Iron Mountain: Fiscal 4Q07 Financial Results

Iron Mountain Incorporated announced its financial results for the quarter and full year
ended December 31, 2007, reporting strong revenue growth, higher
operating income before depreciation and amortization (OIBDA) and full
year earnings of $0.76 per diluted share.

Iron Mountain posted strong year over year revenue growth of 19% in
the fourth quarter supported by solid internal growth of 10%, with
acquisitions and favorable foreign currency changes contributing the
remainder. The Company had balanced revenue performance across its
North American Physical, International Physical and Worldwide Digital
business segments, with overall gains supported by robust service
revenue growth. OIBDA of $184 million for the quarter was within the
Company’s forecasted range as benefits from revenue gains were offset
by impacts from business mix, increased investments and certain
year-end compensation and benefit accruals.

The fourth quarter capped a solid year of financial performance for
the company. Full year revenues were up 16% to $2.73 billion and OIBDA
grew 14% for the year to $704 million, consistent with the Company’s
long-term financial objectives. Net income increased 19% to $153
million due primarily to a lower effective tax rate of 31%, which added
about $0.07 per diluted share to earnings. Implementation of the global
treasury program reduced the Company’s structural tax rate to
approximately 37% while the favorable effects of certain foreign
currency gains and losses and other discrete items reduced the
effective tax rate further. Capital expenditures of $415 million were
15.2% of 2007 revenues, down from 15.8% of revenues for 2006.

"We are pleased with the performance of the business this year,"
said Richard Reese, Chairman and CEO. "We delivered solid revenue and
OIBDA growth across our portfolio, consistent with our long-term
financial goals, and made significant progress in executing our
strategic agenda. Fundamentally, the business continues to run well and
we are investing in new services and infrastructure, consistent with
our strategy, to enhance our ability to provide comprehensive,
end-to-end solutions to our customers’ most complex information
management challenges."

Key Financial Highlights – Q4 2007

Iron Mountain’s total consolidated revenues for the quarter grew 19%
over the prior year period to $727 million driven by solid internal
growth of 10% and augmented by several acquisitions, most notably
ArchivesOne, Inc., RMS Services – USA, Inc. and Stratify, Inc. The
Company’s overall revenue growth was highlighted by continued strength
in service revenue internal growth (12%) led by increased special
project revenues in both North America and Europe and strong recycled
paper revenues. Solid storage (8%) and core service (8%) internal
revenue growth rates were also key factors in the Company’s revenue
performance for the quarter. See Appendix A at the end of this press
release for a presentation of Selected Financial Data.

The Company posted a 17% increase in gross profits for the quarter
driven primarily by strong revenue gains. The benefits from the revenue
gains were partially offset by the mix of revenues, as labor and
transportation intensive services such as secure shredding and Document
Management Solutions (DMS) grew faster than storage, and the dilutive
margin impacts of acquisitions completed during the year. OIBDA for the
quarter grew 9% to $184 million, reflecting the Company’s revenue
performance, offset by impacts from business mix, increased investments
and certain year-end compensation and benefit accruals. OIBDA growth
was also impacted by a $10 million net gain on asset dispositions in
2006. Excluding the impacts of asset dispositions from both years,
OIBDA grew 15% in the quarter. See Appendix B at the end of this press
release for a discussion of OIBDA and the required reconciliation to
the appropriate GAAP measures.

Operating income for the fourth quarter of 2007 was $115 million,
which was flat compared to the same period in 2006, due to increased
depreciation and amortization expense driven primarily by higher levels
of capital expenditures, acquisitions and accelerated depreciation
related to certain planned building moves. Further, operating income
for the fourth quarter of 2006 included a $10 million net gain on asset
dispositions compared to a $1 million net gain in the fourth quarter of
2007. Net income for the quarter was $28 million, or $0.14 per diluted
share, including other expense, net of $6 million, or $0.02 per diluted
share. The components of other expense, net, including the impact of
foreign currency fluctuations are detailed in the table below.

Also impacting net income was an increase in the Company’s effective
tax rate for the quarter. The 44.6% tax rate reflects the net negative
tax effect of certain foreign currency gains and losses recorded in
different tax jurisdictions. This impact lowered earnings by
approximately $0.03 per diluted share in the quarter. Absent the impact
of any foreign currency rate fluctuations and other discrete items, the
Company expects its structural tax rate to be approximately 36% for
2008.

The Company’s year to date Free Cash Flow before Acquisitions and
Discretionary Investments ("FCF") for the year ended December 31, 2007
was $148 million reflecting a 30% increase in cash flows from operating
activities, approximately $33 million of insurance proceeds related to
the July 2006 fire in one of our London, England facilities, controlled
capital expenditures and the cash flow benefit of a $60 million year
end accrual with respect to fourth quarter capital expenditures. The
reversal of this accrual in the first quarter ending March 31, 2008,
will impact our 2008 FCF. See Appendix B at the end of this press
release for a discussion of FCF and the required reconciliation to the
appropriate GAAP measures.

Iron Mountain Incorporated