10-Q

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)
ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 2004
or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from                             to

Commission file number 1-13045

IRON MOUNTAIN INCORPORATED
(Exact Name of Registrant as Specified in its Charter)

Pennsylvania (State or Other Jurisdiction of Incorporation or Organization)	23-2588479 (I.R.S. Employer Identification No.)
745 Atlantic Avenue, Boston, MA 02111 (Address of Principal Executive Offices, Including Zip Code)
(617) 535-4766 (Registrant's Telephone Number, Including Area Code)

        Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o

        Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes ý    No o

        Number of shares of the registrant's Common Stock at November 1, 2004: 129,380,787

IRON MOUNTAIN INCORPORATED

Index

		Page
PART I—FINANCIAL INFORMATION
Item 1    —	Unaudited Consolidated Financial Statements
	Consolidated Balance Sheets at December 31, 2003 and September 30, 2004 (Unaudited)	3
	Consolidated Statements of Operations for the Three Months Ended September 30, 2003 and 2004 (Unaudited)	4
	Consolidated Statements of Operations for the Nine Months Ended September 30, 2003 and 2004 (Unaudited)	5
	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2003 and 2004 (Unaudited)	6
	Notes to Consolidated Financial Statements (Unaudited)	7
Item 2    —	Management's Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3    —	Quantitative and Qualitative Disclosures About Market Risk	48
Item 4    —	Controls and Procedures	49
PART II—OTHER INFORMATION
Item 1    —	Legal Proceedings	51
Item 6    —	Exhibits	52
	Signature	53

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Part I. Financial Information

Item 1. Unaudited Consolidated Financial Statements

IRON MOUNTAIN INCORPORATED

CONSOLIDATED BALANCE SHEETS

(In Thousands, except Share and Per Share Data)

(Unaudited)

			December 31, 2003			September 30, 2004
ASSETS
Current Assets:
	Cash and cash equivalents		$	74,683		$	44,428
	Accounts receivable (less allowances of $20,922 and $14,010, respectively)			279,800			343,941
	Deferred income taxes			33,043			32,213
	Prepaid expenses and other			84,057			59,046
		Total Current Assets		471,583			479,628
Property, Plant and Equipment:
	Property, plant and equipment			1,950,893			2,143,420
	Less—Accumulated depreciation			(458,626	)		(567,974	)
		Net Property, Plant and Equipment		1,492,267			1,575,446
Other Assets, net:
	Goodwill			1,776,279			1,943,622
	Customer relationships and acquisition costs			116,466			162,121
	Deferred financing costs			23,934			37,149
	Other			11,570			8,262
		Total Other Assets, net		1,928,249			2,151,154
		Total Assets	$	3,892,099		$	4,206,228
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
	Current portion of long-term debt		$	115,781		$	17,923
	Accounts payable			87,006			96,619
	Accrued expenses			234,426			236,219
	Deferred revenue			107,857			119,165
	Other current liabilities			39,675			451
		Total Current Liabilities		584,745			470,377
Long-term Debt, net of current portion				1,974,147			2,330,155
Other Long-term Liabilities				24,499			22,248
Deferred Rent				20,578			22,998
Deferred Income Taxes				146,231			183,602
Commitments and Contingencies (see Note 9)
Minority Interests				75,785			11,735
Shareholders' Equity:
	Preferred stock (par value $0.01; authorized 10,000,000 shares; none issued and outstanding)			—			—
	Common stock (par value $0.01; authorized 200,000,000 shares; issued and outstanding 128,362,881 shares and 129,359,464 shares, respectively)			1,284			1,293
	Additional paid-in capital			1,033,642			1,053,088
	Retained earnings			39,234			103,538
	Accumulated other comprehensive items, net			(8,046	)		7,194
		Total Shareholders' Equity		1,066,114			1,165,113
		Total Liabilities and Shareholders' Equity	$	3,892,099		$	4,206,228

The accompanying notes are an integral part of these consolidated financial statements.

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IRON MOUNTAIN INCORPORATED

CONSOLIDATED STATEMENTS OF OPERATIONS

(In Thousands, except Per Share Data)

(Unaudited)

			Three Months Ended September 30,
			2003		2004
Revenues:
	Storage		$	222,973	$	263,867
	Service and storage material sales			158,785		195,463
		Total Revenues		381,758		459,330
Operating Expenses:
	Cost of sales (excluding depreciation)			171,355		209,797
	Selling, general and administrative			98,087		122,508
	Depreciation and amortization			33,197		42,269
	Loss (Gain) on disposal/writedown of property, plant and equipment, net			1,870		(246	)
		Total Operating Expenses		304,509		374,328
Operating Income				77,249		85,002
Interest Expense, Net				38,790		54,313
Other Expense (Income), Net				10,343		(2,979	)
		Income Before Provision for Income Taxes and Minority Interest		28,116		33,668
Provision for Income Taxes				12,012		14,293
Minority Interest in Earnings of Subsidiaries				1,310		925
		Net Income	$	14,794	$	18,450
Net Income per Share—Basic			$	0.12	$	0.14
Net Income per Share—Diluted			$	0.11	$	0.14
Weighted Average Common Shares Outstanding—Basic				127,955		129,288
Weighted Average Common Shares Outstanding—Diluted				130,089		131,366

The accompanying notes are an integral part of these consolidated financial statements.

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IRON MOUNTAIN INCORPORATED

CONSOLIDATED STATEMENTS OF OPERATIONS

(In Thousands, except Per Share Data)

(Unaudited)

			Nine Months Ended September 30,
			2003		2004
Revenues:
	Storage		$	634,773	$	768,232
	Service and storage material sales			458,066		570,430
		Total Revenues		1,092,839		1,338,662
Operating Expenses:
	Cost of sales (excluding depreciation)			493,538		608,934
	Selling, general and administrative			285,377		353,456
	Depreciation and amortization			93,911		119,912
	Loss (Gain) on disposal/writedown of property, plant and equipment, net			1,886		(1,260	)
		Total Operating Expenses		874,712		1,081,042
Operating Income				218,127		257,620
Interest Expense, Net				110,752		140,431
Other Expense, Net				2,361		4,236
		Income Before Provision for Income Taxes and Minority Interest		105,014		112,953
Provision for Income Taxes				44,635		46,668
Minority Interest in Earnings of Subsidiaries				4,168		1,981
		Net Income	$	56,211	$	64,304
Net Income per Share—Basic			$	0.44	$	0.50
Net Income per Share—Diluted			$	0.43	$	0.49
Weighted Average Common Shares Outstanding—Basic				127,817		128,934
Weighted Average Common Shares Outstanding—Diluted				130,035		131,056

The accompanying notes are an integral part of these consolidated financial statements.

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IRON MOUNTAIN INCORPORATED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

(Unaudited)

		Nine Months Ended September 30,
		2003			2004
Cash Flows from Operating Activities:
	Net income	$	56,211		$	64,304
Adjustments to reconcile net income to cash flows provided by operating activities:
	Minority interests		4,168			1,981
	Depreciation		88,921			112,334
	Amortization (includes deferred financing costs and bond discount of $2,939 and $2,466, respectively)		7,929			10,044
	Provision for deferred income taxes		40,738			41,448
	Loss on early extinguishment of debt		21,175			2,454
	Loss (Gain) on disposal/writedown of property, plant and equipment, net		1,886			(1,260	)
	(Gain) Loss on foreign currency, stock-based employee compensation expense, interest rate swap expense and other, net		(18,024	)		8,607
Changes in Assets and Liabilities (exclusive of acquisitions):
	Accounts receivable		(14,880	)		(52,035	)
	Prepaid expenses and other current assets		5,098			685
	Accounts payable		(6,516	)		7,719
	Accrued expenses, deferred revenue and other current liabilities		(2,014	)		10,476
	Other assets and long-term liabilities		(1,073	)		2,222
	Cash Flows from Operating Activities		183,619			208,979
Cash Flows from Investing Activities:
	Capital expenditures		(148,039	)		(159,090	)
	Cash paid for acquisitions, net of cash acquired		(378,803	)		(253,528	)
	Additions to customer relationship and acquisition costs		(8,638	)		(9,512	)
	Investment in convertible preferred stock		(1,357	)		—
	Proceeds from sales of property and equipment		6,621			2,508
	Cash Flows from Investing Activities		(530,216	)		(419,622	)
Cash Flows from Financing Activities:
	Repayment of debt and term loans		(485,408	)		(891,151	)
	Proceeds from borrowings and term loans		626,029			862,042
	Early retirement of senior subordinated notes		(306,439	)		(20,797	)
	Net proceeds from sales of senior subordinated notes		455,590			269,427
	Debt financing (repayment to) and equity contribution from (distribution to) minority shareholders, net		20,099			(41,741	)
	Other, net		3,165			765
	Cash Flows from Financing Activities		313,036			178,545
Effect of exchange rates on cash and cash equivalents			813			1,843
Decrease in Cash and Cash Equivalents			(32,748	)		(30,255	)
Cash and Cash Equivalents, Beginning of Period			56,292			74,683
Cash and Cash Equivalents, End of Period		$	23,544		$	44,428

The accompanying notes are an integral part of these consolidated financial statements.

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IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Share and Per Share Data)

(Unaudited)

(1) General

        The interim consolidated financial statements are presented herein without audit and, in the opinion of management, reflect all adjustments of a normal recurring nature necessary for a fair presentation. Interim results are not necessarily indicative of results for a full year.

        The consolidated balance sheet presented as of December 31, 2003 has been derived from the consolidated financial statements that have been audited by our independent auditors. The unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States ("GAAP") have been omitted pursuant to those rules and regulations, but we believe that the disclosures are adequate to make the information presented not misleading. The consolidated financial statements and notes included herein should be read in conjunction with the consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2003.

        On May 27, 2004, the Board of Directors of Iron Mountain Incorporated (the "Company" or "IMI") authorized and approved a three-for-two stock split effected in the form of a dividend on the Company's common stock. Such additional shares of common stock were issued on June 30, 2004 to all shareholders of record as of the close of business on June 15, 2004. All share and per share amounts have been restated to reflect the stock split.

        Certain reclassifications have been made to the 2003 financial statements to conform to the 2004 presentation.

(2) Summary of Significant Accounting Policies

a.

Principles of Consolidation

        The accompanying financial statements reflect our financial position and results of operations on a consolidated basis. Financial position and results of operations of Iron Mountain Europe Limited ("IME"), our European subsidiary, are consolidated for the appropriate periods based on its fiscal year ended October 31. All significant intercompany account balances have been eliminated or presented to reflect the underlying economics of the transactions.

b.

Foreign Currency Translation

        Local currencies are considered the functional currencies for most of our operations outside the United States. All assets and liabilities are translated at period-end exchange rates, and revenues and expenses are translated at average exchange rates for the applicable period, in accordance with Statement of Financial Accounting Standards ("SFAS") No. 52, "Foreign Currency Translation." Resulting translation adjustments are reflected in the accumulated other comprehensive items component of shareholders' equity. The gain or loss on foreign currency transactions, including those related to (a) U.S. dollar denominated 8¹/8% senior notes of our Canadian subsidiary (the "Subsidiary notes"), (b) our 7¹/4% GBP Senior Subordinated Notes due 2014 (the "7¹/4% notes"), (c) the borrowings in certain foreign currencies under our revolving credit agreements, and (d) the foreign currency denominated intercompany obligations of our foreign subsidiaries to us, are included in other

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(income) expense, net, on our consolidated statements of operations. The total of such net losses amounted to $4,838 and net gains of $18,796 for the three and nine months ended September 30, 2003, respectively, and the total of such net gains amounted to $2,753 and net losses of $2,185 for the three and nine months ended September 30, 2004, respectively.

c.

Goodwill and Other Intangible Assets

        We apply the provisions of SFAS No. 142, "Goodwill and Other Intangible Assets." Under SFAS No. 142, goodwill and intangible assets with indefinite lives are not amortized but are reviewed annually for impairment or more frequently if impairment indicators arise. Separable intangible assets that are not deemed to have indefinite lives are amortized over their useful lives.

        We have selected October 1 as our annual goodwill impairment review date. We performed our last annual goodwill impairment review as of October 1, 2003 and noted no impairment of goodwill at our reporting units as of that date. As of September 30, 2004, no factors were identified that would alter this assessment.

        The changes in the carrying value of goodwill attributable to each reportable operating segment for the nine month period ended September 30, 2004 are as follows:

	Business Records Management			Off-Site Data Protection			International			Corporate & Other			Total Consolidated
Balance as of December 31, 2003	$	1,218,472		$	244,621		$	311,815		$	1,371		$	1,776,279
Goodwill acquired during the period		75,972			2,617			56,597			—			135,186
Adjustments to purchase reserves		(442	)		(70	)		10,799			—			10,287
Fair value adjustments		(1,701	)		(31	)		(225	)		—			(1,957	)
Other adjustments and currency effects		3,399			—			20,474			(46	)		23,827
Balance as of September 30, 2004	$	1,295,700		$	247,137		$	399,460		$	1,325		$	1,943,622

        The components of our amortizable intangible assets at September 30, 2004 are as follows:

	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Customer Relationships and Acquisition Costs	$	182,853	$	20,732	$	162,121
Non-Compete Agreements		8,780		7,949		831
Deferred Financing Costs		45,221		8,072		37,149
Total	$	236,854	$	36,753	$	200,101

d.

Stock Based Compensation

        As of January 1, 2003, we adopted the measurement provisions of SFAS No. 123, "Accounting for Stock-Based Compensation," as amended by SFAS No. 148, "Accounting for Stock-Based Compensation—Transition and Disclosure." As a result we adopted the fair value method of accounting in our financial statements beginning January 1, 2003 using the prospective method. The prospective method involves recognizing expense for the fair value for all awards granted or modified in the year of

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adoption and thereafter with no expense recognition for previous awards. Additionally, we recognize expense related to the discount embedded in our employee stock purchase plan. We apply the fair value recognition provisions to all stock based awards granted, modified or settled on or after January 1, 2003 and we continue to provide the required pro forma information for all awards previously granted, modified or settled before January 1, 2003.

        Had we elected to recognize compensation cost based on the fair value of the options granted at grant date as prescribed by SFAS No. 123 and No. 148 for options granted prior to January 1, 2003, net income and net income per share would have been changed to the pro forma amounts indicated in the table below:

		Three Months Ended September 30,						Nine Months Ended September 30,
		2003			2004			2003			2004
Net income, as reported		$	14,794		$	18,450		$	56,211		$	64,304
Add: Stock-based employee compensation expense included in reported net income, net of tax benefit			380			1,578			502			2,501
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of tax benefit			(881	)		(2,017	)		(2,061	)		(3,890	)
Net income, pro forma		$	14,293		$	18,011		$	54,652		$	62,915
Earnings per share:
	Basic—as reported	$	0.12		$	0.14		$	0.44		$	0.50
	Basic—pro forma		0.11			0.14			0.43			0.49
	Diluted—as reported		0.11			0.14			0.43			0.49
	Diluted—pro forma		0.11			0.14			0.42			0.48

        The weighted average fair value of options granted for the nine months ended September 30, 2003 and 2004 was $10.97 and $8.48 per share, respectively. The values were estimated on the date of grant using the Black-Scholes option pricing model. The following table summarizes the weighted average assumptions used for grants in the respective period:

Weighted Average Assumption	Nine Months Ended September 30, 2003		Nine Months Ended September 30, 2004
Expected volatility	27.3	%	24.9	%
Risk-free interest rate	2.85		3.41
Expected dividend yield	None		None
Expected life of the option	5.0 years		5.0 years

e.

Income Per Share—Basic and Diluted

        In accordance with SFAS No. 128, "Earnings per Share," basic net income per common share is calculated by dividing net income by the weighted average number of common shares outstanding. The calculation of diluted net income per share is consistent with that of basic net income per share, but

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gives effect to all potential common shares (that is, securities such as options, warrants or convertible securities) that were outstanding during the period, unless the effect is antidilutive. Potential common shares, substantially attributable to stock options, included in the calculation of diluted net income per share totaled 2,135,012 shares and 2,078,369 shares for the three months ended September 30, 2003 and 2004, respectively, and 2,218,232 shares and 2,122,218 shares for the nine months ended September 30, 2003 and 2004, respectively. Potential common shares of 460,058 for the three and nine months ended September 30, 2003, respectively, and no shares for the three and nine months ended September 30, 2004 have been excluded from the calculation of diluted net income per share, as their effects are antidilutive.

f.

Supplemental Cash Flow Information

        For the nine months ended September 30, 2003 and 2004, cash payments for interest were $95,043 and $134,211, respectively, and cash payments for income taxes (net of refunds) were $3,720 and $7,820, respectively.

(3) Comprehensive Income

        SFAS No. 130, "Reporting Comprehensive Income," requires presentation of the components of comprehensive income, including the changes in equity from non-owner sources such as unrealized gains (losses) on hedging transactions, securities and foreign currency translation adjustments. Our total comprehensive income is as follows:

			Three Months Ended September 30,					Nine Months Ended September 30,
			2003		2004			2003		2004
Comprehensive Income:
	Net Income		$	14,794	$	18,450		$	56,211	$	64,304
	Other Comprehensive Income (Loss):
		Foreign Currency Translation Adjustments		656		5,602			11,093		2,437
		Unrealized Gain (Loss) on Hedging Contracts		3,377		6,625			2,987		12,993
		Unrealized Gain (Loss) on Securities		46		(206	)		150		(190	)
Comprehensive Income			$	18,873	$	30,471		$	70,441	$	79,544

(4) Derivative Instruments and Hedging Activities

        SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," requires that every derivative instrument be recorded in the balance sheet as either an asset or a liability measured at its fair value. Periodically, we acquire derivative instruments that are intended to hedge either cash flows or values that are subject to exchange or other market price risk, and not for trading purposes. We have formally documented our hedging relationships, including identification of the hedging instruments and the hedge items, as well as our risk management objectives and strategies for undertaking each hedge transaction. Given the recurring nature of our revenues and the long term nature of our asset base, we have the ability and the preference to use long term, fixed interest rate debt to finance our

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business, thereby preserving our long term returns on invested capital. We target a range 80% to 85% of our debt portfolio to be fixed with respect to interest rates. Occasionally, we will use floating to fixed interest rate swaps as a tool to maintain our targeted level of fixed rate debt. In addition we will use borrowings in foreign currencies, either obtained in the U.S. or by our foreign subsidiaries, to naturally hedge foreign currency risk associated with our international investments. Sometimes we enter into currency swaps to temporarily hedge an overseas investment, such as a major acquisition to lock in certain transaction economics, while we arrange permanent financing.

        We have entered into two interest rate swap agreements, which are derivatives as defined by SFAS No. 133 and designated as cash flow hedges. These swap agreements hedge interest rate risk on certain amounts of our term loan. We have recorded, in the accompanying consolidated balance sheet, the estimated cost to terminate these swaps (fair value of the derivative liability), a deferred tax asset and a corresponding charge to accumulated other comprehensive items of $6,649 ($5,252 recorded in accrued expenses and $1,397 recorded in other long-term liabilities), $2,424 and $4,225, respectively, as of September 30, 2004. For the three and nine months ended September 30, 2003, we recorded additional interest expense of $2,198 and $6,471, respectively, resulting from interest rate swap cash settlements. For the three and nine months ended September 30, 2004, we recorded additional interest expense of $2,149 and $6,642 respectively, resulting from interest rate swap cash settlements. These interest rate swap agreements were determined to be highly effective, and therefore no ineffectiveness was recorded in earnings.

        In addition, we have entered into a third interest rate swap agreement, which was designated as a cash flow hedge through December 31, 2002. This swap agreement hedged interest rate risk on certain amounts of our variable operating lease commitments. We have recorded, in the accompanying consolidated balance sheet, the estimated cost to terminate this swap (fair value of the derivative liability) of $316 (which was all recorded in accrued expenses) as of September 30, 2004. For the three and nine months ended September 30, 2003, we recorded additional interest expense of $539 and $1,541, respectively, resulting from the cash settlements associated with this interest rate swap agreement. As a result of the repayment of the real estate term loans discussed in Note 6, we recorded an additional $795 of interest in the first quarter of 2004, representing the fair value of the derivative liability. The total impact of marking to market the fair market value of the derivative liability and cash settlements associated with the interest rate swaps agreement resulted in our recording additional interest expense of $23 and $1,249 for the three and nine months ended September 30, 2004, respectively.

        Also, we consolidated a variable interest entity ("VIE III", collectively with our two other variable interest entities, our "Variable Interest Entities") which had entered into an interest rate swap agreement upon its inception that was designated as a cash flow hedge. This swap agreement hedges the majority of interest rate risk associated with VIE III's real estate term loans. We have recorded, in the accompanying consolidated balance sheet, the estimated cost to terminate this swap (fair value of the derivative liability) of $8,451 ($3,550 recorded in accrued expenses and $4,901 recorded in other long-term liabilities) as of September 30, 2004. For the three and nine months ended September 30, 2003, we recorded additional interest expense of $1,231 and $3,576, respectively, resulting from interest rate swap cash settlements. As a result of the repayment of the real estate term loans discussed in

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Note 6, we recorded an additional $8,656 of interest in the third quarter of 2004, representing the fair value of the derivative liability. The total impact of marking to market the fair market value of the derivative liability and cash settlements associated with the interest rate swap agreement resulted in our recording additional interest expense of $9,598 and $12,057 for the three and nine months ended September 30, 2004, respectively.

        In July 2003, we provided the initial financing totaling 190,459 British pounds sterling to IME for all of the consideration associated with the acquisition of the European information management services business of Hays plc ("Hays IMS") using cash on hand and borrowings under our revolving credit facility. In March 2004, IME repaid 135,000 British pounds sterling with proceeds from their new credit agreement (see Note 6). We recorded a foreign currency gain of $11,866 in other (income) expense, net for this intercompany balance in the first quarter of 2004. In order to minimize the foreign currency risk associated with providing IME with the consideration necessary for the acquisition of Hay IMS, we borrowed 80,000 British pounds sterling under our revolving credit facility to create a natural hedge. In the first quarter of 2004, these borrowings were repaid and we recorded a foreign currency loss of $2,995 on the translation of this revolving credit balance to U.S. dollars in other (income) expense, net.

        In addition, on July 16, 2003, we entered into two cross currency swaps with a combined notional value of 100,000 British pounds sterling. We settled these swaps in March 2004 by paying our counter parties a total of $27,714 representing the fair market value of the derivative and the associated swap costs, of which $18,978 was accrued for as of December 31, 2003. In the first quarter of 2004, we recorded a foreign currency loss for this swap of $8,736 in other (income) expense, net in the accompanying consolidated statement of operations. Upon cash settlement, we received $162,800 in exchange for 100,000 British pounds sterling. We did not designate these swaps as hedges and, therefore, all mark to market fluctuations of the swaps were recorded in other (income) expense, net in our consolidated statements of operations from inception to cash settlement of the swaps.

        In April 2004, IME entered into two floating for fixed interest rate swap contracts, each with a notional value of 50,000 British pounds sterling and a duration of two years, which were designated as cash flow hedges. These swap agreements hedge interest rate risk on IME's 100,000 British pounds sterling term loan facility (see Note 6). We have recorded, in the accompanying consolidated balance sheet, the fair value of the derivative asset, a deferred tax liability and a corresponding increase to accumulated other comprehensive items of $1,376 (which was all recorded in other current assets), $406 and $970, respectively, as of September 30, 2004. For the three and nine months ended September 30, 2004, we recorded additional interest expense of $16 and $218, respectively, resulting from interest rate swap cash settlements.

(5) Acquisitions

        In February 2004, we completed the acquisition of Mentmore plc's ("Mentmore") 49.9% equity interest in IME for total consideration of 82,500 British pounds sterling ($154,000) in cash. Included in this amount is the repayment of all trade and working capital funding owed to Mentmore by IME. Completion of the transaction gives us 100% ownership of IME, affording us full access to all future

12

cash flows and greater strategic and financial flexibility. We do not expect this transaction to have material impact on revenue or operating income since we already fully consolidate IME's financial results. Using the purchase method of accounting for this acquisition, the net assets of IME will be adjusted to reflect 49.9% of the difference between the fair market value and their current carrying value.

        Each of the 2004 acquisitions were accounted for using the purchase method of accounting, and accordingly, the results of operations for each acquisition have been included in our consolidated results from their respective acquisition dates. Cash consideration for the various acquisitions was provided through our credit facilities and the issuance of certain of our senior subordinated notes.

        A summary of the consideration paid and the allocation of the purchase price of all 2004 acquisitions is as follows:

Cash Paid (net of cash acquired)(1)		$	250,786
Fair Value of Identifiable Net Assets Acquired:
	Fair Value of Identifiable Assets Acquired(2)		(60,229	)
	Liabilities Assumed(3)		16,165
	Minority Interest(4)		(71,536	)
	Total Fair Value of Identifiable Net Assets Acquired		(115,600	)
Recorded Goodwill		$	135,186

(1)

Included in cash paid for acquisitions in the consolidated statement of cash flows for the nine months ended September 30, 2004 is $2,742 of contingent and other payments that were paid in 2004 related to acquisitions made in 1999 and 2003.

(2)

Comprised primarily of accounts receivable, prepaid expenses and other, land, buildings, racking, leasehold improvements and customer relationship assets.

(3)

Comprised primarily of accounts payable, accrued expenses and notes payable.

(4)

Comprised primarily of the carrying value of Mentmore's 49.9% minority interest in IME at the date of acquisition.

        Allocation of the purchase price for the 2004 acquisitions was based on estimates of the fair value of net assets acquired, and is subject to adjustment. The purchase price allocations of certain 2003 and 2004 transactions are subject to finalization of the assessment of the fair value of property, plant and equipment, intangible assets (primarily customer relationship assets), operating leases, restructuring purchase reserves and deferred income taxes. We are not aware of any information that would indicate that the final purchase price allocations will differ meaningfully from preliminary estimates.

        In connection with each of our acquisitions, we have undertaken certain restructurings of the acquired businesses. The restructuring activities include certain reductions in staffing levels, elimination of duplicate facilities and other costs associated with exiting certain activities of the acquired businesses. The estimated cost of these restructuring activities were recorded as costs of the acquisitions and were

13

provided for in accordance with Emerging Issues Task Force Issue No. 95-3, "Recognition of Liabilities in Connection with a Purchase Business Combination." We finalize restructuring plans for each business no later than one year from the date of acquisition. Unresolved matters at September 30, 2004 primarily include completion of planned abandonments of facilities and severance contracts in connection with certain acquisitions.

        The following is a summary of reserves related to such restructuring activities:

	Year Ended December 31, 2003			Nine Months Ended September 30, 2004
Reserves, Beginning Balance	$	9,906		$	16,322
Reserves Established		12,526			13,714
Expenditures		(5,436	)		(8,581	)
Adjustments to Goodwill, including currency effect(1)		(674	)		(229	)
Reserves, Ending Balance	$	16,322		$	21,226

(1)

Includes adjustments to goodwill as a result of management finalizing its restructuring plans.

        At September 30, 2004, the restructuring reserves related to acquisitions consisted of lease losses on abandoned facilities of $12,761, severance costs for approximately 62 people of $1,956 and other exit costs of $6,509. These accruals are expected to be used prior to September 30, 2005, except for lease losses of $10,868 and severance contracts of $222, both of which are based on contracts that extend beyond one year.

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(6) Long-term Debt

        Our long-term debt consists of the following:

	December 31, 2003					September 30, 2004
	Carrying Amount			Fair Value		Carrying Amount			Fair Value
IMI Revolving Credit Facility(1)	$	142,280		$	142,280	$	172,184		$	172,184
IMI Term Loan Facility(1)		248,750			248,750		199,500			199,500
IME Revolving Credit Facility(1)		—			—		85,772			85,772
IME Term Loan Facility(1)		—			—		182,140			182,140
81/8% Senior Notes due 2008 (Subsidiary notes)(3)		18,768			20,684		—			—
81/4% Senior Subordinated Notes due 2011(2)(3)		149,670			156,375		149,704			156,375
85/8% Senior Subordinated Notes due 2013(2)(3)		481,075			521,748		481,060			524,153
71/4% GBP Senior Subordinated Notes due 2014(2)(3)		—			—		269,910			257,089
73/4% Senior Subordinated Notes due 2015(2)(3)		441,331			456,052		440,647			454,974
65/8% Senior Subordinated Notes due 2016(2)(3)		314,071			311,200		314,441			310,400
Real Estate Term Loans(1)		202,647			202,647		—			—
Real Estate Mortgages(1)		17,584			17,584		16,283			16,283
Seller Notes(1)		12,607			12,607		10,561			10,561
Other(1)		61,145			61,145		25,876			25,876
Total Long-term Debt		2,089,928					2,348,078
Less Current Portion		(115,781	)				(17,923	)
Long-term Debt, Net of Current Portion	$	1,974,147				$	2,330,155

(1)

The fair value of this long-term debt either approximates the carrying value (as borrowings under these debt instruments are based on current variable market interest rates as of December 31, 2003 and September 30, 2004) or it is impracticable to estimate the fair value due to the nature of such long-term debt.

(2)

These debt instruments are collectively referred to as the "Parent notes."

(3)

The fair values of the Parent notes and the Subsidiary notes are based on quoted market prices for these notes on December 31, 2003 and September 30, 2004.

        In January 2004, we completed an offering of 150,000 British pounds sterling in aggregate principal amount of our 7¹/4% notes, which were issued at a price of 100% of par. Our net proceeds of 146,900 British pounds sterling, after paying the initial purchasers' discounts, commissions and transaction fees, were used to fund our acquisition of Mentmore's 49.9% equity interest in IME for total consideration of 82,500 British pounds sterling, to redeem $19,985 in aggregate principal amount of our outstanding Subsidiary notes in February 2004, to repay borrowings under our revolving credit facility, to repay $48,750 of our term loans, to repay other indebtedness and to pay for other acquisitions.

        In February 2004, we redeemed the remaining $19,985 of outstanding principal amount of the Subsidiary notes, at a redemption price (expressed as a percentage of principal amount) of 104.063%,

15

plus accrued and unpaid interest. We recorded a charge to other (income) expense, net of $2,028 in the first quarter of 2004 related to the early retirement of these remaining Subsidiary notes, which consists of redemption premiums and transaction costs as well as original issue discount related to these Subsidiary notes.

        In March 2004, IME and certain of its subsidiaries entered into a credit agreement (the "IME Credit Agreement") with a syndicate of European lenders. The IME Credit Agreement provides for maximum borrowing availability in the principal amount of 210,000 British pounds sterling, including a 100,000 British pounds sterling revolving credit facility (the "IME revolving credit facility"), which includes the ability to borrow in certain other foreign currencies, a 100,000 British pounds sterling term loan (the "IME term loan facility"), and a 10,000 British pounds sterling overdraft protection line. The IME revolving credit facility matures on March 5, 2009. The IME term loan facility is payable in three installments; two installments of 20,000 British pounds sterling on March 5, 2007 and 2008, respectively, and the final payment of the remaining balance on March 5, 2009. The interest rate on borrowings under the IME Credit Agreement varies depending on IME's choice of currency options and interest rate period, plus an applicable margin. The IME Credit Agreement includes various financial covenants applicable to the results of IME, which may restrict IME's ability to incur indebtedness under the IME Credit Agreement and from third parties, as well as limit IME's ability to pay dividends to us. Most of IME's non-dormant subsidiaries have either guaranteed the obligations or have their shares pledged to secure IME's obligations under the IME Credit Agreement. We have not guaranteed or otherwise provided security for the IME Credit Agreement nor have any of our U.S., Canadian, Mexican or South American subsidiaries.

        In March 2004, IME borrowed approximately 147,000 British pounds sterling under the IME Credit Agreement, including the full amount of the term loan. IME used those proceeds to repay us 135,000 British pounds sterling related to our initial financing of the acquisition of Hays IMS, to repay amounts outstanding under its prior term loan and revolving credit facility and to pay transaction costs associated with the IME Credit Agreement. We used the 135,000 British pounds sterling received from IME to: (1) pay down $103,932 of real estate term loans, (2) settle all obligations totaling $27,714 associated with terminating our two cross currency swaps used to hedge the foreign currency impact of our intercompany financing with IME related to the Hays IMS acquisition, and (3) to pay down amounts outstanding under our prior credit agreement. Our consolidated balance sheet as of September 30, 2004 included 147,092 British pounds sterling ($267,912) of borrowings under the IME Credit Agreement. The remaining availability, based on its current level of external debt and the leverage ratio under the IME revolving credit facility on July 31, 2004, was approximately 49,600 British pounds sterling ($90,300). The interest rate in effect under the IME revolving credit facility ranged from 3.8% to 6.6% as of July 31, 2004.

        On April 2, 2004 and subsequently on July 8, 2004, we entered into a new amended and restated revolving credit facility and term loan facility (the "IMI Credit Agreement") to replace our prior credit agreement and to reflect more favorable pricing of our term loans. The IMI Credit Agreement has an aggregate principal amount of $550,000 and is comprised of a $350,000 revolving credit facility (the "IMI revolving credit facility"), which includes the ability to borrow in certain foreign currencies, and a $200,000 term loan facility (the "IMI term loan facility"). The IMI revolving credit facility matures on

16

April 2, 2009. With respect to the IMI term loan facility, quarterly loan payments of $500 began in the third quarter of 2004 and will continue through maturity on April 2, 2011, at which time the remaining outstanding principal balance of the IMI term loan facility is due. The interest rate on borrowings under the IMI Credit Agreement varies depending on our choice of interest rate and currency options, plus an applicable margin. All intercompany notes and the capital stock of most of our U.S. subsidiaries are pledged to secure the IMI Credit Agreement. As of September 30, 2004, we had $172,184 of borrowings under our IMI revolving credit facility, of which $6,000 was denominated in U.S. dollars and the remaining balance was denominated in Canadian dollars (CAD 211,000); we also had various outstanding letters of credit totaling $22,427. The remaining availability, based on IMI's current level of external debt and the leverage ratio under the IMI revolving credit facility, on September 30, 2004 was $155,389. The interest rate in effect under the IMI revolving credit facility was 4.5% as of September 30, 2004.

        Our Variable Interest Entities were financed with real estate term loans. In March 2004, $103,932 of these real estate term loans was repaid; the remaining $98,715 of real estate term loans was repaid in August 2004. We recorded a charge to other (income) expense, net of $426 for the nine months ended September 30, 2004 related to the early retirement of these real estate term loans.

        Our indentures and other agreements governing our indebtedness contain certain restrictive financial and operating covenants including covenants that restrict our ability to complete acquisitions, pay cash dividends, incur indebtedness, make investments, sell assets and take certain other corporate actions. The covenants do not contain a rating trigger. Therefore, a change in our debt rating would not trigger a default under our indentures and other agreements governing our indebtedness. As of September 30, 2004, we were in compliance with all material debt covenants and agreements.

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(7) Selected Financial Information of Parent, Guarantors and Non-Guarantors

        The following financial data summarizes the consolidating Company on the equity method of accounting as of September 30, 2004 and December 31, 2003 and for the three and nine month periods ended September 30, 2004 and 2003. The Guarantors column includes all subsidiaries that guarantee the Parent notes. The subsidiaries that do not guarantee the Parent notes are referred to in the table as the "Non-Guarantors."

			September 30, 2004
			Parent		Guarantors		Non- Guarantors		Eliminations			Consolidated
Assets
Current Assets:
	Cash and Cash Equivalents		$	—	$	13,236	$	31,192	$	—		$	44,428
	Accounts Receivable			—		234,963		108,978		—			343,941
	Intercompany Receivable			869,607		—		—		(869,607	)		—
	Other Current Assets			1,915		63,656		26,105		(417	)		91,259
		Total Current Assets		871,522		311,855		166,275		(870,024	)		479,628
Property, Plant and Equipment, Net				—		1,098,646		476,800		—			1,575,446
Other Assets, Net:
	Long-term Notes Receivable from Affiliates and Intercompany Receivable			1,712,645		1,000		—		(1,713,645	)		—
	Investment in Subsidiaries			470,301		174,430		925		(645,656	)		—
	Goodwill			—		1,367,427		566,440		9,755			1,943,622
	Other			30,510		78,556		99,038		(572	)		207,532
		Total Other Assets, Net		2,213,456		1,621,413		666,403		(2,350,118	)		2,151,154
		Total Assets	$	3,084,978	$	3,031,914	$	1,309,478	$	(3,220,142	)	$	4,206,228
Liabilities and Shareholders' Equity
	Intercompany Payable		$	—	$	384,835	$	484,772	$	(869,607	)	$	—
	Current Portion of Long-term Debt			2,274		1,212		14,437		—			17,923
	Total Other Current Liabilities			51,628		278,941		122,302		(417	)		452,454
	Long-term Debt, Net of Current Portion			1,860,336		1,291		468,528		—			2,330,155
	Long-term Notes Payable to Affiliates and Intercompany Payable			1,000		1,712,645		—		(1,713,645	)		—
	Other Long-term Liabilities			4,627		199,755		25,038		(572	)		228,848
	Commitments and Contingencies
	Minority Interests			—		—		3,094		8,641			11,735
	Shareholders' Equity			1,165,113		453,235		191,307		(644,542	)		1,165,113
		Total Liabilities and Shareholders' Equity	$	3,084,978	$	3,031,914	$	1,309,478	$	(3,220,142	)	$	4,206,228

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			December 31, 2003
			Parent		Guarantors		Non- Guarantors		Eliminations			Consolidated
Assets
Current Assets:
	Cash and Cash Equivalents		$	—	$	54,793	$	19,890	$	—		$	74,683
	Accounts Receivable			—		202,271		77,529		—			279,800
	Intercompany Receivable			870,924		—		13,935		(884,859	)		—
	Other Current Assets			3,591		84,733		29,186		(410	)		117,100
		Total Current Assets		874,515		341,797		140,540		(885,269	)		471,583
Property, Plant and Equipment, Net				—		973,619		518,648		—			1,492,267
Other Assets, Net:
	Long-term Notes Receivable from Affiliates and Intercompany Receivable			1,625,796		1,000		98,715		(1,725,511	)		—
	Investment in Subsidiaries			402,045		91,336		—		(493,381	)		—
	Goodwill			—		1,323,340		443,198		9,741			1,776,279
	Other			23,661		69,221		61,783		(2,695	)		151,970
		Total Other Assets, Net		2,051,502		1,484,897		603,696		(2,211,846	)		1,928,249
		Total Assets	$	2,926,017	$	2,800,313	$	1,262,884	$	(3,097,115	)	$	3,892,099
Liabilities and Shareholders' Equity
	Intercompany Payable		$	—	$	237,392	$	647,467	$	(884,859	)	$	—
	Current Portion of Long-term Debt			1,265		1,645		112,871		—			115,781
	Total Other Current Liabilities			73,385		256,018		139,971		(410	)		468,964
	Long-term Debt, Net of Current Portion			1,777,480		2,924		193,743		—			1,974,147
	Long-term Notes Payable to Affiliates and Intercompany Payable			1,000		1,724,511		—		(1,725,511	)		—
	Other Long-term Liabilities			6,773		169,695		17,535		(2,695	)		191,308
	Commitments and Contingencies
	Minority Interests			—		—		6,105		69,680			75,785
	Shareholders' Equity			1,066,114		408,128		145,192		(553,320	)		1,066,114
		Total Liabilities and Shareholders' Equity	$	2,926,017	$	2,800,313	$	1,262,884	$	(3,097,115	)	$	3,892,099

19

			Three Months Ended September 30, 2004
			Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
Revenues:
	Storage		$	—		$	195,460		$	68,407		$	—		$	263,867
	Service and Storage Material Sales			—			136,647			58,816			—			195,463
		Total Revenues		—			332,107			127,223			—			459,330
Operating Expenses:
	Cost of Sales (Excluding Depreciation)			—			146,680			63,117			—			209,797
	Selling, General and Administrative			(42	)		90,979			31,571			—			122,508
	Depreciation and Amortization			9			31,605			10,655			—			42,269
	(Gain) Loss on Disposal/Writedown of Property, Plant and Equipment, Net			—			(286	)		40			—			(246	)
		Total Operating Expenses		(33	)		268,978			105,383			—			374,328
Operating Income				33			63,129			21,840			—			85,002
Interest Expense, Net				37,477			616			16,220			—			54,313
Equity in the (Earnings) Losses of Subsidiaries				(54,553	)		1,207			—			53,346			—
Other (Income) Expense, Net				(1,341	)		(4,502	)		2,864			—			(2,979	)
	Income Before Provision for Income Taxes and Minority Interest			18,450			65,808			2,756			(53,346	)		33,668
Provision for Income Taxes				—			11,379			2,914			—			14,293
Minority Interest in Earnings of Subsidiaries				—			—			925			—			925
		Net Income (Loss)	$	18,450		$	54,429		$	(1,083	)	$	(53,346	)	$	18,450

20

			Three Months Ended September 30, 2003
			Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
Revenues:
	Storage		$	—		$	181,568		$	41,405		$	—		$	222,973
	Service and Storage Material Sales			—			127,449			31,336			—			158,785
		Total Revenues		—			309,017			72,741			—			381,758
Operating Expenses:
	Cost of Sales (Excluding Depreciation)			—			137,406			33,949			—			171,355
	Selling, General and Administrative			(33	)		80,236			17,884			—			98,087
	Depreciation and Amortization			4			26,814			6,379			—			33,197
	Loss on Disposal/Writedown of Property, Plant and Equipment, Net			—			1,822			48			—			1,870
		Total Operating Expenses		(29	)		246,278			58,260			—			304,509
Operating Income				29			62,739			14,481			—			77,249
Interest Expense, Net				5,176			25,890			7,724			—			38,790
Equity in the Earnings of Subsidiaries				(28,612	)		(677	)		—			29,289			—
Other Expense (Income), Net				8,671			(6,033	)		7,705			—			10,343
	Income (Loss) Before Provision (Benefit) for Income Taxes and Minority Interest			14,794			43,559			(948	)		(29,289	)		28,116
Provision (Benefit) for Income Taxes				—			12,268			(256	)		—			12,012
Minority Interest in Earnings of Subsidiaries				—			—			1,310			—			1,310
		Net Income (Loss)	$	14,794		$	31,291		$	(2,002	)	$	(29,289	)	$	14,794

21

			Nine Months Ended September 30, 2004
			Parent			Guarantors			Non- Guarantors		Eliminations			Consolidated
Revenues:
	Storage		$	—		$	572,912		$	195,320	$	—		$	768,232
	Service and Storage Material Sales			—			408,225			162,205		—			570,430
		Total Revenues		—			981,137			357,525		—			1,338,662
Operating Expenses:
	Cost of Sales (Excluding Depreciation)			—			432,936			175,998		—			608,934
	Selling, General and Administrative			81			264,541			88,834		—			353,456
	Depreciation and Amortization			25			91,286			28,601		—			119,912
	(Gain) Loss on Disposal/Writedown of Property, Plant and Equipment, Net			—			(1,365	)		105		—			(1,260	)
		Total Operating Expenses		106			787,398			293,538		—			1,081,042
Operating (Loss) Income				(106	)		193,739			63,987		—			257,620
Interest Expense (Income), Net				112,018			(9,797	)		38,210		—			140,431
Equity in the Earnings of Subsidiaries				(179,545	)		(6,067	)		—		185,612			—
Other Expense (Income), Net				3,117			(8,295	)		9,414		—			4,236
	Income Before Provision for Income Taxes and Minority Interest			64,304			217,898			16,363		(185,612	)		112,953
Provision for Income Taxes				—			38,674			7,994		—			46,668
Minority Interest in Earnings of Subsidiaries				—			—			1,981		—			1,981
		Net Income	$	64,304		$	179,224		$	6,388	$	(185,612	)	$	64,304

22

			Nine Months Ended September 30, 2003
			Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
Revenues:
	Storage		$	—		$	529,554		$	105,219		$	—		$	634,773
	Service and Storage Material Sales			—			375,045			83,021			—			458,066
		Total Revenues		—			904,599			188,240			—			1,092,839
Operating Expenses:
	Cost of Sales (Excluding Depreciation)			—			404,863			88,675			—			493,538
	Selling, General and Administrative			247			241,215			43,915			—			285,377
	Depreciation and Amortization			13			78,178			15,720			—			93,911
	Loss on Disposal/Writedown of Property, Plant and Equipment, Net			—			1,674			212			—			1,886
		Total Operating Expenses		260			725,930			148,522			—			874,712
Operating (Loss) Income				(260	)		178,669			39,718			—			218,127
Interest Expense, Net				9,706			79,387			21,659			—			110,752
Equity in the Earnings of Subsidiaries				(97,027	)		(3,319	)		—			100,346			—
Other Expense (Income), Net				30,850			(15,632	)		(12,857	)		—			2,361
	Income Before Provision for Income Taxes and Minority Interest			56,211			118,233			30,916			(100,346	)		105,014
Provision for Income Taxes				—			31,803			12,832			—			44,635
Minority Interest in Earnings of Subsidiaries				—			—			4,168			—			4,168
		Net Income	$	56,211		$	86,430		$	13,916		$	(100,346	)	$	56,211

23

			Nine Months Ended September 30, 2004
			Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
Cash Flows from Operating Activities:
	Cash Flows from Operating Activities		$	(140,178	)	$	303,838		$	45,319		$	—		$	208,979
Cash Flows from Investing Activities:
	Capital expenditures			—			(108,193	)		(50,897	)		—			(159,090	)
	Cash paid for acquisitions, net of cash acquired			—			(52,053	)		(201,475	)		—			(253,528	)
	Intercompany loans to subsidiaries			160,067			188,709			—			(348,776	)		—
	Investment in subsidiaries			(111,988	)		(111,988	)		—			223,976			—
	Additions to customer relationship and acquisition costs			—			(7,593	)		(1,919	)		—			(9,512	)
	Proceeds from sales of property and equipment			—			2,454			54			—			2,508
		Cash Flows from Investing Activities		48,079			(88,664	)		(254,237	)		(124,800	)		(419,622	)
Cash Flows from Financing Activities:
	Repayment of debt and term loans			(591,649	)		(205,162	)		(94,340	)		—			(891,151	)
	Proceeds from borrowings and term loans			408,192			—			453,850			—			862,042
	Early retirement of senior subordinated notes			—			—			(20,797	)		—			(20,797	)
	Net proceeds from sales of senior subordinated notes			269,427			—			—			—			269,427
	Debt financing (repayment to) and equity contribution from (distribution to) minority shareholders, net			—			—			(41,741	)		—			(41,741	)
	Intercompany loans from parent			—			(163,557	)		(185,219	)		348,776			—
	Equity contribution from parent			—			111,988			111,988			(223,976	)		—
	Other, net			6,129			—			(5,364	)		—			765
		Cash Flows from Financing Activities		92,099			(256,731	)		218,377			124,800			178,545
Effect of exchange rates on cash and cash equivalents				—			—			1,843			—			1,843
(Decrease) Increase in cash and cash equivalents				—			(41,557	)		11,302			—			(30,255	)
Cash and cash equivalents, beginning of period				—			54,793			19,890			—			74,683
Cash and cash equivalents, end of period			$	—		$	13,236		$	31,192		$	—		$	44,428

24

			Nine Months Ended September 30, 2003
			Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
Cash Flows from Operating Activities:
	Cash Flows from Operating Activities		$	(309	)	$	156,209		$	27,719		$	—		$	183,619
Cash Flows from Investing Activities:
	Capital expenditures			—			(112,828	)		(35,211	)		—			(148,039	)
	Cash paid for acquisitions, net of cash acquired			—			(65,407	)		(313,396	)		—			(378,803	)
	Intercompany loans to subsidiaries			(290,090	)		(316,357	)		—			606,447			—
	Investment in subsidiaries			(1,655	)		(1,655	)		—			3,310			—
	Investment in convertible preferred stock			—			(1,357	)		—			—			(1,357	)
	Additions to customer relationship and acquisition costs			—			(6,498	)		(2,140	)		—			(8,638	)
	Proceeds from sales of property and equipment			—			6,555			66			—			6,621
		Cash Flows from Investing Activities		(291,745	)		(497,547	)		(350,681	)		609,757			(530,216	)
Cash Flows from Financing Activities:
	Repayment of debt and term loans			(442,078	)		(489	)		(42,841	)		—			(485,408	)
	Proceeds from borrowings and term loans			529,784			—			96,245			—			626,029
	Early retirement of senior subordinated notes			(254,407	)		—			(52,032	)		—			(306,439	)
	Net proceeds from sales of senior subordinated notes			455,590			—			—			—			455,590
	Debt financing (repayment to) and equity contribution from (distribution to) minority shareholders, net			—			—			20,099			—			20,099
	Intercompany loans from parent			—			295,856			310,591			(606,447	)		—
	Equity contribution from parent			—			1,655			1,655			(3,310	)		—
	Other, net			3,165			—			—			—			3,165
		Cash Flows from Financing Activities		292,054			297,022			333,717			(609,757	)		313,036
Effect of exchange rates on cash and cash equivalents				—			—			813			—			813
(Decrease) Increase in cash and cash equivalents				—			(44,316	)		11,568			—			(32,748	)
Cash and cash equivalents, beginning of period				—			52,025			4,267			—			56,292
Cash and cash equivalents, end of period			$	—		$	7,709		$	15,835		$	—		$	23,544

25

(8) Segment Information

An analysis of our business segment information and reconciliation to the consolidated financial statements is as follows:

	Business Records Management		Off-Site Data Protection		International		Corporate & Other			Total Consolidated
Three Months Ended September 30, 2003
Revenue	$	260,983	$	63,937	$	49,780	$	7,058		$	381,758
Contribution		74,363		17,691		11,157		9,105			112,316
Expenditures for Segment Assets		70,753		3,088		319,278		7,502			400,621
Three Months Ended September 30, 2004
Revenue		279,326		70,250		98,689		11,065			459,330
Contribution		71,096		20,065		23,925		11,939			127,025
Expenditures for Segment Assets		95,407		4,521		19,636		12,750			132,314
Nine Months Ended September 30, 2003
Revenue		762,580		187,202		121,608		21,449			1,092,839
Contribution		213,341		52,144		27,680		20,759			313,924
Total Assets		2,502,547		377,816		715,875		143,303	(1)		3,739,541
Expenditures for Segment Assets(2)		143,973		23,451		343,165		24,891			535,480
Nine Months Ended September 30, 2004
Revenue		823,305		204,775		279,503		31,079			1,338,662
Contribution		221,905		58,853		68,421		27,093			376,272
Total Assets		2,671,816		387,932		967,052		179,428	(1)		4,206,228
Expenditures for Segment Assets(2)		170,796		15,508		207,756		28,070			422,130

(1)

Total Corporate & Other assets include the intersegment elimination amounts of $1,745,805 and $1,870,821 as of September 30, 2003 and 2004, respectively.

(2)

Includes capital expenditures, cash paid for acquisitions, net of cash acquired and additions to customer relationship and acquisition costs in the accompanying consolidated statements of cash flows.

        The accounting policies of the reportable segments are the same as those described in Note 2 to Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2003, except that certain costs continue to be allocated from Corporate & Other to the other segments in both 2003 and 2004, primarily to our Business Records Management and Off-Site Data Protection segments. These allocations, which include rent, worker's compensation, property, general liability, auto and other insurance, pension/medical costs, incentive compensation, real estate property taxes and provision for bad debts, are based on rates set at the beginning of each year. Contribution for each segment is defined as total revenues less cost of sales (excluding depreciation) and selling, general and administrative expenses (including the costs allocated to each segment as described above). Internally, we use Contribution as the basis for evaluating the performance of and allocating resources to our operating segments.

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        A reconciliation of Contribution to net income on a consolidated basis is as follows:

			Three Months Ended September 30,					Nine Months Ended September 30,
			2003		2004			2003		2004
Contribution			$	112,316	$	127,025		$	313,924	$	376,272
	Less: Depreciation and Amortization			33,197		42,269			93,911		119,912
		Loss (Gain) on Disposal/Writedown of Property, Plant and Equipment, Net		1,870		(246	)		1,886		(1,260	)
		Interest Expense, Net		38,790		54,313			110,752		140,431
		Other Expense (Income), Net		10,343		(2,979	)		2,361		4,236
		Provision for Income Taxes		12,012		14,293			44,635		46,668
		Minority Interest in Earnings of Subsidiaries		1,310		925			4,168		1,981
Net Income			$	14,794	$	18,450		$	56,211	$	64,304

        Information about our operations in different geographical areas is as follows:

		Three Months Ended September 30,				Nine Months Ended September 30,
		2003		2004		2003		2004
Revenues:
United States		$	309,760	$	333,110	$	906,616	$	983,785
United Kingdom			35,937		69,549		87,919		203,754
Canada			22,218		27,533		64,615		75,374
Other International			13,843		29,138		33,689		75,749
	Total Revenues	$	381,758	$	459,330	$	1,092,839	$	1,338,662

		December 31, 2003		September 30, 2004
Long-lived Assets:
United States		$	2,514,031	$	2,596,872
United Kingdom			551,924		599,137
Canada			253,874		297,944
Other International			100,687		232,647
	Total Long-lived Assets	$	3,420,516	$	3,726,600

(9) Commitments and Contingencies

        We are a party to numerous operating leases. No material changes in the obligations associated with these leases have occurred since December 31, 2003. See our Annual Report on Form 10-K for the year ended December 31, 2003 for amounts outstanding at December 31, 2003.

        As previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2003 and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2004, the arbitrator in

27

our arbitration proceeding against J. Peter Pierce did not find the evidence provided by us sufficient to rule in our favor on the particular claims at issue and, in response to that decision, we filed a motion to vacate the arbitrator's decision and award in the Superior Court for Middlesex County, New Jersey. On June 16, 2004, that court denied our motion to vacate and confirmed the arbitration decision. We have appealed the court's decision to the Appellate Division of the New Jersey Superior Court. Mr. Pierce filed a motion to dismiss the appeal. The motion to dismiss filed by Mr. Pierce was denied. In the meanwhile, on September 13, 2004, the arbitrator issued a final award, granting Mr. Pierce indemnification for legal expenses incurred in the arbitration in the amount of approximately $1,600. Mr. Pierce brought an action in the Superior Court for Middlesex County to confirm such award and such court issued an order to show cause. We opposed this action and filed a motion to dismiss Mr. Pierce's claims and vacate the arbitration award, or in the alternative, for a stay pending disposition of the pending appeal regarding the motion to vacate.

        As previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2003, six lawsuits were outstanding against us by certain of our customers or abutters and/or their insurers in connection with the arson that resulted in damage to one and destruction of another records and information management services facility in South Brunswick Township, New Jersey in March 1997. As a result of a mediation in August, 2004, the parties to these six lawsuits entered into a written settlement of these matters. Pursuant to the settlement agreement, the Company contributed $500 to a settlement fund in exchange for a complete release. The Superior Court for Middlesex County, New Jersey has, therefore, dismissed all of these cases. In addition, our insurers reimbursed us for the costs of the defense.

        Other than the matters discussed above, there have been no material developments during the third quarter of 2004 in the proceedings described in our Annual Report on Form 10-K for the year ended December 31, 2003 or our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2004 and June 30, 2004.

        Additionally, we are involved in litigation from time to time in the ordinary course of business with a portion of the defense and/or settlement costs being covered by various commercial liability insurance policies purchased by us. In the opinion of management, no material legal proceedings, other than those described above and in our Annual Report on Form 10-K for the year ended December 31, 2003 and our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2004 and June 30, 2004, are pending to which we, or any of our properties, are subject.

(10) Subsequent Events

        In late October, the Company began a process to raise an additional $150,000 of term loans as permitted under our IMI Credit Agreement. The new term loans will mature at the same time as our current IMI term loan facility with quarterly loan payments of $375 beginning in the first quarter of 2005 and will be priced at LIBOR plus a margin of 1.75%. The transaction is expected to close by mid-November.

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IRON MOUNTAIN INCORPORATED

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

        The following discussion and analysis of our financial condition and results of operations for the three and nine months ended September 30, 2004 and 2003 should be read in conjunction with our consolidated financial statements and notes for the three and nine months ended September 30, 2004 included herein, and for the year ended December 31, 2003, included in our Annual Report on Form 10-K for the year ended December 31, 2003.

Forward Looking Statements

        We have made statements in this Quarterly Report on Form 10-Q that constitute "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995 and in other federal securities laws. These forward-looking statements concern our operations, economic performance, financial condition, goals, beliefs, strategies, objectives, plans and current expectations. The forward-looking statements are subject to various known and unknown risks, uncertainties and other factors. When we use words such as "believes," "expects," "anticipates," "estimates" or similar expressions, we are making forward-looking statements. Although we believe that our forward-looking statements are based on reasonable assumptions, our expected results may not be achieved, and actual results may differ materially from our expectations. Important factors that could cause actual results to differ from expectations include, among others: (1) changes in customer preferences and demand for our services; (2) changes in the price for our services relative to the cost of providing such services; (3) the cost and availability of financing for contemplated growth; (4) our ability or inability to complete acquisitions on satisfactory terms and to integrate acquired companies efficiently; (5) in the various digital businesses in which we are engaged, capital and technical requirements will be beyond our means, markets for our services will be less robust than anticipated, or competition will be more intense than anticipated; (6) the possibility that business partners upon whom we depend for technical assistance or management and acquisition expertise outside the United States will not perform as anticipated; (7) changes in the political and economic environments in the countries in which our international subsidiaries operate, including foreign currency fluctuations; and (8) other trends in competitive or economic conditions affecting our financial condition or results of operations not presently contemplated. You should not rely upon forward-looking statements except as statements of our present intentions and of our present expectations, which may or may not occur. You should read these cautionary statements as being applicable to all forward-looking statements wherever they appear. We undertake 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. Readers are also urged to carefully review and consider the various disclosures we have made in this document, as well as our other periodic reports on Forms 10-K, 10-Q and 8-K filed with the SEC.

Non-GAAP Measures

Operating Income Before Depreciation and Amortization, or OIBDA

        OIBDA is defined as operating income before depreciation and amortization expenses. OIBDA Margin is calculated by dividing OIBDA by total revenues. Our management uses these measures to evaluate the operating performance of our consolidated business. As such, we believe these measures provide relevant and useful information to our current and potential investors. We use OIBDA for planning purposes and multiples of current or projected OIBDA-based calculations in conjunction with our discounted cash flow models to determine our overall enterprise valuation and to evaluate acquisition targets. We believe OIBDA and OIBDA Margin are useful measures to evaluate our ability to grow our revenues faster than our operating expenses and they are an integral part of our internal

29

reporting system utilized by management to assess and evaluate the operating performance of our business. OIBDA does not include certain items, specifically (1) minority interest in earnings (losses) of subsidiaries, net, (2) other (income) expense, net, (3) income from discontinued operations and loss on sale of discontinued operations and (4) cumulative effect of change in accounting principle that we believe are not indicative of our core operating results. OIBDA also does not include interest expense, net and the provision for income taxes. These expenses are associated with our capitalization and tax structures, which management does not consider when evaluating the profitability of our core operations. Finally, OIBDA does not include depreciation and amortization expenses, in order to eliminate the impact of capital investments, which management believes is better evaluated by comparing capital expenditures to incremental revenue generated and as a percentage of total revenues. OIBDA and OIBDA Margin should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP such as operating or net income or cash flows from operating activities (as determined in accordance with GAAP).

Reconciliation of OIBDA to Operating Income and Net Income (In Thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2003		2004			2003		2004
OIBDA	$	110,446	$	127,271		$	312,038	$	377,532
Less: Depreciation and Amortization		33,197		42,269			93,911		119,912
Operating Income		77,249		85,002			218,127		257,620
Less: Interest Expense, Net		38,790		54,313			110,752		140,431
Other Expense (Income), Net		10,343		(2,979	)		2,361		4,236
Provision for Income Taxes		12,012		14,293			44,635		46,668
Minority Interest		1,310		925			4,168		1,981
Net Income	$	14,794	$	18,450		$	56,211	$	64,304

Critical Accounting Policies

        Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of the financial statements and for the period then ended. On an on-going basis, we evaluate the estimates used, including those related to the allowance for doubtful accounts, impairments of tangible and intangible assets, income taxes, purchase accounting related reserves, self-insurance liabilities, incentive compensation liabilities, litigation liabilities and contingencies. We base our estimates on historical experience, actuarial estimates, current conditions and various other assumptions that we believe to be reasonable under the circumstances. These estimates form the basis for making judgments about the carrying values of assets and liabilities and are not readily apparent from other sources. We use these estimates to assist us in the identification and assessment of the accounting treatment necessary with respect to commitments and contingencies. Actual results may differ from these estimates. Our critical accounting policies include the following and are in no particular order:

•

Accounting for Acquisitions



•

Allowance for Doubtful Accounts



•

Accounting for Variable Interest Entities

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•

Accounting for Derivative Instruments and Hedging Activities



•

Accounting for Internal Use Software



•

Deferred Income Taxes



•

Stock-based Compensation

        Further detail regarding our critical accounting policies can be found in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" and the consolidated financial statements and the notes included in our Annual Report on Form 10-K for the year ended December 31, 2003 as filed with the SEC. Management has determined that no material changes concerning our critical accounting polices have occurred since December 31, 2003.

Overview

        The following discussions set forth, for the periods indicated, management's discussion and analysis of results. Significant trends and changes are discussed for the three and nine month periods ended September 30, 2004 within each section, except in instances where the trend or explanation of the change is consistent for both periods reported. In those instances, only the trend or explanation for the change for the nine months ended September 30, 2004 is referenced.

Results of Operations

        The following tables set forth, for the periods indicated, information derived from our consolidated statements of operations (in thousands).

	Three Months Ended September 30,
							Dollar Change		Percent Change
	2003			2004
Revenues	$	381,758		$	459,330		$	77,572	20.3	%
Operating Expenses		304,509			374,328			69,819	22.9	%
Operating Income		77,249			85,002			7,753	10.0	%
Other Expenses, Net		62,455			66,552			4,097	6.6	%
Net Income	$	14,794		$	18,450		$	3,656	24.7	%
OIBDA(1)	$	110,446		$	127,271		$	16,825	15.2	%
OIBDA Margin(1)		28.9	%		27.7	%

	Nine Months Ended September 30,
							Dollar Change		Percent Change
	2003			2004
Revenues	$	1,092,839		$	1,338,662		$	245,823	22.5	%
Operating Expenses		874,712			1,081,042			206,330	23.6	%
Operating Income		218,127			257,620			39,493	18.1	%
Other Expenses, Net		161,916			193,316			31,400	19.4	%
Net Income	$	56,211		$	64,304		$	8,093	14.4	%
OIBDA(1)	$	312,038		$	377,532		$	65,494	21.0	%
OIBDA Margin(1)		28.6	%		28.2	%

(1)

See "Non-GAAP Measures—Operating Income Before Depreciation and Amortization, or OIBDA" for definition, reconciliation and a discussion of why we believe these measures provide relevant and useful information to our current and potential investors.

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REVENUES

        Our consolidated storage revenues increased $40.9 million, or 18.3%, to $263.9 million and $133.5 million, or 21.0%, to $768.2 million for the three and nine months ended September 30, 2004 compared to the same periods in 2003, respectively. For the three months ended September 30, 2004, the increase is attributable to acquisitions (8%), consisting primarily of $15.2 million from the operations of Hays IMS, internal revenue growth (8%) resulting from net increases in records and other media stored by existing customers and sales to new customers, and foreign currency exchange rate fluctuations (2%). For the nine months ended September 30, 2004, the increase is attributable to acquisitions (10%), consisting primarily of $60.4 million from the operations of Hays IMS, internal revenue growth (8%) resulting from net increases in records and other media stored by existing customers and sales to new customers, and foreign currency exchange rate fluctuations (3%). Foreign currency exchange rate fluctuations were due primarily to the strengthening of the British pound sterling, Canadian dollar, and Euro against the U.S. dollar, based on an analysis of weighted average rates for the comparable periods.

        Consolidated service and storage material sales revenues increased $36.7 million, or 23.1%, to $195.5 million and $112.4 million, or 24.5%, to $570.4 million for the three and nine months ended September 30, 2004 compared to the same periods in 2003, respectively. For the three months ended September 30, 2004, the increase is attributable to acquisitions (15%), including revenue from the Hays IMS operations of $16.4 million, internal revenue growth (5%) resulting from net increases in service and storage material sales to existing customers and sales to new customers, and foreign currency exchange rate fluctuations (4%). For the nine months ended September 30, 2004, the increase is attributable to acquisitions (16%), including revenue from the Hays IMS operations of $60.9 million, internal revenue growth (5%) resulting from net increases in service and storage material sales to existing customers, sales to new customers, and foreign currency exchange rate fluctuations (4%). Foreign currency exchange rate fluctuations were primarily due to the strengthening of the British pound sterling, Canadian dollar, and Euro against the U.S. dollar, based on an analysis of weighted average rates for the comparable periods.

        For the reasons stated above, our consolidated revenues increased $77.6 million, or 20.3%, to $459.3 million and $245.8 million, or 22.5% to $1.3 billion, for the three and nine months ended September 30, 2004 compared to the same periods in 2003, respectively. Internal revenue growth was 7% for the three and nine months ended September 30, 2004. We calculate internal revenue growth in local currency for our international operations.

Internal Growth—Eight-Quarter Trend

	2002		2003								2004
	Fourth Quarter		First Quarter		Second Quarter		Third Quarter		Fourth Quarter		First Quarter		Second Quarter		Third Quarter
Storage Revenue	8	%	8	%	8	%	9	%	8	%	8	%	9	%	8	%
Service and Storage Material Sales Revenue	10	%	8	%	3	%	2	%	1	%	6	%	4	%	5	%
Total Revenue	9	%	8	%	6	%	6	%	5	%	8	%	7	%	7	%

        Our internal revenue growth rate represents the weighted average year over year growth rate of our revenues after removing the effects of acquisitions and foreign currency exchange rate fluctuations. Over the past eight quarters, the internal growth rate of our storage revenues has ranged between 8% and 9%. Our storage revenue internal growth rate for the three and nine months ended September 30, 2004 reflects stabilized net carton volume growth in our North American records management business

32

and higher growth rates in our digital businesses and our international businesses. Net carton volume growth is a function of the rate new cartons are added by existing and new customers offset by the rate of carton destructions and other permanent removals.

        The internal growth rate for service and storage material sales revenue is inherently more volatile than the storage revenue internal growth rate due to more discretionary services we offer, such as large special projects, data products and carton sales and recycled paper. These revenues are impacted to a greater extent by economic downturns as customers defer or cancel the purchase of these services as a way to reduce their short-term costs. As a commodity, recycled paper prices are subject to the volatility of that market. The internal growth rate for service and storage material sales revenues increased during the first quarter of 2004 compared to the last three quarters of 2003 due primarily to high growth in our Secure Shredding product line. The growth rate for our Secure Shredding product line remained strong in the second quarter of 2004. However, the absence of large special projects, lower product sales and softness in certain storage related services contributed to the decrease in our service and storage material sales revenue internal growth rate and our total revenue growth rate during the second quarter of 2004. Our service and storage material sales revenue internal growth rate improved during the third quarter of 2004 due to a rebound in product sales, the completion of a few large special projects and increasing revenues from our digital business offset by continued softness in certain service and storage related services.

OPERATING EXPENSES

Cost of Sales

        Consolidated cost of sales (excluding depreciation) is comprised of the following expenses (in thousands):

									% of Consolidated Revenues
	Three Months Ended September 30,								Three Months Ended September 30,
					Dollar Change		Percent Change						Percent Change (Favorable)/Unfavorable
	2003		2004						2003		2004
Labor	$	88,490	$	107,538	$	19,048	21.5	%	23.2	%	23.4	%	0.2	%
Facilities		51,800		62,582		10,782	20.8	%	13.6	%	13.6	%	0.0	%
Transportation		16,425		21,085		4,660	28.4	%	4.3	%	4.6	%	0.3	%
Product Cost of Sales		7,304		8,207		903	12.4	%	1.9	%	1.8	%	(0.1	)%
Other		7,336		10,385		3,049	41.6	%	1.9	%	2.3	%	0.4	%
	$	171,355	$	209,797	$	38,442	22.4	%	44.9	%	45.7	%	0.8	%

									% of Consolidated Revenues
	Nine Months Ended September 30,								Nine Months Ended September 30,
					Dollar Change		Percent Change						Percent Change (Favorable)/Unfavorable
	2003		2004						2003		2004
Labor	$	249,903	$	311,783	$	61,880	24.8	%	22.9	%	23.3	%	0.4	%
Facilities		152,981		184,143		31,162	20.4	%	14.0	%	13.8	%	(0.2	)%
Transportation		47,239		59,705		12,466	26.4	%	4.3	%	4.5	%	0.2	%
Product Cost of Sales		22,692		25,439		2,747	12.1	%	2.1	%	1.9	%	(0.2	)%
Other		20,723		27,864		7,141	34.5	%	1.9	%	2.1	%	0.2	%
	$	493,538	$	608,934	$	115,396	23.4	%	45.2	%	45.5	%	0.3	%

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Labor

        Labor expense for the three and nine months ended September 30, 2004 increased compared to the three and nine months ended September 30, 2003 as a percentage of revenue primarily due to the Hays IMS acquisition, which first entered our reported results for one month in the third quarter of 2003 and is fully included in the first nine months of 2004. Incentive compensation expense for the nine months ended September 30, 2004 was higher than incentive compensation expense for the nine months ended September 30, 2003 as a result of changes in estimates in the first quarter of 2003, which resulted in lower expenses during that period. Labor expenses have also increased as a result of higher allocations of internal information technology personnel and consultants to revenue producing projects in our digital business. These increases were partially offset by improved labor management in our off-site data protection operations. In addition, during the three months ended September 30, 2004, we experienced higher labor costs as a percentage of revenue in our U.S. records management business due to higher growth of labor expenses compared to growth in service revenue. We have implemented plans to address this labor management issue. We expect that labor expenses as a percentage of consolidated revenues in 2004 will continue to trend higher compared to 2003 as we report a full year of integrated Hays IMS operations.

Facilities

        The largest component of our facilities cost is rent expense, which increased $18.5 million for the nine months ended September 30, 2004 compared to the nine months ended September 30, 2003 primarily as a result of increased rent in our European operations of $13.3 million attributable to new facilities and properties acquired through acquisitions, including our acquisition of Hays IMS. Other facilities expenses in our European operations for the nine months ended September 30, 2004 increased $13.9 million compared to the nine months ended September 30, 2003 primarily due to the growth of operations and acquisitions. Excluding our European operations, the remaining facilities expenses decreased as a result of property insurance, which decreased $3.7 million for the nine months ended September 30, 2004 compared to the nine months ended September 30, 2003.

Transportation

        Our transportation expenses, which increased 0.2% as a percentage of consolidated revenues for the nine months ended September 30, 2004 compared to the nine months ended September 30, 2003, are influenced by several variables including total number of vehicles, owned versus leased vehicles, use of subcontracted couriers, fuel expenses, and maintenance. In the nine months ended September 30, 2004, we experienced a $5.3 million increase in transportation expenses in our European operations as compared to the nine months ended September 30, 2003, which is primarily attributable to an increase in fleet size and vehicles under operating lease resulting from the acquisition of Hays IMS and growth of operations. An increased percentage of vehicles under operating lease, higher fuel expenses, and increased subcontracted courier expenses during the nine months ended September 30, 2004 compared to the nine months ended September 30, 2003 also contributed to higher expenses.

Product Cost of Sales and Other Cost of Sales

        Product and other cost of sales are highly correlated to complementary revenue streams. Product cost of sales for the nine months ended September 30, 2004 was lower than the nine months ended September 30, 2003 as a percentage of product revenues due to more focused selling efforts on higher margin products and improved product sourcing.

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Selling, General and Administrative Expenses

        Selling, general and administrative expenses are comprised of the following expenses (in thousands):

											% of Consolidated Revenues
	Three Months Ended September 30,										Three Months Ended September 30,
						Dollar Change			Percent Change						Percent Change (Favorable)/Unfavorable
	2003		2004								2003		2004
General and Administrative	$	50,909	$	64,222		$	13,313		26.2	%	13.3	%	14.0	%	0.7	%
Sales, Marketing & Account Management		29,482		40,426			10,944		37.1	%	7.7	%	8.8	%	1.1	%
Information Technology		16,461		20,348			3,887		23.6	%	4.3	%	4.4	%	0.1	%
Bad Debt Expense		1,235		(2,488	)		(3,723	)	(301.5	)%	0.3	%	(0.5	)%	(0.8	)%
	$	98,087	$	122,508		$	24,421		24.9	%	25.7	%	26.7	%	1.0	%

											% of Consolidated Revenues
	Nine Months Ended September 30,										Nine Months Ended September 30,
						Dollar Change			Percent Change						Percent Change (Favorable)/Unfavorable
	2003		2004								2003		2004
General and Administrative	$	149,971	$	191,480		$	41,509		27.7	%	13.7	%	14.3	%	0.6	%
Sales, Marketing & Account Management		82,006		108,627			26,621		32.5	%	7.5	%	8.1	%	0.6	%
Information Technology		50,096		56,970			6,874		13.7	%	4.6	%	4.3	%	(0.3	)%
Bad Debt Expense		3,304		(3,621	)		(6,925	)	(209.6	)%	0.3	%	(0.3	)%	(0.6	)%
	$	285,377	$	353,456		$	68,079		23.9	%	26.1	%	26.4	%	0.3	%

General and Administrative

        The increase in general and administrative expenses as a percentage of consolidated revenues for the nine months ended September 30, 2004 compared to the nine months ended September 30, 2003 is primarily attributable to a $26.8 million increase in general and administrative expenses in our European operations due to the growth of operations and acquisitions, including Hays IMS. In our North American operations, general and administrative expenses increased as a result of higher wages due to normal inflation and merit increases, increased stock compensation expense, increased travel, recruiting, professional fees and higher insurance costs. These increases were partially offset by lower incentive compensation expenses. We expect that our general and administrative expenses as a percentage of consolidated revenues in 2004 will continue to trend higher compared to 2003, as we report a full year of integrated Hays IMS operations.

Sales, Marketing & Account Management

        The majority of our sales, marketing and account management costs are labor related and are primarily driven by the headcount in each of these departments. Increased headcount and commissions are the most significant contributors to the increase in sales and marketing expenses for the nine months ended September 30, 2004 compared to the nine months ended September 30, 2003. Throughout the year ended December 31, 2003 and during 2004, we have continued to invest in the expansion and improvement of our sales force and account management personnel. Excluding our European operations, since September 30, 2003, we added sales and marketing employees, enlarged our

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account management force and continued several new marketing and promotional efforts to develop awareness in the marketplace of our entire service offerings. The costs associated with these efforts have contributed to the increase in our sales, marketing and account management expenses. Our larger North American sales force generated a $6.9 million increase in sales commissions for the nine months ended September 30, 2004 compared to the nine months ended September 30, 2003. In addition, costs associated with our European sales and account management teams increased by $5.3 million for the nine months ended September 30, 2004 compared to the nine months ended September 30, 2003, due to the doubling of our sales force through the hiring of new personnel and acquisitions. We expect that sales, marketing and account management expenses will continue to increase as a percentage of consolidated revenues as we continue to expand and train our sales force and develop new marketing initiatives.

Information Technology

        Information technology expenses decreased as a percentage of consolidated revenues for the nine months ended September 30, 2004 compared to the nine months ended September 30, 2003 principally due to increased utilization of existing information technology resources and increasing allocations of information technology resources to revenue producing projects in our digital business. The decrease as a percentage of consolidated revenues was partially offset by increased information technology spending in our European operations of $7.1 million for the nine months ended September 30, 2004 compared to the nine months ended September 30, 2003. In addition to our European operations, during the three months ended September 30, 2004, information technology expenses increased as a result of several software development projects within our digital business.

Bad Debt Expense

        The decrease in consolidated bad debt expense for the nine months ended September 30, 2004 compared to the nine months ended September 30, 2003 is primarily attributable to the success of our centralized collection efforts within the U.S. and Canada, which resulted in improved cash collections and an improved accounts receivable aging that allowed us to continue to reduce our allowance for doubtful accounts during the nine months ended September 30, 2004.

Depreciation, Amortization, and (Gain) Loss on Disposal/Writedown of Property, Plant and Equipment, Net

        Consolidated depreciation and amortization expense increased $26.0 million to $119.9 million (9.0% of consolidated revenues) for the nine months ended September 30, 2004 from $93.9 million (8.6% of consolidated revenues) for the nine months ended September 30, 2003. Depreciation expense increased $7.7 million and $23.4 million for the three and nine months ended September 30, 2004 compared to the same periods in 2003, respectively, primarily due to the additional depreciation expense related to recent capital expenditures, including storage systems, which include racking, building and leasehold improvements, computer systems hardware and software, and buildings.

        Consolidated gains on disposal/writedown of property, plant and equipment, net of $0.2 million and $1.3 million for the three and nine months ended September 30, 2004, respectively, consisted primarily of a gain on the sale of a property in Florida during the second quarter of 2004 of $1.2 million. We recorded losses on disposal/writedown of property, plant and equipment, net of $1.9 million for the three and nine months ended September 30, 2003, consisting of $4.4 million of disposals and asset writedowns during the nine months ended September 30, 2003 offset by a gain of $2.5 million on the sale of a property in Texas during the first quarter of 2003.

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OPERATING INCOME

        As a result of the foregoing factors, consolidated operating income increased $7.8 million, or 10.0%, to $85.0 million (18.5% of consolidated revenues) for the three months ended September 30, 2004 from $77.2 million (20.2% of consolidated revenues) for the three months ended September 30, 2003. Consolidated operating income increased $39.5 million, or 18.1%, to $257.6 million (19.2% of consolidated revenues) for the nine months ended September 30, 2004 from $218.1 million (20.0% of consolidated revenues) for the nine months ended September 30, 2003.

OIBDA

        As a result of the foregoing factors, consolidated OIBDA increased $16.8 million, or 15.2%, to $127.3 million (27.7% of consolidated revenues) for the three months ended September 30, 2004 from $110.4 million (28.9% of consolidated revenues) for the three months ended September 30, 2003. Consolidated OIBDA increased $65.5 million, or 21.0%, to $377.5 million (28.2% of consolidated revenues) for the nine months ended September 30, 2004 from $312.0 million (28.6% of consolidated revenues) for the nine months ended September 30, 2003.

OTHER EXPENSES, NET

Interest Expense, Net

        Consolidated interest expense, net increased $15.5 million to $54.3 million (11.8% of consolidated revenues) and $29.7 million to $140.4 million (10.5% of consolidated revenues) for the three and nine months ended September 30, 2004, respectively, from $38.8 million (10.2% of consolidated revenues) and $110.8 million (10.1% of consolidated revenues) for the three and nine months ended September 30, 2003, respectively. The increase of interest expense, net as a percentage of consolidated revenues is primarily due to a non-cash charge of $8.7 million due to recharacterization of the interest rate swap associated with a real estate term loan we repaid in August 2004. This charge represents the fair market value of the swap, which is a calculation of the net present value of the expected monthly cash payments over the remaining term of the swap based on current market conditions, as of the date the real estate term loan was repaid. We did not terminate the swap and will continue to mark to market the fair market value of the derivative liability to interest expense, net and make our monthly cash settlements as required under the swap contract for the remaining term of approximately three years. Increased borrowings and a slight increase in our overall weighted average interest rate from 7.6% as of September 30, 2003 to 7.8% as of September 30, 2004 also contributed to the increase in interest expense as a percentage of revenue.

        The increase in dollar terms was primarily attributable to additional borrowings, which were used to finance our acquisitions, primarily the Hays IMS acquisition, and the charges of $8.7 million in the third quarter of 2004 and $0.8 million in the first quarter of 2004 associated with the fair market value of interest rate swaps we had used to hedge two of our real estate term loans that were repaid in March 2004 and August 2004, respectively.

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Other (Income) Expense, Net

        Significant items included in other (income) expense, net include the following (in thousands):

	Three Months Ended September 30,									Nine Months Ended September 30,
	2003			2004			Change			2003			2004			Change
Foreign currency transaction (gains) losses, net	$	4,838		$	(2,753	)	$	(7,591	)	$	(18,796	)	$	2,185		$	20,981
Debt extinguishment expense		5,510			29			(5,481	)		21,175			2,454			(18,721	)
Other, net		(5	)		(255	)		(250	)		(18	)		(403	)		(385	)
	$	10,343		$	(2,979	)	$	(13,322	)	$	2,361		$	4,236		$	1,875

        Foreign currency losses of $2.2 million based on period-end exchange rates were recorded in the nine months ended September 30, 2004 primarily due to the weakening of the Canadian dollar against the U.S. dollar and the weakening of the British pound sterling against the Euro offset by the strengthening of the British pound sterling against the U.S. dollar during the nine months ended September 30, 2004 as these currencies relate to our intercompany balances with our Canadian, U.K. and European subsidiaries, U.S. dollar denominated debt held by our Canadian subsidiary, borrowings denominated in foreign currencies under our revolving credit facility, British pounds sterling denominated debt held by our U.S. parent company, British pounds sterling currency held in the U.S. and our British pound sterling denominated cross currency swap, which was terminated in March 2004. For the nine months ended September 30, 2003, foreign currency gains of $18.8 million based on period-end exchange rates were recorded primarily due to the strengthening of the Canadian dollar against the U.S. dollar as these currencies relate to our intercompany balances with our Canadian subsidiaries, U.S. dollar denominated debt held by our Canadian subsidiary and Canadian dollar borrowings under our revolving credit facility.

        Foreign currency gains of $2.8 million based on period-end exchange rates were recorded in the three months ended September 30, 2004 primarily due to the strengthening of the Canadian dollar against the U.S. dollar offset by the weakening of the British pound sterling against both the Euro and the U.S. dollar during the three months ended September 30, 2004 as these currencies relate to our intercompany balances with and between our Canadian, U.K. and European subsidiaries, and British pounds sterling denominated debt held by our U.S. parent company. For the three months ended September 30, 2003, foreign currency losses of $4.8 million based on period-end exchange rates were recorded primarily due to the weakening of the Canadian dollar and the British pound sterling against the U.S. dollar as these currencies relate to our intercompany balances with our Canadian and U.K. subsidiaries, and U.S. dollar denominated debt held by our Canadian subsidiary.

        During the three months ended March 31, 2004, we redeemed the remaining outstanding principal amount of the Subsidiary notes, resulting in a charge of $2.0 million and we repaid a portion of our real estate term loans, which resulted in a charge of $0.4 million. During the nine months ended September 30, 2003, we recorded a charge of $1.8 million related to the early retirement of our 9¹/8% Senior Subordinated Notes due 2007 in the first quarter of 2003, a charge of $13.8 million related to the early retirement of our 8³/4% Senior Subordinated Notes due 2007 in the second quarter of 2003, and a charge of $5.5 million related to the early retirement of $50.0 million our 8¹/8% Senior Notes due 2008 in the third quarter in 2003. The charges consisted primarily of the call and tender premiums associated with the extinguished debt and the write-off of unamortized deferred financing costs and discounts. We did not incur any such charges during the three months ended September 30, 2004.

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Provision for Income Taxes

        Our effective tax rates for the three and nine months ended September 30, 2004 were 42.5% and 41.3%, respectively. The primary reconciling item between the statutory rate of 35% and our effective tax rate is state income taxes (net of federal benefit). Our effective tax rates were 42.7% and 42.5% for the three and nine months ended September 30, 2003, respectively. The decrease in our effective tax rate in 2004 compared to 2003 is the result of increased income earned in foreign jurisdictions that are taxed at rates lower than in the U.S. Also, the disallowance of certain intercompany interest charges by states, including a change in Massachusetts tax laws, retroactive to January 1, 2002 increased our provision for income taxes for the nine months ended September 30, 2003 by 0.8%. There may be future volatility with respect to our effective tax rate related to items including unusual unforecasted permanent items, significant changes in tax rates in foreign jurisdictions and the need for additional valuation allowances. Also, as a result of our net operating loss carryforwards, we do not expect to pay any significant international, U.S. federal and state income taxes during 2004.

Minority Interest

        Minority interest in earnings of subsidiaries, net resulted in a charge to income of $0.9 million (0.2% of consolidated revenues) and $2.0 million (0.1% of consolidated revenues) for the three and nine months ended September 30, 2004, respectively, compared to $1.3 million (0.3% of consolidated revenues) and $4.2 million (0.4% of consolidated revenues) for the three and nine months ended September 30, 2003, respectively. This represents our minority partners' share of earnings in our majority-owned international subsidiaries that are consolidated in our operating results. The decrease is a result of increased financing expenses incurred by our European operations due to the acquisition of the operations of Hays IMS and our acquisition of the remaining 49.9% equity interest in IME which was reflected for the first time during the second quarter of 2004, which were offset by the increased profitability of our South American businesses.

NET INCOME

        As a result of the foregoing factors, consolidated net income increased $3.7 million, or 24.7%, to $18.5 (4.0% of consolidated revenues) for the three months ended September 30, 2004 from net income of $14.8 million (3.9% of consolidated revenues) for the three months ended September 30, 2003. For the nine months ended September 30, 2004 consolidated net income increased $8.1 million, or 14.4%, to $64.3 million (4.8% of consolidated revenues) from net income of $56.2 million (5.1% of consolidated revenues) for the nine months ended September 30, 2003.

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Segment Analysis (In Thousands)

        The results of our various operating segments are discussed below. In general, our business records management segment offers records management, secure shredding, healthcare information services, vital records services, and service and courier operations in the U.S. and Canada. Our off-site data protection segment offers data backup and disaster recovery services, vital records services, service and courier operations, and intellectual property management services in the U.S. Our international segment offers elements of our business records management and off-site data protection services lines outside the U.S. and Canada. Our corporate and other segment includes our corporate overhead functions and our fulfillment, consulting and digital archiving services.

Business Records Management

	Segment Revenue								Segment Contribution(1)				Segment Contributions as a Percentage of Segment Revenue
	September 30, 2003		September 30, 2004		Increase in Revenues		Percentage Increase in Revenues		September 30, 2003		September 30, 2004		September 30, 2003		September 30, 2004
Three Months Ended	$	260,983	$	279,326	$	18,343	7.0	%	$	74,363	$	71,096	28.5	%	25.5	%
Nine Months Ended		762,580		823,305		60,725	8.0	%		213,341		221,905	28.0	%	27.0	%

Items Excluded from the Calculation of Contribution

	Depreciation Amortization				Foreign Currency (Gains) Losses, Net						Loss (Gain) on Disposal/Writedown of Property, Plant and Equipment, Net
	September 30, 2003		September 30, 2004		September 30, 2003			September 30, 2004			September 30, 2003		September 30, 2004
Three Months Ended	$	17,571	$	21,551	$	2,973		$	(5,439	)	$	1,648	$	22
Nine Months Ended		52,215		62,080		(22,963	)		1,055			14		(1,304	)

(1)

See Note 8 of Notes to Consolidated Financial Statements for definition of Contribution and for the basis on which allocations are made and a reconciliation of Contribution to net income on a consolidated basis.

        During the three and nine months ended September 30, 2004, revenue in our business records management segment increased 7.0% and 8.0%, respectively, compared to the three and nine months ended September 30, 2003 primarily due to increased storage revenues, growth of our secure shredding operations and acquisitions (including revenue from the U.S. operations of Hays IMS of $8.2 million for the nine months ended September 30, 2004), and was impacted by slower growth in service and special project revenue. In addition, favorable currency fluctuations during the three and nine months ended September 30, 2004 in Canada increased revenue $1.4 million and $5.2 million, respectively, when compared to the three and nine months ended September 30, 2003. Contribution as a percent of segment revenue decreased in the three and nine months ended September 30, 2004 due to higher transportation expenses and our increased investment in our sales and account management force, which were partially offset by reduced facility expenses. We also experienced higher labor costs as a percentage of revenue in the quarter ending September 30, 2004 due to higher growth of labor expenses compared to growth in service revenue. We have implemented plans to address this labor management issue.

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Off-Site Data Protection

	Segment Revenue								Segment Contribution(1)				Segment Contribution as a Percentage of Segment Revenue
	September 30, 2003		September 30, 2004		Increase in Revenues		Percentage Increase in Revenues		September 30, 2003		September 30, 2004		September 30, 2003		September 30, 2004
Three Months Ended	$	63,937	$	70,250	$	6,313	9.9	%	$	17,691	$	20,065	27.7	%	28.6	%
Nine Months Ended		187,202		204,775		17,573	9.4	%		52,144		58,853	27.9	%	28.7	%

Items Excluded from the Calculation of Contribution

	Depreciation and Amortization				Loss (Gain) on Disposal/ Writedown of Property, Plant and Equipment, Net
	September 30, 2003		September 30, 2004		September 30, 2003		September 30, 2004
Three Months Ended	$	3,555	$	3,909	$	107	$	(109	)
Nine Months Ended		10,166		10,691		1,792		(21	)

(1)

See Note 8 of Notes to Consolidated Financial Statements for definition of Contribution and for the basis on which allocations are made and a reconciliation of Contribution to net income on a consolidated basis.

        During the three and nine months ended September 30, 2004, revenue in our off-site data protection segment increased 9.9% and 9.4%, respectively, compared to the three and nine months ended September 30, 2003 primarily due to internal revenue growth from both existing and new customers. Higher revenue growth rates from our electronic vaulting and intellectual property management services augmented the segment's overall revenue growth rate. Contribution as a percent of segment revenue increased primarily due to increased product sales margins, improved labor management, and stable overhead costs. This increase was partially offset by the growth of our sales and account management force.

International

	Segment Revenue								Segment Contribution(1)				Segment Contribution as a Percentage of Segment Revenue
	September 30, 2003		September 30, 2004		Increase in Revenues		Percentage Increase in Revenues		September 30, 2003		September 30, 2004		September 30, 2003		September 30, 2004
Three Months Ended	$	49,780	$	98,689	$	48,909	98.3	%	$	11,157	$	23,925	22.4	%	24.2	%
Nine Months Ended		121,608		279,503		157,895	129.8	%		27,680		68,421	22.8	%	24.5	%

Items Excluded from the Calculation of Contribution

	Depreciation and Amortization				Foreign Currency (Gains) Losses, Net
	September 30, 2003		September 30, 2004		September 30, 2003			September 30, 2004
Three Months Ended	$	4,410	$	8,875	$	(61	)	3,103
Nine Months Ended		9,402		23,696		(564	)	7,150

(1)

See Note 8 of Notes to Consolidated Financial Statements for definition of Contribution and for the basis on which allocations are made and a reconciliation of Contribution to net income on a consolidated basis.

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        Revenue in our international segment increased 98.3% and 129.8% during the three and nine months ended September 30, 2004, respectively, compared to the three and nine months ended September 30, 2003, primarily due to acquisitions completed in Europe, including revenue of $31.3 million and $113.1 million from the acquisition of Hays IMS during the three and nine months ended September 30, 2004, respectively, and in South America, as well as increased sales efforts. Favorable currency fluctuations during the nine months ended September 30, 2004 in Europe, Mexico and South America increased revenue, as measured in U.S. dollars, by $9.3 and $29.3 million compared to the three and nine months ended September 30, 2003, respectively. Contribution as a percent of segment revenue increased primarily due to improved gross margins from our European, South American, and Mexican operations.

Corporate and Other

        The Corporate and Other segment is comprised of results from operations not discussed above including our digital and fulfillment operations and costs associated with our corporate headquarter operations. Certain costs incurred by our Corporate division were allocated to the other segments in both 2003 and 2004, primarily to our Business Records Management and Off-Site Data Protection segments. These allocations, which include rent, worker's compensation, property, general liability, auto and other insurance, pension/medical costs, incentive compensation, real estate property taxes and provision for bad debts, are based on rates set at the beginning of each year. Revenue in our Corporate and Other segment increased $4.0 million to $11.1 million for the three months ended September 30, 2004 compared to $7.1 million for the three months ended September 30, 2003 and increased $9.6 million to $31.1 million for the nine months ended September 30, 2004 compared to $21.4 million for the nine months ended September 30, 2003. Contribution increased $2.8 million to $11.9 million for the three months ended September 30, 2004 compared to $9.1 million for the three months ended September 30, 2003 and increased $6.3 million to $27.1 million for the nine months ended September 30, 2004 compared to $20.8 million for the nine months ended September 30, 2003. Items excluded from the calculation of Contribution include the following: (1) depreciation and amortization expense for the three months ended September 30, 2004 of $7.9 million compared to $7.7 million for the three months ended September 30, 2003 and depreciation and amortization expense for the nine months ended September 30, 2004 of $23.4 million compared to $22.1 million for the nine months ended September 30, 2003, (2) foreign currency gains of $0.4 million and losses of $1.9 million for the three months ended September 30, 2004 and 2003, respectively and foreign currency gains of $6.0 million and $4.7 million for the nine months ended September 30, 2004 and 2003, respectively.

Liquidity and Capital Resources

        The following is a summary of our cash balances and cash flows for the nine months ended September 30, 2003 and 2004 (in thousands).

	2003			2004
Cash flows provided by operating activities	$	183,619		$	208,979
Cash flows used in investing activities		(530,216	)		(419,622	)
Cash flows provided by financing activities		313,036			178,545
Cash and cash equivalents at end of period	$	23,544		$	44,428

        Net cash provided by operating activities was $209.0 million for the nine months ended September 30, 2004 compared to $183.6 million for the nine months ended September 30, 2003. The increase resulted primarily from an increase in operating income and non-cash items, such as depreciation offset by the net change in assets and liabilities. The net change in assets and liabilities is

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primarily associated with growth in revenues and the resulting increase in receivables, an increase in days sales outstanding, increased cash taxes and increased purchase reserve payments year over year.

        We have made significant capital expenditures, additions to customer relationship and acquisition costs and other investments, primarily acquisitions. Our capital expenditures are primarily related to growth and include investments in storage systems, information systems and discretionary investments in real estate. Cash paid for our capital expenditures and additions to customer relationship and acquisition costs during the nine months ended September 30, 2004 amounted to $159.1 million and $9.5 million, respectively. For the nine months ended September 30, 2004 and 2003, capital expenditures, net and additions to customer relationship and acquisition costs were funded entirely with cash flows provided by operating activities. Excluding acquisitions, we expect our capital expenditures to be between approximately $210 million and approximately $240 million in the year ending December 31, 2004.

        In the nine months ended September 30, 2004, we paid net cash consideration of $253.5 million for acquisitions, which included $111.7 million associated with the purchase of Mentmore's 49.9% equity interest in IME. Cash flows from operations, recent borrowings under our revolving credit facilities and the net proceeds from other financing transactions funded these acquisitions.

        Since September 30, 2004, we completed four acquisitions for total consideration, including related real estate and in one case significant net operating loss carryforwards, of approximately $136 million. These transactions will be reflected in our consolidated statement of cash flows in the fourth quarter of 2004.

        Net cash provided by financing activities was $178.5 million for the nine months ended September 30, 2004. During the nine months ended September 30, 2004 we had gross borrowings under our revolving credit facilities of $862.0 million and we received net proceeds of $269.4 million from the issuance of our 7¹/4% notes. We used the proceeds from these financing transactions to repay debt and term loans ($891.1 million), retire the Subsidiary notes ($20.8 million), repay debt financing from minority shareholders, net ($41.7 million) and to fund acquisitions.

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        We are highly leveraged and expect to continue to be highly leveraged for the foreseeable future. Our consolidated debt as of September 30, 2004 was comprised of the following (in thousands):

IMI Revolving Credit Facility	$	172,184
IMI Term Loan Facility		199,500
IME Revolving Credit Facility		85,772
IME Term Loan Facility		182,140
81/4% Senior Subordinated Notes due 2011(1)		149,704
85/8% Senior Subordinated Notes due 2013(1)		481,060
71/4% GBP Senior Subordinated Notes due 2014(1)		269,910
73/4% Senior Subordinated Notes due 2015(1)		440,647
65/8% Senior Subordinated Notes due 2016(1)		314,441
Real Estate Mortgages		16,283
Seller Notes		10,561
Other		25,876
Long-term Debt		2,348,078
Less Current Portion		(17,923	)
Long-term Debt, Net of Current Portion	$	2,330,155

(1)

These debt instruments are collectively referred to as the "Parent notes." The Parent notes are fully and unconditionally guaranteed, on a senior subordinated basis, by substantially all of our direct and indirect wholly owned U.S. subsidiaries (the "Guarantors"). These guarantees are joint and several obligations of the Guarantors. The remainder of our subsidiaries do not guarantee the Parent notes or the IMI revolving credit facility and IMI term loan facility.

44

        Our indentures use OIBDA-based calculations as primary measures of financial performance, including leverage ratios. Our key bond leverage ratio, as calculated per our bond indentures, was 5.0 as of September 30, 2004 and December 31, 2003. Noncompliance with this leverage ratio would have a material adverse effect on our financial condition and liquidity. Our target for this ratio is generally in the range of 4.5 to 5.5 while the maximum ratio allowable under the bond indentures is 6.5.

        Our ability to pay interest on or to refinance our indebtedness depends on our future performance, working capital levels and capital structure, which are subject to general economic, financial, competitive, legislative, regulatory and other factors which may be beyond our control. There can be no assurance that we will generate sufficient cash flow from our operations or that future financings will be available on acceptable terms or in amounts sufficient to enable us to service or refinance our indebtedness, or to make necessary capital expenditures.

        Our indentures and other agreements governing our indebtedness contain certain restrictive financial and operating covenants including covenants that restrict our ability to complete acquisitions, pay cash dividends, incur indebtedness, make investments, sell assets and take certain other corporate actions. The covenants do not contain a rating trigger. Therefore, a change in our debt rating would not trigger a default under our indentures and other agreements governing our indebtedness. As of September 30, 2004, we were in compliance with all material debt covenants and agreements.

        In January 2004, we completed an offering of 150 million British pounds sterling in aggregate principal amount of our 7¹/4% notes, which were issued at a price of 100.0% of par. Our net proceeds of 146.9 million British pounds sterling, after paying the initial purchasers' discounts, commissions and transaction fees, were used to fund our acquisition of Mentmore's 49.9% equity interest in IME for total consideration of 82.5 million British pounds sterling, to redeem $20.0 million in aggregate principal amount of our outstanding 8¹/8% Senior Notes due 2008 ("Subsidiary notes") in February 2004, to repay borrowings under our revolving credit facility, to repay $48.8 million of our term loans and to repay other indebtedness and to pay for other acquisitions.

        In February 2004, using proceeds from our January 2004 offering of 7¹/4% notes, we redeemed the remaining $20 million of outstanding principal amount of the Subsidiary notes, at a redemption price (expressed as a percentage of principal amount) of 104.063%, plus accrued and unpaid interest. We recorded a charge of approximately $2 million to other (income) expense, net in the first quarter of 2004 related to the early retirement of these remaining Subsidiary notes, which consists of redemption premiums and transaction costs as well as original issue discount related to these Subsidiary notes.

        In February 2004, we completed the acquisition of Mentmore's 49.9% equity interest in IME for total consideration of 82.5 million British pounds sterling ($154 million) in cash from proceeds of our 7¹/4% notes issued in January 2004. Included in this amount is the repayment of all trade and working capital funding owed to Mentmore by IME. Completion of the transaction gave us 100% ownership of IME, affording us full access to all future cash flows and greater strategic and financial flexibility. This transaction should have no material impact on revenue or operating income since we already fully consolidate IME's financial results. Using the purchase method of accounting for this acquisition, the net assets of IME will be adjusted to reflect 49.9% of the difference between the fair market value and their current carrying value. As a result, we expect this transaction will increase depreciation and amortization expenses going forward. Additionally, we will record an increase in interest expense, net associated with the 7¹/4% notes used to fund this acquisition and will no longer record the minority interest in earnings of subsidiaries, net related to Mentmore's ownership interest in IME.

        In March 2004, IME and certain of its subsidiaries entered into a credit agreement (the "IME Credit Agreement") with a syndicate of European lenders. The IME Credit Agreement provides for

45

maximum borrowing availability in the principal amount of 210 million British pounds sterling, including a 100 million British pounds sterling revolving credit facility (the "IME revolving credit facility"), which includes the ability to borrow in certain other foreign currencies, a 100 million British pounds sterling term loan (the "IME term loan facility"), and a 10 million British pounds sterling overdraft protection line. The IME revolving credit facility matures on March 5, 2009. The IME term loan facility is payable in three installments; two installments of 20 million British pounds sterling on March 5, 2007 and 2008, respectively, and the final payment of the remaining balance on March 5, 2009. The interest rate on borrowings under the IME Credit Agreement varies depending on IME's choice of currency options and interest rate period, plus an applicable margin. The IME Credit Agreement includes various financial covenants applicable to the results of IME, which may restrict IME's ability to incur indebtedness under the IME Credit Agreement and from third parties, as well as limit IME's ability to pay dividends to us. Most of IME's non-dormant subsidiaries have either guaranteed the obligations or have their shares pledged to secure IME's obligations under the IME Credit Agreement. We have not guaranteed or otherwise provided security for the IME Credit Agreement nor have any of our U.S., Canadian, Mexican or South American subsidiaries.

        In March 2004, IME borrowed approximately 147 million British pounds sterling under the IME Credit Agreement, including the full amount of the term loan. IME used those proceeds to repay us 135 million British pounds sterling related to our initial financing of the acquisition of the European operations of Hays IMS, to repay amounts outstanding under its prior term loan and revolving credit facility and to pay transaction costs associated with the IME Credit Agreement. We used the 135 million British pounds sterling received from IME to: (1) pay down approximately $104 million of real estate term loans, (2) settle all obligations totaling $27.7 million associated with terminating our two cross currency swaps used to hedge the foreign currency impact of our intercompany financing with IME related to the Hays IMS acquisition, and (3) to pay down amounts outstanding under our prior credit agreement. The IME Credit Agreement in conjunction with our 7¹/4% notes provided permanent financing for the Hays IMS acquisition and allowed us to maintain the economics of the transaction with respect to exchange rates as originally contemplated at the time of the acquisition. Our consolidated balance sheet as of September 30, 2004 included 147.1 million British pounds sterling ($267.9 million) of borrowings under the IME Credit Agreement. The remaining availability, based on its current level of external debt and the leverage ratio under the IME revolving credit facility on July 31, 2004, was approximately 50 million British pounds sterling ($90.3 million).

        On April 2, 2004 and subsequently on July 8, 2004, we entered into a new amended and restated credit facility and term loan facility (the "IMI Credit Agreement") to replace our prior credit agreement and to reflect more favorable pricing of our term loans. The IMI Credit Agreement has an aggregate principal amount of $550.0 million and is comprised of a $350.0 million revolving credit facility (the "IMI revolving credit facility"), which includes the ability to borrow in certain foreign currencies, and a $200.0 million term loan facility (the "IMI term loan facility"). The IMI revolving credit facility matures on April 2, 2009. With respect to the IMI term loan facility, quarterly loan payments of $0.5 million began in the third quarter of 2004 and will continue through maturity on April 2, 2011, at which time the remaining outstanding principal balance of the IMI term loan facility is due. The interest rate on borrowings under the IMI Credit Agreement varies depending on our choice of interest rate and currency options, plus an applicable margin. All intercompany notes and the capital stock of most of our U.S. subsidiaries are pledged to secure the IMI Credit Agreement. As of September 30, 2004, we had $172.2 million of borrowings under the IMI revolving credit facility, of which $6 million was denominated in U.S. dollars and the remaining balance was denominated in Canadian dollars (CAD 211 million); we also had various outstanding letters of credit totaling $22.4 million. The remaining availability, based on IMI's current level of external debt and the leverage ratio under the IMI revolving credit facility, on September 30, 2004 was $155.4 million.

46

        In late October, the Company began a process to raise an additional $150 million of term loans as permitted under our IMI Credit Agreement. The new term loans will mature at the same time as our current IMI term loan facility with quarterly loan payments of $0.4 million beginning in the first quarter of 2005 and will be priced at LIBOR plus a margin of 1.75%. The transaction is expected to close by mid-November.

        In April 2004, IME entered into two floating for fixed interest rate swap contracts, each with a notional value of 50.0 million British pounds sterling and a duration of two years, which were designated as cash flow hedges. These swap agreements hedge interest rate risk on IME's 100 million British pounds sterling term loan facility.

        Our Variable Interest Entities were financed with real estate term loans. In March 2004, approximately $104 million of these real estate term loans was repaid. In August 2004, we repaid the remaining $98.7 million of real estate term loans held by one of our Variable Interest Entities using available borrowing capacity under the IMI revolving credit facility. As a result, during the third quarter of 2004, we recorded a non-cash charge of $8.7 million due to recharacterization of the interest rate swap associated with this real estate term loan. This charge represents the fair market value of the swap, which is a calculation of the net present value of the expected monthly cash payments over the remaining term of the swap based on current market conditions, as of the date the real estate term loan was repaid. We did not terminate the swap and expect to enjoy the benefit of the fixed rate financing and will continue to mark to market the fair market value of the derivative liability to interest expense, net and make our monthly cash settlements as required under the swap contract for the remaining term of approximately three years. See Notes 4 and 6 to Notes to Consolidated Financial Statements and "—Critical Accounting Policies."

        We expect to meet our cash flow requirements for the next twelve months from cash generated from operations, existing cash, cash equivalents and marketable securities, borrowings under our revolving credit facilities and other financings, which may include secured credit facilities, securitizations and mortgage or capital lease financings.

Net Operating Loss Carryforwards

        At September 30, 2004, we had estimated net operating loss carryforwards of approximately $112 million for federal income tax purposes. As a result of such loss carryforwards, cash paid for income taxes has historically been substantially lower than the provision for income taxes. These net operating loss carryforwards do not include approximately $103 million of potential preacquisition net operating loss carryforwards of Arcus Group, Inc. and certain foreign acquisitions. Any tax benefit realized related to preacquisition net operating loss carryforwards will be recorded as a reduction of goodwill when, and if, realized. The Arcus Group carryforwards begin to expire in two years. As a result of these loss carryforwards, we do not expect to pay significantly more international, U.S. federal and state income taxes in 2004 as compared to 2003.

Seasonality

        Historically, our businesses have not been subject to seasonality in any material respect.

Inflation

        Certain of our expenses, such as wages and benefits, insurance, occupancy costs and equipment repair and replacement, are subject to normal inflationary pressures. Although to date we have been able to offset inflationary cost increases through increased operating efficiencies and the negotiation of

47

favorable long-term real estate leases, we can give no assurance that we will be able to offset any future inflationary cost increases through similar efficiencies, leases or increased storage or service charges.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Interest Rate Risk

        Given the recurring nature of our revenues and the long term nature of our asset base, we have the ability and the preference to use long term, fixed interest rate debt to finance our business, thereby preserving our long term returns on invested capital. We target a range 80% to 85% of our debt portfolio to be fixed with respect to interest rates. Occasionally, we will use floating to fixed interest rate swaps as a tool to maintain our targeted level of fixed rate debt. As part of this strategy, in December 2000, January 2001, May 2001, and April 2004 we, IME, and our Variable Interest Entities, which we now consolidate, entered into a total of six derivative financial contracts, which are variable-for-fixed interest rate swaps consisting of (a) two contracts for interest payments payable on our term loan of an aggregate principal amount of $195.5 million, (b) one contract based on interest payments previously payable on our real estate term loans of an aggregate principal amount of $47.5 million that have been subsequently repaid, (c) one contract based on interest payments previously payable on our real estate term loans of an aggregate principal amount of $97.0 million that have been subsequently repaid, and (d) two contracts for interest payments payable on IME's term loan of an aggregate principal amount of 100.0 million British pounds sterling. See Note 4 to Notes to Consolidated Financial Statements and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies" in our Annual Report on Form 10-K for the year ended December 31, 2003.

        After consideration of the swap contracts mentioned above, as of September 30, 2004, we had $157.7 million of variable rate debt outstanding with a weighted average variable interest rate of 5.3%, and $2,190.4 million of fixed rate debt outstanding. As of September 30, 2004, 93% of our total debt outstanding was fixed. If the weighted average variable interest rate on our variable rate debt had increased by 1%, our net income for the three and six months ended September 30, 2004 would have been reduced by $0.3 million and $1.1 million, respectively. See Note 6 to Notes to Consolidated Financial Statements for a discussion of our long-term indebtedness, including the fair values of such indebtedness as of September 30, 2004 included in this Form 10-Q.

Currency Risk

        Our investments in IME, Iron Mountain Canada Corporation ("IM Canada"), Iron Mountain South America, Ltd. and other international investments may be subject to risks and uncertainties related to fluctuations in currency valuation. Our reporting currency is the U.S. dollar. However, our international revenues and expenses are generated in the currencies of the countries in which we operate, primarily the Canadian dollar and British pound sterling. The currencies of many Latin American countries, particularly the Argentine peso, have experienced substantial volatility and depreciation. Declines in the value of the local currencies in which we are paid relative to the U.S. dollar will cause revenues in U.S. dollar terms to decrease and dollar-denominated liabilities to increase in local currency. The impact on our earnings is mitigated somewhat by the fact that most operating and other expenses are also incurred and paid in the local currency. We also have several intercompany obligations between our foreign subsidiaries and Iron Mountain and our U.S.-based subsidiaries. These intercompany obligations are primarily denominated in the local currency of the foreign subsidiary.

        We have adopted and implemented a number of strategies to mitigate the risks associated with fluctuations in currency valuations. One strategy is to finance our largest international subsidiaries with

48

local debt that is denominated in local currencies, thereby providing a natural hedge. In determining the amount of any such financing, we take into account local tax strategies among other factors. Another strategy we utilize is to borrow in foreign currencies at the U.S. parent level to hedge our intercompany financing activities. Finally, on occasion, we enter into currency swaps to temporarily hedge an overseas investment, such as a major acquisition to lock in certain transaction economics, while we arrange permanent financing. We have implemented these strategies for our two major foreign investments in the U.K. and Canada. Specifically, through IME borrowing under the IME Credit Agreement and our 150 million British pounds sterling denominated 7¹/4 notes, which effectively hedges most of our outstanding intercompany loan with IME. With respect to Canada, in August 2004, we repaid the remaining $98.7 million of real estate term loans by having IM Canada draw on its portion of the IMI revolving credit facility in local currency and repaying a portion of its intercompany loan back to the U.S. parent. This has created a natural hedge and will reduce our currency fluctuations with regard to our investment in IM Canada while providing IM Canada with additional borrowings and interest expenses to reduce its income tax burden. As of September 30, 2004, except as noted above, our currency exposures to intercompany balances are unhedged.

Item 4. Controls and Procedures

        The term "disclosure controls and procedures" is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These rules refer to the controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files under the Exchange Act is recorded, processed, summarized and reported within required time periods. As of September 30, 2004 (the "Evaluation Date"), we carried out an evaluation, under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation, the chief executive officer and chief financial officer have concluded that, as of the Evaluation Date, such disclosure controls and procedures were effective in ensuring that required information will be disclosed on a timely basis in our reports filed under the Exchange Act.

        Additionally, we strive to give our shareholders as much information as possible to allow them to make their own judgments regarding our performance. In that spirit, we are presenting a summary of our approach and progress in meeting the requirements of the SEC's rules under Section 404 of the Sarbanes-Oxley Act of 2002 ("Section 404").

        We are steadily working towards achieving compliance with Section 404, requiring us to document, assess and test our system of internal controls over financial reporting. We selected the framework developed by the Committee of Sponsoring Organizations ("COSO") of the Treadway Commission to assess the design effectiveness of our internal controls over financial reporting. We began with an extensive planning effort, where we identified our critical processes and significant accounts across all of our business units and corporate support groups around the world. Our effort includes, to varying degrees, our operations within North America, Europe, and Latin America. It also includes our information technology functions that are critical to supporting our business operations.

        Our North American operations are comprised of our U.S. and Canadian business records management, off-site data protection, electronic records divisions, and all of our corporate functions. We completed the documentation of all risks and controls in these areas and we are fully engaged in our internal testing phase. To date, we have not identified any significant issues which we anticipate will not be remediated prior to December 31, 2004.

49

        Our European operations, which comprise approximately 19% of our consolidated revenues, have undergone dramatic changes due to numerous acquisitions and significant internal growth over the past few years. Revenue in our European operations has grown from approximately $100 million in 2002 to expected annual revenue of greater than $300 million for 2004. Over this period, we engaged in significant merger integration activities. These include customer focused activities, information system conversions, facilities rationalization, and various other activities. Also, as part of the Hays integration, we identified the need to consolidate the existing accounting operations with the Hays accounting operations. As such, during 2003, we began planning the transition to a new accounting operations center. We began processing in this new accounting operations center during June 2004. Part of this implementation was to hire approximately 45 new employees to process most financial transactions for the United Kingdom. As such, the average tenure of our accounting staff in the new accounting operations center is less than one year. All of these activities make our Section 404 assessment process in Europe more challenging to complete than in our other operations.

        Within our European operations, we are finalizing the documentation of our risks and controls and started our internal testing phase. During these phases, we identified opportunities to strengthen our internal controls over financial reporting. We implemented improvements in our internal controls over financial reporting including preparing and reviewing account reconciliations on a more timely basis, obtaining more complete information in order to prepare certain account analysis and judgmental estimates, and strengthening our local monitoring controls. We are developing remediation plans for identified improvement areas, some of which are currently being implemented. Remediation plans include the hiring of temporary and permanent resources as well as implementing and improving processes, systems, and controls within our European operations. We believe that we have put in place sufficient processes and controls to ensure that our SEC reports fairly present in all material respects our results of operations and cash flows for the periods presented and that such information is recorded, summarized and reported within the time periods specified by the SEC. We are devoting significant internal and external resources to the Section 404 assessment within our European operations and will consider the status of these matters when assessing the effectiveness of the Company's internal control over financial reporting as of December 31, 2004.

        Our information technology functions include all of our general computer controls, controls supporting our significant billing and enterprise resource planning systems, and network controls that support our critical processes and significant accounts. Our efforts in our information technology area closely mirror the progress within our business processes in North America and Europe. We are fully engaged in our internal testing for North America and recently began our internal testing in Europe. To date, we have not identified any significant issues which we anticipate will not be remediated prior to December 31, 2004.

        The COSO framework that we adopted also requires us to assess our corporate control environment, which includes concepts such as "tone-at-the-top", attitudes towards internal controls, competency of the employee base, and overall management style. We are currently utilizing a variety of techniques to assess the corporate control environment including, but not limited to, face-to-face interviews, employee surveys, a review of Board of Directors and executive management communication, and a review of hiring and training practices. Additionally, as required by Section 404, we began the review of the design and assessment of the effectiveness of our anti-fraud controls throughout the organization. We included all of our operations within the process and will be conducting testing at all our business units regardless of size.

        During our Section 404 readiness assessment, we made enhancements to our internal control over financial reporting including documentation, monitoring and review, approvals, fraud deterrence, and segregation of duties. We are continuing our assessment, remediation efforts, and testing in order to meet the requirements of Section 404. Therefore, we cannot offer assurances as to the ultimate conclusion of our final assessment or represent that there will not be any reportable conditions or material weaknesses that would be required to be disclosed at December 31, 2004.

50

Part II. Other Information

Item 1. Legal Proceedings

        As previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2003 and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2004, the arbitrator in our arbitration proceeding against J. Peter Pierce did not find the evidence provided by us sufficient to rule in our favor on the particular claims at issue and, in response to that decision, we filed a motion to vacate the arbitrator's decision and award in the Superior Court for Middlesex County, New Jersey. On June 16, 2004, that court denied our motion to vacate and confirmed the arbitration decision. We have appealed the court's decision to the Appellate Division of the New Jersey Superior Court. Mr. Pierce filed a motion to dismiss the appeal. The motion to dismiss filed by Mr. Pierce was denied. In the meanwhile, on September 13, 2004, the arbitrator issued a final award, granting Mr. Pierce indemnification for legal expenses incurred in the arbitration in the amount of approximately $1.6 million. Mr. Pierce brought an action in the Superior Court for Middlesex County to confirm such award and such court issued an order to show cause. We opposed this action and filed a motion to dismiss Mr. Pierce's claims and vacate the arbitration award, or in the alternative, for a stay pending disposition of the pending appeal regarding the motion to vacate.

        As previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2003, six lawsuits were outstanding against us by certain of our customers or abutters and/or their insurers in connection with the arson that resulted in damage to one and destruction of another records and information management services facility in South Brunswick Township, New Jersey in March 1997. As a result of a mediation in August, 2004, the parties to these six lawsuits entered into a written settlement of these matters. Pursuant to the settlement agreement, the Company contributed $0.5 million to a settlement fund in exchange for a complete release. The Superior Court for Middlesex County, New Jersey has, therefore, dismissed all of these cases. In addition, our insurers reimbursed us for the costs of the defense.

        Other than the matters discussed above, there have been no material developments during the third quarter of 2004 in the proceedings described in our Annual Report on Form 10-K for the year ended December 31, 2003 or our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2004 and June 30, 2004.

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Item 6. Exhibits

Exhibit No.	Description
3.1	Amended and Restated Articles of Incorporation, as amended.
3.2	Amended and Restated By-Laws, as amended.
31.1	Certification required by Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.
31.2	Certification required by Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.
32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	IRON MOUNTAIN INCORPORATED
NOVEMBER 9, 2004 (DATE)	BY:	/s/  JEAN A. BUA Jean A. Bua Vice President and Corporate Controller (Principal Accounting Officer)

53

QuickLinks

Index

Part I. Financial Information
Item 1. Unaudited Consolidated Financial Statements

Consolidated Balance Sheets at December 31, 2003 and September 30,2004 (Unaudited)
Consolidated Statements of Operations for the Three Months Ended September 30, 2003 and 2004 (Unaudited)
Consolidated Statements of Operations for the Nine Months Ended September 30, 2003 and 2004 (Unaudited)
Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2003 and 2004 (Unaudited)
Notes to Consolidated Financial Statements
IRON MOUNTAIN INCORPORATED

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Item 4. Controls and Procedures

Part II. Other Information
Item 1. Legal Proceedings
Item 6. Exhibits

SIGNATURES

EX-3.1

                                                                     EXHIBIT 3.1


              ----------------------------------------------------

                              AMENDED AND RESTATED

                            ARTICLES OF INCORPORATION

                                       OF

                           IRON MOUNTAIN INCORPORATED

              ----------------------------------------------------

                           AS AMENDED ON MAY 27, 2004



                          COMMONWEALTH OF PENNSYLVANIA

                AMENDMENT AND RESTATED ARTICLES OF INCORPORATION

                                       OF

                           IRON MOUNTAIN INCORPORATED

     In compliance with the requirements of 15 Pa.C.S. Section 1915 of the
Business Corporation Law of 1988 (relating to articles of amendment), the
undersigned business corporation, desiring to amend and restate its Articles of
Incorporation, hereby states that:

FIRST:    The name of the Corporation is Iron Mountain Incorporated.

SECOND:   The address of this Corporation's current registered office in
          this Commonwealth is:

          Corporation Service Company
          319 Market Street
          Harrisburg, PA 17101
          Dauphin County

THIRD:    The Corporation is incorporated under the provisions of the
          Business Corporation Law of 1988, as amended.  The date of
          incorporation of the Corporation was March 5, 1997.

FOURTH:   The aggregate number of shares which the corporation shall have the
          authority to issue is Two Hundred Ten Million (210,000,000) shares, to
          be divided into Two Hundred Million (200,000,000) shares of Common
          Stock, par value $0.01 per share, and Ten Million (10,000,000) shares
          of Preferred Stock, par value $0.01 per share.

     The Board of Directors is authorized to provide for the issuance of the
shares of Preferred Stock as a class without series or in one or more series,
and, by filing a statement pursuant to applicable law of the Commonwealth of
Pennsylvania, to establish from time to time the number of shares to be included
in each such class or series, and to fix the designations, powers, preferences
and rights of the shares of each such class or series.

     Any or all classes and series of shares, or any part thereof, may be
represented by uncertified shares to the extent determined by the Board of
Directors, except that shares represented by a certificate that is issued and
outstanding shall continue to be represented thereby until the certificate is
surrendered to the Corporation.

FIFTH:    The shareholders shall not have the right to cumulate their shares
          in voting for the election of Directors.

                                      - 1 -


SIXTH:    Subchapter E (Sections 2541-2548), Subchapter G (Section 2561-2568)
          and Subchapter H (Section 2571-2578) of the Pennsylvania Business
          Corporation Law of 1988, as amended, shall not be applicable to this
          Corporation.

SEVENTH:  These Amended and Restated Articles of Incorporation supersede the
          Corporation's original Articles of Incorporation and all
          amendments thereto and prior restatement thereof.

EIGHTH:   The duration of the Corporation is perpetual.

                                      - 2 -

EX-3.2

                                                                     EXHIBIT 3.2


               --------------------------------------------------

                              AMENDED AND RESTATED

                                     BYLAWS

                                       OF

                           IRON MOUNTAIN INCORPORATED

               --------------------------------------------------

                           AS AMENDED ON MARCH 4, 2004



                              AMENDED AND RESTATED

                                     BYLAWS

                                       OF

                           IRON MOUNTAIN INCORPORATED


                               ARTICLE I - OFFICE

     Section 1.1.  REGISTERED OFFICE. The registered office of the Corporation
shall be located within the Commonwealth of Pennsylvania at such place as the
Board of Directors (hereinafter referred to as the "Board of Directors" or the
"Board") shall determine from time to time.


                      ARTICLE II - MEETINGS OF SHAREHOLDERS

     Section 2.1.  PLACE OF MEETINGS OF SHAREHOLDERS. Meetings of shareholders
shall be held at such places, within or without the Commonwealth of
Pennsylvania, as may be fixed from time to time by the Board of Directors. If no
such place is fixed by the Board of Directors, meetings of the shareholders
shall be held at the registered office of the Corporation.

     Section 2.2.  ANNUAL MEETING OF SHAREHOLDERS.

          (a)      TIME. A meeting of the shareholders of the Corporation shall
     be held in each calendar year, commencing with the year 1998, at such time
     as the Board of Directors may determine.

          (b)      ELECTION OF DIRECTORS. At such annual meeting, there shall be
     held an election of Directors.

     Section 2.3.  SPECIAL MEETINGS OF SHAREHOLDERS. Except as expressly
required by law, special meetings of the shareholders may be called at any time
only by:

                                      - 1 -


          (a)      the Chairman of the Board, if any, if such officer is serving
     as the chief executive officer of the Corporation, and otherwise the
     President of the Corporation; or

          (b)      the Board of Directors.

     Upon the written request of any person who has called a special meeting,
under these Bylaws or applicable law, which request specifies the general nature
of the business to be transacted at such meeting, it shall be the duty of the
Secretary to fix the time and place of such meeting, which shall be held not
less than five nor more than 60 days after the receipt of such request, and to
give due notice thereof as required by Section 2.4 hereof. If the Secretary
neglects or refuses to fix the time and place of such meeting, the person or
persons calling the meeting may do so.

     Section 2.4.  NOTICES OF MEETINGS OF SHAREHOLDERS. Written notice,
complying with Article VI of these Bylaws, stating the place and time and, in
the case of special meetings, the general nature of the business to be
transacted at any meeting of the shareholders, shall be given to each
shareholder of record entitled to vote at the meeting, except as provided in
Section 1707 of the Pennsylvania Business Corporation Law of 1988, as amended
(the "Pennsylvania BCL"), at least five days prior to the day named for the
meeting, provided that notice shall be given at least ten days prior to the day
named for a meeting to consider a fundamental change under Chapter 19 of the
Pennsylvania BCL. Such notices may be given by, or at the direction of, the
Secretary or other authorized person. If the Secretary or other authorized
person neglects or refuses to give notice of a meeting, the person or persons
calling the meeting may do so.

     Section 2.5.  QUORUM OF AND ACTION BY SHAREHOLDERS.

          (a)      GENERAL RULE. Except as provided in subsections (c), (d) and
     (e) of this Section 2.5, the presence, in person or by proxy, of
     shareholders entitled to cast at least a

                                      - 2 -


     majority of the votes that all shareholders are entitled to cast on a
     particular matter to be acted upon at the meeting shall constitute a quorum
     for the purpose of consideration and action on the matter. If two or more
     classes of stock are entitled to vote as separate classes upon any matter,
     then, in the case of each such class, a quorum for the consideration of
     such matter shall, except as otherwise provided by law or by the
     Corporation's Articles of Incorporation (the "Articles"), consist of the
     presence, in person or by proxy, of shareholders entitled to cast at least
     a majority of the votes that all holders of shares of that class are
     entitled to cast on such matter. To the extent that a quorum is present
     with respect to consideration of any action or particular matter or matters
     but a quorum is not present as to any other matter or matters,
     consideration of an action on the matter or matters for which a quorum is
     present may occur and, after such consideration and action, the meeting may
     be adjourned for purposes of the consideration of and action on a matter or
     matters for which a quorum is not present. Unless the Pennsylvania BCL
     permits otherwise, this Section 2.5(a) may be modified only by a Bylaw
     amendment adopted by the shareholders.

          (b)      ACTION BY SHAREHOLDERS. Except as otherwise provided by law,
     whenever any corporate action is to be taken by vote of the shareholders of
     the Corporation at a duly organized meeting of shareholders, it shall be
     authorized upon receiving the affirmative vote of a majority of the votes
     properly cast at the meeting with respect to such matter and, if any
     shareholders are entitled to vote thereon as a class, upon receiving the
     affirmative vote of a majority of the votes properly cast by the
     shareholders entitled to vote as a class. Unless the Pennsylvania BCL
     permits otherwise, this Section 2.5(b) may be modified only by a Bylaw
     amendment adopted by the shareholders.

                                      - 3 -


          (c)      WITHDRAWAL. The shareholders present at a duly organized
     meeting can continue to do business until adjournment, notwithstanding the
     withdrawal of enough shareholders to leave less than a quorum.

          (d)      ELECTION OF DIRECTORS AT ADJOURNED MEETINGS. In the case of
     any meeting called for the election of Directors, those shareholders who
     attend a meeting called for the election of Directors that has been
     previously adjourned for lack of a quorum (whether with respect to a
     particular matter or all matters to be considered and acted upon at such
     meeting), although less than a quorum as fixed in subsection (a), shall
     nevertheless constitute a quorum for the purpose of electing Directors.

          (e)      CONDUCT OF OTHER BUSINESS AT ADJOURNED MEETINGS. Those
     shareholders entitled to vote who attend a meeting of shareholders that has
     been previously adjourned for one or more periods aggregating at least 15
     days because of an absence of a quorum (whether with respect to a
     particular matter or all matters to be considered and acted upon at such
     meeting), although less than a quorum as fixed in subsection (a), shall
     nevertheless constitute a quorum for the purpose of acting upon any matter
     set forth in the notice of meeting if the notice states that those
     shareholders who attend the adjourned meeting shall nevertheless constitute
     a quorum for the purpose of acting upon the matter.

     Section 2.6.  ADJOURNMENTS.

          (a)      GENERAL RULE. Any regular or special meeting of the
     shareholders, including one at which Directors are to be elected, may be
     adjourned for such period as the shareholders present and entitled to vote
     shall direct.

                                      - 4 -


          (b)      LACK OF QUORUM. If a meeting cannot be organized because a
     quorum has not attended, those present may, except as otherwise provided in
     this Section 2.6, adjourn the meeting to such time and place as they may
     determine.

          (c)      NOTICE OF AN ADJOURNED MEETING. When a meeting of
     shareholders is adjourned, it shall not be necessary to give any notice of
     the adjourned meeting or of the business to be transacted at an adjourned
     meeting, other than by announcement at the meeting at which the adjournment
     is taken, unless the Board fixes a new record date for the adjourned
     meeting or applicable law requires notice of the business to be transacted
     and such notice has not previously been given.

     Section 2.7.  VOTING LIST, VOTING AND PROXIES.

          (a)      VOTING LIST. The officer or agent having charge of the
     transfer books for shares of the Corporation shall make a complete list of
     the shareholders entitled to vote at any meeting of shareholders, arranged
     in alphabetical order, with the address of and the number of shares held by
     each. The list shall be produced and kept open at the time and place of the
     meeting and shall be subject to the inspection of any shareholder during
     the whole time of the meeting for the purposes thereof, except that, if the
     Corporation has 5,000 or more shareholders, in lieu of making the list, the
     Corporation may make the information therein available at the meeting by
     any other means.

          (b)      VOTING. Except as otherwise specifically provided by law, all
     matters coming before the meeting shall be determined by a vote of shares.
     Such vote shall be taken by voice unless the presiding officer determines,
     or required by a vote of the shareholders, before the vote begins, that it
     be taken by ballot.

                                      - 5 -


          (c)      PROXIES. At all meetings of shareholders, shareholders
     entitled to vote may attend and vote either in person or by proxy. Every
     proxy shall be executed in writing by the shareholder or by such
     shareholder's duly authorized attorney-in-fact and filed with the Secretary
     of the Corporation. A proxy, unless coupled with an interest (as defined in
     Section 1759(d) of the Pennsylvania BCL), shall be revocable at will,
     notwithstanding any other agreement or any provision in the proxy to the
     contrary, but the revocation of a proxy shall not be effective until
     written notice thereof has been given to the Secretary of the Corporation.
     An unrevoked proxy shall not be valid after three years from the date of
     its execution unless a longer time is expressly provided therein. A proxy
     shall not be revoked by the death or incapacity of the maker unless, before
     the vote is counted or the authority is exercised, written notice of the
     death or incapacity is given to the Secretary of the Corporation.

          (d)      JUDGES OF ELECTION. In advance of any meeting of shareholders
     of the Corporation, the Board of Directors may appoint one or three Judges
     of Election, who need not be shareholders and who will have such duties as
     provided in Section 1765(a)(3) of the Pennsylvania BCL, to act at the
     meeting or any adjournment thereof. If one or three Judges of Election are
     not so appointed, the presiding officer of the meeting may, and on the
     request of any shareholder shall, appoint one or three Judges of Election
     at the meeting. In case any person appointed as a Judge of Election fails
     to appear or refuses to act, the vacancy may be filled by appointment made
     by the Board of Directors in advance of the convening of the meeting or at
     the meeting by the presiding officer. A person who is a candidate for
     office to be filled at the meeting shall not act as a Judge of Election.

                                      - 6 -


Unless the Pennsylvania BCL permits otherwise, this Section 2.7(d) may be
modified only by a Bylaw amendment adopted by the shareholders.

     Section 2.8.  PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE. The Board
may provide by resolution, or the presiding officer may permit, with respect to
a particular meeting of shareholders that one or more persons may participate in
that meeting of the shareholders, be counted for the purposes of determining a
quorum and exercise all rights and privileges to which such person might be
entitled were such person personally in attendance, including the right to vote,
by means of conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other. Unless the
Board so provides, or the presiding officer so permits, no person may
participate in a meeting of the shareholders by means of conference telephone or
similar communications equipment.

     Section 2.9.  NO CONSENTS IN LIEU OF MEETING. Subject to the rights of
holders of shares of any class or series of Preferred Stock in respect of
actions to be taken by holders of such shares, no action of the shareholders
shall be taken by either unanimous or partial written consent or other consent
in lieu of a meeting.

     Section 2.10. BUSINESS AT MEETINGS OF SHAREHOLDERS.

          (a)      Except as otherwise provided by law (including but not
     limited to Rule 14a-8 of the Securities Exchange Act of 1934, as amended,
     or any successor provision thereto) or in these Bylaws, the business which
     shall be conducted at any meeting of the shareholders shall (i) have been
     specified in the written notice of the meeting (or any supplement thereto)
     given by the Corporation, (ii) be brought before the meeting at the
     direction of the Board of Directors, (iii) be brought before the meeting by
     the presiding officer of the meeting unless a majority of the Directors
     then in office object to such

                                      - 7 -


     business being conducted at the meeting, or (iv) in the case of an annual
     meeting of shareholders, have been specified in a written notice given to
     the Secretary of the Corporation, by or on behalf of any shareholder who
     shall have been a shareholder of record on the record date for such meeting
     and who shall continue to be entitled to vote thereat (the "Shareholder
     Notice"), in accordance with all of the following:

                   (A)   Each Shareholder Notice must be delivered to, or mailed
          and received at, the principal executive offices of the Corporation
          (i) in the case of an annual meeting that is called for a date that is
          within 30 days before or after the anniversary date of the immediately
          preceding annual meeting of shareholders, not less than 60 days nor
          more than 90 days prior to the first anniversary (the "Anniversary")
          of the date the Corporation's proxy statement was released to
          shareholders in connection with the previous year's annual meeting of
          shareholders, and (ii) in the case of an annual meeting that is called
          for a date that is not within 30 days before or after the anniversary
          date of the immediately preceding annual meeting, not later than the
          later of (x) the 90'th day prior to such annual meeting or (y) the
          close of business on the tenth day following the day on which public
          disclosure of the date of the meeting was made;

                   (B)   Each such Shareholder Notice must set forth: (i) the
          name and address of the shareholder who intends to bring the business
          before the meeting; (ii) the general nature of the business which such
          shareholder seeks to bring before the meeting, the reasons for
          conducting such business and, if a specific action is to be proposed,
          the text of the resolution or resolutions which the proposing
          shareholder proposes that the shareholders adopt; (iii) a
          representation

                                      - 8 -


          that the shareholder is a holder of record of the stock of the
          Corporation entitled to vote at such meeting , including the class and
          number of shares of such stock that are owned beneficially and of
          record by such shareholder, and intends to appear in person or by
          proxy at the meeting to bring the business specified in the notice
          before the meeting; (iv) whether such shareholder intends to deliver a
          proxy statement and form of proxy to holders of, in the case of a
          proposal, at least the percentage of the Corporation's voting shares
          required under these Bylaws and applicable law to carry the proposal
          (an affirmative statement of such intent, a "Solicitation Notice");
          and (v) any material interest of the shareholder in any proposed
          action. The presiding officer of the meeting may, in such officer's
          sole discretion, refuse to acknowledge any business proposed by a
          shareholder not made in compliance with the foregoing procedure; and

                   (C)   If the shareholder has provided the Corporation with a
          Solicitation Notice, such shareholder must have delivered a proxy
          statement and form of proxy to holders of at least the percentage of
          the Corporation's voting shares required under applicable law to carry
          such proposal. If no Solicitation Notice relating thereto has been
          timely provided pursuant to this Section 2.10, the shareholder
          proposing such business must not have solicited a number of proxies
          sufficient to have required the delivery of such a Solicitation Notice
          under this Section 2.10.

          (b)      Notwithstanding anything in these Bylaws to the contrary, no
     business shall be conducted at an annual meeting except in accordance with
     the procedures set forth in this Section 2.10. The chairman of the meeting
     shall, if the facts warrant,

                                      - 9 -


     determine and declare to the meeting that business was not properly brought
     before the meeting and in accordance with the procedures prescribed by this
     Section 2.10, and if he should so determine, he shall so declare to the
     meeting and any such business not properly brought before the meeting shall
     not be transacted. Notwithstanding the foregoing provisions of this Section
     2.10, a shareholder shall also comply with all applicable requirements of
     the Securities Exchange Act of 1934, as amended, and the rules and
     regulations thereunder with respect to the matters set forth in this
     Section 2.10 and any shareholder proposal not required to be considered by
     such rules need not be considered.


                        ARTICLE III - BOARD OF DIRECTORS

     Section 3.1.  POWERS, NUMBER, CLASSIFIED BOARD, ETC.

          (a)      GENERAL POWERS. Except as otherwise provided by law and these
     Bylaws, all powers of the Corporation shall be exercised by or under the
     authority of, and the business and affairs of the Corporation shall be
     managed under the direction of, the Board of Directors. Unless the
     Pennsylvania BCL permits otherwise, this Section 3.1 (a) may be modified
     only by a Bylaw amendment adopted by the shareholders.

          (b)      NUMBER. The number of members of the Board of Directors shall
     be the number of Directors serving at the time of adoption of this Section
     3.1, or such other number as may thereafter from time to time (i) be
     determined by the Board of Directors, or (ii) be set forth in a notice of a
     meeting of shareholders called for the election of a full Board of
     Directors; provided, that if such notice contemplates a change in the size
     of the Board of Directors, such change shall take effect as of the time the
     election called for by the notice is held.

                                     - 10 -


          (c)      TERM. Each Directors, other shall hold office until the next
     annual meeting of shareholders and until his successor is duly elected and
     qualified or until his earlier death or resignation, subject to
     shareholders' exercising a statutory right at any time to remove directors.

          (d)      VACANCIES. Any vacancies on the Board of Directors, including
     vacancies resulting from an increase in the number of Directors, may be
     filled by a majority vote of the remaining members of the Board (though
     less than a quorum) or by a sole remaining Director or by the shareholders;
     and each person so selected shall be a Director to serve for the balance of
     the unexpired term.

          (e)      QUALIFICATION.  A Director must be a natural person at least
     18 years of age.

     Section 3.2.  PLACE OF MEETINGS. Meetings of the Board of Directors may be
held at such place within or without the Commonwealth of Pennsylvania as a
majority of the Directors may determine from time to time or as may be
designated in the notice of the meeting.

     Section 3.3.  REGULAR MEETINGS. A regular meeting of the Board of Directors
shall be held annually, immediately following the annual meeting of the
shareholders, at the place where such meeting of the shareholders is held or at
such other place and time as a majority of the Directors in office after the
annual meeting of shareholders may designate. At such meeting, the Board of
Directors shall elect officers of the Corporation. In addition to such regular
meeting, the Board of Directors shall have the power to fix by resolution the
place and time of other regular meetings of the Board.

     Section 3.4.  SPECIAL MEETINGS. Special meetings of the Board of Directors
shall be held whenever ordered by the Chairman of the Board, if any, by the
President (if there is not then

                                     - 11 -


a Chairman of the Board), by a majority of the executive committee of the Board,
if any, or by a majority of the Directors in office.

     Section 3.5.  PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE. Any
Director may participate in any meeting of the Board of Directors or of any
committee (provided such Director is otherwise entitled to participate), be
counted for the purpose of determining a quorum thereof and exercise all rights
and privileges to which such Director might be entitled were he or she
personally in attendance, including the right to vote, or any other rights
attendant to presence in person at such meeting, by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other.

     Section 3.6.  NOTICES OF MEETINGS OF BOARD OF DIRECTORS.

          (a)      REGULAR MEETINGS. No notice shall be required to be given of
     any regular meeting, unless the same is held at other than the place or
     time for holding such meeting as fixed in accordance with Section 3.3 of
     these Bylaws, in which event five days' notice shall be given of the place
     and time of such meeting complying with Article VI of these Bylaws.

          (b)      SPECIAL MEETINGS. Written notice stating the place and time
     of any special meeting of the Board of Directors shall be sufficient if
     given at least twenty-four (24) hours in advance of the time fixed for the
     meeting.

     Section 3.7.  QUORUM ACTION BY THE BOARD OF DIRECTORS. A majority of the
Directors in office shall be necessary to constitute a quorum for the
transaction of business and the acts of a majority of the Directors present and
voting at a meeting at which a quorum is present shall be the acts of the Board
of Directors. If there is no quorum present at a duly convened meeting of

                                     - 12 -


the Board of Directors, the majority of those present may adjourn the meeting
from time to time and place to place.

     Section 3.8.  ACTION BY UNANIMOUS CONSENT OF THE BOARD OF DIRECTORS. Any
action required or permitted to be taken at a meeting of the Directors, or of
the members of any committee of the Board of Directors, may be taken without a
meeting if, prior or subsequent to the action, a written consent or consents
thereto by all of the Directors in office (or all of the members of the
committee with respect to committee action) is filed with the Secretary of the
Corporation. In addition to other means of filing with the Secretary, insertion
of such consent in the minute book of the Corporation shall be deemed filing
with the Secretary regardless of whether the Secretary or some other authorized
person has actual possession of the minute book. Written consents by all of the
directors or committee members, as the case may be, executed pursuant to this
Section 3.8 may be executed in any number of counterparts and shall be deemed
effective as of the date set forth therein.

     Section 3.9.  COMMITTEES.

          (a)      ESTABLISHMENT AND POWERS. The Board of Directors of the
     Corporation may, by resolution adopted by a majority of the Directors in
     office, establish one or more committees to consist of one (1) or more
     Directors of the Corporation. Any committee, to the extent provided in the
     resolution of the Board of Directors or in the Bylaws, shall have and may
     exercise all of the powers and authority of the Board of Directors, except
     that a committee shall not have any power or authority as to the following:

                   (i)   The submission to shareholders of any action requiring
approval of shareholders under the Pennsylvania BCL.

                   (ii)  The creation or filling of vacancies in the Board of
Directors.

                                     - 13 -


                   (iii) The adoption, amendment or repeal of the Bylaws.

                   (iv)  The amendment or repeal of any resolution of the Board
of Directors that by its terms is amendable or repealable only by the Board of
Directors.

                   (v)   Action on matters committed by the Bylaws or resolution
of the Board of Directors to another committee of the Board of Directors.

          (b)      ALTERNATE MEMBERS. The Board of Directors may designate one
     or more Directors as alternate members of any committee who may replace any
     absent or disqualified member at any meeting of the committee or for the
     purpose of any written action by the committee. In the absence or
     disqualification of a member and alternate member or members of a
     committee, the member or members thereof present at a meeting and not
     disqualified from voting, whether or not he or they constitute a quorum,
     may unanimously appoint another Director to act at the meeting in the place
     of the absent or disqualified member.

          (c)      TERM. Each committee of the Board of Directors shall serve at
     the pleasure of the Board of Directors.

          (d)      STATUS OF COMMITTEE ACTION. The term "Board of Directors" or
     "Board," when used in any provision of these Bylaws relating to the
     organization or procedures of or the manner of taking action by the Board
     of Directors, shall be construed to include and refer to any executive or
     other committee of the Board of Directors. Any provision of these Bylaws
     relating or referring to action to be taken by the Board of Directors or
     the procedure required therefor shall be satisfied by the taking of
     corresponding action by a committee of the Board of Directors to the extent
     authority to take the action has been

                                     - 14 -


     delegated to the committee pursuant to this Section. Notwithstanding the
     foregoing, in the event that the Corporation has an executive committee of
     the Board of Directors that consists of four members, three members shall
     constitute a quorum for the transaction of business and the acts of three
     of the members of the executive committee present and voting at a meeting
     at which a quorum is present shall be the acts of the executive committee.

     Section 3.10. NOMINATIONS.

          (a)      Notwithstanding the provisions of Section 2.10 of these
     Bylaws (dealing with business at meetings of shareholders), nominations for
     the election of Directors may be made by only the Board of Directors, a
     committee appointed by the Board of Directors or by any shareholder of
     record entitled to vote in the election of Directors who is a shareholder
     at the record date of the meeting and also on the date of the meeting at
     which Directors are to be elected; provided, however, that with respect to
     a nomination made by a shareholder, such shareholder must provide timely
     written notice to the Chairman of the Board of the Corporation or, if there
     be none, the President of the Corporation in accordance with the following
     requirements, except as otherwise provided by law:

                   (A)   To be timely, a shareholder's notice must be delivered
          to, or mailed and received at, the principal executive offices of the
          Corporation addressed to the attention of the Chairman of the Board
          or, if there be none, the President (i) in the case of an annual
          meeting that is called for a date that is within 30 days before or
          after the anniversary date of the immediately preceding annual meeting
          of shareholders, not less than 60 days nor more than 90 days prior to
          the Anniversary, and (ii) in the case of an annual meeting that is
          called for a date that

                                     - 15 -


          is not within 30 days before or after the anniversary date of the
          immediately preceding annual meeting, or in the case of a special
          meeting of shareholders called for the purpose of electing Directors,
          not later than the later of (x) the 90th day prior to such annual
          meeting or (y) the close of business on the tenth day following the
          day on which public disclosure of the date of the meeting was made;
          PROVIDED, HOWEVER, such time periods shall be subject to Rule 14a-8 of
          the Securities Exchange Act of 1934, as amended, or any successor
          provision thereto, to the extent applicable;

                   (B)   Each such written notice must set forth: (i) the name
          and address of the shareholder who intends to make the nomination;
          (ii) the name, age and address of the person or persons to be
          nominated; (iii) a representation that the shareholder is a holder of
          record of shares of the Corporation entitled to vote at such meeting,
          including the class and number of shares of such stock that are owned
          beneficially and of record by such shareholder, and intends to appear
          in person or by proxy at the meeting to nominate the person or persons
          specified in the notice; (iv) a Solicitation Notice or a statement
          that the shareholder does not intend to deliver a proxy statement and
          form of proxy to holders of a sufficient number of holders of the
          Corporation's voting shares to elect such nominee or nominees; (v) a
          description of all arrangements or understandings between the
          shareholder and each nominee and any other person or persons (naming
          such person or persons) pursuant to which the nomination or
          nominations are to be made by the shareholder; (vi) such other
          information regarding each nominee proposed by such shareholder as
          would have been required to be included in a

                                     - 16 -


          proxy statement filed pursuant to the proxy rules of the Securities
          and Exchange. Commission had the nominee been nominated, or intended
          to be nominated, by the Board of Directors (including, without
          limitation, the principal occupation or employment of such person);
          and (vii) the written consent of each nominee to serve as a Director
          of the Corporation if so elected. The presiding officer of the meeting
          may refuse, in such officer's sole discretion, to acknowledge the
          nomination of any person as not made in compliance with the foregoing
          procedure; and

                   (C)   If the shareholder has provided the Corporation with a
          Solicitation Notice, such shareholder must have delivered a proxy
          statement and form of proxy to holders of a percentage of the
          Corporation's voting shares reasonably believed by such shareholder to
          be sufficient to elect the nominee or nominees proposed to be
          nominated by such shareholder. If no Solicitation Notice relating
          thereto has been timely provided pursuant to this Section 3.10, the
          shareholder proposing such nomination must not have solicited a number
          of proxies sufficient to have required the delivery of such a
          Solicitation Notice under this Section 3.10.

          (b)      No person shall be eligible to serve as a Director of the
     Corporation unless nominated in accordance with the procedures set forth in
     this Section 3.10. The Chairman of the meeting shall, as the facts warrant,
     determine and declare to the meeting that a nomination was not made in
     accordance with the procedures prescribed by this Section 3.10, and if he
     should so determine, he shall so declare to the meeting and the defective
     nomination shall be disregarded. Notwithstanding the foregoing provisions
     of this Section 3.10, a shareholder shall also comply with all applicable
     requirements of the

                                     - 17 -


Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder with respect to the matters set forth in this Section 3.10 and any
shareholder proposal not required to be considered by such rules need not be
considered.

     Section 3.11. PAYMENTS TO DIRECTORS. Directors may be reimbursed for the
expenses of attending Board meetings and committee meetings and may be paid a
fixed sum for attendance at each meeting or such other compensation for their
services as may, from time to time, be fixed by the Board of Directors. No such
payment shall preclude any Director from serving the Corporation in any other
capacity and receiving compensation therefor.

     Section 3.12. DISTRIBUTIONS. The Directors may, to the extent permitted by
law, authorize and the Corporation may make distributions from time to time.


                              ARTICLE IV - OFFICERS

     Section 4.1.  ELECTION AND OFFICE. The Corporation shall have a President,
a Secretary and a Treasurer who shall be elected by the Board of Directors. The
Board of Directors may elect as additional officers a Chairman of the Board, a
Chairman Emeritus, one or more Vice Chairmen of the Board, one or more Vice
Presidents, a Chief Financial Officer, and one or more other officers or
assistant officers. Any number of offices may be held by the same person. The
President and the Secretary shall be natural persons of the age of 18 years or
older. The Treasurer may be a corporation, but if a natural person shall be of
the age of 18 years or older.

     Section 4.2.  TERM. The officers and assistant officers shall each serve at
the pleasure of the Board of Directors until the first meeting of the Board of
Directors following the next annual meeting of shareholders, unless removed from
office by the Board of Directors during their respective tenures. Officers may,
but need not, be Directors.

                                     - 18 -


     Section 4.3.  POWERS AND DUTIES OF THE CHAIRMAN OF THE BOARD. The Chairman
of the Board of Directors, if any, shall be the chief executive officer of the
Corporation, and, subject to the direction of the Board of Directors, shall have
general charge of the management and direction of the business, affairs and
property of the Corporation, and general supervision over its other officers and
agents, and, when present, shall preside at all meetings of the shareholders and
the Board of Directors. The Chairman of the Board of Directors shall perform
such other duties and have such other powers as the Board of Directors shall
designate from time to time.

     Section 4.4.  CHAIRMAN EMERITUS. A Chairman Emeritus may be designated from
time to time by the Board of Directors. The Chairman Emeritus shall, at the
pleasure of the Board of Directors, receive notice of, and be invited to attend
and participate in, all meetings of the Board of Directors; provided, however,
that the Chairman Emeritus shall not have a vote on any matter brought before
such meeting. The Chairman Emeritus shall not have any power or authority to act
on behalf of the Corporation other than in connection with the performance of
such duties as the Board of Directors shall from time to time designate.

     Section 4.5.  POWERS AND DUTIES OF THE PRESIDENT. In the absence of a
Chairman of the Board, the President shall have duties and powers given in these
Bylaws to the Chairman of the Board. If there is a Chairman of the Board and
unless otherwise determined by the Board of Directors, the President shall be
the chief operating officer of the Corporation. In general, he shall perform all
duties incident to the office of President and, unless otherwise determined by
the Board of Directors, chief operating officer and shall see that all orders
and resolutions of the Board of Directors and the Chairman of the Board, if any,
are carried into effect and shall perform such other executive, supervisory and
management functions and duties as may be assigned to him from time to time by
the Board of Directors or the Chairman of the Board.

                                     - 19 -


     Section 4.6.  POWERS AND DUTIES OF THE SECRETARY. Unless otherwise
determined by the Board of Directors, the Secretary shall be responsible for the
keeping of the minutes of all meetings of the Board of Directors and the
shareholders, in books provided for that purpose, and for the giving and serving
of all notices for the Corporation. The Secretary shall perform all other duties
ordinarily incident to the office of Secretary and shall have such other powers
and perform such other duties as may be assigned to the Secretary by the Board
of Directors. The minute books of the Corporation may be held by a person other
than the Secretary.

     Section 4.7.  POWERS AND DUTIES OF THE TREASURER. Unless otherwise
determined by the Board of Directors, the Treasurer shall have charge of all the
funds and securities of the Corporation which may come into such officer's
hands. When necessary or proper, unless otherwise determined by the Board of
Directors, the Treasurer shall endorse for collection on behalf of the
Corporation checks, notes and other obligations, and shall deposit the same to
the credit of the Corporation to such banks or depositories as the Board of
Directors may designate and may sign all receipts and vouchers for payments made
to the Corporation. The Treasurer shall sign all checks made by the Corporation,
except when the Board of Directors shall otherwise direct. The Treasurer shall
be responsible for the regular entry in books of the Corporation to be kept for
such purpose of a full and accurate account of all funds and securities received
and paid by the Treasurer on account of the Corporation. Whenever required by
the Board of Directors, the Treasurer shall render a statement of the financial
condition of the Corporation. The Treasurer shall have such other powers and
shall perform the duties as may be assigned to such officer from time to time by
the Board of Directors. The Treasurer shall give such bond, if any, for the
faithful performance of the duties of such office as shall be required by the
Board of Directors. If the Corporation has a Chief Financial Officer, the Chief
Financial

                                     - 20 -


Officer shall have such power and authority as determined by the Board of
Directors, including without limitation, the powers provided herein of the
Treasurer.

     Section 4.8.  POWERS AND DUTIES OF VICE PRESIDENTS AND ASSISTANT OFFICERS.
Unless otherwise determined by the Board of Directors, each Vice Chairman, Vice
President and each assistant officer shall have the powers and perform the
duties of his or her respective superior officer. Vice Presidents and assistant
officers shall have such rank as may be designated by the Board of Directors.
Vice Presidents may be designated as having responsibility for a specific area
of the Corporation's affairs, in which event such Vice President shall be
superior to the other Vice Presidents in relation to matters within his or her
area. The President shall be the superior officer of the Vice Presidents. The
Chairman of the Board shall be the superior officer of the Vice Chairmen and the
President. The Treasurer and Secretary shall be the superior officers of the
Assistant Treasurers and Assistant Secretaries, respectively.

     Section 4.9.  DELEGATION OF OFFICE. The Board of Directors may delegate the
powers or duties of any officer of the Corporation to any other person from time
to time.

     Section 4.10. VACANCIES. The Board of Directors shall have the power to
fill any vacancies in any office occurring for any reason.


                            ARTICLE V - CAPITAL STOCK

     Section 5.1.  SHARE CERTIFICATES.

          (a)      EXECUTION. Except as otherwise provided in Section 5.6, the
     shares of the Corporation shall be represented by certificates. Unless
     otherwise provided by the Board of Directors, every share certificate shall
     be signed by two officers and sealed with the corporate seal, which may be
     a facsimile, engraved or printed, but where such certificate is signed by a
     transfer agent or a registrar, the signature of any corporate officer upon

                                     - 21 -


     such certificate may be a facsimile, engraved or printed. In case any
     officer who has signed, or whose facsimile signature has been placed upon,
     any share certificate shall have ceased to be such officer because of
     death, resignation or otherwise, before the certificate is issued, it may
     be issued with the same effect as if the officer had not ceased to be such
     at the date of its issue. In case the corporate seal which has been affixed
     to, impressed on, or reproduced in any such certificate or certificates
     shall cease to be the seal of the Corporation before such certificate or
     certificates have been delivered by the Corporation, such certificate or
     certificates may nevertheless be issued and delivered by the Corporation as
     though the seal affixed thereto, impressed thereon or reproduced therein
     had not ceased to be the seal of the Corporation. The provisions of this
     Section 5.1 shall be subject to any inconsistent or contrary agreement at
     the time between the Corporation and any transfer agent or registrar.

          (b)      DESIGNATIONS, ETC. To the extent the Corporation is
     authorized to issue shares of more than one class or series, every
     certificate shall set forth upon the face or back of the certificate (or
     shall state on the face or back of the certificate that the Corporation
     will furnish to any shareholder upon request and without charge) a full or
     summary statement of the designations, voting rights, preferences,
     limitations and special rights of the shares of each class or series
     authorized to be issued so far as they have been fixed and determined and
     the authority of the Board of Directors to fix and determine the
     designations, voting rights, preferences, limitations and special rights of
     the classes and series of shares of the Corporation.

          (c)      FRACTIONAL SHARES. Except as otherwise determined by the
     Board of Directors, shares or certificates therefor may be issued as
     fractional shares for shares held

                                     - 22 -


     by any dividend reinvestment plan or employee benefit plan created or
     approved by the Corporation's Board of Directors, but not by any other
     person.

     Section 5.2.  TRANSFER OF SHARES. Transfer of certificated shares shall be
made on the books of the Corporation only upon surrender of the share
certificate, duly endorsed or with duly executed stock powers attached and
otherwise in proper form for transfer (which shall include, without limitation,
such proof or guaranty of the authenticity of the signature as the Corporation
or its agents may require), which certificate shall be cancelled at the time of
the transfer. In the event the Board authorizes uncertificated shares, as
permitted by the Articles, the Board shall adopt alternative procedures for
registration of transfers of such uncertificated shares. The Corporation shall
be entitled to treat the holder of record of any share or shares of stock as the
holder in fact thereof and, accordingly, shall not be bound to recognize any
equitable or other claim to, or interest in, such share or shares on the part of
any other person, whether or not it shall have express or other notice thereof,
save as expressly provided by law, by the Articles or these Bylaws. It shall be
the duty of each shareholder to notify the Corporation of his or her post office
address.

     Section 5.3.  DETERMINATION OF SHAREHOLDERS OF RECORD.

          (a)      FIXING RECORD DATE. The Board of Directors of the
Corporation may fix a time prior to the date of any meeting of shareholders
as a record date for the determination of the shareholders entitled to notice
of, or to vote at, the meeting, which time, except in the case of an
adjourned meeting, shall be not more than 90 days prior to the date of the
meeting of shareholders. Only shareholders of record on the date fixed shall
be so entitled notwithstanding any transfer of shares on the books of the
Corporation after any record date fixed as provided in this subsection. The
Board of Directors may

                                     - 23 -


similarly fix a record date for the determination of shareholders of record
for any other purpose. When a determination of shareholders of record has
been made as provided in this section for purposes of a meeting, the
determination shall apply to any adjournment thereof unless the Board of
Directors fixes a new record date for the adjourned meeting.

          (b)      DETERMINATION WHEN NO RECORD DATE FIXED. If a record date
is not fixed:

                   (i)   The record date for determining shareholders entitled
to notice of or to vote at a meeting of shareholders shall be at the close of
business on the day next preceding the day on which notice is given or, if
notice is waived, at the close of business on the day immediately preceding the
day on which the meeting is held.

                   (ii)  The record date for determining shareholders for any
other purpose shall be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto.

          (c)      CERTIFICATION BY NOMINEE. The Board of Directors may adopt
a procedure whereby a shareholder of the Corporation may certify in writing
to the Corporation that all or a portion of the shares registered in the name
of the shareholder are held for the account of a specified person or persons.
The resolution of the Board of Directors may set forth:

                   (i)   the classification of shareholder who may certify;

                   (ii)  the purpose or purposes for which the certification may
be made;

                   (iii) the form of certification and information to be
contained therein;

                   (iv)  if the certification is with respect to a record date,
the time after the

                                     - 24 -


record date within which the certification must be received by the Corporation;
and

                   (v)   such other provisions with respect to the procedure as
are deemed necessary or desirable.

     Upon receipt by the Corporation of a certification complying with the
procedure, the persons specified in the certification shall be deemed, for the
purposes set forth in the certification, to be the holders of record of the
number of shares specified in place of the shareholder making the certification.

     Section 5.4.  LOST SHARE CERTIFICATES. Unless waived in whole or in part by
the Board of Directors, any person requesting the issuance of a new certificate
in lieu of an alleged lost, destroyed, mislaid or wrongfully taken certificate
shall (a) give to the Corporation his or her bond of indemnity with an
acceptable surety, and (b) satisfy such other requirements as may be imposed by
the Corporation. Thereupon, a new share certificate shall be issued to the
registered owner or his or her assigns in lieu of the alleged lost, destroyed,
mislaid or wrongfully taken certificate, provided that the request therefor and
issuance thereof have been made before the Corporation has notice that such
shares have been acquired by a bona fide purchaser.

     Section 5.5.  CLOSING OF TRANSFER BOOKS. The stock transfer books of the
Corporation may, if deemed appropriate by the Board of Directors, be closed for
such length of time not exceeding fifty (50) days as the Board of Directors (but
not the shareholders) may determine, preceding the date of any meeting of
shareholders or the date for the payment of any dividend or the date for the
allotment of rights or the date when any issuance, change, conversion or
exchange of capital stock shall go into effect, during which time no transfer of
stock on the books of the Corporation may be made.

                                     - 25 -


     Section 5.6.  UNCERTIFICATED SHARES. Notwithstanding anything herein to the
contrary, any or all classes and series of shares, or any part thereof, may be
represented by uncertificated shares to the extent determined by the Board of
Directors, except that shares represented by a certificate that is issued and
outstanding shall continue to be represented thereby until the certificate is
surrendered to the Corporation. Within a reasonable time after the issuance or
transfer of uncertificated shares, the Corporation shall send to the registered
owner thereof, a written notice containing the information required to be set
forth or stated on certificates. The rights and obligations of the holders of
shares represented by certificates and the rights and obligations of the holders
of uncertificated shares of the same class and series shall be identical.
Notwithstanding anything herein to the contrary, the provisions of Section 5.2
shall be inapplicable to uncertificated shares and in lieu thereof the Board of
Directors shall adopt alternative procedures for registration of transfers.


                  ARTICLE VI - NOTICES - COMPUTING TIME PERIODS

     Section 6.1.  CONTENTS OF NOTICE. Whenever any notice of a meeting is
required to be given pursuant to these Bylaws, the Articles or otherwise, the
notice shall specify: (a) the place, date and time of the meeting; (b) in the
case of a special meeting of shareholders or where otherwise required by law or
the Bylaws, the general nature of the business to be transacted at such meeting;
and (c) any other information required by law.

     Section 6.2.  METHOD OF NOTICE. Whenever written notice is required to be
given to any person under the provisions of applicable law, the Articles or
these Bylaws, it may be given to the person either personally or by sending a
copy thereof by first class or express mail, postage prepaid, or by telegram
(with messenger service specified), telex or TWX (with answerback received) or
courier service, charges prepaid, or by facsimile transmission, to such person's

                                     - 26 -


address (or to such person's telex, TWX or telecopier number) appearing on the
books of the Corporation or, in the case of Directors, supplied by such Director
to the Corporation for the purpose of notice. If the notice is sent by mail,
telegraph or courier service, it shall be deemed to have been given to the
person entitled thereto when deposited in the United States mail or with a
telegraph office or courier service for delivery to that person or, in the case
of telex, TWX or facsimile, when dispatched. Except as otherwise provided
herein, or as otherwise directed by the Board of Directors, notices of meetings
may be given by, or at the direction of, the Secretary.

     Section 6.3.  COMPUTING TIME PERIODS.

          (a)      DAYS TO BE COUNTED. In computing the number of days for
purposes of these Bylaws, all days shall be counted, including Saturdays,
Sundays or a holiday on which national banks are or may elect to be closed
("Holiday"); provided, however, that if the final day of any time period
falls on a Saturday, Sunday or Holiday, then the final day shall be deemed to
be the next day which is not a Saturday, Sunday or Holiday. In computing the
number of days for the purpose of giving notice of any meeting, the date upon
which the notice is given shall be counted but the day set for the meeting
shall not be counted.

          (b)      ONE DAY-NOTICE. In any case where only one day's notice is
being given,. notice must be given at least 24 hours in advance of the date
and time specified for the meeting in question, by delivery in person,
telephone, telex, TWX, facsimile or similar means of communication.

     Section 6.4.  WAIVER OF NOTICE. Whenever any notice is required to be given
by law or the Articles or these Bylaws, a waiver thereof in writing, signed by
the person or persons entitled to the notice, whether before or after the time
stated therein, shall be deemed equivalent to the

                                     - 27 -


giving of the notice. Neither the business to be transacted at, nor the purpose
of, a meeting need be specified in the waiver of notice of the meeting.
Attendance of a person at any meeting shall constitute a waiver of notice of the
meeting except where a person attends a meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any business
because the meeting was not lawfully called or convened.

     Section 6.5.  MODIFICATION OF PROPOSAL CONTAINED IN NOTICE. Whenever the
language of a proposed resolution is included in a written notice of a meeting
required to be given under the provisions of the Pennsylvania BCL, the Articles
or these Bylaws, the meeting considering the resolution may, without further
notice, adopt it with such clarifying or other amendments as do not enlarge its
original purpose.

     Section 6.6.  BULK MAIL. If the Corporation has more than 30 shareholders,
notice of any regular or special meeting of the shareholders, or any other
notice required by the Pennsylvania BCL or by the Articles of these Bylaws to be
given to all shareholders or to all holders of a class or a series of shares,
may be given by any class of post-paid mail if the notice is deposited in the
United States mail at least 20 days prior to the day named for the meeting or
any corporate or shareholder action specified in the notice.

     Section 6.7.  SHAREHOLDER WITHOUT FORWARDING ADDRESSES. Notice or other
communications need not be sent to any shareholder with whom the Corporation has
been unable to communicate for more than 24 consecutive months because
communications to the shareholder are returned unclaimed or the shareholder has
otherwise failed to provide the Corporation with a current address. Whenever the
shareholder provides the Corporation with a current address, the Corporation
shall commence sending notices and other communications to the shareholder in
the same manner as to other shareholders.

                                     - 28 -


     ARTICLE VII - LIMITATION OF DIRECTORS' LIABILITY AND INDEMNIFICATION OF
                      DIRECTORS, OFFICERS AND OTHER PERSONS

     Section 7.1.  LIMITATION OF DIRECTORS' LIABILITY. No Director of the
Corporation shall be personally liable, as such, for monetary damages for any
action taken or any failure to take any action unless: (a) the Director has
breached or failed to perform the duties of his or her office under the
Pennsylvania BCL, and (b) the breach or failure to perform constitutes
self-dealing, willful misconduct or recklessness; provided, however, that the
provisions of this Section shall not apply to the responsibility or liability of
a Director pursuant to any criminal statute, or to the liability of a Director
for the payment of taxes pursuant to Federal, state or local law.

     Section 7.2.  INDEMNIFICATION AND INSURANCE.

          (a)      Indemnification of Directors and Officers.

                   (i)   Each Indemnitee (as defined below) shall be indemnified
and held harmless by the Corporation for all actions taken by him or her and for
all failures to take action (regardless of the date of any such action or
failure to take action) to the fullest extent permitted by Pennsylvania law
against all expense, liability and loss (including without limitation attorneys
fees, judgments, fines, taxes, penalties, and amounts paid or to be paid in
settlement) reasonably incurred by or imposed upon the Indemnitee in connection
with any Proceeding (as defined below). No indemnification pursuant to this
Section shall be made, however, in any case where the act or failure to act
giving rise to the claim for indemnification is determined by a court to have
constituted willful misconduct or recklessness.

                   (ii)  The right to indemnification provided in this Section
shall include the right to have the expenses incurred by the Indemnitee in
defending any Proceeding paid by the Corporation in advance of the final
disposition of the Proceeding to the fullest extent

                                     - 29 -


permitted by Pennsylvania law; provided that, if Pennsylvania law continues so
to require, the payment of such expenses incurred by the Indemnitee in advance
of the final disposition of a Proceeding shall be made only upon delivery to the
Corporation of an undertaking, by or on behalf of the Indemnitee, to repay all
amounts so advanced without interest if it shall ultimately be determined that
the Indemnitee is not entitled to be indemnified under this Section or
otherwise.

                   (iii) Indemnification pursuant to this Section shall continue
as to an Indemnitee who has ceased to be a Director or officer and shall inure
to the benefit of his or her heirs, executors and administrators.

                   (iv)  For purposes of this Article, (A) "Indemnitee" shall
mean each Director or officer of the Corporation (including, without limitation,
the Chairman Emeritus) who was or is a party to, or is threatened to be made a
party to, or is otherwise involved in, any Proceeding, by reason of the fact
that he or she is or was a representative of the Corporation or is or was
serving in any capacity at the request or for the benefit of the Corporation as
a representative of another corporation or any partnership, joint venture,
trust, employee benefit plan, or other enterprise; and (B) "Proceeding" shall
mean any threatened, pending or completed action, suit or proceeding (including
without limitation an action, suit or proceeding by or in the right of the
Corporation), whether civil, criminal, administrative, investigative or through
arbitration.

          (b)      INDEMNIFICATION OF EMPLOYEES AND OTHER PERSONA. The
Corporation may, by action of its Board of Directors and to the extent
provided in such action, indemnify employees and other persons as though they
were Indemnitees. To the extent that any

                                     - 30 -


such employee or agent of the Corporation has been successful on the merits
or otherwise in defense of any Proceeding or in defense of any claim, issue
or matter therein, the Corporation shall indemnify such person against
expenses (including attorneys' fees) actually and reasonably incurred by such
person in connection therewith.

          (c)      NON-EXCLUSIVITY OF RIGHTS. The rights to indemnification
and to the advancement of expenses provided in this Article shall not be
exclusive of any other rights that any person may have or hereafter acquire
under any statute, provision of the Articles or Bylaws, agreement, vote of
shareholders or Directors, or otherwise.

          (d)      INSURANCE. The Corporation may purchase and maintain
insurance, at its expense, for the benefit of any person on behalf of whom
insurance is permitted to be purchased by Pennsylvania law against any
expense, liability or loss, whether or not the Corporation would have the
power to indemnify such person under Pennsylvania or other law. The
Corporation may also purchase and maintain insurance to insure its
indemnification obligations whether arising hereunder or otherwise.

          (e)      FUND FOR PAYMENT OF EXPENSES. The Corporation may create a
fund of any nature, which may, but need not be, under the control of a
trustee, or otherwise may secure in any manner its indemnification
obligations, whether arising hereunder, under the Articles, by agreement,
vote of shareholders or Directors, or otherwise.

     Section 7.3.  AMENDMENT. The provisions of this Article VII relating to the
limitation of Directors' liability, to indemnification and to the advancement of
expenses shall constitute a contract between the Corporation and each of its
Directors and officers which may be modified as to any Director or officer in
respect of any act or omission occurring prior to the date of any such
modification only with that person's consent or as specifically provided in this
Section.

                                     - 31 -


Notwithstanding any other provision of these Bylaws relating to their amendment
generally, any repeal or amendment of this Article VII which is adverse to any
Director or officer shall apply to such Director or officer only on a
prospective basis, and shall not reduce any limitation on the personal liability
of a Director of the Corporation, or limit the rights of an Indemnitee to
indemnification or to the advancement of expenses with respect to any action or
failure to act occurring prior to the time of such repeal or amendment.
Notwithstanding any other provision of these Bylaws, no repeal or amendment of
these Bylaws shall affect any or all of this Article so as either to reduce the
limitation of Directors' liability or limit indemnification or the advancement
of expenses in any manner unless adopted by (a) the unanimous vote of the
Directors of the Corporation then serving, or (b) the affirmative vote of
shareholders entitled to cast not less than a majority of the votes that all
shareholders are entitled to cast in the election of Directors; provided that no
such amendment shall have retroactive effect inconsistent with the preceding
sentence.

     Section 7.4.  CHANGES IN PENNSYLVANIA LAW. References in this Article VII
to Pennsylvania law or to any provision thereof shall be to such law as it
existed on the date this Article VII was adopted or as such law thereafter may
be changed; provided that (a) in the case of any change which expands the
liability of Directors or limits the indemnification rights or the rights to
advancement of expenses which the Corporation may provide, the rights to limited
liability, to indemnification and to the advancement of expenses provided in
this Article shall continue as theretofore to the extent permitted by law; and
(b) if such change permits the Corporation without the requirement of any
further action by shareholders or Directors to limit further the liability of
Directors (or limit the liability of officers) or to provide broader
indemnification rights or rights to the advancement of expenses than the
Corporation was

                                     - 32 -


permitted to provide prior to such change, then liability thereupon shall be so
limited and the rights to indemnification and the advancement of expenses shall
be so broadened to the extent permitted by law.

                           ARTICLE VIII - FISCAL YEAR

     Section 8.1.  DETERMINATION OF FISCAL YEAR. The Board of Directors shall
have the power by resolution to fix the fiscal year of the Corporation. If the
Board of Directors shall fail to do so, the Chairman of the Board or, if there
be none, the President of the Corporation shall fix the fiscal year.

                             ARTICLE IX - AMENDMENTS

     Section 9.1.  Except as otherwise expressly provided in Section 7.3:

          (a)      SHAREHOLDERS. The shareholders entitled to vote thereon shall
     have the power to alter, amend, or repeal these Bylaws, by the vote of
     shareholders entitled to cast at least a majority of the votes which all
     shareholders are entitled to cast thereon, at any regular or special
     meeting, duly convened after notice to the shareholders of such purpose. In
     the case of a meeting of shareholders to amend or repeal these Bylaws,
     written notice shall be given to each shareholder that the purpose, or one
     of the purposes, of the meeting is to consider the adoption, amendment or
     repeal of the Bylaws.

          (b)      BOARD OF DIRECTORS. The Board of Directors (but not a
     committee thereof), by a vote of the majority of Directors then in office,
     shall have the power to alter, amend, and repeal these Bylaws, regardless
     of whether the shareholders have previously adopted the Bylaw being amended
     or repealed, subject to the power of the shareholders to change such
     action, provided that the Board of Directors shall not have the power to
     amend these

                                     - 33 -


Bylaws on any subject that is expressly committed to the shareholders by the
express terms hereof, by Section 1504 of the Pennsylvania BCL or otherwise.

               ARTICLE X - INTERPRETATION OF BYLAWS - SEPARABILITY

     Section 10.1. INTERPRETATION. All words, terms and provisions of these
Bylaws shall be interpreted and defined by and in accordance with the
Pennsylvania BCL. If any provision of these Bylaws shall be inconsistent with
any provision of the Articles, the provision of the Articles shall prevail.
Where any provision of these Bylaws refers to a rule or process as set forth in
these Bylaws, the reference shall be construed to include and be satisfied by
any rule or process on the same subject set forth in the Articles.

     Section 10.2. SEPARABILITY. The provisions of these Bylaws are independent
of and separable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that for any reason any other or
others of them may be invalid or unenforceable in whole or in part.


                    ARTICLE XI - DETERMINATIONS BY THE BOARD

     Section 11.1. EFFECT OF BOARD DETERMINATIONS. Any determination involving
interpretation or application of these Bylaws made in good faith by the Board of
Directors shall be final, binding and conclusive on all parties in interest.

                                     - 34 -

EX-31.1

                                                                    EXHIBIT 31.1

                           SECTION 302 CERTIFICATIONS


I, C. Richard Reese, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Iron Mountain
     Incorporated;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material fact or omit to state a material fact necessary to make the
     statements made, in light of the circumstances under which such statements
     were made, not misleading with respect to the period covered by this
     report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The registrant's other certifying officer(s) and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

          a.   Designed such disclosure controls and procedures, or caused such
               disclosure controls and procedures to be designed under our
               supervision, to ensure that material information relating to the
               registrant, including its consolidated subsidiaries, is made
               known to us by others within those entities, particularly during
               the period in which this report is being prepared;

          b.   Evaluated the effectiveness of the registrant's disclosure
               controls and procedures and presented in this report our
               conclusions about the effectiveness of the disclosure controls
               and procedures, as of the end of the period covered by this
               report based on such evaluation; and

          c.   Disclosed in this report any change in the registrant's internal
               control over financial reporting that occurred during the
               registrant's most recent fiscal quarter (the registrant's fourth
               fiscal quarter in the case of an annual report) that has
               materially affected, or is reasonably likely to materially
               affect, the registrant's internal control over financial
               reporting; and

5.   The registrant's other certifying officer(s) and I have disclosed, based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors (or persons performing the equivalent functions):



          a.   All significant deficiencies and material weaknesses in the
               design or operation of internal control over financial reporting
               which are reasonably likely to adversely affect the registrant's
               ability to record, process, summarize and report financial
               information; and

          b.   Any fraud, whether or not material, that involves management or
               other employees who have a significant role in the registrant's
               internal control over financial reporting.


Date: November 9, 2004


                                                    /s/ C. Richard Reese
                                                    --------------------
                                                    C. Richard Reese
                                                    Chief Executive Officer

EX-31.2

                                                                    EXHIBIT 31.2

                           SECTION 302 CERTIFICATIONS


I, John F. Kenny, Jr., certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Iron Mountain
     Incorporated;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material fact or omit to state a material fact necessary to make the
     statements made, in light of the circumstances under which such statements
     were made, not misleading with respect to the period covered by this
     report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The registrant's other certifying officer(s) and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

          a.   Designed such disclosure controls and procedures, or caused such
               disclosure controls and procedures to be designed under our
               supervision, to ensure that material information relating to the
               registrant, including its consolidated subsidiaries, is made
               known to us by others within those entities, particularly during
               the period in which this report is being prepared;

          b.   Evaluated the effectiveness of the registrant's disclosure
               controls and procedures and presented in this report our
               conclusions about the effectiveness of the disclosure controls
               and procedures, as of the end of the period covered by this
               report based on such evaluation; and

          c.   Disclosed in this report any change in the registrant's internal
               control over financial reporting that occurred during the
               registrant's most recent fiscal quarter (the registrant's fourth
               fiscal quarter in the case of an annual report) that has
               materially affected, or is reasonably likely to materially
               affect, the registrant's internal control over financial
               reporting; and

5.   The registrant's other certifying officer(s) and I have disclosed, based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors (or persons performing the equivalent functions):



          a.   All significant deficiencies and material weaknesses in the
               design or operation of internal control over financial reporting
               which are reasonably likely to adversely affect the registrant's
               ability to record, process, summarize and report financial
               information; and

          b.   Any fraud, whether or not material, that involves management or
               other employees who have a significant role in the registrant's
               internal control over financial reporting.


Date: November 9, 2004


                                                    /s/ John F. Kenny, Jr.
                                                    ----------------------
                                                    John F. Kenny, Jr.
                                                    Chief Financial Officer

EX-32.1

                                                                    EXHIBIT 32.1


                            CERTIFICATION PURSUANT TO
                 18 U.S.C. Section 1350, as adopted pursuant to
                  Section 906 of the Sarbanes-Oxley Act of 2002

          In connection with the filing of the Quarterly Report on Form 10-Q for
the quarter ended September 30, 2004 (the "Report") by Iron Mountain
Incorporated (the "Company"), the undersigned, as the Chief Executive Officer of
the Company, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my
knowledge:

          1. the Report fully complies with the requirements of Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934; and

          2. the information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.


Date: November 9, 2004


                                                    /s/ C. Richard Reese
                                                    --------------------
                                                    C. Richard Reese
                                                    Chief Executive Officer

EX-32.2

                                                                    EXHIBIT 32.2


                            CERTIFICATION PURSUANT TO
                 18 U.S.C. Section 1350, as adopted pursuant to
                  Section 906 of the Sarbanes-Oxley Act of 2002

          In connection with the filing of the Quarterly Report on Form 10-Q for
the quarter ended September 30, 2004 (the "Report") by Iron Mountain
Incorporated (the "Company"), the undersigned, as the Chief Financial Officer of
the Company, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my
knowledge:

          1. the Report fully complies with the requirements of Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934; and

          2. the information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.


Date: November 9, 2004


                                                     /s/ John F. Kenny, Jr.
                                                     ---------------------
                                                     John F. Kenny, Jr.
                                                     Chief Financial Officer