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

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 a large accelerated filer, an accelerated filer, a non-accelerated filer or a small reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

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

Number of shares of the registrant's Common Stock at August 1, 2008: 201,539,910



PART I—FINANCIAL INFORMATION
Item 1—Unaudited Consolidated Financial Statements
	Consolidated Balance Sheets at December 31, 2007 and June 30, 2008 (Unaudited)	3
	Consolidated Statements of Operations for the Three Months Ended June 30, 2007 and 2008 (Unaudited)	4
	Consolidated Statements of Operations for the Six Months Ended June 30, 2007 and 2008 (Unaudited)	5
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2007 and 2008 (Unaudited)	6
	Notes to Consolidated Financial Statements (Unaudited)	7
Item 2—Management's Discussion and Analysis of Financial Condition and Results of Operations		37
Item 4—Controls and Procedures		53
PART II—OTHER INFORMATION
Item 1A—Risk Factors		54
Item 2—Unregistered Sales of Equity Securities and Use of Proceeds		54
Item 4—Submission of Matters to a Vote of Security Holders		54
Item 6—Exhibits		55
Signatures		56

IRON MOUNTAIN INCORPORATED

CONSOLIDATED BALANCE SHEETS

(In Thousands, except Share and Per Share Data)

(Unaudited)

			December 31, 2007			June 30, 2008

ASSETS
Current Assets:
	Cash and cash equivalents		$	125,607		$	203,197
	Accounts receivable (less allowances of $19,246 and $19,954, respectively)			564,049			603,419
	Deferred income taxes			41,465			57,773
	Prepaid expenses and other			91,275			90,760

		Total Current Assets		822,396			955,149
Property, Plant and Equipment:
	Property, plant and equipment			3,522,525			3,672,255
	Less—Accumulated depreciation			(1,186,564	)		(1,300,916	)

		Net Property, Plant and Equipment		2,335,961			2,371,339
Other Assets, net:
	Goodwill			2,574,292			2,583,428
	Customer relationships and acquisition costs			480,403			499,237
	Deferred financing costs			34,030			36,369
	Other			60,839			63,088

		Total Other Assets, net		3,149,564			3,182,122

		Total Assets	$	6,307,921		$	6,508,610

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
	Current portion of long-term debt		$	33,440		$	98,839
	Accounts payable			208,672			147,441
	Accrued expenses			329,221			311,648
	Deferred revenue			194,344			197,680

		Total Current Liabilities		765,677			755,608
Long-term Debt, net of current portion				3,232,848			3,318,950
Other Long-term Liabilities				89,990			104,855
Deferred Rent				63,636			69,108
Deferred Income Taxes				351,226			355,477
Commitments and Contingencies (see Note 9)
Minority Interests				9,089			4,270
Stockholders' Equity:
	Preferred stock (par value $0.01; authorized 10,000,000 shares; none issued and outstanding)			—			—
	Common stock (par value $0.01; authorized 400,000,000 shares; issued and outstanding 200,693,217 shares and 201,455,398 shares, respectively)			2,007			2,014
	Additional paid-in capital			1,209,512			1,233,579
	Retained earnings			509,875			579,243
	Accumulated other comprehensive items, net			74,061			85,506

		Total Stockholders' Equity		1,795,455			1,900,342

		Total Liabilities and Stockholders' Equity	$	6,307,921		$	6,508,610

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

IRON MOUNTAIN INCORPORATED

CONSOLIDATED STATEMENTS OF OPERATIONS

(In Thousands, except Per Share Data)

(Unaudited)

			Three Months Ended June 30,

			2007			2008
Revenues:
	Storage		$	368,679		$	416,195
	Service and storage material sales			300,010			352,662

		Total Revenues		668,689			768,857
Operating Expenses:
	Cost of sales (excluding depreciation and amortization)			307,963			346,971
	Selling, general and administrative			188,845			225,932
	Depreciation and amortization			60,290			72,907
	Loss (Gain) on disposal/writedown of property, plant and equipment, net			357			(839	)

		Total Operating Expenses		557,455			644,971
Operating Income				111,234			123,886
Interest Expense, Net				61,222			59,757
Other (Income) Expense, Net				(3,235	)		3,532

		Income Before Provision for Income Taxes and Minority Interest		53,247			60,597
Provision for Income Taxes				14,024			24,859
Minority Interests in Earnings (Losses) of Subsidiaries, Net				171			(148	)

		Net Income	$	39,052		$	35,886

Net Income per Share—Basic			$	0.20		$	0.18

Net Income per Share—Diluted			$	0.19		$	0.18

Weighted Average Common Shares Outstanding—Basic				199,792			200,855

Weighted Average Common Shares Outstanding—Diluted				201,742			203,038

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

IRON MOUNTAIN INCORPORATED

CONSOLIDATED STATEMENTS OF OPERATIONS

(In Thousands, except Per Share Data)

(Unaudited)

			Six Months Ended June 30,

			2007			2008
Revenues:
	Storage		$	720,844		$	820,512
	Service and storage material sales			580,357			697,729

		Total Revenues		1,301,201			1,518,241
Operating Expenses:
	Cost of sales (excluding depreciation and amortization)			602,968			694,722
	Selling, general and administrative			369,350			448,160
	Depreciation and amortization			117,462			142,437
	Loss on disposal/writedown of property, plant and equipment, net			394			2,706

		Total Operating Expenses		1,090,174			1,288,025
Operating Income				211,027			230,216
Interest Expense, Net				111,557			119,776
Other Income, Net				(10,958	)		(2,503	)

		Income Before Provision for Income Taxes and Minority Interest		110,428			112,943
Provision for Income Taxes				36,107			43,131
Minority Interests in Earnings of Subsidiaries, Net				562			444

		Net Income	$	73,759		$	69,368

Net Income per Share—Basic			$	0.37		$	0.35

Net Income per Share—Diluted			$	0.37		$	0.34

Weighted Average Common Shares Outstanding—Basic				199,511			200,863

Weighted Average Common Shares Outstanding—Diluted				201,579			203,229

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

IRON MOUNTAIN INCORPORATED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

(Unaudited)

		Six Months Ended June 30,

		2007			2008
Cash Flows from Operating Activities:
	Net income	$	73,759		$	69,368
Adjustments to reconcile net income to cash flows from operating activities:
	Minority interests in earnings of subsidiaries, net		562			444
	Depreciation		105,955			125,043
	Amortization (includes deferred financing costs and bond discount of $2,968 and $2,438, respectively)		14,475			19,832
	Stock compensation expense		5,806			9,835
	Provision for deferred income taxes		18,501			11,179
	Loss on early extinguishment of debt		5,743			345
	Loss on disposal/writedown of property, plant and equipment, net		394			2,706
	Gain on foreign currency and other, net		(1,816	)		(2,459	)
Changes in Assets and Liabilities (exclusive of acquisitions):
	Accounts receivable		(19,789	)		(40,176	)
	Prepaid expenses and other current assets		3,823			7,972
	Accounts payable		(7,209	)		(23,552	)
	Accrued expenses, deferred revenue and other current liabilities		2,377			5,103
	Other assets and long-term liabilities		4,182			3,993

	Cash Flows from Operating Activities		206,763			189,633
Cash Flows from Investing Activities:
	Capital expenditures		(166,787	)		(174,130	)
	Cash paid for acquisitions, net of cash acquired		(263,852	)		(46,318	)
	Additions to customer relationship and acquisition costs		(8,788	)		(6,639	)
	Investment in joint ventures		—			(1,709	)
	Proceeds from sales of property and equipment and other, net		8,107			26

	Cash Flows from Investing Activities		(431,320	)		(228,770	)
Cash Flows from Financing Activities:
	Repayment of revolving credit and term loan facilities and other debt		(1,396,457	)		(753,936	)
	Proceeds from revolving credit and term loan facilities and other debt		1,221,663			562,718
	Net proceeds from sales of senior subordinated notes		435,818			295,500
	Debt financing (repayment to) and equity contribution from (distribution to) minority stockholders, net		(478	)		384
	Proceeds from exercise of stock options and employee stock purchase plan		12,309			9,940
	Excess tax benefits from stock-based compensation		3,924			4,146
	Payment of debt financing costs		(5,485	)		(763	)

	Cash Flows from Financing Activities		271,294			117,989
Effect of Exchange Rates on Cash and Cash Equivalents			2,858			(1,262	)

Increase in Cash and Cash Equivalents			49,595			77,590
Cash and Cash Equivalents, Beginning of Period			45,369			125,607

Cash and Cash Equivalents, End of Period		$	94,964		$	203,197

Supplemental Data:
Cash Paid for Interest		$	100,297		$	117,634

Cash Paid for Income Taxes		$	11,775		$	25,876

Non-Cash Investing Activities:
	Capital Leases	$	—		$	23,393

	Capital Expenditures	$	27,543		$	22,993

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

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Share and Per Share Data)

(Unaudited)

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, 2007 has been derived from our audited consolidated financial statements. 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 of America ("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 annual consolidated financial statements and notes for the year ended December 31, 2007 included in our Annual Report on Form 10-K dated February 29, 2008.

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 intercompany account balances have been eliminated or presented to reflect the underlying economics of the transactions.

Local currencies are considered the functional currencies for our operations outside the United States, with the exception of certain foreign holding companies, whose functional currency is the U.S. dollar. 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 stockholders' equity. The gain or loss on foreign currency transactions, calculated as the difference between the historical exchange rate and the exchange rate at the applicable measurement date, including those related to (a) our 7¹/4% GBP Senior Subordinated Notes due 2014, (b) our 6³/4% Euro Senior Subordinated Notes due 2018, (c) the borrowings in certain foreign currencies under our revolving credit agreements, and (d) certain foreign currency denominated intercompany obligations of our foreign subsidiaries to us and between our foreign subsidiaries, are included in other expense (income), net, on our consolidated statements of operations. We recorded a net gain of $3,947 and $3,994 for the three and six months ended June 30, 2007, respectively. We recorded a net loss of $3,293 and a net gain of $2,638 for the three and six months ended June 30, 2008, respectively.

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 annual goodwill impairment review as of October 1, 2007 and noted no impairment of goodwill. In making this assessment, we rely on a number of factors including operating results, business plans, economic projections, anticipated future cash flows, transactions and market place data. There are inherent uncertainties related to these factors and our judgment in applying them to the analysis of goodwill impairment. As of June 30, 2008, no factors were identified that would alter this assessment. When changes occur in the composition of one or more reporting units, the goodwill is reassigned to the reporting units affected based on their relative fair value. Our reporting units at which level we performed our goodwill impairment analysis as of October 1, 2007 were as follows: North America (excluding Fulfillment), Fulfillment, U.K., Continental Europe, Worldwide Digital Business (excluding Iron Mountain Intellectual Property Management, Inc. ("IPM")), IPM, South America, Mexico and Asia Pacific.

Goodwill valuations have been calculated using an income approach based on the present value of future cash flows of each reporting unit. This approach incorporates many assumptions including future growth rates, discount factors, expected capital expenditures and income tax cash flows. Changes in economic and operating conditions impacting these assumptions could result in goodwill impairments in future periods.

The changes in the carrying value of goodwill attributable to each reportable operating segment for the six month period ended June 30, 2008 are as follows:

The components of our amortizable intangible assets at June 30, 2008 are as follows:

We adopted SFAS No. 123R, "Share-Based Payment," ("SFAS No. 123R") effective January 1, 2006 using the modified prospective method. We record stock-based compensation expense, utilizing the straight-line method, for the cost of stock options and restricted stock (together, "Employee Stock-Based Awards").

Stock-based compensation expense, included in the accompanying consolidated statements of operations, for the three and six months ended June 30, 2007 was $3,330 ($2,533 after tax, or $0.01 per basic and diluted share) and $5,806 ($4,463 after tax, or $0.02 per basic and diluted share), respectively, and for the three and six months ended June 30, 2008 was $4,828 ($3,856 after tax, or $0.02 per basic and diluted share) and $9,835 ($7,757 after tax, or $0.04 per basic and diluted share), respectively, for Employee Stock-Based Awards.

SFAS No. 123R requires that the benefits associated with the tax deductions in excess of recognized compensation cost be reported as a financing cash flow. This requirement reduces reported operating cash flows and increases reported financing cash flows. As a result, net financing cash flows included $3,924 and $4,146 for the six months ended June 30, 2007 and 2008, respectively, from the benefits of tax deductions in excess of recognized compensation cost. We used the short form method to calculate the Additional Paid-in Capital ("APIC") pool. The tax benefit of any resulting excess tax deduction increases the APIC pool. Any resulting tax deficiency is deducted from the APIC pool.

Under our various stock option plans, options were granted with exercise prices equal to the market price of the stock on the date of grant. The majority of our options become exercisable ratably over a period of five years and generally have a contractual life of 10 years, unless the holder's employment is terminated. Beginning in 2007, certain of the options we issue become exercisable ratably over a period of ten years and have a contractual life of 12 years, unless the holder's employment is terminated. As of June 30, 2008, 10-year vesting options represent 11.5% of total outstanding options. Our directors are considered employees under the provisions of SFAS No. 123R.

The weighted average fair value of options granted for the six months ended June 30, 2007 and 2008 was $10.29 and $10.22 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:

Expected volatility was calculated utilizing daily historical volatility over a period that equates to the expected life of the option. The risk-free interest rate was based on the U.S. Treasury interest rates whose term is consistent with the expected life of the stock options. Expected dividend yield was not considered in the option pricing model since we do not pay dividends and have no current plans to do so in the future. The expected life (estimated period of time outstanding) of the stock options granted was estimated using the historical exercise behavior of employees.

A summary of option activity for the six months ended June 30, 2008 is as follows:

The aggregate intrinsic value of stock options exercised during the three and six months ended June 30, 2007 was approximately $5,507 and $12,673, respectively. The aggregate intrinsic value of stock options exercised during the three and six months ended June 30, 2008 was approximately $6,190 and $12,746, respectively. The aggregate fair value of stock options vested during the three and six months ended June 30, 2007 was approximately $3,245 and $5,230, respectively. The aggregate fair value of stock options vested during the three and six months ended June 30, 2008 was approximately $5,406 and $12,316, respectively.

Under our various stock option plans, we may also issue grants of restricted stock. We granted restricted stock in July 2005, which had a 3-year vesting period, and December 2006 and December 2007, which had a 5-year vesting period. The fair value of restricted stock is the excess of the market price of our common stock at the date of grant over the exercise price, which is zero. Included in our stock-based compensation expense for the six months ended June 30, 2007 and 2008 is a portion of the cost related to restricted stock granted in July 2005, December 2006 and December 2007.

A summary of restricted stock activity for the six months ended June 30, 2008 is as follows:

The total fair value of shares vested for the three and six months ended June 30, 2007 was $600 and $845, respectively. The total fair value of shares vested for the three and six months ended June 30, 2008 was $657.

We offer an employee stock purchase plan in which participation is available to substantially all U.S. and Canadian employees who meet certain service eligibility requirements (the "ESPP"). The ESPP provides a way for our eligible employees to become stockholders on favorable terms. The ESPP provides for the purchase of our common stock by eligible employees through successive offering periods. We generally have two 6-month offering periods, the first of which begins June 1 and ends November 30 and the second begins December 1 and ends May 31. During each offering period, participating employees accumulate after-tax payroll contributions, up to a maximum of 15% of their compensation, to pay the exercise price of their options. Participating employees may withdraw from an offering period before the purchase date and obtain a refund of the amounts withheld as payroll deductions. At the end of the offering period, outstanding options are exercised, and each employee's accumulated contributions are used to purchase our common stock. The price for shares purchased under the ESPP is 95% of the fair market price at the end of the offering period, without a look back feature. As a result, we recognize no compensation cost for this plan. The ESPP was amended and approved by our stockholders on May 26, 2005 to increase the number of shares from 1,687,500 to 3,487,500. For the six months ended June 30, 2007 and 2008, there were 170,655 shares and

157,514 shares, respectively, purchased under the ESPP. The number of shares available for purchase at June 30, 2008 was 1,218,018.

As of June 30, 2008, unrecognized compensation cost related to the unvested portion of our Employee Stock-Based Awards was $69,229 and is expected to be recognized over a weighted-average period of 4.8 years.

We generally issue shares for the exercises of stock options, issuance of restricted stock and issuance of shares under our ESPP from unissued reserved shares.

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 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.

The following table presents the calculation of basic and diluted net income per share:

	Three Months Ended June 30,				Six Months Ended June 30,

	2007		2008		2007		2008
Net income	$	39,052	$	35,886	$	73,759	$	69,368

Weighted-average shares—basic		199,792,000		200,855,000		199,511,000		200,863,000
Effect of dilutive potential stock options		1,942,665		2,179,402		2,052,027		2,354,163
Effect of dilutive potential restricted stock		7,408		3,098		15,970		12,175

Weighted-average shares—diluted		201,742,073		203,037,500		201,578,997		203,229,338

Net income per share—basic	$	0.20	$	0.18	$	0.37	$	0.35

Net income per share—diluted	$	0.19	$	0.18	$	0.37	$	0.34

Antidilutive stock options, excluded from the calculation		5,075,715		1,416,508		3,160,162		911,568

Our revenues consist of storage revenues as well as service and storage material sales revenues. Storage revenues consist of periodic charges related to the storage of materials or data (generally on a per unit basis). Service and storage material sales revenues are comprised of charges for related service activities and courier operations and the sale of software licenses and storage materials. Included in service and storage materials sales are related core service revenues arising from: (a) the handling of records including the addition of new records, temporary removal of records from storage, refiling of removed records, destruction of records, and permanent withdrawals from storage; (b) courier operations, consisting primarily of the pickup and delivery of records upon customer request; (c) secure

shredding of sensitive documents; and (d) other recurring services including maintenance and support contracts. Our complementary services revenues, included in service and storage material sales, arise from special project work, including data restoration, providing fulfillment services, consulting services and product sales, including software licenses, specially designed storage containers, magnetic media including computer tapes and related supplies.

We recognize revenue when the following criteria are met: persuasive evidence of an arrangement exists, services have been rendered, the sales price is fixed or determinable, and collectability of the resulting receivable is reasonably assured. Storage and service revenues are recognized in the month the respective storage or service is provided and customers are generally billed on a monthly basis on contractually agreed-upon terms. Amounts related to future storage or prepaid service contracts, including maintenance and support contracts, for customers where storage fees or services are billed in advance are accounted for as deferred revenue and recognized ratably over the applicable storage or service period or when the service is performed. Storage material sales are recognized when shipped to the customer (as title has passed to the customer) and include software license sales. Sales of software licenses to distributors are recognized at the time a distributor reports that the software has been licensed to an end-user and all revenue recognition criteria have been satisfied.

We maintain an allowance for doubtful accounts and credit memos for estimated losses resulting from the potential inability of our customers to make required payments and disputes regarding billing and service issues. When calculating the allowance, we consider our past loss experience, current and prior trends in our aged receivables and credit memo activity, current economic conditions, and specific circumstances of individual receivable balances. We consider accounts receivable to be delinquent after such time as reasonable means of collection have been exhausted. We charge-off uncollectible balances as circumstances warrant, generally, no later than one year past due.

Our effective tax rates for the three and six months ended June 30, 2007 were 26.3% and 32.7%, respectively. Our effective tax rates for the three and six months ended June 30, 2008 were 41.0% and 38.2%, respectively. We provide for income taxes during interim periods based on our estimate of the effective tax rate for the year. Discrete items and changes in our estimate of the annual effective tax rate are recorded in the period they occur.

We account for income taxes in accordance with SFAS No. 109, "Accounting for Income Taxes" ("SFAS No. 109"), which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the tax and financial reporting basis of assets and liabilities and for loss and credit carryforwards. Valuation allowances are provided when recovery of deferred tax assets is not considered more likely than not.

We have elected to recognize interest and penalties associated with uncertain tax positions as a component of the provision for income taxes in the accompanying consolidated statements of operations. We recorded $657 and $1,313 for interest and penalties for the three and six months ended

June 30, 2007, respectively. We recorded $1,139 and $1,625 for interest and penalties for the three and six months ended June 30, 2008, respectively.

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" ("SFAS No. 157"). SFAS No. 157 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles in the United States and expands disclosures about fair value measurements. SFAS No. 157 applies under other accounting pronouncements that require or permit fair value measurements, and is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. Under SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities—Including an amendment of FASB Statement No. 115" ("SFAS No. 159"), entities are permitted to choose to measure many financial instruments and certain other items at fair value that previously were not required to be measured at fair value. We did not elect the fair value measurement option under SFAS No. 159 for any of these financial assets or liabilities.

Relative to SFAS No. 157, the FASB issued FASB Staff Positions 157-1 ("FSP 157-1") and 157-2 ("FSP 157-2"). FSP 157-1 amends SFAS No. 157 to exclude SFAS No. 13, "Accounting for Leases," and its related interpretive accounting pronouncements that address leasing transactions, while FSP 157-2 delays the effective date of the application of SFAS No. 157 to fiscal years beginning after November 15, 2008 for all non-financial assets and non-financial liabilities that are recognized or disclosed at fair value in the financial statements on a non-recurring basis.

We adopted SFAS No. 157 on January 1, 2008, with the exception of the application of the statement to non-financial assets and non-financial liabilities. Although the adoption of SFAS No. 157 did not impact our financial condition, results of operations, or cash flows, we are now required to provide additional disclosures as part of our financial statements. Non-financial assets and non-financial liabilities for which we have not applied the provisions of SFAS No. 157 include those measured at fair value in goodwill impairment testing, asset retirement obligations initially measured at fair value and those initially measured at fair value in business combinations. We have various financial instruments that must be measured under the new fair value standard including certain marketable securities and derivatives. We currently do not have non-financial assets and non-financial liabilities that are required to be measured at fair value on a recurring basis. Our financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy. A financial asset or liability's classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The three levels are as follows:

Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access at the measurement date.

Level 2—Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and

inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

Level 3—Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.

The following table provides the assets and liabilities carried at fair value measured on a recurring basis as of June 30, 2008:

In December 2007, the FASB issued SFAS No. 141(R), "Business Combinations" ("SFAS No. 141R"), and SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statement—an amendment to ARB No. 51" ("SFAS No. 160"). SFAS No. 141R and SFAS No. 160 will require (a) more of the assets acquired and liabilities assumed to be measured at fair value as of the acquisition date, (b) liabilities related to contingent consideration to be remeasured at fair value in each subsequent period, (c) an acquirer to expense as incurred acquisition-related costs, such as transaction fees for attorneys, accountants and investment bankers, as well as, costs associated with restructuring the activities of the acquired company, and (d) noncontrolling interests in subsidiaries initially to be measured at fair value and classified as a separate component of equity. SFAS No. 141R is effective and provided for prospective application for fiscal years beginning after December 15, 2008. SFAS No. 160 is required to apply retrospectively in comparative financial statements for fiscal years beginning after December 15, 2008. The impact of SFAS No. 141R and SFAS No. 160 is dependent upon the level of future acquisitions; however, they will generally result in (1) increased operating costs associated with the expensing of transaction and restructuring costs, as incurred, (2) increased volatility in earnings related to the fair valuing of contingent consideration through earnings in subsequent periods, and (3) increased depreciation, amortization and equity balances associated with the fair valuing of noncontrolling interests and their classification as a separate component of consolidated stockholders' equity.

regarding how: (a) an entity uses derivative instruments; (b) derivative instruments and related hedged items are accounted for under SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS No. 133"); and (c) derivative instruments and related hedged items affect an entity's financial position, financial performance, and cash flows. Specifically, SFAS No. 161 requires:

SFAS No. 161 is effective for fiscal years and interim periods beginning after November 15, 2008 and early adoption is permitted. We do not expect the adoption of SFAS No. 161 to have a material impact on our disclosures.

In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles ("SFAS No. 162"). SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with GAAP (the "GAAP hierarchy"). SFAS No. 162 makes the GAAP hierarchy explicitly and directly applicable to preparers of financial statements, a step that recognizes preparers' responsibilities for selecting the accounting principles for their financial statements, and sets the stage for making the framework of the FASB Concept Statements fully authoritative. The effective date for SFAS No. 162 is 60 days following the SEC's approval of the Public Company Accounting Oversight Board's related amendments to remove the GAAP hierarchy from auditing standards, where it has resided for some time. We do not expect the adoption of SFAS No. 162 to have a material impact on our financial statements and results of operations.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 accounting for acquisitions, allowance for doubtful accounts and credit memos, impairments of tangible and intangible assets, income taxes, stock-based compensation and self-insured liabilities. 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. Actual results may differ from these estimates.

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:

SFAS No. 133 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 which are subject to foreign 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 hedged 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 business, thereby preserving our long term returns on invested capital. We target approximately 75% of our debt portfolio to be fixed with respect to interest rates. Occasionally, we will use 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, while we arrange permanent financing or to hedge our exposures due to foreign currency exchange movements related to our intercompany accounts with and between our foreign subsidiaries.

In June 2006, IME entered into a floating for fixed interest rate swap contract with a notional value of 75,000 British pounds sterling and was designated as a cash flow hedge. This swap agreement hedged interest rate risk on IME's British pounds multi-currency term loan facility. The notional value of the swap declined to 60,000 British pounds sterling in March 2007 to match the remaining term loan amount outstanding as of that date and was terminated in the second quarter of 2007. For the three and six months ended June 30, 2007, we recorded additional interest expense of $108 and interest

income of $799, respectively, resulting from interest rate swap cash settlements and changes in fair value.

In September 2006, we entered into a forward contract program to exchange U.S. dollars for 55,000 in Australian dollars ("AUD") and 20,200 in New Zealand dollars ("NZD") to hedge our intercompany exposure in these countries. These forward contracts settle on a monthly basis, at which time we enter into new forward contracts for the same underlying AUD and NZD amounts, to continue to hedge movements in AUD and NZD against the U.S. dollar. At the time of settlement, we either pay or receive the net settlement amount from the forward contract and recognize this amount in other expense (income), net in the accompanying statement of operations as a realized foreign exchange gain or loss. We have not designated these forward contracts as hedges. These forward contracts were not renewed in the third quarter of 2007. We recorded a realized loss in connection with these forward contracts of $2,768 and $4,629 for the three and six months ended June 30, 2007, respectively. At the end of each month, we mark the outstanding forward contracts to market and record an unrealized foreign exchange gain or loss for the mark-to-market valuation. For the six months ended June 30, 2007, we recorded an unrealized foreign exchange loss of $702 in other (income) expense, net in the accompanying statement of operations.

In January 2007, we entered into forward contracts to exchange 124,368 U.S. dollars for 96,000 Euros and 194,000 Canadian dollars ("CAD") for 127,500 Euros to hedge our intercompany exposures with Canada and our subsidiaries whose functional currency is the Euro. In March 2007, in conjunction with the issuance of CAD denominated senior subordinated notes, the CAD for Euro swap was not renewed and was replaced with additional U.S. for Euro swaps. These forward contracts were not renewed in the third quarter of 2007. In May 2007, we entered into forward contracts to exchange 146,096 U.S. dollars for 73,600 in British pounds sterling to hedge our intercompany exposures with IME. These forward contracts settle on a monthly basis, at which time we may enter into new forward contracts for the same underlying amounts to continue to hedge movements in the underlying currencies. At the time of settlement, we either pay or receive the net settlement amount from the forward contract and recognize this amount in other expense (income), net in the accompanying statement of operations as a realized foreign exchange gain or loss. We have not designated these forward contracts as hedges. We recorded a realized gain in connection with these forward contracts of $337 and $7,722 for the three and six months ended June 30, 2007, respectively. We recorded a realized loss in connection with these forward contracts of $876 and a realized gain of $559 for the three and six months ended June 30, 2008, respectively. At the end of each month, we mark the outstanding forward contracts to market and record an unrealized foreign exchange gain or loss for the mark-to-market valuation. For the six months ended June 30, 2007 and 2008, we recorded an unrealized foreign exchange loss of $168 and $1,151, respectively, in other (income) expense, net in the accompanying statement of operations.

In the third quarter of 2007, we designated a portion of our 6³/4% Euro Senior Subordinated Notes due 2018 issued by Iron Mountain Incorporated ("IMI") as a hedge of net investment of certain of our Euro denominated subsidiaries. As a result, we recorded foreign exchange gains of $18 ($12, net of tax) and foreign exchange losses of $18,850 ($12,064, net of tax) of related to the mark to marking of such debt to currency translation adjustments which is a component of accumulated other comprehensive

items, net included in stockholders' equity for the three and six months ended June 30, 2008, respectively.

We account for acquisitions 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 2008 acquisitions was primarily provided through borrowings under our credit facilities, issuance of senior subordinated notes and cash equivalents on-hand. The unaudited pro forma results of operations for the period ended June 30, 2008 are not presented due to the insignificant impact of the 2008 acquisitions on our consolidated results of operations.

A summary of the consideration paid for acquisitions in 2008 and the allocation of the purchase price is as follows:


Cash Paid (gross of cash acquired)(1)		$	45,308
Fair Value of Identifiable Net Assets Acquired:
	Cash, Accounts Receivable, Prepaid Expenses and Other		1,444
	Property, Plant and Equipment		3,394
	Customer Relationship Assets(2)		23,910
	Core Technology		—
	Other Assets		504
	Liabilities Assumed(3)		(1,153	)
	Minority Interest(4)		4,489

	Total Fair Value of Identifiable Net Assets Acquired		32,588

Recorded Goodwill		$	12,720

Allocation of the purchase price for the 2008 acquisitions was based on estimates of the fair value of net assets acquired, and is subject to adjustment. The purchase price allocations of certain 2007 and 2008 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, deferred revenue 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 provided in accordance with EITF 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 June 30, 2008 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:

At June 30, 2008, the restructuring reserves related to acquisitions consisted of lease losses on abandoned facilities ($7,992), severance costs ($110), and other exit costs ($1,607). These accruals are expected to be used prior to June 30, 2009, except for lease losses of $7,172, severance costs of $77, and other exit costs of $99, all of which are based on contracts that extend beyond one year.

	December 31, 2007					June 30, 2008

	Carrying Amount			Fair Value		Carrying Amount			Fair Value
New Revolving Credit Facility(1)	$	394,156		$	394,156	$	210,870		$	210,870
New Term Loan Facility(1)		408,500			408,500		406,450			406,450
8¹/4% Senior Subordinated Notes due 2011(2)(3)		71,809			71,790		71,881			71,701
8⁵/8% Senior Subordinated Notes due 2013(2)(3)		447,981			453,844		447,971			450,113
7¹/4% GBP Senior Subordinated Notes due 2014(2)(3)		299,595			281,619		299,310			263,393
7³/4% Senior Subordinated Notes due 2015(2)(3)		437,680			437,366		437,225			429,099
6⁵/8% Senior Subordinated Notes due 2016(2)(3)		316,047			302,534		316,294			299,200
7¹/2% CAD Senior Subordinated Notes due 2017 (the "Subsidiary Notes")(2)(4)		178,395			172,151		173,250			168,053
8³/4% Senior Subordinated Notes due 2018(2)(3)		200,000			210,750		200,000			206,000
8% Senior Subordinated Notes due 2018(2)(3)		49,692			50,000		49,706			49,625
6³/4% Euro Senior Subordinated Notes due 2018(2)(3)		372,719			353,054		400,140			354,530
8% Senior Subordinated Notes due 2020(2)(3)		—			—		300,000			295,500
Real Estate Mortgages(5)		7,381			7,381		7,151			7,151
Seller Notes(5)		8,329			8,329		8,201			8,201
Other(5)		74,004			74,004		89,340			89,340

Total Long-term Debt		3,266,288					3,417,789
Less Current Portion		(33,440	)				(98,839	)

Long-term Debt, Net of Current Portion	$	3,232,848				$	3,318,950

We recorded a charge to other expense (income), net of $1,721 in the first quarter of 2007 related to the early retirement of a portion of the IMI term loans, representing the write-off of a portion of our deferred financing costs.

On April 16, 2007, we entered into a new credit agreement (the "New Credit Agreement") to replace both the IMI revolving credit and term loan facilities of $750,000 and the IME revolving credit and term loan facilities of 200,000 British pounds sterling. On November 9, 2007, we increased the aggregate amount available to be borrowed under the New Credit Agreement from $900,000 to $1,200,000. The New Credit Agreement consists of revolving credit facilities, where we can borrow, subject to certain limitations as defined in the New Credit Agreement, up to an aggregate amount of $790,000 (including Canadian dollar and multi-currency revolving credit facilities) (the "new revolving credit facility"), and a $410,000 term loan facility (the "new term loan facility"). Our subsidiaries, Canada Company and Iron Mountain Switzerland GmbH, may borrow directly under the Canadian revolving credit and multi-currency revolving credit facilities, respectively. Additional subsidiary borrowers may be added under the multi-currency revolving credit facility. The new revolving credit facility terminates on April 16, 2012. With respect to the new term loan facility, quarterly loan payments of approximately $1,000 are required through maturity on April 16, 2014, at which time the remaining outstanding principal balance of the new term loan facility is due. The interest rate on borrowings under the New Credit Agreement varies depending on our choice of interest rate and currency options, plus an applicable margin. IMI guarantees the obligations of each of the subsidiary borrowers under the New Credit Agreement, and substantially all of our U.S. subsidiaries guarantee the obligations of IMI and the subsidiary borrowers. The capital stock or other equity interests of most of our U.S. subsidiaries, and up to 66% of the capital stock or other equity interests of our first tier foreign subsidiaries, are pledged to secure the New Credit Agreement, together with all intercompany obligations of foreign subsidiaries owed to us or to one of our U.S. subsidiary guarantors. We recorded a charge to other expense (income), net of approximately $5,703 in the first six months of 2007 related to the early retirement of the IMI and IME revolving credit facilities and term loans, representing the write-off of deferred financing costs. As of June 30, 2008, we had $210,870 of outstanding borrowings under the new revolving credit facility, which was denominated in CAD 213,000; we also had various outstanding letters of credit totaling $36,956. The remaining availability, based on IMI's leverage ratio, which is calculated based on the last 12 months' earnings before interest, taxes, depreciation and amortization ("EBITDA"), and other adjustments as defined in the New Credit Agreement and current external debt, under the new revolving credit facility on June 30, 2008, was $542,174. The interest rate in effect under the new revolving credit facility and new term loan facility were approximately 5.3% and 4.2%, respectively, as of June 30, 2008. For the three and six months ended June 30, 2007, we recorded commitment fees of $336 and $786, respectively, and for the three and six months ended June 30, 2008, we recorded commitment fees of $300 and $643, respectively, based on the unused balances under our revolving credit facilities.

In June 2008, we completed an underwritten public offering of $300,000 in aggregate principal amount of our 8% Senior Subordinated Notes due 2020, which were issued at par. Our net proceeds of $295,500, after paying the underwriters' discounts and commissions, was used to (a) redeem the remaining $71,881 of aggregate principal amount of our outstanding 8¹/4% Senior Subordinated Notes (the "8¹/4% notes"), plus accrued and unpaid interest, all of which were called for redemption in June 2008 and paid off in July 2008, (b) repay borrowings under our revolving credit facility, and (c) for general corporate purposes, including possible future acquisitions and investments. We recorded a charge to other expense (income), net of $345 in the second quarter of 2008 related to the early extinguishment of the 8¹/4% notes, which consists of deferred financing costs and original issue discounts related to the 8¹/4% notes.

The New Credit Agreement, 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 the New Credit Agreement and our indentures and other agreements governing our indebtedness. Our revolving credit and term loan facilities, as well as our indentures, use EBITDA based calculations as primary measures of financial performance, including leverage ratios. IMI's revolving credit and term leverage ratio was 4.5 and 4.4 as of December 31, 2007 and June 30, 2008, respectively, compared to a maximum allowable ratio of 5.5. Similarly, our bond leverage ratio, per the indentures, was 5.1 as of both December 31, 2007 and June 30, 2008, compared to a maximum allowable ratio of 6.5. Noncompliance with these leverage ratios would have a material adverse effect on our financial condition and liquidity. We were in compliance with all debt covenants in material agreements as of June 30, 2008.

(7) Selected Consolidated Financial Statements of Parent, Guarantors, Canada Company and Non-Guarantors

The following data summarizes the consolidating Company on the equity method of accounting as of December 31, 2007 and June 30, 2008 and for the three and six months ended June 30, 2007 and 2008.

The Parent Notes and the Subsidiary Notes are guaranteed by the subsidiaries referred to below as the "Guarantors." These subsidiaries are 100% owned by the Parent. The guarantees are full and unconditional, as well as joint and several.

(7) Selected Consolidated Financial Statements of Parent, Guarantors, Canada Company and Non-Guarantors (Continued)

Additionally, the Parent guarantees the Subsidiary Notes which were issued by Canada Company. Canada Company does not guarantee the Parent Notes. The other subsidiaries that do not guarantee the Parent Notes or the Subsidiary Notes are referred to below as the "Non-Guarantors."

			December 31, 2007

			Parent		Guarantors		Canada Company		Non- Guarantors		Eliminations			Consolidated
Assets
Current Assets:
	Cash and Cash Equivalents		$	—	$	27,955	$	15,529	$	82,123	$	—		$	125,607
	Accounts Receivable			—		365,626		33,900		164,523		—			564,049
	Intercompany Receivable			910,450		—		56,773		—		(967,223	)		—
	Other Current Assets			1,036		91,763		3,680		36,789		(528	)		132,740

		Total Current Assets		911,486		485,344		109,882		283,435		(967,751	)		822,396
Property, Plant and Equipment, Net				—		1,506,261		184,993		644,707		—			2,335,961
Other Assets, Net:
	Long-term Notes Receivable from Affiliates and Intercompany Receivable			1,991,357		1,000		—		—		(1,992,357	)		—
	Investment in Subsidiaries			1,682,963		1,404,005		—		—		(3,086,968	)		—
	Goodwill			—		1,750,477		205,182		618,633		—			2,574,292
	Other			30,064		323,493		15,601		206,595		(481	)		575,272

		Total Other Assets, Net		3,704,384		3,478,975		220,783		825,228		(5,079,806	)		3,149,564

		Total Assets	$	4,615,870	$	5,470,580	$	515,658	$	1,753,370	$	(6,047,557	)	$	6,307,921

Liabilities and Stockholders' Equity
Intercompany Payable			$	—	$	942,323	$	—	$	24,900	$	(967,223	)	$	—
Current Portion of Long-term Debt				4,889		12,439		533		15,579		—			33,440
		Total Other Current Liabilities		61,250		472,865		36,878		161,772		(528	)		732,237
Long-term Debt, Net of Current Portion				2,749,423		13,130		423,051		47,244		—			3,232,848
Long-term Notes Payable to Affiliates and Intercompany Payable				1,000		1,991,357		—		—		(1,992,357	)		—
Other Long-term Liabilities				3,853		385,647		23,821		92,012		(481	)		504,852
Commitments and Contingencies
Minority Interests				—		—		—		9,089		—			9,089
Stockholders' Equity				1,795,455		1,652,819		31,375		1,402,774		(3,086,968	)		1,795,455

		Total Liabilities and Stockholders' Equity	$	4,615,870	$	5,470,580	$	515,658	$	1,753,370	$	(6,047,557	)	$	6,307,921

(7) Selected Consolidated Financial Statements of Parent, Guarantors, Canada Company and Non-Guarantors (Continued)

			June 30, 2008

			Parent		Guarantors		Canada Company		Non- Guarantors		Eliminations			Consolidated
Assets
Current Assets:
	Cash and Cash Equivalents		$	—	$	125,508	$	1,107	$	76,582	$	—		$	203,197
	Accounts Receivable			—		380,316		34,461		188,642		—			603,419
	Intercompany Receivable			977,912		—		46,695		—		(1,024,607	)		—
	Other Current Assets			101		106,574		3,359		38,499		—			148,533

		Total Current Assets		978,013		612,398		85,622		303,723		(1,024,607	)		955,149
Property, Plant and Equipment, Net				—		1,499,526		185,106		686,707		—			2,371,339
Other Assets, Net:
	Long-term Notes Receivable from Affiliates and Intercompany Receivable			2,129,024		1,000		—		—		(2,130,024	)		—
	Investment in Subsidiaries			1,757,114		1,476,070		—		—		(3,233,184	)		—
	Goodwill			—		1,755,158		199,263		629,007		—			2,583,428
	Other			32,821		336,054		14,602		215,687		(470	)		598,694

		Total Other Assets, Net		3,918,959		3,568,282		213,865		844,694		(5,363,678	)		3,182,122

		Total Assets	$	4,896,972	$	5,680,206	$	484,593	$	1,835,124	$	(6,388,285	)	$	6,508,610

Liabilities and Stockholders' Equity
Intercompany Payable			$	—	$	998,827	$	—	$	25,780	$	(1,024,607	)	$	—
Current Portion of Long-term Debt				76,714		4,128		—		17,997		—			98,839
		Total Other Current Liabilities		62,066		399,507		32,059		163,137		—			656,769
Long-term Debt, Net of Current Portion				2,852,997		13,410		391,342		61,201		—			3,318,950
Long-term Notes Payable to Affiliates and Intercompany Payable				1,000		2,129,024		—		—		(2,130,024	)		—
Other Long-term Liabilities				3,853		410,426		23,579		92,052		(470	)		529,440
Commitments and Contingencies
Minority Interests				—		—		—		4,270		—			4,270
Stockholders' Equity				1,900,342		1,724,884		37,613		1,470,687		(3,233,184	)		1,900,342

		Total Liabilities and Stockholders' Equity	$	4,896,972	$	5,680,206	$	484,593	$	1,835,124	$	(6,388,285	)	$	6,508,610

(7) Selected Consolidated Financial Statements of Parent, Guarantors, Canada Company and Non-Guarantors (Continued)

			Three Months Ended June 30, 2007

			Parent			Guarantors			Canada Company			Non- Guarantors			Eliminations			Consolidated
Revenues:
	Storage		$	—		$	265,786		$	20,200		$	82,693		$	—		$	368,679
	Service and Storage Material Sales			—			193,809			21,833			84,368			—			300,010

		Total Revenues		—			459,595			42,033			167,061			—			668,689
Operating Expenses:
	Cost of Sales (Excluding Depreciation and Amortization)			—			205,092			17,191			85,680			—			307,963
	Selling, General and Administrative			41			136,823			7,092			44,889			—			188,845
	Depreciation and Amortization			41			40,996			2,847			16,406			—			60,290
	Loss on Disposal/Writedown of Property, Plant and Equipment, Net			—			172			31			154			—			357

		Total Operating Expenses		82			383,083			27,161			147,129			—			557,455

Operating (Loss) Income				(82	)		76,512			14,872			19,932			—			111,234
Interest Expense, Net				48,143			168			7,111			5,800			—			61,222
Other Expense (Income), Net				12,768			(2,569	)		(6,623	)		(14,282	)		7,471			(3,235	)

	(Loss) Income Before Provision for Income Taxes and Minority Interest			(60,993	)		78,913			14,384			28,414			(7,471	)		53,247
Provision for Income Taxes				—			9,497			2,903			1,624			—			14,024
Equity in the Earnings of Subsidiaries, Net of Tax				(100,045	)		(29,758	)		—			—			129,803			—
Minority Interests in Earnings of Subsidiaries, Net				—			—			—			171			—			171

		Net Income	$	39,052		$	99,174		$	11,481		$	26,619		$	(137,274	)	$	39,052

(7) Selected Consolidated Financial Statements of Parent, Guarantors, Canada Company and Non-Guarantors (Continued)

			Three Months Ended June 30, 2008

			Parent			Guarantors			Canada Company		Non- Guarantors			Eliminations			Consolidated
Revenues:
	Storage		$	—		$	294,715		$	24,006	$	97,474		$	—		$	416,195
	Service and Storage Material Sales			—			221,072			26,293		105,297			—			352,662

		Total Revenues		—			515,787			50,299		202,771			—			768,857
Operating Expenses:
	Cost of Sales (Excluding Depreciation and Amortization)			—			222,330			22,095		102,546			—			346,971
	Selling, General and Administrative			18			157,474			9,603		58,837			—			225,932
	Depreciation and Amortization			44			50,373			3,621		18,869			—			72,907
	(Gain) Loss on Disposal/Writedown of Property, Plant and Equipment, Net			—			(484	)		17		(372	)		—			(839	)

		Total Operating Expenses		62			429,693			35,336		179,880			—			644,971

Operating (Loss) Income				(62	)		86,094			14,963		22,891			—			123,886
Interest Expense (Income), Net				52,457			(592	)		7,797		95			—			59,757
Other Expense, Net				2,232			191			—		1,109			—			3,532

(Loss) Income Before Provision for Income Taxes and Minority Interest				(54,751	)		86,495			7,166		21,687			—			60,597
Provision for Income Taxes				—			18,490			2,418		3,951			—			24,859
Equity in the Earnings of Subsidiaries, Net of Tax				(90,637	)		(21,262	)		—		—			111,899			—
Minority Interests in Losses of Subsidiaries, Net				—			—			—		(148	)		—			(148	)

		Net Income	$	35,886		$	89,267		$	4,748	$	17,884		$	(111,899	)	$	35,886

(7) Selected Consolidated Financial Statements of Parent, Guarantors, Canada Company and Non-Guarantors (Continued)

			Six Months Ended June 30, 2007

			Parent			Guarantors			Canada Company			Non- Guarantors			Eliminations			Consolidated
Revenues:
	Storage		$	—		$	519,916		$	38,760		$	162,168		$	—		$	720,844
	Service and Storage Material Sales			—			381,327			41,399			157,631			—			580,357

		Total Revenues		—			901,243			80,159			319,799			—			1,301,201
Operating Expenses:
	Cost of Sales (Excluding Depreciation and Amortization)			—			399,696			37,695			165,577			—			602,968
	Selling, General and Administrative			—			266,858			14,194			88,298			—			369,350
	Depreciation and Amortization			62			79,696			5,361			32,343			—			117,462
	Loss on Disposal/Writedown of Property, Plant and Equipment, Net			—			193			26			175			—			394

		Total Operating Expenses		62			746,443			57,276			286,393			—			1,090,174

Operating (Loss) Income				(62	)		154,800			22,883			33,406			—			211,027
Interest Expense (Income), Net				93,624			(1,202	)		9,326			9,809			—			111,557
Other Expense (Income), Net				21,556			(9,060	)		(6,619	)		(24,306	)		7,471			(10,958	)

	(Loss) Income Before Provision for Income Taxes and Minority Interest			(115,242	)		165,062			20,176			47,903			(7,471	)		110,428
Provision for Income Taxes				—			26,458			5,070			4,579			—			36,107
Equity in the Earnings of Subsidiaries, Net of Tax				(189,001	)		(48,612	)		—			—			237,613			—
Minority Interests in (Losses) Earnings of Subsidiaries, Net				—			—			(348	)		910			—			562

		Net Income	$	73,759		$	187,216		$	15,454		$	42,414		$	(245,084	)	$	73,759

(7) Selected Consolidated Financial Statements of Parent, Guarantors, Canada Company and Non-Guarantors (Continued)

			Six Months Ended June 30, 2008

			Parent			Guarantors			Canada Company		Non- Guarantors			Eliminations			Consolidated
Revenues:
	Storage		$	—		$	579,097		$	47,613	$	193,802		$	—		$	820,512
	Service and Storage Material Sales			—			441,050			52,384		204,295			—			697,729

		Total Revenues		—			1,020,147			99,997		398,097			—			1,518,241
Operating Expenses:
	Cost of Sales (Excluding Depreciation and Amortization)			—			447,779			44,892		202,051			—			694,722
	Selling, General and Administrative			63			319,274			18,854		109,969			—			448,160
	Depreciation and Amortization			76			96,396			7,150		38,815			—			142,437
	Loss (Gain) on Disposal/Writedown of Property, Plant and Equipment, Net			—			2,761			8		(63	)		—			2,706

		Total Operating Expenses		139			866,210			70,904		350,772			—			1,288,025

Operating (Loss) Income				(139	)		153,937			29,093		47,325			—			230,216
Interest Expense (Income), Net				104,818			(2,168	)		15,877		1,249			—			119,776
Other Expense (Income), Net				10,806			(1,655	)		—		(11,654	)		—			(2,503	)

(Loss) Income Before Provision for Income Taxes and Minority Interest				(115,763	)		157,760			13,216		57,730			—			112,943
Provision for Income Taxes				—			31,180			4,472		7,479			—			43,131
Equity in the Earnings of Subsidiaries, Net of Tax				(185,131	)		(56,200	)		—		—			241,331			—
Minority Interests in Earnings of Subsidiaries, Net				—			—			—		444			—			444

		Net Income	$	69,368		$	182,780		$	8,744	$	49,807		$	(241,331	)	$	69,368

(7) Selected Consolidated Financial Statements of Parent, Guarantors, Canada Company and Non-Guarantors (Continued)

			Six Months Ended June 30, 2007

			Parent			Guarantors			Canada Company			Non- Guarantors			Eliminations			Consolidated
Cash Flows from Operating Activities			$	(86,781	)	$	209,139		$	14,997		$	69,408		$	—		$	206,763
Cash Flows from Investing Activities:
	Capital expenditures			—			(118,268	)		(3,643	)		(44,876	)		—			(166,787	)
	Cash paid for acquisitions, net of cash acquired			—			(239,505	)		(2,071	)		(22,276	)		—			(263,852	)
	Intercompany loans to subsidiaries			(234,800	)		(83,991	)		—			—			318,791			—
	Investment in Subsidiaries			(2,607	)		(2,607	)		—			—			5,214			—
	Additions to customer relationship and acquisition costs			—			(3,652	)		(580	)		(4,556	)		—			(8,788	)
	Proceeds from sales of property and equipment and other, net			—			(322	)		18			8,411			—			8,107

		Cash Flows from Investing Activities		(237,407	)		(448,345	)		(6,276	)		(63,297	)		324,005			(431,320	)
Cash Flows from Financing Activities:
	Repayment of revolving credit and term loan facilities and other debt			(647,109	)		(3,862	)		(431,473	)		(314,013	)		—			(1,396,457	)
	Proceeds from revolving credit and term loan facilities and other debt			669,500			—			514,386			37,777			—			1,221,663
	Net proceeds from sale of senior subordinated notes			289,058			—			146,760			—			—			435,818
	Debt financing (repayment to) and equity contribution from (distribution to) minority stockholders, net			—			—			—			(478	)		—			(478	)
	Intercompany loans from parent			—			234,221			(236,905	)		321,475			(318,791	)		—
	Equity contribution from parent			—			2,607			—			2,607			(5,214	)		—
	Proceeds from exercise of stock options and employee stock purchase plan			12,309			—			—			—			—			12,309
	Excess tax benefit from stock-based compensation			3,924			—			—			—			—			3,924
	Payment of debt financing costs			(3,494	)		—			(1,991	)		—			—			(5,485	)

		Cash Flows from Financing Activities		324,188			232,966			(9,223	)		47,368			(324,005	)		271,294
Effect of exchange rates on cash and cash equivalents				—			—			82			2,776			—			2,858

(Decrease) Increase in cash and cash equivalents				—			(6,240	)		(420	)		56,255			—			49,595
Cash and cash equivalents, beginning of period				—			16,354			762			28,253			—			45,369

Cash and cash equivalents, end of period			$	—		$	10,114		$	342		$	84,508		$	—		$	94,964

(7) Selected Consolidated Financial Statements of Parent, Guarantors, Canada Company and Non-Guarantors (Continued)

			Six Months Ended June 30, 2008

			Parent			Guarantors			Canada Company			Non- Guarantors			Eliminations			Consolidated
Cash Flows from Operating Activities			$	(97,792	)	$	223,685		$	12,205		$	51,535		$	—		$	189,633
Cash Flows from Investing Activities:
	Capital expenditures			—			(114,817	)		(5,760	)		(53,553	)		—			(174,130	)
	Cash paid for acquisitions, net of cash acquired			—			(34,656	)		—			(11,662	)		—			(46,318	)
	Intercompany loans to subsidiaries			(48,480	)		(12,027	)		—			—			60,507			—
	Investment in subsidiaries			(10,990	)		(10,990	)		—			—			21,980			—
	Additions to customer relationship and acquisition costs			—			(4,234	)		(267	)		(2,138	)		—			(6,639	)
	Investment in joint ventures			—			—			—			(1,709	)		—			(1,709	)
	Proceeds from sales of property and equipment and other, net			—			526			13			(513	)		—			26

		Cash Flows from Investing Activities		(59,470	)		(176,198	)		(6,014	)		(69,575	)		82,487			(228,770	)
Cash Flows from Financing Activities:
	Repayment of revolving credit and term loan facilities and other debt			(700,754	)		(11,346	)		(33,786	)		(8,050	)		—			(753,936	)
	Proceeds from revolving credit and term loan facilities and other debt			549,150			114			6,564			6,890			—			562,718
	Net proceeds from sales of senior subordinated notes			295,500			—			—			—			—			295,500
	Debt financing (repayment to) and equity contribution from (distribution to) minority stockholders, net			—			—			—			384			—			384
	Intercompany loans from parent			—			50,308			6,887			3,312			(60,507	)		—
	Equity contribution from parent			—			10,990			—			10,990			(21,980	)		—
	Proceeds from exercise of stock options and employee stock purchase plan			9,940			—			—			—			—			9,940
	Excess tax benefits from stock-based compensation			4,146			—			—			—			—			4,146
	Payment of debt financing costs			(720	)		—			(43	)		—			—			(763	)

		Cash Flows from Financing Activities		157,262			50,066			(20,378	)		13,526			(82,487	)		117,989
Effect of exchange rates on cash and cash equivalents				—			—			(235	)		(1,027	)		—			(1,262	)

Increase (Decrease) in cash and cash equivalents				—			97,553			(14,422	)		(5,541	)		—			77,590
Cash and cash equivalents, beginning of period				—			27,955			15,529			82,123			—			125,607

Cash and cash equivalents, end of period			$	—		$	125,508		$	1,107		$	76,582		$	—		$	203,197

The South America, Mexico, Asia Pacific and Europe operating segments have been aggregated given their similar economic characteristics, products, customers and processes and reported as one reportable segment, "International Physical Business." The Worldwide Digital Business does not meet the quantitative criteria for a reportable segment; however, management determined that it would disclose such information on a voluntary basis.

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

	North American Physical Business		International Physical Business		Worldwide Digital Business		Total Consolidated

Three Months Ended June 30, 2007
Total Revenues	$	466,250	$	163,624	$	38,815	$	668,689
Depreciation and Amortization		37,335		16,142		6,813		60,290
Contribution		133,416		33,502		4,963		171,881
Expenditures for Segment Assets(1)		291,138		40,249		4,706		336,093
Three Months Ended June 30, 2008
Total Revenues		517,101		198,416		53,340		768,857
Depreciation and Amortization		45,106		19,597		8,204		72,907
Contribution		150,391		39,954		5,609		195,954
Expenditures for Segment Assets(1)		77,774		42,719		6,247		126,740
Six Months Ended June 30, 2007
Total Revenues		911,248		313,116		76,837		1,301,201
Depreciation and Amortization		72,517		31,823		13,122		117,462
Contribution		257,635		60,741		10,507		328,883
Total Assets		4,110,120		1,372,523		231,153		5,713,796
Expenditures for Segment Assets(1)		357,043		73,417		8,967		439,427
Six Months Ended June 30, 2008
Total Revenues		1,021,580		389,598		107,063		1,518,241
Depreciation and Amortization		88,178		38,199		16,060		142,437
Contribution		281,656		81,706		11,997		375,359
Total Assets		4,297,417		1,771,666		439,527		6,508,610
Expenditures for Segment Assets(1)		136,911		75,360		14,816		227,087

The accounting policies of the reportable segments are the same as those described in Note 2 except that certain corporate and centrally controlled costs are allocated primarily to our North American Physical Business and Worldwide Digital Business segments. These allocations, which include human resources, information technology, finance, rent, real estate property taxes, medical costs, incentive compensation, stock option expense, worker's compensation, 401(k) match contributions and property, general liability, auto and other insurance, are based on rates and methodologies established at the beginning of each year. Included in the corporate costs allocated to our North American Physical Business segment are certain costs related to staff functions, including finance, human resources and information technology, which benefit the enterprise as a whole. These costs are primarily related to the general management of these functions on a corporate level and the design and development of

programs, policies and procedures that are then implemented in the individual segments, with each segment bearing its own cost of implementation. Management has decided to allocate these costs to the North American Physical Business segment as further allocation is impracticable.

Contribution for each segment is defined as total revenues less cost of sales (excluding depreciation and amortization) 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.

A reconciliation of Contribution to income before provision for income taxes and minority interest on a consolidated basis is as follows:

We are a party to numerous operating leases. No material changes in the obligations associated with these leases have occurred since December 31, 2007. See our Annual Report on Form 10-K dated February 29, 2008 for amounts outstanding at December 31, 2007.

On September 19, 2007, a container storing back-up electronic media belonging to one of our customers, the Louisiana Office of Student Financial Assistance ("LOSFA"), was lost while being transported to the customer's office. We immediately undertook efforts to locate the media and we promptly notified LOSFA and appropriate law enforcement authorities. In response to a public reward offer, the container was returned to us and we have been provided with information to the effect that the media was discarded. To date, the media has not been found. Beginning on October 15, 2007, LOSFA issued one or more press releases and other public communications advising of the loss, indicating that personally identifiable information was on the media and advising persons who might be affected as to how to protect themselves against possible identity theft and fraud. LOSFA has demanded that we indemnify it in connection with any losses arising from the lost media. In late October 2007 and early November 2007, actions seeking to represent a purported class of allegedly

affected individuals were filed in state courts in Louisiana in the 18th Judicial District for the Parish of West Baton Rouge (West Baton Rouge), in the Civil District Court for the Parish of Orleans (New Orleans), and in the United States District Court for the Eastern District of Louisiana (Eastern District of Louisiana). These actions sought monetary damages under various theories of liability as a result of the lost media. We removed the first of those actions (West Baton Rouge) to the United States District Court for the Middle District of Louisiana where, subsequently, it was voluntarily dismissed. We removed the second action (New Orleans) to the United States District Court for the Eastern District of Louisiana, where it was consolidated with the third such action (Eastern District of Louisiana). On June 5, 2008, the Court granted our motion for summary judgment dismissing all of the claims against us, and the time for appeal has expired. The Court also remanded the one case in which LOSFA is the sole remaining defendant to the Civil District Court for the Parish of Orleans (New Orleans), Louisiana.

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 are pending to which we, or any of our properties, are subject. We record legal costs associated with loss contingencies as expenses in the period in which they are incurred.

In July 2006, we experienced a significant fire in a leased records and information management facility in London, England, that resulted in the complete destruction of the facility and its contents. The London Fire Brigade ("LFB") issued a report in which it was concluded that the fire resulted from human agency, i.e., arson, and its report to the Home Office concluded that the fire resulted from a deliberate act. The LFB also concluded that the installed sprinkler system failed to control the fire due to the primary fire pump being disabled prior to the fire and the standby fire pump being disabled in the early stages of the fire by third-party contractors. We have received notices of claims from customers or their subrogated insurance carriers under various theories of liabilities arising out of lost data and/or records as a result of the fire. Certain of those claims have resulted in litigation in courts in the United Kingdom. We deny any liability in respect of the London fire and we have referred these claims to our primary warehouse legal liability insurer, which has been defending them to date under a reservation of rights. Certain of the claims have also been settled for nominal amounts, typically one to two British pounds sterling per carton, as specified in the contracts, which amounts have been or will be reimbursed to us from our primary property insurer. On or about April 12, 2007, a firm of British solicitors representing 31 customers and/or their subrogated insurers filed a Claim Form in the (U.K.) High Court of Justice, Queen's Bench Division, seeking unspecified damages in excess of 15,000 British pounds sterling on account of the records belonging to those customers that were destroyed in the fire. On or about April 20, 2007, another firm of British solicitors representing 21 customers and/or their subrogated insurer also filed a Claim Form in the same court seeking provisional damages of approximately 15,000 British pounds sterling on account of the records belonging to those customers that were destroyed in the fire. Both of those matters are being held in abeyance by agreement between the claimants and the solicitors appointed by our primary warehouse legal liability carrier and some of them have been settled for nominal amounts. However, many of these claims, including larger

ones, remain outstanding. On or about October 17, 2007, our primary warehouse legal liability carrier, in the name of our subsidiary Iron Mountain (U.K.) Limited, filed a Claim Form with the (U.K.) High Court of Justice, Queen's Bench Division, Commercial Court, against The Virgin Drinks Group Limited, a customer who had records destroyed in the fire, seeking a declaration to the effect that our liability to that customer is limited to a maximum of one British pound sterling per carton of lost records and, in any event, to a maximum of 500 British pounds sterling in the aggregate, in accordance with the parties' contract. Detailed Particulars of Claim and Particulars of Virgin Drinks' counterclaim in respect of that matter have been filed and served.

We believe we carry adequate property and liability insurance. We do not expect that this event will have a material impact to our consolidated results of operations or financial condition. Revenues from this facility represented less than 1% of our consolidated enterprise revenues. We recorded approximately $12,306 to other (income) expense, net in the first six months of 2007 related to recoveries associated with settlement of the business interruption portion of our insurance claim. We utilize cash received from our insurance carriers to fund capital expenditures and for general working capital needs. Recoveries from the insurance carriers related to business personal property claims are reflected in our statement of cash flows under proceeds from sales of property and equipment and other, net included in investing activities section when received and amounted to $9,354 for the six months ended June 30, 2007. Recoveries from the insurance carriers related to business interruption claims are reflected in our statement of cash flows as a component of net income included in the operating activities section when received.

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 six months ended June 30, 2008 should be read in conjunction with our consolidated financial statements and notes thereto for the three and six months ended June 30, 2008, included herein, and for the year ended December 31, 2007, included in our Annual Report on Form 10-K for the year ended December 31, 2007.

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 other federal securities laws. These forward-looking statements concern our operations, economic performance, financial condition, goals, beliefs, future growth strategies, investments, 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) the cost to comply with current and future legislation, regulations and customer demands relating to privacy issues; (2) the impact of litigation that may arise in connection with incidents in which we fail to protect our customer's information; (3) changes in the price for our services relative to the cost of providing such services; (4) changes in customer preferences and demand for our services; (5) in the various digital businesses in which we are engaged, the cost of capital and technical requirements, demand for our services or competition for customers; (6) our ability or inability to complete acquisitions on satisfactory terms and to integrate acquired companies efficiently; (7) the cost or potential liabilities associated with real estate necessary for our business; (8) the performance of business partners upon whom we depend for technical assistance or management and acquisition expertise outside the U.S.; (9) changes in the political and economic environments in the countries in which our international subsidiaries operate; (10) claims that our technology violates the intellectual property rights of a third party; and (11) 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. Other risks may adversely impact us, as described more fully under "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2007. You should read these cautionary statements as being applicable to all forward-looking statements wherever they appear. Except as required by law, 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 filed with the Securities and Exchange Commission (the "SEC").

OIBDA is defined as operating income before depreciation and amortization expenses. OIBDA Margin is calculated by dividing OIBDA by total revenues. We use multiples of current and projected OIBDA 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 provide current

and potential investors with relevant and useful information regarding our ability to generate cash flow to support business investment and our ability to grow revenues faster than operating expenses. These measures are an integral part of the internal reporting system we use to assess and evaluate the operating performance of our business. OIBDA does not include certain items that we believe are not indicative of our core operating results, 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 principles. 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 we do not consider when evaluating the operating profitability of our core operations. Finally, OIBDA does not include depreciation and amortization expenses, in order to eliminate the impact of capital investments, which we evaluate 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 accounting principles generally accepted in the Unites States of America ("GAAP"), such as operating or net income or cash flows from operating activities (as determined in accordance with GAAP).

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 accounting for acquisitions, allowance for doubtful accounts and credit memos, impairment of tangible and intangible assets, income taxes, stock-based compensation and self-insured liabilities. 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.

Actual results may differ from these estimates. Our critical accounting policies include the following, which are listed in no particular order:

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, 2007, as filed with the SEC on February 29, 2008. Management has determined that no material changes concerning our critical accounting policies have occurred since December 31, 2007.

In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative Instruments and Hedging Activities—an Amendment of SFAS No. 133" ("SFAS No. 161"). SFAS No. 161 enhances required disclosures regarding derivatives and hedging activities, including enhanced disclosures regarding how: (a) an entity uses derivative instruments; (b) derivative instruments and related hedged items are accounted for under SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities"; and (c) derivative instruments and related hedged items affect an entity's financial position, financial performance, and cash flows. Specifically, SFAS No. 161 requires:

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 six month periods ended June 30, 2008 within each section. Trends and changes that are consistent within the three and six months periods are not repeated and are discussed on a year-to-date basis.

Comparison of Three and Six Months Ended June 30, 2008 to Three and Six Months Ended June 30, 2007 (in thousands):

Our consolidated storage revenues increased $47.5 million, or 12.9%, to $416.2 million and $99.7 million, or 13.8%, to $820.5 million for the three and six months ended June 30, 2008, respectively, compared to the same periods in 2007. The increase is primarily attributable to internal revenue growth (8% in both periods), supported by strength in our North American, Latin American and Asia Pacific physical businesses. Acquisitions (3% in both periods) and foreign currency exchange rate fluctuations (2% and 3%, respectively) also added to total growth.

Consolidated service and storage material sales revenues increased $52.7 million, or 17.6%, to $352.7 million and $117.4 million, or 20.2%, to $697.7 million for the three and six months ended June 30, 2008, respectively, compared to the same periods in 2007. The increase is attributable to internal revenue growth (9% in both periods), supported by strong growth in shredding revenues, including increased recycled paper revenues, fuel surcharges and increased digital services revenues. Acquisitions (6% and 8%, respectively) and foreign currency exchange rate fluctuations (3% in both periods) also added to total growth.

For the reasons stated above, our consolidated revenues increased $100.2 million, or 15.0%, to $768.9 million and $217.0 million, or 16.7%, to $1.5 billion for the three and six months ended June 30, 2008, respectively, compared to the same periods in 2007. Internal revenue growth was 9% for both the three and six months ended June 30, 2008. We calculate internal revenue growth in local currency for our international operations. Acquisitions contributed 3% and 5% to consolidated revenues for the three and six months ended June 30, 2008, respectively. Foreign currency exchange rate fluctuations, based on an analysis of weighted average rates for the comparable periods, increased our revenues 3% for both periods, and were primarily due to the strengthening of the Canadian dollar, Euro, British pound sterling, Australian dollar and Brazilian real against the U.S. dollar in the first half of 2008.

Our internal revenue growth rate represents the weighted average year over year growth rate of our revenues after removing the effects of acquisitions, foreign currency exchange rate fluctuations and the impact of the sale of our North American commodity product sales business line, which consisted of the sale of data storage media, imaging products and data center furniture to our physical data protection and recovery services customers (representing less than 1% of 2007 consolidated revenues). Over the past eight quarters, the internal growth rate of our storage revenues has decreased from a high of 10% to 11% in 2006 to 8% to 9%. Our storage revenue internal growth rate has moderated over the past six quarters as the result of a growing revenue base and periodic increases in destructions and permanent withdrawals in our North American Physical Business segment, as well as in the U.K., from the lower levels experienced in 2006. Strong growth rates in Latin America and in our digital services business further supported consolidated internal growth. Net carton volume growth is a function of the rate at which 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 the more discretionary nature of the services we offer, such as large special projects, software licenses, and the price of recycled paper. These revenues are often event driven and 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, and may often be difficult to replicate in future periods. 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 reflects the following: (1) growth in North American storage-related service revenues, increased special project revenues and higher recycled paper revenues; (2) two large public sector contracts in Europe, one that was completed in the third quarter of 2007 and one that will be completed in 2008; (3) continued growth in our secure shredding operations; and (4) a large data restoration project completed by our digital services business in the third quarter of 2005, which created a difficult comparable for the growth rate in the third quarter of 2006.

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

For the six months ended June 30, 2008 as compared to the six months ended June 30, 2007, labor expense decreased slightly as a percentage of consolidated revenues, mainly as a result of higher recycled paper revenue and strong growth in our digital services revenues, which have higher gross margins, and labor efficiencies in our North American business. These benefits more than offset the impact of revenue mix, as labor-intensive services such as secure shredding and Document Management Solutions ("DMS") continue to grow at a faster rate than our storage revenues, and the dilutive impact of acquisitions.

Facilities costs as a percentage of consolidated revenues decreased to 13.4% for the six months ended June 30, 2008 from 14.0% for the six months ended June 30, 2007. The largest component of our facilities cost is rent expense, which increased in dollar terms by $12.2 million but remained flat as a percentage of consolidated storage revenues at 12.6% for both the six months ended June 30, 2007 and 2008. The dollar increase in rent is mainly driven by the timing of new real estate as we continue to expand our storage business, while the decrease as a percentage of total revenue relates to the expansion of our secure shredding and other service businesses, which incur lower rent and facilities costs than our core physical business. Facilities costs increased in dollar terms due to increased costs of utilities of $4.4 million and maintenance and common area charges of $2.9 million related to rising costs and an increased number of facilities.

Our transportation expenses, which are influenced by several variables including total number of vehicles, owned versus leased vehicles, use of subcontracted couriers, fuel expenses, maintenance and insurance, increased as a percentage of consolidated revenues for the six months ended June 30, 2008 compared to the six months ended June 30, 2007. The expansion of our secure shredding operations, which incurs higher transportation costs than our core physical business, contributed to the increase in dollar terms, as well as rising fuel costs, which contributed $6.3 million of the increase, and the use of couriers and leased vehicles which combined contributed $3.1 million.

Product and other cost of sales, which includes cartons, media and other service, storage and supply costs, are highly correlated to complementary revenue streams. The increase in product cost of sales in dollar terms for the six months ended June 30, 2008 compared to the six months ended June 30, 2007, primarily reflects the effect of an increase in carton and media sales.

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

The increase in general and administrative expenses for the six months ended June 30, 2008 compared to the six months ended June 30, 2007 is mainly attributable to increased compensation expense of $22.7 million, reflecting increased headcount due to acquisitions and general business expansion, as well as increases in related facility costs of $4.6 million, professional fees of $4.1 and other overhead of $12.9 million. Increased stock option expense of $2.9 million over the first half of 2007, as well as security, new products and infrastructure enhancements initiated in the latter part of 2007, also contributed to the increase in general and administrative expenses.

The majority of our sales, marketing and account management costs are labor-related and are comprised mainly of compensation and commissions. These costs are primarily driven by the headcount in each of these departments, which, on average, was higher throughout the six months ended June 30, 2008 compared to the six months ended June 30, 2007. Compensation expense and commissions increased $12.3 million and $4.4 million, respectively, in the first half of 2008 compared to the first half of 2007.

Information technology expenses increased as a percentage of consolidated revenues for the six months ended June 30, 2008 compared to the six months ended June 30, 2007. The dollar increase in information technology expenses is primarily related to a $10.2 million increase in compensation expense, and represents an investment in infrastructure and product development. Additionally, we wrote-off $0.9 million of previously deferred costs, primarily internal labor costs, associated with internal use software development costs that were discontinued prior to being implemented in 2008.

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

Consolidated depreciation and amortization expense increased $25.0 million to $142.4 million (9.4% of consolidated revenues) for the six months ended June 30, 2008 from $117.5 million (9.0% of consolidated revenues) for the six months ended June 30, 2007. Depreciation expense increased $9.5 million and $19.1 million for the three and six months ended June 30, 2008, respectively, compared to the same periods in 2007, primarily due to the additional depreciation expense related to recent capital expenditures and acquisitions, including storage systems, which include racking, building and leasehold improvements, computer systems hardware and software, and buildings. Amortization expense increased $3.2 million and $5.9 million for the three and six months ended June 30, 2008, respectively, compared to the same periods in 2007 primarily due to amortization of intangible assets, such as customer relationship intangible assets and intellectual property acquired through business combinations. We expect that amortization expense will continue to increase as we acquire new businesses and reflect the full year impact of acquisitions completed in the latter part of 2007.

Consolidated loss on disposal/writedown of property, plant and equipment, net of $2.7 million for the six months ended June 30, 2008, consisted primarily of a $2.3 million impairment of an owned storage facility, which we decided to exit in the first quarter of 2008.

As a result of all the foregoing factors, consolidated operating income increased $12.7 million, or 11.4%, to $123.9 million (16.1% of consolidated revenues) for the three months ended June 30, 2008 from $111.2 million (16.6% of consolidated revenues) for the three months ended June 30, 2007. Consolidated operating income increased $19.2 million, or 9.1%, to $230.2 million (15.2% of consolidated revenues) for the six months ended June 30, 2008 from $211.0 million (16.2% of consolidated revenues) for the six months ended June 30, 2007.

As a result of all the foregoing factors, consolidated OIBDA increased $25.3 million, or 14.7%, to $196.8 million (25.6% of consolidated revenues) for the three months ended June 30, 2008 from $171.5 million (25.7% of consolidated revenues) for the three months ended June 30, 2007. Consolidated OIBDA increased $44.2 million, or 13.4%, to $372.7 million (24.5% of consolidated revenues) for the six months ended June 30, 2008 from $328.5 million (25.2% of consolidated revenues) for the six months ended June 30, 2007.

Consolidated interest expense, net decreased $1.5 million to $59.8 million (7.8% of consolidated revenues) for the three months ended June 30, 2008 from $61.2 million (9.2% of consolidated revenues) for the three months ended June 30, 2007 and increased $8.2 million to $119.8 million (7.9% of consolidated revenues) for the six months ended June 30, 2008 from $111.6 million (8.6% of consolidated revenues) for the six months ended June 30, 2007 primarily due to increased borrowings to fund acquisitions, offset by a decrease in our weighted average interest rate to 7.2% as of June 30, 2008 from 7.6% as of June 30, 2007. In addition, as a result of the repayment of IME's revolving credit facility and term loans with borrowings in the U.S., we had higher than normal interest expense of approximately $4.1 million in the second quarter of 2007. This was a result of the difference in our calendar reporting period and that of IME which is two months in arrears, and had no impact on cash flows.

Foreign currency transaction gains, net of $2.6 million based on period-end exchange rates were recorded in the six months ended June 30, 2008, primarily due to the strengthening of the Euro and the Brazilian real and the weakening of the Canadian dollar, British pound sterling and the Chilean peso against the U.S. dollar compared to December 31, 2007, as these currencies relate to our intercompany balances with and between our Canadian, European and Latin American subsidiaries, and British pounds sterling and Euro denominated debt held by our U.S. parent company.

Foreign currency transaction gains, net of $4.0 million based on period-end exchange rates were recorded in the six months ended June 30, 2007, primarily due to the strengthening of the Canadian dollar, Euro and British pound sterling against the U.S. dollar compared to December 31, 2006, as these currencies relate to our intercompany balances with and between our Canadian and European subsidiaries, and British pounds sterling and Euro denominated debt held by our U.S. parent company.

Other, net in the six months ended June 30, 2007 consisted of $12.3 million of business interruption insurance proceeds pertaining to the fire in one of our London, England facilities, offset by $5.7 million write-off associated with deferred financing costs related to the early extinguishment of U.S. and U.K. term loans and revolving credit facilities.

Our effective tax rates for the three months ended June 30, 2007 and 2008 were 26.3% and 41.0%, respectively. Our effective tax rates for the six months ended June 30, 2007 and 2008 were 32.7% and 38.2%, respectively. The increase in our effective tax rate in 2008 resulted from a decrease in the foreign currency gains whose tax effect reduced the effective tax rate for the three months ended June 30, 2007 by approximately 9%. Additionally, our effective tax rate in 2008 increased over 2007 due to an increase year over year in discrete interest charges due to fully utilizing our net operating losses in the United States, as well as an increase in the structural rate due to unbenefitted net operating

losses related to start-up ventures overseas. We provide for income taxes during interim periods based on our estimate of the effective tax rate for the year. Discrete items and changes in our estimate of annual effective tax rate are recorded in the period they occur.

Our effective tax rate is subject to future variability due to, among other items: (a) changes in the mix of income from foreign jurisdictions; (b) tax law changes; (c) volatility in foreign exchange gains and (losses); and (d) the timing of the establishment and reversal of tax reserves. We are subject to income taxes in both the U.S. and numerous foreign jurisdictions. We are subject to examination by various tax authorities in jurisdictions in which we have significant business operations. We regularly assess the likelihood of additional assessments by tax authorities and provide for these matters as appropriate. Although we believe our tax estimates are appropriate, the final determination of tax audits and any related litigation could result in changes in our estimates.

Minority interest in earnings of subsidiaries, net resulted in a $0.1 million benefit to income and a $0.4 million charge to income for the three and six months ended June 30, 2008, respectively, compared to a charge of $0.2 million and $0.6 million for the three and six months ended June 30, 2007, respectively. This represents our minority partners' share of earnings in our majority-owned international subsidiaries that are consolidated in our operating results.

As a result of all the foregoing factors, for the three and six months ended June 30, 2008, consolidated net income was $35.9 million (4.7% of consolidated revenues) and $69.4 million (4.6% of consolidated revenues), respectively, compared to consolidated net income of $39.1 million (5.8% of consolidated revenues) and $73.8 million (5.7% of consolidated revenues) for the three and six months ended June 30, 2007, respectively.

The results of our various operating segments are discussed below. Our reportable segments are North American Physical Business, International Physical Business and Worldwide Digital Business. See Note 8 of Notes to Consolidated Financial Statements. Our North American Physical Business, which consists of the United States and Canada, offers the storage of paper documents, as well as all other non-electronic media such as microfilm and microfiche, master audio and videotapes, film, X-rays and blueprints, including healthcare information services, vital records services, service and courier operations, and the collection, handling and disposal of sensitive documents for corporate customers ("Hard Copy"); the storage and rotation of backup computer media as part of corporate disaster recovery plans, including service and courier operations ("Data Protection"); secure shredding services ("Shredding"); and the storage, assembly, and detailed reporting of customer marketing literature and delivery to sales offices, trade shows and prospective customers' sites based on current and prospective customer orders, which we refer to as the "Fulfillment" business. Our International Physical Business segment offers information protection and storage services throughout Europe, South America, Mexico and Asia Pacific, including Hard Copy, Data Protection and Shredding. Our Worldwide Digital Business offers information protection and storage services for electronic records conveyed via telecommunication lines and the Internet, including online backup and recovery solutions for server data and personal computers, as well as email archiving, third party technology escrow services that protect intellectual property assets such as software source code, and electronic discovery services for the legal market that offers in-depth discovery and data investigation solutions.

During the six months ended June 30, 2008, revenue in our North American Physical Business segment increased 12.1% over the same period last year, primarily due to solid internal growth supported by increased secure shredding revenues and higher recycled paper revenues, and acquisitions, primarily ArchivesOne, which contributed $23.0 million, or approximately 2.5%. In addition, favorable currency fluctuations during the six months ended June 30, 2008 in Canada resulted in increased revenue, as measured in U.S. dollars, of 1% when compared to the six months ended June 30, 2007. Contribution as a percent of segment revenue decreased in the six months ended June 30, 2008 due mainly to increased transportation expenses, such as rising fuel costs, and selling, general and administrative expenses, as discussed above.

Included in our North American Physical Business segment are certain costs related to staff functions, including finance, human resources and information technology, which benefit the enterprise as a whole. These costs are primarily related to the general management of these functions on a corporate level and the design and development of programs, policies and procedures that are then implemented in the individual segments, with each segment bearing its own cost of implementation. Management has decided to allocate these costs to the North American Physical Business segment as further allocation is impracticable.

Revenue in our International Physical Business segment increased 24.4% during the six months ended June 30, 2008 over the same period last year, primarily due to internal growth of 11% and acquisitions in Europe and Asia Pacific. Further, favorable currency fluctuations during the six months ended June 30, 2008, primarily in Europe, resulted in increased revenue, as measured in U.S. dollars, of approximately 8% compared to the six months ended June 30, 2007. Contribution as a percent of segment revenue increased in the six months ended June 30, 2008 primarily due to higher-margin special projects, in particular a large public sector contract in Europe that will be completed in 2008, as well as the impact of increased leverage associated with certain start-up international investments that continue to benefit from increased revenue.

During the six months ended June 30, 2008, revenue in our Worldwide Digital Business segment increased 39.3% over the same period last year, due to strong internal growth of 15% and the acquisition of Stratify Inc. ("Stratify") in December 2007. The increase in internal growth is primarily attributable to growth in digital storage revenue from our online backup service offerings, offset by a large license sale that occurred in the first quarter of 2007 and did not repeat in the first quarter of 2008. Contribution as a percent of segment revenue decreased primarily due to the changing mix of our revenue year over year with lower (higher margin) license sales and increased sales of our online backup subscription business (lower margin). However, contribution increased in dollar terms due to our significant year over year revenue gains.

The following is a summary of our cash balances as of, and cash flows for the six months ended, June 30, 2007 and 2008 (in thousands):

Net cash provided by operating activities was $189.6 million for the six months ended June 30, 2008, compared to $206.8 million for the six months ended June 30, 2007. The decrease resulted primarily from an increase in working capital, which represents the net change in operating assets and liabilities, exclusive of acquisitions, which was driven primarily by an increase in accounts receivable and a decrease in accounts payable and a decrease in net income, including $12.3 million of business interruption insurance income related to the fire in one of our London, England facilities recognized in 2007 that did not repeat in 2008, offset by an increase in non-cash items, such as depreciation and amortization.

Due to the nature of our businesses, we make significant capital expenditures and additions to customer acquisition costs. 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 acquisition costs during the six months ended June 30, 2008 amounted to $174.1 million and $6.6 million, respectively. For the six months ended June 30, 2008, capital expenditures, net and additions to customer acquisition costs were funded with cash flows provided by operating activities, borrowings under our revolving credit facilities and cash equivalents on-hand. Excluding acquisitions, we expect our capital expenditures to be between $440 million and $480 million in the year ending December 31, 2008. Included in our estimated capital expenditures for 2008 is $40 million to $50 million of opportunity-driven real estate purchases.

Net cash provided by financing activities was $118.0 million for the six months ended June 30, 2008. During the six months ended June 30, 2008, we had gross borrowings under our revolving credit and term loan facilities and other debt of $562.7 million, $295.5 million of proceeds from the sale of senior subordinated notes, $9.9 million of proceeds from the exercise of stock options and the employee stock purchase plan and $4.1 million of excess tax benefits from stock-based compensation. We used the proceeds from these financing transactions to repay revolving credit and term loan facilities and other debt ($753.9 million) and to fund acquisitions and capital expenditures.

We are highly leveraged and expect to continue to be highly leveraged for the foreseeable future. Our consolidated debt as of June 30, 2008 was comprised of the following (in thousands):


Revolving Credit Facility(1)			$	210,870
Term Loan Facility(1)				406,450
8¹/4% Senior Subordinated Notes due 2011(2)				71,881
8⁵/8% Senior Subordinated Notes due 2013(2)				447,971
7¹/4% GBP Senior Subordinated Notes due 2014(2)				299,310
7³/4% Senior Subordinated Notes due 2015(2)				437,225
6⁵/8% Senior Subordinated Notes due 2016(2)				316,294
7¹/2% CAD Senior Subordinated Notes due 2017 (the "Subsidiary Notes")(3)				173,250
8³/4% Senior Subordinated Notes due 2018(2)				200,000
8% Senior Subordinated Notes due 2018(2)				49,706
6³/4% Euro Senior Subordinated Notes due 2018(2)				400,140
8% Senior Subordinated Notes due 2020(2)				300,000
Real Estate Mortgages, Seller Notes and Other				104,692

	Total Long-term Debt			3,417,789
Less Current Portion				(98,839	)

		Long-term Debt, Net of Current Portion	$	3,318,950

Our revolving credit and term loan facilities, as well as our indentures, use earnings before interest, taxes, depreciation and amortization ("EBITDA") based calculations as primary measures of financial performance, including leverage ratios. IMI's revolving credit and term leverage ratio was 4.5 and 4.4 as of December 31, 2007 and June 30, 2008, respectively, compared to a maximum allowable ratio of 5.5. Similarly, our bond leverage ratio, per the indentures, was 5.1 as of both December 31, 2007 and June 30, 2008, compared to a maximum allowable ratio of 6.5. Noncompliance with these leverage ratios would have a material adverse effect on our financial condition and liquidity.

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.

On April 16, 2007, we entered into a new credit agreement (the "New Credit Agreement") to replace both the IMI revolving credit and term loan facilities of $750 million and the IME revolving credit and term loan facilities of 200 million British pounds sterling. On November 9, 2007, we increased the aggregate amount available to be borrowed under the New Credit Agreement from $900 million to $1.2 billion. The New Credit Agreement consists of revolving credit facilities where we can borrow, subject to certain limitations as defined in the New Credit Agreement, up to an aggregate amount of $790 million (including Canadian dollar and multi-currency revolving credit facilities) (the "new revolving credit facility"), and a $410 million term loan facility (the "new term loan facility"). Our subsidiaries, Canada Company and Iron Mountain Switzerland GmbH, may borrow directly under the Canadian revolving credit and multi-currency revolving credit facilities, respectively. Additional subsidiary borrowers may be added under the multi-currency revolving credit facility. The new revolving credit facility terminates on April 16, 2012. With respect to the new term loan facility, quarterly loan payments of approximately $1.0 million are required through maturity on April 16, 2014, at which time the remaining outstanding principal balance of the new term loan facility is due. The interest rate on borrowings under the New Credit Agreement varies depending on our choice of interest rate and currency options, plus an applicable margin. IMI guarantees the obligations of each of the subsidiary borrowers under the New Credit Agreement, and substantially all of our U.S. subsidiaries guarantee the obligations of IMI and the subsidiary borrowers. The capital stock or other equity interests of most of our U.S. subsidiaries, and up to 66% of the capital stock or other equity interests of our first tier foreign subsidiaries, are pledged to secure the New Credit Agreement, together with all intercompany obligations of foreign subsidiaries owed to us or to one of our U.S. subsidiary guarantors.

In June 2008, we completed an underwritten public offering of $300 million in aggregate principal amount of our 8% Senior Subordinated Notes due 2020, which were issued at par. Our net proceeds of $295.5 million, after paying the underwriters' discounts and commissions, was used to (a) redeem the remaining $71.9 million of aggregate principal amount of our outstanding 8¹/4% Senior Subordinated Notes (the "8¹/4% notes") plus accrued and unpaid interest, all of which were called for redemption in June 2008 and paid off in July 2008, (b) repay borrowings under our revolving credit facility, and (c) for general corporate purposes, including possible future acquisitions and investments. We recorded a charge to other expense (income), net of $0.3 million in the second quarter of 2008 related to the early extinguishment of the 8¹/4% notes, which consists of deferred financing costs and original issue discounts related to the 8¹/4% notes.

As of June 30, 2008, we had $210.9 million of outstanding borrowings under the new revolving credit facility, all of which was denominated in Canadian dollars (CAD 213.0 million); we also had various outstanding letters of credit totaling $37.0 million. The remaining availability, based on IMI's leverage ratio, which is calculated based on the last 12 months' earnings before interest, taxes, depreciation and amortization, other adjustments as defined in the New Credit Agreement and current external debt, under the new revolving credit facility on June 30, 2008, was $542.2 million. The interest rate in effect under the new revolving credit facility and new term loan facility were approximately 5.3% and 4.2%, respectively, as of June 30, 2008.

In the second quarter of 2008, we acquired a business in North America that provides Hard Copy, Shredding and Data Protection services, and the remaining 29% minority interest in our Brazilian business, and established operations in Switzerland through a minority-owned joint venture, for total

cash consideration of approximately $42 million. We funded these acquisitions with cash and cash equivalents on-hand, borrowings under the New Credit Agreement and the issuance of senior subordinated notes.

We expect to meet our cash flow requirements for the next twelve months from cash generated from operations, existing cash, cash equivalents, borrowings under the New Credit Agreement and other financings, which may include secured credit facilities, securitizations and mortgage or capital lease financings. We expect to meet our long-term cash flow requirements using the same means described above, as well as the potential issuance of debt or equity securities as we deem appropriate. See Note 6 to Notes to Consolidated Financial Statements.

We have federal net operating loss carryforwards which begin to expire in 2019 through 2022 of $63.3 million at June 30, 2008 to reduce future federal taxable income, if any. We also have an asset for state net operating loss of $24.7 million (net of federal tax benefit), which begins to expire in 2009 through 2025, subject to a valuation allowance of approximately 98%.

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 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.

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 is recorded, processed, summarized and communicated to management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding what is required to be disclosed by a company in the reports that it files under the Exchange Act. As of June 30, 2008 (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 our disclosure controls and procedures. Based upon that evaluation, our chief executive officer and chief financial officer have concluded that, as of the Evaluation Date, our disclosure controls and procedures are effective.

There have been no changes in our internal control over financial reporting during the quarter ended June 30, 2008 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There are no material changes from the risk factors previously disclosed under "Risk Factors" in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2007.

There were no sales of unregistered securities for the three months ended June 30, 2008. The following table sets forth our common stock repurchased for the three months ended June 30, 2008:

The following matters were voted on by our stockholders at the Annual Meeting of Stockholders held on June 5, 2008.

Exhibit No.			Description

	4.1		Seventh Supplemental Indenture, dated as of June 5, 2008, by and among Iron Mountain Incorporated, the Guarantors named therein and The Bank of New York Trust Company, N.A., as trustee (Incorporated by reference to Iron Mountain Incorporated's Current Report on Form 8-K dated June 11, 2008)
	10.1		Amendment to the 2002 Stock Incentive Plan (Incorporated by reference to Iron Mountain Incorporated's Current Report on Form 8-K dated June 11, 2008)
	10.2		Amendment to the 2006 Senior Executive Incentive Program (Incorporated by reference to Iron Mountain Incorporated's Current Report on Form 8-K dated June 11, 2008)
	10.3		Amendment to the 2003 Senior Executive Incentive Program (Incorporated by reference to Iron Mountain Incorporated's Current Report on Form 8-K dated June 11, 2008)
	12		Statement re: Computation of Ratios.
	31.1		Rule 13a-14(a) Certification of Chief Executive Officer.
	31.2		Rule 13a-14(a) Certification of Chief Financial Officer.
	32.1		Section 1350 Certification of Chief Executive Officer.
	32.2		Section 1350 Certification of Chief Financial Officer.

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.


(Mark One)
ý		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 2008
OR
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from to


Delaware (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)


Large accelerated filer ý		Accelerated filer o		Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller reporting company o

	North American Physical Business			International Physical Business			Worldwide Digital Business			Total Consolidated

Balance as of December 31, 2007	$	1,717,700		$	597,195		$	259,397		$	2,574,292
Deductible Goodwill acquired during the period		12,619			—			—			12,619
Nondeductible Goodwill acquired during the period		—			101			—			101
Fair value and other adjustments, net of tax(1)		(1,082	)		(178	)		(6,860	)		(8,120	)
Currency effects		(6,453	)		10,989			—			4,536

Balance as of June 30, 2008	$	1,722,784		$	608,107		$	252,537		$	2,583,428

	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount

Customer Relationships and Acquisition Costs	$	591,768	$	(92,531	)	$	499,237
Core Technology(1)		44,629		(13,714	)		30,915
Non-Compete Agreements(1)		1,518		(1,261	)		257
Deferred Financing Costs		53,547		(17,178	)		36,369

Total	$	691,462	$	(124,684	)	$	566,778

Weighted Average Assumption

Expected volatility	25.9	%	25.8	%
Risk-free interest rate	4.55	%	3.25	%
Expected dividend yield	None		None
Expected life of the option	6.6 years		6.7 years

			Weighted Average Exercise Price			Aggregate Intrinsic Value

Outstanding at December 31, 2007	11,996,635		$	21.01
Granted	1,661,897			29.59
Exercised	(607,167	)		9.56
Forfeited	(676,118	)		26.94
Expired	(19,650	)		15.72

Outstanding at June 30, 2008	12,355,597		$	22.47	7.5	$	64,078

Options exercisable at June 30, 2008	5,015,032		$	16.20	5.8	$	53,031

			Weighted- Average Grant-Date Fair Value

Non-vested at December 31, 2007	29,870		$	21.69
Granted	—			—
Vested	(21,547	)		20.63
Forfeited	(642	)		28.16

Non-vested at June 30, 2008	7,681		$	24.11

			Fair Value Measurements at June 30, 2008 Using

Description	Total Carrying Value at June 30, 2008		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Available for Sale Securities(1)	$	7,506	$	7,506	$	—	$	—
Derivative Liabilities(2)		1,151		—		1,151		—

	Year Ended December 31, 2007			Six Months Ended June 30, 2008

Reserves, Beginning Balance	$	5,553		$	3,602
Reserves Established		2,246			7,979
Expenditures		(3,991	)		(1,292	)
Adjustments to Goodwill, including currency effect(1)		(206	)		(580	)

Reserves, Ending Balance	$	3,602		$	9,709

	Three Months Ended June 30,

	Three Months Ended June 30,						Dollar Change			Percentage Change
	2007			2008			Dollar Change			Percentage Change
Revenues	$	668,689		$	768,857		$	100,168			15.0	%
Operating Expenses		557,455			644,971			87,516			15.7	%

Operating Income		111,234			123,886			12,652			11.4	%
Other Expenses, Net		72,182			88,000			15,818			21.9	%

Net Income	$	39,052		$	35,886		$	(3,166	)		(8.1	)%

OIBDA(1)	$	171,524		$	196,793		$	25,269			14.7	%

OIBDA Margin(1)		25.7	%		25.6	%

		2006						2007												2008

		Third Quarter			Fourth Quarter			First Quarter			Second Quarter			Third Quarter			Fourth Quarter			First Quarter			Second Quarter
Storage Revenue			11	%		10	%		9	%		9	%		8	%		8	%		8	%		8	%
Service and Storage Material
	Sales Revenue		3	%		10	%		10	%		11	%		16	%		12	%		10	%		9	%
Total Revenue			7	%		10	%		9	%		10	%		12	%		10	%		9	%		9	%

	Three Months Ended June 30,										% of Consolidated Revenues

																	Percentage Change (Favorable)/ Unfavorable
					Dollar Change			Percentage Change
	2007		2008		Dollar Change			Percentage Change			2007			2008
Labor	$	151,224	$	171,992	$	20,768			13.7	%		22.6	%		22.4	%		(0.2	)%
Facilities		90,236		98,017		7,781			8.6	%		13.5	%		12.7	%		(0.8	)%
Transportation		31,702		38,693		6,991			22.1	%		4.7	%		5.0	%		0.3	%
Product Cost of Sales		13,499		12,897		(602	)		(4.5	)%		2.0	%		1.7	%		(0.3	)%
Other		21,302		25,372		4,070			19.1	%		3.2	%		3.3	%		0.1	%

	$	307,963	$	346,971	$	39,008			12.7	%		46.1	%		45.1	%		(1.0	)%

	Three Months Ended June 30,								Six Months Ended June 30,

	Three Months Ended June 30,					Dollar Change			Six Months Ended June 30,						Dollar Change
	2007			2008		Dollar Change			20070			2008			Dollar Change
Foreign currency transaction (gains) losses, net	$	(3,947	)	$	3,293	$	7,240		$	(3,994	)	$	(2,638	)	$	1,356
Other, net		712			239		(473	)		(6,964	)		135			7,099

	$	(3,235	)	$	3,532	$	6,767		$	(10,958	)	$	(2,503	)	$	8,455

	Three Months Ended June 30,

	Three Months Ended June 30,						Dollar Change		Percentage Change
	2007			2008			Dollar Change		Percentage Change
Segment Revenue	$	466,250		$	517,101		$	50,851		10.9	%
Segment Contribution(1)	$	133,416		$	150,391		$	16,975		12.7	%
Segment Contribution(1) as a Percentage of Revenue		28.6	%		29.1	%

	Six Months Ended June 30,

	Six Months Ended June 30,						Dollar Change		Percentage Change
	2007			2008			Dollar Change		Percentage Change
Segment Revenue	$	911,248		$	1,021,580		$	110,332		12.1	%
Segment Contribution(1)	$	257,635		$	281,656		$	24,021		9.3	%
Segment Contribution(1) as a Percentage of Revenue		28.3	%		27.6	%

	2007			2008

Cash flows provided by operating activities	$	206,763		$	189,633
Cash flows used in investing activities		(431,320	)		(228,770	)
Cash flows provided by financing activities		271,294			117,989
Cash and cash equivalents at the end of period		94,964			203,197

Period		Average Price Paid per Share

May 1, 2008-May 31, 2008	8,514	$	29.61	—	—

Total	8,514	$	29.61	—	—



Clarke H. Bailey	177,843,771	8,108,398
Constantin R. Boden	184,701,739	1,250,430
Robert T. Brennan	184,750,432	1,201,737
Kent P. Dauten	177,190,183	8,761,986
Michael Lamach	177,845,354	8,106,815
Arthur D. Little	184,721,379	1,230,790
C. Richard Reese	184,717,924	1,234,245
Vincent J. Ryan	184,763,493	1,188,676
Laurie A. Tucker	185,486,617	465,552


	IRON MOUNTAIN INCORPORATED
August 7, 2008 (DATE)	BY:	/s/ BRIAN P. MCKEON Brian P. McKeon Executive Vice President and Chief Financial Officer (Principal Financial Officer)