IRON MOUNTAIN INC - Annual Report: 2019 (Form 10-K)

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•	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;

•	our ability or inability to execute our strategic growth plan, expand internationally, complete acquisitions on satisfactory terms, and to integrate acquired companies efficiently;

•	changes in the amount of our growth and maintenance capital expenditures and our ability to raise capital and invest according to plan;

•	our ability to execute on Project Summit and the potential impacts of Project Summit on our ability to retain and recruit employees and execute on our strategy;

•	the cost and our ability to comply with 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 or our internal records or information technology ("IT") systems and the impact of such incidents on our reputation and ability to compete;

•	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 and changes in the global political climate;

•	the impact of executing on our growth strategy through joint ventures;

•	our ability to comply with our existing debt obligations and restrictions in our debt instruments or to obtain additional financing to meet our working capital needs;

•	the impact of service interruptions or equipment damage and the cost of power on our data center operations;

•	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; and

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

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Pursuing Volume Opportunities in Records and Information Management Globally with a Focus on Faster-Growing Geographies and Verticals - We are establishing and enhancing leadership positions in higher-growth markets such as central and eastern Europe, Latin America, Asia and Africa, through both organic expansion and acquisitions where GDP growth is faster and outsourcing information management is at an earlier stage. We are also focused on increasing revenues in more established markets such as the United States, Canada, Western Europe, Australia and New Zealand, primarily through targeted sales and marketing efforts to attract new customers or to gain incremental volumes from existing customers. We believe much of the opportunity for new customers is from existing verticals that do not already outsource some or all of their storage and information management needs to us or another third party vendor. We expect to continue to invest in attractive acquisitions of customer relationships and storage and information management services businesses, designed to optimize the utilization of our existing assets and to expand our presence and better serve our customers.

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Driving Revenue Growth and Margin Expansion Through Revenue Management and Continuous Improvement - We expect to continue to drive revenue growth and margin expansion through further deployment of our revenue management program. Further, we expect continuous improvement initiatives will generate additional margin expansion opportunities, primarily in our established markets. In our higher-growth markets, we expect profits will grow with increased scale, and we will look to reinvest a portion of the cash flows generated to support expansion in these markets.

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Continued Expansion of Data Center Business - We have made significant progress through acquisitions and organic growth in scaling our data center business, with 14 operating data centers across 13 global markets. As of December 31, 2019, approximately 86% of our capacity is leased, with total potential capacity of 357 megawatts in land and buildings currently owned or operated by Iron Mountain making us among the largest global data center operators.

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•	Investing in Faster-Growing Businesses - We continue to identify, acquire, incubate and scale complementary businesses and products to support our long-term growth objectives and drive solid returns on invested capital. These opportunities include our Entertainment Services, Fine Arts and Consumer Storage (each as defined below) businesses and digital services.

•	Global RIM Business: Our Global RIM Business segment includes five distinct offerings.

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Global Data Center Business: Our Global Data Center Business segment provides enterprise-class data center facilities to protect mission-critical assets and ensure the continued operation of our customers’ IT infrastructure, with secure, reliable and flexible data center options. The world’s most heavily regulated organizations have trusted us with their data centers for over 15 years, and as of December 31, 2019, five of the top 10 global cloud providers were Iron Mountain Data Center customers.

•	Corporate and Other Business: Our Corporate and Other Business segment consists primarily of Adjacent Businesses and other corporate items.

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Large, Diversified, Global Business - The world's most heavily regulated organizations trust us with the storage of their records. Our mission-critical storage offerings and related services generated approximately $4.3 billion in annual revenue in 2019. Our business has a highly diverse customer base of approximately 225,000 customers - with no single customer accounting for more than 1% of revenue during the year ended December 31, 2019 - and operates in approximately 50 countries globally. This presents a significant cross-sell opportunity for our data center and digital services businesses.

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Recurring, Durable Revenue Stream - We generate a majority of our revenues from contracted storage rental fees, via agreements that generally range from one to five years in length. Historically, in our Records Management business, we have seen strong customer retention (of approximately 98%) and solid physical records retention; more than 50% of physical records that entered our facilities 15 years ago, are still with us today. We have also seen strong customer retention in our Global Data Center Business, with low annual customer churn of approximately 4%.

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•	Comprehensive Information Management Solution - As an S&P 500 REIT with approximately 1,450 locations globally and with offerings spanning physical storage, digitization services and digital storage, we are positioned to provide a holistic offering to our customers. We are able to cater to our customers' physical and digital needs and to help guide their digital transformation journey.

•	Significant Owner and Operator of Real Estate - We operate approximately 91 million square feet of real estate worldwide. Our owned real estate footprint spans nearly 30 million square feet and is concentrated in major metropolitan statistical areas in North America, Western Europe and Latin America.

•	Limited Revenue Cyclicality - Historically, economic downturns have not significantly affected our storage rental business. Due to the stability in our total global physical records volumes, the success of our revenue management, and the growth of our Global Data Center Business, we believe we can continue to grow storage rental revenue over time.

•	Shifting Revenue Mix - Our growth portfolio, which consists of our business in our higher-growth markets, our Global Data Center Business, and our Adjacent Businesses, comprised 24% of our total revenue in 2019, and grew 4% year over year, on an organic basis. We expect our growth portfolio to comprise an increasingly larger percentage of our overall business in the coming years.

•	Large Data Center Platform with Significant Expansion Opportunity - With over 3.5 million gross square feet, as of December 31, 2019, we have 120 MW of leasable capacity with an additional 237 MW under construction or held for development.

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Differentiated Compliance and Security - We offer comprehensive compliance support and physical and cyber security. Our multi-layered approach to security includes a combination of technical and human security measures, and experienced senior military and public sector cyber security leaders lead our security. As of December 31, 2019, Iron Mountain data centers meet FISMA high and PCI-DSS compliance standards and are FedRAMP compliant.

•	Efficient Access and Flexibility - We have the ability to provide customers with a range of deployment options from one cabinet to an entire building, leveraging our global portfolio of hyperscale-ready, and underground data centers. We also provide access to numerous carriers, cloud providers and peering exchanges with migration support and IT.

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100% Green Powered Data Centers - As of December 31, 2019, Iron Mountain data centers are powered by 100% renewable energy, with carbon credit assistance and low power usage effectiveness ("PUE"). Iron Mountain is one of the top 25 buyers of renewable energy among the Fortune 1000 and now offers the Green Power Pass, which allows customers to include the power they consume at any Iron Mountain data center as green power in their CDP, RE100, GRI, or other sustainability reporting.

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•	our inability to identify suitable companies to acquire or invest in;

•	our inability to complete acquisitions or investments on satisfactory terms;

•	our inability to structure investments or acquisitions in a manner that complies with our debt covenants and is consistent with our leverage ratio goals;

•	increased demands on our management, operating systems, internal controls and financial and physical resources and, if necessary, our inability to successfully expand our infrastructure;

•	our inability to execute on our plans to help our customers digitize their records or incorporate new technologies into our offerings;

•	failure to achieve satisfactory returns on acquired companies or other investments, particularly in markets where we do not currently operate;

•	incurring additional debt necessary to acquire suitable companies or make other growth investments if we are unable to pay the purchase price or make the investment out of working capital, common stock or other equity securities;

•	our inability to manage the budgeting, forecasting and other process control issues presented by future growth, particularly with respect to operations in countries outside of the United States or in new lines of business;

•	insufficient revenues to offset expenses and liabilities associated with new investments; and

•	our inability to attract, develop and retain skilled employees to lead and support our strategic growth plan.

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•	challenges and difficulties associated with managing our larger, more complex, company;

•	conforming standards, controls, procedures and policies, business cultures and compensation and benefits structures between the two businesses;

•	consolidating corporate and administrative infrastructures;

•	coordinating geographically dispersed organizations;

•	potential unknown liabilities and unforeseen expenses or delays associated with an acquisition; and

•	our ability to deliver on our strategy going forward.

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the impact of foreign government regulations and United States regulations that apply to us in foreign countries where we operate; in particular, we are subject to United States and foreign anticorruption laws, such as the Foreign Corrupt Practices Act and the United Kingdom Bribery Act, and, although we have implemented internal controls, policies and procedures and training to deter prohibited practices, our employees, partners, contractors or agents may violate or circumvent such policies and the law;

•	the volatility of certain foreign economies in which we operate;

•	political uncertainties and changes in the global political climate or other global events, such as the recent trade wars involving the U.S. or global pandemics, which may impose restrictions on, or create additional risk in relation to, global operations;

•	unforeseen liabilities, particularly within acquired businesses;

•	costs and difficulties associated with managing international operations of varying sizes and scale;

•	our operations in the United Kingdom and the European Union may be adversely affected by the exit from the European Union (“Brexit”) by the United Kingdom, and the uncertainty associated therewith;

•	the risk that business partners upon whom we depend for technical assistance or management and acquisition expertise in some markets outside of the United States will not perform as expected;

•	difficulties attracting and retaining local management and key employees to operate our business in certain countries;

•	cultural differences and differences in business practices and operating standards; and

•	foreign currency fluctuations.

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•	human error;

•	equipment failure;

•	physical, electronic and cyber security breaches;

•	fire, hurricane, flood, earthquake and other natural disasters;

•	water damage;

•	fiber cuts;

•	extreme temperatures;

•	power loss or telecommunications failure;

•	war, terrorism and any related conflicts or similar events worldwide; and

•	sabotage and vandalism.

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•	we may not have the right to exercise sole decision-making authority regarding the properties, business, partnership, joint venture or other entity;

•	if our partners become bankrupt or fail to fund their share of required capital contributions, we may choose or be required to contribute such capital;

•	our partners may have economic, tax or other interests or goals that are inconsistent with our interests or goals, and that could affect our ability to negotiate satisfactory joint venture terms, to operate the property or business or maintain our qualification for taxation as a REIT;

•	our partners may be subject to different laws or regulations than us, or may be structured differently than us for tax purposes, which could create conflicts of interest and/or affect our ability to maintain our qualification for taxation as a REIT;

•	our partners may take actions that are not within our control, which could require us to dispose of the joint venture asset, transfer it to a taxable REIT subsidiary ("TRS") in order for us to maintain our qualification for taxation as a REIT, or purchase such partner's interests or assets at an above-market price;

•	in connection with our joint ventures, we may agree to restrictions on our ability to expand our business in certain geographies independently or with other partners;

•	disputes between us and our partners may result in litigation or arbitration that would increase our expenses and prevent our management from focusing their time and effort on our day-to-day business; and

•	we may in certain circumstances be liable for the actions of our third-party partners or guarantee all or a portion of the joint venture's liabilities, which may require the company to pay an amount greater than its investment in the joint venture.

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•	acquisition and occupancy costs that make it difficult to meet anticipated margins and difficulty locating suitable facilities due to a relatively small number of available buildings having the desired characteristics in some real estate markets;

•	uninsured losses or damage to our storage facilities due to an inability to obtain full coverage on a cost-effective basis for some casualties, such as fires, hurricanes and earthquakes, or any coverage for certain losses, such as losses from riots or terrorist activities;

•	inability to use our real estate holdings effectively and costs associated with vacating or consolidating facilities if the demand for physical storage were to diminish; and

•	liability under environmental laws for the costs of investigation and cleanup of contaminated real estate owned or leased by us, whether or not (i) we know of, or were responsible for, the contamination, or (ii) the contamination occurred while we owned or leased the property.

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•	inability to satisfy our obligations with respect to our various debt instruments;

•	inability to make borrowings to fund future working capital, capital expenditures and strategic opportunities, including acquisitions, further organic development of our Global Data Center Business and expansions into adjacent businesses, and other general corporate requirements, including possible required repurchases, redemptions or prepayments of our various indebtedness;

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limits on our distributions to stockholders; in this regard if these limits prevented us from satisfying our REIT distribution requirements, we could fail to remain qualified for taxation as a REIT or, if these limits do not jeopardize our qualification for taxation as a REIT but do nevertheless prevent us from distributing 100% of our REIT taxable income, we will be subject to federal corporate income tax, and potentially a nondeductible excise tax, on the retained amounts;

•	limits on future borrowings under our existing or future credit arrangements, which could affect our ability to pay our indebtedness or to fund our other liquidity needs;

•	inability to generate sufficient funds to cover required interest payments;

•	restrictions on our ability to refinance our indebtedness on commercially reasonable terms;

•	limits on our flexibility in planning for, or reacting to, changes in our business and the information management services industry; and

•	inability to adjust to adverse economic conditions that could place us at a disadvantage to our competitors with less debt and who, therefore, may be able to take advantage of opportunities that our indebtedness prevents us from pursuing.

•	incur additional indebtedness;

•	pay dividends or make other restricted payments;

•	make asset dispositions;

•	create or permit liens;

•	sell, transfer or exchange assets;

•	guarantee certain indebtedness;

•	make acquisitions and other investments; and

•	enter into partnerships and joint ventures.

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•	we will not be allowed a deduction for distributions to stockholders in computing our taxable income;

•	we will be subject to federal and state income tax on our taxable income at regular corporate income tax rates; and

•	we would not be eligible to elect REIT status again until the fifth taxable year that begins after the first year for which we failed to qualify as a REIT.

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(1)	Total building utilization and total racking utilization for Records Management includes the utilization for IGDS and Consumer Storage.

(2)	Total building utilization and total racking utilization for Data Management excludes certain data management operations of Recall, as Recall's unit of measurement for computer media was not consistent with ours.

(3)	Includes the Records Management and Data Management businesses in South Africa and United Arab Emirates.

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(1)

On January 1, 2019, we adopted Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842), as amended ("ASU 2016-02"). The selected financial data above for 2019 reflects the adoption of ASU 2016-02. At January 1, 2019, we recognized the cumulative effect of initially applying ASU 2016-02 as an adjustment to the opening balance of (Distributions in excess of earnings) Earnings in excess of distributions, resulting in an increase of approximately $5.8 million to stockholders' equity.

(2)

On January 1, 2018, we adopted ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"). The selected financial data above for 2018 reflects the adoption of ASU 2014-09. At January 1, 2018, we recognized the cumulative effect of initially applying ASU 2014-09 as an adjustment to the opening balance of (Distributions in excess of earnings) Earnings in excess of distributions, resulting in a decrease of approximately $30.2 million to stockholders' equity.

(3)	The selected financial data above for 2018 includes the results of IODC from January 10, 2018.

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(4)

In June 2019, we received a notification of assessment from tax and customs authorities in the Netherlands related to a value-added tax (“VAT”) liability of approximately 16.8 million Euros primarily related to the years ending December 31, 2018 and 2017, as described more fully in Note 2.y. to Notes to Consolidated Financial Statements included in this Annual Report. Based on our estimate of the amount of loss related to this matter that is both probable and estimable, we have restated the following: (i) selling, general and administrative expenses and interest expense were increased by approximately $11.0 million and $0.4 million, respectively, and the provision for income taxes was decreased by approximately $2.0 million for the year ended December 31, 2018 and (ii) selling, general and administrative expenses and interest expense were increased by approximately $16.6 million and $0.1 million, respectively, and the provision for income taxes was decreased by approximately $3.0 million for the year ended December 31, 2017.

(5)

Beginning in the fourth quarter of 2019, we present Significant Acquisition Costs (as defined in Note 2.x. to Notes to Consolidated Financial Statements included in this Annual Report) as a separate line on our Consolidated Statements of Operations. Previously, these costs were included within Cost of sales (excluding depreciation and amortization) and Selling, general and administrative expense. All prior periods are now presented to conform to this presentation. This change in presentation resulted in a decrease in Cost of sales (excluding depreciation and amortization) of approximately $7.6 million, $20.5 million, $12.0 million and $0.0 million for the years ended December 31, 2018, 2017, 2016 and 2015, respectively, and a decrease to Selling, general and administrative expense of approximately $43.0 million, $64.4 million, $120.0 million and $47.0 million for the years ended December 31, 2018, 2017, 2016 and 2015, respectively. See Note 2.x. to Notes to Consolidated Financial Statements included in this Annual Report for additional information on this change in presentation.

(6)

Beginning in 2019, we present gains on sale of real estate as a component of operating income in the line item (Gain) loss on disposal/write-down of property, plant and equipment, net in our Consolidated Statements of Operations. Such amounts are presented gross of tax with any tax impact presented within Provision (benefit) for income taxes. All prior periods are now presented to conform to this presentation. Previously, we classified gains on sale of real estate, net of tax, as a separate line on our Consolidated Statements of Operations and excluded such amounts from our reported operating income. We presented such amounts net of tax as these gains were presented below the Provision (benefit) for income taxes in our Consolidated Statements of Operations. This change in presentation resulted in an increase in (Gain) loss on disposal/write-down of property, plant and equipment, net of approximately $63.8 million, $1.6 million, $2.3 million and $1.1 million for the years ended December 31, 2018, 2017, 2016 and 2015, respectively, and an increase in Provision (benefit) for income taxes of approximately $8.5 million, $0.0 million, $0.1 million and $0.2 million for the years ended December 31, 2018, 2017, 2016 and 2015, respectively. See Note 2.x. to Notes to Consolidated Financial Statements included in this Annual Report for additional information on this change in presentation.

(7)	The selected financial data above for 2016 includes the results of Recall from May 2, 2016.

(8)

For definitions of Adjusted EBITDA and Adjusted EBITDA Margin, a reconciliation of Adjusted EBITDA to Income (loss) from continuing operations and a discussion of why we believe these non-GAAP measures provide relevant and useful information to our current and potential investors, see "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Measures" included in this Annual Report.

(9)	Includes restricted cash of $4.9 million, $15.1 million and $22.2 million as of December 31, 2019, 2018 and 2017, respectively.

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(1)

The difference between our effective tax rate and our structural tax rate (or adjusted effective tax rate) for the years ended December 31, 2019, 2018, 2017, 2016 and 2015 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 years ended December 31, 2019, 2018, 2017, 2016 and 2015 was 18.2%, 18.2%, 19.7%, 18.5% and 16.8%, respectively.

(2)	Columns may not foot due to rounding.

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

(2)	Tax expense associated with the gain on sale of real estate for the years ended December 31, 2019, 2018, 2017, 2016 and 2015 was $5.4 million, $8.5 million, $0.0 million, $0.1 million and $0.2 million, respectively.

(3)	Includes amortization expense for Data Center In-Place Lease Intangible Assets and Data Center Tenant Relationship Intangible Assets as defined in Note 2.i. to Notes to Consolidated Financial Statements included in this Annual Report.

(4)	Includes foreign currency transaction losses (gains), net of $24.9 million, $(15.6) million, $43.2 million, $20.4 million, and $70.9 million for the years ended December 31, 2019, 2018, 2017, 2016 and 2015, respectively. See Note 2.u. to Notes to Consolidated Financial Statements included in this Annual Report for additional information regarding the components of Other expense (income), net.

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(5)

Represents the tax impact of (i) the reconciling items above, which impacts our reported income (loss) from continuing operations before provision (benefit) for income taxes but has an insignificant impact on our reported provision (benefit) for income taxes and (ii) other discrete tax items. Discrete tax items resulted in a (benefit) provision for income taxes of $(1.6) million, $(27.8) million, $(38.3) million, $(2.4) million, and $(14.6) million for the years ended December 31, 2019, 2018, 2017, 2016 and 2015, respectively.

(6)	Net of tax provision (benefit) of $0.0 million, $(0.1) million, $(1.8) million, $0.8 million, and $0.0 million for the years ended December 31, 2019, 2018, 2017, 2016 and 2015, respectively.

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•	A significant decrease in the market price of an asset;

•	A significant change in the extent or manner in which a long-lived asset is being used or in its physical condition;

•	A significant adverse change in legal factors or in the business climate that could affect the value of the asset;

•	An accumulation of costs significantly greater than the amount originally expected for the acquisition or construction of an asset;

•	A current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset; and

•	A current expectation that, more likely than not, an asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life.

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(1)	For purposes of our goodwill impairment analysis, the term "capital expenditures" includes both growth investment and recurring capital expenditures.

(2)	Terminal growth rates are applied in year 10 of our discounted cash flow analysis.

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(1)	See "Non-GAAP Measures—Adjusted EBITDA" in this Annual Report for the definitions of Adjusted EBITDA and Adjusted EBITDA Margin, reconciliation of Adjusted EBITDA to Income (Loss) from Continuing Operations and a discussion of why we believe these non-GAAP measures provide relevant and useful information to our current and potential investors.

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(1)	Constant currency growth rates are calculated by translating the 2018 results at the 2019 average exchange rates and the 2017 results at the 2018 average exchange rates.

(2)	Our organic revenue growth rate, which is a non-GAAP measure, represents the year-over-year growth rate of our revenues excluding the impact of business acquisitions, divestitures, foreign currency exchange rate fluctuations and the impact of the adoption of ASU 2014-09, but including the impact of acquisitions of customer relationships.

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(1)	See "Non-GAAP Measures—Adjusted EBITDA" in this Annual Report for the definitions of Adjusted EBITDA and Adjusted EBITDA Margin, a reconciliation of Adjusted EBITDA to Income (Loss) from Continuing Operations and a discussion of why we believe these non-GAAP measures provide relevant and useful information to our current and potential investors.

(2)	Segment Adjusted EBITDA Margin is calculated by dividing Segment Adjusted EBITDA by total segment revenues.

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(1)	See "Non-GAAP Measures—Adjusted EBITDA" in this Annual Report for the definitions of Adjusted EBITDA and Adjusted EBITDA Margin, a reconciliation of Adjusted EBITDA to Income (Loss) from Continuing Operations and a discussion of why we believe these non-GAAP measures provide relevant and useful information to our current and potential investors.

(2)	Segment Adjusted EBITDA Margin is calculated by dividing Segment Adjusted EBITDA by total segment revenues.

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(1)	See "Non-GAAP Measures—Adjusted EBITDA" in this Annual Report for the definition of Adjusted EBITDA, a reconciliation of Adjusted EBITDA to Income (Loss) from Continuing Operations and a discussion of why we believe this non-GAAP measure provides relevant and useful information to our current and potential investors.

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•	We paid cash for acquisitions (net of cash acquired) of $58.2 million, primarily funded by borrowings under our Revolving Credit Facility.

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We paid cash for capital expenditures of $693.0 million. Our business requires capital expenditures to maintain our ongoing operations, support our expected revenue growth and new products and services, and increase our profitability. All of these expenditures are included in the cash flows from investing activities. Additional details of our capital spending is included in the Capital Expenditures section below.

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We acquired customer relationships, and incurred both customer inducements (which consists of permanent withdrawal fees following the adoption of ASU 2014-09) and Contract Fulfillment Costs (as defined in Note 2.l. to Notes to Consolidated Financial Statements included in this Annual Report) and third-party commissions for the year ended December 31, 2019 of $46.1 million, $9.4 million and $76.2 million, respectively.

•	We paid $19.2 million as part of our investment in the MakeSpace JV (as discussed above).

•	We received proceeds of $166.1 million primarily related to the sale of facilities in the United States and the United Kingdom.

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•	Net proceeds of $987.5 million associated with the issuance of the 47/8% Senior Notes due 2029 (as defined below).

•	Net payments of $475.3 million primarily associated with the repayments on our Revolving Credit Facility.

•	Payment of dividends in the amount of $704.5 million on our common stock.

•	Real Estate: Expenditures primarily related to investments in land, buildings, building improvements, leasehold improvements and racking structures to grow our revenues or achieve operational efficiencies.

•	Non-Real Estate: Expenditures that support the growth of our business, and/or increase our profitability, such as customer-inventory technology systems, security upgrades or system enhancements.

•	Data Center: Expenditures primarily related to investments in new construction of data center facilities (including the acquisition of land and development of facilities) or capacity expansion in existing buildings.

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

•	Real Estate: Expenditures primarily related to the replacement of components of real estate assets such as buildings, building improvements, leasehold improvements and racking structures.

•	Non-Real Estate: Expenditures primarily related to the replacement of customer-facing assets such as containers and shred bins, warehouse equipment, fixtures, computer hardware, or third-party or internally-developed software assets.

•	Data Center: Expenditures related to the upgrade or re-configuration of existing data center assets.

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(1)	The amount at December 31, 2017 includes approximately $66,800 related to a financing lease associated with our data center in Manassas, Virginia.

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(1)

The maximum allowable leverage ratio under our indentures for the GBP Notes due 2025, the 47/8% Notes due 2027, the 51/4% Notes and the 47/8% Notes due 2029 is 7.0, while the maximum allowable leverage ratio under the indentures pertaining to our remaining senior and senior subordinated notes is 6.5. In certain instances as provided in our indentures, we have the ability to incur additional indebtedness that would result in our bond leverage ratio exceeding the maximum allowable ratio under our indentures and still remain in compliance with the covenant.

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(1)

Excluded from our financing lease obligations is the potential obligation related to an agreement we entered into in the fourth quarter of 2019 to lease a facility in the United Kingdom that is currently under construction. The exact terms of the lease will be determined upon the completion of building construction, which is expected to occur in late 2020. We expect the rent due in the first year of the lease to be approximately $5.0 million, and we expect the term of the lease to be approximately 25 years.

(2)	Amounts include variable rate interest payments, which are calculated utilizing the applicable interest rates as of December 31, 2019; see Note 4 to Notes to Consolidated Financial Statements included in this Annual Report.

(3)	These amounts are net of sublease income of $34.1 million in total (including $7.7 million, $10.3 million, $8.4 million and $7.7 million, in less than 1 year, 1-3 years, 3-5 years and more than 5 years, respectively).

(4)	Purchase commitments include obligations for future construction costs associated with the expansion of our Global Data Center Business, which represent a significant amount of the purchase commitments due in less than one year.

(5)	The table above excludes $35.1 million in uncertain tax positions as we are unable to make reliable estimates of the period of cash settlement, if any, with the respective taxing authorities.

(6)	The table above excludes $67.7 million of redeemable noncontrolling interests, which represents the estimated redemption value of the redeemable noncontrolling interests. See Note 2.v. to Notes to Consolidated Financial Statements included in this Annual Report. This table also excludes purchase commitments associated with acquisitions closed or expected to close in 2020.

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(b)	Exhibits filed as part of this report: As listed in the Exhibit Index following the Financial Statement Schedule III-Schedule of Real Estate and Accumulated Depreciation.

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•	We tested the effectiveness of controls over goodwill, including those over the Forecast and the selection of the Adjusted EBITDA multiples and discount rates.

•	We evaluated management’s ability to accurately forecast by comparing actual results to management’s historical forecasts.

•	We evaluated the reasonableness of management’s Forecast by comparing it to (1) historical results, (2) internal communications to management and the Board of Directors, and (3) forecasted information included in Company press releases and industry reports of the Company and companies in its peer group.

•	With the assistance of our fair value specialists, we evaluated the Adjusted EBITDA multiples, including testing the underlying source information and mathematical accuracy of the calculations and comparing the multiples selected by management to its guideline companies.

•	With the assistance of our fair value specialists, we evaluated the discount rates, including testing the underlying source information and the mathematical accuracy of the calculations, and developing a range of independent estimates and comparing those to the discount rates selected by management.

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(1)	Total fair value and other adjustments primarily include net adjustments of $(2,717) primarily related to property, plant and equipment, customer relationship intangible assets and other liabilities and $7,186 of cash paid related to certain acquisitions completed in 2017.

(2)	Total fair value and other adjustments primarily include net adjustments of $4,942 primarily related to property, plant and equipment, customer relationship and data center lease-based intangible assets and deferred income taxes and other liabilities offset by $662 of net cash received related to certain acquisitions completed in 2018.

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(1)	Includes Data Center In-Place Leases, Data Center Tenant Relationships and Data Center Above-Market Leases.

(2)	Third-party commissions asset is included in Other, a component of Other assets, net in the accompanying Consolidated Balance Sheets as of December 31, 2019 and 2018. See Note 6 for additional information on the third-party commissions asset.

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(1)

Estimated minimum future lease payments exclude variable common area maintenance charges, insurance and taxes. Differences in estimated lease payments between December 31, 2019 and December 31, 2018 are primarily related to adjustments to account for certain build to suit leases that were accounted for as financing obligations under ASC 840 but are accounted for as operating leases under ASU 2016-02 and foreign currency exchange rate impacts.

(2)	Includes financing lease and financing obligations associated with build to suit lease transactions at December 31, 2018.

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(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.

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(1)	See Note 12.

(2)	Columns may not foot due to rounding.

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(1)	Primarily consists of the issuance of credit memos, the write-off of accounts receivable and the impact associated with currency translation adjustments.

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(1)	Money market funds and time deposits are measured based on quoted prices for similar assets and/or subsequent transactions.

(2)	Certain trading securities are measured at fair value using quoted market prices.

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(3)	Certain trading securities are measured based on inputs other than quoted market prices that are observable.

(4)

Derivative assets and liabilities include (i) interest rate swap agreements, including forward-starting interest rate swap agreements, to limit our exposure to changes in interest rates on a portion of our floating rate indebtedness, (ii) cross-currency swap agreements to hedge the variability of exchange rates impacts between the United States dollar and the Euro and certain of our Euro denominated subsidiaries and (iii) short-term (six months or less) foreign exchange currency forward contracts that we have entered into to hedge certain of our foreign exchange intercompany exposures. Our derivative financial instruments are measured using industry standard valuation models using market-based observable inputs, including interest rate curves, forward and spot prices for currencies and implied volatilities. Credit risk is also factored into the determination of the fair value of our derivative financial instruments. See Note 3 for additional information on our derivative financial instruments.

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(1)	During the year ended December 31, 2017, approximately $29,100 of cumulative translation adjustment associated with our businesses in Russia and Ukraine was reclassified from accumulated other comprehensive items, net and was included in the gain on sale associated with the Russia and Ukraine Divestment (see Note 13).

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(1)

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, includes gains or losses primarily related to (i) borrowings in certain foreign currencies under our Revolving Credit Facility and our Former Revolving Credit Facility (each as defined in Note 4), (ii) our Euro Notes (as defined in Note 4), (iii) certain foreign currency denominated intercompany obligations of our foreign subsidiaries to us and between our foreign subsidiaries, which are not considered permanently invested and (iv) amounts that are paid or received on the net settlement amount from forward contracts (as more fully discussed in Note 3).

(2)	Other, net for the year ended December 31, 2017 includes a gain of $38,869 associated with the Russia and Ukraine Divestment (as defined in Note 13).

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(1)

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 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. The fair value (Level 3 of fair value hierarchy described at Note 2.s.) 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, 2019 and 2018.

(2)	The amount of debt for the Term Loan B (as defined below) reflects an unamortized original issue discount of $1,355 and $1,581 as of December 31, 2019 and 2018, respectively.

(3)	The amount of debt for the AUD Term Loan reflects an unamortized original issue discount of $1,232 and $1,690 as of December 31, 2019 and 2018, respectively.

(4)	The fair value (Level 3 of fair value hierarchy described at Note 2.s.) of this debt instrument approximates the carrying value as borrowings under this debt instrument are based on a current variable market interest rate.

(5)	The fair values (Level 1 of fair value hierarchy described at Note 2.s.) of these debt instruments are based on quoted market prices for these notes on December 31, 2019 and 2018, respectively.

(6)

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 IMI's 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. The remainder of our subsidiaries do not guarantee the Parent Notes. See Note 5.

(7)

The 43/8% Notes, the CAD Notes due 2023, the Euro Notes, the GBP Notes due 2025, the 53/8% Notes, the 47/8% Notes due 2027, the 51/4% Notes and the 47/8% Notes due 2029 (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.

(8)	Canada Company is the direct obligor on 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 5.

(9)	Iron Mountain (UK) PLC ("IM UK") is the direct obligor on the GBP Notes due 2025, 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 5.

(10)	Iron Mountain US Holdings, Inc. ("IM US Holdings"), one of the Guarantors, is the direct obligor on the 53/8% 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 5.

(11)

Includes (i) real estate mortgages of $27,036 and $18,576 as of December 31, 2019 and 2018, respectively, which bear interest at approximately 3.9% as of December 31, 2019 and 4.1% as of December 31, 2018 and are payable in various installments through 2024, (ii) financing lease liabilities of $367,182 and $447,173 as of December 31, 2019 and 2018, respectively, which bear a weighted average interest rate of 5.7% at December 31, 2019 and 2018 and (iii) other notes and other obligations, which were assumed by us as a result of certain acquisitions, of $129,453 and $140,953 as of December 31, 2019 and 2018, respectively, and bear a weighted average interest rate of 10.8% at December 31, 2019 and 11.1% at December 31, 2018, respectively. We believe the fair value (Level 3 of fair value hierarchy described at Note 2.s.) of this debt approximates its carrying value.

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(12)	The Accounts Receivable Securitization Special Purpose Subsidiaries are the obligors under this program. We believe the fair value (Level 3 of fair value hierarchy described at Note 2.s.) of this debt approximates its carrying value.

(13)	The Mortgage Securitization Special Purpose Subsidiary is the obligor under this program. We believe the fair value (Level 3 of fair value hierarchy described at Note 2.s.) of this debt approximates its carrying value.

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•	43/8% Notes: $500,000 principal amount of senior notes maturing on June 1, 2021 and bearing interest at a rate of 43/8% per annum, payable semi-annually in arrears on December 1 and June 1;

•	6% Notes due 2023: $600,000 principal amount of senior notes maturing on August 15, 2023 and bearing interest at a rate of 6% per annum, payable semi-annually in arrears on February 15 and August 15;

•	CAD Notes due 2023: 250,000 CAD principal amount of senior notes maturing on September 15, 2023 and bearing interest at a rate of 53/8% per annum, payable semi-annually in arrears on March 15 and September 15;

•	53/4% Notes: $1,000,000 principal amount of senior subordinated notes maturing on August 15, 2024 and bearing interest at a rate of 53/4% per annum, payable semi-annually in arrears on February 15 and August 15;

•	Euro Notes: 300,000 Euro principal amount of senior notes maturing on January 15, 2025 and bearing interest at a rate of 3% per annum, payable semi-annually in arrears on January 15 and July 15;

•	GBP Notes due 2025: 400,000 British pounds sterling principal amount of senior notes maturing on November 15, 2025 and bearing interest at a rate of 37/8% per annum, payable semi-annually in arrears on May 15 and November 15;

•	53/8% Notes: $250,000 principal amount of senior notes maturing on June 1, 2026 and bearing interest at a rate of 53/8% per annum, payable semi-annually in arrears on December 1 and June 1;

•	47/8% Notes due 2027: $1,000,000 principal amount of senior notes maturing on September 15, 2027 and bearing interest at a rate of 47/8% per annum, payable semi-annually in arrears on March 15 and September 15;

•	51/4% Notes: $825,000 principal amount of senior notes maturing on March 15, 2028 and bearing interest at a rate of 51/4% per annum, payable semi-annually in arrears on March 15 and September 15; and

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•	47/8% Notes due 2029: $1,000,000 principal amount of senior notes maturing on September 15, 2029 and bearing interest at a rate of 47/8% per annum, payable semi-annually in arrears on March 15 and September 15.

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(1)	Prior to this date, the relevant notes are redeemable, at our option, in whole or in part, at a specified redemption price or make-whole price, as the case may be.

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(1)

The maximum allowable leverage ratio under our indentures for the GBP Notes due 2025, the 47/8% Notes due 2027, the 51/4% Notes and the 47/8% Notes due 2029 is 7.0, while the maximum allowable leverage ratio under the indentures pertaining to our remaining senior and senior subordinated notes is 6.5. In certain instances as provided in our indentures, we have the ability to incur additional indebtedness that would result in our bond leverage ratio exceeding the maximum allowable ratio under our indentures and still remain in compliance with the covenant.

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(1)	Included within Cash and Cash Equivalents at December 31, 2019 is approximately $198,300 and $0 of cash on deposit associated with our Cash Pools for the Guarantors and Non-Guarantors, respectively. See Note 4 for more information on our Cash Pools.

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(1)	Included within Cash and Cash Equivalents at December 31, 2018 is approximately $58,900 and $12,700 of cash on deposit associated with our Cash Pools for the Guarantors and Non-Guarantors, respectively. See Note 4 for more information on our Cash Pools.

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(1)

Included in cash paid for acquisitions in our Consolidated Statement of Cash Flows for the year ended December 31, 2019 is net cash acquired of $2,260 and contingent and other payments, net of $7,267 related to acquisitions made in years prior to 2019. Included in cash paid for acquisitions in our Consolidated Statement of Cash Flows for the year ended December 31, 2018 is net cash acquired of $44,534 and contingent and other payments, net of $23,967 related to acquisitions made in years prior to 2018. Included in cash paid for acquisitions in our Consolidated Statement of Cash Flows for the year ended December 31, 2017 is net cash acquired of $14,746 and contingent and other payments, net of $137 related to acquisitions made in years prior to 2017.

(2)	Purchase price holdbacks and other includes $18,824 purchase price accrued for the EvoSwitch Transaction in 2018 and $16,771 purchase price accrued for the Santa Fe China Transaction in 2017.

(3)	Consists primarily of buildings, building improvements, leasehold improvements, data center infrastructure, racking structures, warehouse equipment and computer hardware and software.

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(4)	The weighted average lives of customer relationship intangible assets associated with acquisitions in 2019, 2018 and 2017 was 16 years, 10 years and 12 years, respectively.

(5)	The weighted average lives of data center in-place leases associated with acquisitions in 2018 was six years.

(6)	The weighted average lives of data center tenant relationships associated with acquisitions in 2018 was nine years.

(7)	The weighted average lives of data center above-market leases associated with acquisitions in 2018 was three years and the weighted average lives of data center below-market leases associated with acquisitions in 2018 was seven years.

(8)	The goodwill associated with acquisitions, including IODC, 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.

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(1)	Amounts as of December 31, 2018 has been restated to reflect the impact of the Netherlands VAT liability (as discussed in Note 2.y.) which resulted in an increase in accrued liabilities and other adjustments of $4,971.

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(1)	Other increases and decreases in valuation allowances are primarily related to changes in foreign currency exchange rates and disposal of certain foreign subsidiaries.

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(1)	This amount includes gross additions related to the Recall Transaction.

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(1)

The change in net income (loss) attributable to Iron Mountain Incorporated in the fourth quarter of 2019 compared to the third quarter of 2019 is primarily attributable to (i) an increase of approximately $63,000 in losses on foreign currency transactions in the fourth quarter of 2019 compared to the third quarter of 2019, (ii) Restructuring Charges of $48,600, which began in the fourth quarter of 2019 (as described in Note 14), partially offset by (iii) an increase in net gains on disposal/write-down of property, plant and equipment of $37,500 recorded during the fourth quarter of 2019 compared to the third quarter of 2019 and (iv) a decrease of approximately $5,100 in the provision for income taxes recorded in the fourth quarter of 2019 compared to the third quarter of 2019.

(2)	Income (loss) from continuing operations reflects the immaterial restatement described in Note 2.y., which reduced Income (loss) from continuing operations for the three month periods ended March 31, 2018, June 30, 2018, September 30, 2018 and December 31, 2018 by $6,225, $1,640, $1,279 and $274, respectively.

(3)

The change in net income (loss) attributable to Iron Mountain Incorporated in the fourth quarter of 2018 compared to the third quarter of 2018 is primarily attributable to (i) gains of approximately $62,500 recorded during the fourth quarter of 2018 associated with the sale of land and buildings in the United Kingdom (see Note 2.g.), (ii) a gain on disposal/write-down of property, plant and equipment (excluding real estate) recorded during the fourth quarter of 2018 of approximately $8,800 related to the receipt of insurance proceeds related to the involuntary conversion of certain assets in a facility we own in Argentina (see Note 2.g.), (iii) a decrease in the provision for income taxes recorded in the fourth quarter of 2018 compared to the third quarter of 2018 of approximately $11,200, (iv) an increase in gains on foreign currency transactions in the fourth quarter of 2018 compared to the third quarter of 2018 of approximately $20,000 and (v) a charge of $11,100 recorded during the third quarter of 2018 relating to the resolution of the post-closing adjustments to the Access Contingent Consideration (as defined and discussed in Note 13) that did not recur during the fourth quarter of 2018.

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•

Global RIM Business—provides (i) storage of physical records, including media such as microfilm and microfiche, 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 customers in approximately 50 countries ("Records Management"), (ii) 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; and related services offerings, (collectively, "Data Management"), (iii) Information Governance and Digital Solutions, which develops, implements and supports comprehensive storage and information management solutions for the complete lifecycle of our customers' information, including the management of physical records, document conversion and digital storage in the United States and Canada, (iv) the shredding of sensitive documents for customers that, in many cases, store their records with us ("Secure Shredding") and the subsequent sale of shredded paper for recycling, and (v) on-demand, valet storage for consumers across 24 markets in North America through the MakeSpace JV (as defined in Note 13).

•

Global Data Center Business—provides enterprise-class data center facilities to protect mission-critical assets and ensure the continued operation of our customers’ IT infrastructure, with secure and reliable data center options. As of December 31, 2019, our Global Data Center Business footprint spanned nine markets in the United States: Denver, Colorado; Kansas City, Missouri; Boston, Massachusetts; Boyers, Pennsylvania; Manassas, Virginia; Edison, New Jersey; Columbus, Ohio; and Phoenix and Scottsdale, Arizona and four international markets: Amsterdam, London, and Singapore, with land held for development in Frankfurt.

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Corporate and Other Business—consists primarily of Adjacent Businesses and other corporate items. Our Adjacent Businesses is comprised of (i) helping entertainment and media industry clients store, safeguard and deliver physical media of all types, and provides digital content repository systems that house, distribute, and archive key media assets, throughout the United States, Canada, France, China - Hong Kong S.A.R., the Netherlands and the United Kingdom ("Entertainment Services") and (ii) technical expertise in the handling, installation and storing of art in the United States, Canada and Europe ("Fine Arts"). Additionally, our Corporate and Other Business segment includes costs related to executive and staff functions, including finance, human resources and IT, which benefit the enterprise as a whole, and stock-based employee compensation expense associated with all stock options, restricted stock units, performance units and shares of stock issued under our employee stock purchase plan. Additionally, our Corporate and Other Business segment includes our technology escrow services business in the United States.

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(1)

Excludes all intercompany receivables or payables and investment in subsidiary balances. Total Assets as of December 31, 2019 reflects the adoption of ASU 2016-02. Total Assets for the Corporate and Other Business segment have been restated to reflect the impact of the Netherlands VAT liability (as discussed in Note 2.y.) which resulted in an increase in total assets for this segment of $4,971 and $2,985, at December 31, 2018 and 2017, respectively.

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(1)	Each of the offerings within our product and service lines has a component of revenue that is storage rental related and a component that is service revenues, except the destruction services offering, which does not have a storage rental component.

(2)	Includes Secure Shredding services.

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(1)	Purchase commitments (i) include obligations for future construction costs associated with the expansion of our Global Data Center Business, which represent a significant amount of the purchase commitments due in 2020 and (ii) exclude our operating and financing lease obligations (see Note 2.m.).

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•	The assets and liabilities, including all associated tangible and intangible assets and employees, related to Recall's records and information management facilities in 13 United States cities were sold to Access CIG, LLC (“Access CIG”) on May 4, 2016 (the “Access Sale”);

•	The assets and liabilities, including associated tangible and intangible assets and employees, related to Recall’s record and information management facilities in two areas of Scotland were sold to Oasis Group on December 9, 2016; and

•	The assets and liabilities, including all associated tangible and intangible assets and employees, related to certain of Recall’s records and information management facilities in two cities in the United States, and in three cities in Canada, were sold to Arkive Information Management LLC and Arkive Information Management Ltd. on December 29, 2016.

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(1)

As indicated above, on May 4, 2016, we completed the Access Sale. As part of the total consideration for the Access Sale we were entitled to receive up to $25,000 of additional cash proceeds (the "Access Contingent Consideration"). During 2018, we settled the Access Contingent Consideration with Access CIG, as well as indemnification claims Access CIG previously raised in connection with the Access Sale. Changes to the realizable value of the Access Contingent Consideration were recorded to our Consolidated Statement of Operations as a component of discontinued operations. The loss from discontinued operations during the year ended December 31, 2018 primarily relates to losses incurred due to the resolution of the post-closing adjustments to the Access Contingent Consideration in connection with our agreement with Access CIG.

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(1)	Represents the gross book value of racking installed in our 1,150 leased facilities, which is included in historical book value of racking in Note 2.f., but excluded from Schedule III.

(2)	Represents the gross book value of buildings and building improvements that are subject to financing leases, which are included in the historical book value of building and building improvements in Note 2.f., but excluded from Schedule III.

(3)

Represents the gross book value of non-real estate assets that are included in the historical book value of construction in progress assets in Note 2.f., but excluded from Schedule III, as such assets are not considered real estate associated with owned buildings. The historical book value of real estate assets associated with owned buildings that were related to construction in progress as of December 31, 2019 is included in Schedule III.

(4)	Represents the gross book value of owned land that is either (i) associated with buildings that are subject to financing leases or (ii) under development, which are included in the historical book value of either land or construction in progress, respectively, in Note 2.f., but excluded from Schedule III.

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(1)	Represents the accumulated depreciation of non-real estate assets that is included in the total accumulated depreciation of property, plant and equipment on our Consolidated Balance Sheet, but excluded from Schedule III as the assets to which this accumulated depreciation relates are not considered real estate assets associated with owned buildings.

(2)	Represents the accumulated depreciation of racking as of December 31, 2019 installed in our 1,150 leased facilities, which is included in total accumulated depreciation of property, plant and equipment on our Consolidated Balance Sheet, but excluded from Schedule III, as disclosed in Footnote 1 to Schedule III.

(3)	Represents the accumulated depreciation of buildings and building improvements as of December 31, 2019 that are subject to financing leases, which is included in the total accumulated depreciation of property, plant and equipment on our Consolidated Balance Sheet, but excluded from Schedule III, as disclosed in Footnote 1 to Schedule III.

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(1)

The above information only includes the real estate facilities that are owned. The gross cost includes the cost for land, land improvements, buildings, building improvements and racking. The listing does not reflect the 1,150 leased facilities in our real estate portfolio. In addition, the above information does not include any value for financing leases for property that is classified as land, buildings and building improvements in our consolidated financial statements.

(2)	Amount includes cumulative impact of foreign currency translation fluctuations.

(3)	Date of construction or acquired represents the date we constructed the facility, acquired the facility through purchase or acquisition.

(4)	Property was acquired in connection with the Recall Transaction.

(5)	Property was acquired in connection with the IODC Transaction.

(6)	Property was acquired in connection with the Credit Suisse Transaction.

(7)	This date represents the date the categorization of the property was changed from a leased facility to an owned facility.

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(8)	The following tables present the changes in gross carrying amount of real estate owned and accumulated depreciation for the years ended December 31, 2019 and 2018:

(1)	Includes acquisition of sites through business combinations and purchase accounting adjustments.

(2)	Includes costs associated with real estate we acquired which primarily includes building improvements and racking, which were previously subject to leases.

(1)	Includes accumulated depreciation associated with building improvements and racking, which were previously subject to leases.

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