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 Q3 2011 Earnings Call Webcast. [Operator Instructions] I would now like to turn the call over to Mr. Stephen Golden, Vice President of Investor Relations. Please go ahead, sir.

Thank you, and welcome, everyone, to our 2011 third quarter earnings conference call. Joining me this morning are: Richard Reese, our Chairman and CEO; and Brian McKeon, our CFO. After their prepared remarks, we will open the phone for your Q&A. Per 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 2011 and 2012 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 SEC reports 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 you know, we use several non-GAAP measures when presenting our financial results. Adjusted OIBDA, adjusted EPS and free cash flow before 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 Chairman and CEO, Richard Reese.

Thank you, Stephen. Good morning and I thank everyone for joining this morning. I'm going to see if I can move fairly quickly because we've got quite a bit of information to try to cover for you today. In addition to our normal Q3 review, we will talk a little bit about the outlook for next year, as well as I'm going to review our -- some of our elements to our strategic plan and just give you a sense of our progress on some of the major parts of that. And then last, I'll give you a bit of an overview of our outlook for 2012 and of course, Brian will give you much more detail on all of this. As we talk today, we will be mentioning, multiple times, the impact of foreign exchange and rates, so forth on our reported numbers, our outlooks and our discussion are based upon recent trading ranges and I should tell you that actual mileage may vary, given what seems to be going on with the markets. But we have just used the last couple of weeks as a basis for our forecasting. So let's get to Q3. Performance for the quarter was good and really on target as we've expected. Our reported revenue is up 6%, with about 3% really excluding any impacts of FX. Storage rates were solid at 4% on a constant currency basis, and the trends remain consistent. Total services were up 5% on a reported basis but, we continued to also to see weakness in our core service, and those trends remained unchanged and that weakness primarily in North America. Adjusted OIBDA was $250 million, was on target, in line of our plans. Overall, it was a solid quarter, consistent trends and performance as we expected and…

Thanks, Richard. Slide 3 highlights the key messages from today's review. Our business delivered solid operating performance in Q3 keeping us on track for our full-year goals. Results were supported by solid storage revenue growth and continued profit improvement in our international business. Revenue growth for the quarter was 6%, with trends consistent with those discussed the last few quarters. Storage revenues increased 6%, or 4% on a constant currency basis. And service revenues grew 5% in the quarter or 2% on a constant currency basis, as strong gains in Hybrid services and benefits from higher commodity pricing offset soft core service activity levels. Profit and cash flow performance was in line with our expectations, supported by strong gains in our international segment. Adjusted OIBDA for the quarter was $252 million as expected. Adjusted EPS was $0.37 for the quarter and free cash flow was $305 million on a year-to-date basis. We've made significant progress against our initial $1.2 billion shareholder payout commitment, highlighted by $537 million of share repurchases and $51 million of cash dividends paid in the quarter. Our successful $400 million debt offering in September has us well-positioned from a liquidity perspective to fund our operations and continue payouts to shareholders. While our operating outlook has not changed, we are revising our full year 2011 guidance to reflect the recent strengthening of the U.S. dollar, and about $10 million of projected restructuring cost in Western Europe. Recent movements in foreign currency exchange rates have narrowed the expected full year FX growth benefit this year by about 1%. In Q4 we also expect to incur about $10 million in restructuring costs in our Western European businesses in support of future margin expansion goals. These costs were not factored into our previous full-year guidance, as more specific plans related…

[Operator Instructions] Our first question comes from Andrew Steinerman of JPMorgan. Andrew C. Steinerman - JP Morgan Chase & Co, Research Division: Richard, I've known you for a decade now and you usually don't speak so much about the economy given the nature of Iron Mountain's business, but in your opening remarks, you mentioned the economy quite a bit. Does that frame your guidance for 2012? And in particular, why is it fair to assume current trends now in terms of internal growth continue into 2012?

Well I guess the reason I didn't talk about the economy in the past is we've really never seen such an impact. And look, part of the reason was when we had good economic growth, we've never seen the economy come down quite like this in my lifetime, and when you're operating down with small numbers on growth rates, everything going on, plusses and minuses, have an amplification, and so it's just more painful. Why should we -- what then, 2 questions on that. We have done a reasonable amount of work just convincing ourselves to make sure that what we're telling you is right, that this is the impact of the economy, and not an acceleration of secular trends. I'm not suggesting that there aren't secular trends because there are there always have been and will continue, but all the data I look at says that we are being impacted by the economy when you see the rate at which it came off and the fact that services came down first and a year later, storage growth rates came down. And you understand the nature of what we do for customers, it all makes sense. But in terms of why is it fair to project the same trends going forward is, 2 things, we're not in the business of projecting the economy. So I don't know what it's going to do. Second is, at least I [ph] understand it, there's a rebound. We'll be a significant lag to that. So it -- for its impact 2012, we'd all have to be feeling real good about the economy taking off right now, and I don't know anybody that feels good about that. Third is, my tea leaves. When I read the tea leaves about the global situation, the overleverage of the world, you name it, problems, I don't see any major changes and a positive impact for a couple of years, at least. So we're running our business on the basis that nothing good is, nothing positive from the outside is going to happen for us. And so we're controlling expenses tightly, and we're digging for revenue. And we're doing some really good things and we are improving with the business. We're getting productivity in our sales force, our bookings are up. Some of the flow-through rate is slow. We're having some cases, some slowdown in getting boxes to move from competitors where we've had some switchings going on. Everybody's holding on tighter to what they have. But net, net of that, the team's working hard, and our forecast for next year is the sum total of a lot of assumptions and a lot of people committing to make these things happen.

Our next question comes from Nate Brochmann of William Blair and Company. Nathan Brochmann - William Blair & Company L.L.C., Research Division: I wanted to talk a little bit about the restructuring efforts in Europe and some of the headcount reductions. This is kind of -- now that you're done with the strategic review there, is this kind of a onetime thing, or do you think that there could be more to go as you implement the full part of this plan?

We've identified the bulk of the changes that we need to make. I would say that there's always the potential that we, as we move things forward, there may be selective things that we might do, for example, facility consolidations or other changes in the plan. We'll try to highlight those for you. I think we're identifying the big changes right now and expect this will primarily hit in Q4. Our future outlook doesn't -- 2012 doesn't incorporate any additional charges. So the sum is -- this should be the bulk of it, and there's always a potential we may move from something forward, and if we do move something forward, it's something that would be tied to having an incremental benefit for us, and we'll make sure to highlight that discreetly for you. Nathan Brochmann - William Blair & Company L.L.C., Research Division: Okay, great. And then now Richard, just if you could expand just quickly on the last point a little bit, in terms of some of the offensive things that you are doing in terms of whether it's productivity, increased bookings, attacking the unvended market, I'm just wondering if you elaborate on a few of those things. Give us a little bit of color in terms of attacking even a sluggish environment.

Sure. Look, people ask me that question and I hate to sound like a broken record, we're going to be doing what I'm about to tell you about for 10 years. So it takes time and it takes - it's a repetitive sort of thing, but we're seeing impact. The strategy basically is in our core businesses, there's more market opportunity, but you got to dig deeper to find it. And so it's about how you segment the markets, and how you tailor your [indiscernible] segments. And frankly, just getting more sophisticated, and [indiscernible] is not been something that we've ever had to do, and that marketing is driven towards supporting our sales organization, which is driving our efficiency up. We're selling more dollars of revenue per dollar of cost. All those things we're doing to -- and that's just good blocking and tackling. So there's nothing that goes bingo, you light it up. This is not the kind of business we'll put out a promotion program and run an ad on the Super Bowl, and your revenue will go up. This is blocking and tackling, that we started I'd say a year plus ago, and we'll continue to do it. We're seeing impact. As you know, a positive there but it's still early, we're still in the investment cycle. We don't intend to increase it next year. If someone asked me why wouldn't you? And the answer is let see what we did, let's see it flow through, let's make sure it proves out, and if it does, maybe come 2013, we'll think about doing something else but, it's kind of where we are.

Our next question comes from Gary Bisbee of Barclays Capital.

The first question, I'd guess I was trying -- in your PowerPoint, it's -- when it looks at the international segment, it says internal growth was 2%, and everything you talked about was 5% or 6% for Storage in constant currency. What's the difference there between this 6% constant currency and the 2% internal?

It's basically, we're rolling over a large project in Europe that's rolling off. And --

The acquisition is the difference between the 5% and the 2%. The Polish acquisition we completed at the beginning of the year.

That's right. They're about 3 points of benefit.

And so, how should we think about that 2% internal. That's obviously -- that's a slowdown from what it's been doing I think, and below, I think, what was implied by the plan that you provided earlier this year to get to 2013 target. Is that something that we should expect, would accelerate based on what you're doing, or is the economy in Europe hurting, or is the restructuring efforts that you're doing may be hurting the top line, but being done to drive the bottom line, any a color on that?

Gary, that's what I was trying to answer. If you look at the storage rate, we've been very consistently, solidly in the 5% to 6% range. And the current quarter, we had an impact of rolling over. We had a large nonrecurring contract in Western Europe that we're rolling over as we look forward into next year.

And by the way, it's a large contract in a country in which we are rolling over as in we are firing the customer because we don't like the margin profile. But that impacts the services side, the core fundamental storage is still growing 5% range, and that's what we forecasted going forward. Once we've cycled through those numbers, you'll see the services growth rates pick back up. It's more of a math exercise relative to that.

It's very much consistent trends. I think what we're dealing with is excluding some of the changes in the paper pricing, which are very recent. We're targeting solid 5% growth next year in Europe. And the business performance has been excellent. It's consistently good growth, margin gains right on track, return on improvement right on track. We feel very good about the international business. So very consistent with our plans.

And then a quick follow-up, Richard, I think you'd mentioned the core services impacted by the economy but then you also said there was a minor issue in the healthcare market. Can you just expand upon that?

Sure. Healthcare, and this is primarily a North American phenomenon, where we have a bigger mix of healthcare than we do around the world. As you know, healthcare has gone through all kinds of changes, and healthcare is a business with us that's a relatively small amount of our storage, but a reasonable amount of our core services. And the activity rates on that have been coming off, frankly have been coming off for over 10 years. This is not brand new. But as I said, when everything else slows down in your business, you start to see some of these underlying things. As the healthcare, and the acceleration of it is the -- is our government spending somewhere between $45 million and $100 million of $100 billion to computerize healthcare records. What happens is, is the activity rates is their records age is coming off as they're going to the electronic medical record to find access on a patient care basis. Now, we've studied it carefully, and what you'll find is the we're still going through the early adopters cycle, they intend to drop their activity rate it tends to -- it's like an S-curve. It tends to come down and settle, because they still need access to those physical records for a variety of reasons, but about half of our -- we used to figure about half of our activity in that space was related to patient care events and the other half is related to billing audits and to research and all kinds of other things. The storage side of that business is holding up, because they're keeping their records, but those are becoming deader faster. And by the way, unfortunately, that'll -- we've really done some pretty deep customer -- of our customer analysis as to adoption rates and everything else. We've got a few more years to eat through that piece of the change. It's a very slow evolving thing.

Our next question comes from Andrew Wittmann of Baird. Andrew J. Wittmann - Robert W. Baird & Co. Incorporated, Research Division: I wanted to dig a little bit into the margin expansion in international and just make sure first I'm doing the math right in terms of how you're applying the margin growth and then just ask a couple of questions. So looks like about 150 basis points of margin expansion's realized so far this year, implied in -- at the midpoint of guidance looks like another 70 basis points at the corporate level, which probably means if you assume North America is flat, that's about another 280 implied internationally. So we're somewhere in the, I don't know, 400 basis points range of margin expansion implied through next year? Is that about the right math and then, you feel like you can -- you get the rest of the way there in '13?

I'm not quite following your math. Let me try to lay out the progression of the margins, but we were on track for about a 200 basis point improvement this year in international, 150 year-to-date and we'll have additional benefit flowing through in Q4. That excludes the restructuring costs. Just want to be clear that we view with the restructuring as onetime in nature, and not impacting the underlying operations. As we look forward in next year, we're targeting another 150 to 200 basis point improvement. So and we would project to -- we're not talking about 2013 today, but we're expecting to continue on that trajectory consistent with our business plan. So we've had a very nice step up this year, expect to continue that next year. It's not quite as high as the math that you are backing into there, but definitely a significant improvement. Andrew J. Wittmann - Robert W. Baird & Co. Incorporated, Research Division: Yes, it's hard to explain over the phone. That matches what I was calculating. How does the European economic environment impact your ability and your confidence in hitting the ultimate goal? I mean, clearly this has changed a lot since you initially laid out the plan. I just kind of want to hear philosophically how you think you get the --

The bulk of the things that we're implementing on margin improvement -- I mean this has been a long-term strategy. So this isn't something that we've just started, I mean we've been positioning ourselves for this for some time. But it is within our control. This is operational improvements, cost initiatives, many of the things that we implemented in North America. So we feel very good about that. I think there's always the risk of impacts on the margin related to the economy. We can't control things like fluctuations in paper pricing and that can have some impact on the margin. We actually think we'll be able to manage that effectively next year, from a return point of view. But there's always the risk that you can have some pressure on the margin with services and --

Yes, and look, our forecast -- we've said we're not in the business of trying to -- do economic forecasts. We're not -- if we were good at that, we wouldn't be working so hard. We'll make our money other ways. We are basically assuming the economies will be what they are or in other words, our activity patterns all over the same. The European business is, by and large, are not as active relative to storage as our North America business. It's a mixed business, mix and market maturity kind of issues of what people choose to outsource and so forth. And then -- and remember that our internationals is a combination of -- for the U.K., Western Europe, Eastern Europe, Asia-Pacific and Latin America and then pull out some of the other parts of that, we call break. But we get still, a good strong growth in our emerging market segments, so those things. And although the core material markets are bigger, the likely decline or change in fluctuation in activity rates given their level of activity in general. Hopefully as long as the rest of the world, that is the emerging markets hold up. They'll likely cover those. I'm not guaranteeing it but, that's kind of how we think about it. Andrew J. Wittmann - Robert W. Baird & Co. Incorporated, Research Division: Okay. And then just there happens to be a fairly large business model out there that is noted for sale, may be as a whole or in parts. How does that impact your ability or desire to return capital along the plan that you've laid out? I mean are the 2 items of potentially doing M&A, and doing the return of capital to shareholders usually exclusive, or how do you factor in that new variable?

A lot of variables in our business. We've made a commitment to our shareholders and we're going to meet that commitment. But other than that, I don't think I could give comment on what else we might or might not do. Andrew J. Wittmann - Robert W. Baird & Co. Incorporated, Research Division: All right. And then, Brian, just with interest rates being low here, we're obviously you're active in the bond market this past quarter, I know lots of your existing debt have got some level of pre-penalties. Is there any opportunities in the capital structure and the debt financing to take advantage of today's low rates?

Well, I don't know -- rates today are low, but yes, it's yesterday and today, but changes frequently. But we did a lot of optimization on our front and we'll always look at that. But I think we've termed out our debt pretty well, and don't have anything that's obvious in the immediate term. Which is something we'll always look at. But I think for right now, we're pretty -- we've done the work to position us well for the first phase of this initial payout commitment, and we'll continue to evaluate it but nothing significant right now that we'd -- makes sense for us.

Our next question comes from Kevin McVeigh of Macquarie.

Richard, could you help us understand why you think you should [ph] spend between -- on that service level activities, lagging storage as opposed to leading over the last cycle? And then just, you should think about healthcare as a percentage of service, overall relative to the storage business, can you help us frame out kind of the revenue contribution from healthcare as opposed to other end markets?

The reason I think is it's changed is, is look -- any prior period where we've seen significant economic weakness, quite frankly is, we were in a high acquisition mode and anything that was going on, on the margin, you didn't see that well, okay? Second is, so it may -- what I'm really saying is it may have happened and we didn't see it. In my lifetime, as I've said I've never lived anything as dramatic as this, and any bad recession we've seen is peanuts compared to this, and I'd like to say we were going pretty fast in the middle of it anyway. So I think it probably got masked. It's logical though, for that to happen in this case because if you think about what we do is on the way up for a customer, our whole portfolio of customers are growing. On average, they send us data that's say, probably on average, 18 months old. So on the way up, what they're creating today, since their activity of creation is higher as -- the larger they are, the more transaction, the more activity or what they're creating today, what they created 18 months ago was lower, okay, and we're getting at 18 months later, we're getting it today. But their service activities, halfway to retrieving, is directly related to the rate of creation. So on the way up, people create data. We see higher service transactions as they retrieve and deal with it and as the business activities going on, but we don't see the storage until later. And if they're moving up, it's 18 months later that they're building that we'll see 18 months at the best a bigger number out. I don't know if that makes sense, but that's the underlying trend. On the way down, it's just the opposite. We saw the service decline a year before. We saw the storage decline. Okay? On the way down, it's their service activities and their business, is coming down and they're not using information as much. And therefore, not creating residual archival data for us to store as much. We won't see the storage until later, and -- but we'll see the service when they're stop doing it. So I think those are the general trends that caused that. And quite frankly, Kevin, I've missed your second question so you might repeat it.

Healthcare.

Oh, you wanted me to mention healthcare a little bit is that what you're asking for?

Yes, just if you think about healthcare as a percentage of the service revenue relative to what percentage of storage it is?

It's about 10%. Healthcare, as a segment overall, is about 10% of the business. It's more service weighted, because it tends to be a more active file or ancient records, and that has been a headwind for us. I mean, we've seen double-digit declines in the service, active service revenue, around healthcare as expected, with things like x-ray going away. It'd been going away for quite a period of time as well as some of the shift to EMR. We have offsets to that in terms of things like Hybrid revenue growing and actually in our Hybrid business, healthcare is one of our fastest growing segments.

And look, if you roll out over time, and look in the next 2 or 3 years, we expect to see continued pressure on the core services in North America for this trend. If the economy picks up, it will over wash it. The trend of our broad portfolio will over wash that. It might. The healthcare will keep that rebound suppressed a little bit, but it will wash over the negative side of it. If you look out into the broader future, one of the strategic reasons is a variety of reasons why we went with the Hybrid business, but one of them was recognizing that some of this will happen. I mean healthcare, you can see coming 10 years ago. It was easy to see where that business has to go, and so forth. And our DMS business or Hybrid business, growth rates will eventually [indiscernible] but I mean in terms of the size and magnitude will actually also get what that will contribute to the positive side of it. And our DMS business is, if you think about it, is the counter strategy to decrease inactivity records. One of the things that happens when they decrease the activity in their physical records is, the -- they change of the workflow processes, they apply different technologies and they also have to deal with a hybrid document, that is, they have to deal with legacy paper as well as often times current paper in a mixed environment. And that's what our DMS or Hybrid business deals with.

Got it, super. And then just what assumption are you assuming per ton for recycled paper in the 2013 guidance, or 2012, rather?

We basically take the most recent -- it correlates with the most recent reported SOP rates what's -- was in the little north of 200.

Our last question comes from Scott Schneeberger of Oppenheimer. Scott A. Schneeberger - Oppenheimer & Co. Inc., Research Division: The -- I'm looking at Slide 14, Global Records Management volume growth drivers and noticing destructions, it might be something seasonal looking at the pattern, but destructions picking up. Could you speak to that a little bit?

It's actually down year-on-year, so it is -- there are some seasonal impacts. You can see by the nature of the chart on Slide 14, that destructions, they're driven by episodic events, so let's say the overall trend in destructions has been quite stable coming off the peaks that we saw kind of in 2009. So I wouldn't read too much into the one quarter change. I will also, though, caveat that we always -- this is an area that you can have fluctuations driven by significant events. Scott A. Schneeberger - Oppenheimer & Co. Inc., Research Division: Sure. And then moving right to the top of that chart, looks like a trend down in the volume growth for -- from the pattern. Could you speak to volume and price, to just a dynamic in general, what you're seeing on both of those elements?

The storage volume overall has been -- we certainly saw a decline coming out of our peaks at 2008, and the economic effects through 2009. I think since then our storage trends have been more stable. The -- this quarter, we've reporting it was about 2% year-on-year. North America was up. International continues strong. Pricing is in a consistent range. So really more consistency than different I think, what you're seeing on the trend here is more the transition from the high single-digit rates that we are at in 2008 and pre- the [ph] crisis to 2% to 3% range that we've been in more recently. So I think it's one thing to gives us confidence on our outlook is we do feel good about the storage side of the equation and stability there, and hopefully with some benefits from economic improvement and some pull through from some of our sales initiatives we can prove that over time. Scott A. Schneeberger - Oppenheimer & Co. Inc., Research Division: And one more if I may, just North America, the margin outlook that you have there, what just what you've been seeing recently, and where do you think that'll go?

It implies relatively stable margins, consistent with our plans, there's a little bit of pressure from the paper change, because that -- a big swing like that, to move over 25% in 2 months and that's that tends to pull right through to the bottom line in the short term. So we'll have some moderate pressure there but on balance, it's sustaining the high returns that we have. It's consistent with the business plan we've talked about. I would just take a step back and say overall in the business, we feel quite good about the margin side of the equation. We're managing North America, consistent with what we've discussed. We've got international on the right track. I think the growth side, we have some macro pressures from things like FX and paper. The underlying trends are where they've been and we're working through the tough economy. But I think on the margin side, we feel like we're executing very well, consistent with our plans.

So in summary, thank you for all for joining us in Q3 and year-to-date performance. As Brian just said and I don't totally want to repeat ourselves, we as a management team and a company actually feel good about what we're doing relative to the environment we're operating in. We're making significant progress towards the -- improving our business, towards meeting our goals in our strategic plan and we're staying very focused on how we think about these kinds of issues. This is a business that we are operating for the long haul, and we think we've got a good future ahead of us. So we want to make sure that we're prepared for it when the world changes either way that we can operate in it, and remain with consistent performance, which has been our hallmark for over quite a few years and we'll continue doing that. So thank you all for your support and thanks for your coming today. We ran a little bit over time. I'm -- trick to try to keep these to 1 hour. So we'll try to do better next time. So thank you very much.

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