Good morning. My name is Christy and I will be your conference operator today. At this time, I would like to welcome everyone to Iron Mountain's Third Quarter 2012 Earnings Conference Call. [Operator Instructions] I would like to turn the call over to Vice President of Investor Relations, Stephen Golden. Please go ahead, Sir.

Thank you, and welcome, everyone, to our 2012 third quarter earnings conference call. We're all hoping that those of you impacted by the recent impact of Sandy came through it safely, and we're glad you could join us today. Joining me this morning are Richard Reese, our Chairman and CEO, and Brian McKeon, our CFO, and after their prepared remarks, we'll open up the phones for Q&A. I'd like to take this opportunity to thank everybody for joining us in New York a few weeks back for our Annual Investor Day event. We had a great turnout, and I think the day was a great success. Again, we truly appreciate your interest and your support. Per our custom, we have a user-controlled slide presentation at the Investor Relations page of our website at www.ironmountain.com. Referring now to Slide 2 of our presentation. Today's earnings call and slide presentation will contain a number of forward-looking statements, most notably our outlook for our 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 annual report on Form 10-K and quarterly report on Form 10-Q 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 reconciliations of these non-GAAP measures to the appropriate GAAP measures, as required by Reg G, at the Investor Relations page of our website, as well as in today's press release. Please note that we have updated the definitions of adjusted OIBDA, adjusted EPS and free cash flow to exclude certain costs and expenditures related to our 2011 proxy contest, the work of the strategic review Special Committee of our board and our proposed conversion to a REIT. With that, I'd like to introduce our Chairman and CEO, Richard Reese.

Good morning, Stephen and thank you, everybody, and welcome to our call. I'd like to repeat Stephen's comments to those of you who may have suffered through Hurricane Sandy. It was a massive storm up on the East Coast. We have large operations, and quite a large facility footprint in that area. So we know what you all went through. I am happy to report that Iron Mountain did not suffer any significant facility damage and so forth from the hurricane, and we've weathered that storm quite well, given its impact around us and so forth. We are, however, having some operating challenges primarily related to local access. There are places where we still can't get into our facilities on a regular basis. We've been able to inspect and make sure things are fine, but it has mostly to do with control of local access, and I'm sure that will clear itself up in due course. We also, because of the impact on our customers, particularly in Manhattan, would expect to see some noise in our Q4 service revenues. There'll be some impact. It's a little early to quantify, but we don't expect it will impact storage or any of the real fundamentals of our business for the quarter. So I hope you all are well. We are busy making sure our customers are taken care of and, quite frankly, through our foundation, making sure any of our employees that are impacted are taken care of, and that's a key part of our agenda at the moment. Let's look back at the quarter. You'll see that we had good operating results, but we've had some noise or we call macro factors in our numbers. We are telling you and we do expect that for the full year, we'll be --…

Thanks, Richard, and good morning, everyone. Slide 3 highlights the key messages from today's review. We delivered solid operating performance in Q3 supported by durable storage rental growth. Our profit results are on track, and continue to be supported by International margin gains and benefits from overhead cost controls. Storage rental grew 3 -- grew 4% on a constant dollar basis in Q3, reflecting consistent gains in North America and 12% growth in International, including benefits from our recently completed acquisitions in Brazil and Europe. Overall business trends were consistent with continued impacts from pressure on activity-based services. Reported results were constrained, as expected, by significantly lower recycled paper prices and weakened foreign currencies. Recycled paper prices were down 37% year-on-year, reducing revenues and profits by $11 million in the quarter. The year-on-year impact of lower paper prices will lessen in Q4, as we begin to lap the sharp price decline that began in Q4 of 2011. Unfavorable FX changes reduced growth rates by about 2%. Excluding these macro factors, revenue and adjusted OIBDA grew 1% and 2%, respectively, on a constant dollar basis. Good performance in the quarter is keeping us on track to achieve our full year financial goals. As we head into the fourth quarter, we're narrowing our full year guidance ranges. We're reiterating our adjusted OIBDA midpoint. We're also pulling in the top end of our revenue range to reflect year-to-date performance and current FX and paper pricing levels. I'll speak more to these and other refinements to our year end outlook later in my remarks. Let's now turn to Slide 4, and review our financial results in more detail. Slide 4 compares our results for this quarter to the third quarter of 2011. As noted, Q3 results were constrained by recycled paper and FX impacts.…

[Operator Instructions] Your first question comes from the line of James Samford with Citigroup.

The impact of Sandy, I believe you've said that some potential impact to services. Can you provide just a little bit of history on your geographic concentration in the tri-state area and the sort of prior natural disaster impacts that might have impacted your business.

Oh, we have significant facilities in that area. I couldn't tell you how many off the top of my head on how many square feet, but it's significant. You can assume that Metro New York, New Jersey is one of our largest, if not, largest market geographically. Historically, we've had other natural disasters. We've been through a bunch. This one's a pretty big one, it looks like. It's a little early to tell the impact on customers. But you'll see a wiggle, what we'd call a wiggle in the revenue. Storage doesn't get impacted. It might get delayed by a week or 2 coming in, but that's not a significant impact. What happens is, is service will decline. Your transportation and retrieval/refile activity will decline. That type of service, I'm just trying to parse in my head real quick, is not a major part of our service line of revenue. So I would -- net-net, it's a few million dollars, I'm guessing right now, but it's not $100 million. It's not even $50 million. I bet it's not $10 million. It's a few million dollars that we'll see. But we kind of keep track of everything, so we just wanted to let you know that's happening. Just like the London Olympics. You can see the difference on a year-over-year comparison the thing's so steady.

And I guess, just a quick -- I assume your 2013 outlook is still sort of on track at this point, that you provided at Analyst Day?

Yes, we just -- all this will be -- I don't like -- or I guess I do like to call it noise, I call it noise a lot. It's noise, but it just explains why things move a little bit here and there. But yes, we don't see any change in the trajectory of the business.

Yes, I'd just say on the service front, to Richard's point, it's early to tell. It will be more at the margin. I think, right now, we don't have a good sense of how long the delays might be in place, so that's...

As we spoke, I just got an e-mail telling me that one of our high-activity facilities, New York, New Jersey area, we just got into it, as in to be able to be up and running, delivering services. We've been into it, but not been able to deliver services. So it looks like it's back online at these facilities. Now we'll have to wait and see whether our customers are online and so forth.

Your next question comes from the line of George Tong with Piper Jaffray.

Could you tell us what your outlook is in services demand, x paper prices, and when you might see a re-acceleration in the activity-based services and what might drive that?

Well, I don't know that we -- well, there's 2 components to the activity-based services. One, the big driver down still is our healthcare business, which we have said constantly is a business that, frankly, slowly is going away. Not the business itself. It's changing its nature. It's becoming a much less active storage business. And so the activity, which that is our most activity vertical segment, is coming way off. The storage side of the business is growing nicely, but the activity side is coming off. That trend will continue slowly for quite a while, okay? And then you have activity clients related to just all data getting less active. That's also a slower -- that's also a slow trend. And then third, you have economic activity declines, and we talked a lot about this in Investor Day. It's hard to parse which percentage. I mean, we know what's going on in the healthcare, which is a big part of it. But add it all up, you're talking $15 million to $20 million headwind in terms of total services on an annual basis. And I think if we had good robust economies, and as we weed through some of this, that might come down by 1/3 or somewhere like that. That's a guess though. That's not a precise answer.

Right, got it. And you mentioned extra execution capability driving the accelerated investments in the fourth quarter. Could you provide additional details on where the investments are going and what benefits or returns you're expecting to realize from the investments?

Yes, so we'll have -- as I have noted, George, we've got about $10 million of real estate transactions in the fourth quarter. The biggest one is we're consolidating volume in London. We have excess capacity and we're going to close a facility. That's about a $6 million impact. We've got some investments in the U.S. as well. We're consolidating volume at an existing -- we have an existing lease facility that we're going to move out of and take a charge there. And we've got some investments going around just in terms of upgrading facilities as well. And net-net -- that's factored into our outlook. We're counting on that next year, but those will have benefits in terms of reduced rental costs going into next year. So I think Richard's point on the international front was the team's been executing extremely well. We feel very good about the -- getting to our 2013 goals and I think we've got some ability here to move things forward. Good return activity forward and faster, and we're going to take advantage of that.

I mean, the team's basically, and we've done this before, they've come to us and they said, "Look, we -- our plans for this year are pretty cooked, and they're operating and the margins are flowing and so forth." And if we will relieve them on a reported basis from -- let them have some more expense in Q4 on a reported basis, they'll accelerate and get at more, and so those are good decisions, and so we said, "Sure, let's do it."

Your next question comes from the line of Nate Brochmann with William Blair & Company. Nathan Brochmann - William Blair & Company L.L.C., Research Division: Okay. I want to just have just a follow-up on that question a little bit, and something that we talked about at Investor Day. But obviously is, you guys kind of cull through your portfolio of real estate and converting some leases to maybe purchase facilities, et cetera, and maybe some consolidation. How far are you through that process of really looking at that portfolio and how much value might there to be unlocked as kind of we go forward through that process?

Well, I think, we're -- to a degree, we've had a level of activity going on for a long time, right? Building consolidations are a normal part of what we do, and so that work continues. I think the opportunity we highlighted at Investor Day was we have basically a $2.5 billion universe in potential investment opportunity between buying out leases and investing. And the real estate and expansion markets, kind of a probability-based view on that. We put out an estimate of $1 billion deployment, perhaps, over a long period of time and...

And buying in an existing lease facility is not to be confused with moving out and consolidating an inventory. They're really kind of separate transactions, okay? If we're consolidating inventory, we're typically either moving out of an owned building and selling the building or moving out of a lease and taking a charge because the present value of where we're going justifies that investment. Those are separate decisions. We would tend to buy-in buildings, buy-in leases, where we have high-quality buildings, good real estate, and where the cost of financing it in an acquired mode is cheaper than the cost of the lease that we have. And oftentimes, that occurs at a lease renewal cycle or when landlords want to get some liquidity out of their portfolio, and so on a negotiated basis.

So one way to look at is if we got $1 billion, you'd say the majority of that is lease buyouts. If we've got a cap rate of 8%, on average, on leases, if we can finance at a lower rate directly, that will be a net benefit to us. So that might give you a sense of kind of the net annualized benefit we could realize over time from the financing side of that. And we'll continue to increase our network utilization through other activities like building those, as Richard talking about. Nathan Brochmann - William Blair & Company L.L.C., Research Division: Okay, that's helpful. And then second question. We talked a little bit on the services in terms of some of the headwinds and also kind of the shredding services being down a little bit. Is competition getting a little bit hotter in that in terms of, at least, here in Chicago, we see some more competitors and some more trucks around? Is that a big concern or is that just on the periphery?

Well, the competition is always a concern because of -- and sure, the shredding business has some large players and a lot, a lot, a lot of small players, and it's a reasonably easy-entry business for the small players. But our shredding services, the bend [ph] tips and the number stops and all the activities are up and continue to grow quite nicely, but what we're suffering is -- we're suffering 2 things: some price decline, which is competitive-market driven, but a lot driven off of a rollover of some very large enterprise accounts quite some years ago in a different market environment, and which we then are repricing themselves or getting repriced to current markets. But the big driver is the paper itself. I mean, the paper is a key driver of revenue and profitability in that business, and it's gone from an all-time high to not quite an all-time low, but a much lower number.

Your next question comes from the line of Andrew Steinerman with JPMorgan. Andrew C. Steinerman - JP Morgan Chase & Co, Research Division: [Audio Gap] growth, I know you said it was in line with expectations, but it was different than the second quarter rate. Could you just go over those differences again? You went through them quickly. And do you think that the fourth quarter storage growth will be similar to the third?

Andrew, we missed the very beginning of your question. Was your question about storage growth? Andrew C. Steinerman - JP Morgan Chase & Co, Research Division: Yes, so my question is about the internal growth of 2.4% in storage, which you noted was in line with your expectations, but it was different than the 4% in the second quarter. Could you just go over those differences? And do you feel like the fourth quarter storage growth internally will be similar to the third?

So the differences -- we had a very good Q2. The International number came down from 7% to 5%, and that was primarily just reduction from mid-double-digit growth in Latin America to 12%-ish type growth. It was -- we had very good rates. It was just a bit lower. And we did see some -- we had a very good Q2 in Europe, and that's came back down to more normalized levels, I'd argue.

And there's seasonality in the storage side of the business, which lends itself to the first half of the year versus the second half of the year.

North America, as I mentioned, was down a bit. It was 1.5 versus 2. And that it really is just kind of the quarter-to-quarter, year-over-year comparisons. We were up against the kind of volume built through Q3 of last year, and came down a bit early this year. But net-net, it's been really quite flat. We would expect to see some of those compares be a bit better in Q4. So we're comfortable we're on track to the 4% full year number and the 3% internal number we've been talking about. Andrew C. Steinerman - JP Morgan Chase & Co, Research Division: Right. But there's not a lot of difference when you talk about the fourth quarter storage internal growth rate than the third quarter, no other things to call out?

No, more similar than different, which is typical in our business.

Your next question comes from the line of Gary Bisbee with Barclays.

[Audio Gap] on that and dig in a bit into the North American storage. It sounds like the business is flat x pricing and I guess that's been the recent trend, not just this quarter. But what's baked into that mid-term view or the -- was it through 2016 view that you gave at the Investor Day? Is that a continuation of flat North American volumes? And how confident are you that there's not a -- that we're not going to actually see the volume start to decline a bit?

Well, we -- just going back to Investor Day, we talked about the longer-term outlook being 1% to 3%, including a 1.5% to 2% pricing. So that it is basically flat volume, with revenue growth primarily coming from pricing. And our churn has been stable in North America, what's flowing out. The incoming volume has come down moderately in terms of new sales and organic growth from customers, but we can augment that through additional activities, as well as through things like tuck-in acquisitions or customer acquisitions. And we feel quite confident that we can -- it's a very slow change, and that we can offset that through good return investments that keep the volume flowing in. So we're...

And I think -- look, there's no guarantee about the future in anything, but if you look forward -- look where we are today, look forward versus look back, that you'll see significantly more focus of resources, asset, organization towards driving storage. And that's in marketing programs, sales programs, compensation programs. Everybody is aligned around this agenda, and that was not true looking backwards, and so -- and it will have benefits.

And then just following on that, and I'm not trying to give you a hard time, but the thought process around buying in a lot of real estate, if it sounds like we're at a situation were flat is the expectation, how do you think about the decision to buy properties in North America if it's really not growing? I mean, would you buy them in markets where you'd have the ability to consolidate another facility into it if it shrinks? It seems to me, the math isn't quite so obvious if there's the potential for weaker volumes.

Sure. No, look, it's a local market -- it's not a local market decision, it's a local market analysis. If you were to -- and you do run the models of what if the business shrank over the next 50 years and so forth, what's your last building standing, what's your next-to-last building standing and so forth and so on, and those are the obvious ones you want to buy. Okay? And you run your portfolio that way. You also recognize that if you were in a declining situation, you're probably better off to own the real estate so you can have more flexibility of reselling it into the open market than you would be committed to a long lease. So you increase the flexibility of your portfolio, but we're not talking about -- relative to the size of our portfolio, we're not talking about buying in that many of the buildings over time, okay, to make that issue a serious issue. And the last, and certainly not least, is that we would likely deploy -- I don't know if I'd say a disproportion amount, disproportion amount relative to the size of the business, for sure, in emerging markets, where the real estate arbitrage is much, much higher. The cost of debt capital, the cost of lease capital, so to speak, and financing in emerging markets is in line with venture capital returns, and we would likely deploy a significant amount in places like that. And I use kind of over and over the example that we've now gone outside of São Paulo, Brazil, and bought 10 acres of land, and we're going to build a campus there because we can drive very, very much better economics, and we've got a very good, growing business there. And a lot of facilities we can -- on leases we can get out of that we can consolidate out of into.

Okay, great. And then just one clean-up one. What exactly are the organizational changes in the severance? Is that any -- is that a material number or you're just cleaning a few things up?

It's in the range of $5 million to $7 million in Q4, and we've got a few different things going on, but basically, we're -- it's part of ongoing productivity-based initiatives we're looking at, where we can be more efficient in the company, and that's what it's related to. So it's more than one activity. They're smaller in terms of their individual scope, but net-net, we do expect a fair bit of severance cost to pull through Q4.

Your next question comes from the line of Scott Schneeberger with Oppenheimer. Scott A. Schneeberger - Oppenheimer & Co. Inc., Research Division: You guys were discussing the weather impact from Sandy and addressing some of the short-term issues it could have on service. Is there a potential for a positive impact, longer-term, perhaps? And with, I would imagine, very elevated insurance claims, is that something that could show up in 2013?

Well, I think if we -- I think it's too early to call that. It's -- net-net, I don't think that will be a net benefit to us. It's just too early to call.

Look, I think the only -- generally speaking, the only positive that comes out of these kind of messes are is -- is in certain customers will have heightened awareness around the quality of their own operations and where they're storing things and what they're doing, and be more open to making a change, and then there will likely be a few customers who have a bloody mess after this, and we may get called in to help fix it, which we do from time to time. Scott A. Schneeberger - Oppenheimer & Co. Inc., Research Division: Okay. And just -- it was covered fairly well at the Investor Day, but could you address, Richard, the main verticals, financial services, healthcare, legal, for instance, just what you see for the intermediate-term outlook, the next 12 to 18 months?

In what respect? Scott A. Schneeberger - Oppenheimer & Co. Inc., Research Division: Just anything that would deviate from how they've been trending, particularly, healthcare, over the next year or so.

Well, let's take healthcare. What we see in healthcare is a consistent trend. We see actually good, great opportunity inside the healthcare space, as they computerize their health records and so forth. They don't get rid of the paper records for lots of real reasons, good reasons. So we see lots of storage opportunity in the space. We see lots of -- some hybrid or digital scanning opportunities and things like that. I don't know if we see a trend, but they're kind of in the middle of that, and they've got some years of work. The trend is the bigger hospitals started a long time ago, and the bigger healthcare systems, and the smaller ones are still working through it, trying to figure out how to do it. Financial services, what you see there is -- I mean you know it's an industry that's under pressure, and they push that pressure back at their vendors, and we see a lot of that. We see their activity rates have been down since 2007 and '08, come back slightly. Which is the same thing you guys see in the capital markets, okay? If we get robust markets and robust trading and robust everything else, I'm sure their activities -- everybody will be smiling better and their activities will be up and so forth. So I'd say you would see us -- whatever your outlook is for a given vertical in terms of their economic activity, you will see that'll flow through to us, and you'll see that the service sides respond faster and the storage respond slower. There's a lag there.

Your next question comes from the line of Shlomo Rosenbaum with Stifel. Shlomo H. Rosenbaum - Stifel, Nicolaus & Co., Inc., Research Division: Can you just comment a little bit on Slide 12 where it looks like there's an increase in both organic additions and destructions? Can you provide any color as to what's going on kind of on a sequential basis?

Just finding the slide, Shlomo, sorry. And you're looking at the outgoing volume on Slide 12? Shlomo H. Rosenbaum - Stifel, Nicolaus & Co., Inc., Research Division: Yes, it looks like there was a step up both in outgoing volume and in organic additions, and I just wanted to know if there's any color you could provide behind that.

You do see there's some seasonality in numbers. I think, sometimes, it's important to look at Q3 to Q3 levels. I think what you see in the organic additions is they're relatively stable. And on the outgoing volume, Q3 to Q3 is actually down a bit and are now calling -- you typically have some fluctuation quarter-to-quarter. It's driven -- and many times, larger events can cause quarter-to-quarterly fluctuation. I think, overall, if you look at where Q2 and Q3 are, they're actually down from where they were the prior 3 quarters, and so -- it's one of the reasons we talk about the compares year-on-year is we knew we had some increase in the outgoing volume a little earlier in the year, and that stabilized down so we have a tougher compare in Q3, but that should be sequentially a bit better as we get into Q4. Shlomo H. Rosenbaum - Stifel, Nicolaus & Co., Inc., Research Division: What seasonality is there in this business? Can you just give us from a practical standpoint why there's a seasonality in 3Q? What is behind it, if that's indeed what this chart is saying, in your view?

Seasonality in the business is more related -- you'll see a higher growth of storage in the first couple of quarters because people are cleaning out last year's records. That's the biggest trend you see in terms of gross adds, gross additions coming in. Shlomo H. Rosenbaum - Stifel, Nicolaus & Co., Inc., Research Division: Okay. And then in terms of the corporate, it seems like you guys are taking costs down in the OIB and that's positively impacting OIBDA. Can you talk about some of the items that happened that affected the quarter on a sequential basis?

On corporate costs, Shlomo? Shlomo H. Rosenbaum - Stifel, Nicolaus & Co., Inc., Research Division: Yes.

It's flow-through benefits of -- we had a number of initiatives we started advancing really late last year around looking at our support cost areas and trying to make sure they're well-aligned with good customer service, but also being as efficient as we can be, and we're seeing the flow-through benefits of that. So it's across a number of functional areas. It's something that we expect to continue to do on an ongoing basis, and I think what you're seeing more than anything is, given when we advance those initiatives, we're starting to see the flow-through benefits of those year-on-year. Shlomo H. Rosenbaum - Stifel, Nicolaus & Co., Inc., Research Division: Okay. And then the lower revenue from fuel surcharges, is this just index-based stuff that you just had lower charges so you had lower -- lower fuel so lower surcharges?

Yes, surcharges were down. Fuel prices have been down a bit and they were down about $1 million year-on-year in the quarter. Shlomo H. Rosenbaum - Stifel, Nicolaus & Co., Inc., Research Division: Okay. And then the last question I have, is this the first time you've had back-to-back quarters of sequential down volumes in North America? So we had last quarter, you noted it on the Analyst Day as well, but is this kind of a historical period? Or is this something that has really been happening over the last few years just it's so close to 0 that you haven't really called it out?

It's been basically flat. We're -- if you look at the volumes and how they've trended over the last several quarters, it's been up a bit, down slightly, but basically flat and we're expecting flat this year, so it's -- I would say the headline in storage is flat in North America. Scott A. Schneeberger - Oppenheimer & Co. Inc., Research Division: I'm not talking about revenue. I'm talking about volumes.

I am too. Storage volume is flat. Down a bit because of the compare of Q3 to Q3, and that reflects just some of the ebbing and flowing of volume coming in now. But as we go forward, we expect it to be flat. That's where we'll be this year. So that's really the broader theme, is it's relatively flat.

Your final question comes from the line of Kevin McVeigh with Macquarie.

Apologize if you answered this already, but the components of the core services, I know part of that's fuel, part of it is just healthcare activity overall. Can you just bracket in kind of round numbers what drove the decline there and how you're thinking about healthcare, in particular? Richard, I know that continues to be an area that -- on the service side, that's been a little slower, just how we're thinking about that going forward?

Well, I think -- we're thinking that healthcare is going to continue to decline and roughly come down to -- over quite a period of time, to about half of what it used to be. And it's got few more years before it will get itself to that level, I think. And I think the rest of it is more -- the bigger part of the rest of it is more economic activity. So it depends on the economies, what comes to on there, I think. So thank you, everybody, for coming this morning. We do try to keep to at least an hour, and I started off extending it short. I've always misjudged that so I apologize to you. I know you have other calls to get to. Thanks for coming to Investor Day, and we look forward to continue to communicate with you, and we'll talk to you next quarter.

That does conclude today's conference. You may now disconnect.