$700 Million Represents Initial Payment of Accumulated Earnings and
Profits to Stockholders
BOSTON--(BUSINESS WIRE)--Oct. 11, 2012--
Iron
Mountain Incorporated (NYSE: IRM), today announced that its Board of
Directors has declared a special dividend to shareholders in connection
with the Company’s previously announced plan to convert into a Real
Estate Investment Trust (“REIT”). The special dividend of $700 million,
or approximately $4.07 per share based on the number of shares currently
outstanding (the “Special Dividend”), represents a significant part of
the distribution that would eventually be required should the Company
successfully convert to a REIT.
“Today’s announcement marks an important milestone in our plan to
convert to a REIT,” said
Richard Reese
, Iron Mountain’s Chairman and
Chief Executive Officer. “Iron Mountain is a great business with high
returns and strong cash flow driven by consistent financial performance.
This special dividend is consistent with our previous commitment to
increase shareholder payouts, and our operating as a REIT will further
enhance our ability to generate attractive total returns for our
stockholders.”
The Special Dividend represents the initial distribution to satisfy the
requirement that the Company pay to stockholders its accumulated
earnings and profits (“E&P”) of approximately $1 billion to $1.5 billion
in connection with its potential conversion to a REIT, which is expected
to occur no sooner than its taxable year beginning January 1, 2014.
Provided the Company converts to a REIT, it expects to distribute the
remaining balance of its E&P after the conversion. The amount and timing
of future special E&P distributions will be based, in part, on U.S.
Internal Revenue Service rules and the timing of the conversions of
additional international operations into the REIT structure.
The Special Dividend is payable on November 21, 2012 to stockholders of
record as of the close of business on October 22, 2012. Stockholders can
elect to receive payment of the Special Dividend in the form of stock or
cash, with the total cash payment to all stockholders limited to no more
than $140 million, or 20 percent of the total distribution. The amount
of shares to be distributed will be determined based upon stockholder
elections and the average closing price on the three trading days
following November 14, 2012. Election forms will be mailed to all
stockholders promptly following the record date.
About Iron Mountain
Iron Mountain Incorporated (NYSE: IRM) provides information management
services that help organizations lower the costs, risks and
inefficiencies of managing their physical and digital data. The
Company’s solutions enable customers to protect and better use their
information—regardless of its format, location or lifecycle stage—so
they can optimize their business and ensure proper recovery, compliance
and discovery. Founded in 1951, Iron Mountain manages billions of
information assets, including business records, electronic files,
medical data, emails and more for organizations around the world. Visit www.ironmountain.com.
Forward Looking Statements
This press release contains forward looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 and
other securities laws. The forward looking statements are subject to
various known and unknown risks, uncertainties and other factors. When
the Company uses words such as “believes,” “expects,” “anticipates,”
“estimates,” “plans” or similar expressions, the Company is making
forward looking statements. Although the Company believes that its
forward looking statements are based on reasonable assumptions, its
expected results may not be achieved, and actual results may differ
materially from its expectations. For example:
-
This press release states that the Company plans to pursue conversion
to a REIT. In fact, there are significant implementation and
operational complexities to address before the Company can convert to
a REIT, including obtaining a favorable private letter ruling from the
U.S. Internal Revenue Service (the “IRS”), completing internal
reorganizations and modifying accounting, information technology and
real estate systems, receiving stockholder approvals and making
required stockholder payouts. The Company can provide no assurance
when conversion to a REIT will be successful, if at all. In addition,
REIT qualification involves the application of highly technical and
complex provisions of the Internal Revenue Code of 1986, as amended,
to the Company’s operations as well as various factual determinations
concerning matters and circumstances not entirely within the Company’s
control. Although, if it converts to a REIT, the Company plans to
operate in a manner consistent with the REIT qualification rules, the
Company cannot give assurance that it will so qualify or remain so
qualified.
-
This press release states that the Company plans to elect REIT status
no earlier than the taxable year beginning January 1, 2014. In fact,
the Company does not know when, if at all, it will elect REIT status,
and it may not do so. Further, many conditions must be met in order to
complete the conversion to a REIT, and the timing and outcome of many
of these are beyond the Company’s control. In addition, even after the
Company has paid the Special Dividend, it may decide to elect not to
convert to a REIT if the Board determines that, for any reason,
including a change in tax law, it is in the best interest of the
Company and its stockholders to not elect REIT status.
-
This press release provides an estimated range of the Company’s total
E&P distributions. The Company is in the process of conducting a study
of its pre-REIT accumulated earnings and profits as of the close of
the Company’s 2011 taxable year using the Company’s historical tax
returns and other available information. This is a very involved and
complex study, which is not yet complete, and the actual result of the
study relating to the Company’s pre-REIT accumulated earnings and
profits as of the close of the Company’s 2011 taxable year may be
materially different from the Company’s current estimates. In
addition, the estimated range of the Company’s total E&P distributions
is also based on the Company’s projected taxable income for its 2012
and 2013 taxable years and the Company’s current business plans and
performance, but the Company’s actual earnings and profits (and,
consequently, the actual amount of the total E&P distributions) will
vary depending on, among other items, the timing of certain
transactions, the Company’s actual taxable income and performance for
2012 and 2013 and possible changes in legislation or tax rules and IRS
revenue procedures relating to distributions of earnings and profits.
For these reasons and others, the Company’s actual amount of all E&P
distributions may be materially different from the Company’s estimates.
-
This press release states that the Company anticipates distributing
the balance of the E&P amount after the Company successfully converts
to a REIT. The timing of the remaining E&P distributions, which may or
may not occur, may be affected by potential tax law changes, including
an extension of the current tax law regime for taxation of dividends,
the completion of various phases of the REIT conversion process and
other factors beyond the Company’s control.
The Company’s forward looking statements should not be relied upon
except as statements of the Company’s present intentions and of the
Company’s present expectations, which may or may not occur. Cautionary
statements should be read as being applicable to all forward looking
statements wherever they appear. Except as required by law, the Company
undertakes 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 the Company has made in the Company’s
filings with the SEC, including the “Risk Factors” and “Cautionary Note
Regarding Forward Looking Statements” sections in the Company’s Annual
Report on Form 10-K for the year ended December 31, 2011, filed with the
SEC on February 28, 2012, the “Cautionary Note Regarding Forward Looking
Statements” section in the Company’s Current Report on Form 8-K filed
with the SEC on June 5, 2012 and the “Risk Factors” section in the
Company’s Quarterly Report on Form 10-Q for the quarter ended June 30,
2012, filed with the SEC on August 1, 2012.
Source: Iron Mountain Incorporated
Investor Relations:
Iron Mountain Incorporated
Stephen
P. Golden, 617-535-4799
Vice President, Investor Relations
sgolden@ironmountain.com