Segment Information

12 Months Ended

Dec. 31, 2019

During the fourth quarter of 2019, as a result of the realignment of our global managerial structure and changes to our internal financial reporting associated with Project Summit, we reassessed the composition of our reportable operating segments and reporting units. As a result of the managerial structure changes associated with Project Summit, we now have the following reportable operating segments: (i) Global Records and Information Management ("Global RIM") Business (which consists of the former North American Records and Information Management Business (excluding our technology escrow services business, which is now included as a component of our Corporate and Other Business segment), North American Data Management Business, Western European Business and Other International Business); (ii) Global Data Center Business; and (iii) Corporate and Other Business (which includes our Adjacent Businesses and our technology escrow services business). As a result of these changes, previously reported segment information has been restated to conform to the current presentation.

As of December 31, 2019, our three reportable operating segments are described as follows:

•

Global RIM Business—provides (i) storage of physical records, including media such as microfilm and microfiche, film, X-rays and blueprints, including healthcare information services, vital records services, service and courier operations, and the collection, handling and disposal of sensitive documents for customers in approximately 50 countries ("Records Management"), (ii) storage and rotation of backup computer media as part of corporate disaster recovery plans, including service and courier operations (“Data Protection & Recovery”); server and computer backup services; and related services offerings, (collectively, "Data Management"), (iii) Information Governance and Digital Solutions, which develops, implements and supports comprehensive storage and information management solutions for the complete lifecycle of our customers' information, including the management of physical records, document conversion and digital storage in the United States and Canada, (iv) the shredding of sensitive documents for customers that, in many cases, store their records with us ("Secure Shredding") and the subsequent sale of shredded paper for recycling, and (v) on-demand, valet storage for consumers across 24 markets in North America through the MakeSpace JV (as defined in Note 13).

•

Global Data Center Business—provides enterprise-class data center facilities to protect mission-critical assets and ensure the continued operation of our customers’ IT infrastructure, with secure and reliable data center options. As of December 31, 2019, our Global Data Center Business footprint spanned nine markets in the United States: Denver, Colorado; Kansas City, Missouri; Boston, Massachusetts; Boyers, Pennsylvania; Manassas, Virginia; Edison, New Jersey; Columbus, Ohio; and Phoenix and Scottsdale, Arizona and four international markets: Amsterdam, London, and Singapore, with land held for development in Frankfurt.

•

Corporate and Other Business—consists primarily of Adjacent Businesses and other corporate items. Our Adjacent Businesses is comprised of (i) helping entertainment and media industry clients store, safeguard and deliver physical media of all types, and provides digital content repository systems that house, distribute, and archive key media assets, throughout the United States, Canada, France, China - Hong Kong S.A.R., the Netherlands and the United Kingdom ("Entertainment Services") and (ii) technical expertise in the handling, installation and storing of art in the United States, Canada and Europe ("Fine Arts"). Additionally, our Corporate and Other Business segment includes costs related to executive and staff functions, including finance, human resources and IT, which benefit the enterprise as a whole, and stock-based employee compensation expense associated with all stock options, restricted stock units, performance units and shares of stock issued under our employee stock purchase plan. Additionally, our Corporate and Other Business segment includes our technology escrow services business in the United States.

An analysis of our business segment information and reconciliation to the accompanying Consolidated Financial Statements is as follows:



	Global RIM Business		Global Data Center Business		Corporate and Other Business			Total Consolidated
As of and for the Year Ended December 31, 2019
Total Revenues	$	3,812,433	$	257,151	$	193,000		$	4,262,584
Storage Rental	2,320,076		246,925		114,086			2,681,087
Service	1,492,357		10,226		78,914			1,581,497
Depreciation and Amortization	454,652		133,927		69,622			658,201
Depreciation	330,534		78,939		46,850			456,323
Amortization	124,118		54,988		22,772			201,878
Adjusted EBITDA	1,563,223		121,517		(247,135		)	1,437,605
Total Assets(1)	10,753,218		2,535,848		527,750			13,816,816
Expenditures for Segment Assets	398,690		427,935		56,242			882,867
Capital Expenditures	248,232		392,029		52,722			692,983
Cash Paid for Acquisitions, Net of Cash Acquired	54,717		—		3,520			58,237
Acquisitions of Customer Relationships, Customer Inducements, Contract Fulfillment Costs and third-party commissions	95,741		35,906		—			131,647
As of and for the Year Ended December 31, 2018
Total Revenues	$	3,842,600	$	228,983	$	154,178		$	4,225,761
Storage Rental	2,301,344		218,675		102,436			2,622,455
Service	1,541,256		10,308		51,742			1,603,306
Depreciation and Amortization	472,155		105,680		61,679			639,514
Depreciation	341,384		58,707		52,649			452,740
Amortization	130,771		46,973		9,030			186,774
Adjusted EBITDA	1,569,353		99,574		(244,103		)	1,424,824
Total Assets(1)	9,135,198		2,217,505		504,515			11,857,218
Expenditures for Segment Assets	443,634		1,794,386		79,286			2,317,306
Capital Expenditures	254,308		152,739		53,015			460,062
Cash Paid for Acquisitions, Net of Cash Acquired	93,217		1,639,427		25,913			1,758,557
Acquisitions of Customer Relationships, Customer Inducements and Contract Fulfillment Costs	96,109		2,220		358			98,687
As of and for the Year Ended December 31, 2017
Total Revenues	$	3,706,110	$	37,694	$	101,774		$	3,845,578
Storage Rental	2,261,831		35,839		79,887			2,377,557
Service	1,444,279		1,855		21,887			1,468,021
Depreciation and Amortization	458,634		10,224		53,518			522,376
Depreciation	351,915		8,617		45,751			406,283
Amortization	106,719		1,607		7,767			116,093
Adjusted EBITDA	1,470,579		11,275		(238,281		)	1,243,573
Total Assets(1)	9,151,755		382,198		1,441,434			10,975,387
Expenditures for Segment Assets	424,628		86,543		126,850			638,021
Capital Expenditures	262,474		32,015		48,642			343,131
Cash Paid for Acquisitions, Net of Cash Acquired(2)	86,969		54,528		78,208			219,705
Acquisitions of Customer Relationships and Customer Inducements	75,185		—		—			75,185

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(1)

Excludes all intercompany receivables or payables and investment in subsidiary balances. Total Assets as of December 31, 2019 reflects the adoption of ASU 2016-02. Total Assets for the Corporate and Other Business segment have been restated to reflect the impact of the Netherlands VAT liability (as discussed in Note 2.y.) which resulted in an increase in total assets for this segment of $4,971 and $2,985, at December 31, 2018 and 2017, respectively.

The accounting policies of the reportable segments are the same as those described in Note 2. Adjusted EBITDA for each segment is defined as income (loss) from continuing operations before interest expense, net, provision (benefit) for income taxes, depreciation and amortization, and also excludes certain items that we believe are not indicative of our core operating results, specifically: (1) (gain) loss on disposal/write-down of property, plant and equipment (including real estate); (2) intangible impairments; (3) other expense (income), net (which includes foreign currency transaction (gains) losses, net); (4) Significant Acquisition Costs; and (5) Restructuring Charges. Internally, we use Adjusted EBITDA as the basis for evaluating the performance of, and allocated resources to, our operating segments.

A reconciliation of Adjusted EBITDA to income (loss) from continuing operations on a consolidated basis is as follows:



	Year Ended December 31,
	2019			2018			2017
Adjusted EBITDA	$	1,437,605		$	1,424,824		$	1,243,573
(Add)/Deduct:
Provision (Benefit) for Income Taxes	59,931			42,753			22,962
Other Expense (Income), Net	33,898			(11,692		)	79,429
Interest Expense, Net	419,298			409,648			353,645
(Gain) Loss on disposal/write-down of property, plant and equipment, net	(63,824		)	(73,622		)	(766		)
Depreciation and amortization	658,201			639,514			522,376
Significant Acquisition Costs	13,293			50,665			84,901
Restructuring Charges	48,597			—			—
Intangible impairments	—			—			3,011
Income (Loss) from Continuing Operations	$	268,211		$	367,558		$	178,015

Information as to our operations in different geographical areas is as follows:



	Year Ended December 31,
	2019		2018		2017
Revenues:
United States	$	2,632,586	$	2,579,847	$	2,310,296
United Kingdom	274,931		280,993		246,373
Canada	243,033		249,505		243,625
Australia	143,511		155,367		157,333
Remaining Countries	968,523		960,049		887,951
Total Revenues	$	4,262,584	$	4,225,761	$	3,845,578
Long-lived Assets:
United States	$	7,862,262	$	6,902,232	$	5,476,551
United Kingdom	755,859		547,768		529,233
Canada	556,591		453,398		500,396
Australia	530,755		442,755		470,432
Remaining Countries	2,875,010		2,302,951		2,048,460
Total Long-lived Assets	$	12,580,477	$	10,649,104	$	9,025,072

Information as to our revenues by product and service lines by segment are as follows:



	Global RIM Business		Global Data Center Business		Corporate and Other Business		Total Consolidated
For the Year Ended December 31, 2019
Records Management(1)	$	2,866,192	$	—	$	128,954	$	2,995,146
Data Management(1)	520,082		—		64,046		584,128
Information Destruction(1)(2)	426,159		—		—		426,159
Data Center	—		257,151		—		257,151
Total Revenues	$	3,812,433	$	257,151	$	193,000	$	4,262,584
For the Year Ended December 31, 2018
Records Management(1)	$	2,871,253	$	—	$	96,669	$	2,967,922
Data Management(1)	539,035		—		57,509		596,544
Information Destruction(1)(2)	432,312		—		—		432,312
Data Center	—		228,983		—		228,983
Total Revenues	$	3,842,600	$	228,983	$	154,178	$	4,225,761
For the Year Ended December 31, 2017
Records Management(1)	$	2,778,024	$	—	$	69,667	$	2,847,691
Data Management(1)	542,148		—		32,103		574,251
Information Destruction(1)(2)	385,938		—		4		385,942
Data Center	—		37,694		—		37,694
Total Revenues	$	3,706,110	$	37,694	$	101,774	$	3,845,578

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(1)	Each of the offerings within our product and service lines has a component of revenue that is storage rental related and a component that is service revenues, except the destruction services offering, which does not have a storage rental component.


(2)	Includes Secure Shredding services.

Significant Acquisition Costs included in the accompanying Consolidated Statements of Operations by segment are as follows:



	Year Ended December 31,
	2019		2018		2017
Global RIM Business	$	8,223	$	20,590	$	47,722
Global Data Center Business	337		11,423		—
Corporate and Other Business	4,733		18,652		37,179
Total Significant Acquisition Costs	$	13,293	$	50,665	$	84,901