Good morning. My name is Bonnie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Iron Mountain Third Quarter 2010 Earnings Call Webcast. [Operator Instructions] I would now like to turn the call over to Stephen Golden, Vice President of Investor Relations. Mr. Golden, you may begin your conference, sir.

Thank you, and welcome, everyone, to our 2010 third quarter earnings conference call. After my announcements 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 Q&A. I would like to take this opportunity to thank everyone who attended our 13th Annual Investor Day in New York earlier this month. We are pleased with the turnout, and hope you found the presentations informative. As always, we appreciate your support. For our custom, we have a user-controlled slide presentation 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 or 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 differ materially from those contemplated in our forward-looking statements. As you know, we use several non-GAAP measures when presenting our financial results. Adjusted OIBDA, adjusted EPS and free cash flow before discretionary acquisitions 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 the reconciliation of these non-GAAP measures to their appropriate GAAP measures as required by Reg G at the Investor Relations page of our website as well as in today's press release. With that, I'd like to introduce our CFO, Brian McKeon.

Thanks, Stephen, and good morning, everyone. Slide 3 highlights the key messages from today's review. We continue to drive strong financial performance in the third quarter. Reported revenue growth for the quarter of 2% was in line with our outlook. Results were supported by solid gains in our International Physical segment, strong growth in hybrid services and benefits from higher recycled paper prices. Revenue growth continues to be constrained by economic factors, which contributed to very soft core service activity this summer. Adjusted OIBDA came in above the high end of our guidance range, driven by continued benefits from productivity initiatives and lower incentive compensation accruals. Adjusted OIBDA increased 13% in Q3 and 11% year-to-date versus the prior year. Adjustments to incentive compensation accruals added about five points of growth in Q3 and four points of growth on a year-to-date basis. Adjusted EPS for the quarter was $0.35 per share, an increase of 39% compared to the same period last year. Our reported EPS was a loss of $0.76 per share, including a $1.24 per share after-tax charge for the Digital goodwill impairment. As we proactively advance changes to improve performance in our Digital business, we evaluated our Digital business carrying value, resulting in a $255 million estimated goodwill impairment charge. We'll finalize the amount in the fourth quarter and record any adjustment if necessary at that time. It's important to note that this charge does not impact revenue, adjusted OIBDA, adjusted EPS or free cash flow. Both Bob and I will discuss this more fully later in our remarks. Also included in reported EPS were benefits for the impacts on Other Income and our effective tax rate related to the weakening of the U.S. dollar within the quarter and the gain on the sale of our domain name management…

Thanks, Brian, and good morning, everyone. The third quarter was another quarter of solid operating performance for Iron Mountain as we benefited from our strong business foundation, combined with our commitment to operational excellence and global service expansion. I'll discuss this more fully later in my remarks, but I want you to know that we're taking proactive steps to address the challenges currently facing our Digital business and get it back on track. This ongoing review has resulted in a $255 million impairment charge that Brian described in his comments. First, I will briefly review our current business performance and talk about what we're doing to continue delivering solid financial results. I also want to reinforce the key messages delivered at our recent Investor Day held earlier in the month, specifically, that we have a strong sustainable business foundation, that we continue to deliver excellent financial performance and improved returns, that we're focused on improving our growth trajectory to targeted strategies and that we intend to create long-term value as a leading information management services company. Let's first discuss our Q3 results and current business trends. As we discussed at Investor Day, we continue to work through the challenges of a tough economy that are moderating our revenue growth. As recently as 2008, our internal growth rate was 8%. Since that time, we've moderated to the 2% to 3% range where we are currently. Most important change in our growth rate is the decrease in core service activity levels driven by the economy. In Q3, we saw continued pressure on these core service activities, reflecting impacts from high unemployment, excess office space and generally lower levels of spending. We've also seen moderating in storage revenue growth. Trends have been stabilizing on this front, and in Q3, Records Management volumes globally…

[Operator Instructions] Our first question comes from Vance Edelson of Morgan Stanley.

Could you discuss current trends in destruction activity levels? Any change so far in the fourth quarter, and what's the immediate outlook? Do you expect activity to remain somewhat elevated through year end?

The trends in the quarter were relatively similar. We saw in North America continued higher outgoing volume in total. We saw some increase in permanent withdrawals. The overall volume growth in Records Management in North America was relatively flat. That offsets some progress we're making on the new sales front and solid gains in international. On balance, the Records Management volume trends were relatively similar, and that's what we're projecting in the near term. Obviously, we are advancing the new sales initiatives that we expect to have -- I think we're going to benefit -- benefit for us as we go into 2011.

The sales performance, Vance, remained strong.

And similarly, the gains in backup and archiving services that you noted, did that momentum continue into the fourth quarter?

We're not reporting on the fourth quarter today, but we have had solid gains in backup and archiving services. And that has offset the pressure that we highlighted in areas like eDiscovery and the Digital business.

Just wondering about the pricing trends for eDiscovery. The volumes are understandably weak, but what's the competitive environment like and how is that affecting pricing?

So pricing is the key contributor here, Vance. The price per gigabyte and price per matter has come down. And essentially, because of the secular pressure on the legal sector, they're trying to call the amount of data they review. So it is a significant price drop that's driving a lot of the pressures that we noted and a central part of the reason behind the impairment.

Our next question comes from Andrew Steinerman of JPMorgan. Andrew Steinerman - JP Morgan Chase & Co: I heard you just mentioned permanent withdrawals in the context of a continued higher outgoing volumes. Just to be clear, is that a competitive dynamic or is this kind of an internal customer dynamic when we're talking higher outgoing volume levels? Is this something that you highlight against new or the same as what you've been saying?

More similar, Andrew, it does vary quarter-to-quarter. And the biggest competitor for us remains people doing this in-house, Andrew. And that's fundamentally when it comes to outgoing volumes or the fact that we can't get -- it takes longer to move somebody, and it's a function of them doing it themselves, generally speaking, versus that of a particular competitor.

We do track this and that's what we hear back from customers, is the larger factor on the permanent withdrawal front is people deciding to bring it in-house. There are competitive dynamics. It's, again, more similar than different. We do see quarter-to-quarter fluctuations. I think the key thing to hear is it's remained high in North America and on balance -- and in international markets, where we're seeing positive trends. So net-net, it's similar trends, more similar than different, but we continue to see a relatively higher level of outgoing volume, which is constraining overall volume growth. Andrew Steinerman - JP Morgan Chase & Co: Just to square the point away, when you say in-housing or competition versus in-house, you mean, on the kind of a partial basis? You don't mean that there's customers actually changing their minds of using an outside vendor?

No, yes. So this is very much on the margin. We track it pretty granularly by region, by reason. If you zoom way out, it's essentially very similar as Brian said. But no, we don't see -- I don't know of any customer that's decided to move everything that was outsourced to an in-source basis.

Our next question comes from David Gold of Sidoti. David Gold - Sidoti & Company, LLC: I wanted to get a little bit more color on the issues, particularly in the eDiscovery side. A couple of things, one, the pricing drop that you're pointing to, especially now, it's been going on for a long time, but is there something that happened recently? Has there been a large drop of late? I'm just trying to get a sense for basically what the catalyst was for reviewing, let's say, right now and making the decision for the write-down?

Let's look at it from a market perspective. Fundamentally, the law firms are getting squeezed very hard by their corporate customers to lower their prices, and that leads to a trend towards legal process outsourcing. There are also -- in the attempt to lower cost, they're trying to do a lot of the calling of data themselves, which means smaller matters. And the price per gigabyte has dropped precipitously over the last year, and that's what's driving this from a market perspective. Customers are just not willing to pay what they were paying for their law firms. The law firms are not willing to incur the cost associated with eDiscovery, and they're trying to drive down the size of the matter. Our cost to serve remains high even though the size of the matter is lower. So what you should hear from that is that our -- a goal of ours is to drive down the cost of offering that service, and that's something we're getting on.

And just in terms -- the second part of your question, as we've been highlighting, we've been proactively working on a number of fronts and improving performance in the Digital business. I'm looking at this in more detail. We've very recently had a change in leadership. We've highlighted the pressures in areas like eDiscovery. We've made a decision to divest a part of the business, recently the Domain Name business. And that led us to accelerate looking at the carrying values and to assess the carrying value of the goodwill. And we decided to take that step and to record the impairment this quarter, and it's part of this overall proactive effort we're taking to get the business on track.

And David, what we want you to hear is that it's taking longer than originally anticipated to build scale. But fundamentally, we have strong services that we're focused on improving our performance. David Gold - Sidoti & Company, LLC: Part two of that, if I can add. I guess many of the competitors that we've seen have developed new products in the last few months in order to do something called quick calling, basically to reduce the cost of the servicing there. And then I guess, just out of curiosity, are you guys similarly develop -- it sounds like this may force you to develop a product similar to that, or purchase something?

Well, no. We have it. We've developed it internally. It's called eVantage, it's an early case assessment tool. It's just getting to the market now, so it's not offsetting the pressures that we've described, but it's a lower cost alternative so that the law firms can do their calling on premise earlier in the cycle. So we're very much on that. It's internally developed and it doesn't represent an area that we have to fill in, either organically or inorganically. David Gold - Sidoti & Company, LLC: Incentive comp, can you give a sense for how much the pullback helped in the quarter?

We did quantify that, so it was about five points of the OIBDA growth, which was I believe, that's $12 million year-on-year. Keep in mind that a fair amount of that is we're catching up, if you will, for a year-to-date accruals and reflecting our most recent views. As we highlighted at Investor Day, David, we're having low incentive compensation payouts this year for the full year. It'll probably at about three points to our growth rate and in terms of our forecast. And as we look forward to next year, we'll plan for normal accruals and that is -- on a comparison basis, it will provide a drag to our OIBDA growth rate. But we are not achieving our revenue growth goals this year, and it's been -- areas like service trends that have been a real challenge for us. And that's being reflected in low incentive compensation payouts this year.

Our next question comes from Gary Bisbee of Barclays Capital.

I guess the question is how often do you think that purchasing manager for the Digital services would be the same as the historical person you've had a relationship with for Physical, and to the extent that it does happen for a lot of these, maybe others than the hybrid that you talked about at the Investor Day to be somewhere in the IT department, how do you improve your performance there based on what I assume is developing a totally separate relationship.

Gary, it's really the synergies between our Data Protection business and our Digital business call the same decision-making stack within IT. And that's where we're combining our sales forces between Digital and Data Protection and really affecting what is the same decision-making stack. The folks who do tape vaulting are the same folks in the same position area that drive decisions around archival, around data protection, around data recovery. So that's where synergy exists. The key areas of synergy, if you look at records management, shredding, those are very synergistic calling under the same decision areas. Data protection and Digital, very synergistic. Where we sell across the product line is in the enterprise accounts and then in the smallest accounts.

Our next question comes from John Mirshekari of Fidelity.

What kind of opportunities do you guys have to refinance your debt given how low interest rates are currently?

We have been taking steps last year. We did a major refinancing of a new bond issuance and achieved a longer term on high-yield bonds and achieved some efficiency there. We've done some paydowns. We have within our longer-term bonds, obviously, prepayment costs associated with some of the longer maturities. And we basically paid down the things that makes sense to pay down in the current environment. As noted, we don't have anything really coming up soon. And we have some British pound based bonds that make sense for to -- that have a low interest rate, make sense for us to retain from a hedging point of view. So we look at that all the time and it's -- we evaluate that and we've been paying down everything or refinancing the things that make sense.

With interest rates lower now than a year ago, do you think you have room to bring down the average cost of debt which is 6.9?%

Well, I think in terms of -- we could look at areas in terms of and fixed and floating mix over time, and that could help us. And that's something that we're evaluating. We're relatively fixed right now. And that I think would be probably the primary area that we could achieve some efficiencies.

Our next question comes from Scott Schneeberger of Oppenheimer. Scott Schneeberger - Oppenheimer & Co. Inc.: Could you just -- I guess discussing in the core storage verticals and end customers that you serve and industries, trends that you're seeing amongst your largest ones?

So from a vertical perspective, Scott, healthcare is doing very well. Legal faces the same pressures that really across their business that we have highlighted in eDiscovery. Financial Services remains our strongest segment and an area where we continue to drive more and more vital importance into that business. We're seeing very strong growth from a hybrid perspective in our core business and good progress on the Digital front as well. So vertically, Financial Services remains number one. Healthcare is moving along well. Legal is under pressure but nothing more to report really. Scott Schneeberger - Oppenheimer & Co. Inc.: Could you just give us an update on the Mimosa integration and also customers' reception to that integrated offering?

We actually just announced this week a suite offerings with Mimosa. I'm very pleased with the quality of the product, and we're beginning to receive accolades from the analyst community as it relates to near points, mimosa's near point solution and the fact that it is further out in front of the competition in terms of market capability. From a selling trajectory, I've mentioned Sears and Varian Semiconductor in my remarks. We're starting to bring down some big names. The fact is that it's a product that many of our customers need. I'm pleased with the asset. The integration of the team is going well. T.M. Ravi is in a senior marketing role for us. We've got a good part of that team that's firmly embedded in our Digital business. So I feel very good about that potential of that acquisition. Scott Schneeberger - Oppenheimer & Co. Inc.: Should we anticipate in the near term additional divestitures? Just thoughts on will there be similar calling with regard to you looking internally at some of your business units?

We're constantly looking at our business and understanding what's core and what's context. It resulted in the sale of the Data Domain Name business where it just rally wasn't core from the standpoint of our customers' needs. And that resulted in the divestiture. At this point, we feel we've got the right asset base and to focus on making sure that we drive results from that asset base.

[Operator Instructions] Our next question comes from Kevin McVeigh of Macquarie.

I'm wondering if you could just walk through the free cash flow, which was really good, particularly the full year guidance? If I did it right, it looks like the year-to-date CapEx is $174 million, but the full year is about $270 million. Is it going to be a $100 million spike in the fourth quarter? And if so, what does that relate to?

There will be higher spending in the fourth quarter, and that's typical for the business. We tend to have a number of our capacity expansion projects that are planned earlier in the year and executed later in the year. And so, if you look back in time, Kevin, we've had a pretty typical pattern of heavier spending later in the year, just in terms of how we plan the capacity additions within the Physical business. That's the key driver.

And then, just -- I know you're kind of pretty mad, and any the initial thoughts on 2011 relative to the analyst day? Are we still pretty much in line with where we're firming up?

I'm glad you asked. What we have is we put out preliminary numbers in terms of growth rates and outlook. Our outlook for revenue growth and adjusted OIBDA growth are on track for what we had talked about, and the 2% to 4% growth in revenue and the 0% to 3% in adjusted OIBDA. Again, just want to reinforce that some of that, the adjusted OIBDA we are working through the lapping on the incentive compensation issues, so that's an underlying growth of 3% to 6% on an operating basis. We'll work through refining areas like free cash flow and EPS, but we're on track towards what we had talked about, no changes to note today.

Real quick, Brian, if you could, I know you kind of talked about incremental spend at Mimosa, some targeted growth initiatives and then a pickup on the comp accrual. Do you have any sense to what the net impact overall was to SG&A for most period items?

We did highlight the incentive comp piece. I'm sorry, the other pieces you'd mentioned were...

I thought that there was some incremental spend from Mimosa and then some targeted growth initiatives as well?

I don't have that right in front of me on the Mimosa incremented. I apologize, Kevin, I don't want to ask any number without having them right in front of me.

Okay. We'll get it later.

All right. Those are the questions in the queue. We very much appreciate your attention this morning. We also appreciate those of you who attended Investor Day a few weeks back. Again, driving our- the fact that we have a strong sustainable business foundation continued to drive solid performance. We are very much focused on improving growth and are mindful of why we're here, which is to create long-term value. We appreciate your support. Enjoy the rest of your day. Thanks.

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