Iron Mountain Reports First Quarter Results

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Iron Mountain Incorporated (NYSE: IRM), a global leader in information management services, announces financial results for the first quarter of 2024. The conference call / webcast details, earnings call presentation and supplemental financial information, which includes definitions of certain capitalized terms used in this release, are available on Iron Mountain’s Investor Relations website. Reconciliations of non-GAAP measures to the appropriate GAAP measures are included herein.

“We are pleased to report a strong start to 2024, resulting in all-time record Revenue and a record first quarter Adjusted EBITDA,” said William L. Meaney, President and CEO of Iron Mountain. “Our business is performing well and we are positioned to continue our growth trajectory. Our team remains laser focused on delivering the best integrated set of solutions and services for our customers. Our consistent strong performance is evidence that our strategy, through Project Matterhorn, is working.”

Financial Performance Highlights for the First Quarter of 2024

($ in millions, except per share data)
	Three Months Ended		Y/Y % Change
	3/31/24	3/31/23	Reported $	Constant Fx
Storage Rental Revenue	$885	$810	9%	9%
Service Revenue	$592	$504	17%	17%
Total Revenue	$1,477	$1,314	12%	12%

Net Income	$77	$66	18%
Reported EPS	$0.25	$0.22	14%
Adjusted EPS	$0.43	$0.42	2%

Adjusted EBITDA	$519	$461	13%	13%
Adjusted EBITDA Margin	35.1%	35.1%	0 bps

AFFO	$324	$295	10%
AFFO per share	$1.10	$1.01	9%

Total reported revenues for the first quarter were $1.5 billion, compared with $1.3 billion in the first quarter of 2023, an increase of 12.4%. Excluding the impact of foreign currency exchange (“Fx”), total reported revenues increased 12.2% compared to the prior year, driven by a 9.0% increase in storage rental revenue and a 17.2% increase in service revenue.
Net Income for the first quarter was $77.0 million, compared with $65.5 million in the first quarter of 2023.
Adjusted EBITDA for the first quarter was $518.9 million, compared with $460.8 million in the first quarter of 2023, an increase of 12.6%. On a constant currency basis, Adjusted EBITDA increased by 12.5% in the first quarter, compared to the first quarter of 2023, driven by the increase in storage rental revenue, ALM improvement and data center commencements.
FFO (Normalized) per share was $0.74 for the first quarter, compared with $0.71 in the first quarter of 2023.
AFFO was $323.7 million for the first quarter, compared with $295.2 million in the first quarter of 2023, an increase of 9.6% driven by improved Adjusted EBITDA.
AFFO per share was $1.10 for the first quarter, compared with $1.01 in the first quarter of 2023.

Dividend

On May 2, 2024, Iron Mountain’s Board of Directors declared a quarterly cash dividend of $0.65 per share for the second quarter. The second quarter 2024 dividend is payable on July 5, 2024, for shareholders of record on June 17, 2024.

Guidance

Iron Mountain affirmed full year 2024 guidance; details are summarized in the table below.

2024 Guidance⁽¹⁾
($ in millions, except per share data)
	2024 Guidance	Y/Y % Change at Midpoint
Total Revenue	$6,000 – $6,150	11%
Adjusted EBITDA	$2,175 – $2,225	12%
AFFO	$1,300 – $1,335	9%
AFFO Per Share	$4.39 – $4.51	8%

(1) Iron Mountain does not provide a reconciliation of non-GAAP measures that it discusses as part of its annual guidance or long term outlook because certain significant information required for such reconciliation is not available without unreasonable efforts or at all, including, most notably, the impact of exchange rates on Iron Mountain’s transactions, loss or gain related to the disposition of real estate and other income or expense. Without this information, Iron Mountain does not believe that a reconciliation would be meaningful.

About Iron Mountain

Iron Mountain Incorporated (NYSE: IRM) is a global leader in information management services. Founded in 1951 and trusted by more than 240,000 customers worldwide, Iron Mountain serves to protect and elevate the power of our customers’ work. Through a range of offerings including digital transformation, data centers, secure records storage, information management, asset lifecycle management, secure destruction and art storage and logistics, Iron Mountain helps businesses bring light to their dark data, enabling customers to unlock value and intelligence from their stored digital and physical assets at speed and with security, while helping them meet their environmental goals.

To learn more about Iron Mountain, please visit: www.IronMountain.com and follow @IronMountain on X (formerly Twitter) and LinkedIn.

Forward Looking Statements

We have made statements in this press release that constitute “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995 and other securities laws. These forward-looking statements concern our current expectations regarding our future results from operations, economic performance, financial condition, goals, strategies, investment objectives, plans and achievements.

These forward-looking statements are subject to various known and unknown risks, uncertainties and other factors, and you should not rely upon them except as statements of our present intentions and of our present expectations, which may or may not occur. When we use words such as “believes”, “expects”, “anticipates”, “estimates”, “plans”, “intends”, “projects”, “pursue”, “will” or similar expressions, we are making forward-looking statements. Although we believe that our forward-looking statements are based on reasonable assumptions, our expected results may not be achieved, and actual results may differ materially from our expectations. In addition, important factors that could cause actual results to differ from expectations include, among others: (i) our ability or inability to execute our strategic growth plan, including our ability to invest according to plan, grow our businesses (including through joint ventures or other co-investment vehicles), incorporate alternative technologies (including artificial intelligence) into our offerings, achieve satisfactory returns on new product offerings, continue our revenue management, expand and manage our global operations, complete acquisitions on satisfactory terms, integrate acquired companies efficiently and transition to more sustainable sources of energy; (ii) changes in customer preferences and demand for our storage and information management services, including as a result of the shift from paper and tape storage to alternative technologies that require less physical space; (iii) the costs of complying with and our ability to comply with laws, regulations and customer requirements, including those relating to data privacy and cybersecurity issues, as well as fire and safety and environmental standards; (iv) the impact of attacks on our internal information technology (“IT”) systems, including the impact of such incidents on our reputation and ability to compete and any litigation or disputes that may arise in connection with such incidents; (v) our ability to fund capital expenditures; (vi) the impact of our distribution requirements on our ability to execute our business plan; (vii) our ability to remain qualified for taxation as a real estate investment trust for United States federal income tax purposes; (viii) changes in the political and economic environments in the countries in which we operate and changes in the global political climate; (ix) our ability to raise debt or equity capital and changes in the cost of our debt; (x) our ability to comply with our existing debt obligations and restrictions in our debt instruments; (xi) the impact of service interruptions or equipment damage and the cost of power on our data center operations; (xii) the cost or potential liabilities associated with real estate necessary for our business; (xiii) unexpected events, including those resulting from climate change or geopolitical events, could disrupt our operations and adversely affect our reputation and results of operations; (xiv) failures to implement and manage new IT systems; (xv) other trends in competitive or economic conditions affecting our financial condition or results of operations not presently contemplated; and (xvi) the other risks described in our periodic reports filed with the SEC, including under the caption “Risk Factors” in Part I, Item 1A of our Annual Report. Except as required by law, we undertake no obligation to update any forward-looking statements appearing in this press release.

Reconciliation of Non-GAAP Measures

Throughout this press release, Iron Mountain discusses (1) Adjusted EBITDA, (2) Adjusted EPS, (3) FFO (Nareit), (4) FFO (Normalized), and (5) AFFO. These measures do not conform to accounting principles generally accepted in the United States (“GAAP”). These non-GAAP measures are supplemental metrics designed to enhance our disclosure and to provide additional information that we believe to be important for investors to consider in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP, such as operating income, net income (loss) attributable to Iron Mountain Incorporated or cash flows from operating activities (as determined in accordance with GAAP). The reconciliation of these measures to the appropriate GAAP measure, as required by Regulation G under the Securities Exchange Act of 1934, as amended, and their definitions are included later in this release.

Condensed Consolidated Balance Sheets (Unaudited; dollars in thousands)

	3/31/2024			12/31/2023
ASSETS
Current Assets:
Cash and Cash Equivalents	$	191,655		$	222,789
Accounts Receivable, Net		1,268,061			1,259,826
Prepaid Expenses and Other		275,358			252,930
Total Current Assets	$	1,735,074		$	1,735,545
Property, Plant and Equipment:
Property, Plant and Equipment	$	10,647,036		$	10,373,989
Less: Accumulated Depreciation		(4,108,897	)		(4,059,120	)
Property, Plant and Equipment, Net	$	6,538,139		$	6,314,869
Other Assets, Net:
Goodwill	$	5,107,473		$	5,017,912
Customer and Supplier Relationships and Other Intangible Assets		1,330,638			1,279,800
Operating Lease Right-of-Use Assets		2,677,803			2,696,024
Other		440,429			429,652
Total Other Assets, Net	$	9,556,343		$	9,423,388
Total Assets	$	17,829,556		$	17,473,802

LIABILITIES AND EQUITY
Current Liabilities:
Current Portion of Long-term Debt	$	118,771		$	120,670
Accounts Payable		524,901			539,594
Accrued Expenses and Other Current Liabilities		1,052,454			1,250,259
Deferred Revenue		332,801			325,665
Total Current Liabilities	$	2,028,927		$	2,236,188
Long-term Debt, Net of Current Portion		12,588,569			11,812,500
Long-term Operating Lease Liabilities, Net of Current Portion		2,525,552			2,562,394
Other Long-term Liabilities		255,491			237,590
Deferred Income Taxes		233,135			235,410
Redeemable Noncontrolling Interests		179,222			177,947
Total Long-term Liabilities	$	15,781,969		$	15,025,841
Total Liabilities	$	17,810,896		$	17,262,029
Equity
Total Equity	$	18,660		$	211,773
Total Liabilities and Equity	$	17,829,556		$	17,473,802


Quarterly Condensed Consolidated Statements of Operations (Unaudited; dollars in thousands, except per-share data)

	Q1 2024			Q4 2023		Q/Q % Change		Q1 2023			Y/Y % Change
Revenues:
Storage Rental	$	884,842		$	871,144	1.6	%	$	810,089		9.2	%
Service		592,021			548,685	7.9	%		504,260		17.4	%
Total Revenues	$	1,476,863		$	1,419,829	4.0	%	$	1,314,349		12.4	%

Operating Expenses:
Cost of Sales (excluding Depreciation and Amortization)	$	653,255		$	601,329	8.6	%	$	571,626		14.3	%
Selling, General and Administrative		319,465			314,932	1.4	%		294,520		8.5	%
Depreciation and Amortization		209,555			199,941	4.8	%		182,094		15.1	%
Acquisition and Integration Costs		7,809			12,860	(39.3	)%		1,595		n/a
Restructuring and Other Transformation		40,767			53,853	(24.3	)%		36,913		10.4	%
Loss (Gain) on Disposal/Write-Down of PP&E, Net		389			6,157	(93.7	)%		(13,061	)	103.0	%
Total Operating Expenses	$	1,231,240		$	1,189,072	3.5	%	$	1,073,687		14.7	%

Operating Income (Loss)	$	245,623		$	230,757	6.4	%	$	240,662		2.1	%
Interest Expense, Net		164,519			151,784	8.4	%		137,169		19.9	%
Other (Income) Expense, Net		(12,530	)		40,761	(130.7	)%		21,200		(159.1	)%
Net Income (Loss) Before Provision (Benefit) for Income Taxes	$	93,634		$	38,212	145.0	%	$	82,293		13.8	%
Provision (Benefit) for Income Taxes		16,609			9,018	84.2	%		16,758		(0.9	)%
Net Income (Loss)	$	77,025		$	29,194	163.8	%	$	65,535		17.5	%
Less: Net Income (Loss) Attributable to Noncontrolling Interests		2,964			712	n/a			940		n/a
Net Income (Loss) Attributable to Iron Mountain Incorporated	$	74,061		$	28,482	160.0	%	$	64,595		14.7	%

Net Income (Loss) Per Share Attributable to Iron Mountain Incorporated:
Basic	$	0.25		$	0.10	150.0	%	$	0.22		13.6	%
Diluted	$	0.25		$	0.10	150.0	%	$	0.22		13.6	%

Weighted Average Common Shares Outstanding – Basic		292,746			292,328	0.1	%		291,442		0.4	%
Weighted Average Common Shares Outstanding – Diluted		295,221			295,014	0.1	%		293,049		0.7	%

Quarterly Reconciliation of Net Income (Loss) to Adjusted EBITDA (Dollars in thousands)

	Q1 2024			Q4 2023		Q/Q % Change		Q1 2023			Y/Y % Change

Net Income (Loss)	$	77,025		$	29,194	163.8	%	$	65,535		17.5	%

Add / (Deduct):
Interest Expense, Net		164,519			151,784	8.4	%		137,169		19.9	%
Provision (Benefit) for Income Taxes		16,609			9,018	84.2	%		16,758		(0.9	)%
Depreciation and Amortization		209,555			199,941	4.8	%		182,094		15.1	%
Acquisition and Integration Costs		7,809			12,860	(39.3	)%		1,595		n/a
Restructuring and Other Transformation		40,767			53,853	(24.3	)%		36,913		10.4	%
Loss (Gain) on Disposal/Write-Down of PP&E, Net (Including Real Estate)		389			6,157	(93.7	)%		(13,061	)	103.0	%
Other (Income) Expense, Net, Excluding our Share of Losses (Gains) from our Unconsolidated Joint Ventures		(13,110	)		40,332	(132.5	)%		17,491		(175.0	)%
Stock-Based Compensation Expense		14,039			20,604	(31.9	)%		12,509		12.2	%
Our Share of Adjusted EBITDA Reconciling Items from our Unconsolidated Joint Ventures		1,253			1,506	(16.8	)%		3,805		(67.1	)%
Adjusted EBITDA	$	518,855		$	525,249	(1.2	)%	$	460,808		12.6	%

Adjusted EBITDA

We define Adjusted EBITDA as net income (loss) before interest expense, net, provision (benefit) for income taxes, depreciation and amortization (inclusive of our share of Adjusted EBITDA from our unconsolidated joint ventures), and excluding certain items we do not believe to be indicative of our core operating results, specifically: (i) Acquisition and Integration Costs; (ii) Restructuring and other transformation; (iii) Loss (gain) on disposal/write-down of property, plant and equipment, net (including real estate); (iv) Other (income) expense, net; and (v) Stock-based compensation expense. Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by total revenues. We use multiples of current or projected Adjusted EBITDA in conjunction with our discounted cash flow models to determine our estimated overall enterprise valuation and to evaluate acquisition targets. We believe Adjusted EBITDA and Adjusted EBITDA Margin provide our current and potential investors with relevant and useful information regarding our ability to generate cash flows to support business investment. These measures are an integral part of the internal reporting system we use to assess and evaluate the operating performance of our business.

Quarterly Reconciliation of Reported Earnings per Share to Adjusted Earnings per Share

	Q1 2024			Q4 2023			Q/Q % Change		Q1 2023			Y/Y % Change

Reported EPS – Fully Diluted from Net Income (Loss) Attributable to Iron Mountain Incorporated	$	0.25		$	0.10		150.0	%	$	0.22		13.6	%
Add / (Deduct):
Acquisition and Integration Costs		0.03			0.04		(25.0	)%		0.01		n/a
Restructuring and Other Transformation		0.14			0.18		(22.2	)%		0.13		7.7	%
Loss (Gain) on Disposal/Write-Down of PP&E, Net		—			0.02		n/a			(0.04	)	n/a
Other (Income) Expense, Net, Excluding our Share of Losses (Gains) from our Unconsolidated Joint Ventures		(0.04	)		0.14		(128.6	)%		0.06		(166.7	)%
Stock-Based Compensation Expense		0.05			0.07		(28.6	)%		0.04		25.0	%
Non-Cash Amortization Related to Derivative Instruments		0.01			0.01		—			0.02		(50.0	)%
Tax Impact of Reconciling Items and Discrete Tax Items (1)		(0.01	)		(0.04	)	(75.0	)%		(0.02	)	(50.0	)%
Net Income Attributable to Noncontrolling Interests		0.01			—		n/a			—		n/a
Adjusted EPS – Fully Diluted from Net Income (Loss) Attributable to Iron Mountain Incorporated	$	0.43		$	0.52		(17.3	)%	$	0.42		2.4	%

(1) The difference between our effective tax rates and our structural tax rate (or adjusted effective tax rates) for the three months ended March 31, 2024 and 2023 is primarily due to (i) the reconciling items above, which impact our reported net income (loss) before provision (benefit) for income taxes but have an insignificant impact on our reported provision (benefit) for income taxes and (ii) other discrete tax items. Our structural tax rate for purposes of the calculation of Adjusted EPS for the quarters ended March 31, 2024 and 2023 was 13.9% and 15.2% respectively, and quarter ended December 31, 2023 was 12.3%.

Adjusted Earnings Per Share, or Adjusted EPS

We define Adjusted EPS as reported earnings per share fully diluted from net income (loss) attributable to Iron Mountain Incorporated (inclusive of our share of adjusted losses (gains) from our unconsolidated joint ventures) and excluding certain items, specifically: (i) Acquisition and Integration Costs; (ii) Restructuring and other transformation; (iii) Amortization related to the write-off of certain customer relationship intangible assets; (iv) (Gain) loss on disposal/write-down of property, plant and equipment, net (including real estate); (v) Other expense (income), net; (vi) Stock-based compensation expense; (vii) Non-cash amortization related to derivative instruments; and (viii) Tax impact of reconciling items and discrete tax items. We do not believe these excluded items to be indicative of our ongoing operating results, and they are not considered when we are forecasting our future results. We believe Adjusted EPS is of value to our current and potential investors when comparing our results from past, present and future periods. Figures may not foot due to rounding.

Quarterly Reconciliation of Net Income (Loss) to FFO and AFFO (Dollars in thousands, except per-share data)

	Q1 2024			Q4 2023			Q/Q % Change		Q1 2023			Y/Y % Change

Net Income	$	77,025		$	29,194		163.8	%	$	65,535		17.5	%
Add / (Deduct):
Real Estate Depreciation (1)		83,573			83,928		(0.4	)%		76,129		9.8	%
(Gain) Loss on Sale of Real Estate, Net of Tax		(1,194	)		193		n/a			(15,746	)	(92.4	)%
Data Center Lease-Based Intangible Assets Amortization (2)		5,576			3,804		46.6	%		6,129		(9.0	)%
Our Share of FFO (Nareit) Reconciling Items from our Unconsolidated Joint Ventures		441			853		(48.3	)%		132		n/a
FFO (Nareit)	$	165,421		$	117,972		40.2	%	$	132,179		25.1	%
Add / (Deduct):
Acquisition and Integration Costs		7,809			12,860		(39.3	)%		1,595		n/a
Restructuring and Other Transformation		40,767			53,853		(24.3	)%		36,913		10.4	%
Loss (Gain) on Disposal/Write-Down of PP&E, Net (Excluding Real Estate)		1,818			6,290		(71.1	)%		4,550		(60.1	)%
Other (Income) Expense, Net, Excluding our Share of Losses (Gains) from our Unconsolidated Joint Ventures		(13,110	)		40,332		(132.5	)%		17,491		(175.0	)%
Stock-Based Compensation Expense		14,039			20,604		(31.9	)%		12,509		12.2	%
Non-Cash Amortization Related to Derivative Instruments		4,176			4,176		—			5,834		(28.4	)%
Real Estate Financing Lease Depreciation		2,986			3,022		(1.2	)%		2,988		(0.1	)%
Tax Impact of Reconciling Items and Discrete Tax Items (3)		(4,170	)		(13,050	)	(68.0	)%		(6,893	)	(39.5	)%
Our Share of FFO (Normalized) Reconciling Items from our Unconsolidated Joint Ventures		41			(56	)	173.2	%		226		(81.9	)%
FFO (Normalized)	$	219,777		$	246,005		(10.7	)%	$	207,392		6.0	%
Per Share Amounts (Fully Diluted Shares):
FFO (Nareit)	$	0.56		$	0.40		40.0	%	$	0.45		24.4	%
FFO (Normalized)	$	0.74		$	0.83		(10.8	)%	$	0.71		4.2	%

Weighted Average Common Shares Outstanding – Basic		292,746			292,328		0.1	%		291,442		0.4	%
Weighted Average Common Shares Outstanding – Diluted		295,221			295,014		0.1	%		293,049		0.7	%

(1) Includes depreciation expense related to owned real estate assets (land improvements, buildings, building improvements, leasehold improvements and racking), excluding depreciation related to real estate financing leases.
(2) Includes amortization expense for Data Center In-Place Lease Intangible Assets and Data Center Tenant Relationship Intangible Assets.
(3) Represents the tax impact of (i) the reconciling items above, which impact our reported net income (loss) before provision (benefit) for income taxes but have an insignificant impact on our reported provision (benefit) from income taxes and (ii) other discrete tax items.

Funds From Operations, or FFO (Nareit), and FFO (Normalized)

Funds from operations (“FFO”) is defined by the National Association of Real Estate Investment Trusts as net income (loss) excluding depreciation on real estate assets, losses and gains on sale of real estate, net of tax, and amortization of data center leased-based intangibles (“FFO (Nareit)”). We calculate our FFO measure, including FFO (Nareit), adjusting for our share of reconciling items from our unconsolidated joint ventures. FFO (Nareit) does not give effect to real estate depreciation because these amounts are computed, under GAAP, to allocate the cost of a property over its useful life. Because values for well-maintained real estate assets have historically increased or decreased based upon prevailing market conditions, we believe that FFO (Nareit) provides investors with a clearer view of our operating performance. Our most directly comparable GAAP measure to FFO (Nareit) is net income (loss).

We modify FFO (Nareit), as is common among REITs seeking to provide financial measures that most meaningfully reflect their particular business (“FFO (Normalized)”). Our definition of FFO (Normalized) excludes certain items included in FFO (Nareit) that we believe are not indicative of our core operating results, specifically: (i) Acquisition and Integration Costs; (ii) Restructuring and other transformation; (iii) Loss (gain) on disposal/write-down of property, plant and equipment, net (excluding real estate); (iv) Other (income) expense net; (v) Stock-based compensation expense; (vi) Non-cash amortization related to derivative instruments; (vii) Real estate financing lease depreciation; and (viii) Tax impact of reconciling items and discrete tax items.

FFO (Normalized) per share

FFO (Normalized) divided by weighted average fully-diluted shares outstanding.

Quarterly Reconciliation of Net Income (Loss) to FFO and AFFO (continued) (Dollars in thousands, except per-share data)

	Q1 2024		Q4 2023		Q/Q % Change		Q1 2023		Y/Y % Change

FFO (Normalized)	$	219,777	$	246,005	(10.7	)%	$	207,392	6.0	%
Add / (Deduct):
Non-Real Estate Depreciation		57,073		51,572	10.7	%		40,948	39.4	%
Amortization Expense (1)		60,346		57,613	4.7	%		55,899	8.0	%
Amortization of Deferred Financing Costs		6,100		3,278	86.1	%		4,332	40.8	%
Revenue Reduction Associated with Amortization of Customer Inducements and Above- and Below-Market Leases		1,322		1,829	(27.7	)%		1,760	(24.9	)%
Non-Cash Rent Expense (Income)		5,659		4,982	13.6	%		7,436	(23.9	)%
Reconciliation to Normalized Cash Taxes		1,931		7,090	(72.8	)%		3,157	(38.8	)%
Our Share of AFFO Reconciling Items from our Unconsolidated Joint Ventures		182		181	0.6	%		1,981	(90.8	)%
Less:
Recurring Capital Expenditures		28,737		44,916	(36.0	)%		27,663	3.9	%
AFFO	$	323,653	$	327,634	(1.2	)%	$	295,242	9.6	%

Per Share Amounts (Fully Diluted Shares):
AFFO Per Share	$	1.10	$	1.11	(0.9	)%	$	1.01	8.9	%

Weighted Average Common Shares Outstanding – Basic		292,746		292,328	0.1	%		291,442	0.4	%
Weighted Average Common Shares Outstanding – Diluted		295,221		295,014	0.1	%		293,049	0.7	%

(1) Includes customer and supplier relationship value, intake costs, acquisition of customer relationships, capitalized commissions and other intangibles.

Adjusted Funds From Operations, or AFFO

We define adjusted funds from operations (“AFFO”) as FFO (Normalized) (1) excluding (i) Non-cash rent expense (income), (ii) Depreciation on non-real estate assets, (iii) Amortization expense associated with customer and supplier relationship value, intake costs, acquisitions of customer and supplier relationships, capitalized commissions and other intangibles, (iv) Amortization of deferred financing costs and debt discount/premium, (v) Revenue reduction associated with amortization of customer inducements and above- and below-market data center leases and (vi) The impact of reconciling to normalized cash taxes and (2) including Recurring capital expenditures. We also adjust for these items to the extent attributable to our portion of unconsolidated ventures. We believe that AFFO, as a widely recognized measure of operations of REITs, is helpful to investors as a meaningful supplemental comparative performance measure to other REITs, including on a per share basis. AFFO should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP, such as operating income, net income (loss) or cash flows from operating activities (as determined in accordance with GAAP).

AFFO per share

AFFO divided by weighted average fully-diluted shares outstanding.

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