Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2011

Summary of Significant Accounting Policies

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

	North American Physical Business		International Physical Business			Total Consolidated
Balance as of December 31, 2010	$	1,750,420	$	531,717		$	2,282,137
Deductible goodwill acquired during the year		1,384		—			1,384
Non-deductible goodwill acquired during the year		—		35,207			35,207
Fair value and other adjustments(1)		161		(1,450	)		(1,289	)
Currency effects		7,281		33,409			40,690
Balance as of June 30, 2011	$	1,759,246	$	598,883		$	2,358,129

(1)

Fair value and other adjustments primarily include $(1,347) of adjustments to property, plant and equipment, net, customer relationships and deferred income taxes, as well as $58 of cash paid related to prior years' acquisitions.

Components of amortizable intangible assets

	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer Relationships and Acquisition Costs	$	626,375	$	(176,267	)	$	450,108
Core Technology(1)		3,943		(2,220	)		1,723
Trademarks and Non-Compete Agreements(1)		3,038		(2,302	)		736
Deferred Financing Costs		48,249		(16,146	)		32,103
Total	$	681,605	$	(196,935	)	$	484,670

(1)

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

Stock-based compensation expense for Employee Stock Based Awards is included in the accompanying consolidated statements of operations

	Three Months Ended June 30,				Six Months Ended June 30,
	2010		2011		2010		2011
Cost of sales (excluding depreciation and amortization)	$	105	$	45	$	140	$	320
Selling, general and administrative expenses		5,098		3,555		8,977		7,719
Total stock-based compensation	$	5,203	$	3,600	$	9,117	$	8,039

Summary of the weighted average assumptions used for grants

	Six Months Ended June 30,
Weighted Average Assumptions	2010			2011
Expected volatility		32.7	%		33.4	%
Risk-free interest rate		2.63	%		2.47	%
Expected dividend yield		1	%		3	%
Expected life of option		6.4 years			6.3 years

Summary of option activity

	Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic value
Outstanding at December 31, 2010		12,140,560		$	24.30
Granted		1,004,673			28.51
Exercised		(3,094,618	)		22.28
Forfeited		(1,966,270	)		25.93
Expired		(91,342	)		28.17
Outstanding at June 30, 2011		7,993,003		$	25.17		6.86	$	72,211
Options exercisable at June 30, 2011		4,068,019		$	24.16		5.65	$	40,961
Options expected to vest		3,584,888		$	26.18		8.07	$	28,666

Aggregate intrinsic value of stock options exercised

	Three Months Ended June 30,				Six Months Ended June 30,
	2010		2011		2010		2011
Aggregate intrinsic value of stock options exercised	$	2,461	$	22,862	$	5,964	$	28,909

Summary of restricted stock and RSUs activity

	Restricted Stock and RSUs			Weighted-Average Grant-Date Fair Value
Non-vested at December 31, 2010		168,221		$	22.53
Granted		373,351			29.10
Vested		(18,540	)		25.64
Forfeited		(94,394	)		26.24
Non-vested at June 30, 2011		428,638		$	27.29

Summary of PU activity

	PUs
Non-vested at December 31, 2010		—
Granted		154,239
Vested		—
Forfeited		(39,562	)
Non-vested at June 30, 2011		114,677

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

	Three Months Ended June 30,					Six Months Ended June 30,
	2010			2011		2010			2011
Income (Loss) from continuing operations	$	48,928		$	65,530	$	82,153		$	142,691
Total Income (Loss) from discontinued operations	$	(7,176	)	$	187,517	$	(14,562	)	$	184,975
Net income (loss) attributable to Iron Mountain Incorporated	$	41,292		$	252,684	$	66,858		$	326,144
Weighted-average shares—basic		203,006,000			201,653,000		203,294,000			200,941,000
Effect of dilutive potential stock options		1,199,318			1,538,373		1,161,801			1,266,761
Effect of dilutive potential restricted stock, RSUs and PUs		4,602			119,319		2,346			73,489
Weighted-average shares—diluted		204,209,920			203,310,692		204,458,147			202,281,250
Earnings per share—basic:
Income (Loss) from continuing operations	$	0.24		$	0.32	$	0.40		$	0.71
Total Income (Loss) from discontinued operations	$	(0.04	)	$	0.93	$	(0.07	)	$	0.92
Net income (loss) attributable to Iron Mountain Incorporated—basic	$	0.20		$	1.25	$	0.33		$	1.62
Earnings per share—diluted:
Income (Loss) from continuing operations	$	0.24		$	0.32	$	0.40		$	0.71
Total Income (Loss) from discontinued operations	$	(0.04	)	$	0.92	$	(0.07	)	$	0.91
Net income (loss) attributable to Iron Mountain Incorporated—diluted	$	0.20		$	1.24	$	0.33		$	1.61
Antidilutive stock options, RSUs and PUs, excluded from the calculation		8,273,166			2,126,488		8,337,720			5,413,769

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

			Fair Value Measurements at December 31, 2010 Using
Description	Total Carrying Value at December 31, 2010		Quoted prices in active markets (Level 1)			Significant other observable inputs (Level 2)			Significant unobservable inputs (Level 3)
Money Market Funds(1)	$	107,129	$	—		$	107,129		$	—
Time Deposits(1)		134,022		—			134,022			—
Trading Securities		9,215		8,527	(2)		688	(1)		—
Derivative Assets(3)		2,500		—			2,500			—
Derivative Liabilities(3)		2,440		—			2,440			—

			Fair Value Measurements at June 30, 2011 Using
Description	Total Carrying Value at June 30, 2011		Quoted prices in active markets (Level 1)			Significant other observable inputs (Level 2)			Significant unobservable inputs (Level 3)
Money Market Funds(1)	$	140,947	$	—		$	140,947		$	—
Time Deposits(1)		127,272		—			127,272			—
Trading Securities		10,471		9,371	(2)		1,100	(1)		—
Derivative Assets(3)		3,301		—			3,301			—
Derivative Liabilities(3)		319		—			319			—

(1)

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

(2)

Securities are measured at fair value using quoted market prices.

(3)

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

Other expense (income), net

	Three Months Ended June 30,					Six Months Ended June 30,
	2010		2011			2010		2011
Foreign currency transaction (gains) losses, net	$	3,754	$	1,853		$	8,951	$	(1,243	)
Debt extinguishment expense, net		—		1,843			—		993
Other, net		394		(1,039	)		3,957		(6,046	)
	$	4,148	$	2,657		$	12,908	$	(6,296	)