8-K/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC  20549

FORM 8-K/A

(Amendment No. 1)

CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): January 10, 2018

IRON MOUNTAIN INCORPORATED

(Exact Name of Registrant as Specified in Its Charter)

Delaware

(State or Other Jurisdiction of Incorporation)

1-13045	23-2588479
(Commission File Number)	(IRS Employer Identification No.)
One Federal Street, Boston, Massachusetts	02110
(Address of Principal Executive Offices)	(Zip Code)

(617) 535-4766

(Registrant’s Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  o

In this Current Report on Form 8-K, the terms “we,” “us,” and “our” refer to Iron Mountain Incorporated.

Item 2.01.Completion of Acquisition or Disposition of Assets.

On January 10, 2018, we filed a Current Report on Form 8-K, or the Original Form 8-K, to report the completion of our previously announced acquisition of IO Data Centers, LLC, or IODC, pursuant to a purchase agreement, or the Purchase Agreement, dated as of December 11, 2017, among IRM Data Centers Expansion LLC, our indirect, wholly-owned subsidiary, IODC, the Sellers referred to therein, Innovation Holdings, LLC, solely in its capacity as a representative of the Sellers, and, solely with respect to Articles 1, 10 and 11 of the Purchase Agreement, us, as guarantor, to purchase the United States operations of IODC, a colocation data center services provider, and its United States subsidiaries, or the IODC Transaction.

This amendment to the Original Form 8-K is being filed to provide the financial statements and pro forma financial information required by Item 9.01(a) and (b) of Form 8-K relating to the IODC Transaction. This amendment reports no other updates or amendments to the Original Form 8-K.

Item 9.01.Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired

The audited combined statement of revenue and certain operating expenses of IO Data Centers, LLC, IO Data Centers USA, LLC, IO Capital Princess, LLC, IO Phoenix One, LLC, IO New Jersey One, LLC, IO Ohio One, LLC, IO.Cloud, LLC, IO Data Centers Government Services, LLC and 4802 E Van Buren, LLC, or the IO Portfolio, for the year ended December 31, 2017 and the notes related thereto are filed as Exhibit 99.1 hereto.

(b) Pro Forma Financial Information

The unaudited pro forma consolidated balance sheet and unaudited pro forma statement of operations of the combined company as of and for the year ended December 31, 2017 and the notes related thereto are filed as Exhibit 99.2 hereto.

(d) Exhibits

23.1	Consent of Deloitte & Touche LLP. (Filed herewith.)
99.1	Audited Combined Statement of Revenue and Certain Operating Expenses for the year ended December 31, 2017 of the IO Portfolio, and notes thereto. (Filed herewith.)
99.2	Unaudited Pro Forma Balance Sheet and Unaudited Pro Forma Statement of Operations of the combined company as of and for the year ended December 31, 2017, and notes thereto. (Filed herewith.)

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SIGNATURES

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

	IRON MOUNTAIN INCORPORATED
	By:	/s/ Stuart B. Brown
	Name:	Stuart B. Brown
	Title:	Executive Vice President and Chief Financial Officer
Date: March 19, 2018

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EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in Registration Statement No. 333-209827 on Form S-3ASR, and Nos. 333-201636, 333-192019, 333-165261, 333-155304, 333-138716, 333-130270, 333-120395, 333-118322, 333-95901, 333-89008, and 333-43787, and 333-221176 on Form S-8 of Iron Mountain Incorporated of our report dated March 16, 2018, relating to the combined statement of revenue and certain operating expenses of IO Data Centers, LLC, IO Data Centers USA, LLC, IO Capital Princess, LLC, IO Phoenix One, LLC, IO New Jersey One, LLC, IO Ohio One, LLC, IO.Cloud, LLC, IO Data Centers Government Services, LLC and 4802 E Van Buren, LLC (collectively, “IO Portfolio”) for the year ended December 31, 2017 (which report expresses an unmodified opinion and includes an emphasis-of-matter paragraph referring to the purpose of the statement), appearing in this Current Report on Form 8-K/A of Iron Mountain Incorporated filed March 19, 2018.

/s/ Deloitte & Touche LLP

Phoenix, Arizona

March 19, 2018

EX-99.1

Exhibit 99.1

INDEPENDENT AUDITORS’ REPORT

To the Board of Directors and Members of Iron Mountain Incorporated

Phoenix, Arizona

We have audited the accompanying Combined Statement of Revenue and Certain Operating Expenses of IO Data Centers, LLC, IO Data Centers USA, LLC, IO Capital Princess, LLC, IO Phoenix One, LLC, IO New Jersey One, LLC, IO Ohio One, LLC, IO.Cloud, LLC, IO Data Centers Government Services, LLC and 4802 E Van Buren, LLC (collectively, “IO Portfolio” or the “Company”) for the year ended December 31, 2017, and the related notes (the “historical summary”).

Management’s Responsibility for the Historical Summary

Management is responsible for the preparation and fair presentation of the historical summary in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the historical summary that is free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on the historical summary based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the historical summary is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the historical summary. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the historical summary, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the historical summary in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the historical summary.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the historical summary referred to above presents fairly, in all material respects, the revenue and certain operating expenses described in Note 1 of IO Portfolio for the year in ended December 31, 2017, in accordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter

We draw attention to Note 1 to the historical summary, which describes that the accompanying historical summary was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission (S-X Rule 3-14) and is not intended to be a complete presentation of the Company’s revenue and expenses. Our opinion is not modified with respect to this matter.

/s/ DELOITTE & TOUCHE LLP

Phoenix, Arizona

March 16, 2018

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IO Portfolio

Combined Statement of Revenue and Certain Operating Expenses

(dollars in thousands)

	Year ended
	December
	31, 2017
Revenues:
Data center services	$	126,958
Related-party data center services	11,661
Total revenues	138,619
Certain operating expenses:
Utilities	21,111
Property operating costs	19,995
Property taxes	3,328
Insurance	760
Total certain operating expenses	45,194
Revenue in excess of certain operating expenses	$	93,425

See accompanying notes to the combined statement of revenue and certain operating expenses.

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IO Portfolio

Notes to the Combined Statement of Revenue and Certain Operating Expenses

For the Year Ended December 31, 2017

1.Basis of Presentation

The accompanying combined statement of revenue and certain operating expenses includes the revenue and certain operating expenses of the IO Portfolio, consisting of a land parcel in Arizona and two data center properties located in Arizona, and data center properties in Ohio and New Jersey (the “Portfolio”).  The Portfolio comprises approximately 1.6 million square feet, including data center space totaling approximately 728,000 square feet.

The Portfolio is owned by IO Data Centers LLC (the “Parent”) for the period presented.   The accompanying combined statement of revenue and certain operating expenses includes certain accounts of the Portfolio, and intercompany amounts have been eliminated.

The accompanying combined statement of revenue and certain operating expenses has been prepared for the purpose of complying with Rule 3-14 of Regulation S-X of the U.S. Securities and Exchange Commission for the acquisition of one or more real estate properties which in aggregate are significant. The Portfolio is considered a group of related properties as the individual properties were under common control and management by the Parent, and the acquisition of a single property in the Portfolio was conditional on the acquisition of the other properties. Therefore, a single combined statement of revenue and certain operating expenses is presented. The combined statement of revenue and certain operating expenses excludes the following expenses which may not be comparable to the proposed future operations of the Portfolio:

·Depreciation and amortization

·Income taxes

·Interest expense

·Management fees paid to related parties

·Payroll and other costs not directly related to the proposed future operations of the Portfolio

2.Summary of Significant Accounting Policies

Revenue Recognition

Revenue is recognized when persuasive evidence of an arrangement exists, services have been rendered, the price is fixed and collectability is reasonably assured. The Portfolio generates revenue through monthly recurring services, which consist of license fees for data center and colocation services, power charges, and other data center-related services. These services are referred to as Data Center as a Service. Contracts are generally written as license service agreements for recurring monthly services with terms ranging in length from one to 10 years. In accordance with the FASB ASC 840, Leases, service contracts are treated as operating leases and revenue is recognized ratably over the term of the related contract on a straight-line basis.

Some incremental revenue is generated through nonrecurring or periodic charges for data center-related services, such as custom installations and customer-specific work and is recognized when the services are provided in accordance with FASB ASC 605, Revenue Recognition. These revenue arrangements with multiple deliverables are divided into separate units and revenue is allocated using the relative selling price method based upon management’s best estimate of selling price.

The Portfolio will typically provide certain service levels, such as the continuity of power, as agreed upon in each individual customer contract. The contract also typically states that in the event service levels are not achieved, the Portfolio will credit the customer’s future billings. Approximately $0.2 million of service level credits were issued during the year ended December 31, 2017.

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In certain instances (depending on tax jurisdictions) the Portfolio will assess and collect taxes from customers and remit such amounts to governmental authorities on a pass-through basis. Taxes collected and remitted are reported on a net basis, resulting in no impact to reported results.

Use of Estimates

Management has made a number of estimates and assumptions relating to the reporting and disclosure of revenue and certain operating expenses during the reporting period to prepare the combined statement of revenue and certain expenses in conformity with U.S. generally accepted accounting principles.  Estimates are used for, but not limited to, the following:

·Accrued operating liabilities

·Revenue recognition allocated in multiple-deliverable contracts or arrangements

·Recognition and measurement of contingencies

·    Inclusion of certain operating expenses expected to be comparable to the future proposed operations of the Portfolio.

These estimates are based on management’s best knowledge of current events.

3.Future Minimum Customer Contract Revenue

Revenue contracts contain varying terms and expiration dates and frequently have provisions to extend the length of the agreement and other terms and conditions as negotiated. The Portfolio retains substantially all the risks and benefits of ownership of the underlying assets licensed to customers in accordance with the contracts.

As of December 31, 2017, the future minimum non-cancellable contract payments for each of the next five years and thereafter is as follows (dollars in thousands):

Year Ending December 31,
2018	$	108,493
2019	85,999
2020	66,532
2021	38,608
2022	27,441
Thereafter	61,325
Total remaining noncancellable contract payments	$	388,398

Remaining non-cancellable contract payments, to be collected over a weighted-average period of 5.25 years, were $388.4 million as of December 31, 2017. Contract value represents the minimum contracted payments and does not represent fair value or revenue to be recognized.

4.Tenant Concentrations

No tenant comprised more than 10% of the Portfolio’s combined rental revenue for the year ended December 31, 2017.

5.Related Party Transactions

A wholly owned subsidiary of the Portfolio’s ultimate parent company provides services to the Portfolio.  For the year-ended December 31, 2017, $0.66 million of related party services are included in the Portfolio’s property operating expenses.

During the year ended December 31, 2017, the Portfolio recognized $11.7 million of revenue related to the sale of data center services to related parties, including affiliates of its members. Related-party revenue recognized for the year ended December 31, 2017 was reduced by $1.3 million of equity

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accretion related to the equity units and warrants of the Portfolio’s parent that were issued to a customer in conjunction with the execution of their master services agreement.

6.Commitments and Contingencies

The Portfolio is subject to various legal proceedings, claims, and government audits that arise in the ordinary course of business.  Management regularly evaluates the status of these matters to assess whether a loss is probable or there is a reasonable possibility that a loss may have been incurred and determine if accruals are appropriate and further evaluates these matters to assess whether an estimate of possible loss or range of loss can be made, if accruals are not appropriate.  There are no pending actions that management believes would have a material adverse effect on the Portfolio’s results of operations.

7.Certain Operating Expenses

Certain operating expenses include only those costs expected to be comparable to the proposed future operations of the property, such as utilities, maintenance expense, property operating costs, property taxes, and insurance costs.

8.Subsequent Events

On January 10, 2018, the Portfolio was acquired by Iron Mountain Incorporated for a total purchase price of $1.34 billion, subject to working capital and other customary adjustments and including additional cash consideration related to Portfolio performance since the signing of the purchase agreement. Management of the Portfolio has evaluated subsequent events related to the Portfolio for recognition or disclosure through March 16, 2018, which is the date the combined statement of revenue and certain operating expenses was available to be issued, and determined that there are no other items to disclose.

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EX-99.2

Exhibit 99.2

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share amounts)

On December 11, 2017, IRM Data Centers Expansion LLC (“Buyer”), an indirect, wholly owned subsidiary of Iron Mountain Incorporated (“IMI”; IMI, Buyer and IMI’s other subsidiaries being collectively referred to as “we”, “us” or the “Company” ), entered into a purchase agreement (the “Purchase Agreement”) with IO Data Centers, LLC, a leading data center colocation space and solutions provider based in Phoenix, Arizona (“IODC”), the Sellers referred to therein, Innovation Holdings, LLC, solely in its capacity as a representative of the Sellers, and, solely with respect to Articles 1, 10 and 11 of the Purchase Agreement, IMI, as a guarantor, to acquire the United States operations of IODC for an aggregate cash purchase price of $1,315,000, plus up to $60,000 of additional proceeds, subject to certain adjustments as set forth in the Purchase Agreement (the “IODC Transaction”). On January 10, 2018, the Company closed the IODC Transaction.

The accompanying unaudited pro forma consolidated financial statements present the pro forma consolidated financial position and results of operations of the Company based upon the historical financial statements of the Company and IODC, after giving effect to the IODC Transaction.

The unaudited pro forma consolidated balance sheet as of December 31, 2017, and the unaudited pro forma consolidated statement of operations for the year ended December 31, 2017, are presented herein. The accompanying unaudited pro forma consolidated financial statements are based upon the historical financial statements and have been derived from the (1) audited consolidated financial statements of IMI contained in its Annual Report on Form 10-K as of and for the fiscal year ended December 31, 2017, and (2) audited combined statement of revenue and certain expenses of IODC for the year ended December 31, 2017. The historical financial information has been adjusted to give effect to pro forma adjustments that are (1) directly attributable to the IODC Transaction; (2) factually supportable; and (3) expected to have a continuing impact on the operations of the Company.

The accompanying unaudited pro forma consolidated financial statements are prepared using the acquisition method of accounting, with the Company treated as the acquirer and as if the IODC Transaction had been consummated on (1) December 31, 2017 for purposes of preparing the unaudited pro forma consolidated balance sheet as of December 31, 2017 and (2) January 1, 2017 for purposes of preparing the unaudited pro forma consolidated statement of operations for the year ended December 31, 2017. The Company is in the process of obtaining a third-party valuation related to assets acquired and liabilities assumed from IODC. The amounts of certain assets presented in the accompanying unaudited pro forma consolidated financial statements are based on preliminary valuations and are subject to adjustment as additional information is obtained and the third-party valuation is finalized. The primary areas of the purchase price allocation that are not finalized relate to the fair values of property and equipment and lease-based intangible assets. Any excess purchase price over the acquired net assets, as adjusted to reflect estimated fair values, has been recorded as goodwill.

IMI is organized and operates as a real estate investment trust for United States federal income tax purposes (a “REIT”). As a REIT, IMI is generally entitled to a deduction for dividends that it pays and therefore is not subject to United States federal corporate income tax on its net taxable income that is currently distributed to its stockholders. However, IMI may be subject to certain federal, state, local and foreign taxes on its income or assets, including (1) taxes on any undistributed income, (2) taxes related to its taxable REIT subsidiaries, (3) franchise taxes, (4) property taxes and (5) transfer taxes.

The accompanying unaudited pro forma consolidated financial statements presented are based on the assumptions and adjustments described in the accompanying notes. The accompanying unaudited pro forma consolidated financial statements are provided for illustrative purposes only and do not purport to represent what the actual consolidated results of operations or the consolidated financial position of the Company would have been had the IODC Transaction occurred on the dates assumed, nor are they necessarily indicative of what the financial position or results of operations would be for any future periods. The unaudited pro forma consolidated statement of operations does not include the impact of any revenue, cost or other operating synergies that may result from the IODC Transaction or any related restructuring costs. The accompanying unaudited pro forma consolidated financial

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statements reflect a hypothetical situation, and actual results may differ from these unaudited pro forma consolidated financial statements once the Company has finalized the required purchase price allocation. There can be no assurance that such finalization will not result in material changes. The accompanying unaudited pro forma consolidated financial statements should be read in conjunction with (1) the accompanying notes to the unaudited pro forma consolidated financial statements; (2) the audited consolidated financial statements as of and for the fiscal year ended December 31, 2017 and notes thereto of the Company included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commision (“SEC”) on February 16, 2018; and (3) the audited combined statement of revenue and certain expenses and notes thereto of IODC for the year ended December 31, 2017, which is filed as Exhibit 99.1 to the Current Report on Form 8-K/A to which these unaudited pro forma consolidated financial statements are filed as Exhibit 99.2.

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IRON MOUNTAIN INCORPORATED
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 2017
(In thousands)

	Historical			Purchase Accounting				Other Pro Forma
	Iron Mountain			Adjustments			(Note)	Adjustments			(Note)	Pro Forma
ASSETS
Current Assets:
Cash and cash equivalents	$	925,699		$	(1,340,000	)	1,4(a),6(a)	$	816,000		3,6(f),6(g)	$	401,699
Accounts receivable, net	835,742			4,120			6(e)	—				839,862
Prepaid expenses and other	188,874			2,389			6(e)	—				191,263
Total Current Assets	1,950,315			(1,333,491		)		816,000				1,432,824
Property, Plant and Equipment:
Property, plant and equipment	6,251,100			858,432			4(b),6(b)	—				7,109,532
Less—Accumulated depreciation	(2,833,421		)	—				—				(2,833,421		)
Property, Plant and Equipment, net	3,417,679			858,432				—				4,276,111
Other Assets, net:
Goodwill	4,070,267			261,374			4(b),6(d),6(e)	—				4,331,641
Customer relationships, customer inducements and lease-based intangibles	1,400,547			255,376			4(b),6(c)	—				1,655,923
Other	133,594			—				—				133,594
Total Other Assets, net	5,604,408			516,750				—				6,121,158
Total Assets	$	10,972,402		$	41,691			$	816,000			$	11,830,093
LIABILITIES AND EQUITY
Current Liabilities:
Current portion of long-term debt	$	146,300		$	—			$	—			$	146,300
Accounts payable	289,137			2,689			6(e)	—				291,826
Accrued expenses	653,146			10,118			6(e)	12,748			6(h)	676,012
Deferred revenue	241,590			10,335			6(e)	—				251,925
Total Current Liabilities	1,330,173			23,142				12,748				1,366,063
Long-term Debt, net of current portion	6,896,971			—				741,000			6(g)	7,637,971
Other Long-term Liabilities	73,039			18,549			4(b),6(c)	—				91,588
Deferred Rent	126,231			—				—				126,231
Deferred Income Taxes	155,728			—				—				155,728
Redeemable Noncontrolling Interests	91,418			—				—				91,418
Equity:
Iron Mountain Incorporated Stockholders’ Equity:
Preferred stock	—			—				—				—
Common stock	2,831			—				22			6(f)	2,853
Additional paid-in capital	4,164,562			—				74,978			6(f)	4,239,540
(Distributions in excess of earnings) Earnings in excess of distributions	(1,765,966		)	—				(12,748		)	6(h)	(1,778,714		)
Accumulated other comprehensive items, net	(103,989		)	—				—				(103,989		)
Total Iron Mountain Incorporated Stockholders’ Equity	2,297,438			—				62,252				2,359,690
Noncontrolling Interests	1,404			—				—				1,404
Total Equity	2,298,842			—				62,252				2,361,094
Total Liabilities and Equity	$	10,972,402		$	41,691			$	816,000			$	11,830,093

See accompanying notes to unaudited pro forma consolidated financial statements.

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IRON MOUNTAIN INCORPORATED
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2017
(In thousands, except per share data)

	Historical					Purchase Accounting				Other Pro Forma
	Iron Mountain			IO Data Centers, LLC		Adjustments			(Note)	Adjustments			(Note)	Pro Forma
Revenues:
Storage rental	$	2,377,557		$	138,275	$	1,143		7(a),7(b)	$	—			$	2,516,975
Service	1,468,021			344		—				—				1,468,365
Total Revenues	3,845,578			138,619		1,143				—				3,985,340
Operating Expenses:
Cost of sales (excluding depreciation and amortization)	1,685,318			45,194		—				—				1,730,512
Selling, general and administrative	984,965			—		—				13,350			7(d)	998,315
Depreciation and amortization	522,376			—		67,419			7(c)	—				589,795
Intangible impairments	3,011			—		—				—				3,011
Loss (gain) on disposal/write-down of property, plant and equipment (excluding real estate), net	799			—		—				—				799
Total Operating Expenses	3,196,469			45,194		67,419				13,350				3,322,432
Operating Income (Loss)	649,109			93,425		(66,276		)		(13,350		)		662,908
Interest Expense, Net	353,575			—		—				44,614			7(e)	398,189
Other Expense (Income), Net	79,429			—		—				—				79,429
Income (Loss) from Continuing Operations Before Provision (Benefit) for Income Taxes and Gain on Sale of Real Estate	216,105			93,425		(66,276		)		(57,964		)		185,290
Provision (Benefit) for Income Taxes	25,947			—		—				—				25,947
Gain on Sale of Real Estate, Net of Tax	(1,565		)	—		—				—				(1,565		)
Income (Loss) from Continuing Operations	191,723			93,425		(66,276		)		(57,964		)		160,908
Earnings (Losses) per Share - Basic:	$	0.71												$	0.56
Earnings (Losses) per Share - Diluted:	$	0.71												$	0.56
Weighted Average Common Shares Outstanding—Basic	265,898									16,071			7(f)	281,969
Weighted Average Common Shares Outstanding—Diluted	266,845									16,065			7(f)	282,910

See accompanying notes to unaudited pro forma consolidated financial statements.

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NOTES TO UNAUDITED PRO FORMA

CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share amounts)

NOTE 1—DESCRIPTION OF THE IODC TRANSACTION

On December 11, 2017, IMI and Buyer entered into the Purchase Agreement to acquire the United States operations of IODC, including the land and buildings associated with four data centers in Phoenix and Scottsdale, Arizona; Edison, New Jersey; and Columbus, Ohio, for an aggregate cash purchase price of $1,315,000 (the “Initial IODC Consideration”), plus up to $60,000 of additional proceeds (including (i) $25,000 of contingent consideration (the “IODC Contingent Consideration”) and (ii) $35,000 of additional payments associated with the execution of future customer contracts), subject to certain adjustments as set forth in the Purchase Agreement.

On January 10, 2018, we completed the IODC Transaction and paid approximately $1,340,000 of total consideration, consisting of the Initial IODC Consideration and the IODC Contingent Consideration.

NOTE 2—BASIS OF PRESENTATION

The accompanying unaudited pro forma consolidated financial statements were prepared in accordance with Article 11 of SEC Regulation S-X. The accompanying unaudited pro forma consolidated financial statements are based upon the historical financial statements and have been derived from the (1) audited consolidated financial statements of the Company contained in its Annual Report on Form 10-K as of and for the fiscal year ended December 31, 2017, and (2) audited combined statement of revenue and certain expenses of IODC for the year ended December 31, 2017.

The unaudited pro forma consolidated financial statements as it relates to the IODC Transaction were prepared using the acquisition method of accounting with IMI treated as the acquiring entity. Accordingly, the historical consolidated financial information has been adjusted to give effect to the impact of the consideration issued in connection with the IODC Transaction. In the unaudited pro forma consolidated balance sheet, the purchase price has been allocated to the assets acquired and liabilities assumed based upon management’s preliminary estimate of their respective fair values as of the date of the IODC Transaction. Any differences between the fair value of the consideration issued and the fair value of the assets acquired and liabilities assumed was recorded as goodwill. The amounts allocated to the assets acquired and liabilities assumed in the unaudited pro forma consolidated financial statements are based on management’s preliminary valuation estimates. Definitive allocations will be performed and finalized based on certain valuations and other studies that will be performed by the Company, with the assistance of outside valuation specialists, during the measurement period of the IODC Transaction. Accordingly, the purchase price allocation adjustments and related depreciation and amortization reflected in the unaudited pro forma consolidated financial statements are preliminary, have been made solely for the purpose of preparing these statements and are subject to revision based on the final determination of fair value upon the conclusion of the measurement period of the IODC Transaction.

The unaudited pro forma consolidated statement of operations also includes certain purchase accounting adjustments, including items expected to have a continuing impact on the consolidated results, such as depreciation of the acquired tangible assets, amortization of the acquired intangible assets and assumed intangible liabilities, interest expense related to the 51/4% Notes (as defined below), and the impact of recording the remaining amounts due under the acquired leases on a straight-line basis. The unaudited pro forma consolidated statement of operations does not include the impacts of any revenue, cost or other operating synergies that may result from the IODC Transaction or any related restructuring costs.

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NOTE 3—FINANCING

Debt Offering

In December 2017, IMI completed a private offering of $825,000 in aggregate principal amount of 5¼% Senior Notes due 2028 (the “5¼% Notes”). The 5¼% Notes were issued at par. The net proceeds were approximately $814,700, after deducting discounts to the initial purchasers.

Equity Offering

In December 2017, IMI entered into an underwriting agreement (the “Underwriting Agreement”) with a syndicate of 16 banks (the “Underwriters”) related to the public offering by IMI of 14,500,000 shares (the “Firm Shares”) of its common stock (the “Equity Offering”). The offering price to the public for the Equity Offering was $37.00 per share, and IMI agreed to pay the Underwriters an underwriting commission of $1.38195 per share. The net proceeds to IMI from the Equity Offering, after deducting underwriters’ commissions, was $516,462.

Pursuant to the Underwriting Agreement, the Underwriters were granted a 30-day option to purchase from us up to an additional 2,175,000 shares of common stock (the “Option Shares”) at the public offering price, less the underwriting commission and less an amount per share equal to any dividends or distributions declared by IMI and payable on the Firm Shares but not payable on the Option Shares (the “Over-Allotment Option”). On January 10, 2018, the Underwriters exercised the Over-Allotment Option in its entirety. The net proceeds from the exercise of the Over-Allotment Option, after deducting underwriters’ commissions and offering expenses, was approximately $75,000.

Use of Debt and Equity Offering Proceeds

The issuance of the 5¼% Notes and the Equity Offering occurred prior to December 31, 2017. At December 31, 2017, pending their use to finance the purchase of the IODC Transaction, the net proceeds of the Equity Offering, together with the net proceeds from the issuance of the 5¼% Notes, were used to temporarily repay approximately $807,000 of borrowings under the Company’s revolving credit facility and invest approximately $524,000 in money market funds. The purchase price of the IODC Transaction was assumed to be funded by approximately $524,000 from the money market funds, $75,000 in proceeds from the Over-Allotment Option, and $741,000 in additional borrowings under our revolving credit facility.

NOTE 4—PURCHASE PRICE

At the closing of the IODC Transaction, the Company paid approximately $1,340,000 in total consideration, including the Initial IODC Consideration and the IODC Contingent Consideration.

(a) The table below reflects the cash paid and financing sources for the IODC Transaction:

Initial IODC Consideration	$	1,315,000
IODC Contingent Consideration	25,000
Total cash paid	$	1,340,000
Cash and cash equivalents	$	524,000
Exercise of Over-Allotment Option	75,000
Borrowings under the revolving credit facility	741,000
Total source of funds	$	1,340,000

(b) The table below reflects the preliminary purchase price allocation for the IODC Transaction:

Property, plant and equipment	$	858,432
Lease-based intangible assets and liabilities	236,827
Net current liabilities over assumed assets	(16,633		)
Estimated fair value of identifiable net assets acquired	1,078,626
Goodwill	261,374
Estimated purchase price	$	1,340,000

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The goodwill balance is primarily attributed to the assembled workforce, expanded customer opportunities and cost and other operating synergies anticipated upon the integration of the operations of the Company and IODC.

IMI is organized and operates as a REIT. The assets and related income from the IODC Transaction have largely been integrated into IMI’s REIT structure and, accordingly, are not expected to be subject to U.S. federal income taxes. As such, no deferred taxes have been recorded for purposes of the unaudited pro forma consolidated financial statements. Further, IMI does not anticipate the IODC Transaction will have a material impact on state and local taxes.

NOTE 5—CONFORMING ACCOUNTING POLICIES

At this time, IMI is not aware of any material differences between the accounting policies of IMI and IODC at the acquisition date. IMI is currently in the process of conducting a more detailed review of IODC’s accounting policies in an effort to determine if differences in accounting policies require IMI to conform IODC’s accounting policies to its accounting policies. As a result, IMI may identify additional differences between the accounting policies of the two companies that, when conformed, could have a material impact on these unaudited pro forma consolidated financial statements.

NOTE 6—UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET ADJUSTMENTS

Purchase Accounting Adjustments

(a) Reflects the cash portion of the purchase price paid of approximately $1,340,000.

(b) Reflects the total fair value of acquired property, plant and equipment of $858,432. The fair value estimate for property, plant and equipment is preliminary and has been determined based on the assumptions that management believes market participants would use in pricing an asset.

(c) Reflects identifiable intangible assets and liabilities expected to be recognized in connection with the IODC Transaction, consisting of the following:

Description	Estimated Fair Value			Presentation in Unaudited Pro Forma Consolidated Balance Sheet
In-place leases	$	110,902		Customer relationships, customer inducements and lease-based intangibles
Tenant relationships	100,948			Customer relationships, customer inducements and lease-based intangibles
Above-market leases	31,590			Customer relationships, customer inducements and lease-based intangibles
Below-market leases	(18,549		)	Other Long-term Liabilities
Tenant improvements, legal commissions and other costs	11,936			Customer relationships, customer inducements and lease-based intangibles
Total identifiable net intangible assets	$	236,827

The fair value estimate for identifiable intangible assets and liabilities has been determined based on the assumptions that management believes market participants would use.

(d) Goodwill is calculated as the difference between the fair value of the purchase price and the values assigned to the identifiable tangible and intangible assets acquired and liabilities assumed. See Note 4 for the calculation of the amount of goodwill recognized in connection with the IODC Transaction.

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The final fair value determination for tangible assets and identifiable intangible assets and liabilities may differ from this preliminary determination and those differences may be material.

(e) Reflects current assets acquired and current liabilities assumed upon the closing of the IODC Transaction.

Other Pro Forma Adjustments

(f) Reflects the adjustment to give effect to the issuance of the Option Shares upon the exercise of the Over-Allotment Option in its entirety.

(g) Reflects the adjustment to give effect to the borrowings under the Company’s revolving credit facility to finance a portion of the IODC Transaction.

(h) Reflects the recognition of transaction costs incurred by the Company upon the closing of the IODC Transaction.

NOTE 7—UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS ADJUSTMENTS

Purchase Accounting Adjustments

(a) Reflects an adjustment to storage revenue of $2,484 for the year ended December 31, 2017, representing a net decrease in storage revenue related to the amortization of net above-market leases.

Description	Estimated Useful Life (in years)	Amount			Annual Expense
Above-market leases	5.25	$	31,590		$	6,017
Below-market leases	5.25	(18,549		)	(3,533		)
Total decrease to storage revenue					$	2,484

(b) Reflects an increase to storage revenue of $3,627 for the year ended December 31, 2017, representing the impact to storage revenue for the remaining amounts due under the acquired leases on a straight-line basis.

(c) Reflects depreciation and amortization on the assets acquired in the IODC Transaction based upon our current estimate of the useful lives of such assets.

Description	Estimated Useful Life (in years)	Amount		Annual Expense
Building and building improvements	40	$	266,162	$	6,654
Data center equipment and modules	19	508,650		26,658
Land improvements	14	12,060		861
In-place leases	5.25	110,902		21,124
Tenant relationships	10.25	100,948		9,849
Tenant improvements, legal commissions and other costs	5.25	11,936		2,273
Total				$	67,419

Other Pro Forma Adjustments

(d) Reflects an adjustment to selling, general and administrative expense of $13,350 for the year ended December 31, 2017 representing salary, commissions and related benefits expenses of non-property-level IODC employees retained by the Company in connection with the IODC Transaction who are not fully devoted to the operations of the facilities, but are expected to have a continuing impact on the Company.

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(e) Reflects the increased annual interest expense and amortization of deferred financing costs as a result of the December 2017 issuance of the 5¼% Notes, as discussed in Note 3.

(f) The weighted average shares outstanding used to compute pro forma basic and diluted net loss per share for the year ended December 31, 2017 have been adjusted to give effect to the issuance of (1) the Firm Shares in connection with the Equity Offering and (2) the Option Shares issued upon the exercise of the Over-Allotment Option in its entirety as if such issuances had occurred on January 1, 2017.

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