Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2012

Summary of Significant Accounting Policies

Changes in the carrying value of goodwill attributable to each reportable operating segment

	North American Business		International Business		Total Consolidated
Gross Balance as of December 31, 2011	$	2,010,241	$	564,044	$	2,574,285
Deductible goodwill acquired during the year		4,818		—		4,818
Currency effects		5,289		18,883		24,172
Gross Balance as of March 31, 2012	$	2,020,348	$	582,927	$	2,603,275
Accumulated Amortization Balance as of December 31, 2011	$	261,362	$	58,655	$	320,017
Currency effects		264		373		637
Accumulated Amortization Balance as of March 31, 2012	$	261,626	$	59,028	$	320,654
Net Balance as of December 31, 2011	$	1,748,879	$	505,389	$	2,254,268
Net Balance as of March 31, 2012	$	1,758,722	$	523,899	$	2,282,621
Accumulated Goodwill Impairment Balance as of December 31, 2011	$	85,909	$	46,500	$	132,409
Accumulated Goodwill Impairment Balance as of March 31, 2012	$	85,909	$	46,500	$	132,409

Components of amortizable intangible assets

The components of our amortizable intangible assets as of March 31, 2012 are as follows:

	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer Relationships and Acquisition Costs	$	612,560	$	(196,242	)	$	416,318
Core Technology(1)		3,760		(2,583	)		1,177
Trademarks and Non-Compete Agreements(1)		3,075		(2,562	)		513
Deferred Financing Costs		55,008		(20,573	)		34,435
Total	$	674,403	$	(221,960	)	$	452,443

(1)

Included in other assets, net in the accompanying consolidated balance sheet.

Stock-based compensation expense related to continuing operations

	Three Months Ended March 31,
	2011		2012
Cost of sales (excluding depreciation and amortization)	$	275	$	215
Selling, general and administrative expenses		4,164		9,585
Total stock-based compensation	$	4,439	$	9,800

Summary of the weighted average assumptions used for stock option grants

	Three Months Ended March 31,
Weighted Average Assumptions	2011			2012
Expected volatility		33.4	%		33.8	%
Risk-free interest rate		2.51	%		1.23	%
Expected dividend yield		3	%		3	%
Expected life		6.3 years			6.3 years

Summary of stock option activity

	Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic value
Outstanding at December 31, 2011		7,118,458		$	25.73
Granted		21,472			28.86
Exercised		(103,868	)		20.47
Forfeited		(90,076	)		25.92
Expired		(9,510	)		30.33
Outstanding at March 31, 2012		6,936,476		$	25.81		6.47	$	23,729
Options exercisable at March 31, 2012		4,082,790		$	25.48		5.57	$	15,598
Options expected to vest		2,643,329		$	26.31		7.75	$	7,504

Aggregate intrinsic value of stock options exercised

	Three Months Ended March 31,
	2011		2012
Aggregate intrinsic value of stock options exercised	$	6,047	$	1,064

Summary of restricted stock and RSUs activity

	Restricted Stock and RSUs			Weighted- Average Grant-Date Fair Value
Non-vested at December 31, 2011		610,951		$	28.85
Granted		655,809			28.86
Vested		(139,477	)		28.36
Forfeited		(11,550	)		28.75
Non-vested at March 31, 2012		1,115,733		$	28.92

Summary of Performance Unit (PU) activity

	PUs Original Awards			PUs Adjustment(1)			Total PUs Awards			Weighted- Average Grant-Date Fair Value
Non-vested at December 31, 2011		112,749			—			112,749		$	29.06
Granted		221,781			12,012			233,793			28.87
Vested		(96,120	)		(1,938	)		(98,058	)		28.46
Forfeited		(291	)		—			(291	)		28.11
Non-vested at March 31, 2012		238,119			10,074			248,193		$	29.11

(1)

Represents the additional number of PUs based on either (a) the final performance criteria achievement at the end of the one-year performance period or (b) a change in estimated awards based on the forecasted performance against the predefined targets.

Calculation of basic and diluted net income (loss) per share attributable to the entity

	Three Months Ended March 31,
	2011			2012
Income (Loss) from continuing operations	$	81,176		$	61,073
Total income (loss) from discontinued operations (see Note 10)	$	(6,557	)	$	(5,093	)
Net income (loss) attributable to Iron Mountain Incorporated	$	73,460		$	55,350
Weighted-average shares—basic		200,228,000			171,320,000
Effect of dilutive potential stock options		995,149			720,788
Effect of dilutive potential restricted stock, RSUs and PUs		27,659			181,867
Weighted-average shares—diluted		201,250,808			172,222,655
Earnings (Losses) per share—basic:
Income (Loss) from continuing operations	$	0.41		$	0.36
Total income (loss) from discontinued operations (see Note 10)	$	(0.03	)	$	(0.03	)
Net income (loss) attributable to Iron Mountain Incorporated—basic	$	0.37		$	0.32
Earnings (Losses) per share—diluted:
Income (Loss) from continuing operations	$	0.40		$	0.35
Total income (loss) from discontinued operations (see Note 10)	$	(0.03	)	$	(0.03	)
Net income (loss) attributable to Iron Mountain Incorporated—diluted	$	0.37		$	0.32
Antidilutive stock options, RSUs and PUs, excluded from the calculation		8,701,049			2,045,616

Assets and liabilities carried at fair value measured on a recurring basis

			Fair Value Measurements at December 31, 2011 Using
Description	Total Carrying Value at December 31, 2011		Quoted prices in active markets (Level 1)			Significant other observable inputs (Level 2)			Significant unobservable inputs (Level 3)
Money Market Funds(1)	$	35,110	$	—		$	35,110		$	—
Time Deposits(1)		146,713		—			146,713			—
Trading Securities		9,124		8,497	(2)		627	(1)		—
Derivative Assets(3)		2,803		—			2,803			—
Derivative Liabilities(3)		435		—			435			—

			Fair Value Measurements at March 31, 2012 Using
Description	Total Carrying Value at March 31, 2012		Quoted prices in active markets (Level 1)			Significant other observable inputs (Level 2)			Significant unobservable inputs (Level 3)
Money Market Funds(1)	$	35,112	$	—		$	35,112		$	—
Time Deposits(1)		131,231		—			131,231			—
Trading Securities		9,763		9,143	(2)		620	(1)		—
Derivative Assets(3)		72		—			72			—
Derivative Liabilities(3)		4,172		—			4,172			—

(1)

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

(2)

Securities are measured at fair value using quoted market prices.

(3)

Our derivative assets and liabilities primarily relate to short-term (six months or less) foreign currency contracts that we have entered into to hedge our intercompany exposures denominated in British pounds sterling and Australian dollars. We calculate the fair value of such forward contracts by adjusting the spot rate utilized at the balance sheet date for translation purposes by an estimate of the forward points observed in active markets.

Other expense (income), net

	Three Months Ended March 31,
	2011			2012
Foreign currency transaction (gains) losses, net	$	(3,096	)	$	(2,575	)
Debt extinguishment (income) expense, net		(850	)		—
Other, net		(5,012	)		(729	)
	$	(8,958	)	$	(3,304	)