
$ —
$ 19,269

~~The assets and liabilities associated with~~proposed transaction from the ~~Seattle/Atlanta Divestments and~~ACCC, we completed the ~~Canadian Divestments are included in our North American Records and Information Management Business segment. The assets and liabilities associated with~~sale of the Australia Divestment Business ~~are included~~(the “Australia Sale”) to a consortium led by Housatonic Partners (the “Australia Divestment Business Purchasers”) for total consideration of approximately 70,000 Australian dollars (or approximately $53,200, based upon the exchange rate between the United States dollar and the Australian dollar as of October 31, 2016, the closing date of the Australia Sale), subject to adjustments. The total consideration consists of (i) 35,000 Australian dollars in ~~our Other International~~cash received upon the closing of the Australia Sale and (ii) 35,000 Australian dollars in the form of a note due from the Australia Divestment Business ~~segment.~~Purchasers to us (the “Bridging Loan Note”). The ~~assets~~Bridging Loan Note bears interest at 3.3% per annum and ~~liabilities~~matures on December 29, 2017, at which point all outstanding obligations become due. The total consideration for the Australia Sale is subject to certain adjustments, including ones associated with customer attrition, subsequent to the closing of the Australia Sale.

On December 9, 2016, we completed the sale of the UK Divestments ~~are included in our Western European Business segment.~~(the "UK Sale") to the Oasis Group for total consideration of approximately 1,800 British pounds sterling (or approximately $2,200, based upon the exchange rate between the United States dollar and the British pound sterling as of December 9, 2016, the closing date of the UK Sale), subject to adjustments.


b.	~~Presentation of Divestments in Consolidated Statements of Operations and Consolidated Statements of Cash Flows~~

We have concluded that the Australian Divestment Business and the Iron Mountain Canadian Divestments (collectively, the “Iron Mountain Divestments”) do not meet the criteria to be reported as discontinued operations in our Consolidated Statements of Operations for the three and nine months ended September 30, 2015 and 2016, respectively, and in our Consolidated Statements of Cash Flows for the nine months ended September 30, 2015 and 2016, respectively, as our decision to divest these businesses ~~does~~did not represent a strategic shift that ~~will have~~had a major effect on our operations and financial results. Accordingly, the revenues and expenses associated with the Iron Mountain Divestments are ~~included~~presented as a component of income (loss) from continuing operations in our Consolidated ~~Statements~~Statement of Operations for the three ~~and nine~~ months ended ~~September 30, 2015 and~~March 31, 2016 ~~respectively,~~ and the cash flows associated with ~~these businesses~~the Iron Mountain Divestments are ~~included~~presented as a component of cash flows from continuing operations in our Consolidated ~~Statements~~Statement of Cash Flows for the ~~nine~~three months ended ~~September 30, 2015 and 2016, respectively.~~

~~Table of Contents~~

~~IRON MOUNTAIN INCORPORATED~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(In Thousands, Except Share and Per Share Data)~~

~~(Unaudited)~~

~~(10) Divestments (Continued)~~

March 31, 2016.

We have concluded that the Initial United States Divestments, the Seattle/Atlanta Divestments, the Recall Canadian Divestments and the UK Divestments (collectively, the “Recall Divestments”) meet the criteria to be reported as discontinued operations in our Consolidated ~~Statements~~Statement of Operations ~~for the three~~ and ~~nine months ended September 30, 2016 and in our~~ Consolidated ~~Statements~~Statement of Cash Flows ~~for the nine months ended September 30, 2016, respectively,~~ as the Recall Divestments met the criteria to be reported as assets and liabilities held for sale at, or within a short period of time following, the closing of the Recall Transaction.

The table below summarizes certain results of operations of the Recall Divestments:



	Three Months Ended March 31, 2017
Description	Initial United States Divestments		Seattle/Atlanta Divestments			Recall Canadian Divestments			UK Divestments		Total(1)
Income (Loss) from Discontinued Operations Before Provision (Benefit) for Income Taxes	$	—	$	239		$	(668	)	$	—	$	(429	)
Provision (Benefit) for Income Taxes	—		41		—	(133		)	—		(92		)
Income (Loss) from Discontinued Operations, Net of Tax	$	—	$	198		$	(535	)	$	—	$	(337	)

Three Months Ended September 30, 2016
Description
Initial
United States Divestments(1)
Seattle/Atlanta Divestments Recall Canadian Divestments UK Divestments Total
Total Revenues $ —
$ 3,200
$ 2,977
$ 385
$ 6,562
Income (Loss) from Discontinued Operations Before Provision (Benefit) for Income Taxes —
1,534
888
(88 ) 2,334
Provision (Benefit) for Income Taxes —
70
—
239
(16 ) 293
Income (Loss) from Discontinued Operations, Net of Tax $ —
$ 1,464
$ 649
$ (72 ) $ 2,041

(1) During the three months ended March 31, 2017, we recognized a loss from discontinued operations before benefit for income taxes of $429, primarily related to costs associated with transitional service agreements related to the Recall Divestments.

Nine Months Ended September 30, 2016
Description Initial
United States Divestments(1) Seattle/Atlanta Divestments Recall Canadian Divestments UK Divestments Total
Total Revenues $ —
$ 5,010
$ 4,865
$ 696
$ 10,571
Income (Loss) from Discontinued Operations Before Provision (Benefit) for Income Taxes —
2,468
1,755
(13 ) 4,210
Provision (Benefit) for Income Taxes —
114
471
(3 ) 582
Income (Loss) from Discontinued Operations, Net of Tax $ —
$ 2,354
$ 1,284
$ (10 ) $ 3,628

~~(1)~~

The Access Sale occurred nearly simultaneously with the closing of the Recall Transaction. Accordingly, the revenue and expenses associated with the Initial United States Divestments are not included in our Consolidated Statements of Operations for the three and nine months ended September 30, 2016, respectively, and the cash flows associated with the Initial United States Divestments are not included in our Consolidated Statement of Cash Flows for the nine months ended September 30, 2016, due to the immaterial nature of the revenues, expenses and cash flows related to the Initial United States Divestments for the period of time we owned these businesses (May 2, 2016 through May 4, 2016).

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In Thousands, Except Share and Per Share Data)

(Unaudited)

(11) ~~Transformation Initiative~~

During the third quarter of 2015, we implemented a plan that calls for certain organizational realignments to reduce our overhead costs, particularly in our developed markets, in order to optimize our selling, general and administrative cost structure and to support investments to advance our growth strategy (the “Transformation Initiative”), which is expected to be completed by the end of 2017. As a result of the Transformation Initiative, we recorded a charge of $9,080 for both the three and nine months ended September 30, 2015 and a charge of $188 and $6,007 for the three and nine months ended September 30, 2016, respectively, primarily related to employee severance and associated benefits. Costs included in the accompanying Consolidated Statements of Operations associated with the Transformation Initiative are as follows:

Three Months Ended
September 30, Nine Months Ended
September 30,
2015 2016 2015 2016
Cost of sales (excluding depreciation and amortization) $ —
$ —
$ —
$ —
Selling, general and administrative expenses 9,080
188
9,080
6,007
Total $ 9,080
$ 188
$ 9,080
$ 6,007

~~Costs recorded by segment associated with the Transformation Initiative are as follows:~~

Three Months Ended
September 30, Nine Months Ended
September 30,
2015 2016 2015 2016
North American Records and Information Management Business $ 5,200
$ 40
$ 5,200
$ 2,329
North American Data Management Business 241
—
241
395
Western European Business 1,439
—
1,439
204
Other International Business —
—
—
—
Corporate and Other Business 2,200
148
2,200
3,079
Total $ 9,080
$ 188
$ 9,080
$ 6,007

Through September 30, 2016, we have recorded cumulative charges to our Consolidated Statements of Operations associated with the Transformation Initiative of $16,174. As of September 30, 2016, we had accrued $751 related to the Transformation Initiative. We expect that this liability will be paid throughout the remainder of 2016.

~~Table of Contents~~

~~IRON MOUNTAIN INCORPORATED~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(In Thousands, Except Share and Per Share Data)~~

~~(Unaudited)~~

~~(12)~~ Recall Costs

~~We expect to incur approximately $300,000 of Recall Costs, including approximately $80,000 of Recall Deal Close & Divestment Costs, as well as approximately $220,000 of Recall Integration Costs.~~

Recall Costs included in the accompanying Consolidated Statements of Operations are as follows:

Recall Deal Close & Divestment Costs
Three Months Ended
September 30, Nine Months Ended
September 30,
2015 2016 2015 2016
Cost of sales (excluding depreciation and amortization) $ —
$ —
$ —
$ —
Selling, general and administrative expenses 14,662
3,861
20,324
35,938
Total Recall Deal Close & Divestment Costs $ 14,662
$ 3,861
$ 20,324
$ 35,938


	Recall Integration Costs
	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
	2015		2016		2015		2016		2016		2017
Cost of sales (excluding depreciation and amortization)	$	—	$	4,457	$	—	$	4,788	$	—	$	7,887
Selling, general and administrative expenses	—		25,815		—		62,146		18,327		12,684
Total Recall Integration Costs	$	—	$	30,272	$	—	$	66,934

Total Recall Costs	$	14,662	$	34,133	$	20,324	$	102,872	$	18,327	$	20,571

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


	Recall Deal Close & Divestment Costs
	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
	2015		2016		2015		2016		2016		2017
North American Records and Information Management Business	$	—	$	—	$	—	$	—	$	39	$	7,299
North American Data Management Business	—		—		—		—		—		873
Western European Business	—		—		—		—		217		3,216
Other International Business	—		—		—		—		431		1,651
Corporate and Other Business	14,662		3,861		20,324		35,938		17,640		7,532
Total Recall Deal Close & Divestment Costs	$	14,662	$	3,861	$	20,324	$	35,938
Total Recall Costs									$	18,327	$	20,571

~~Table~~A rollforward of ~~Contents~~

~~IRON MOUNTAIN INCORPORATED~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(In Thousands, Except Share and Per Share Data)~~

~~(Unaudited)~~

~~(12)~~accrued liabilities related to Recall Costs ~~(Continued)~~

on our Consolidated Balance Sheets as of December 31, 2016 to March 31, 2017 is as follows:

Recall Integration Costs
Three Months Ended
September 30, Nine Months Ended
September 30,
2015 2016 2015 2016
North American Records and Information Management Business $ —
$ 4,989
$ —
$ 7,822
North American Data Management Business —
1,578
—
2,095
Western European Business —
7,483
—
11,613
Other International Business —
5,638
—
11,586
Corporate and Other Business —
10,584
—
33,818
Total Recall Integration Costs $ —
$ 30,272
$ —
$ 66,934

Total Recall Costs $ 14,662
$ 34,133
$ 20,324
$ 102,872



	Accrual for Recall Costs
Balance at December 31, 2016	$	4,914
Amounts accrued	5,147
Change in estimates(1)	(230		)
Payments	(5,371		)
Currency translation adjustments	47
Balance at March 31, 2017(2)	$	4,507

As of September 30, 2016, we had accrued approximately $25,555 of Recall Integration Costs, primarily related to employee severance costs. We expect that this liability will be paid throughout the remainder of 2016.

~~(13) Subsequent Events~~

~~Mortgage Securitization Program~~

In October 2016, we entered into a $50,000 mortgage securitization program (the "Mortgage Securitization Program") involving certain of our wholly owned subsidiaries with Goldman Sachs Mortgage Company (“Goldman Sachs”). Under the Mortgage Securitization Program, IMIM contributed certain real estate assets to its wholly owned special purpose entity, Iron Mountain Mortgage Finance I, LLC (the "Mortgage Special Purpose Subsidiary"). The Mortgage Special Purpose Subsidiary then used the real estate to secure collateralized loans from Goldman Sachs. The Mortgage Special Purpose Subsidiary is a consolidated subsidiary of IMI. Borrowings under the Mortgage Securitization Program bear interest at 3.5%. The Mortgage Securitization Program is scheduled to terminate in November 2026. Proceeds from the Mortgage Securitization Program will be used to repay outstanding borrowings on the Revolving Credit Facility.

~~Australia Sale~~

On October 31, 2016, after receiving approval of the proposed transaction from the ACCC, we completed the sale of the Australia Divestment Business (the “Australia Sale”) to a consortium led by Housatonic Partners (the “Buyers”) for total consideration of approximately 70,000 Australian dollars (or approximately $53,200, based upon the exchange rate between the United States dollar and the Australian dollar as of October 31, 2016), subject to adjustments. The purchase price consists of (i) 35,000 Australian dollars in cash received upon the closing of the Australia Sale and (ii) 35,000 Australian dollars in the form of a note due from the Buyers to us (the “Bridging Loan Note”). The Bridging Loan Note bears interest at 3.3% per annum and matures on December 29, 2017, at which point all outstanding obligations become due. The purchase price for the Australia Sale is subject to certain adjustments, including a working capital adjustment and adjustments associated with customer attrition subsequent to the closing of the Australia Sale. We recorded a charge of $14,000 associated with the anticipated loss on disposal of the Australia Divestment Business during the quarter ended September 30, 2016, representing the excess of the carrying value of the Australia Divestment Business compared to its fair value (less costs to sell) as of September 30, 2016, based upon the sale price described above.


(1)	Includes adjustments made to amounts accrued in a prior period.

(2)

Accrued liabilities related to Recall Costs as of March 31, 2017 presented in the table above generally related to employee severance costs and onerous lease liabilities. We expect that the majority of these liabilities will be paid throughout 2017. Additional Recall Costs recorded in our Consolidated Statement of Operations have either been settled in cash during the three months ended March 31, 2017 or are included in our Consolidated Balance Sheet as of March 31, 2017 as a component of accounts payable.

IRON MOUNTAIN INCORPORATED

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations for the three ~~and nine~~ months ended ~~September 30, 2016~~March 31, 2017 should be read in conjunction with our Consolidated Financial Statements and Notes thereto for the three ~~and nine~~ months ended ~~September 30, 2016,~~March 31, 2017, included herein, and for the year ended December 31, ~~2015,~~2016, included in our Annual Report on Form 10-K filed with the United States Securities and Exchange Commission ("SEC") on February ~~26, 2016~~23, 2017 (our "Annual Report").

FORWARD-LOOKING STATEMENTS

We have made statements in this Quarterly Report on Form 10-Q ("Quarterly Report") that constitute "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995 and other securities laws. These forward-looking statements concern our operations, economic performance, financial condition, goals, beliefs, future growth strategies, investment objectives, plans and current expectations, such as our (1) commitment to future dividend payments, (2) expected ~~2016~~2017 consolidated internal storage rental revenue growth rate and capital expenditures, (3) ~~statements made in relation to~~estimate of total acquisition and integration expenditures associated with our acquisition of Recall Holdings Limited ("Recall") pursuant to the Scheme Implementation Deed, as amended, with Recall (the "Recall Transaction") including (i) the total cost to integrate the combined companies and (ii) the expected proceeds from the Divestments (as defined in Note 4 to Notes to Consolidated Financial Statements included in this Quarterly Report) associated with the Recall Transaction, and (4) expected cost savings associated with the Transformation Initiative (as defined below). These forward-looking statements are subject to various known and unknown risks, uncertainties and other factors. When we use words such as "believes," "expects," "anticipates," "estimates" or similar expressions, we are making forward-looking statements. Although we believe that our forward-looking statements are based on reasonable assumptions, our expected results may not be achieved, and actual results may differ materially from our expectations. In addition, important factors that could cause actual results to differ from expectations include, among others:

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

the adoption of alternative technologies and shifts by our customers to storage of data through non-paper based technologies;

changes in customer preferences and demand for our storage and information management services;

the cost to comply with current and future laws, regulations and customer demands relating to data security and privacy issues, as well as fire and safety standards;

the impact of litigation or disputes that may arise in connection with incidents in which we fail to protect our customers' information;

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

changes in the political and economic environments in the countries in which our international subsidiaries ~~operate;~~operate and changes in the global political climate;

our ability or inability to complete acquisitions on satisfactory terms and to integrate acquired companies efficiently;

changes in the amount of our capital expenditures;

changes in the cost of our debt;

the impact of alternative, more attractive investments on dividends;

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

the performance of business partners upon whom we depend for technical assistance or management expertise outside the United States;

~~changes in the valuation of records and information businesses which could impact the proceeds we will receive from the Divestments;~~ and

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

You should not rely upon forward-looking statements except as statements of our present intentions and of our present expectations, which may or may not occur. You should read these cautionary statements as being applicable to all forward-looking statements wherever they appear. Except as required by law, we undertake no obligation to release publicly the result of any revision to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Readers are also urged to carefully review and consider the various disclosures we have made in this Quarterly Report, as well as our other periodic reports filed with the SEC including under "Risk Factors" in our ~~Quarterly Report on Form 10-Q for the quarter ended March 31, 2016 filed with the SEC on April 28, 2016 and in our~~ Annual Report.

Overview

The following discussions set forth, for the periods indicated, management's discussion and analysis of financial condition and results of operations. Significant trends and changes are discussed for the three ~~and nine~~ month ~~periods~~period ended ~~September 30, 2016~~March 31, 2017 within each section. ~~Trends and changes that are consistent with the three and nine month periods are not repeated and are discussed on a year to date basis.~~

Recall Acquisition

On May 2, 2016 (Sydney, Australia time), we completed the Recall Transaction. At the closing of the Recall Transaction, we paid approximately $331.8 million and issued approximately 50.2 million shares of our common stock which, based upon the closing price of our common stock as of April 29, 2016 (the last day of trading on the New York Stock Exchange (the "NYSE") prior to the closing of the Recall Transaction) of $36.53 per share, resulted in a total purchase price to Recall shareholders of approximately $2,166.9 million.

We account for acquisitions using the acquisition method of accounting, and, accordingly, the assets and liabilities acquired are recorded at their estimated fair values and the results of operations for each acquisition have been included in our consolidated results from their respective acquisition dates. With respect to the acquisition of Recall, theThe results of operations of Recall have been included in our consolidated results from May 2, 2016. See Note 4 to Notes to Consolidated Financial Statements included in this Quarterly Report for unaudited pro forma results of operations for us and Recall, as if the Recall Transaction was completed on January 1, 2015, for the three ~~and nine~~ months ended ~~September 30, 2015 and 2016, respectively.~~March 31, 2016.

We currently estimate total ~~operating~~acquisition and ~~capital~~integration expenditures associated with the Recall Transaction to be approximately $380.0 million, the majority of which is expected to be incurred by the end of 2018. This amount consists of (i) ~~approximately $80.0 million of~~ operating expenditures to complete the Recall Transaction, including advisory and professional fees and costs to complete the Divestments ~~required~~(as defined in ~~connection with receipt of regulatory approval and~~Note 4 to ~~provide~~Notes to Consolidated Financial Statements included in this Quarterly Report) including transitional services required to support the divested businesses during a transition period ~~(“Recall Deal Close & Divestment Costs”), (ii) approximately $220.0 million of~~and operating expenditures to integrate Recall with our existing operations, including moving, severance, facility upgrade, REIT conversion and system upgrade costs (“("Recall ~~Integration Costs” and, collectively with Recall Deal Close & Divestment Costs, “Recall Costs”~~Costs") and ~~(iii) approximately $80.0 million of~~(ii) capital expenditures to integrate Recall with our existing operations. From January 1, 2015 through ~~September 30, 2016,~~March 31, 2017, we have incurred cumulative operating and capital expenditures associated with the Recall Transaction of ~~$156.9~~$224.2 million, including ~~$149.9~~$199.5 million of Recall Costs and ~~$7.0~~$24.7 million of capital expenditures.

See Note 1211 to Notes to Consolidated Financial Statements included in this Quarterly Report for more information on Recall Costs, including costs recorded by segment as well as recorded between cost of sales and selling, general and administrative expenses.

Divestments Associated with the Recall Transaction

As disclosed in Note 4 to Notes to Consolidated Financial Statements included in this Quarterly Report, we sought regulatory approval of the Recall Transaction and, as part of the regulatory approval process, we agreed to make the Divestments.

The Initial United States Divestments, the Seattle/Atlanta Divestments, the Recall Canadian Divestments and the UK Divestments (each as defined in Note 6 to Notes to Consolidated Financial Statements included in our Annual Report) (collectively, the "Recall Divestments") meet the criteria to be reported as discontinued operations as the Recall Divestments met the criteria to be reported as assets and liabilities held for sale at, or within a short period of time following, the closing of the Recall Transaction. Accordingly, the results of operations for the Recall Divestments are presented as a component of

discontinued operations in our Consolidated Statement of Operations for the three months ended March 31, 2017 and the cash flows associated with the Recall Divestments are presented as a component of cash flows from discontinued operations in our Consolidated Statement of Cash Flows for the three months ended March 31, 2017.

The Australia Divestment Business and the Iron Mountain Canadian Divestments (each as defined in Note 6 to Notes to Consolidated Financial Statements included in our Annual Report) (collectively, the "Iron Mountain Divestments") do not meet the criteria to be reported as discontinued operations as our decision to divest the Iron Mountain Divestments does not represent a strategic shift that will have a major effect on our operations and financial results. Accordingly, the revenues and expenses associated with the Iron Mountain Divestments are presented as a component of income (loss) from continuing operations in our Consolidated Statement of Operations for the three months ended March 31, 2016 and the cash flows associated with the Iron Mountain Divestments are presented as a component of cash flows from continuing operations in our Consolidated Statement of Cash Flows for the three months ended March 31, 2016.

The Australia Divestment Business represents approximately $12.2 million of total revenues and approximately $0.1 million of total income from continuing operations for the three months ended March 31, 2016. The Iron Mountain Canadian Divestments represent approximately $1.2 million of total revenues and approximately $0.7 million of total income from continuing operations for the three months ended March 31, 2016. The Australia Divestment Business was previously included in our Other International Business segment and the Iron Mountain Canadian Divestments were previously included in our North American Records and Information Management Business segment.

See Note 10 to Notes to Consolidated Financial Statements included in this Quarterly Report for additional information regarding the presentation of the Divestments in our Consolidated Statements of Operations and Consolidated Statements of Cash Flows for the three months ended March 31, 2017.

Transformation Initiative

During the third quarter of 2015, we implemented a plan that calls for certain organizational realignments to reduce our overhead costs by $125.0 million by the end of 2017, particularly in our developed markets, in order to optimize our selling, general and administrative cost structure and to support investments to advance our growth strategy (the "Transformation Initiative")~~, which is expected to be completed by the end of 2017.~~. As a result of the Transformation Initiative, we recorded a charge of ~~$0.2 million and $6.0~~$5.7 million for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2016, ~~respectively, and a charge of $9.1 million for both the three and nine months ended September 30, 2015,~~ primarily related to employee severance and associated benefits. ~~See Note 11 to Notes to Consolidated Financial Statements included in this Quarterly Report for more information~~We are on ~~costs related to the Transformation Initiative, including costs recorded by segment as well as between cost of sales and selling, general and administrative expenses.~~

~~As we quantify incremental costs associated with future Transformation Initiative actions~~target to achieve our $125.0 million cost reduction goal ~~we will disclose~~by the ~~relevant cost estimates and charges in the period that such actions are approved.~~end of 2017.

General

Our revenues consist of storage rental revenues as well as service revenues and are reflected net of sales and value added taxes. Storage rental revenues, which are considered a key driver of financial performance for the storage and information management services industry, consist primarily of recurring periodic rental charges related to the storage of materials or data (generally on a per unit basis) that are typically retained by customers for many years and technology escrow services that protect and manage source code. Service revenues include charges for related service activities, which include: (1) the handling of records, including the addition of new records, temporary removal of records from storage, refiling of removed records and the destruction of records; (2) courier operations, consisting primarily of the pickup and delivery of records upon customer request; (3) secure shredding of sensitive documents and the related sale of recycled paper, the price of which can fluctuate from period to period; (4) other services, including the scanning, imaging and document ~~management solutions,~~conversion services of active and inactive records, or Information Governance and Digital Solutions, which relate to physical and digital records, and project revenues; (5) customer termination and permanent removal fees; (6) data restoration projects; (7) special project work; (8) the storage, assembly, reporting and ~~detailed reporting~~delivery of customer marketing literature, ~~and delivery to sales offices, trade shows and prospective customers' sites based on current and prospective customer orders;~~or fulfillment services; (9) consulting services; and (10) other technology services and product sales (including specially designed storage containers and related supplies). Our service revenue growth has been negatively impacted by declining activity rates as stored records are becoming less active. While customers continue to store their records and tapes with us, they are less likely than they have been in the past to retrieve records for research and other purposes, thereby reducing service activity levels.

Cost of sales (excluding depreciation and amortization) consists primarily of wages and benefits for field personnel, facility occupancy costs (including rent and utilities), transportation expenses (including vehicle leases and fuel), other product cost of sales and other equipment costs and supplies. Of these, wages and benefits and facility occupancy costs are the most significant. Selling, general and administrative expenses consist primarily of wages and benefits for management, administrative, information technology, 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. Trends in facility occupancy costs are impacted by the total number of facilities we occupy, the mix of properties we own versus properties we occupy under operating leases, fluctuations in per square foot occupancy costs, and the levels of utilization of these properties. Trends in total wages and benefits in dollars and as a percentage of total consolidated revenue are influenced by changes in headcount and compensation levels, achievement of incentive compensation targets, workforce productivity and variability in costs associated with medical insurance and workers' compensation.

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 than our operations in North America and, therefore, labor costs are a higher percentage of international segment revenue. In addition, the overhead structure of our expanding international operations has not achieved the same level of overhead leverage as our North American segments, which may result in an increase in selling, general and administrative expenses, as a percentage of consolidated revenue, as our international operations become a more meaningful percentage of our consolidated results.

Our depreciation and amortization charges result primarily from the capital-intensive nature of our business. The principal components of depreciation relate to storage systems, which include racking structures, buildings, building and leasehold improvements and computer systems hardware and ~~software and buildings.~~software. Amortization relates primarily to customer relationship intangible assets. Both depreciation and amortization are impacted by the timing of acquisitions.

Our consolidated revenues and expenses are subject to variations caused by the net effect of foreign currency translation ~~on revenues and expenses~~ incurred by our entities 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. As a result of the relative size of our international operations, these fluctuations may be material on individual balances. Our revenues and expenses from our international operations are generally denominated in the local currency of the country in which they are derived or incurred. Therefore, the impact of currency fluctuations on our operating income and operating margin is partially mitigated. 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 ~~2015~~2016 results at the ~~2016~~2017 average exchange rates. Constant currency growth rates are a non-GAAP measure.

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:


	Average Exchange Rates for the Three Months Ended September 30,				Percentage Strengthening / (Weakening) of Foreign Currency		Average Exchange Rates for the Three Months Ended March 31,				Percentage Strengthening / (Weakening) of Foreign Currency
	2015		2016		Percentage Strengthening / (Weakening) of Foreign Currency		2016		2017		Percentage Strengthening / (Weakening) of Foreign Currency
Australian dollar	$	0.726	$	0.758	4.4	%	$	0.722	$	0.758	5.0	%
Brazilian real	$	0.284	$	0.308	8.5	%	$	0.257	$	0.318	23.7	%
British pound sterling	$	1.549	$	1.313	(15.2	)%	$	1.433	$	1.239	(13.5	)%
Canadian dollar	$	0.765	$	0.767	0.3	%	$	0.729	$	0.756	3.7	%
Euro	$	1.113	$	1.116	0.3	%	$	1.103	$	1.066	(3.4	)%

Average Exchange
Rates for the
Nine Months Ended
September 30,

Percentage
Strengthening /
(Weakening) of
Foreign Currency
2015 2016
Australian dollar $ 0.763
$ 0.742
(2.8 )%
Brazilian real $ 0.320
$ 0.283
(11.6 )%
British pound sterling $ 1.532
$ 1.393
(9.1 )%
Canadian dollar $ 0.795
$ 0.757
(4.8 )%
Euro $ 1.115
$ 1.116
0.1 %

Non-GAAP Measures

Adjusted ~~OIBDA~~EBITDA

Adjusted ~~OIBDA~~EBITDA is defined as ~~operating~~ income (loss) from continuing operations before interest expense, net, provision (benefit) for income taxes, depreciation and amortization, ~~intangible impairments, (gain) loss on disposal/write-down of property, plant~~ and equipment (excluding real estate), net, Recall Costs and REIT Costs (as defined in Note 7 to Notes to Consolidated Financial Statements included in this Quarterly Report). Adjusted OIBDA does not includealso excludes certain items that we believe are not indicative of our core operating results, specifically: ~~(1)~~(i) (gain) loss on disposal/write-down of property, plant and equipment (excluding real estate), net; ~~(2)~~(ii) intangible impairments; (iii) other (income) expense, net; (iv) gain on sale of real estate, net of tax; ~~(3) intangible impairments; (4)~~and (v) Recall Costs; (5) REIT Costs; (6) other expense (income), net; (7) income (loss) from discontinued operations, net of tax; (8) gain (loss) on sale of discontinued operations, net of tax; and (9) net income (loss) attributable to noncontrolling interests.Costs. Adjusted ~~OIBDA~~EBITDA Margin is calculated by dividing Adjusted ~~OIBDA~~EBITDA by total revenues. We use multiples of current or projected Adjusted ~~OIBDA~~EBITDA in conjunction with our discounted cash flow models to determine our estimated overall enterprise valuation and to evaluate acquisition targets. We believe Adjusted ~~OIBDA~~EBITDA and Adjusted ~~OIBDA~~EBITDA Margin provide our current and potential investors with relevant and useful information regarding our ability to generate cash flow to support business investment. These measures are an integral part of the internal reporting system we use to assess and evaluate the operating performance of our business.

Adjusted ~~OIBDA also does not include~~EBITDA excludes both interest expense, net and the provision (benefit) for income taxes. These expenses are associated with our capitalization and tax structures, which we do not consider when evaluating the operating profitability of our core operations. Finally, Adjusted ~~OIBDA~~EBITDA does not include depreciation and amortization expenses, in order to eliminate the impact of capital investments, which we evaluate by comparing capital expenditures to incremental revenue generated and as a percentage of total revenues. Adjusted ~~OIBDA~~EBITDA and Adjusted ~~OIBDA~~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 orincome, income (loss) from continuing operations, net income (loss) or cash flows from operating activities from continuing operations (as determined in accordance with GAAP).

Reconciliation of ~~Operating~~ Income (Loss) from Continuing Operations to Adjusted ~~OIBDA~~EBITDA (in thousands):

Three Months Ended
September 30, Nine Months Ended
September 30,
2015 2016 2015 2016
Operating Income $ 126,822
$ 135,454
$ 401,258
$ 362,146
Add: Depreciation and Amortization 86,492
124,670
259,992
326,896
(Gain) Loss on Disposal/Write-Down of Property, Plant and Equipment (Excluding Real Estate), Net (141 ) (54 ) 707
(1,131 )
Recall Costs 14,662
34,133
20,324
102,872
Adjusted OIBDA $ 227,835
$ 294,203
$ 682,281
$ 790,783



	Three Months Ended March 31,
	2016			2017
Income (Loss) from Continuing Operations	$	63,041		$	58,844
Add/(Deduct):
Provision (Benefit) for Income Taxes	11,900			9,220
Other (Income) Expense, Net	(11,937		)	(6,364		)
Interest Expense, Net	67,062			86,055
(Gain) Loss on Disposal/Write-Down of Property, Plant and Equipment (Excluding Real Estate), Net	(451		)	(459		)
Depreciation and Amortization	87,204			124,707
Recall Costs	18,327			20,571
Adjusted EBITDA	$	235,146		$	292,574

Adjusted EPS

Adjusted EPS is defined as reported earnings per share fully diluted from continuing operations excluding: (1) (gain) loss on disposal/write-down of property, plant and equipment (excluding real estate), net; (2) gain on sale of real estate, net of tax; (3) intangible impairments; (4) other (income) expense, ~~(income),~~ net; (5) Recall Costs; ~~(6) REIT Costs;~~ and ~~(7)~~(6) the tax impact of reconciling items and discrete tax items. Adjusted EPS includes income (loss) attributable to noncontrolling interests. We do not believe these excluded items to be indicative of our ongoing operating results, and they are not considered when we are forecasting our future results. We believe Adjusted EPS is of value to our current and potential investors when comparing our results from past, present and future periods.

Reconciliation of Reported EPS—Fully Diluted from Continuing Operations to Adjusted EPS—Fully Diluted from Continuing Operations:


	Three Months Ended September 30,					Nine Months Ended September 30,					Three Months Ended March 31,
	2015			2016		2015			2016		2016			2017
Reported EPS—Fully Diluted from Continuing Operations	$	0.11		$	0.02	$	0.56		$	0.22	$	0.30		$	0.22
Add: Income (Loss) Attributable to Noncontrolling Interests	—			—		—			—
Add/(Deduct):
Income (Loss) Attributable to Noncontrolling Interests											—			—
Other (Income) Expense, Net											(0.06		)	(0.02		)
(Gain) Loss on Disposal/Write-Down of Property, Plant and Equipment (Excluding Real Estate), Net	—			—		—			—		—			—
Gain on Sale of Real Estate, Net of Tax	—			—		—			—
Other Expense (Income), Net	0.17			0.09		0.28			0.15
Recall Costs	0.07			0.13		0.10			0.43		0.09			0.08
Tax Impact of Reconciling Items and Discrete Tax Items(1)	(0.04		)	0.03		(0.05		)	0.01		—			(0.04		)
Adjusted EPS—Fully Diluted from Continuing Operations(2)	$	0.31		$	0.27	$	0.89		$	0.80	$	0.33		$	0.24

(1)

The difference between our effective tax rate and our structural tax rate (or adjusted effective tax rate) for the three ~~and nine~~ months ended ~~September 30, 2015~~March 31, 2016 and ~~2016,~~2017, respectively, is primarily due to (i) the reconciling items above, which impact our reported income (loss) from continuing operations 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. Our structural tax rate for purposes of the calculation of Adjusted EPS for the three ~~and nine~~ months ended ~~September 30, 2015~~March 31, 2016 and ~~2016~~2017 was ~~16.5%~~14.0% and ~~18.6%~~23.1%, respectively.


(2)	Columns may not foot due to rounding.

FFO (NAREIT) and FFO (Normalized)

Funds from operations (“FFO”) is defined by the National Association of Real Estate Investment Trusts ("NAREIT") and us as net income excluding depreciation on real estate assets and gain on sale of real estate, net of tax (“FFO (NAREIT)”). FFO (NAREIT) does not give effect to real estate depreciation because these amounts are computed, under GAAP, to allocate the cost of a property over its useful life. Because values for well-maintained real estate assets have historically increased or decreased based upon prevailing market conditions, we believe that FFO (NAREIT) provides investors with a clearer view of our operating performance. Our most directly comparable GAAP measure to FFO (NAREIT) is net income. Although NAREIT has published a definition of FFO, modifications to FFO (NAREIT) are common among REITs as companies seek to provide financial measures that most meaningfully reflect their particular business. Our definition of FFO (Normalized) excludes certain items included in FFO (NAREIT) that we believe are not indicative of our core operating results, specifically: (1) (gain) loss on disposal/write-down of property, plant and equipment (excluding real estate), net; (2) intangible impairments; (3) other (income) expense, ~~(income),~~ net; (4) ~~deferred income taxes and REIT tax adjustments; (5)~~ Recall Costs; (5) the tax impact of reconciling items and discrete tax items; (6) ~~REIT Costs; (7) income (loss)~~loss (income) from discontinued operations, net of tax; and ~~(8) gain (loss)~~(7) loss (gain) on sale of discontinued operations, net of tax.

Reconciliation of Net Income (Loss) to FFO (NAREIT) and FFO (Normalized) (in thousands):

Three Months Ended
September 30, Nine Months Ended
September 30,
2015 2016 2015 2016
Net Income (Loss) $ 23,517
$ 7,800
$ 119,263
$ 57,708
Add: Real Estate Depreciation(1) 44,896
61,655
134,454
165,037
Gain on Sale of Real Estate, Net of Tax(2) (850 ) (325 ) (850 ) (325 )
FFO (NAREIT) 67,563
69,130
252,867
222,420
Add: (Gain) Loss on Disposal/Write-Down of Property, Plant and Equipment (Excluding Real Estate), Net (141 ) (54 ) 707
(1,131 )
Other Expense, Net(3) 35,246
23,302
59,599
37,006
Deferred Income Taxes and REIT Tax Adjustments(4) (685 ) (6,976 ) (7,175 ) (15,035 )
Recall Costs 14,662
34,133
20,324
102,872
Income from Discontinued Operations, Net of Tax(5) —
(2,041 ) —
(3,628 )
FFO (Normalized) $ 116,645
$ 117,494
$ 326,322
$ 342,504



	Three Months Ended March 31,
	2016			2017
Net Income (Loss)	$	63,041		$	58,507
Add/(Deduct):
Real Estate Depreciation(1)	45,063			62,956
FFO (NAREIT)	108,104			121,463
Add/(Deduct):
(Gain) Loss on Disposal/Write-Down of Property, Plant and Equipment (Excluding Real Estate), Net	(451		)	(459		)
Other (Income) Expense, Net(2)	(11,937		)	(6,364		)
Recall Costs	18,327			20,571
Tax Impact of Reconciling Items and Discrete Tax Items(3)	577			(9,678		)
Loss (Income) from Discontinued Operations, Net of Tax(4)	—			337
FFO (Normalized)	$	114,620		$	125,870


(1)	Includes depreciation expense related to real estate assets (land improvements, buildings, building improvements, leasehold improvements and racking).


(2)	~~Net~~Includes foreign currency transaction (gains) losses, net of ~~tax provision of $0.1~~$(12.5) million ~~for each of~~and $(4.2) million in the three ~~and nine~~ months ended ~~September 30,~~March 31, 2016 and ~~$0.2 million for each of the three and nine months ended September 30, 2015.~~2017, respectively.

(3)

~~Includes foreign currency transaction losses, net~~Represents the tax impact of ~~$10.7 million~~(i) the reconciling items above, which impact our reported income (loss) from continuing operations before provision (benefit) for income taxes but have an insignificant impact on our reported provision (benefit) for income taxes and ~~$15.3 million in the three and nine months ended September 30, 2016, respectively, and $32.5 million and $56.5 million in the three and nine months ended September 30, 2015, respectively.~~(ii) other discrete tax items.


(4)	~~REIT tax adjustments primarily include the impact of the repatriation of foreign earnings and accounting method changes related to the REIT conversion (including the impact of amended tax returns).~~


~~(5)~~	Net of tax ~~provision~~benefit of ~~$0.3 million and $0.6~~$0.1 million for the three ~~and nine~~ months ended ~~September 30, 2016, respectively.~~March 31, 2017.

Critical Accounting Policies

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 preparation of these financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of the financial statements and for the period then ended. On an ongoing basis, we evaluate the estimates used. We base our estimates on historical experience, actuarial estimates, current conditions and various other assumptions that we believe to be reasonable under the circumstances. These estimates form the basis for making judgments about the carrying values of assets and liabilities and are not readily apparent from other sources. Actual results may differ from these estimates. Our critical accounting policies include the following, which are listed in no particular order:

Revenue Recognition

Accounting for Acquisitions

Impairment of Tangible and Intangible Assets

Income Taxes

Further detail regarding our critical accounting policies can be found in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report, and the Consolidated Financial Statements and the Notes included therein. We have determined that no material changes concerning our critical accounting policies have occurred since December 31, ~~2015.~~2016.

Recent Accounting Pronouncements

See Note 2.k. to Notes to Consolidated Financial Statements included in this Quarterly Report for a description of recently issued accounting ~~pronouncements.~~pronouncements, including those recently adopted.

Results of Operations

Comparison of three ~~and nine~~ months ended ~~September 30, 2016~~March 31, 2017 to three ~~and nine~~ months ended ~~September 30, 2015~~March 31, 2016 (in thousands):


	Three Months Ended September 30,												Three Months Ended March 31,
	Three Months Ended September 30,						Dollar Change				Percentage Change		Three Months Ended March 31,								Dollar Change				Percentage Change
	2015			2016						2016				2017							Dollar Change				Percentage Change
Revenues	$	746,529		$	942,822		Dollar Change	$	196,293		Percentage Change			26.3	%	$	750,690			$	938,876			$	188,186		25.1	%
Operating Expenses	619,707			807,368			187,661				30.3	%	620,624				791,121				170,497				27.5	%
Operating Income	126,822			135,454			8,632				6.8	%	130,066				147,755				17,689				13.6	%
Other Expenses, Net	103,305			129,695			26,390				25.5	%	67,025				88,911				21,886				32.7	%
Income from Continuing Operations	23,517			5,759			(17,758		)		(75.5	)%	63,041				58,844				(4,197		)		(6.7	)%
Income from Discontinued Operations, Net of Tax	—			2,041			2,041				100.0	%
Loss from Discontinued Operations, Net of Tax													—				(337		)		(337		)		(100.0	)%
Net Income	23,517			7,800			(15,717		)		(66.8	)%	63,041				58,507				(4,534		)		(7.2	)%
Net Income Attributable to Noncontrolling Interests	407			720			313				76.9	%	267				382				115				43.1	%
Net Income Attributable to Iron Mountain Incorporated	$	23,110		$	7,080		$	(16,030	)		(69.4	)%	$	62,774			$	58,125			$	(4,649	)		(7.4	)%
Adjusted OIBDA(1)	$	227,835		$	294,203		$	66,368			29.1	%
Adjusted OIBDA Margin(1)	30.5		%	31.2		%
Adjusted EBITDA(1)													$	235,146			$	292,574			$	57,428			24.4	%
Adjusted EBITDA Margin(1)													31.3		%		31.2		%

Nine Months Ended
September 30,

Dollar
Change

Percentage
Change
2015 2016
Revenues $ 2,255,549
$ 2,577,260
$ 321,711
14.3 %
Operating Expenses 1,854,291
2,215,114
360,823
19.5 %
Operating Income 401,258
362,146
(39,112 ) (9.7 )%
Other Expenses, Net 281,995
308,066
26,071
9.2 %
Income from Continuing Operations 119,263
54,080
(65,183 ) (54.7 )%
Income from Discontinued Operations, Net of Tax —
3,628
3,628
100.0 %
Net Income 119,263
57,708
(61,555 ) (51.6 )%
Net Income Attributable to Noncontrolling Interests 1,727
1,822
95
5.5 %
Net Income Attributable to Iron Mountain Incorporated $ 117,536
$ 55,886
$ (61,650 ) (52.5 )%
Adjusted OIBDA(1) $ 682,281
$ 790,783
$ 108,502
15.9 %
Adjusted OIBDA Margin(1) 30.2 % 30.7 %


(1)	See "Non-GAAP Measures—Adjusted ~~OIBDA"~~EBITDA" in this Quarterly Report for the definition, reconciliation and a discussion of why we believe these measures provide relevant and useful information to our current and potential investors.

REVENUES

Consolidated revenues consists of the following (in thousands):


	Three Months Ended September 30,							Percentage Change								Three Months Ended March 31,											Percentage Change
	Three Months Ended September 30,				Dollar Change			Actual			Constant Currency(1)			Internal Growth(2)		Three Months Ended March 31,								Dollar Change			Actual		Constant Currency(1)		Internal Growth(2)
	2015		2016				2016				Constant Currency(1)		2017											Dollar Change			Actual		Constant Currency(1)		Internal Growth(2)
Storage Rental	$	460,052	$	576,465	Dollar Change		$	Actual		116,413			25.3	Internal Growth(2)		%		27.2	%		2.6	%	$	461,211		$	572,279		$	111,068		24.1	%	24.6	%	3.0	%
Service	286,477		366,357		79,880			27.9	%		29.9	%		(0.5	)%	289,479				366,597				77,118			26.6	%	26.7	%	0.6	%
Total Revenues	$	746,529	$	942,822	$	196,293		26.3	%		28.2	%		1.4	%	$	750,690			$	938,876			$	188,186		25.1	%	25.4	%	2.0	%

Nine Months Ended
September 30, Percentage Change

Dollar
Change
Actual
Constant
Currency(1)

Internal
Growth(2)
2015 2016
Storage Rental $ 1,380,133
$ 1,576,358
$ 196,225
14.2 % 16.9 % 2.3 %
Service 875,416
1,000,902
125,486
14.3 % 17.4 % (0.2 )%
Total Revenues $ 2,255,549
$ 2,577,260
$ 321,711
14.3 % 17.1 % 1.3 %


(1)	Constant currency growth rates are calculated by translating the ~~2015~~2016 results at the ~~2016~~2017 average exchange rates.

(2)

Our internal revenue growth rate, which is a non-GAAP measure, represents the weighted average year-over-year growth rate of our revenues excluding the impact of business acquisitions, divestitures and foreign currency exchange rate fluctuations. The revenues generated by Recall have been integrated with our existing revenues and it is impracticable for us to determine actual Recall revenue ~~contribution.~~contribution for the applicable periods. Therefore, our internal revenue growth rates exclude the impact of revenues associated with the Recall Transaction based upon forecasted or budgeted Recall revenues beginning in the third quarter of 2016. Our internal revenue growth rate includes the impact of acquisitions of customer relationships.

Storage Rental Revenues

Consolidated storage rental revenues increased ~~$116.4~~$111.1 million, or ~~25.3%~~24.1%, to ~~$576.5 million and $196.2 million, or 14.2%, to $1,576.4~~$572.3 million for the three ~~and nine~~ months ended ~~September 30, 2016, respectively,~~March 31, 2017 from ~~$460.1 million and $1,380.1~~$461.2 million for the three ~~and nine~~ months ended ~~September 30, 2015, respectively.~~March 31, 2016. In the three ~~and nine~~ months ended ~~September 30, 2016,~~March 31, 2017, the net impact of acquisitions/divestitures and consolidated internal storage rental revenue growth were partially offset by unfavorable fluctuations in foreign currency exchange rates compared to the three ~~and nine~~ months ended ~~September 30, 2015.~~March 31, 2016. The net impact of acquisitions/divestitures contributed ~~24.6% and 14.6%~~21.6% to the reported storage rental revenue growth ~~rates~~rate for the three ~~and nine~~ months ended ~~September 30, 2016, respectively,~~March 31, 2017 compared to the ~~same~~comparable prior year ~~periods,~~period, primarily driven ~~primarily~~ by our acquisition of Recall. Internal storage rental revenue growth of ~~2.3%~~3.0% in the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 compared to the ~~same~~comparable prior year period was driven by ~~sustained~~ internal storage rental revenue growth of ~~0.7%~~2.7%, 1.7%~~, 0.8%~~ and ~~9.9%~~8.3% in our ~~North American Records and Information Management Business,~~ North American Data Management Business, Western European Business and Other International Business segments, ~~respectively.~~respectively, primarily driven by volume increases, as well as internal storage rental revenue growth of 1.9% in our North American Records and Information Management Business segment, primarily driven by net price increases. Excluding the impact of acquisitions, global records management net volumes as of March 31, 2017 increased by 1.9% over the ending volume as of March 31, 2016. These increases were partially offset by the impact of foreign currency exchange rate fluctuations, which decreased our reported storage rental revenue growth ~~rates~~rate for the three ~~and nine~~ months ended ~~September 30, 2016~~March 31, 2017 by ~~1.9% and 2.7%, respectively,~~0.5% compared to the ~~same~~comparable prior year ~~periods.~~period. Global records management reported net volumes, including the impact of acquisitions, as of ~~September 30, 2016~~March 31, 2017 increased by ~~29.2%~~25.0% over the ending volume at ~~September 30, 2015,~~March 31, 2016, supported by volume increases across each of our reportable operating segments, primarily associated with the acquisition of Recall.

Service Revenues

Consolidated service revenues increased ~~$79.9~~$77.1 million, or ~~27.9%~~26.6%, to ~~$366.4 million and $125.5 million, or 14.3%, to $1,000.9~~$366.6 million for the three ~~and nine~~ months ended ~~September 30, 2016, respectively,~~March 31, 2017 from ~~$286.5 million and $875.4~~$289.5 million for the three ~~and nine~~ months ended ~~September 30, 2015, respectively.~~March 31, 2016. In the three ~~and nine~~ months ended ~~September 30, 2016,~~March 31, 2017, the net impact of acquisitions/divestitures ~~was partially offset by negative~~and consolidated internal service revenue growth ~~and~~were partially offset by unfavorable fluctuations in foreign currency exchange rates compared to the three ~~and nine~~ months ended ~~September 30, 2015.~~March 31, 2016. The net impact of acquisitions/divestitures contributed ~~30.4% and 17.6%~~26.1% to the reported service revenue growth ~~rates~~rate for the three ~~and nine~~ months ended ~~September 30, 2016, respectively,~~March 31, 2017 compared to the ~~same~~comparable prior year ~~periods,~~period, primarily driven ~~primarily~~ by our acquisition of Recall. Internal service revenue growth was ~~negative 0.5% and negative 0.2%~~0.6% for the three ~~and nine~~ months ended ~~September 30, 2016, respectively,~~March 31, 2017 compared to the ~~same~~comparable prior year ~~periods.~~period. The ~~negative~~ internal service revenue growth for the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 reflects ~~reduced~~growth in secure shredding revenues, in part due to higher recycled paper prices, and the stabilization in recent periods of the decline in retrieval/re-file activity and athe related decrease in transportation revenues within our North American Records and Information Management Business, ~~and~~as well as increased special project work within our Western European Business ~~segments, as well as~~segment, partially offset by continued declines in service revenue activity levels in our North American Data Management Business segment, as the storage business becomes more archival in nature. In the North American Records and Information Management Business segment, the decline in service activities has begun to stabilize in recent periods, while service revenue declines in the Western European Business and the North American Data Management Business segments are reflecting more recent reductions in service activity levels. Foreign currency exchange rate fluctuations decreased our reported total service revenues by ~~2.0% and 3.1%~~0.1% for the three ~~and nine~~ months ended ~~September 30, 2016, respectively,~~March 31, 2017 compared to the ~~same~~comparable prior year ~~periods.~~period.

Total Revenues

For the reasons stated above, our consolidated revenues increased ~~$196.3~~$188.2 million, or ~~26.3%~~25.1%, to ~~$942.8 million and $321.7 million, or 14.3%, to $2,577.3~~$938.9 million for the three ~~and nine~~ months ended ~~September 30, 2016, respectively,~~March 31, 2017 from ~~$746.5 million and $2,255.5~~$750.7 million for the three ~~and nine~~ months ended ~~September 30, 2015, respectively.~~March 31, 2016. The net impact of acquisitions/divestitures contributed ~~26.8% and 15.8%~~23.4% to the reported consolidated revenue growth ~~rates~~rate for the three ~~and nine~~ months ended ~~September 30, 2016, respectively,~~March 31, 2017 compared to the ~~same~~comparable prior year ~~periods,~~period, primarily driven ~~primarily~~ by our acquisition of Recall. Consolidated internal revenue growth was ~~1.4% and 1.3%~~2.0% in the three ~~and nine~~ months ended ~~September 30, 2016, respectively,~~March 31, 2017 compared to the ~~same~~comparable prior year ~~periods.~~period. These increases were partially offset by the impact of foreign currency exchange rate fluctuations, which decreased our reported consolidated revenues by ~~1.9% and 2.8%~~0.3% in the three ~~and nine~~ months ended ~~September 30, 2016, respectively,~~March 31, 2017 compared to the ~~same~~comparable prior year ~~periods.~~period, primarily due to the weakening of the British pound sterling and the Euro against the United States dollar, based on an analysis of weighted average rates for the comparable period.

Internal Growth—Eight-Quarter Trend


	2014		2015								2016						2015						2016								2017
	Fourth Quarter		First Quarter		Second Quarter		Third Quarter		Fourth Quarter		First Quarter		Second Quarter		Third Quarter		Second Quarter		Third Quarter		Fourth Quarter		First Quarter		Second Quarter		Third Quarter		Fourth Quarter		First Quarter
Storage Rental Revenue	3.5	%	3.0	%	2.7	%	2.8	%	2.2	%	2.2	%	2.1	%	2.6	%	2.7	%	2.8	%	2.2	%	2.2	%	2.1	%	2.1	%	2.9	%	3.0	%
Service Revenue	2.3	%	(1.0	)%	—	%	(0.9	)%	0.3	%	1.6	%	(2.1	)%	(0.5	)%	—	%	(0.9	)%	0.3	%	1.6	%	(2.1	)%	(1.3	)%	(0.9	)%	0.6	%
Total Revenue	3.0	%	1.4	%	1.6	%	1.3	%	1.4	%	2.0	%	0.4	%	1.4	%	1.6	%	1.3	%	1.4	%	2.0	%	0.4	%	0.8	%	1.4	%	2.0	%

We expect our consolidated internal storage rental revenue growth rate for ~~2016~~2017 to be approximately ~~1.5%~~2.0% to ~~2.0%~~2.5%. During the past eight quarters, our internal storage rental revenue growth rate has ranged between 2.1% and ~~3.5%~~3.0%. Our internal storage rental revenue growth rates have been relatively stable over the past two fiscal years, as internal storage rental revenue growth for full year ~~2014~~2015 and ~~2015~~2016 were ~~2.2%~~2.7% and ~~2.7%~~2.3%, respectively. At various points in the economic cycle, internal storage rental revenue growth may be influenced by changes in pricing and volume. Within our international portfolio, the Western European Business segment is generating consistent low single-digit internal storage rental revenue growth, while the Other International Business segment is producing high single-digit internal storage rental revenue growth by capturing the first-time outsourcing trends for physical records storage and management in those markets. The internal growth rate for service revenue is inherently more volatile than the internal growth rate for storage rental revenues due to the more discretionary nature of certain services we offer, such as large special projects, and, as a commodity, the volatility of pricing for recycled paper. These revenues, which are often event-driven and impacted to a greater extent by economic downturns as customers defer or cancel the purchase of certain services as a way to reduce their short-term costs, may be difficult to replicate in future periods. The internal growth rate for total service revenues over the past eight quarters reflects reduced retrieval/re-file activity and a related decrease in transportation revenues within our North American Records and Information Management Business and Western European Business segments, as well as continued service declines in service revenue activity levels in our North American Data Management Business segment as the storage business becomes more archival in nature.

OPERATING EXPENSES

Cost of Sales

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


	Three Months Ended September 30,							Percentage Change						% of Consolidated Revenues						Percentage Change (Favorable)/ Unfavorable		Three Months Ended March 31,										Percentage Change						% of Consolidated Revenues						Percentage Change (Favorable)/ Unfavorable
																																Percentage Change
					Dollar Change			Percentage Change		Actual			Constant Currency																Dollar Change			Actual			Constant Currency
	2015		2016				2015			Actual		2016				2016						2017						2016				Actual		2017
Labor	$	158,905	$	199,459	Dollar Change		$	40,554			25.5	%	Constant Currency		27.4	%		21.3	%				21.2	%	(0.1	)%	$	169,028	Dollar Change		$	200,160			Constant Currency	$	31,132			18.4	%		18.2	%		22.5	%	21.3	%	(1.2	)%
Facilities	105,024		146,534		41,510			39.5	%		42.0	%		14.1	%		15.5	%			1.4	%	104,194			144,253				40,059			38.4	%		38.2	%		13.9	%		15.4	%		1.5	%
Transportation	24,958		38,337		13,379			53.6	%		55.9	%		3.3	%		4.1	%		0.8	%	25,249			35,221				9,972			39.5	%		39.9	%		3.4	%		3.8	%		0.4	%
Product Cost of Sales and Other	28,776		41,021		12,245			42.6	%		45.2	%		3.9	%		4.4	%		0.5	%	27,634			39,186				11,552			41.8	%		41.4	%		3.7	%		4.2	%		0.5	%
Recall Costs	—		4,457		4,457			100.0	%		100.0	%		—	%		0.5	%		0.5	%	—			7,887				7,887			100.0	%		100.0	%		—	%		0.8	%		0.8	%
	$	317,663	$	429,808	$	112,145		35.3	%		37.5	%		42.6	%		45.6	%		3.0	%	$	326,105		$	426,707			$	100,602		30.8	%		30.6	%		43.4	%		45.4	%		2.0	%

Nine Months Ended
September 30, Percentage Change
% of
Consolidated
Revenues

Percentage
Change
(Favorable)/
Unfavorable

Dollar
Change
Actual
Constant
Currency

2015 2016 2015 2016
Labor $ 484,389
$ 561,056
$ 76,667
15.8 % 19.5 % 21.5 % 21.8 % 0.3 %
Facilities 319,833
383,648
63,815
20.0 % 23.4 % 14.2 % 14.9 % 0.7 %
Transportation 75,310
96,812
21,502
28.6 % 31.8 % 3.3 % 3.8 % 0.5 %
Product Cost of Sales and Other 86,068
105,258
19,190
22.3 % 26.2 % 3.8 % 4.1 % 0.3 %
Recall Costs —
4,788
4,788
100.0 % 100.0 % — % 0.2 % 0.2 %
$ 965,600
$ 1,151,562
$ 185,962
19.3 % 22.8 % 42.8 % 44.7 % 1.9 %

Labor

Labor expenses decreased to ~~21.2%~~21.3% of consolidated revenues in the three months ended ~~September 30, 2016~~March 31, 2017 compared to ~~21.3%~~22.5% in the three months ended ~~September 30, 2015.~~March 31, 2016. The decrease in labor expenses as a percentage of consolidated ~~revenue~~revenues was driven by a ~~121~~185 basis point decrease in labor expenses associated with our North American Records and Information Management Business segment as a percentage of consolidated ~~revenue (11.42%~~revenues (11.61% in the three months ended ~~September 30, 2016~~March 31, 2017 compared to ~~12.63%~~13.46% in the comparable prior year period), primarily associated with wages and benefits growing at a lower rate than revenue, partially attributable to synergies associated with our acquisition of Recall. This decrease was partially offset by a 9791 basis point increase in labor expenses associated with our Other International Business segment as a percentage of consolidated ~~revenue (4.90%~~revenues (4.79% in the three months ended ~~September 30, 2016~~March 31, 2017 compared to ~~3.93%~~3.88% in the comparable prior year period), primarily associated with increased wages and benefits.

Labor expenses increased to 21.8% of consolidated revenues in the nine months ended September 30, 2016 compared to 21.5% in the nine months ended September 30, 2015. The increase in labor expenses as a percentage of consolidated revenue was driven by a 44 basis point increase in labor expenses associated with our Other International Business segment as a percentage of consolidated revenue (4.53% in the nine months ended September 30, 2016 compared to 4.09% in the comparable prior year period), primarily associated with increased wages, a 23 basis point increase in labor expenses associated with our Corporate and Other Business segment as a percentage of consolidated revenue (0.37% in the nine months ended September 30, 2016 compared to 0.14% in the comparable prior year period), primarily associated with the impact of recent acquisitions, as well as a 22 basis point increase in labor expenses associated with our Western European Business segment as a percentage of consolidated revenue (2.88% in the nine months ended September 30, 2016 compared to 2.66% in the comparable prior year period), primarily associated with increased wages and benefits. These increases were partially offset by a 48 basis point decrease in labor expenses associated with our North American Records and Information Management Business segment as a percentage of consolidated revenue (12.14% in the nine months ended September 30, 2016 compared to 12.62% in the comparable prior year period), primarily associated with wages and benefits growing at a lower rate than revenue. Labor expenses for the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 increased by ~~$91.4~~$30.8 million, or ~~19.5%~~18.2%, on a constant dollar basis compared to the ~~same~~comparable prior year period, primarily driven by our acquisition of Recall. ~~Labor expenses were favorably impacted by 3.7 percentage points due to currency rate changes during the nine months ended September 30, 2016 compared to the same prior year period.~~

Facilities

Facilities expenses increased to ~~14.9%~~15.4% of consolidated revenues in the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 compared to ~~14.2%~~13.9% in the ~~nine~~three months ended ~~September 30, 2015.~~March 31, 2016. The 150 basis point increase in facilities expenses as a percentage of consolidated revenues was primarily driven by ~~a 94 basis point~~an increase in rent expense as a ~~percentage~~result of consolidated revenues (7.81% in the nine months ended September 30, 2016 compared to 6.87% in the comparable prior year period), partially offset by a 23 basis point decrease in other facilities costs as a percentage of consolidated revenues (7.08% in the nine months ended September 30, 2016 compared to 7.31% in the comparable prior year period). The increase in rent expense was primarily driven by the acquisition of Recall, as Recall's real estate portfolio contains a more significant proportion of leased facilities than our real estate portfolio as it existed prior to the closing of the Recall ~~Transaction. We expect this trend~~Transaction, as well as an increase in ~~rent expense to continue through the first quarter of 2017.~~other facilities costs. The ~~decrease~~increase in other facilities costs was primarily driven by ~~lower utilities and building maintenance costs associated with our North American Records and Information Management Business segment, as well as lower~~increased property taxes, primarily associated with our Western European Business segment. Facilities expenses for the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 increased by ~~$72.8~~$39.9 million, or ~~23.4%~~38.2%, on a constant dollar basis compared to the ~~same~~comparable prior year period, primarily driven by our acquisition of Recall. ~~Facilities expenses were favorably impacted by 3.4 percentage points due to currency rate changes during the nine months ended September 30, 2016 compared to the same prior year period.~~

Transportation

Transportation expenses increased to 3.8% of consolidated revenues in the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 compared to ~~3.3%~~3.4% in the ~~nine~~three months ended ~~September 30, 2015.~~March 31, 2016. The increase in transportation expenses as a percentage of consolidated revenues was driven by ~~a 31 basis point~~an increase in third party carrier costs ~~(1.15% in the nine months ended September 30, 2016 compared to 0.84% in the comparable prior year period),~~as a percentage of consolidated revenue, primarily associated with our Other International Business segment, as well as a 14 basis point increase in vehicle lease and insurance costs (0.45% in the nine months ended September 30, 2016 compared to 0.31% in the comparable prior year period), primarily associated with our Western European Business segment. Transportation expenses for the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 increased by ~~$23.3~~$10.0 million, or ~~31.8%~~39.9%, on a constant dollar basis compared to the ~~same~~comparable prior year period, primarily driven by our acquisition of Recall. ~~Transportation expenses were favorably impacted by 3.2 percentage points due to currency rate changes during the nine months ended September 30, 2016 compared to the same prior year period.~~

Product Cost of Sales and Other

Product cost of sales and other, which includes cartons, media and other service, storage and supply costs and is highly correlated to service revenue streams, particularly project revenues, increased to ~~4.1%~~4.2% of consolidated revenues for the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 compared to ~~3.8%~~3.7% in the ~~nine~~three months ended ~~September 30, 2015.~~March 31, 2016. The increase in product cost of sales and other was driven by a 37 basis point increase in product cost of sales and other associated with our Other International Business segment (1.17% for the nine months ended September 30, 2016 compared to 0.80% in the comparable prior year period) driven byspecial project costs. Product cost of sales and other increased by ~~$21.9~~$11.5 million, or ~~26.2%~~41.4%, on a constant dollar basis compared to the ~~same~~comparable prior year period, primarily driven by our acquisition of Recall. ~~Product cost of sales and other were favorably impacted by 3.9 percentage points due to currency rate changes during the nine months ended September 30, 2016.~~

Recall Costs

Recall Costs included in cost of sales were ~~$4.8~~$7.9 million in the ~~nine~~three months ended ~~September 30, 2016,~~March 31, 2017, and primarily consisted of employee severance costs and facility integration costs.

Selling, General and Administrative Expenses

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


	Three Months Ended September 30,								Percentage Change						% of Consolidated Revenues						Percentage Change (Favorable)/ Unfavorable		Three Months Ended March 31,											Percentage Change						% of Consolidated Revenues						Percentage Change (Favorable)/ Unfavorable
																																		Percentage Change
					Dollar Change				Percentage Change		Actual			Constant Currency																Dollar Change				Actual			Constant Currency
	2015		2016					2015			Actual		2016				2016						2017						2016					Actual		2017
General and Administrative	$	116,295	$	128,250	Dollar Change			$	11,955			10.3	%	Constant Currency		12.4	%		15.6	%				13.6	%	(2.0	)%	$	111,988	Dollar Change			$	134,800			Constant Currency	$	22,812			20.4	%		21.2	%		14.9	%	14.4	%	(0.5	)%
Sales, Marketing & Account Management	54,079		60,572		6,493				12.0	%		14.3	%		7.2	%		6.4	%			(0.8	)%	53,222			63,306				10,084				18.9	%		19.7	%		7.1	%		6.7	%		(0.4	)%
Information Technology	25,433		31,863		6,430				25.3	%		27.6	%		3.4	%		3.4	%		—	%	24,091			31,793				7,702				32.0	%		33.1	%		3.2	%		3.4	%		0.2	%
Bad Debt Expense	5,224		2,583		(2,641		)		(50.6	)%		(51.2	)%		0.7	%		0.3	%		(0.4	)%	138			(2,417		)		(2,555		)		(1,851.4	)%		(1,563.9	)%		—	%		(0.3	)%		(0.3	)%
Recall Costs	14,662		29,676		15,014				102.4	%		102.4	%		2.0	%		3.1	%		1.1	%	18,327			12,684				(5,643		)		(30.8	)%		(30.8	)%		2.4	%		1.4	%		(1.0	)%
	$	215,693	$	252,944	$	37,251			17.3	%		19.3	%		28.9	%		26.8	%		(2.1	)%	$	207,766		$	240,166			$	32,400			15.6	%		16.3	%		27.7	%		25.6	%		(2.1	)%

Nine Months Ended
September 30, Percentage Change
% of
Consolidated
Revenues

Percentage
Change
(Favorable)/
Unfavorable

Dollar
Change
Actual
Constant
Currency

2015 2016 2015 2016
General and Administrative $ 355,569
$ 371,654
$ 16,085
4.5 % 7.2 % 15.8 % 14.4 % (1.4 )%
Sales, Marketing & Account Management 160,959
175,332
14,373
8.9 % 11.4 % 7.1 % 6.8 % (0.3 )%
Information Technology 75,493
86,968
11,475
15.2 % 18.0 % 3.3 % 3.4 % 0.1 %
Bad Debt Expense 15,647
5,749
(9,898 ) (63.3 )% (63.0 )% 0.7 % 0.2 % (0.5 )%
Recall Costs 20,324
98,084
77,760
382.6 % 382.6 % 0.9 % 3.8 % 2.9 %
$ 627,992
$ 737,787
$ 109,795
17.5 % 20.3 % 27.8 % 28.6 % 0.8 %

General and Administrative

General and administrative expenses decreased to 14.4% of consolidated revenues ~~during~~in the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 compared to ~~15.8%~~14.9% in the ~~nine~~three months ended ~~September 30, 2015.~~March 31, 2016. The decrease in general and administrative expenses as a percentage of consolidated revenues was driven mainly by a 52 basis point decrease in professional fees (1.30% in the nine months ended September 30, 2016 compared to 1.82% in the comparable prior year period), primarily associated with our North American Records and Information Management Business, Western European Business and Corporate and Other Business segments and a 36 basis point decrease in compensation expense, ~~(9.62% in the nine months ended September 30, 2016 compared to 9.98% in the comparable prior year period),~~ primarily associated with wages and benefits growing at a lower rate than revenue, ~~as well as a 26 basis point decrease in employee related expenses (1.12% in~~partially attributable to the ~~nine months ended September 30, 2016 compared to 1.38% in the comparable prior year period), primarily due to decreased travel~~Transformation Initiative and ~~entertainment expenses~~synergies associated with our ~~North American Records and Information Management Business segment.~~acquisition of Recall, partially offset by an increase in professional fees. General and administrative expenses for the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 increased by ~~$25.1~~$23.5 million, or ~~7.2%~~21.2%, on a constant dollar basis compared to the ~~same~~comparable prior year period, primarily driven by our acquisition of Recall. ~~General and administrative expenses were favorably impacted by 2.7 percentage points due to currency rate changes during the nine months ended September 30, 2016.~~

Sales, Marketing & Account Management

Sales, marketing and account management expenses decreased to ~~6.8%~~6.7% of consolidated revenues ~~during~~in the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 compared to 7.1% in the ~~nine~~three months ended ~~September 30, 2015.~~March 31, 2016. The decrease in sales, marketing and account management expenses as a percentage of consolidated revenues was driven by a ~~36 basis point~~ decrease in sales, marketing and account management expenses in our North American Records and Information Management Business segment (3.21% in the nine months ended September 30, 2016 compared to 3.57% in the comparable prior year period),compensation expense, primarily associated with ~~compensation~~wages and benefits growing at a lower rate than revenue, partially attributable to the Transformation Initiative and ~~lower professional fees.~~synergies associated with our acquisition of Recall. Sales, marketing and account management expenses for the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 increased by ~~$17.9~~$10.4 million, or ~~11.4%~~19.7%, on a constant dollar basis compared to the ~~same~~comparable prior year period, primarily driven by our acquisition of Recall. ~~Sales, marketing and account management expenses were favorably impacted by 2.5 percentage points due to currency rate changes during the nine months ended September 30, 2016.~~

Information Technology

Information technology expenses increased to 3.4% of consolidated revenues ~~during~~in the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 compared to ~~3.3%~~3.2% in the ~~nine~~three months ended ~~September 30, 2015.~~March 31, 2016. The increase in information technology expenses as a percentage of consolidated revenues was driven by ~~a 16 basis point~~an increase in ~~information technology expenses associated with~~maintenance and software license fees, primarily in our Corporate and Other Business segment as a percentage of consolidated revenues (2.16% in the nine months ended September 30, 2016 compared to 2.00% in the comparable prior year period), primarily associated with increased software maintenance and license fees.segment. Information technology expenses for the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 increased by ~~$13.3~~$7.9 million, or ~~18.0%~~33.1%, on a constant dollar basis compared to the ~~same~~comparable prior year period, primarily driven by our acquisition of Recall. ~~Information technology expenses were favorably impacted by 2.8 percentage points due to currency rate changes during the nine months ended September 30, 2016.~~

Bad Debt Expense

Consolidated bad debt expense for the nine months ended September 30, 2016 decreased to 0.2% of consolidated revenues during the nine months ended September 30, 2016 compared to 0.7% in the nine months ended September 30, 2015. Bad debt expenses for the nine months ended September 30, 2016 decreased by $9.8 million, or 63.0%, on a constant dollar basis compared to the same prior year period. This decrease in bad debt expense was primarily driven by lower bad debt expense associated with our North American Records and Information Management Business segment. We maintain an allowance for doubtful accounts that is calculated based on our past loss experience, current and prior trends in our aged receivables, current economic conditions, and specific circumstances of individual receivable balances. We continue to monitor our customers' payment activity and make adjustments based on their financial condition and in light of historical and expected trends. Bad debt expenses for the three months ended March 31, 2017 decreased by $2.6 million on a constant dollar basis compared to the comparable prior year period, primarily driven by lower bad debt expense associated with our North American Records and Information Management Business segment.

Recall Costs

Recall Costs included in selling, general and administrative expenses were ~~$98.1~~$12.7 million in the ~~nine~~three months ended ~~September 30, 2016,~~March 31, 2017, and primarily consisted of advisory and professional fees, as well as severance ~~and REIT conversion~~ costs. Recall Costs included in selling, general and administrative expenses were ~~$20.3~~$18.3 million in the ~~nine~~three months ended ~~September 30, 2015,~~March 31, 2016, and primarily consisted of advisory and professional fees.

Depreciation ~~Amortization,~~ and ~~(Gain) Loss on Disposal/Write-down of Property, Plant and Equipment (Excluding Real Estate), Net~~Amortization

Depreciation expense increased ~~$40.8~~$24.2 million, or ~~18.0%~~32.1%, on a reported dollar basis ($~~45.5~~24.2 million, or ~~20.5%~~32.2%, on a constant dollar basis) for the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 compared to the ~~nine~~three months ended ~~September 30, 2015,~~March 31, 2016, primarily due to the increased depreciation of property, plant and equipment acquired in the Recall Transaction. In particular, the increase in depreciation expense was driven by (i) the depreciation of leasehold improvements acquired in the Recall Transaction, which are depreciated using the straight-line method over a period of the useful life of the leasehold improvements, 10 years or the life of the lease (whichever is shorter) and (ii) the depreciation of racking structures included in leased facilities acquired in the Recall Transaction, which are depreciated using the straight-line method over a period of the useful life of the racking structures, 20 years or the life of the lease (whichever is shorter). See Note 2.f. to Notes to Consolidated Financial Statements in our Annual Report for additional information regarding the useful lives over which our property, plant and equipment is depreciated.

Amortization expense increased ~~$26.1~~$13.3 million, or ~~78.0%~~112.7%, on a reported dollar basis ($~~27.4~~13.4 million, or ~~84.9%~~113.7%, on a constant dollar basis) for the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 compared to the ~~nine~~three months ended ~~September 30, 2015,~~March 31, 2016, primarily due to the increased amortization of customer relationship intangible assets acquired in the Recall Transaction, which are amortized over a weighted average useful life of 1413 years.

Consolidated gain on disposal/write-down of property, plant and equipment (excluding real estate), net was $1.1 million for the nine months ended September 30, 2016 and consisted primarily of gains associated with the retirement of leased vehicles accounted for as capital lease assets within our North American Records and Information Management Business segment. Consolidated loss on disposal/write-down of property, plant and equipment (excluding real estate), net was $0.7 million for the nine months ended September 30, 2015 and consisted primarily of the write-off of certain property associated with our North American Records and Information Management Business segment.

~~OPERATING INCOME AND ADJUSTED OIBDA (in thousands)~~

~~The following table reflects the effect of the foregoing factors on our consolidated operating income and Adjusted OIBDA:~~

Three Months Ended
September 30,
Dollar
Change
Percentage Change
2015 2016
Operating Income $ 126,822
$ 135,454
$ 8,632
6.8 %
Operating Income as a Percentage of Consolidated Revenue 17.0 % 14.4 %
Adjusted OIBDA 227,835
294,203
66,368
29.1 %
Adjusted OIBDA Margin 30.5 % 31.2 %

Nine Months Ended
September 30,
Dollar
Change
Percentage Change
2015 2016
Operating Income $ 401,258
$ 362,146
$ (39,112 ) (9.7 )%
Operating Income as a Percentage of Consolidated Revenue 17.8 % 14.1 %
Adjusted OIBDA 682,281
790,783
108,502
15.9 %
Adjusted OIBDA Margin 30.2 % 30.7 %

OTHER EXPENSES, NET

Interest Expense, Net

Consolidated interest expense, net increased ~~$18.2~~$19.0 million to ~~$83.3~~$86.1 million ~~(8.8% of consolidated revenues) and $29.1 million to $225.2 million (8.7% of consolidated revenues)~~ for the three ~~and nine~~ months ended ~~September 30, 2016, respectively,~~March 31, 2017 from ~~$65.1~~$67.1 million ~~(8.7% of consolidated revenues) and $196.1 million (8.7% of consolidated revenues)~~ for the three ~~and nine~~ months ended ~~September 30, 2015, respectively,~~March 31, 2016 primarily due to (i) the issuance of $1,000.0 million in aggregate principal amount of 6% Senior Notes due 2020 (the "6% Notes due 2020") by Iron Mountain Incorporated ("IMI") in September 2015, (ii) $850.0 million of borrowings under the Bridge Facility (as defined below) during the second quarter of 2016, (iii) the issuance of $500.0 million in aggregate principal amount of 4³/₈% Senior Notes due 2021 (the "4³/₈% Notes") by ~~IMI~~Iron Mountain Incorporated ("IMI") in May 2016, ~~(iv)~~(ii) the issuance of $250.0 million in aggregate principal amount of 5³/₈% Senior Notes due 2026 (the "5³/₈% Notes") by Iron Mountain US Holdings, Inc. ("IM US Holdings") in May 2016, (iii) the issuance of 250.0 million Canadian dollars in aggregate principal amount of 5³/₈% CAD Senior Notes due 2023 (the "CAD Notes due 2023") by Iron Mountain Canada Operations, ULC ("Canada Company") in September 2016, (iv) $185.8 million of borrowings from the Australian Dollar Term Loan during the third quarter of 2016 and (v) higher borrowings (on a weighted average basis) under the Revolving Credit ~~Agreement~~Facility (as defined below) during the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 compared to the ~~nine~~three months ended ~~September 30, 2015. This increase was partially offset by the redemption in October 2015 of (i) 255.0 million Euro aggregate principal outstanding of the 6~~³/₄~~% Euro Senior Subordinated Notes due 2018, (ii) $400.0 million aggregate principal outstanding of the 7~~³/₄~~% Senior Subordinated Notes due 2019 and (iii) the remaining $106.0 million aggregate principal outstanding of the 8~~³/₈~~% Senior Subordinated Notes due 2021.~~March 31, 2016. Our weighted average interest rate was ~~5.1%~~5.3% and ~~5.8%~~5.2% at ~~September 30,~~March 31, 2017 and 2016, ~~and 2015,~~ respectively.

Other (Income) Expense, ~~(Income),~~ Net (in thousands)

Three Months Ended
September 30,
Dollar
Change
Nine Months Ended
September 30,
Dollar
Change
2015 2016 2015 2016
Foreign currency transaction losses (gains), net $ 32,539
$ 10,685
$ (21,854 ) $ 56,461
$ 15,336
$ (41,125 )
Debt extinguishment expense 2,156
—
(2,156 ) 2,156
9,283
7,127
Other, net 551
12,617
12,066
982
12,387
11,405
$ 35,246
$ 23,302
$ (11,944 ) $ 59,599
$ 37,006
$ (22,593 )



	Three Months Ended March 31,						Dollar Change
	2016			2017			Dollar Change
Foreign currency transaction (gains) losses, net	$	(12,542	)	$	(4,164	)	$	8,378
Other, net	605			(2,200		)	(2,805		)
	$	(11,937	)	$	(6,364	)	$	5,573

Foreign Currency Transaction (Gains) Losses

We recorded net foreign currency transaction ~~losses~~gains of ~~$15.3~~$4.2 million in the ~~nine~~three months ended ~~September 30, 2016,~~March 31, 2017, based on period-end exchange rates. These ~~losses~~gains resulted primarily from ~~changes in~~ the ~~exchange rate~~impact of each of the Argentine peso and British pound sterling against the United States dollar compared to December 31, 2015, as these currencies relate to our intercompany balances with and between our Latin American and European subsidiaries, as well as Euro denominated borrowings by IMI under our Revolving Credit Facility (as defined below). These losses were partially offset by gains primarily from changes in the exchange rate of each of the Brazilian real, Mexican peso and Russian ruble against the United States dollar compared to December 31, 2016 on our intercompany balances with and between certain of our subsidiaries. These gains were partially offset by losses resulting primarily from the impact of changes in the exchange rate of each of the British pound sterling and Euro against the United States dollar compared to December 31, 2016 on our intercompany balances with and between certain of our subsidiaries.

We recorded net foreign currency transaction gains of $12.5 million in the three months ended March 31, 2016, based on period-end exchange rates. These gains resulted primarily from the impact of changes in the exchange rate of each of the Brazilian real, British pound sterling, Euro, and Russian ruble against the United States dollar compared to December 31, 2015 ~~as these currencies relate to~~on our intercompany balances with and between certain of our ~~Latin American and European~~ subsidiaries.

~~We recorded net foreign currency transaction~~ These gains were partially offset by losses ~~of $56.5 million in the nine months ended September 30, 2015, based on period-end exchange rates. These losses resulted~~resulting primarily from the impact of changes in the exchange rate of each of the Argentine peso ~~Brazilian real, Euro, Russian ruble~~ and Ukrainian hryvnia against the United States dollar compared to December 31, ~~2014, as these currencies relate to~~2015 on our intercompany balances with and between certain of our ~~Latin American and European~~ subsidiaries, as well as ~~Euro forward contracts. These losses were partially offset by gains primarily from changes~~a change in the exchange rate of the ~~British pound sterling as it relates~~Euro against the United States dollar compared to ~~our intercompany balances with and between our European subsidiaries, and~~December 31, 2015 on Euro denominated ~~bonds issued~~borrowings by ~~IMI.~~

~~We recorded a charge of approximately $2.2 million in the third quarter of 2015 related to the refinancing of the~~IMI under our Revolving Credit Agreement (as defined below), representing the write-off of unamortized deferred financing costs. We recorded a charge of approximately $9.3 million in the second quarter of 2016 related to the termination of the Bridge Facility (as defined below), which primarily consists of the write-off of unamortized deferred financing costs.Facility.

Other, net for the three and nine months ended September 30, 2016 includes a charge of $14.0 million associated with the anticipated loss on disposal of the Australia Divestment Business (as defined in Note 4 to Notes to Consolidated Financial Statements included in this Quarterly Report). As disclosed in Note 10 to Notes to Consolidated Financial Statements, we have determined that the Australia Divestment Business met the criteria to be reported as held for sale beginning in the second quarter of 2016. Accordingly, the Australia Divestment Business is reflected in our Consolidated Balance Sheet at the lower of its carrying value or its fair value (less costs to sell). This charge represents the excess of the carrying value of the Australia Divestment Business compared to its fair value (less costs to sell) as of September 30, 2016, based upon the sale price of the business described more fully in Note 13 to Notes to Consolidated Financial Statements. Other, net in the nine months ended September 30, 2015 consisted primarily of $0.6 million related to the write-down of certain investments.

Provision for Income Taxes

Our effective tax ~~rates~~rate for the three ~~and nine~~ months ended ~~September 30, 2015 were 14.3%~~March 31, 2016 and ~~18.6%, respectively. Our effective tax rates for the three~~2017 was 15.9% and ~~nine months ended September 30, 2016 were 81.2% and 46.2%~~13.5%, respectively. The primary reconciling items between the federal statutory tax rate of 35.0% and our overall effective tax ~~rates~~rate in the three ~~and nine~~ months ended ~~September 30, 2015~~March 31, 2016 were the benefit derived from the dividends paid deduction and differences in the rates of tax at which our foreign earnings are subject, including foreign exchange gains and losses in different jurisdictions with different tax rates, and state income taxes (net of federal tax benefit). In the third quarter of 2015, we recorded a tax benefit of $4.1 million related to the expiration of certain statutes of limitations and an out-of-period tax adjustment ($9.0 million tax benefit) to correct the valuation of certain deferred tax assets associated with the REIT conversion that occurred in 2014.rates. The primary reconciling items between the federal statutory tax rate of 35.0% and our overall effective tax ~~rates~~rate in the three ~~and nine~~ months ended ~~September 30, 2016~~March 31, 2017 were the benefit derived from the dividends paid deduction, a release of valuation allowances on certain of our foreign net operating losses of $7.5 million as a result of the merger of certain of our foreign subsidiaries and differences in the rates of tax at which our foreign earnings are subject, including foreign exchange gains and losses in different jurisdictions with different tax ~~rates, and~~rates. These benefits were partially offset by the impact of a legislative change enacted in the ~~$14.0~~first quarter of 2017 in the United Kingdom which eliminated the deductibility of certain interest expense and increased our tax provision for the first quarter of 2017 by $1.8 million, ~~charge (described~~or 2.5%. We are seeking an exemption from Her Majesty's Revenue and Customs but have not as yet received clarification on our request and, therefore, we have reflected the incremental tax associated with this legislative change into our annual effective tax rate.

As a result of the 2016 Indefinite Reinvestment Assessment (as defined in Note ~~2.i.~~2.e. to Notes to Consolidated Financial ~~Statements) recorded during~~Statements included in this Quarterly Report), we concluded that it is our intent to indefinitely reinvest our current and future undistributed earnings of our unconverted foreign TRSs outside the ~~third quarter~~United States. Accordingly, we no longer provide incremental foreign withholding taxes on the retained book earnings of ~~2016~~these unconverted foreign TRSs. As a REIT, future repatriation of incremental undistributed earnings of our foreign subsidiaries will not be subject to federal or state income tax, with the exception of foreign withholding taxes in limited instances; however, such future repatriations will require distribution in accordance with REIT distribution rules, and any such distribution may then be taxable, as appropriate, at the stockholder level. We continue, however, to provide for incremental foreign withholding taxes on net book over outside basis differences related to the ~~anticipated loss on disposal~~earnings of ~~the Australia Divestment Business, which had no associated tax benefit.~~our foreign QRSs and certain of our converted TRSs.

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

~~Gain on Sale of Real Estate, Net of Tax~~

Consolidated gain on sale of real estate for the nine months ended September 30, 2016 was $0.3 million, net of tax of $0.1 million, associated with the sale of land in North America. Consolidated gain on sale of real estate was $0.9 million, net of tax of $0.2 million, for the nine months ended September 30, 2015, which was associated with the sale of a building in the United Kingdom.

INCOME ~~(LOSS)~~ FROM CONTINUING OPERATIONS AND ADJUSTED EBITDA (in thousands)

The following table reflects the effect of the foregoing factors on our consolidated income ~~(loss)~~ from continuing ~~operations:~~operations and Adjusted EBITDA:

Three Months Ended
September 30,
Dollar
Change
Percentage Change
2015 2016
Income (Loss) from Continuing Operations $ 23,517
$ 5,759
$ (17,758 ) (75.5 )%
Income (Loss) from Continuing Operations as a Percentage of Consolidated Revenue 3.2 % 0.6 %



	Three Months Ended March 31,						Dollar Change			Percentage Change
	2016			2017			Dollar Change			Percentage Change
Income from Continuing Operations	$	63,041		$	58,844		$	(4,197	)	(6.7	)%
Income from Continuing Operations as a percentage of Consolidated Revenue	8.4		%	6.3		%
Adjusted EBITDA	235,146			292,574			57,428			24.4	%
Adjusted EBITDA Margin	31.3		%	31.2		%

Nine Months Ended
September 30,
Dollar
Change
Percentage Change
2015 2016
Income from Continuing Operations $ 119,263
$ 54,080
$ (65,183 ) (54.7 )%
Income from Continuing Operations as a Percentage of Consolidated Revenue 5.3 % 2.1 %

~~INCOME~~LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX

~~Income~~Loss from discontinued operations, net of tax was ~~$3.6~~$0.3 million for the ~~nine~~three months ended ~~September 30, 2016,~~March 31, 2017, primarily related to the operations of the Recall ~~Divestments (as defined in Note 10 to Notes to Consolidated Financial Statements included in this Quarterly Report).~~

Divestments.

NONCONTROLLING INTERESTS

For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2016 and 2017, net income attributable to noncontrolling interests resulted in a decrease in net income attributable to IMI of ~~$0.7~~$0.3 million and ~~$1.8 million, respectively. For the three and nine months ended September 30, 2015, net income attributable to noncontrolling interests resulted in a decrease in net income attributable to IMI of~~ $0.4 ~~million and $1.7~~ million, respectively. These amounts represent our noncontrolling partners' share of earnings/losses in our majority-owned international subsidiaries that are consolidated in our operating results.

Segment Analysis (in thousands)

See Note 7 to Notes to Consolidated Financial Statements included in this Quarterly Report for a description of our reportable operating segments.

North American Records and Information Management Business


	Three Months Ended September 30,									Percentage Change								Three Months Ended March 31,											Percentage Change
	Three Months Ended September 30,						Dollar Change			Actual			Constant Currency			Internal Growth		Three Months Ended March 31,								Dollar Change			Actual		Constant Currency		Internal Growth
	2015			2016					2016				Constant Currency		2017											Dollar Change			Actual		Constant Currency		Internal Growth
Storage Rental	$	269,239		$	298,049		Dollar Change		$	Actual		28,810			10.7	Internal Growth		%		10.7	%		1.1	%	$	267,223		$	298,183		$	30,960		11.6	%	11.2	%	1.9	%
Service	171,998			201,928			29,930			17.4	%		17.4	%		(0.8	)%	177,458				209,414				31,956			18.0	%	17.5	%	1.1	%
Segment Revenue	$	441,237		$	499,977		$	58,740		13.3	%		13.3	%		0.4	%	$	444,681			$	507,597			$	62,916		14.1	%	13.7	%	1.6	%
Segment Adjusted OIBDA(1)	$	175,331		$	199,559		$	24,228
Segment Adjusted OIBDA(1) as a Percentage of Segment Revenue	39.7		%	39.9		%
Segment Adjusted EBITDA(1)																		$	176,557			$	209,530			$	32,973
Segment Adjusted EBITDA(1) as a percentage of Segment Revenue																		39.7		%		41.3		%

Nine Months Ended
September 30, Percentage Change

Dollar
Change
Actual
Constant
Currency

Internal
Growth
2015 2016
Storage Rental $ 809,039
$ 853,183
$ 44,144
5.5 % 5.9 % 0.7 %
Service 523,772
572,945
49,173
9.4 % 10.1 % 0.9 %
Segment Revenue $ 1,332,811
$ 1,426,128
$ 93,317
7.0 % 7.6 % 0.8 %
Segment Adjusted OIBDA(1) $ 533,598
$ 565,254
$ 31,656

Segment Adjusted OIBDA(1) as a Percentage of Segment Revenue 40.0 % 39.6 %


(1)	See Note 7 to Notes to ~~the~~ Consolidated Financial Statements included in this Quarterly Report for the definition of Adjusted ~~OIBDA~~EBITDA and a reconciliation of Adjusted ~~OIBDA~~EBITDA to income (loss) from continuing ~~operations before provision (benefit) for income taxes and gain on sale of real estate.~~operations.

For the three ~~and nine~~ months ended ~~September 30, 2016,~~March 31, 2017, reported revenue in our North American Records and Information Management Business segment increased ~~13.3% and 7.0%, respectively,~~14.1% compared to the three ~~and nine~~ months ended ~~September 30, 2015. In the three and nine months ended September 30,~~March 31, 2016 due to the net impact of acquisitions/divestitures, ~~and~~ internal revenue growth ~~were partially offset by unfavorable~~and favorable fluctuations in foreign currency exchange rates compared to the three ~~and nine~~ months ended ~~September 30, 2015.~~March 31, 2016. The net impact of acquisitions/divestitures contributed ~~12.9% and 6.8%~~12.1% to the reported revenue growth ~~rates~~rate in our North American Records and Information Management Business segment for the three ~~and nine~~ months ended ~~September 30, 2016, respectively,~~March 31, 2017 compared to the ~~same~~comparable prior year ~~periods,~~period, primarily driven by our acquisition of Recall. The internal revenue growth in the ~~nine~~three months ended ~~September 30,~~March 31, 2017 compared to the three months ended March 31, 2016 was primarily the result of internal ~~service~~storage rental revenue growth of ~~0.9% in the nine months ended September 30, 2016 compared to the nine months ended September 30, 2015, which was~~1.9% primarily driven by ~~special project revenue recognized in the first quarter of 2016. The negative~~net price increases and internal service revenue growth of ~~0.8%~~1.1% driven by growth in ~~the three months ended September 30, 2016 was primarily~~secure shredding revenues, in part due to ahigher recycled paper prices, as well as the stabilization in recent periods of the decline in retrieval/re-file activity and the related decrease in special project revenue in the three months ended September 30, 2016 compared to the same prior year period. For the nine months ended September 30, 2016, foreign currency exchange rate fluctuations decreased our reported revenues for the North American Records and Information Management Business segment by 0.6% compared to the same prior year period due to the weakening of the Canadian dollar against the United States dollar.transportation revenues. Adjusted ~~OIBDA~~EBITDA as a percentage of segment revenue increased 20160 basis points during the three months ended ~~September 30, 2016~~March 31, 2017 compared to the three months ended ~~September 30, 2015,~~March 31, 2016, primarily driven by a ~~228 basis point~~ decrease in ~~selling, general~~wages and ~~administrative expenses~~benefits as a percentage of segment revenue ~~(14.67% in the three months ended September 30, 2016 compared to 16.95% in the comparable prior year period),~~ primarily associated with wages and benefits growing at a lower rate than revenue, partially attributable to the Transformation Initiative and ~~lower bad debt expense, partially offset by a 210 basis point increase in cost~~synergies associated with our acquisition of ~~sales~~Recall, as well as a percentage of segment revenue (45.42% in the three months ended September 30, 2016 compared to 43.32% in the comparable prior year period), primarily driven by increased wages and benefits, rent expense and building maintenance costs. Adjusted OIBDA as a percentage of segment revenue decreased 40 basis points during the nine months ended September 30, 2016 compared to the nine months ended September 30, 2015, primarily driven by a 153 basis point increase in cost of sales as a percentage of segment revenue (45.00% in the nine months ended

~~September 30, 2016 compared to 43.47% in the comparable prior year period), primarily associated with increased wages, benefits and medical costs, partially offset by a 114 basis point~~ decrease in selling, general and administrative expenses as a percentage of segment revenue (15.36% in the nine months ended September 30, 2016 compared to 16.50% in the comparable prior year period), primarily associated with a decrease in professional fees, travel and entertainment expenses and bad debt expense.

North American Data Management Business


	Three Months Ended September 30,									Percentage Change								Three Months Ended March 31,											Percentage Change
	Three Months Ended September 30,						Dollar Change			Actual			Constant Currency			Internal Growth		Three Months Ended March 31,								Dollar Change			Actual		Constant Currency		Internal Growth
	2015			2016					2016				Constant Currency		2017											Dollar Change			Actual		Constant Currency		Internal Growth
Storage Rental	$	63,947		$	72,612		Dollar Change		$	Actual		8,665			13.6	Internal Growth		%		13.5	%		2.2	%	$	65,348		$	73,312		$	7,964		12.2	%	11.9	%	2.7	%
Service	33,438			34,865			1,427			4.3	%		4.2	%		(11.3	)%	30,995				33,638				2,643			8.5	%	8.3	%	(6.7	)%
Segment Revenue	$	97,385		$	107,477		$	10,092		10.4	%		10.3	%		(2.4	)%	$	96,343			$	106,950			$	10,607		11.0	%	10.8	%	(0.3	)%
Segment Adjusted OIBDA(1)	$	50,268		$	59,714		$	9,446
Segment Adjusted OIBDA(1) as a Percentage of Segment Revenue	51.6		%	55.6		%
Segment Adjusted EBITDA(1)																		$	53,460			$	55,912			$	2,452
Segment Adjusted EBITDA(1) as a percentage of Segment Revenue																		55.5		%		52.3		%

Nine Months Ended
September 30, Percentage Change

Dollar
Change
Actual
Constant
Currency

Internal
Growth
2015 2016
Storage Rental $ 191,867
$ 207,602
$ 15,735
8.2 % 8.5 % 1.7 %
Service 102,353
99,488
(2,865 ) (2.8 )% (2.5 )% (10.7 )%
Segment Revenue $ 294,220
$ 307,090
$ 12,870
4.4 % 4.7 % (2.6 )%
Segment Adjusted OIBDA(1) $ 152,178
$ 170,255
$ 18,077

Segment Adjusted OIBDA(1) as a Percentage of Segment Revenue 51.7 % 55.4 %


(1)	See Note 7 to Notes to ~~the~~ Consolidated Financial Statements included in this Quarterly Report for the definition of Adjusted ~~OIBDA~~EBITDA and a reconciliation of Adjusted ~~OIBDA~~EBITDA to income (loss) from continuing ~~operations before provision (benefit) for income taxes and gain on sale of real estate.~~operations.

For the three ~~and nine~~ months ended ~~September 30, 2016,~~March 31, 2017, reported revenue in our North American Data Management Business segment increased ~~10.4% and 4.4%, respectively,~~11.0% compared to the three ~~and nine~~ months ended ~~September 30, 2015. In the three and nine months ended September 30,~~March 31, 2016 primarily due to the net impact of acquisitions/~~divestitures was partially offset by negative internal revenue growth and unfavorable fluctuations in foreign currency exchange rates compared to the three and nine months ended September 30, 2015.~~divestitures. The net impact of acquisitions/divestitures contributed ~~12.7% and 7.3%~~11.1% to the reported revenue growth rates in our North American Data Management Business segment for the three ~~and nine~~ months ended ~~September 30, 2016, respectively,~~March 31, 2017 compared to the ~~same~~comparable prior year ~~periods,~~period, primarily driven by our acquisition of Recall. The negative internal revenue growth for the three ~~and nine~~ months ended ~~September 30, 2016~~March 31, 2017 was primarily attributable to negative internal service revenue growth of ~~11.3% and 10.7%~~6.7% for the three ~~and nine~~ months ended ~~September 30, 2016, respectively,~~March 31, 2017 which was due to continued declines in service revenue activity levels as the business becomes more archival in nature, partially offset by internal storage rental revenue growth of ~~2.2% and 1.7%~~2.7% in the three ~~and nine~~ months ended September 30, 2016, respectively. For the nine months ended September 30, 2016, foreign currency exchange rate fluctuations decreased our reported revenues for the North American Data Management Business segment by 0.3% comparedMarch 31, 2017, primarily attributable to ~~the same prior year period due to the weakening of the Canadian dollar against the United States dollar.~~volume increases. Adjusted ~~OIBDA~~EBITDA as a percentage of segment revenue ~~increased 370~~decreased 320 basis points during the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 compared to the ~~nine~~three months ended ~~September 30, 2015,~~March 31, 2016, primarily driven by ~~a 348 basis point decrease~~an increase in ~~overhead expenses as a percentage of segment revenue (17.05% in the nine months ended September 30, 2016 compared to 20.53% in the comparable prior year period), primarily driven by lower~~ selling, general and administrative ~~expenses.~~expenses, partially attributable to investments associated with product management and development.

Western European Business


	Three Months Ended September 30,									Percentage Change								Three Months Ended March 31,											Percentage Change
	Three Months Ended September 30,						Dollar Change			Actual			Constant Currency			Internal Growth		Three Months Ended March 31,								Dollar Change			Actual		Constant Currency		Internal Growth
	2015			2016					2016				Constant Currency		2017											Dollar Change			Actual		Constant Currency		Internal Growth
Storage Rental	$	60,629		$	74,534		Dollar Change		$	Actual		13,905			22.9	Internal Growth		%		36.3	%		0.3	%	$	57,819		$	71,567		$	13,748		23.8	%	37.2	%	1.7	%
Service	38,374			48,251			9,877			25.7	%		38.3	%		(0.4	)%	36,057				48,505				12,448			34.5	%	48.0	%	4.4	%
Segment Revenue	$	99,003		$	122,785		$	23,782		24.0	%		37.1	%		—	%	$	93,876			$	120,072			$	26,196		27.9	%	41.3	%	2.7	%
Segment Adjusted OIBDA(1)	$	30,789		$	37,546		$	6,757
Segment Adjusted OIBDA(1) as a Percentage of Segment Revenue	31.1		%	30.6		%
Segment Adjusted EBITDA(1)																		$	31,946			$	34,142			$	2,196
Segment Adjusted EBITDA(1) as a percentage of Segment Revenue																		34.0		%		28.4		%

Nine Months Ended
September 30, Percentage Change

Dollar
Change
Actual
Constant
Currency

Internal
Growth
2015 2016
Storage Rental $ 179,612
$ 203,926
$ 24,314
13.5 % 20.6 % 0.8 %
Service 116,725
130,933
14,208
12.2 % 18.7 % (4.6 )%
Segment Revenue $ 296,337
$ 334,859
$ 38,522
13.0 % 19.9 % (1.3 )%
Segment Adjusted OIBDA(1) $ 87,146
$ 102,765
$ 15,619

Segment Adjusted OIBDA(1) as a Percentage of Segment Revenue 29.4 % 30.7 %


(1)	See Note 7 to Notes to ~~the~~ Consolidated Financial Statements included in this Quarterly Report for the definition of Adjusted ~~OIBDA~~EBITDA and a reconciliation of Adjusted ~~OIBDA~~EBITDA to income (loss) from continuing ~~operations before provision (benefit) for income taxes and gain on sale of real estate.~~operations.

For the three ~~and nine~~ months ended ~~September 30, 2016,~~March 31, 2017, reported revenue in our Western European Business segment increased ~~24.0% and 13.0%, respectively,~~27.9% compared to the three ~~and nine~~ months ended ~~September 30, 2015.~~March 31, 2016. In the three ~~and nine~~ months ended ~~September 30, 2016,~~March 31, 2017, the net impact of acquisitions/divestitures and internal revenue growth was partially offset by ~~negative internal revenue growth and~~ unfavorable fluctuations in foreign currency exchange rates compared to the three ~~and nine~~ months ended ~~September 30, 2015.~~March 31, 2016. The net impact of acquisitions/divestitures contributed ~~37.1% and 21.2%~~38.6% to the reported revenue growth rates in our Western European Business segment for the three ~~and nine~~ months ended ~~September 30, 2016, respectively,~~March 31, 2017 compared to the ~~same~~comparable prior year ~~periods,~~period, primarily driven by our acquisition of Recall. Internal revenue growth for the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 was ~~negative 1.3%~~2.7%, primarily attributable to ~~negative~~ internal service revenue growth of ~~4.6%~~4.4% for the ~~nine~~three months ended ~~September 30, 2016,~~March 31, 2017, which was due to reduced retrieval/refile activity and a related decrease in transportation revenues, partially offset by 0.8% internal storage rental revenue growth in the nine months ended September 30, 2016.primarily associated with increased special project activity. For the three ~~and nine~~ months ended ~~September 30, 2016,~~March 31, 2017, foreign currency exchange rate fluctuations decreased our reported revenues for the Western European Business segment by ~~13.1% and 6.9%, respectively,~~13.4% compared to the ~~same~~comparable prior year ~~periods~~period due to the weakening of the British pound sterling and Euro against the United States dollar. Adjusted ~~OIBDA~~EBITDA as a percentage of segment revenue decreased 50560 basis points during the three months ended ~~September 30, 2016~~March 31, 2017 compared to the three months ended ~~September 30, 2015,~~March 31, 2016, primarily driven by ~~a 536 basis point~~an increase in cost of sales as a percentage of segment revenue, ~~(46.72% in the three months ended September 30, 2016 compared to 41.36% in the comparable prior year period),~~ primarily ~~driven by~~associated with increased wages and benefits, ~~and~~ rent expense and property taxes, partially offset by a ~~483 basis point~~ decrease in selling, general and administrative expenses as a percentage of segment revenue, ~~(22.71% in the three months ended September 30, 2016 compared to 27.54% in the comparable prior year period),~~ primarily associated with wages and benefits growing at a lower rate than ~~revenue. Adjusted OIBDA as a percentage of segment~~ revenue, ~~increased 130 basis points during the nine months ended September 30, 2016 compared~~partially attributable to the ~~nine months ended September 30, 2015, primarily driven by a 458 basis point decrease in selling, general~~Transformation Initiative and ~~administrative expenses as a percentage of segment revenues (24.18% in the nine months ended September 30, 2016 compared to 28.76% in the comparable prior year period), primarily~~synergies associated with ~~lower professional fees, as well as wages and benefits growing at a lower rate than revenues, partially offset by a 329 basis point increase in cost~~our acquisition of sales as a percentage of segment revenues (45.13% in the nine months ended September 30, 2016 compared to 41.84% in the comparable prior year period), primarily associated with higher wages and rent expense.Recall.

Other International Business


	Three Months Ended September 30,									Percentage Change								Three Months Ended March 31,											Percentage Change
	Three Months Ended September 30,						Dollar Change			Actual			Constant Currency			Internal Growth		Three Months Ended March 31,								Dollar Change			Actual		Constant Currency		Internal Growth
	2015			2016					2016				Constant Currency		2017											Dollar Change			Actual		Constant Currency		Internal Growth
Storage Rental	$	60,201		$	119,881		Dollar Change		$	Actual		59,680			99.1	Internal Growth		%		102.2	%		11.6	%	$	60,416		$	117,615		$	57,199		94.7	%	86.0	%	8.3	%
Service	43,126			77,203			34,077			79.0	%		82.7	%		6.9	%	40,925				71,626				30,701			75.0	%	65.8	%	2.8	%
Segment Revenue	$	103,327		$	197,084		$	93,757		90.7	%		94.1	%		9.7	%	$	101,341			$	189,241			$	87,900		86.7	%	77.8	%	6.1	%
Segment Adjusted OIBDA(1)	$	21,267		$	53,844		$	32,577
Segment Adjusted OIBDA(1) as a Percentage of Segment Revenue	20.6		%	27.3		%
Segment Adjusted EBITDA(1)																		$	21,576			$	55,347			$	33,771
Segment Adjusted EBITDA(1) as a percentage of Segment Revenue																		21.3		%		29.2		%

Nine Months Ended
September 30, Percentage Change

Dollar
Change
Actual
Constant
Currency

Internal
Growth
2015 2016
Storage Rental $ 185,866
$ 278,907
$ 93,041
50.1 % 64.6 % 9.9 %
Service 131,512
185,187
53,675
40.8 % 55.9 % 7.8 %
Segment Revenue $ 317,378
$ 464,094
$ 146,716
46.2 % 61.0 % 9.0 %
Segment Adjusted OIBDA(1) $ 63,143
$ 117,351
$ 54,208

Segment Adjusted OIBDA(1) as a Percentage of Segment Revenue 19.9 % 25.3 %


(1)	See Note 7 to Notes to ~~the~~ Consolidated Financial Statements included in this Quarterly Report for the definition of Adjusted ~~OIBDA~~EBITDA and a reconciliation of Adjusted ~~OIBDA~~EBITDA to income (loss) from continuing ~~operations before provision (benefit) for income taxes and gain on sale of real estate.~~operations.

For the three ~~and nine~~ months ended ~~September 30, 2016,~~March 31, 2017, reported revenue in our Other International Business segment increased ~~90.7% and 46.2%, respectively,~~86.7% compared to the three ~~and nine~~ months ended ~~September 30, 2015. In the three and nine months ended September 30,~~March 31, 2016 due to the net impact of acquisitions/divestitures, ~~and~~ internal revenue growth ~~were partially offset by unfavorable~~and favorable fluctuations in foreign currency exchange rates compared to the three ~~and nine~~ months ended ~~September 30, 2015.~~March 31, 2016. The net impact of acquisitions/divestitures contributed ~~84.4% and 52.0%~~71.7% to the reported revenue growth rates in our Other International Business segment for the three ~~and nine~~ months ended ~~September 30, 2016, respectively,~~March 31, 2017 compared to the ~~same~~comparable prior year ~~periods,~~period, primarily driven by our acquisition of Recall. Internal revenue growth for the three ~~and nine~~ months ended ~~September 30, 2016~~March 31, 2017 was ~~9.7% and 9.0%~~6.1%, ~~respectively,~~ supported by ~~11.6% and 9.9%~~8.3% internal storage rental ~~internal~~ revenue growth ~~for the three and nine months ended September 30, 2016, respectively.~~primarily due to volume increases. Foreign currency fluctuations in the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 resulted in ~~decreased~~increased revenue, as measured in United States dollars, of approximately ~~14.8%~~8.9% as compared to the ~~same~~comparable prior year period, primarily due to the ~~weakening~~strengthening of the Australian dollar and Brazilian real against the United States dollar. Adjusted ~~OIBDA~~EBITDA as a percentage of segment revenue increased ~~540~~790 basis points during the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 compared to the ~~nine~~three months ended ~~September 30, 2015. The increase in Adjusted OIBDA~~March 31, 2016, primarily as ~~a percentage of segment revenue during the nine months ended September 30, 2016 was primarily~~ a result of a ~~415 basis point decrease~~higher margin business in ~~selling, general and administrative expenses~~Australia as a ~~percentage~~result of ~~segment revenues (21.98% in~~ the ~~nine months ended September 30, 2016 compared~~Recall acquisition and to ~~26.13% in the comparable prior year period) and~~ a ~~125 basis point decrease in cost of sales as a percentage of segment revenue (52.73% in the nine months ended September 30, 2016 compared to 53.98% in the comparable prior year period), primarily~~lesser extent, synergies associated with ~~compensation expenses growing at a lower rate than revenue,~~our acquisition of Recall, as well as lower professional fees.

Corporate and Other Business


	Three Months Ended September 30,										Percentage Change								Three Months Ended March 31,												Percentage Change
	Three Months Ended September 30,						Dollar Change				Actual			Constant Currency			Internal Growth		Three Months Ended March 31,								Dollar Change				Actual		Constant Currency		Internal Growth
	2015			2016						2016				Constant Currency		2017											Dollar Change				Actual		Constant Currency		Internal Growth
Storage Rental	$	6,036		$	11,390		Dollar Change			$	Actual		5,354			88.7	Internal Growth		%		88.7	%		12.7	%	$	10,405			$	11,602		$	1,197		11.5	%	11.5	%	9.0	%
Service	(459		)	4,109			4,568				995.2	%		995.2	%		190.5	%	4,044				3,414				(630		)		(15.6	)%	(15.6	)%	(18.3	)%
Segment Revenue	$	5,577		$	15,499		$	9,922			177.9	%		177.9	%		34.1	%	$	14,449			$	15,016			$	567			3.9	%	3.9	%	1.4	%
Segment Adjusted OIBDA(1)	$	(49,820	)	$	(56,460	)	$	(6,640	)
Segment Adjusted OIBDA(1) as a Percentage of Consolidated Revenue	(6.7		)%	(6.0		)%
Segment Adjusted EBITDA(1)																			$	(48,393	)		$	(62,357	)		$	(13,964	)
Segment Adjusted EBITDA(1) as a percentage of Consolidated Revenue																			(6.4		)%		(6.6		)%

Nine Months Ended
September 30, Percentage Change

Dollar
Change
Actual
Constant
Currency

Internal
Growth
2015 2016
Storage Rental $ 13,749
$ 32,741
$ 18,992
138.1 % 138.1 % 34.2 %
Service 1,054
12,348
11,294
1,071.5 % 1,071.5 % 201.7 %
Segment Revenue $ 14,803
$ 45,089
$ 30,286
204.6 % 204.6 % 40.7 %
Segment Adjusted OIBDA(1) $ (153,784 ) $ (164,842 ) $ (11,058 )
Segment Adjusted OIBDA(1) as a Percentage of Consolidated Revenue (6.8 )% (6.4 )%


(1)	See Note 7 to Notes to ~~the~~ Consolidated Financial Statements included in this Quarterly Report for the definition of Adjusted ~~OIBDA~~EBITDA and a reconciliation of Adjusted ~~OIBDA~~EBITDA to income (loss) from continuing ~~operations before provision (benefit) for income taxes and gain on sale of real estate.~~operations.

During the ~~nine~~three months ended ~~September 30, 2016,~~March 31, 2017, Adjusted ~~OIBDA~~EBITDA in the Corporate and Other Business segment as a percentage of consolidated ~~revenue improved 40~~revenues decreased 20 basis points compared to the ~~nine~~three months ~~September 30, 2015.~~ended March 31, 2016. Adjusted ~~OIBDA~~EBITDA in the Corporate and Other Business segment decreased ~~$11.1~~$14.0 million in the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 compared to the ~~nine~~three months ended ~~September 30, 2015,~~March 31, 2016, primarily ~~due to the impact of the Recall Transaction, partially offset~~driven by ~~profitability associated with recent acquisitions~~an increase in ~~our Adjacent Businesses operating segment. Adjusted OIBDA in our Corporate and Other Business segment includes approximately $8.7 million and $17.1 million of incremental~~information technology expenses associated with our acquisition of Recall ~~for the three~~ and ~~nine months ended September 30, 2016, respectively.~~increased professional fees associated with our innovation investments.

Liquidity and Capital Resources

The following is a summary of our cash balances and cash flows (in thousands) as of and for the ~~nine~~three months ended ~~September 30,~~March 31,


	2015			2016			2016			2017
Cash flows from operating activities - continuing operations	$	320,095		$	418,952		$	81,118		$	122,174
Cash flows from investing activities - continuing operations	(229,827		)	(507,108		)	(107,281		)	(104,303		)
Cash flows from financing activities - continuing operations	285,540			441,337			19,261			36,662
Cash and cash equivalents at the end of period	492,899			458,128			117,945			295,628

Net cash provided by operating activities from continuing operations was ~~$419.0~~$122.2 million for the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 compared to ~~$320.1~~$81.1 million for the ~~nine~~three months ended ~~September 30, 2015.~~March 31, 2016. The ~~$98.9~~$41.1 million period over period increase in cash flows from operating activities resulted from ~~a decrease in cash used in working capital of $100.3 million, primarily related to the timing of accrued expenses and deferred revenue, offset by a decrease~~an increase in net income (including non-cash charges and realized foreign exchange losses) of ~~$1.4 million.~~$43.7 million, offset by an increase in cash used in working capital of $2.6 million, primarily related to the timing of prepaid expenses.

Our business requires capital expenditures to maintain our ongoing operations, support our expected revenue growth and new products and services, and increase our profitability. These expenditures are included in the cash flows from investing activities. The nature of our capital expenditures has evolved over time along with the nature of our business. Our capital goes to support business-line growth and our ongoing operations, but we also expend capital to support the development and improvement of products and services and projects designed to increase our profitability. These expenditures are generally discretionary in nature. Cash paid for our capital expenditures, acquisition of customer relationships and customer inducements during the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 amounted to ~~$246.0~~$73.2 million, ~~$24.8~~$17.1 million and ~~$16.1~~$4.3 million, respectively. ~~Cash paid for acquisitions (net of cash acquired) during~~For the ~~nine~~three months ended ~~September 30, 2016 of $276.4 million consisted primarily of the cash portion of the purchase price associated with the Recall Transaction. For the nine months ended September 30, 2016,~~March 31, 2017, these expenditures were primarily funded with cash flows from operations, as well as the financing activities described below. Net proceeds from divestments received during the nine months ended September 30, 2016 of $54.0 million consisted of the net cash proceeds from the Access Sale (as defined in Note 4 to Notes to Consolidated Financial Statements included in this Quarterly Report).through borrowings under our Revolving Credit Facility. Excluding capital expenditures associated with potential future acquisitions, ~~and~~ opportunistic real estate investments and capital expenditures associated with the integration of Recall, we expect our capital expenditures to be approximately $320.0 million to $370.0 million in the year ending December 31, ~~2016. We expect to spend up to $50.0 million of additional capital expenditures on opportunistic real estate investments in the year ending December 31, 2016.~~2017.

Net cash provided by financing activities from continuing operations was ~~$441.3~~$36.7 million for the ~~nine~~three months ended ~~September 30, 2016. During the nine months ended September 30, 2016, we received~~March 31, 2017, consisting primarily of net proceeds of ~~$925.4~~$32.4 million ~~associated with the issuance of the 4~~³/₈~~% Notes, 5~~³/₈% Notes and the CAD Notes due 2023 and $185.8 million of proceeds from the AUD Term Loan (as defined below). We used the proceeds from these transactions, as well as cash flows provided by operating activities, for the net payment of $318.8 millionprimarily associated with net ~~payments~~borrowings under the Revolving Credit ~~Facility and the Bridge Facility, as well as for the payment of dividends in the amount of $360.5 million on our common stock.~~Facility.

Capital Expenditures

Below are descriptions of the major types of investments and other capital expenditures that we have made in recent years or that we are likely to consider in 2017. Beginning in the first quarter of 2017, we are separately identifying an additional capital expenditure category, Innovation and Growth Investment capital spend, which was previously included within the Non-Real Estate Investment capital spend category. We have reclassified the categorization of our prior year capital expenditures to conform with our current presentation.

Real Estate:

Real estate assets that support core business growthprimarily related to investments in land, buildings, building improvements, leasehold improvements and racking structures that expand our revenue capacity in existing or new geographies, replace a long-term operational obligation or create operational efficiencies ("Real Estate Investment").

Real estate assets necessary to maintain ongoing business operations primarily related to the repair or replacement of real estate assets such as buildings, building improvements, leasehold improvements and racking structures ("Real Estate Maintenance").

Non-Real Estate:

Non-real estate assets that either (i) support the growth of our business, and/or increase our profitability, such as customer-inventory technology systems, and technology service storage and processing capacity, or (ii) are directly related to the development of core products or services in support of our integrated value proposition and enhance our leadership position in the industry, including items such as increased feature functionality, security upgrades or system enhancements ("Non-Real Estate Investment").

Non-real estate assets necessary to maintain ongoing business operations primarily related to the repair or replacement of customer-facing assets such as containers and shred bins, warehouse equipment, fixtures, computer hardware, or third-party or internally-developed software assets. This category also includes operational support initiatives such as sales and marketing and information technology projects to support infrastructure requirements ("Non-Real Estate Maintenance").

Innovation and Growth Investment:

Discretionary capital expenditures in significant new products and services in new, existing or adjacent business opportunities.

The following table presents our capital spend for the ~~nine~~three months ended ~~September 30, 2015~~March 31, 2016 and ~~2016,~~2017, respectively, organized by the type of the spending as described ~~in the "Our Business Fundamentals" section of "Item 1. Business" of our Annual Report:~~above:


	Nine Months Ended September 30,				Three Months Ended March 31,
	Nine Months Ended September 30,				Three Months Ended March 31,
Nature of Capital Spend (in thousands)	2015		2016		2016		2017
Real Estate:
Investment	$	105,531	$	157,272	$	51,900	$	43,987
Maintenance	28,111		35,611		7,526		8,054
Total Real Estate Capital Spend	133,642		192,883		59,426		52,041
Non-Real Estate:
Investment	34,956		33,755		6,344		10,020
Maintenance	16,043		14,592		3,773		7,245
Total Non-Real Estate Capital Spend	50,999		48,347		10,117		17,265

Innovation and Growth Investment Capital Spend					1,341		4,382
Total Capital Spend (on accrual basis)	184,641		241,230		70,884		73,688
Net increase in prepaid capital expenditures	37		853		327		478
Net decrease accrued capital expenditures	17,903		3,946
Net decrease (increase) in accrued capital expenditures					9,641		(964		)
Total Capital Spend (on cash basis)	$	202,581	$	246,029	$	80,852	$	73,202

Dividends

See Note 9 to Notes to Consolidated Financial Statements included in this Quarterly Report for a listing of dividends that were declared in fiscal year ~~2015~~2016 and the first ~~nine~~three months of 2017. Our quarterly cash dividend for the first quarter of 2017 was paid on April 3, 2017, subsequent to the end of the first quarter, which significantly impacted our financing cash flows from continuing operations for the three months ended March 31, 2017 compared to the three months ended March 31, 2016.

Financial Instruments and Debt

See Note 2.f. to Notes to Consolidated Financial Statements included in this Quarterly Report for information on our financial instruments, ~~that potentially subject us to credit risk consist principally of cash and cash equivalents (including time deposits) and accounts receivable. The only significant~~including concentrations of liquid investments as of September 30, 2016 relate to cash and cash equivalents held in time deposits with six global banks, all of which we consider to be large, highly-rated investment-grade institutions. As of September 30, 2016, our cash and cash equivalents balance was $458.1 million, including time deposits amounting to $18.7 million.

credit risk.

Our consolidated debt as of ~~September 30, 2016~~March 31, 2017 is as follows (in thousands):


	September 30, 2016									March 31, 2017
	Debt (inclusive of discount)			Unamortized Deferred Financing Costs			Carrying Amount			Debt (inclusive of discount)			Unamortized Deferred Financing Costs			Carrying Amount
Revolving Credit Facility~~(1)~~	$	1,240,761		$	(8,166	)	$	1,232,595		$	988,327		$	(6,800	)	$	981,527
Term Loan~~(1)~~	234,375			—			234,375			228,125			—			228,125
AUD Term Loan(2)	188,967			(3,713		)	185,254
6% Notes due 2020(3)(4)	1,000,000			(13,578		)	986,422
6¹/₈% CAD Senior Notes due 2021 (the "CAD Notes due 2021")(5)	152,179			(1,762		)	150,417
4³/₈% Notes(3)(4)	500,000			(8,051		)	491,949
6¹/₈% GBP Senior Notes due 2022 (the "GBP Notes")(4)(6)	518,808			(6,816		)	511,992
Australian Dollar Term Loan										186,963			(3,832		)	183,131
6% Senior Notes due 2020										1,000,000			(11,881		)	988,119
4³/₈% Notes										500,000			(7,163		)	492,837
6¹/₈% CAD Senior Notes due 2021										150,045			(1,561		)	148,484
6¹/₈% GBP Senior Notes due 2022										499,508			(6,012		)	493,496
6% Senior Notes due 2023~~(3)~~	600,000			(7,597		)	592,403			600,000			(7,048		)	592,952
5³/₈% CAD Senior Notes due 2023 (the "CAD Notes due 2023")(4)(5)	190,223			(3,370		)	186,853
CAD Notes due 2023										187,557			(3,405		)	184,152
5³/₄% Senior Subordinated Notes due 2024~~(3)~~	1,000,000			(10,872		)	989,128			1,000,000			(10,186		)	989,814
5³/₈% Notes~~(7)~~	250,000			(4,159		)	245,841			250,000			(3,937		)	246,063
Real Estate Mortgages, Capital Leases and Other	444,772			(1,113		)	443,659			518,191			(1,239		)	516,952
Accounts Receivable Securitization Program~~(8)~~(1)	208,800			(461		)	208,339			250,000			(308		)	249,692
Mortgage Securitization Program										50,000			(1,369		)	48,631
Total Long-term Debt	6,528,885			(69,658		)	6,459,227			6,408,716			(64,741		)	6,343,975
Less Current Portion	(121,203		)	—			(121,203		)	(421,535		)	308			(421,227		)
Long-term Debt, Net of Current Portion	$	6,407,682		$	(69,658	)	$	6,338,024		$	5,987,181		$	(64,433	)	$	5,922,748

(1)

~~The capital stock or other equity interests of most of our United States subsidiaries, and up to 66% of~~Because the ~~capital stock or other equity interests of most of our first-tier foreign subsidiaries, are pledged to secure these debt instruments, together with~~Accounts Receivable Securitization Program terminates on March 6, 2018, at which point all ~~intercompany~~ obligations (including promissory notes) of subsidiaries owed to us or to one of our United States subsidiary guarantors. In addition, Iron Mountain Canada Operations ULC ("Canada Company") has pledged 66% of the capital stock of its subsidiaries, and all intercompany obligations (including promissory notes) owed to or held by it, to secure the Canadian dollar subfacility under the ~~Revolving Credit Facility.~~program become due, this debt is classified within the current portion of long-term debt in our Consolidated Balance Sheet as of March 31, 2017.

See Note 4 to Notes to Consolidated Financial Statements included in our Annual Report and Note 5 to Notes to Consolidated Financial Statements included in this Quarterly Report for additional information regarding our long-term debt.


~~(2)~~	~~The amount of debt for the AUD Term Loan reflects an unamortized original issue discount of $1.9 million as of September 30, 2016.~~

~~(3)~~

Collectively, the "Parent Notes." IMI is the direct obligor on the Parent Notes, which are fully and unconditionally guaranteed, on a senior or senior subordinated basis, as the case may be, by its direct and indirect 100% owned United States subsidiaries that represent the substantial majority of our United States operations (the "Guarantors"). These guarantees are joint and several obligations of the Guarantors. Canada Company, Iron Mountain Europe PLC ("IME"), the Special Purpose Subsidiaries (as defined in Note 5 to Notes to Consolidated Financial Statements) and the remainder of our subsidiaries do not guarantee the Parent Notes. See Note 6 to Notes to Consolidated Financial Statements included in this Quarterly Report.

~~(4)~~

~~The 6% Notes due 2020, the 4~~³/₈~~% Notes, the GBP Notes, the CAD Notes due 2023 and the 5~~³/₈% Notes (collectively, the "Unregistered Notes") have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or under the securities laws of any other jurisdiction. Unless they are registered, the Unregistered Notes may be offered only in transactions that are exempt from registration under the Securities Act or the securities laws of any other jurisdiction.


~~(5)~~	Canada Company is the direct obligor on the CAD Notes due 2021 and the CAD Notes due 2023, which are fully and unconditionally guaranteed, on a senior basis, by IMI and the Guarantors. These guarantees are joint and several obligations of IMI and the Guarantors. See Note 6 to Notes to Consolidated Financial Statements included in this Quarterly Report.


~~(6)~~	IME is the direct obligor on the GBP Notes, which are fully and unconditionally guaranteed, on a senior basis, by IMI and the Guarantors. These guarantees are joint and several obligations of IMI and the Guarantors. See Note 6 to Notes to Consolidated Financial Statements included in this Quarterly Report.


~~(7)~~	~~IM US Holdings, a 100% owned subsidiary of IMI and one of the Guarantors, is the direct obligor on the 5~~³/₈% Notes, which are fully and unconditionally guaranteed, on a senior basis, by IMI and the other Guarantors. These guarantees are joint and several obligations of IMI and such Guarantors. See Note 6 to Notes to Consolidated Financial Statements included in this Quarterly Report.


~~(8)~~	~~The Special Purpose Subsidiaries (as defined in Note 5 to Notes to Consolidated Financial Statements included in this Quarterly Report) are the obligors under this program.~~

a. Credit Agreement

On July 2, 2015, we entered into a new credit agreement (the "Credit Agreement") to refinance our then existing credit ~~agreement that was scheduled~~agreement. The Credit Agreement terminates on July 6, 2019, at which point all obligations become due, but may be extended by one year at our option, subject to ~~terminate on June 27, 2016.~~the conditions set forth in the Credit Agreement. The Credit Agreement consists of a revolving credit facility (the "Revolving Credit Facility") and a term loan (the "Term Loan"). We recorded a charge of approximately $2.2 million to other expense (income), net in the third quarter of 2015 related to the refinancing of the Credit Agreement, representing a write-off of unamortized deferred financing costs.

~~On June 24, 2016, Iron Mountain Information Management, LLC (“IMIM”) entered into a commitment increase supplement (the “Commitment Increase Supplement”), pursuant to which we increased the~~The maximum amount permitted to be borrowed under the Revolving Credit Facility ~~from $1,500.0 million to~~is $1,750.0 million. ~~After entering into~~The original amount of the ~~Commitment Increase Supplement, the maximum amount available for borrowing under the Credit Agreement is $2,000.0 million (consisting of a Revolving Credit Facility of $1,750.0 million and a~~ Term Loan ofwas $250.0 ~~million).~~million. We ~~continue to~~ have the option to request additional commitments of up to $250.0 million, in the form of term loans or through increased commitments under the Revolving Credit Facility, subject to the conditions specified in the Credit Agreement.

As of ~~September 30, 2016,~~March 31, 2017, we had ~~$1,240.8~~$988.3 million and ~~$234.4~~$228.1 million of outstanding borrowings under the Revolving Credit Facility and the Term Loan, respectively, and ~~$55.4~~$53.6 million of various letters of credit outstanding. The remaining amount available for borrowing ~~thereunder,~~under the Revolving Credit Facility as of March 31, 2017, 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 ~~$453.8~~$708.0 million (which amount represents the maximum availability as of such date). The average interest rate in effect under the Credit Agreement was ~~2.9%~~3.0% as of ~~September 30, 2016.~~March 31, 2017. The average interest rate in effect under the Revolving Credit Facility was ~~2.9%~~3.0% and ranged from 2.3% to ~~4.8%~~5.0% as of ~~September 30, 2016~~March 31, 2017 and the interest rate in effect under the Term Loan as of ~~September 30, 2016~~March 31, 2017 was ~~2.8%~~3.2%.

b. Cash Pooling

Certain of our subsidiaries participate in cash pooling arrangements (the “Cash Pools”) with Bank Mendes Gans (“BMG”), an independently operated fully-owned subsidiary of ING Group, in order to help manage global liquidity requirements. Under the Cash Pools, cash deposited by participating subsidiaries with BMG is pledged as security against the drawings of other participating subsidiaries, and legal rights of offset are provided and, therefore, amounts are presented in our Consolidated Balance Sheets on a net basis. Each subsidiary receives interest on the cash balances held on deposit or pays interest on the amounts owed based on an applicable rate as defined in the Cash Pools. At December 31, 2016, we had a net cash position of approximately $1.7 million (which consisted of a gross cash position of approximately $69.5 million less outstanding borrowings of approximately $67.8 million by participating subsidiaries).

During the first quarter of 2017, we significantly expanded our utilization of the Cash Pools and reduced our utilization of our financing centers in Europe for purposes of meeting our global liquidity requirements. As of March 31, 2017, we utilize two separate cash pools with BMG, one of which we utilize to manage global liquidity requirements for our QRSs (the "QRS Cash Pool") and one pool for our TRSs (the "TRS Cash Pool"). As of March 31, 2017, we had a net cash position of approximately $5.4 million in the QRS Cash Pool (which consisted of a gross cash position of approximately $478.2 million less outstanding borrowings of approximately $472.8 million by participating subsidiaries) and we had a net cash position of approximately $11.1 million in the TRS Cash Pool (which consisted of a gross cash position of approximately $217.3 million less outstanding borrowings of approximately $206.2 million by participating subsidiaries). The net cash position balances as of December 31, 2016 and March 31, 2017, respectively, are reflected as cash and cash equivalents in the Consolidated Balance Sheets.

Our leverage and fixed charge coverage ratios under the Credit Agreement as of December 31, ~~2015~~2016 and ~~September 30, 2016,~~March 31, 2017, respectively, and our leverage ratio under our indentures as of December 31, ~~2015~~2016 and ~~September 30, 2016,~~March 31, 2017, respectively, are as follows:


	December 31, 2015	September 30, 2016	Maximum/Minimum Allowable	December 31, 2016	March 31, 2017	Maximum/Minimum Allowable
Net total lease adjusted leverage ratio	5.6	5.7	Maximum allowable of 6.5	5.7	5.8	Maximum allowable of 6.5
Net secured debt lease adjusted leverage ratio	2.6	2.6	Maximum allowable of 4.0	2.7	2.7	Maximum allowable of 4.0
Bond leverage ratio (not lease adjusted)	5.5	5.4	Maximum allowable of 6.5	5.2	5.5	Maximum allowable of 6.5
Fixed charge coverage ratio	2.4	2.5	Minimum allowable of 1.5	2.4	2.3	Minimum allowable of 1.5

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

~~b. Bridge Facility~~

On April 19, 2016, in order to provide a portion of the financing necessary to close the Recall Transaction, we entered into a commitment letter with JPMorgan Chase Bank, N.A., as a lender and administrative agent, and the other lenders party thereto (the "Lenders"), pursuant to which the Lenders committed to provide us an unsecured bridge term loan facility of up to $850.0 million (the "Bridge Facility"). On April 29, 2016, we entered into a bridge credit agreement (the “Bridge Credit Agreement”) with the Lenders and borrowed the full amount of the Bridge Facility. We used the proceeds from the Bridge Facility, together with borrowings under the Revolving Credit Facility, to finance a portion of the cost of the Recall Transaction, including refinancing Recall’s existing indebtedness and to pay costs we incurred in connection with the Recall Transaction.

~~On May 31, 2016, we used the proceeds from the issuance~~Acquisitions

a. Acquisition of ~~the 4~~³/₈~~% Notes and the 5~~³/₈% Notes, together with cash on hand and borrowings under the Revolving Credit Facility, to repay the Bridge Facility, and effective May 31, 2016, we terminated the commitments of the lenders under the Bridge Credit Agreement. We recorded a charge to other expense (income), net of $9.3 million during the second quarter of 2016 related to the early extinguishment of the Bridge Credit Agreement. This charge primarily consisted of the write-off of unamortized deferred financing costs.

~~c. Issuance of 4~~³/₈~~% Notes, 5~~³/₈~~% Notes and CAD Notes due 2023~~

~~In May 2016, IMI completed a private offering of $500.0 million in aggregate principal amount of the 4~~³/₈~~% Notes and IM US Holdings completed a private offering of $250.0 million in aggregate principal amount of the 5~~³/₈~~% Notes. The 4~~³/₈~~% Notes and 5~~³/₈~~% Notes were issued at par. The aggregate net proceeds of $738.8 million from the 4~~³/₈~~% Notes and 5~~³/₈% Notes, after paying the initial purchasers' commissions, were used, together with cash on hand and borrowings under the Revolving Credit Facility, for the repayment of all outstanding borrowings under the Bridge Credit Agreement.

On September 15, 2016, Canada Company completed a private offering of 250.0 million Canadian dollars in aggregate principal amount of the CAD Notes due 2023. The CAD Notes due 2023 were issued at par. The aggregate net proceeds from the CAD Notes due 2023 of 246.3 million Canadian dollars (or $186.7 million based upon the exchange rate between the Canadian dollar and the United States dollar on September 15, 2016 (the settlement date for the CAD Notes due 2023)), after paying the initial purchasers’ commissions, were used to repay outstanding borrowings under the Revolving Credit Facility.

~~d. Australian Dollar Term Loan~~

On September 28, 2016, Iron Mountain Australia Group Pty, Ltd., a wholly owned subsidiary of IMI, entered into a 250.0 million Australian dollar Syndicated Term Loan B Facility (the “AUD Term Loan”) which matures in September 2022. The AUD Term Loan was issued at 99% of par. The net proceeds of approximately 243.8 million Australian dollars (or approximately $185.8 million based upon the exchange rate between the Australian dollar and the United States dollar on September 28, 2016 (the settlement date for the AUD Term Loan)), after paying commissions to the joint lead arrangers and net of the original issue discount, were used to repay outstanding borrowings on the Revolving Credit Facility in October 2016 and for general corporate purposes.

Principal payments on the AUD Term Loan are to be paid in quarterly installments in an amount equivalent to 6.3 million Australian dollars per year, with the remaining balance due on September 28, 2022. The AUD Term Loan is secured by substantially all assets of Iron Mountain Australia Group Pty. Ltd. IMI and the Guarantors guarantee all obligations under the AUD Term Loan. The interest rate on borrowings under the AUD Term Loan is based upon BBSY (an Australian benchmark variable interest rate) plus 4.3%. As of September 30, 2016, we had 250.0 million Australian dollars outstanding on the AUD Term Loan and the interest rate in effect under the AUD Term Loan was 6.1%.

~~e. Cash Pooling~~

~~Subsequent to the closing of the~~ Recall Transaction, certain of our international subsidiaries began participating in a cash pooling arrangement (the “Cash Pool”) with Bank Mendes Gans (“BMG”) in order to help manage global liquidity requirements. The Cash Pool allows participating subsidiaries to borrow funds from BMG against amounts held on deposit with BMG by other participating subsidiaries. The Cash Pool has a legal right of offset and, therefore, amounts are presented in our Consolidated Balance Sheet on a net basis. Each subsidiary receives interest on the cash balances held on deposit or pays interest on the amounts owed based on an applicable rate as defined in the Cash Pool agreement. At September 30, 2016, we had a net cash position of approximately $18.9 million (consisting of a gross cash position of approximately $50.7 million less outstanding borrowings of approximately $31.8 million by participating subsidiaries), which is reflected as cash and cash equivalents in the Consolidated Balance Sheet.

~~f. Mortgage Securitization Program~~

In October 2016, we entered into a $50.0 million mortgage securitization program (the "Mortgage Securitization Program") involving certain of our wholly owned subsidiaries with Goldman Sachs Mortgage Company (“Goldman Sachs”). Under the Mortgage Securitization Program, IMIM contributed certain real estate assets to its wholly owned special purpose entity, Iron Mountain Mortgage Finance I, LLC (the "Mortgage Special Purpose Subsidiary"). The Mortgage Special Purpose Subsidiary then used the real estate to secure collateralized loans from Goldman Sachs. The Mortgage Special Purpose Subsidiary is a consolidated subsidiary of IMI. Borrowings under the Mortgage Securitization Program bear interest at 3.5%. The Mortgage Securitization Program is scheduled to terminate in November 2026. Proceeds from the Mortgage Securitization Program will be used to repay outstanding borrowings on the Revolving Credit Facility.

~~For more information on our Credit Agreement and the Accounts Receivable Securitization Program, see Note 5 to Notes to Consolidated Financial Statements included in this Quarterly Report.~~

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

~~Acquisitions~~

On May 2, 2016 (Sydney, Australia time), we completed the Recall Transaction. At the closing of the Recall Transaction, we paid approximately $331.8 million and issued approximately 50.2 million shares of our common stock which, based upon the closing price of our common stock as of April 29, 2016 (the last day of trading on the NYSE prior to the closing of the Recall Transaction) of $36.53 per share, resulted in a total purchase price to Recall shareholders of approximately $2,166.9 million.

The following table presents the operating and capital expenditures associated with the Recall Transaction incurred for the ~~twelve months~~year ended December 31, ~~2015,~~2016, the three ~~and nine~~ months ended ~~September 30, 2016~~March 31, 2017 and the cumulative amount incurred through ~~September 30, 2016~~March 31, 2017 (in thousands):

Twelve Months Ended December 31, 2015 Three Months Ended
September 30, 2016 Nine Months Ended
September 30, 2016 Cumulative Total

Recall Deal Close & Divestment Costs $ 24,671
$ 3,861
$ 35,938
$ 60,609
Recall Integration Costs 22,353
30,272
66,934
89,287
Recall Costs 47,024
34,133
102,872
149,896
Capital Expenditures 65
4,871
6,939
7,004
Total $ 47,089
$ 39,004
$ 109,811
$ 156,900



	Year Ended December 31, 2016		Three Months Ended March 31, 2017		Cumulative Total
Recall Costs	$	131,944	$	20,571	$	199,529
Recall Capital Expenditures	18,391		6,255		24,711
Total	$	150,335	$	26,826	$	224,240

b. Santa Fe Transaction

In ~~March~~November 2016, we ~~acquired~~entered into a controlling interest in Docufile Holdings Proprietary Limited ("Docufile"), a storage and records management company with operations in South Africa, for approximately $15.0 million. The acquisition of Docufile represents our entrance into Africa.

~~In August 2016, we reached an~~binding agreement ~~in principle under a non-binding memorandum of understanding~~ to acquire the information management assets and operations of Santa Fe Group A/S (“("Santa ~~Fe”~~Fe") in ten regions within Europe and Asia in order to expand our presence in southeast Asia and western Europe. In December 2016, we acquired the information management assets and operations of Santa Fe in Hong Kong, Malaysia, Singapore, Spain and Taiwan (the “2016 Santa Fe Transaction”) for approximately ~~27.0~~15.2 million ~~Euro, or approximately $30.3~~Euros (approximately $16.0 million, ~~(the “Santa Fe Transaction”),~~ based upon the exchange rate between the United States dollar and the Euro as of ~~September~~December 30, ~~2016.~~2016, the closing date of the 2016 Santa Fe ~~operates its information management business in Spain, India, Hong Kong, Macau, Indonesia,~~Transaction). Of the Philippines, Singapore, Malaysia, South Korea and Taiwan. The memorandum of understanding between us and Santa Fe is non-binding and any binding agreement we enter into with Santa Fe will be subject to closing conditions; accordingly, we can provide no assurance that we will complete this acquisition, that the acquisition will not be delayed or that the terms of the acquisition will not change.

~~Divestments~~

As discussed in Note 4 to Notes to Consolidated Financial Statements included in this Quarterly Report, we are required to make the Divestments. The Access Sale (as defined in Note 4 to Notes to Consolidated Financial Statements included in this Quarterly Report) resulted in total ~~consideration of $80.0~~purchase price, 13.5 million (including cash proceeds of $55.0 million received at the closing of the transaction and an additional amount of contingent consideration of up to $25.0 million payable upon the 27-month anniversary of the closing of the Access Sale). See Note 4 to Notes to Consolidated Financial Statements included in this Quarterly Report for information regarding our estimate of the fair value of this contingent consideration as a result of the Access Sale. The Australia Sale (as defined in Note 13 to Notes to Consolidated Financial Statements included in this Quarterly Report) resulted in total consideration of approximately 70.0 million Australian dollarsEuros (or approximately ~~$53.2~~$14.2 million, based upon the exchange rate between the United States dollar and the ~~Australian dollar as of October 31, 2016), subject to adjustments. Our estimate (which incorporates current market conditions)~~Euro on the closing date of the ~~proceeds we will receive in relation to~~2016 Santa Fe Transaction) was paid during the ~~Seattle/Atlanta Divestments, the Canadian Divestments~~year ended December 31, 2016, and the ~~UK Divestments (each as defined~~remaining balance is due on the 18-month anniversary of the closing of the 2016 Santa Fe Transaction. During the first quarter of 2017, we acquired the information management assets and operations of Santa Fe in ~~Note 4~~Macau and South Korea (the "2017 Santa Fe Transaction") for approximately 0.9 million Euros (or approximately $1.0 million, based upon the exchange rate between the United States dollar and the Euro on the closing date of the 2017 Santa Fe Transaction). We expect to ~~Notes to Consolidated Financial Statements included~~acquire Santa Fe's information management assets and operations in ~~this Quarterly Report) is approximately $50.0 million. Upon~~India, Indonesia and the ~~successful~~Philippines by the end of the second quarter of 2017. However, the completion of these ~~divestments,~~pending acquisitions is subject to closing conditions; accordingly, we ~~anticipate using~~can provide no assurance that these acquisitions will be completed or that the ~~net proceeds~~terms thereof will not change.

c. Other Acquisitions

In addition to ~~repay outstanding borrowings under~~the 2017 Santa Fe Transaction noted above, during 2017, in order to enhance our ~~Revolving Credit Facility~~existing operations in the United States and ~~ultimately~~Greece and to ~~reinvest those proceeds in~~expand our ~~business.~~operations into the United Arab Emirates, we completed the acquisition of three storage and records management companies and one art storage company for total consideration of approximately $13.7 million. The individual purchase prices of these acquisitions ranged from approximately $2.0 million to approximately $4.4 million.

Contractual Obligations

We expect to meet our cash flow requirements for the next twelve months from cash generated from operations, existing cash, cash equivalents, borrowings under the Credit Agreement and other financings, which may include senior or senior subordinated notes, secured credit facilities, securitizations and mortgage or capital lease financings, and the issuance of equity. We expect to meet our long-term cash flow requirements using the same means described above. We are ~~highly leveraged and expect to continue to be highly leveraged for the foreseeable future.~~currently operating above our long-term targeted leverage ratio. As a REIT, we expect our long-term capital allocation strategy will naturally shift ~~toward~~towards lower leverage, though our leverage has increased over the last several fiscal years to fund the costs of ~~the~~our REIT conversion and the Recall Transaction.

~~Net Operating Losses~~

We have federal net operating loss carryforwards, which expire from 2021 through 2033, of $64.2 million at September 30, 2016 to reduce future federal taxable income, of which $0.8 million of federal tax benefit is expected to be realized. We can carry forward these net operating losses to the extent we do not utilize them in any given available year. We have state net operating loss carryforwards, which expire from 2016 through 2034, of which an insignificant state tax benefit is expected to be realized. We have assets for foreign net operating losses of $99.1 million, with various expiration dates (and in some cases no expiration date), subject to a valuation allowance of approximately 77%.

Inflation

Certain of our expenses, such as wages and benefits, insurance, occupancy costs and equipment repair and replacement, are subject to normal inflationary pressures. Although to date we have been able to offset inflationary cost increases ~~through~~with increased operating efficiencies, the negotiation of favorable long-term real estate leases and an ability to increase prices in our customer contracts (many of which contain provisions for inflationary price ~~escalators,~~escalators), we can give no assurance that we will be able to offset any future inflationary cost increases through similar efficiencies, leases or increased storage rental or service charges.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

The term "disclosure controls and procedures" is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These rules refer to the controls and other procedures of a company that are designed to ensure that information is recorded, processed, accumulated, summarized, communicated and reported to management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding what is required to be disclosed by a company in the reports that it files under the Exchange Act. As of ~~September 30, 2016~~March 31, 2017 (the "Evaluation Date"), we carried out an evaluation, under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of our disclosure controls and procedures. Based upon that evaluation, our chief executive officer and chief financial officer concluded that, as of the Evaluation Date, our disclosure controls and procedures are effective.

Changes in Internal Control over Financial Reporting

Our management, with the participation of our principal executive officer and principal financial officer, is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our internal control system is designed to provide reasonable assurance to our management and board of directors regarding the preparation and fair presentation of published financial statements.

On May 2, 2016, we completed the acquisition of Recall. See Note 4 to Notes to Consolidated Financial Statements included in this Quarterly Report for further details about the Recall Transaction. As a result of the Recall Transaction, we are currently in the process of assessing and integrating Recall’s internal controls over financial reporting into our financial reporting controls.

There have been no changes ~~other than associated with Recall discussed above,~~ in our internal control over financial reporting (as defined in Rules 13a-15(f) under the Securities Act of 1934) during the quarter ended ~~September 30, 2016~~March 31, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II. Other Information

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

We did not sell any unregistered equity securities during the three months ended ~~September 30, 2016,~~March 31, 2017, nor did we repurchase any shares of our common stock during the three months ended ~~September 30, 2016.~~March 31, 2017.

Item 6. Exhibits

(a) Exhibits

Certain exhibits indicated below are incorporated by reference to documents we have filed with the SEC.



Exhibit No.			Description

~~4.1~~10.1			~~Senior Indenture,~~Marc Duale Separation Agreement dated ~~as of September 15, 2016, among~~March 13, 2017.(Filed herewith.)

10.2			Ernest Cloutier Secondment Letter dated March 27, 2017.(Filed herewith.)

10.3			Advisory Agreement between Marc Duale and Iron Mountain Canada Operations ULC, the Company, the Guarantors named therein and Wells Fargo Bank, National Association, as trustee, with regard to Iron Mountain Canada Operations ULC’s 5.375% CAD Senior Notes due 2023. Europe PLC dated April 12, 2017.(~~Incorporated by reference to the Company’s Current Report on Form 8-K dated September 15, 2016.~~Filed herewith.)

12			Statement: re Computation of Ratios.(Filed herewith.)

31.1			Rule 13a-14(a) Certification of Chief Executive Officer.(Filed herewith.)

31.2			Rule 13a-14(a) Certification of Chief Financial Officer.(Filed herewith.)

32.1			Section 1350 Certification of Chief Executive Officer.(Furnished herewith.)

32.2			Section 1350 Certification of Chief Financial Officer.(Furnished herewith.)

101.1			The following materials from Iron Mountain Incorporated's Quarterly Report on Form 10-Q for the quarter ended ~~September 30, 2016,~~March 31, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income (Loss), (iv) Consolidated Statements of Equity, (v) Consolidated Statements of Cash Flows and (vi) Notes to Consolidated Financial Statements, tagged as blocks of text and in detail. (Filed herewith.)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.




	IRON MOUNTAIN INCORPORATED
	By:	/s/ STUART B. BROWN


		Stuart B. Brown Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

Dated: ~~November 1, 2016~~April 27, 2017

9173



	Carrying Value as of December 31, 2015
North American Records and Information Management(1)	$	1,342,723
North American Secure Shredding(1)	73,021
North American Data Management(2)	369,907
Adjacent Businesses - Data Centers(3)	—
Adjacent Businesses - Consumer Storage(3)	4,636
Adjacent Businesses - Fine Arts(3)	21,550
UKI(4)	260,202
Continental Western Europe(4)	63,442
Emerging Markets - Europe(5)	87,378
Latin America(5)	78,537
Australia(5)	47,786
Southeast Asia(5)	5,683
India(5)	6,113
Total	$	2,360,978



	Carrying Value as of September 30, 2016
North American Records and Information Management	$	2,058,150
North American Secure Shredding	148,905
North American Data Management	499,644
Adjacent Businesses - Data Centers	—
Adjacent Businesses - Consumer Storage	4,636
Adjacent Businesses - Fine Arts	22,911
Western Europe	454,531
Northern and Eastern Europe(1)	142,285
Latin America	180,664
Australia and New Zealand	152,387
Southeast Asia	177,512
Africa and India(2)	20,185
Total	$	3,861,810



		Amount of (Gain) Loss Recognized in Income on Derivatives
		Three Months Ended September 30,					Nine Months Ended September 30,
Derivatives Not Designated as Hedging Instruments	Location of (Gain) Loss Recognized in Income on Derivative	2015			2016		2015		2016
Foreign exchange contracts	Other expense (income), net	$	(301	)	$	—	$	20,113	$	—



	December 31, 2015
	Debt			Unamortized Deferred Financing Costs			Carrying Amount			Fair Value
Revolving Credit Facility(1)	$	784,438		$	(9,410	)	$	775,028		$	784,438
Term Loan(1)	243,750			—			243,750			243,750
6% Senior Notes due 2020 (the "6% Notes due 2020")(2)(3)(4)	1,000,000			(16,124		)	983,876			1,052,500
6¹/₈% CAD Senior Notes due 2021 (the "CAD Notes due 2021")(2)(5)	144,190			(1,924		)	142,266			147,074
6¹/₈% GBP Senior Notes due 2022 (the "GBP Notes")(2)(4)(6)	592,140			(8,757		)	583,383			606,944
6% Senior Notes due 2023 (the "6% Notes due 2023")(2)(3)	600,000			(8,420		)	591,580			618,000
5³/₄% Senior Subordinated Notes due 2024 (the "5³/₄% Notes")(2)(3)	1,000,000			(11,902		)	988,098			961,200
Real Estate Mortgages, Capital Leases and Other(7)	333,559			(1,070		)	332,489			333,559
Accounts Receivable Securitization Program(8)	205,900			(692		)	205,208			205,900
Total Long-term Debt	4,903,977			(58,299		)	4,845,678
Less Current Portion	(88,068		)	—			(88,068		)
Long-term Debt, Net of Current Portion	$	4,815,909		$	(58,299	)	$	4,757,610



Description	Seattle/Atlanta Divestments		Australia Divestment Business		Recall Canadian Divestments		Iron Mountain Canadian Divestments		UK Divestments		Total
Assets held for sale:
Accounts receivable	$	—	$	8,508	$	��	$	—	$	—	$	8,508
Deferred income taxes	—		1,107		—		—		—		1,107
Prepaid expenses and other	—		613		—		—		—		613
Property, plant and equipment, net	—		24,253		—		1,641		—		25,894
Goodwill	—		27,130		—		3,288		—		30,418
Estimated fair value of assets held for sale, less costs to sell	22,429		—		20,642		—		3,507		46,578
Customer relationships and customer inducements	—		14,359		—		—		—		14,359
Other	—		435		—		—		—		435
	$	22,429	$	76,405	$	20,642	$	4,929	$	3,507	$	127,912

Liabilities held for sale:
Accounts payable	$	—	$	2,211	$	—	$	—	$	—	$	2,211
Accrued expenses	—		5,601		—		—		—		5,601
Deferred revenue	—		1,366		—		—		—		1,366
Other long-term liabilities	—		7,390		—		—		—		7,390
Deferred rent	—		2,701		—		—		—		2,701
	$	—	$	19,269	$	—	$	—	$	—	$	19,269



	Three Months Ended September 30, 2016
Description	Initial United States Divestments(1)		Seattle/Atlanta Divestments			Recall Canadian Divestments		UK Divestments			Total
Total Revenues	$	—	$	3,200		$	2,977	$	385		$	6,562
Income (Loss) from Discontinued Operations Before Provision (Benefit) for Income Taxes	—		1,534			888		(88		)	2,334
Provision (Benefit) for Income Taxes	—		70		—	239		(16		)	293
Income (Loss) from Discontinued Operations, Net of Tax	$	—	$	1,464		$	649	$	(72	)	$	2,041



	Twelve Months Ended December 31, 2015		Three Months Ended September 30, 2016		Nine Months Ended September 30, 2016		Cumulative Total
	Twelve Months Ended December 31, 2015		Three Months Ended September 30, 2016		Nine Months Ended September 30, 2016		Cumulative Total
Recall Deal Close & Divestment Costs	$	24,671	$	3,861	$	35,938	$	60,609
Recall Integration Costs	22,353		30,272		66,934		89,287
Recall Costs	47,024		34,133		102,872		149,896
Capital Expenditures	65		4,871		6,939		7,004
Total	$	47,089	$	39,004	$	109,811	$	156,900