Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 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		5,118		64,010			69,128
Currency effects		1,166		(2,763	)		(1,597	)
Gross Balance as of June 30, 2012	$	2,016,525	$	625,291		$	2,641,816
Accumulated Amortization Balance as of December 31, 2011	$	261,362	$	58,655		$	320,017
Currency effects		59		(70	)		(11	)
Accumulated Amortization Balance as of June 30, 2012	$	261,421	$	58,585		$	320,006
Net Balance as of December 31, 2011	$	1,748,879	$	505,389		$	2,254,268
Net Balance as of June 30, 2012	$	1,755,104	$	566,706		$	2,321,810
Accumulated Goodwill Impairment Balance as of December 31, 2011	$	85,909	$	46,500		$	132,409
Accumulated Goodwill Impairment Balance as of June 30, 2012	$	85,909	$	46,500		$	132,409

Components of amortizable intangible assets

	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer Relationships and Acquisition Costs	$	649,920	$	(202,723	)	$	447,197
Core Technology(1)		3,651		(2,654	)		997
Trademarks and Non-Compete Agreements(1)		3,078		(2,606	)		472
Deferred Financing Costs		54,940		(22,033	)		32,907
Total	$	711,589	$	(230,016	)	$	481,573

(1)

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

Stock-based compensation expense related to continuing operations

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2012		2011		2012
Cost of sales (excluding depreciation and amortization)	$	45	$	302	$	320	$	517
Selling, general and administrative expenses		3,555		6,015		7,719		15,600
Total stock-based compensation	$	3,600	$	6,317	$	8,039	$	16,117

Summary of the weighted average assumptions used for stock option grants

	Six Months Ended June 30,
Weighted Average Assumptions	2011			2012
Expected volatility		33.4	%		33.8	%
Risk-free interest rate		2.47	%		1.24	%
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		(412,728	)		23.48
Forfeited		(171,402	)		25.83
Expired		(28,291	)		33.03
Outstanding at June 30, 2012		6,527,509		$	25.85		6.24	$	47,476
Options exercisable at June 30, 2012		4,236,162		$	25.69		5.48	$	31,678
Options expected to vest		2,118,795		$	26.16		7.63	$	14,594

Aggregate intrinsic value of stock options exercised

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2012		2011		2012
Aggregate intrinsic value of stock options exercised	$	22,862	$	2,308	$	28,909	$	3,372

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		781,815			29.48
Vested		(204,794	)		29.12
Forfeited		(26,110	)		28.96
Non-vested at June 30, 2012		1,161,862		$	29.22

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		(124,914	)		(5,013	)		(129,927	)		29.47
Forfeited		(3,381	)		—			(3,381	)		28.11
Non-vested at June 30, 2012		206,235			6,999			213,234		$	28.61

(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 June 30,					Six Months Ended June 30,
	2011		2012			2011		2012
Income (Loss) from continuing operations	$	67,460	$	41,441		$	148,636	$	102,514
Total income (loss) from discontinued operations (see Note 10)	$	185,587	$	(2,524	)	$	179,030	$	(7,617	)
Net income (loss) attributable to Iron Mountain Incorporated	$	252,684	$	38,055		$	326,144	$	93,405
Weighted-average shares—basic		201,653,000		171,296,000			200,941,000		171,308,000
Effect of dilutive potential stock options		1,538,373		753,385			1,266,761		737,087
Effect of dilutive potential restricted stock, RSUs and PUs		119,319		181,292			73,489		181,580
Weighted-average shares—diluted		203,310,692		172,230,677			202,281,250		172,226,667
Earnings (Losses) per share—basic:
Income (Loss) from continuing operations	$	0.33	$	0.24		$	0.74	$	0.60
Total income (loss) from discontinued operations (see Note 10)	$	0.92	$	(0.01	)	$	0.89	$	(0.04	)
Net income (loss) attributable to Iron Mountain Incorporated—basic	$	1.25	$	0.22		$	1.62	$	0.55
Earnings (Losses) per share—diluted:
Income (Loss) from continuing operations	$	0.33	$	0.24		$	0.73	$	0.60
Total income (loss) from discontinued operations (see Note 10)	$	0.91	$	(0.01	)	$	0.89	$	(0.04	)
Net income (loss) attributable to Iron Mountain Incorporated—diluted	$	1.24	$	0.22		$	1.61	$	0.54
Antidilutive stock options, RSUs and PUs, excluded from the calculation		2,126,488		1,885,060			5,413,769		1,965,338

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 June 30, 2012 Using
Description	Total Carrying Value at June 30, 2012		Quoted prices in active markets (Level 1)			Significant other observable inputs (Level 2)			Significant unobservable inputs (Level 3)
Money Market Funds(1)	$	71,046	$	—		$	71,046		$	—
Time Deposits(1)		99,363		—			99,363			—
Trading Securities		9,760		8,986	(2)		774	(1)		—
Derivative Assets(3)		2,609		—			2,609			—
Derivative Liabilities(3)		731		—			731			—

(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 June 30,						Six Months Ended June 30,
	2011			2012			2011			2012
Foreign currency transaction losses (gains), net	$	1,853		$	11,761		$	(1,243	)	$	9,186
Debt extinguishment expense, net		1,843			—			993			—
Other, net		(1,075	)		(1,695	)		(6,087	)		(2,424	)
	$	2,621		$	10,066		$	(6,337	)	$	6,762