Iron Mountain Incorporated Q4/2010 Financial Results

Transcription

1 Place image here Iron Mountain Incorporated Q4/2010 Financial Results February 24, Iron Mountain Incorporated. All rights reserved. Iron Mountain and the design of the mountain are registered trademarks of Iron Mountain Incorporated. 1

2 Safe Harbor Language and Reconciliation of Non-GAAP Measures Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: This presentation contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and federal securities laws, and is subject to the safe-harbor created by such Act. Forward-looking statements include our 2011 financial performance outlook and statements regarding our goals, beliefs, future growth strategies, investment objectives, plans and current expectations, such as our expected continued productivity improvements, international expansion and intent and ability to repurchase shares and pay dividends. These statements involve known and unknown risks, uncertainties and other factors that may cause the actual results to be materially different from those contemplated in the forward-looking statements. Such factors include, but are not limited to: (i) the cost to comply with current and future laws, regulations and customer demands relating to privacy issues; (ii) the impact of litigation or disputes that may arise in connection with incidents in which the Company fails to protect its customers information; (iii) changes in the price for the Company s services relative to the cost of providing such services; (iv) changes in customer preferences and demand for the Company s services; (v) the cost or potential liabilities associated with real estate necessary for the Company s business; (vi) the performance of business partners upon whom the Company depends for technical assistance or management expertise outside the United States; (vii) changes in the political and economic environments in the countries in which the Company s international subsidiaries operate; (viii) in the various digital businesses in which the Company is engaged, the Company s ability to keep up with rapid technological changes, evolving industry expectations and changing customer requirements or competition for customers; (ix) claims that the Company s technology violates the intellectual property rights of a third party; (x) the impact of legal restrictions or limitations under stock repurchase plans on price, volume or timing of stock repurchases; (xi) the impact of alternative, more attractive investments on dividends or stock repurchases; (xii) the Company s ability or inability to complete acquisitions on satisfactory terms and to integrate acquired companies efficiently; (xiii) other trends in competitive or economic conditions affecting the Company s financial condition or results of operations not presently contemplated; and (xiv) other risks described more fully in the Company s most recently filed Annual Report on Form 10-K under Item 1A. Risk Factors. Except as required by law, Iron Mountain undertakes 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. Reconciliation of Non-GAAP Measures: Throughout this presentation, Iron Mountain will be discussing Adjusted Operating Income Before Depreciation & Amortization and Goodwill Impairment (Adjusted OIBDA), Free Cash Flow Before Acquisitions & Investments (FCF) and Adjusted EPS, which do not conform to accounting principles generally accepted in the United States (GAAP). For additional information and the reconciliation of these measures to the appropriate GAAP measure, as required by Securities and Exchange Commission Regulation G, please access the Non-GAAP Measures link on the Investor Relations page of the Company s website at 2

3 Key Messages Q4/2010 results conclude a solid year of financial performance Revenue, Adjusted OIBDA and Adjusted EPS results in line with expectations Reported earnings impacted by finalization of digital goodwill impairment charge Solid FY/2010 results build on strong long-term track record Profitability and free cash flow generation reach record levels Confidence in future cash flows supports 200% dividend increase Continue to target solid FCF and Adjusted EPS gains in 2011 Refining revenue and Adjusted OIBDA outlook 3

4 Strong Full Year Performance % Growth ($MM, except per share data) FY/2009 FY/2010 Reported Internal Revenue $3,014 $3,128 4% 2% Gross Profit (1) $1,742 $1,873 8% Gross Profit % 57.8% 59.9% Adjusted OIBDA $ 868 $ 945 9% Adjusted OIBDA % 28.8% 30.2% EPS FD $1.08 $(0.27) Adjusted EPS FD $0.98 $ % CAPEX (ex RE) (2) $ 284 $ 253 (11)% CAPEX (ex RE) % (2) 9.4% 8.1% Free Cash Flow (3) $ 336 $ % (1) Excluding depreciation and amortization (2) Based on incurred versus cash paid basis. Includes $36MM and $14MM of real estate spending in 2009 and 2010, respectively. (3) Before acquisitions and discretionary investments. 4

5 Solid Quarterly Results % Growth ($MM, except per share data) Q4/2009 Q4/2010 Reported Internal Revenue $ 779 $ 789 1% 1% NA Physical $535 $543 1% 1% Int l Physical $184 $187 2% 3% Worldwide Digital $60 $59 (3)% (5)% Gross Profit (1) $ 459 $ 480 4% Gross Profit % 58.9% 60.8% Adjusted OIBDA $ 230 $ 239 4% Adjusted OIBDA % 29.5% 30.3% EPS FD $0.30 $0.16 Adjusted EPS FD $0.27 $ % (1) Excluding depreciation and amortization 5

6 Revenue Growth Consistent with Expectations Internal Growth by Revenue Type Q4/2010 FY/2010 FY/2010 Outlook Storage 2% 3% 2% -- 3% Core Services (2)% (1)% ~(1)% Total Core Revenue 1% 1% ~1% Complementary Services 5% 9% 9% -- 10% Total Internal Growth 1% 2% 2% -- 3% Impact of Acquisitions/Divestitures <1% <1% <1% Impact of FX Fluctuations 0% ~1% ~1% Total Reported Growth 1% 4% ~4% NOTE: Columns may not foot due to rounding. 6

7 Business Segment Results % Growth ($MM) FY/2009 FY/2010 Reported Internal Revenue $2,102 $2,171 3% 2% NA Physical Adjusted OIBDA $ 857 $ % Adjusted OIBDA % 40.8% 44.3% CAPEX (ex RE) % (1) 7.1% 5.1% Revenue $ 683 $ 725 6% 4% International Physical Worldwide Digital Corporate Adjusted OIBDA $ 125 $ 134 7% Adjusted OIBDA % 18.4% 18.4% CAPEX (ex RE) % (1) 12.3% 12.1% Revenue $ 229 $231 1% (3)% Adjusted OIBDA $ 50 $28 (45)% Adjusted OIBDA % 21.9% 11.9% CAPEX (ex RE) % (1) 8.5% 9.7% Adjusted OIBDA $(164) $(177) 8% CAPEX (ex RE) % (1) 1.0% 1.0% (1) Based on incurred versus cash paid basis. 7

8 Building on Long-Term Track Record $MM (except per share data) yr CAGR Revenues $2,350 $3,128 7% Adjusted OIBDA $606 $945 12% Adjusted OIBDA % 25.8% 30.2% Adjusted EPS $0.60 $ % Capex (ex RE) (1) 13.6% 8.1% Free Cash Flow (2) $47 $373 68% Free Cash Flow (1)(2) 2.0% 11.9% (1) As a % of revenues (2) Before discretionary investments in acquisitions and real estate 8

9 Strong Balance Sheet As of December 31, 2010 ($MM) As of December 31, 2010 Debt, net of cash $2,751 % fixed with respect to interest rates 87% Weighted average interest rate 6.9% Weighted average maturity 6.9 years 6 Consolidated Leverage (1) $800 Debt Maturity Schedule ($MM) 5 $600 4 $ x 3 $ $ (1) Per our senior credit agreement. 9

10 Commitment to Shareholder Payouts Existing dividend tripled in December 2010 $0.75 per share annual rate implies a yield of ~3% 4.8 million shares repurchased in 2010 $239 million remaining under existing share repurchase authorization as of 12/31/2010 Committed to managing our balance sheet in a disciplined way that enhances returns per share 10

11 2011 Financial Outlook: Key Factors Maintaining measured outlook on revenue growth Targeting 2% - 4% reported revenue gains Adjusted OIBDA supported by continued productivity improvement and international margin expansion Outlook for 0% - 3% reported growth, including investments in sales and marketing initiatives Targeting solid Adjusted EPS and FCF gains supported by disciplined cash flow management 11

12 2011 Revenue Growth Drivers Internal Growth by Revenue Type FY 2010 FY 2011 Forecast Storage 3% 2% - 3% Core Services (1)% 0% - 2% Total Core Revenue 1% 1% - 3% Complementary Services 9% (5)% - (10)% Total Internal Growth 2% 0% - 2% Impact of Acquisitions/Divestitures <1% <1% Impact of FX Fluctuations ~1% ~1% Total Reported Growth Enterprise 4% 2% - 4% NOTE: Columns may not foot due to rounding. 12

13 2011 Financial Outlook ($MM) FY/2011 % Growth vs Revenue $3,175 - $3,240 2% - 4% Adjusted OIBDA $941 - $971 0% - 3% Capex (1) ~$245 (8)% Free Cash Flow (2) $375 - $410 1% - 10% Adjusted EPS FD $ $1.30 5% - 13% (1) Based on incurred versus cash basis and includes ~$20MM of capital spending on real estate. (2) Before discretionary investments in acquisitions and real estate, net 13

14 2011 Adjusted OIBDA to Net Income ($MM, except per share data) 2011 Adjusted OIBDA $941- $971 Depreciation & amortization ~344 Interest expense ~200 Other (income) expense -- Pre-tax income $397 - $427 Income tax 39% $155 - $167 Noncontrolling interest -- Consolidated net income $242 - $260 Adjusted EPS FD (1) $ $1.30 (1) Based on an estimated 200 million shares outstanding. 14