Vance Edelson - Morgan Stanley John Healy - Northcoast Research Eric Boyer - Wells Fargo Securities

Good morning. My name is Bonny and I will be your conference operator today. At this time I would like to welcome everyone to the Iron Mountain first quarter 2010 earnings call webcast. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator Instructions) I would now like to turn the call over to Mr. Golden, Vice President of Investor Relation. Please go ahead, Sir.

Thank you, and welcome everyone to our 2010 first quarter earnings conference call. After my announcement this morning, Brian McKeon will review our financial results, followed by Bob Brennan’s CEO remarks. When Bob is finished with his comments we’ll open up the phones for our Q&A. For our custom, we have a user controlled slide present on the Investor Relations page of our website at www.ironmountain.com. Referring now to slide 2; today’s earnings call and slide presentation will contain a number of forward-looking statements most notably our outlook for our 2010 financial performance. All forward-looking statements are subject to risks and uncertainties. Please refer to today’s press release, the Safe Harbor language on this slide and our most recently filed annual report on Form 10-K, for a discussion of the major risk factors that could cause our actual results to be materially different from those contemplated in our forward-looking statements. As a remainder, on our last earnings call we introduced two new metrics; adjusted OIBDA, and adjusted EPS, as part of our ongoing efforts to enhance our investor communications. We used several non-GAAP measures when presenting our financial results; adjusted OIBDA, adjusted EPS, and free cash flow before acquisition and investments among others are metrics we speak to frequently, and ones we believe to be important in evaluating our overall financial performance. We provide additional information and a reconciliation of these non-GAAP measures to the appropriate GAAP measures as required by Red G at the Investor Relations page of our website, as well as in today’s press release. With that, I would like to introduce our CFO, Brain McKeon.

Thanks Steven. Slide three highlights the key messages from today’s review. We posted solid results in the first quarter of 2010. Revenue growth of 7% was in line with expectations. Storage internal growth was solid at 4%. Service internal growth was 5%, as it’s strength in complementary service revenues, including benefits from higher paper prices offset continued softness in core services. As we work to strengthen our revenue growth, we continue to drive strong profit and free cash flow performance. For the quarter we delivered adjusted OIBDA growth of 11%, driven by gross margin expansion of nearly 200 basis points. This expansion continues to be supported by productivity and pricing gains. Proper gain in capital efficiency drove year-to-date free cash flow of $54 million. Adjusted EPS for the quarter was $0.23 per share, an increase of 19% compared to the same period last year. Our reported EPS was $0.12 per share, including the impacts of the higher effective rate and a change in fiscal year end for Iron Mountain Europe from October 31 to December 31. I’ll discuss these items more fully later in my remarks. Overall Q1 was a solid start to the year, we are on track towards delivering strong full year financial performance, consistent with the goals shared on our Q4 earnings call. We are refining our guidance today to include the expected impacts of the recent earthquakes on our Chilean Business, including items such as insurance deductibles and remediation costs. Let’s now turn to slide four and begin or review of the first quarter results. Slide four compares results for this quarter to the first quarter of 2009. As I mentioned, revenues for the quarter were up 7% to $777 million. From a segment perspective, North American Physical posted 4% internal growth, supported by 4% storage…

Thanks Brain, and good morning everyone. As Brain noted our quarterly financial results came in as expected. Our internal revenue growth improved somewhat, despite difficult comparisons and continued pressures from the economy and service revenues. We continued to deliver strong profit growth and cash flow. Overall, Q1 was the solid start to the year, and Ron tracked towards delivering strong financial performance this year. Key messages that you should hear in today’s update; first our financial performance remains strong. The performance reflects the strength of our business model and the gains that we continue to drive through our focus on operational excellence across our business. We are working on improving our growth trajectory, guarding aggressively against new business with positive early results. This emphasis will help offset continued pressures on service activity and the impact on select factors such as the earthquake in Chile. Third, we are making good progress against our strategic priorities, including driving growth and improved returns in our international business, expanding our technology services offering, and continuing to strengthen our organization. Let me start by providing an update on our growth agenda. We are making progress on the growth front, despite some continued head wins in the business. Our quarterly growth performance was in line with expectations. Storage growth, a key financial drive for Iron Mountain was solid at 4%, as expected results and moderation in storage growth in Q1 reflecting impacts on lower new sales levels and higher destructions during 2009. Destructions have stabilized; we are working on driving new sales and believe we are on-track towards achieving our full year objectives of storage revenues. Overall, internal growth result was 4%, as benefits from factors like higher paper pricing, offset continued pressures on core service activity. Service activity is dropping substantially during the economic downturn…

(Operator Instructions) Our first question comes from Kevin Mcveigh - Macquarie Research.

I was wondering if you could talk about the CapEx a little bit. I know we took it down to 290. As we think about that going forward, is that a new range as a percentage of revenue or just some thoughts on the CapEx.

Kevin, as you know we talked at our Investor Day about our longer-term goal in the range of 9%. We still think that that’s a good longer-term goal. We are a bit below that currently. We may see some moderate increases from the current levels overtime as storage growth improves which is our plan, but we think that that 9% level, that longer term goal is still the goal for us.

Great. And could you just quantify, how much did the weather impact the core services in the first quarter?

It was a couple of million dollars. It was focused on some of the Atlantic markets and wanted to highlight it as an additional factor. It had some impact on the core services growth.

Great, and then just one more and I’ll get back in the queue. The Chilean earthquake, the $10 million negative impact, what did that relate to? I know you discussed it a little bit, but can you just clarify it for me a little bit. The $10 million negative impact from the earthquakes in Chili, what did that relate to.

Yes, we highlighted two impacts; one was on revenue, which we estimate for the full year to be about $5 million, and on OIBDA a range of $5 million to $10 million. The impact on the revenue is just expectations for some decreased service activity and some loss storage revenue. Some of the records that were impacted, basically some records sold over in the facilities, and when they get co-mingled with others we destroy them, because we cant endure their integrity, and we are expecting some storage revenue. The profit impacts, obviously there is some impact from the lawsuits. We are also factoring in things like our insurance deductibles and some steps we took to strengthen our insurance coverage, just given this was a significant event. Our clam will be sizable, we are every comfortable with our insurance coverage, but we took some conservative steps just to make sure that we have adequate coverage going forward.

Your next question comes from Andrew Steinerman – JPMorgan. Andrew Steinerman – JPMorgan: With the 4% internal growth on storage for the first quarter, and 4% to 5% for the year, I was wondering if you think internal growth for storage is leaning forward. You you’re your comments about the second quarter overall, but do you fell like storage will stay in this kind of 4% to 5% range. In the year, if I got you correctly, I though I heard you say that the higher level of destructions have now stabilized.

Thanks correct. A couple of things Andrew; as far as next quarter we are expecting storage growth in a similar range to Q1. As we’ve noted, we are still working though some of the tougher comparisons and those comparisons should ease later this year. In terms of some of the key factors, destructions have stabilized. So they are still at healthy levels, but the trend had been going up and we fell comfortable that things are moving in a better direction than they were. The key factor that’s going to help us on improving the storage rate over time is going to be progress on the new sales from. I think there are good results in that area and that will take some time to fall through of course, but ours are better with progress.

I’m particularly pleased Andrew with the progress that we have in generating new sales. The field leadership I mentioned just briefly in my comments has really been able to pivot and focus on driving new revenue, and we’ve got an awful lot in a pipeline that is expanding. The code of performance year-over-year is much stronger, and the fact is we’ve got the North American operations running very well. That allows us to just become much more external in our focus in driving new revenue.

I’ll also highlight our international storages is growing mid to high single digit. Based on some of the progress we made in areas like continental Europe and other expansion markets are doing quite well. So we feel we are on a good path. As you know, it takes a little time for the growth rates to change in storage, but we think we are moving this in the right direction. Andrew Steinerman – JPMorgan: And Bob, you just mentioned new business driving storage growth to accelerate in the back half of the year, Is that always part of the plan. I mean won’t storage also accelerate as non-foreign payroll goes up.

So the flow through benefits takes some time, but the fact is we feel much better about new sales this year, than we did last year at this time.

Andrew I know you appreciate this, but I think in terms of factors like the economy, we would expect, the first things that we would see would be improvements in more discretionary spending, some of the project activity, things on the new sales front. The next benefit would be more which will lag somewhat, but we would expect service activity to improve, and I think the last thing we would expect to see is kind of the flow through of the economy. For storage, just given that it takes some time for people to create the incremental records and to sort them, we are in a kind of storage business. So it will head back over time but I just want to caution that we are still working through some of the lag effects and we think we are prudent in terms of our outlook in that context. To summarize, we feel very good about what we can control in driving new business, and believe that service activity will rebound as the economy rebounds. I mean you know how strong it was in 2008 as we entered the downturn. Andrew Steinerman – JPMorgan: Excellent. Thank you very much.

Our next question comes from Andrea Wirth - Robert W. Baird.

I was wondering if you could just address service a little more, because I think this was the first time that it actually really hadn’t posted any growth at all. Just a little bit more on what actually kind of weakened sequentially and then how do we think about growth and how it has accelerated throughout the year?

Yes, in terms of core service, I mean we’ve been highlighting this for a couple of quarters, but the activity levels in areas like transportation services, trading services have been pressures to the premium services. Yes we saw greater pressure recently through the economic downturn; we obviously were at a high value added proposition for our customers and premium services like rush delivery levels were a significant decline and that cost focuses continued with customers. I think, also note that in some areas we may not have been as competitive as we needed to be. We’ve been improving things like our pricing equation. I think in trading we may have stirred that a little too far; we’ve been making some adjustments on that front. So net-net we are still seeing soft activity. We are planning for that to continue in the near term. We do expect that to improve over time, but it will lag improvement in general economic activity and we’re going to be working through those comparisons for the next couple of quarters.

And then on the IT side, we’ve just kind of generally been hearing comments about companies looking to increase their IT spend and kind of playing through more of the IT refreshed cycle. I think [Gardner] also recently increased their projections for IT spend. Just kind of curious what you are seeing in terms of the time line for IT expanding improvements, and you know has that really changed much recently.

So, Andreas anecdotal feedback is to spend a lot of time with customers, I don’t see IT budgets going up in any kind of significant way. What we do see is that de-capitalization of IT, which is favoring a services model and outsourced model. The thing about a subscription model is that while we were up 4% in 2009, it lags coming in and it doesn’t have a spiky effect on revenue, but we’ve had strong progress on these sales, and I feel very good about just from a macro perspective the fact that IT is going towards more of a ‘pay as you use’ model and that’s a trend that a lot of players have to adjust to more dramatically than we do, and it’s always been our business model.

All right, thank you.

Our next question comes from David Gold - Sidoti.

Can we speak a little bit more on the record center optimization productivity improvement program? Just, again sort of how you think about things domestically? I know it's a moving target, and I know there's more to it, but sort of how far along are we on that and if we've gotten that off the ground overseas and sort of where we are there too?

We have David. It’s essentially we move from market to market and having productivity from the system we have done that very well throughout North America, and we do it from the standpoint of sustainability, so we are adding new programs as well, so we can talk to procurement initiative in the last quarter that will really focus on strengthening our gains and consistency across North America. We have the began exporting the playbook most notable to the U.K, but also to other material markets like Australia, and we feel very good that over time we can presume North American returns out of our mature international business. So its in the mussel memory of the company and that business is running very well while is why we are practicality enthused about the potential to grow the business through new cells because of the fact that the business is running well and we can be more external in our focus. This is something that we had to work on internally for years to get this kind of rhythm, but we feel very comfortable with where we are in that regards as it relates to record center optimization, productivity thought our business and realizing that on a sustainable bases.

Is there much more in North America that you think we can squeeze out?

I think we are continuing to roll out. The process orientation, the process focus on how we manage the business, because Bob noted we are on to a kind of a net phase of initiatives in areas like procurement. We see a lot of opportunities in our organization, just how we interface with the customer and go to market. I highlight that, we think there is efficiencies there. We do want to reinvest those efficiencies to accelerate growth. We think that’s an opportunity for us to become more effective and efficient and so we are committed to continuing to improve our profitability. We think we’ve established very good capabilities in areas like piecing and in just our process approach to running the business to enable us to keep making progress as we move forward and as an enterprise we have other areas to help us drive margin improvement. Most notably we think there is a significant opportunity on the international business as you know the margins there relative to our business are currently quite a bit lower. There is some of that is the stage of development in that business in the investments that we are making and the expansion markets but that’s also represents the significant opportunity for us. Also the major business like gains in scales. So we have a number of things that we believe can help us sustain strong profit performance and revenuer growth as we move forward.

Lets remember the primary driver behind this, we always new that we will be able to be more effective that for produce stronger operating margins as a result of _ . the primary driver was so that we would establish the level of value in the market place that we could then drive though new sales and the value proposition that’s realty unmatched in our business,

Your next question comes from Vance Edelson - Morgan Stanley.

First in terms of recycle paper can you comment on what you are seen on the front lines in terms of your ability to sell the paper as your volumes builds. Are you able to secure favorable pricing, can you work directly with large buyers of the commodity for example, would you say you are essentially behold into whatever the spot rate is?

We have a relationships with companies like waste management, significant partners to help us manage that and that helps us to have a secure avenue for sales overtime. Our pricing is impacted by this spot market so we do see fluctuations in the pricing levels, overtime consisting with the market. We are quiet comfortable in our ability to secure buyers for the paper.

Okay, got it; and on the capital spending priorities going forward, would you say that will largely mirror the first quarter break out; in other words, mainly storage and maybe half that amount on IT. Any changes to the mix anticipated?

Our outlook for this year, is similar to our long range goals. The bulk of our spending is related to storage systems, that’s imported growth. So that’s physical and digital, and a smaller percentage of our spending is on things like IT and strategic initiatives and infrastructure, so the bulk of our spending remains related to growth oriented capital.

Okay, it makes sense. And then speaking of growth orient capitals, beyond the established international markets where you still have room for growth, what’s the latest in terms of international expansion into brand new less developed markets. What regions are you really looking at to create a first time presence now?

To create our first time presence; I mean if you look where we were not, we’re still not in Japan, we’re not in Africa, we’re not in Middle East, in those areas that we are always looking for the right joint venture partners to enter the market with. We are most successful when we go in with the local partners that knows the local market. China is an area where you could argue that we have some flags planted, but there is a lot of opportunity for us to improve our presence in that region, and we recently brought on some talent that will help us to do that.

Okay, and in the more developed markets, is there room for contiguous expansion geographically or would you say to drive revenues it's more a matter of increasing penetration and density in the geography that you already have.

I mean specifically if you look at Brazil, Russia, and India we have very good business that we are think we can -- Brazil, it’s economy to expect that’s move up the stack rank if you will in the next two years, and we think that something that we can take advantage of. Russia we have a great business in our joint venture partners and we are very pleased with the way that’s going, and remember that there is a ton of room in continental Europe as well. You know we are still in the earlier stages of scaling these individual countries. Unlike North America, Spain is different from Germany, which is different from France and those businesses still have a lot of improvement. In a time scale that’s measured in years you will see more improvement there, than you will from markets where we are just entering.

Our next question is from John Healy - Northcoast Research.

I want to talk a little bit about North American physical revenue growth in the quarter. I was curious if you could give us a little bit of color in terms of maybe the component of growth, kind of how much you're seeing from activity levels and creation and maybe how much you're seeing from a pricing stand point?

Just in terms of storage, it was solid, we noted it was 4%. We are getting benefits from pricing to support that, but it’s driving positive volume as well. Its obliviously moderated from what we used to, driven by some of the impact last year; the higher destruction rates and the softer new sales, but overall we’re continuing to grow solid storage revenue growth, and we are looking to improve that as we move forward. The service activity was supported by a couple of factors. Obviously through paper pricing, we are seeing very good growth on the DMS front, and those factors are offset by the softness that we see on service activity levels and also kind of on a select basis some of the more additional project work that we have done, that is related to managing hybrid records, which we think has kind of taken a softer activity in some of the sales pipeline that we saw from last year. On balance it’s solid growth inline with what we are hoping to achieve and we are working on other things that we think we can improve that overtime, and position us well for when we see some of the benefits of the economy improving.

And Brian, I thought you mentioned in a prior question that the first thing you'd see is some of the discretionary parts of your business that you’re firming before other parts would. If you were to exclude the impact of recycled paper prices in the complementary service lines, would you be starting to see that kind of discretionary element of the business picking up or have you got to experience that?

We are seeing that. It was positive in the first quarter, and that was supported by DMS, also by our eDiscovery business, but that is a favorable factor. It’s moving forward sequentially. I don’t want to give you an impression it’s turned around quickly. It’s moving in the right direction, but those early indicators we are seeing some of the positive factors and just I need to be the voice of caution here, and I just want to make sure that people know it. It takes time for some of the benefits to flow through our business and we are going to be working through this in the next couple of quarters, but we do see some signs that its moving in the right direction and we are working on things that will hopefully strengthen that.

Just a fact; remember that we lag in to the downtown and we lag coming out of it. Its just the nature of our business model?

No it's encouraging that piece is at least poking its head up a little bit. Lastly just on the shutting side of the business; I thought you mentioned you may have changed a little bit in the price and value proposition. Can you talk a little bit about maybe how that business performed excluding recycled paper prices in the quarter, and what you think a realistic growth rate for that business could be this year?

The revenues in the business were up solidly in Q1, supported by paper. It’s a little difficult to separate paper from the overall business, because as you might imagine the competitive dynamic is that flows into the overall economics and it influences how you would price your services and things of that nature. Our service revenues were down moderately, but overall it was the quarter for shredding and we think we can have solid growth in that business this year, again aided by some of the macro factors. Bob you want to talk about some of the dynamics.

Yes, John this is narrower I think. We constructively dipped that with the way we competed last year, and we think we allowed our competition some entry and that we are being more aggressive now, and I believe we’ll see the benefits of that, because we have a value proposition that is differentiated from that of our competition, especially as it relates to the chain of custody. We have specific programs in place that allow our sales force to really attack competition, where we gave them a little bit of room last time and we shouldn’t have done that, but we are also working through channels here, so you can expect to see announcements from some of our partners, specifically in the commercial real estate space, and some more to come on that, but where people see the usefulness of offering shredding to their customers; whether it would be an in-office space or other locations that will hope to announce later in the year.

Our next questions comes from Eric Boyer - Wells Fargo Securities.

Yes I suspect that you want, but do you expect any change in seasonality patterns for total consolidated results now that the European business will have a calendar year-end?

Not from the European change. In fact, one of the conclusions as we went through this process was significant effort for the team to kind of deviate on this and get us to a place where we are fully aligned in terms of our reporting globally. The conclusion was, there wasn’t really material affect from the seasonality change, so that enables us to keep the change relatively simple and have a one time charge pull through the other expense line. So the short answer is no, there shouldn’t be an effect in that.

And then with the situation like the, the winter weather that was experienced in the, in the first quarter will any of that revenue be pushed out into the second quarter or is the majority of that type of service revenue lost?

It’s hard to asses, but I wouldn’t count on that being a push out. I think that’s related to normal activity that didn’t happen and we are not expecting it to. I think the key thing on the service sides to recognizes is, which we try to highlight is; one thing is the course of this activity remains soft and we are planning for that to continue for decline in the near term. That we are against a couple of tough comparison in Q2. We had big project in Italy last year that was very beneficial. We’ll work through the lapping on that, and get a large license on digital. So there’s a couple of factors that are going to moderate growth. Paper pricing came down 15%, so that’s less of a benefit, but net-net, I think overall in the business we feel good. We got the storage movement on a good track. We are seeing some positive sings, and we’re looking forward to getting through some of the transition phase here and get to a solid growth rate moving in 2011.

And then with the subscription weakness within digital, which type of the digital subscriptions would you expect to come back first and are you seeing any positive signs that that's happening?

Yes, we are definitely see positive signs as it relates to pipelines. eDiscovery is a very strong business for us. We are very, very pleased with Mimosa and our backlog offerings have become more competitive. I mentioned it quickly in my remarks, but we’ve added capability to our backup offerings that we think opens up the market opportunity for us and we are seeing a promise out of our sales versus to driving increased activity in the pipeline. Keep in mind it’s the subscription model, so we don’t get the lumps that come positively or negatively would being a professional licensed business that you’ll find in many technology companies. We are seeing solid growth in the subscription pipeline, so we’ll look for that to benefit our results going forward.

Your next question comes from Scott Schneeberger - Oppenheimer & Company. Scott Schneeberger - Oppenheimer & Company: My first question actually, if you guys can give some color commentary on your industry verticals for 1Q and it possible like what you have going it like 2Q?

We don’t report granule basis, I would say that in terms of verticals we are very focused strategically in areas like healthcare and government in terms of long-terms growth rate and we are pleased with the progress that we are making on that from. Financial services is obviously a big vertical for us and we are seeing substantially different trends across our verticals, I think they are relatively consistent business…

we are on the right tack though as it relates to the kind of opportunity we fix. We see a lot of usefulness in building our organizations to really drive depth into those industries that are highly regulated with a lot of knowledge. Workers still think financial services, healthcare, legal and you can see through our service offerings that we are becoming more verticalised and you can expect that will become more verticalized in our approach to the market overtime, but we don’t expect to breakout the results specifically by quarter. Scott Schneeberger - Oppenheimer & Company: My following question actually was, the fuel price are up year-over-year quite significantly, if you guys can just give some color on overall energy cost.

Our overall energy cost remain in the 2% to 3% range, it wasn’t a big driver of our margins one way or the other and we are just fuel charges which have been not been material in recent quarters, but we saw our consists an increase is on that prompt we have some ability to offset that with the fuel charges.

At this time there are no further question, are there closing remarks.

Thank you very much. I very much appreciate your time this morning and we feel very good about the business, we feel very good about our prospects and look forward to reporting to you again next quarter. Thanks your time today.

This concludes today's conference call. You may now disconnect.