Edgar Filing: IRON MOUNTAIN INC

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Iron Mountain Incorporated

(Name of Registrant as Specified In Its Charter)

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The following presentation may be provided to stockholders of Iron Mountain Incorporated (the “Company”) by Elliott Associates, L.P. and Elliott International, L.P. (collectively, “Elliott”):

Iron Mountain Incorporated:

Great Business Model,

Significant Incremental Opportunity

March 9, 2011

Disclosure Statement

The information contained in this presentation is for informational purposes only and does not constitute an agreement, offer, a solicitation of

an offer, or any advice or recommendation to enter into or to conclude any transaction or confirmation thereof (whether on the terms shown

or otherwise). The information contained herein is made based upon publicly available information. None of Elliott Associates, L.P. and Elliott

International, L.P. (collectively, "Elliott"), their affiliates or any of their respective officers, directors, employees, stockholders, consultants,

agents, or controlling persons, or their respective officers, directors or employees, is making any representation or warranty, express or

implied, as to the accuracy or completeness of the information contained herein, and each of Elliott Associates and each such other person

expressly disclaims any and all liability to any other person that may be based upon or relate to the information contained herein. This

presentation contains forward-looking statements. These statements may be identified by the use of forward-looking terminology such as the

words “expects,” “intends,” “potential,” “opportunity,” “believes,” “anticipates” and other terms with similar meaning indicating possible

future events or actions or potential impact on the matters described herein. These forward-looking statements are based on current

expectations and assumptions that are subject to risks and uncertainties that could cause actual results to differ materially. Accordingly, you

should not rely upon forward-looking statements as a prediction of actual results.

Elliott intends to make a filing with the Securities and Exchange Commission of a proxy statement and an accompanying proxy card to be used

to solicit proxies in connection with the 2011 Annual Meeting of Stockholders (including any adjournments or postponements thereof or any

special meeting that may be called in lieu thereof) (the “2011 Annual Meeting”) of Iron Mountain Incorporated (the “Company”). Information

relating to the participants in such proxy solicitation is contained in materials filed by Elliott with the Securities and Exchange Commission

pursuant to Rule 14a-12 under the Securities Exchange Act of 1934, as amended. Stockholders are advised to read the proxy statement and

other documents related to the solicitation of stockholders of the Company for use at the 2011 Annual Meeting when they become available

because they will contain important information, including additional information relating to the participants in such proxy solicitation. When

completed and available, Elliott’s definitive proxy statement and a form of proxy will be mailed to stockholders of the Company. These

materials and other materials filed by Elliott in connection with the solicitation of proxies will be available at no charge at the Securities and

Exchange Commission’s website at www.sec.gov. The definitive proxy statement (when available) and other relevant documents filed by

Elliott with the Securities and Exchange Commission will also be available, without charge, by directing a request by mail or telephone to

MacKenzie Partners, Inc., 105 Madison Avenue, New York, New York 10016 (call collect: 212-929-5500; call toll free: 800-322-2885).

Iron Mountain (NYSE: IRM) provides records management, information protection

and

recovery,

and

data

destruction

services

than

150,000

corporate

clients

•

Market-leading

core

business

North

American

Physical

(“NOAM

Physical”)

—

Sustainable, recurring revenue stream with 44% OIBDA margins

—

Well

penetrated

vended

market

–

IRM’s

growth

and

scale

have

made

mature business

•

New initiatives have generated minimal-to-negative returns

—

Worldwide

Digital

business

struggling

with

uncertain

growth,

low

margins

and significant competition from leading technology firms

—

International Physical business has had slow OIBDA growth and lower

margins (vs. NOAM Physical) despite continued investment

Incremental opportunities exist to create significant shareholder value

•

Implement business improvements to achieve operational efficiencies, increase

margins and maximize cash flow available to equity holders

—

Focus on return-on-invested-capital (ROIC) for all growth-related initiatives

•

Optimize corporate structure for tax efficiency

•

Align management compensation incentives with shareholder value creation

Iron Mountain: Leader in Information Storage Services

Significant Opportunity to Generate Shareholder Value

Source: Iron Mountain Incorporated disclosures and Third-Party Analyst Research

Incremental Opportunity for IRM

Business Improvements + REIT Conversion = Potential $52-$77 Stock Price

(1)

Assumes dividend equals 100% of equity free cash flow

Source:

Elliott

estimates;

See

page

for

additional

details

on Elliott estimated stock price calculations shown above

Implied

Dividend Yield

5.0%

(1)

Implied

Dividend Yield

6.4%

(1)

$10

$20

$30

$40

$50

$60

$70

$80

Recent

$25

Mid

$52

High

$77

Business Improvements

Improvements + REIT

IRM Stock Price

Recent

$25

High

$41

REIT Conversion

Mid

$34

Recent

$25

Recent

$25

Mid

$39

High

$50

Market-Leading Core Business -

North American Physical

IRM has a Great Business Model

NOAM Physical is a Profitable and Sustainable Core Business

Source: Iron Mountain Incorporated disclosures and Elliott estimates

IRM has a market-leading position in a great business –

North American

Physical document storage

•

Strong execution track record

•

Buy/lease by the square foot, monetize by the cubic foot

•

Annual revenues from fixed periodic storage fees have grown for 22 consecutive

years

The document storage business benefits from structural forces that create

stability in the face of digitization trends

•

Base of existing boxes represents >90% of revenues with high switching costs

—

Conversion of existing boxes to digital format costs 20-30x annual physical

box storage costs

—

Average life of a box >10 years

•

Multi-year contracts and built-in price escalators protect against price pressure

•

Regulatory

requirements

for

document

retention

drive

significant

percent

box

volumes

While existing box storage market is well penetrated, the remaining

unvended segment is 3x IRM revenue

NOAM Physical

is Core Business

69% of Revenues, 86% of OIBDA

, 96% of Cash Flow

Source: Iron Mountain Incorporated disclosures

(1)

Iron Mountain’s reportable operating segments are North American Physical Business, International Physical Business (“Int’l Physical”) and Worldwide Digital

Business (“Digital”). NOAM Physical and Int’l Physical segments offer physical records management services, data protection & recovery services and information

destruction services, in their respective geographies. The Digital segment includes online backup and recovery solutions for server data and personal computers,

digital

archiving

services,

eDiscovery

services

and

intellectual

property

management

services

and

not

limited

any

particular

geography.

(2)

OIBDA represents operating income before depreciation, amortization, corporate expenses, goodwill impairment and (gain) loss on disposal/writedown of

property, plant and equipment, net

(3)

Calculated as OIBDA (before corporate expenses) –

Capex

2010

OIBDA

NOAM Physical -

86%

Int'l

Physical

12%

NOAM Physical -

96%

2010

OIBDA

Capex

2010 Revenue

NOAM Physical -

69%

Int'l Physical

Digital

23%

(1)

For NOAM Physical; Solid bars correspond with left-axis, trend lines correspond with right-axis

Source: Iron Mountain Incorporated disclosures

35%

37%

39%

41%

43%

45%

2010

2009

2008

2007

24%

28%

32%

36%

40%

2010

2009

2008

2007

10%

12%

14%

16%

2010

2009

2008

2007

$1,100

$1,300

$1,500

$1,700

$1,900

$2,100

$2,300

$500

$600

$700

$800

$900

$1,000

$400

$500

$600

$700

$800

$900

NOAM Physical is a Cash Cow

Margin has Expanded & Cash Flow Nearly Doubled in Last 3 Years

Revenue ($MMs) & Growth (YoY)

OIBDA ($MMs) & Margin

OIBDA –

Capex

($MMs) & Margin

(1)

NOAM Physical, pre-2004 figures reflect Elliott estimates based on Company

disclosures;

Internal

Revenue

Growth

defined

weighted

average

y-o-y

growth

of revenues, excluding acquisitions, divestitures, and FX fluctuations

(1) NOAM Physical

Source: Iron Mountain Incorporated disclosures and Elliott estimates

As NOAM Physical’s Revenue Growth Has Slowed,

Attractive Opportunities to Invest Have Decreased

Revenue & Internal Revenue Growth (YoY)

(1)

10%

15%

20%

25%

30%

Revenue Growth

Internal Revenue Growth

Incremental Invested Capital ($MMs)

(1)

$100

$150

$200

$250

$300

$350

$400

$450

$500

$550

2007

2008

2009

2010

Acquisitions

Capex

New Initiatives Earning Minimal-to-Negative Returns

$0.7B+ Invested in Digital, Minimal Return to Date

Uncertain Growth and Low Margins with Strong Tech Co. Competition

Source: Iron Mountain Incorporated disclosures and Elliott estimate of 35% for tax rate

(1) NOPAT = Net Operating Profit After Taxes

Why invest profits from a high margin business into one with uncertain growth

and low margins?

How is IRM better positioned than existing and emerging tech titans?

Digital Revenue ($MMs)

2007

2008

2009

2010

Digital OIBDA, ex. Corporate ($MMs)

2007

2008

2009

2010

CAGR = 12.3%

$50

$100

$150

$200

$250

CAGR = 2.4%

$284MM Goodwill

Impairment in 2010

$10

$20

$30

$40

$50

$60

Digital

Acquisitions

Capex:

$0.7BN+

2010

NOPAT

-$5MM,

Implied

ROIC:

Negative

$1.9B+ Invested in Int’l Physical, Minimal Return to Date

Slow OIBDA Growth and Low Margins Despite Continued Investment

Int’l

Acquisition

Capex

$1.9BN+

2010

NOPAT

~$31MM,

Implied

ROIC:

~1.6%

CAGR = 2.3%

Source: Iron Mountain Incorporated disclosures and Elliott estimate of 35% for tax rate

(2) NOPAT = Net Operating Profit After Taxes

IRM has spent $0.6BN in International Physical Capex

& Acquisitions from

2007-2010 and segment OIBDA has actually decreased

(1) Since inception

International Physical Revenue ($MMs)

2007

2008

2009

2010

International Physical OIBDA, ex. Corporate ($MMs)

$25

$50

$75

$100

$125

$150

$175

2007

2008

2009

2010

$100

$200

$300

$400

$500

$600

$700

$800

$900

CAGR = -0.5%

NOAM Physical vs. Int’l Physical

Int’l Physical Productivity & Margins are Much Weaker

(1) Number of employees based on IRM’s 2009 Investor Day Presentation

Source: Iron Mountain Incorporated disclosures

(1)

2010 Revenue per Employee ($Ks)

$50

$100

$150

$200

$250

NOAM Physical

Int'l Physical

2010 OIBDA Margin

10%

20%

30%

40%

50%

NOAM Physical

Int'l Physical

Int’l Physical

employee

productivity

is less than

half of

NOAM

Physical

OIBDA

Margin in

Int’l Physical

is 18% vs.

44% in NOAM

Physical

Market Appears Skeptical of Management’s Vision

IRM EV / LTM EBITDA

10x

11x

12x

13x

14x

15x

16x

Feb-02

Feb-03

Feb-04

Feb-05

Feb-06

Feb-07

Feb-08

Feb-09

Feb-10

Feb-11

Valuation Has Declined to an All-Time Low…

EV /

EBITDA

Price

16x

$62

15x

$57

14x

$52

13x

$48

15x

$57

14x

$52

13x

$48

12x

$43

11x

$38

…and

Turnover

the

Shareholder

Base

Reflects

Uncertainty

IRM -

Stock Price & Volume

$15.00

$17.50

$20.00

$22.50

$25.00

$27.50

$30.00

0MM

5MM

10MM

15MM

20MM

25MM

30MM

35MM

40MM

45MM

50MM

Price (LH Axis)

Volume (RH Axis)

“Growth-oriented investors

have become increasingly

frustrated

with the evasive

revenue growth

reacceleration and the

additional pressure on

margins.”

–

J.P. Morgan

10/6/2010

During 6 month period

between Sep ’10 and Feb

’11, over 306MM shares

traded, representing

approximately 150% of

shares outstanding

“You’ve got a rather miniscule dividend.

With lack of big acquisition opportunities,

no need to reduce debt, why not

establish a really significant payout ratio?

You’re a slow growth company.”

“On the dividend strategy…it’s basically

$50MM. Your business throws off $300MM

of cash, just seems like a very small

amount given the growth nature of the

business.”

“With your stock price near an all-time

low, with interest rates near all-time

lows…you could

basically buy back 25% of

the company and still be within your

[target leverage] range.

Have you

thought about that?”

Market is Questioning Management’s Strategy…

Source: Iron Mountain Incorporated disclosures

Comments from 2010 Investor Day

Elliott Believes Recent Corporate

Actions Are Insufficient

•

Increased quarterly dividend in 4Q

2010 from $0.0625/share to only

$0.1875/share

•

Increased amount authorized under

share repurchase program from

$150MM to only $350MM (total ~7% of

outstanding shares)

—

In 2010, repurchased only

4.8MM shares for $112MM

…Yet Management Continues To Pursue Growth For The

Sake of Growth

Source: Iron Mountain Incorporated 2009 Annual Report

April 2010

Letter to

Shareholders

•

Implement business improvements to achieve operational

efficiencies, increase margins and maximize cash flow available

to equity holders

—

Focus on return-on-invested-capital (ROIC) for all growth-

related initiatives

•

Optimize corporate structure for tax efficiency

•

Align management compensation incentives with shareholder

value creation

Opportunities Exist To Create Incremental Shareholder

Value

Implement Business Improvements To Achieve

Operational Efficiencies

Incremental Opportunities for Operational Efficiency

Improve Expense & Capex Management

Implied

Dividend Yield

5.0%

(1)

Implied

Dividend Yield

6.4%

(1)

$10

$20

$30

$40

$50

$60

$70

$80

Recent

$25

Mid

$52

High

$77

Business Improvements

Improvements + REIT

IRM Stock Price

Recent

$25

High

$41

REIT Conversion

Mid

$34

Recent

$25

Recent

$25

Mid

$39

High

$50

(1)

Assumes dividend equals 100% of equity free cash flow

Source: Elliott estimates; See page 33 for additional details on

Elliott estimated stock price calculations shown above

Business Improvements Can Provide Significant Upside

Reduce Capex, Improve Int’l Margins, Rationalize SG&A

(1) International margin improvement reflects higher capacity utilization not cost reductions in SG&A

$10

$15

$20

$25

$30

$35

$40

$45

Recent

$25

Mid

$34

High

$41

Sales, Mktg.

& AM

G&A

Capex

IRM Stock Price

Recent

$25

$2.98

$3.45

$5.47

Int'l Margins

(1)

$3.72

Source: Elliott estimates

Reduce Capex by ~20%

$5.47 Per Share Opportunity

•

Management has said maintenance Capex is 2%

revenues

•

Elliott scenarios reduce total Capex from 7.6%

revenues (Company guidance) to 6.0%

of revenues (in

Elliott Mid-case)

•

Primary reductions to come from:

—

Int’l Physical investments with low ROIC

—

Growth Capex in NOAM Physical

—

Minimal new Capex in Digital

•

A disciplined capital allocation approach can deliver

further upside to current levels

Capital Expenditures Savings ($MMs)

Mid

High

Capital expenditures - savings as a % of sales

1.6%

2.4%

Capital expenditures - savings

Capital expenditures - valuation appreciation

751

1,095

Capital expenditures - valuation appreciation per share

3.75

5.47

See page 42 (Appendix) for more detailed analysis of Capital Expenditures

Source: Iron Mountain Incorporated disclosures and Elliott estimates

Capex

$5.47

Int’l Physical Margin Expansion

$3.45 Per Share Opportunity

International Physical Margin Expansion Savings ($MMs)

Mid

High

Int'l Physical OIBDA - margin benefit as a % of sales

5.0%

10.0%

Int'l Physical OIBDA - margin benefit

Assumed tax rate

35.0%

Int'l Physical OIBDA benefit - after-tax savings

Int'l Physical OIBDA - valuation appreciation

345

691

Int'l Physical OIBDA - valuation appreciation per share

1.73

3.45

$25

$3.45

Int'l Margins

Source: Iron Mountain Incorporated disclosures and Elliott estimates

•

Int’l Physical OIBDA margin is 18% vs. 44% for NOAM

Physical

•

Management to focus on increasing capacity

utilization to drive OIBDA margins

•

Need to start monetizing investments after several

years of building capacity

Recent

$25

Mid

$34

High

$41

G&A

$2.98

Source: Iron Mountain Incorporated disclosures and Elliott estimates

General & Administrative Savings ($MMs)

Mid

High

General and administrative - savings as a % of sales

1.0%

2.0%

General and administrative - pre-tax savings

Assumed tax rate

35.0%

General and administrative - after-tax savings

General and administrative - valuation appreciation

298

596

General and administrative - valuation appreciation per share

1.49

2.98

See page 43 (Appendix) for more detailed analysis of G&A costs

Marginal

G&A

Reduction

Can

Provide

Meaningful

Benefit

$2.98

Per

Opportunity

•

Reduction

corporate

overhead

line

with

maturing

business

•

G&A

total

sales

increased

15.3%

2010,

from

low

13.6%

2002

Recent

$25

Mid

$34

High

$41

Sales, Mktg.

& AM

$3.72

Reduce Sales & Marketing Costs

$3.72 Per Share Opportunity

Sales, Marketing & Account Management Savings ($MMs)

Mid

High

Sales, marketing and account management - savings as a % of sales

1.5%

2.5%

Sales, marketing and account management - pre-tax savings ($MMs)

Assumed tax rate

35.0%

Sales, marketing and account management - after-tax savings ($MMs)

Sales, marketing and account management - valuation appreciation

447

745

Sales, marketing and account management - valuation appreciation per share

2.23

3.72

See page 44 (Appendix) for more detailed analysis of Sales and Marketing costs

Source: Iron Mountain Incorporated disclosures and Elliott estimates

•

Sales & Marketing costs have increased to 9% of sales

recently from 6% earlier in the decade

•

A 150-250bps reduction by scaling back sales and

marketing effort is in line with declining growth

outlook

Optimize Corporate Structure For Tax Efficiency

Incremental Opportunity Through REIT Conversion

Potential Tax Savings & Cap Rate Improvement

Implied

Dividend Yield

5.0%

(1)

Implied

Dividend Yield

6.4%

(1)

$10

$20

$30

$40

$50

$60

$70

$80

Recent

$25

Mid

$52

High

$77

Business Improvements

Improvements + REIT

IRM Stock Price

Recent

$25

High

$41

REIT Conversion

Mid

$34

Recent

$25

Recent

$25

Mid

$39

High

$50

(1)

Assumes dividend equals 100% of equity free cash flow

Source: Elliott estimates; See page 33 for additional details on

Elliott estimated stock price calculations shown above

REIT Structure Can Result in Significant Value Creation

$10

$20

$30

$40

$50

$60

Recent

$25

Mid

$39

High

$50

Tax Savings

Cap Rate Improvement

IRM Stock Price

Recent

$25

$10.58

$13.97

Source: Elliott estimates

Potential REIT Structure

Services

IRM

(REIT)

IRM

Customers

ServiceCo

(TRS)

Lease Payments

Payments for

Services

•

Services business contributed to ServiceCo, which elects to be treated as a taxable REIT

subsidiary (TRS)

•

Customer contracts remain with IRM

•

IRM adopts REIT status and makes arm's length payments to ServiceCo (TRS) for the

services provided by ServiceCo to IRM customers

•

If necessary for REIT compliance, IRM could IPO a percentage of its ownership stake in

ServiceCo (while maintaining voting control)

Storage

Significant Benefits of a REIT Structure Deserve Careful

Analysis

Elliott

has

devoted

considerable

resources

exploring

the

benefits

and

challenges

a REIT structure

•

Worked

exhaustively

with

lawyers,

industry

consultants

and

other

advisors using

publicly available information to establish estimates for value creation, cash flow

and other metrics

•

Detailed analysis of potential commercial, operational, governance and tax

implications

Elliott

believes

IRM's

physical

storage

business

compelling REIT candidate

•

Stable, annuity-like rental income streams (low organic growth in core business)

•

By converting from a “C”

Corp to a REIT, IRM can retain more of the income from

over 1,000 owned and leased facilities

—

Elliott

estimates

tax

savings

equivalent

approximately

60%

of 2011 Net Income

guidance provided by Company

•

Recent IRS guidance offers the ability to adapt standard IRM customer

arrangements

the

requirements

REIT

without

assignment

renegotiation

of customer contracts

Elliott's analysis demonstrates sufficient potential for enhancing shareholder value to

justify further careful review by the Board

•

Only a full analysis by a reinvigorated Board can properly measure the potential

benefits of a REIT conversion against the potential challenges

Mid

$39

High

$50

Cap Rate Improvement

$13.97

Source: Elliott estimates

Benefit from Cap Rate Compression -- Incremental to Tax Savings of

$10.58

EBITDA Multiple (for TRS business)

$13.97

5.0x

6.0x

7.0x

8.0x

9.0x

5.0%

$40.06

$41.07

$42.08

$43.09

$44.09

5.5%

$32.39

$33.40

$34.41

$35.42

$36.43

6.0%

$26.00

$27.01

$28.02

$29.03

$30.04

6.5%

$20.60

$21.61

$22.62

$23.62

$24.63

7.0%

$15.97

$16.97

$17.98

$18.99

$20.00

7.5%

$11.95

$12.96

$13.97

$14.98

$15.98

8.0%

$8.44

$9.44

$10.45

$11.46

$12.47

8.5%

$5.33

$6.34

$7.35

$8.36

$9.37

9.0%

$2.58

$3.59

$4.60

$5.61

$6.61

9.5%

$0.11

$1.12

$2.13

$3.14

$4.15

10.0%

-$2.11

-$1.10

-$0.09

$0.92

$1.93

REIT

Cap Rate

Tax Savings -

$10.58 Per Share Opportunity

Cap Rate Improvement -

$13.97 Per Share Opportunity

•

Elliott estimates $148mm of tax savings

from REIT conversion

•

Implies a FCF benefit of $0.74 per share

Tax Savings

$10.58

Incremental Opportunity: Detailed Cash Flows

Source: Elliott estimates

2011E

Mid

High

Business

REIT

Business

REIT

Status Quo

Improvements

Conversion

Combination

Improvements

Conversion

Combination

NOAM Physical OIBDA

972

1,013

972

1,013

1,040

972

1,040

Int'l Physical OIBDA

135

178

135

178

219

135

219

Digital OIBDA

Total OIBDA, ex. Corporate

1,135

1,220

1,135

1,220

1,289

1,135

1,289

Corporate Expense

(179)

(147)

(179)

(147)

(115)

(179)

(115)

Interest

(200)

Taxes

(161)

(202)

(12)

(21)

(237)

(12)

(32)

Operating Cash Flow

595

672

743

852

737

743

942

NOAM Physical Capex

(106)

(87)

(106)

(87)

(78)

(106)

(78)

Int'l Physical Capex

(93)

(75)

(93)

(75)

(65)

(93)

(65)

Digital Capex

(16)

(5)

(16)

(5)

(16)

(5)

Corporate Capex

(31)

(25)

(31)

(25)

(20)

(31)

(20)

Total Capex

(245)

(192)

(245)

(192)

(168)

(245)

(168)

Distributable Cash Flow

350

479

498

660

569

498

774

Distributable Cash Flow per Share

$1.75

$2.39

$2.49

$3.30

$2.84

$2.49

$3.87

Incremental Equity FCF

129

148

310

219

148

424

Equity FCF Yield

7.00%

6.36%

7.00%

5.02%

New Market Cap

5,005

6,846

7,840

10,383

8,131

9,918

15,399

New Share Price

$25.00

$34.20

$39.16

$51.87

$40.62

$49.54

$76.92

Detailed Cash Flows

($MMs)

(1) Includes taxes payable at both TRS and Int’l Physical businesses

Source: Elliott estimates

Free Cash Flow to Equity Yield

7.00%

6.50%

6.36%

5.50%

5.02%

800

$57.11

$61.48

$62.87

$72.66

$79.53

774

$55.24

$59.46

$60.81

$70.28

$76.92

750

$53.54

$57.64

$58.94

$68.12

$74.56

700

$49.97

$53.79

$55.01

$63.57

$69.59

660

$47.11

$50.72

$51.87

$59.94

$65.61

600

$42.83

$46.11

$47.15

$54.49

$59.65

569

$40.62

$43.73

$44.71

$51.68

$56.56

550

$39.26

$42.27

$43.22

$49.95

$54.67

498

$35.58

$38.30

$39.16

$45.26

$49.54

479

$34.20

$36.82

$37.65

$43.51

$47.62

450

$32.12

$34.58

$35.36

$40.87

$44.73

400

$28.55

$30.74

$31.43

$36.33

$39.76

350

$25.00

$26.91

$27.52

$31.81

$34.81

Current Share Price

$25.00

Mid

High

Business Improvements

$34.20

$40.62

REIT Conversion

$39.16

$49.54

Improvements + REIT Conversion

$51.87

$76.92

Implied Share

Price - Based

on Equity FCF

Yield

Incremental Opportunity: Implied Share Price

Based on Equity FCF Yield

Align Management Compensation Incentives With

Shareholder Value Creation

Align Compensation Incentives with Shareholder Value

Emphasize ROIC and FCF Rather Than Growth

Performance-based incentives are heavily weighted towards financial targets

that favor growth ahead of efficient capital allocation and shareholder value

•

In 2010, the CEO and Chairman’s financial targets were based two-thirds on gross

revenues and contribution (OIBDA) and one-third on achievement of corporate goals,

including, but not limited to, ROIC

•

Focusing on revenues and OIBDA risks promoting the acquisition of revenues and

earnings at the expense of ROIC and shareholder value

Executive compensation plans should be designed to align interests of

management and shareholders

•

Operationally –

Focus on returning cash flow to shareholders and ROIC

•

Compensation

Structure

–

Optimize mix of long-term equity incentive compensation

and cash

Source: Iron Mountain Incorporated disclosures

Elliott’s Slate of Independent Director Nominees

•

Our slate consists of four highly qualified and motivated individuals who are fully

prepared to explore all options to maximize shareholder value

—

All nominees are independent of Elliott

•

These individuals have exceptional experience in the critical areas affecting IRM:

capital allocation and operational efficiency

•

The Company will benefit from fresh, independent perspectives and additional

insights to the Board’s review process

Harvey Schulweis

•

Brings a career-long focus on

optimizing corporate investment

decisions and return on capital

•

Co-Founder and Managing

Director of Niantic Partners, a

real estate investment company

•

President and sole shareholder

of Schulweis Realty, Inc.

•

Former Chairman and CEO of The

Town and Country Trust, a

publicly traded REIT

•

Led the conversion of Town and

Country into a REIT

•

Former GP at Lazard Frères &

Co.

Ted R. Antenucci

•

Deep warehouse/industrial

property experience, both

domestic and international

•

Current President and Chief

Investment Officer, ProLogis

Trust

•

Former President of Catellus

Commercial Development

Corp., responsible for

development, construction

and acquisition activity

•

Helped lead the conversion of

Catellus into a REIT

Allan Z. Loren

•

45-year veteran of building

successful organizations

•

Has extensive strategic,

technology and operational

experience

•

Former Chairman and CEO of

D&B; led successful

turnaround

•

Has held senior executive and

technology positions at

American Express, CIGNA,

Galileo International and

Apple Computer U.S.A.

Robert J. Levenson

•

Has extensive experience as

an executive in the data

processing industry

•

Managing Member of Lenox

Capital Group, a private

venture capital investment

company, since 2000

•

Has held numerous senior

executive positions in leading

firms in the business services

space, including Automatic

Data Processing, Inc. and First

Data Corp.

Elliott’s Slate of Independent Director Nominees

Contacts

Elliott IRM Team

Tel: 212-974-6000

Investors

Source: Iron Mountain Incorporated disclosures

Press

Scott Tagliarino

Tel: 212-478-2620

Email: stagliarino@elliottmgmt.com

Appendix

Business Improvements -

Detail

Capital Expenditure Savings

Management has said

maintenance Capex is

2% of revenues

Elliott scenarios reduce

total Capex from 7.6%

(Company guidance) to

6.0% of revenues (in

Elliott Mid-case)

Primary improvement/

reduction from low ROIC

Int’l Physical Capex and

Growth Capex in NOAM

Physical

Cut new investments in

Digital

Management’s 5-yr

projection for Capex

in 2009 Annual

Investor Day

presentation

Source: Iron Mountain Incorporated disclosures

•

G&A costs have

increased to

over 15% of sales

recently, from

13.6% earlier in

2002

•

Elliott believes

a 100-200bps cut

by consolidation

of facilities and

reduction in

corporate

overhead should

be achievable as

growth is

deemphasized

General and Administrative Costs (as % of Revenue)

Source: Iron Mountain Inc. disclosures

13.6%

13.7%

14.3%

13.7%

14.1%

14.0%

14.7%

15.3%

13.0%

13.5%

14.0%

14.5%

15.0%

15.5%

16.0%

2002

2003

2004

2005

2006

2007

2008

2009

2010

G&A Costs Have Risen And Leave Room For Significant

Improvement

Sales and Marketing Cost Savings Consistent with the

Lower Growth of Attractive But Mature Business

Sales, Marketing and Account Management Costs (as % of Revenue)

Source: Iron Mountain Inc. disclosures

6.0%

6.5%

7.4%

8.3%

8.7%

9.1%

9.2%

9.1%

8.7%

9.0%

5.0%

5.5%

6.0%

6.5%

7.0%

7.5%

8.0%

8.5%

9.0%

9.5%

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

•

Sales &

Marketing costs

have increased

from ~6%

sales earlier in

the decade, to

~9%

recently

•

Elliott believes

a 150-250bps cut

by reducing sales

and marketing

effort is in line

with slowing

growth outlook

REIT Conversion -

Detail

Physical Storage Business is a Compelling REIT

Candidate

Stable,

annuity-like

rental

income

streams

(Low organic growth in core business)

High

margin

physical

storage

business

generates

~80%

total

IRM

OIBDA

Business elements not consistent with REIT requirements can be placed into a taxable

REIT

subsidiary

(TRS),

which

can

continue

“C”

Corp

2011 Revenue Split

2011 OIBDA Split

1, 2

2011 Company Guidance

Source: 4Q 2010 Earnings Presentation

Revenue ($mm)

3,175 -

3,240

OIBDA ($mm)

941 -

971

1. Source: Elliott estimates; Split between Storage vs. Services revenue based on Company guidance; OIBDA margin for NOAM Physical ~60% and Int’l

Physical ~25% (based on Elliott estimates)

2. Net of corporate expense

REIT, $754mm

TRS, $202mm

TRS, $1,589mm

REIT, $1,619mm

Public Market REITs Trade at Significantly Lower AFFO

Yield vs. S&P500 Companies

Investors

appreciate

certainty of

cash flow

Source: Green Street Advisors, Inc.

Source: Industrial, Data Center, Self Storage and GSA Average are sourced from Green Street Advisors, Inc., for whom Adjusted Funds from Operations =

FFO

less

normalized

reserve

for:

capitalized

leasing

and

maintenance

costs;

adjusted

for

straight

line

rents;

less

gains

land sales;

IRM

–

High and

IRM

–

Mid

are

based

Elliott

estimates

and

reflect

2011E

AFFO

Yield

for

IRM

both

the

REIT

and

Combination

valuations.

For

IRM

–

High

and

IRM

–

Mid, Elliott defines

Adjusted Funds from Operations (AFFO) as OIBDA less Corporate Expenses less Cash Interest less Cash Taxes less Capex

2011E AFFO Yield

3.0%

3.5%

4.0%

4.5%

5.0%

5.5%

6.0%

6.5%

Industrial

Data Center

Self Storage

GSA Average

IRM - High

IRM - Mid

Market Value =

AFFO x

AFFO Yield

Elliott Valuations Imply a Meaningful Discount to Where

Comparable REITs Trade