================================================================================
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                             -----------------------
                                    FORM 10-K
                             -----------------------
                        FOR ANNUAL AND TRANSITION REPORTS
                     PURSUANT TO SECTIONS 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934

    For the Fiscal Year Ended December 31, 1998

                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    EXCHANGE ACT OF 1934

    For the transition period from ______ to ______

                         Commission File Number 0-27584


                           IRON MOUNTAIN INCORPORATED
             (Exact name of registrant as specified in its charter)

                               ----------------


<TABLE>
<CAPTION>
                 Delaware                                       04-3107342
<S>                                                   <C>
(State or other jurisdiction of incorporation)       (I.R.S. Employer Identification No.)

 745 Atlantic Avenue, Boston, Massachusetts                      02111
  (Address of principal executive offices)                     (Zip Code)
</TABLE>

                                  617-535-4766
              (Registrant's telephone number, including area code)


Securities registered pursuant to Section 12(b) of the Act: None


     Title of Each Class      Name of Exchange on Which Registered
     -------------------      ------------------------------------
       Not applicable                   Not applicable


Securities registered pursuant to Section 12(g) of the Act:

             Common Stock, $.01 par value per share ("Common Stock")
                                (Title of Class)

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]

As of March 1, 1999, the aggregate market value of the Common Stock of the
registrant held by non-affiliates of the registrant was $639,353,156 based on
the closing price on the Nasdaq Stock Market's National Market (the "Nasdaq
National Market") on such date.


<TABLE>
<S>                                                                               <C>
Number of shares of the registrant's Common Stock at March 1, 1999:               29,501,456
Number of shares of the registrant's Nonvoting Common Stock at March 1, 1999:              0
</TABLE>

================================================================================

<PAGE>

                           IRON MOUNTAIN INCORPORATED
                          1998 FORM 10-K ANNUAL REPORT

                                Table of Contents



<TABLE>
<CAPTION>
PART I                                                                                    Page
------                                                                                    ----
<S>        <C>                                                                           <C>
Item 1.    Business ....................................................................   1
Item 2.    Properties ..................................................................  17
Item 3.    Legal Proceedings ...........................................................  18
Item 4.    Submission of Matters to a Vote of Security Holders .........................  19

PART II
-------
Item 5.    Market for the Registrant's Common Stock and Related Stockholder Matters ....  20
Item 6.    Selected Consolidated Financial and Operating Information ...................  21
Item 7.    Management's Discussion and Analysis of Financial Condition and
            Results of Operations ......................................................  23
Item 7A.   Quantitative and Qualitative Disclosure About Market Risk ...................  33
Item 8.    Financial Statements and Supplementary Data .................................  34
Item 9.    Changes in and Disagreements with Accountants on Accounting and
            Financial Disclosure .......................................................  60
PART III
--------
Item 10.   Directors and Executive Officers of the Registrant ..........................  61
Item 11.   Executive Compensation ......................................................  65
Item 12.   Security Ownership of Certain Beneficial Owners and Management ..............  67
Item 13.   Certain Relationships and Related Transactions ..............................  69

PART IV
-------
Item 14.   Exhibits, Financial Statement Schedules and Reports on Form 8-K .............  70
</TABLE>

                            CERTAIN IMPORTANT FACTORS

     This Annual Report on Form 10-K contains statements which constitute
forward looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements appear in a number of places in
this Annual Report on Form 10-K and include statements regarding the
strategies, beliefs or current expectations of the Company and its management.
Readers are cautioned that any such forward looking statements are not
guarantees of future performance and involve risks and uncertainties, which
could cause actual results to differ materially from those in the forward
looking statements. Such factors include but are not limited to: (i) the
Company's ability or inability to complete acquisitions on satisfactory terms
and to integrate acquired companies efficiently, (ii) the cost and availability
of financing for contemplated growth, (iii) the cost and availability of
appropriate storage facilities, (iv) the possibility of a natural disaster or
other casualty disrupting operations to an extent greater than the Company is
insured for, (v) the demand and price for the Company's services, relative to
the cost of providing such services, (vi) certain risks and uncertainties
associated with the Company's readiness for the year 2000, including but not
limited to, the Company's inability to recruit and/or retain key staff
necessary for addressing year 2000 issues; failure of major third party
suppliers of products and services to adequately address their year 2000 issues
despite assurances to the contrary; delays in the conversion or upgrade of
acquired and to be acquired businesses' software systems to appropriate year
2000 compliant software systems; and actual future costs associated with the
Company's year 2000 plan being greater than currently expected, or (vii) other
trends in competitive or economic conditions affecting the Company's financial
condition or results of operations not presently contemplated. The accompanying
information contained in this Annual Report on Form 10-K, including under the
headings "Business" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations," identifies other important factors that
could cause such differences. The Company undertakes no obligation to release
publicly the result of any revision to these forward-looking statements that
may be made to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.


                                       ii
<PAGE>

                                    PART I

Item 1. Business.

(a) Development of Business.
     Iron Mountain Incorporated ("Iron Mountain" or the "Company") is the
world's largest records and information management services ("RIMS") company,
as measured by its revenues. The Company is an international, full-service
provider of records and information management and related services, enabling
customers to outsource records management functions. Iron Mountain has a
diversified customer base, which includes more than half of the Fortune 500 and
numerous commercial, legal, banking, healthcare, accounting, insurance,
entertainment and government organizations. The Company provides storage for
all major media, including paper, which is the dominant form of records
storage, magnetic media, including computer tapes, microfilm and microfiche,
master audio and video tapes, film and optical disks, X-rays and blueprints.
Iron Mountain's principal services provided to its storage customers include
courier pick-up and delivery, filing, retrieval and destruction of records,
database management, customized reporting and disaster recovery support. The
Company also sells storage materials, including cardboard boxes and magnetic
media, and provides consulting, facilities management, information technology
staffing ("IT Staffing") and other outsourcing services.

     In addition to being the industry leader in business records and the
industry leader in off-site data security services, which is the management of
electronic records, the Company believes that it is the industry leader in the
management of medical records. The Company has also expanded the ancillary
services offered by the Company to include IT Staffing and enhanced its range
of facilities management services, as a result of the Company's acquisitions
completed during 1997 (the "1997 Acquisitions") and during 1998 (the "1998
Acquisitions"). As of December 31, 1998, giving effect to the acquisitions
completed by the Company through March 1, 1999 (the "1999 Acquisitions") and
the Company's pending acquisition of Data Base, Inc. ("Data Base"), the
Company's RIMS business operated 279 RIMS facilities in 65 domestic markets and
four markets in the United Kingdom, servicing over 70,000 customer accounts.
The Company's IT Staffing business managed over 500 independent contractors in
ten markets.

(b) Description of Businesses.

The Records and Information Management Services Industry

Overview

     The RIMS industry stores information in a variety of media formats, which
can broadly be divided into paper and electronic records, and provides a wide
range of services related to the records stored. Paper records are defined to
include paper documents, as well as all other non-electronic media such as
microfilm and microfiche, master audio and video tapes, film, X-rays and blue
prints. Based on publicly available information, organizations in the United
States generate an estimated four trillion documents each year, many of which
must be retained and available for reference for many years. Electronic records
primarily include computer tapes and optical disks.

Paper Records

     Paper records may be broadly divided into two categories: active and
inactive. Active records relate to ongoing and recently completed activities or
contain information that is frequently referenced. Active records are usually
stored and managed on-site by the organization which originated them to ensure
ready availability. Inactive paper records are the principal focus of the RIMS
industry. Inactive records consist of those records which are not needed for
immediate access but which must be retained for legal reasons or regulatory
compliance or for occasional reference in support of ongoing business
operations. Based on industry studies, the Company believes that inactive
records make up approximately 80% of all paper records.

     Medical records generated by healthcare providers are a large and growing
segment of the paper records market. Management believes that a substantial
portion of the medical records market is not yet vended, and that cost cutting
measures being adopted in the medical field have caused healthcare providers to
consider savings initiatives such as outsourcing medical records management.


                                       1
<PAGE>

Electronic Records

     Electronic records management focuses on the storage of and related
services for computer media that is either archival in nature or a back-up copy
of recently processed data. Archival data is generally not needed for access
but is retained for legal, regulatory and compliance reasons. Back-up data
exists because of the need of many businesses to maintain back-up copies of
data in order to be able to operate in the event of a system failure, casualty
loss or other disaster. It is standard operating procedure for data processing
groups to rotate back-up tapes to off-site locations on a regular basis and to
require multiple copies of such information at multiple sites.


Growth of Market

     The Company believes that the volume of stored paper and electronic
records will continue to increase for a number of reasons, including: (i) the
rapid growth of inexpensive document producing technologies such as facsimile
and desktop printing, (ii) the continued proliferation of data processing
technologies such as personal computers and networks, (iii) increased
regulatory requirements, (iv) concerns over possible future litigation and the
resulting increases in volume and holding periods of documentation, (v) the
high cost of reviewing records and deciding whether to retain or destroy them,
(vi) the failure of many entities to adopt or follow policies on records
destruction and (vii) audit requirements to keep backup copies of certain
records in off-site locations.


     Despite the growth of new "paperless" technologies, such as the Internet
and e-mail, management believes that stored information remains predominantly
paper-based and that such technologies have promoted the creation of hard
copies of such electronic information. In addition, management believes that
the proliferation of digital information technologies and distributed data
networks has led to increased demand for data security services, such as the
storage and off-site rotation of back-up copies of magnetic media, and
outsourcing support services that address the needs of data center operations
and disaster recovery programs.


Highly Fragmented Industry

     Most RIMS companies serve a single local market, and are often either
owner-operated or ancillary to another business, such as a moving and storage
company. According to Professional Records and Information Services Management
("PRISM"), a trade group of approximately 520 members, as of December 31, 1998,
approximately 3,300 firms offered records and information management services
in the United States. The Company believes that there are only three national
providers in the RIMS industry, including the Company, and that the rest are
regional or, in most instances, single-city operators. In contrast, due to the
specialized nature of the services provided, the provision of data security
services, medical records management and vital records protection services have
higher market concentrations. The Company has made, and intends to make,
acquisitions to increase its presence in these markets.


Industry Consolidation

     Over the past several years, there has been consolidation in the RIMS
industry. The Company believes that this trend will continue because of the
industry's capital requirements for growth, opportunities for large RIMS
providers to achieve economies of scale and customer demands for more
sophisticated technology-based solutions. In particular, the RIMS business
requires significant up-front capital investment for real estate, racking
systems and management information technology. Economies of scale available in
these areas can reward larger initial capital investments by reducing per unit
storage costs. However, such economies of scale are only realized once a
facility fills available capacity. Accordingly, larger companies with both
access to capital and the ability to quickly fill a new facility enjoy a
competitive cost advantage, which puts pressures on smaller competitors.


     Management believes that the consolidation trend in the industry is also
due to, and will continue as a result of, the preference of certain large
organizations to contract with one vendor in multiple cities for multiple
services. In particular, customers increasingly demand a single, large,
sophisticated company to handle all of their important medical, electronic and
vital records needs. Large, national companies are better able to satisfy these
demands than smaller competitors.


                                       2
<PAGE>

Financial Characteristics of Iron Mountain's Business

     Iron Mountain's RIMS business has the following financial characteristics:


   o   Recurring Revenues. Iron Mountain derives a majority of its RIMS and
       consolidated revenues from fixed periodic, usually monthly, fees charged
       to customers based on the volume of records stored. Revenues from these
       fixed periodic fees have grown for 40 consecutive quarters and have
       represented approximately 60% of the Company's total RIMS revenues in
       each of the last five years. Once a customer places paper records in
       storage with the Company and until those records are destroyed or
       permanently removed, for which the Company typically receives a service
       fee, the Company receives recurring payments for storage fees without
       incurring additional labor or marketing expenses or significant capital
       costs. Similarly, contracts for the storage of electronic media consist
       primarily of fixed monthly payments. The stable and growing storage base
       also provides the foundation for increases in revenues and earnings
       before interest, taxes, depreciation, amortization, extraordinary items
       and other income ("EBITDA") from related service activities and sales of
       storage materials.

   o   Historically Non-Cyclical Business. Iron Mountain has not experienced a
       reduction of its RIMS business as a result of past general economic
       downturns, although the Company can give no assurance that this would be
       the case in the future. Management believes that the outsourcing of RIMS
       may accelerate during economic downturns as companies focus on reducing
       costs through outsourcing non-core operating functions. In addition,
       management believes that companies that have outsourced RIMS are less
       likely during economic downturns to incur the move-out costs and other
       expenses associated with switching vendors or moving RIMS in-house.

   o   Inherent Growth from Existing Paper Records Customers. The Company's
       paper records customers have on average generated additional Cartons(1)
       at a faster rate than stored Cartons have been destroyed or permanently
       removed. From January 1, 1994 through December 31, 1998, Net Carton
       Growth From Existing Customers(2) increased at an average annual rate of
       approximately 6%. The Company believes the consistent growth of its paper
       storage revenues is the result of a number of factors, including: (i) the
       trend toward increased records retention, (ii) customer satisfaction with
       the Company's services and (iii) the costs and inconvenience of moving
       storage operations in-house or to another provider of records and
       information management services.

   o   Diversified and Stable Customer Base. As of March 1, 1999, the Company
       had over 70,000 customer accounts in a variety of industries. The Company
       currently provides services to more than half of the Fortune 500 and
       numerous commercial, legal, banking, healthcare, accounting, insurance,
       entertainment and government organizations. No customer accounted for
       more than 2% of the Company's RIMS or consolidated revenues for the year
       ended December 31, 1998. From January 1, 1994 through December 31, 1998,
       average annual permanent removals of Cartons represented only
       approximately 4% of total Cartons stored.

   o   Capital Expenditures Related Primarily to Growth. The Company's RIMS
       business requires limited annual capital expenditures made in order to
       maintain the Company's current revenue stream. These capital expenditures
       were $1.1 million, $1.2 million and $1.9 million in 1996, 1997 and 1998,
       respectively. From 1994 to 1998, over 90% of the Company's aggregate
       capital expenditures were growth-related investments, primarily in
       racking systems, management information systems, new buildings and
       improvements to existing facilities. These growth-related capital
       expenditures are primarily discretionary and create additional capacity
       for increases in RIMS revenues and EBITDA.

----------------
(1) The term "Carton" is defined as a measurement of volume equal to a single
standard storage carton, approximately 1.2 cubic feet. The number of cartons
stored does not include storage volumes in the Company's vital records services
and data security services, which are described below.

(2) The term "Net Carton Growth From Existing Customers" is defined as the
increase in net Cartons attributable to existing customers without giving
effect to the loss of approximately 1.0 million Cartons in fires attributed to
arson in March 1997 in two of the Company's facilities in South Brunswick
Township, New Jersey. See "Item 3. Legal Proceedings."


                                       3
<PAGE>

Growth Strategy

     The Company's domestic objective is to be one of the largest RIMS
providers in each of its geographic markets and to maintain the Company's
position as the largest national RIMS provider. The Company's international
objective is to continue to capitalize on its expertise in the RIMS industry
and to make additional acquisitions and investments in international markets.
The Company seeks to expand through: (i) increased business with existing
customers, including the provision of new services, (ii) additions of new
customers and (iii) selective acquisitions in existing and new markets.


Growth from Existing Customers

     Existing Iron Mountain RIMS customers storing paper records contribute to
storage and services revenues growth because on average they generate
additional Cartons at a faster rate than old Cartons are destroyed or
permanently removed. From January 1, 1994 through December 31, 1998, Net Carton
Growth From Existing Customers increased at an average rate of approximately
6%. In order to maximize growth opportunities from existing customers, the
Company seeks to maintain high levels of customer retention by providing
premium customer service through its decentralized customer service approach
complemented by its local management staff.

     Through its local account management staff, the Company leverages existing
business relationships with its customers by selling complementary services and
products. Services include records tracking, indexing, customized reporting,
vital records management, RIMS consulting services and additional temporary
staffing/outsourcing services in the information technology, clerical and
medical sectors.


Additions of New Customers

     The Company's sales force is dedicated to establishing new account
relationships and servicing existing customer accounts and draws on the
Company's national marketing organization and senior management. As a result of
recent acquisitions and the Company's decision to increase its sales force by
recruiting additional qualified sales professionals, from December 31, 1996
through March 1, 1999, the Company increased the size of its sales force from
21 to 115 sales professionals, six of whom focus solely on national accounts.
New customer sales efforts have resulted in the addition of over 1,200 new
customer accounts in 1996, over 1,600 new customer accounts in 1997 and over
3,800 new customer accounts in 1998.


Growth through Domestic Acquisitions

     The Company's acquisition strategy includes both expanding geographically,
focusing primarily on the 75 largest U.S. markets, and increasing the Company's
presence and scale within existing markets through "fold-in" acquisitions. Iron
Mountain has a successful record of acquiring and integrating smaller RIMS
companies. In order to capitalize on industry consolidation, in mid-1994 the
Company adopted an active acquisition strategy and implemented changes in its
management, systems and financial infrastructure, to execute such strategy.
Since mid-1994, the Company has acquired or entered into agreements to acquire
61 companies, 60 of which have been completed and one of which is pending. The
Company's corporate development staff is engaged in an ongoing review of
acquisition candidates. Management believes that Iron Mountain is well
positioned to participate in the further consolidation of the RIMS industry.

     The Company has made, and intends to continue to make, acquisitions to
increase its presence in the data security services and medical records
management markets. Of the acquisitions completed since mid-1994, 15 have been
RIMS companies that focused on data security services and five have been RIMS
companies that focused on medical records management. Data Base, with which the
Company has entered into an agreement to acquire, focuses on data security
services. The Company is the industry leader in off-site data security services
and the Company believes that it is the industry leader in medical records
management services. The Company has not acquired any IT Staffing companies
other than through its acquisition of Arcus Group.

     The Company seeks to expand its national presence, size and customer base
through new-market acquisitions. Management believes that the high start-up
costs of commencing operations make acquisitions an attractive means of
entering new markets. The Company seeks to acquire RIMS


                                       4
<PAGE>

companies in markets where management believes there is the potential for
growth. Within such markets, the Company uses a variety of criteria to evaluate
acquisition candidates, including the capacity and condition of existing
storage facilities, past and current operating performance and revenues and the
experience and depth of existing management.

     The Company believes that it can use its expertise and central
administrative organization to leverage an acquisition candidate's local market
presence, promoting the development of underperforming facilities and enhancing
the value of the local assets. The Company believes that its new-market
acquisition strategy could have a number of benefits, including: (i) continued
growth in revenues and EBITDA and diversification across a greater number of
markets, (ii) introduction of the Company's storage, labor, transportation and
other operating efficiencies into new markets, (iii) increased utilization of
efficiencies available through the Company's central administrative and
management information functions, (iv) increased market awareness of Iron
Mountain's national scope and presence and (v) increased overall scale, which
should broaden the range of and facilitate the Company's capital-raising
activities.

     The Company also intends to continue to make fold-in acquisitions to
augment its operations in existing markets. The Company's goal in its existing
markets is to exploit economies of scale while maintaining high quality
service. Following a new-market acquisition, the Company seeks to increase its
business with the acquired customer base and to supplement that growth with new
customers and, potentially, with appropriate fold-in acquisitions so that the
Company may benefit from economies of scale.

     The Company has proven its ability to successfully reduce the cost
structure of its acquired operations and believes it will realize additional
cost savings from recent acquisitions. Certain of these cost savings, including
labor reductions and certain general and administrative costs, are generally
obtained within 12 months of an acquisition. Other cost savings, including
occupancy costs, may take longer to achieve. The Company's goal is to achieve
substantially all of the targeted cost savings within 24 months of an
acquisition.


International Growth Strategy
     The Company recently commenced an international expansion by acquiring a
controlling 50.1% interest in BDM, which has significant operations in the
United Kingdom. See "Completed and Pending Acquisitions." Iron Mountain intends
to continue to make acquisitions and investments in RIMS businesses outside the
United States. BDM is actively pursuing a number of acquisitions and joint
ventures in Europe and Iron Mountain is actively pursuing investment
opportunities in Latin America. In order to implement the Company's strategy of
further international expansion, Iron Mountain recently hired Christophe
Giecold as President of its international division. Mr. Giecold will be
responsible for managing the Company's new international division, focusing on
expansion opportunities within the United Kingdom and Continental Europe.

     In many respects the Company's approach to international investments and
acquisitions will be similar to its approach to domestic acquisitions. The
Company will seek to acquire or invest in RIMS companies in countries, and,
more specifically, markets within such countries, where it believes there is
the potential for growth. These transactions may take the form of acquisitions
of the entire business or controlling or minority investments, with a long-term
goal towards eventual full ownership. In addition to criteria the Company uses
to evaluate domestic acquisition candidates, Iron Mountain will also evaluate
the presence in the potential market of existing Iron Mountain clients as well
as the risks uniquely associated with an international investment, including
those risks described below.

     The experience, depth and strength of local management will be
particularly important in Iron Mountain's international acquisition strategy.
In this regard, the most significant departure from the Company's domestic
acquisition strategy will be that Iron Mountain frequently may seek to form
joint ventures with, or acquire significant interests from, target businesses.
This is the structure of Iron Mountain's investment in BDM. Iron Mountain
believes this strategy, rather than an outright acquisition, may, in certain
markets, better position the Company to expand the existing business, though
the Company's long-term goal is to eventually acquire full ownership of each
such business. The local partner will benefit from Iron Mountain's expertise in
the RIMS industry and, in certain cases, Iron Mountain's


                                       5
<PAGE>

technology, and Iron Mountain will benefit from its local partner's
relationships with customers and its presence in the community.

     The Company also intends to make fold-in acquisitions to augment its
operations in international markets. The Company expects that fold-in
acquisitions will be done directly by Iron Mountain or through the local joint
venture, depending in part on whether Iron Mountain's initial investment was an
acquisition or a joint venture. As with domestic acquisitions, the Company
believes that with appropriate fold-in acquisitions it can benefit from
economies of scale.

     The investment in BDM and any additional international investments, if
completed, may be subject to risks and uncertainties relating to the indigenous
political, social, regulatory, tax and economic structures of other countries,
as well as fluctuations in currency valuation, exchange controls, expropriation
and governmental policies limiting returns to foreign investors. At this time,
there can be no assurance as to whether the BDM investment or any additional
international investment will be successful in achieving its objectives.

     For the amount of revenues from external customers and long-lived assets
(other than financial instruments) attributable to the Company's operations in
the United Kingdom for 1998 (prior to the acquisition of BDM), see Note 10 to
Notes to Consolidated Financial Statements contained herein.


Completed and Pending Acquisitions
     As part of its growth strategy, from January 1, 1996 through December 31,
1998, Iron Mountain acquired 49 RIMS businesses. In addition, Iron Mountain has
entered into definitive agreements to acquire Data Base and related real estate
(the "Data Base Acquisition"). The following table presents certain information
with respect to the Company's acquisitions completed between January 1, 1996
and December 31, 1998. All dollar amounts presented are in millions.


<TABLE>
<CAPTION>
                                                                  Components of Purchase Price Consideration
                                                                -----------------------------------------------
                                             Total Aggregate        Cash           Fair Value of        Total
                                                 Revenues         and Debt         Common Stock        Purchase
                                  Number      Represented(1)       Assumed      and Options Issued      Price
                                 --------   -----------------   ------------   --------------------   ---------
   <S>                             <C>             <C>            <C>                   <C>              <C>
   1996 Acquisitions .........     16              $ 33           $   73                $--              $ 73
   1997 Acquisitions .........     18                96              199                 89               288
   1998 Acquisitions .........     15               152              191(2)              67               258
</TABLE>

----------------
(1) Total annual aggregate revenues were calculated in each case by reference
    to the revenues of each of the acquired businesses during the year in
    which they were acquired. This calculation includes an estimate of total
    revenues for the portion of the year of acquisition during which any such
    acquired business was included in Iron Mountain's results of operations.

(2) Includes approximately $3 million attributable to assets that the Company
    exchanged as part of the consideration in connection with one acquisition.
     


1999 Acquisitions:

     On January 4, 1999, the Company, through a wholly owned subsidiary,
purchased a controlling 50.1% interest in Britannia Data Management Limited
("BDM"), a corporation formed under the laws of England and Wales, from
Mentmore Abbey plc. The Company paid total consideration of $49.8 million
comprised of cash and the capital stock of Arcus Data Security Limited, the
Company's existing data security business in London. BDM has provided RIMS
services for over 30 years, and the Company believes that it is the second
largest provider of these services in the United Kingdom. As of December 31,
1998, BDM operated 16 data storage facilities in the United Kingdom and had
over 1,500 customer accounts. BDM had revenues of $30.3 million for the fiscal
year ended October 31, 1998, based on an average exchange rate of $1.6622 per
British pound for such period. In connection with Iron Mountain's strategy of
further international expansion, BDM is actively pursuing a number of
acquisitions and joint ventures in Europe.

     The Company has acquired three additional RIMS companies in 1999 for total
consideration of approximately $5.6 million. These companies had total revenues
of approximately $3.5 million for the fiscal year ended December 31, 1998. In
connection with the acquisition of one of these companies, the Company also
acquired real estate for approximately $2.3 million.


                                       6
<PAGE>

Pending Data Base Acquisition:
     On February 28, 1999, the Company entered into a Stock Purchase Agreement
with Data Base and the stockholders of Data Base and a Real Estate Purchase and
Sale Agreement with Data Base Real Estate Holdings LLC ("DBR"), as a result of
which the Company will acquire all of the outstanding capital stock of Data
Base and related real estate. The Company will pay aggregate consideration
equal to approximately $115 million in connection with the Data Base
Acquisition. This amount consists of the assumption of indebtedness and
payments to Data Base's stockholders and DBR in the form of cash and 1,476,577
shares of Common Stock. The goodwill created as a result of the Data Base
Acquisition will be deductible by the Company for federal income tax purposes.
The closing of the Data Base Acquisition is subject to regulatory approval and
other customary conditions and is expected to close in the second quarter of
1999, although no assurance can be given that the Data Base Acquisition will be
completed.

     Management believes that Data Base is a premier service provider in the
data security services industry serving over 3,000 customers. Data Base's
services are comprised primarily of off-site data security services, including
secure transport, handling and storage of electronic media, and disaster
recovery support services which facilitate the restoration of corporate data at
a recovery site. As of March 1, 1999, Data Base, headquartered in Bellevue,
Washington, operated in 12 markets in the United States. After the Data Base
Acquisition, the Company's data security services business will operate in
eight new markets and increase its presence in four other markets. Data Base
had revenues of $26.6 million for the year ended December 31, 1998.

     The following table presents certain information for the 1998
Acquisitions, the 1999 Acquisitions and the Data Base Acquisition, all of
which, other than the IT Staffing business acquired as a part of the
acquisition (the "Arcus Merger") of Arcus Group, Inc. and its subsidiaries
("Arcus Group"), were or will be in the RIMS business.

<TABLE>
<CAPTION>
                                                           Principal State(s)/Country
Acquisition                                                       of Operation           Completion Date
-----------                                                --------------------------    ---------------
<S>                                                       <C>                           <C>
1998 Acquisitions:
Bekins Records Management
 (a division of Bekins Van & Storage, Inc.) ...........   Nebraska                      January 1998
Midwest Records Management (a division of I-GO
 Van & Storage Co.) ...................................   Nebraska                      January 1998
Arcus Group, Inc. .....................................   Various (1)                   January 1998
Records Venture One, Inc. (d/b/a Information
 Management Consultants of Arizona) ...................   Arizona                       January 1998
Sloan Vaults, Inc. (d/b/a The Vault) ..................   California                    February 1998
InterMation, Inc. .....................................   Oregon and Washington         April 1998
RIMS business of Bekins Moving & Storage Co. ..........   Oregon and Washington         June 1998
National Underground Storage, Inc. ....................   Pennsylvania                  July 1998
Hart Information Services, Inc. .......................   Texas                         July 1998
Rockford Business Interiors, Inc. .....................   Texas                         July 1998
Albuquerque Archives, Inc. ............................   New Mexico                    August 1998
Records and Filing Consultants, Inc. ..................   Ohio                          August 1998
Commercial Archives, Inc. .............................   New York                      October 1998
Leonard Archives Acquisition Corp. ....................   Michigan and Ohio             October 1998
Datavault Corporation .................................   Maryland and Virginia         November 1998
1999 Acquisitions (through March 1, 1999):
Britannia Data Management Limited (50.1% interest).....   United Kingdom                January 1999
Secure Accessible Files Environment, Inc. .............   Connecticut                   February 1999
Confidential Records Center, Inc. .....................   Maine                         March 1999
Information Storage Service Center, Inc. ..............   New Mexico                    March 1999
Pending Acquisition:
Data Base, Inc. .......................................   Various (2)                   Pending
</TABLE>

------------
(1) Arizona, California, Colorado, Connecticut, Florida, Georgia, Illinois,
    Nevada, New Jersey, New York, North Carolina, Ohio, Oklahoma,
    Pennsylvania, Texas and Washington and the United Kingdom.
(2) Illinois, Maryland, North Carolina, Ohio, Pennsylvania, Texas, Virginia,
    Washington and Wisconsin.

                                       7
<PAGE>

Premium Service Strategy

     Organizations selecting a RIMS provider consider a number of factors in
addition to price. Management believes that the Company is a "premium" brand in
the marketplace based upon its reputation for reliability, customer-oriented
organization, full service approach, investment in technology and national
operating presence. The Company seeks to exploit its strengths in each of these
areas to maintain customer relationships and to attract new customers.
Management believes that the Arcus Group and Record Masters (acquired by the
Company when it acquired HIMCORP, Inc. (doing business under the name "Record
Masters")) brand names which continue to be utilized by the Company are
similarly viewed as premium brands in their specific markets.

Reputation for Reliability

     The Company believes it has a reputation for reliability based on its more
than 48 years of operations, the continuity and depth of its management, its
successful historical growth, the quality and diversity of its customer base,
its technological capabilities and its size and financial resources.

Customer-Oriented Organization and Locally Responsive Management

     Iron Mountain has developed a decentralized, local management structure
that brings significant management experience and stability to local markets
and allows the Company to respond directly, effectively and flexibly to
customers. Broad operating authority is delegated to vice presidents and to
local managers. In pursuing its acquisition strategy, Iron Mountain seeks to
capitalize upon the experience and strengths of existing management in the case
of new market acquisitions. In addition, all full-time union and non-union
employees participate in incentive-based compensation programs that provide
payments based on profits or attainment of specified objectives for the unit in
which they work. Iron Mountain believes that the experience, stability and
commitment of its regional and local management is integral to its ability to
provide superior customer service and maximize growth potential.

Full Service Approach

     Iron Mountain offers a full range of records and information management
services. The Company provides storage for all major media, including paper,
which is the dominant form of records storage, magnetic media, including
computer tapes, microfilm and microfiche, master audio and video tapes, film
and optical disks, X-rays and blueprints. Iron Mountain's principal services
provided to its storage customers include courier pick-up and delivery, filing,
retrieval and destruction of records, database management, customized reporting
and disaster recovery support. The Company also sells storage materials,
including cardboard boxes and magnetic media, and provides consulting,
facilities management and other outsourcing services, including IT Staffing.
The Company believes that its ability to provide all of these services provides
numerous competitive advantages, including: (i) cross marketing opportunities
from marketing additional services to existing customers, (ii) leverage of its
general, administrative, software development and real estate expenses and
(iii) the selling advantage provided by offering one-stop shopping to certain
customers who prefer to use one vendor for all of their records and information
management services.

Investment in Technology

     The Company has made significant investments in management information
systems and computer technology in order to provide faster and more flexible
solutions for its customers and to enhance the quality and lower the costs of
its own operations. The Company believes that its technological capabilities,
especially its Safekeeper(TM) and MediaLink(TM) systems used in the Company's
RIMS business, are a significant tool in attracting new customers. The Company
plans to continue to invest in its proprietary technologies in the future. See
"--Technology and Development; Management Information Systems."

National Operating Presence

     The Company believes it is one of only three RIMS companies with a
national operating presence. Traditionally, the purchase decision for large
multi-site customers has been made at the local level. Recently, however, the
Company has found that certain large organizations have sought to obtain


                                       8
<PAGE>

operating and economic efficiencies by outsourcing a significant portion of
their records and information management functions with a single RIMS company.
The Company seeks to use its national operating presence to compete for such
large multi-site customer accounts. In addition, certain customers prefer to
use large, sophisticated RIMS companies for the storage of vital records and
the support of disaster recovery programs.

Low-Cost Operating Strategy
     Iron Mountain pursues a low-cost operating strategy based primarily on
achieving economies of scale in the areas of storage, labor and transportation,
general and administrative functions and management information systems. The
Company believes that it is one of the few RIMS companies with the size and
resources to realize significant economies of scale in these areas.


Storage Costs

     Because occupancy costs are a major component of the Company's cost of
sales, reducing per unit storage costs is a primary strategic goal of the
Company's RIMS business and its real estate management staff. The Company seeks
to minimize per unit storage costs by: (i) designing racking systems and
operating space to maximize facility storage efficiency, (ii) negotiating
favorable facility leases and having facilities built to its custom
specifications and (iii) leasing larger facilities, which, when filled, are
less expensive per storage unit to operate. Since December 31, 1994, the
Company has acquired or leased 16 RIMS facilities constructed per the Company's
specifications. The average Carton density, which is the ratio of standard
Carton storage capacity to total square feet of floor space, of these
facilities is approximately twice that of the Company's overall average Carton
density. As a result of these practices, average Carton density in the
Company's facilities increased approximately 25% from December 31, 1993 to
December 31, 1998. Because medical records are inherently more active, the
Company stores these records in specialized shelving systems that provide easy
access to individual files, but generally have lower storage densities than
carton shelving. These lower densities are generally offset by higher total
revenues per unit. Management believes its expertise in designing storage
facilities and racking systems will lead to improved densities and cost
reductions in the storage of its medical records.


Labor and Transportation Efficiency

     The Company has made significant investments in computer technologies for
its service operations, resulting in greater operating and logistics
efficiencies. In addition, by increasing the scale of its operations and
customer base in a local market area, the Company seeks to maximize its courier
delivery fleet usage and to increase delivery and routing efficiencies.

     The Company's incentive structure has also contributed to labor
efficiency. Each of the Company's full-time employees participates in incentive
compensation programs based upon achievement of specific operating targets
designed to integrate the objectives and performance of RIMS facility employees
and managers. For the year ended December 31, 1998, the Company's employees
earned incentive compensation in an amount equal to approximately 10% of the
base wages paid by the Company.


G&A and MIS Efficiencies

     The Company's corporate staff provides support to local management in the
areas of acquisitions, marketing, facility acquisition and leasing, racking
system purchasing, finance, accounting and human resource management. In
addition, the Company's corporate staff is responsible for the design and
support of all RIMS technology. The Company believes that central support in
these areas provides local managers with competitive advantages over smaller,
local competitors and results in significant economies of scale.


Technology and Development; Management Information Systems
     The Company pioneered the application of advanced information technology
to the RIMS industry. Iron Mountain's proprietary Safekeeper system, which is
Year 2000 compliant, provides advanced inventory control and information
access, enabling the Company to provide faster, higher quality and


                                       9
<PAGE>

more flexible solutions to its customers and to lower the costs of its
operations. Iron Mountain's Safekeeper system exploits bar-code technology to
provide inventory integrity and a comprehensive, standardized approach to
tracking, accessing and retrieving records. Safekeeper offers state-of-the-art
RIMS capabilities and ease of access to customers while featuring security
functions to protect customer information from unauthorized access. The system
coordinates inventory control, order entry, billing, material sales, service
activity, accounts receivable and management reporting, and features system-
driven quality assurance and error-prevention. The Company has made significant
investments to develop and refine its management information systems and
computer technology, including Safekeeper. Safekeeper is built on an open
systems architecture, which is fully portable and can be implemented in small
processing environments with several users and in large processing environments
with hundreds of users. This allows the Company a substantial measure of
flexibility and vendor independence and reduces the risk of technological
obsolescence.


     During 1999, the Company introduced an Internet access application of
Safekeeper. This new technology will allow customers to reduce the processing
time associated with their records management and maintain increased control
and access to their records. By using the internet capability of Safekeeper,
customers can perform numerous RIMS tasks on-line such as adding and editing
inventory, reviewing national or local inventory levels, ordering pick-ups or
retrievals and viewing the transaction history of their inventory.


     The Company's data security operations utilize the Company's MediaLink
software, which provides integrated bar-code tracking and an electronic data
interface between a customer's data center and an Iron Mountain facility, as
well as audit trail and remote inventory query capabilities. MediaLink assists
customers in meeting their disaster recovery standards. MediaLink's interactive
VoiceLink(TM) allows access to off-site inventory directly from a touch-tone
telephone.


     Safekeeper has improved the Company's customer support and operating
efficiency in the following ways:


Acquisition System Integration

     Safekeeper has been designed to integrate newly acquired RIMS companies
and offer improved levels of customer service and RIMS capabilities to
customers acquired through acquisitions. The critical components of integrating
acquisition systems are the abilities to match the acquired company's carton
identifiers, location identifiers, records descriptive data and billing data.
Safekeeper is designed with flexible, comprehensive capabilities in each of
these areas. Consequently, an acquired company's inventory can be converted to
Safekeeper without having to relabel cartons or reset and relabel inventory
locations. The customers of the acquired company retain their records data and
receive similar billing rate structures. In addition, acquisition customers
experience minimal disruption during integration and, after conversion, gain
access to advanced RIMS access capabilities. Safekeeper utilizes a suite of
conversion routines to automate the conversion process and effectively
translate customer and inventory information.


Storage Efficiency

     Safekeeper enables the Company to maximize the efficient use of storage
space at its facilities. When cartons are added or returned to storage,
Safekeeper identifies available space and the location of the customer's other
records at the facility. Because there is a continual flow of cartons into and
out of the Company's facilities, Safekeeper also permits facility operators to
utilize space that becomes available as soon as cartons are removed. Safekeeper
can pinpoint the location of any carton, enabling facility operators to quickly
determine the optimal location for new or returning cartons.


Inventory Integrity

     The Company uses bar-coding and scanning to track a carton or a record
throughout its life cycle at Iron Mountain. Safekeeper identifies inventory
discrepancies during the order processing cycle and forces their resolution
before they affect the customer. This forced discrepancy resolution means that
errors must be resolved before an order can be closed; until the order is
closed, the Company cannot


                                       10
<PAGE>

process billing. Management believes that this system-driven quality assurance
is a significant advantage over the "best efforts" approach used by many of its
competitors.

Customer Information Access

     Customers can access their RIMS data through a variety of formats,
including access on their own PCs via Safekeeper Desktop(TM), integration of
their internal system with Safekeeper via automated file transfers and paper
reports. Safekeeper Desktop is a PC application, run from customers' desktop or
network PCs; it provides customers with an entire set of RIMS data along with
user-friendly tools for querying, reporting and editing. Safekeeper's suite of
file transfers enable customers to automatically transfer records data and
service requests from their internal system to Safekeeper. The paper reports
include inventory detail and summary, service activity analysis and quality
assurance.

Records Management Flexibility

     Safekeeper offers full life-cycle RIMS, from file creation to destruction,
enabling each customer to establish schedules for records retention and
destruction as dictated by the customer's specific needs. Safekeeper can
flexibly accommodate large or small amounts of RIMS data in accordance with
customer requirements. A series of customer-specific features and options
allows Iron Mountain to tailor the RIMS functionality and reporting to the
customer's needs.

Security

     Safekeeper incorporates strict security protocols and procedures for all
customers to prevent unauthorized access to a client's records information.
Advanced security features that can automatically restrict access by
departmental identification and/or type of service request are available to
customers that are internally set up to provide this information.

Description of Iron Mountain's RIMS Business
     Through its RIMS business, Iron Mountain provides storage for all major
media, including paper, which is the dominant form of records storage, magnetic
media, including computer tapes, microfilm and microfiche, master audio and
video tapes, film and optical disks, X-rays and blueprints. Iron Mountain's
principal services provided to its RIMS customers include courier pick-up and
delivery, filing, retrieval and destruction of records, database management,
customized reporting and disaster recovery support. Iron Mountain also sells
storage materials and provides consulting, outsourcing and other services.

Paper Storage Operations

     Storage revenues accounted for approximately 60% of the Company's RIMS
revenues in each of the Company's last five fiscal years. Storage charges are
generally billed monthly on a per storage unit basis, usually either per unit
or per cubic foot of records, and include the provision of space, racking,
computerized inventory and activity tracking and physical security.

     The storage of a carton begins by issuing Safekeeper bar-coded labels to
the customer. The customer packs records in cartons and affixes the bar-coded
label to each carton. Customer personnel and the Iron Mountain driver conduct a
physical count of the cartons and the driver signs for the cartons, which are
then transported to the RIMS facility. Upon delivery to the facility, the
cartons are subjected to a second physical count. The cartons are delivered to
available space identified by Safekeeper and the bar-coded information is
scanned into the computer together with a bar-coded location identifier. At the
same time, a computer operator enters the customer's data describing the stored
material into the computer and the system confirms that the cartons sent match
the data entered in the computer. Under the Company's computer control system,
the order can only be closed out when all requisite steps and checks have been
completed and counts and locations have been reconciled.

Data Security Services

     Data security services consist of the storage and rotation of back-up and
archival computer media as part of corporate disaster and business recovery
plans. Computer tapes, cartridges and disk packs are transported off-site by
the Company's courier operations on a scheduled basis to secure, climate-
controlled facilities, where they are available to customers 24 hours a day,
365 days a year, to facilitate

                                       11
<PAGE>

data recovery in the event of a disaster. Iron Mountain's MediaLink software
manages this process. Iron Mountain also manages tape library relocation and
supports disaster recovery testing and execution.


Medical Records Services


     Medical records management services principally include the handling,
storage, filing, processing and retrieval of medical records used by hospitals,
private practitioners and other medical institutions. Medical records tend to
be more active in nature and are typically stored on specialized shelving
systems that provide access to individual files. Medical records management
services also include recurring project work and ancillary services. Recurring
project work involves the on-site removal of aged patient files and related
computerized file indexing. Ancillary medical records management services
include release of information, temporary staffing, contract coding, facilities
management and imaging.


Vital Records Services


     Vital records contain critical or irreplaceable data such as master audio
and video recordings, film, software source code and other highly proprietary
information. Vital records may require special facilities or services, either
because of the data they contain or the media on which they are recorded. The
Company's charges for providing enhanced security and special
climate-controlled environments for vital records are higher than for typical
storage functions. The Company provides the same ancillary services for vital
records as it provides for its other storage operations.


Service and Courier Operations


     Services operations include adding records to storage, temporary removal
of records from storage, refiling of removed records, permanent withdrawals
from storage and destruction of records. Service charges are generally assessed
for each procedure on a per unit basis. The Safekeeper system controls the
service processes from order entry through transportation and invoicing.


     Courier operations consist primarily of the pickup and delivery of records
upon customer request. Courier delivery schedules can be tailored to fit
customers' needs, but generally customer orders received by 4:00 p.m. on a
business day are delivered the following business day. The Company also
provides same-day and immediate delivery during business hours and emergency
delivery at night and on weekends and holidays. Charges for courier services
are based on urgency of delivery, volume and location and are billed monthly as
incurred. As of December 31, 1998, the Company currently utilizes a fleet of
approximately 1,100 owned or leased delivery vehicles.


Additional Services and Products


     Iron Mountain offers a variety of additional services, which customers may
request or contract for on an individual basis. These services include
inventorying records, packing records into cartons or other containers, and
creating computerized indexes of files and individual documents. The Company
also provides services for the management of active records programs. The
Company can provide these services, which generally include document and file
processing and storage, both off-site at its own facilities and by supplying
its own personnel to perform management functions on-site at the customer's
premises.


     In addition, the Company provides professional consulting services to
large customers, enabling them to develop and implement comprehensive records
and information management programs. Iron Mountain's consulting business draws
on the Company's experience in records and information management services to
analyze the practices of such companies and assist them in creating more
effective programs of records and information management. The Company's
consultants work with these customers to develop policies for document review,
analysis and evaluation and for scheduling of document retention and
destruction.


     The Company also sells a full line of specially designed corrugated
cardboard, metal and plastic storage containers and magnetic media products.


                                       12
<PAGE>

Customers
     The Company's customer base is diversified in terms of revenues and
industry concentration. Iron Mountain tracks customer accounts, which are based
on invoices. Accordingly, depending upon how many invoices have been arranged
at the request of a customer, one organization may represent multiple customer
accounts. As of March 1, 1999, the Company had over 70,000 customer accounts in
a variety of industries. The Company currently provides services to more than
half of the Fortune 500 and numerous commercial, legal, banking, healthcare,
accounting, insurance, entertainment and government organizations. No customer
accounted for more than 2% of the Company's RIMS or consolidated revenues for
the year ended December 31, 1998.


Marketing and Sales

     The Company's RIMS selling organization, which includes 115 sales
professionals, consists of telemarketing, direct sales and account management,
all supported by a corporate marketing group. Telemarketing sales people use
advanced database telemarketing techniques to identify and source account
leads. Leads are pursued by the direct sales force which is comprised of local
sales representatives and regional and national account managers. Once an
account is established, it is assigned to an account manager, who focuses on
serving the needs of new and existing customers and selling additional services
to this customer base. The corporate marketing organization provides training
and marketing communications as sales support functions.


Competition
     The Company's RIMS business competes with two other national RIMS
companies as well as a large number of local and regional concerns. The Company
believes that competition for customers is based on price, reputation for
reliability, quality of service and scope and scale of technology, and believes
that it generally competes effectively based on these factors. Management
believes that, except for Pierce Leahy Corp., all of these competitors have
United States based revenues significantly lower than those of the Company. In
addition, the Company faces competition from the internal RIMS handling
capability of its current and potential customers. There can be no assurance
that these organizations will outsource more of their RIMS needs or that they
will not bring in-house some or all of the functions they currently outsource.


     The Company also faces competition for acquisition candidates. To
accommodate growth, a RIMS vendor must invest in incremental storage capacity,
which requires added warehouses, racking systems and related equipment,
including computer systems capable of tracking increasingly large inventories.
The amount of such investment is significant relative to the immediate return
that can be realized, and the faster a vendor grows, the more capital is
required. As a result, the industry trend toward consolidation will, in
management's opinion, continue.


     The substantial majority of the Company's RIMS and consolidated revenues
have been derived from the storage of paper documents and from related
services. Such storage requires significant physical space. Alternative
technologies for generating, capturing, managing, transmitting and storing
information have been developed, many of which require significantly less space
than paper. Such technologies include computer media, microforms, audio/video
tape, film, CD-ROM and optical disk. None of these technologies has replaced
paper as the principal means for storing information. However, the Company can
provide no assurance against the possibility that one or more non-paper-based
technologies, whether now existing or developed in the future, may in the
future significantly reduce or supplant the use of paper as a preferred medium,
which could in turn adversely affect the Company's business.


IT Staffing Services
     The Company acquired Arcus Group, whose principle business was off-site
data security services, in January 1998. As part of this acquisition, the
Company also acquired Arcus Group's IT Staffing business and now provides
staffing services to a diverse group of corporate clients. IT Staffing services
include temporary or project staffing and permanent placements for data center
operations and MIS functions, including supplying data center clerks, tape
librarians, systems operators and software programmers. Management believes
that IT Staffing is a high growth segment of the temporary staffing


                                       13
<PAGE>

market, complements the Company's existing services and offers opportunities to
leverage its large customer base. The Company's information technology
professionals, placed with its corporate clients on either a contract,
temporary or permanent basis by the Company's recruiters, have expertise on a
significant number of hardware platforms and software applications and can
provide a wide variety of services covering the systems application development
lifecycle, including planning, design, building and programming,
implementation, maintenance and ongoing management. The Company's IT Staffing
business serves its clients through 11 offices located in seven states.


     In recent years, businesses have become increasingly dependent on the use
of information technology to manage operations more efficiently and remain
competitive. Important internal functions, ranging from financial reporting to
production and inventory management, have become automated through the use of
applications software. As information systems have become less expensive, more
powerful and easier to use, the number and level of employees who use and
depend on these systems have increased significantly. Faced with the challenge
of implementing and operating more complex information systems, businesses are
increasingly using IT Staffing companies to supplement their information
technology operations. Using outside technical professionals (i) allows a
company's management to focus on core business operations, (ii) affords greater
staffing flexibility in information technology departments, (iii) increases a
company's ability to adapt to, and keep pace with, rapidly changing
technologies and (iv) avoids the expense of developing and maintaining in-house
expertise in information technology.


     The Company's account managers target corporate clients based upon client
size, use of contract staffing and relationships with account managers of the
Company's RIMS segment. The Company's recruiters are responsible for sourcing,
qualifying and matching their candidates to meet a corporate client's needs.
The Company ensures the quality of client service by assigning at least two
recruiters of the Company to each client so as to ensure an uninterrupted
relationship with that client. The recruiters then share all resumes received
from candidate professionals so as to optimize the placement process.


     The Company's IT Staffing offices share a common database that permits a
nationwide matching of candidates with a corporate client. This system allows
all relevant details of a candidate's skill and experience to be identified,
stored and readily retrieved so that an appropriate candidate can be matched to
a corporate client's needs.


     The IT Staffing industry is highly fragmented and consists of both large,
national firms as well as local, owner-operated businesses, with no single
company holding a dominant position within the industry. The Company believes
that its future success in the IT Staffing industry will depend in part upon
its continued ability to attract and retain highly skilled information
technology professionals and managerial, technical, sales and support
personnel. The Company considers its compensation and benefits plans, which are
offered to all full time IT Staffing employees, to be market competitive.
Management believes that the Company has good relationships with its IT
Staffing employees.


     For the amounts of revenues from external customers, EBITDA, total assets
and capital expenditures attributable to each industry segment of the Company
(RIMS and IT Staffing), see Note 10 to Notes to Consolidated Financial
Statements contained herein.


Employees
     A key feature of the Company's operating strategy is its decentralized
management structure and empowerment of local management operating in local
business environments. The Company is divided into two operational business
units, each of which has a president in charge of such unit: RIMS and IT
Staffing. Each operational unit is divided into geographic Areas, Regions and
Districts. Generally, Areas are managed by Executive Vice Presidents, Regions
are managed by Vice Presidents and Districts are managed by General Managers.
The Company's international operations are managed by Christophe Giecold, who
is President of the Company's international division. Management believes this
structure offers responsive and superior customer service and positions the
Company to sell ancillary services and products. The Company's headquarters
staff performs a variety of central administrative and support


                                       14
<PAGE>

functions in order to maximize the time and resources that local personnel can
devote to customer service and client development.

     As of March 1, 1999, the Company's RIMS business domestically employed
over 4,500 full time employees, of whom approximately 96% were employed at the
field level and 4% at the Company's headquarters in Boston, Massachusetts.
Through Iron Mountain's international joint venture, BDM, as of March 1, 1999,
the Company's RIMS business employed over 330 full time employees in the United
Kingdom.

     Various Teamster Union locals under four different agreements represent
approximately 4% of the Company's employees. One of these agreements, covering
approximately 16 employees, has expired, and the Company is involved in
negotiations with the union locals involved in such agreement. In addition, the
three other agreements, covering a total of approximately 180 employees, are
scheduled to expire in May 1999, December 1999 and March 2000. Based on its
experience with the union locals, the Company expects that it will enter into
new agreements on satisfactory terms, although the Company cannot make any
assurances at this time that such satisfactory terms will be achieved. In
addition, ten employees of BDM are members of a union under an agreement
scheduled to expire later in 1999.

     All non-union employees, other than BDM employees, are eligible to
participate in the Company's benefit programs, which include medical, dental,
life, short and long-term disability and accidental death and dismemberment
plans. Unionized employees receive these types of benefits through their
unions. In addition to base compensation and other usual benefits, all
full-time union and non-union employees, other than BDM employees, participate
in some form of incentive-based compensation program that provides payments
based on profits, collections or attainment of specified objectives for the
unit in which they work. Management believes that the Company has good
relationships with its employees and unions. BDM employees participate in
separate benefit and incentive-based compensation programs.

Insurance
     The Company carries a comprehensive property insurance policy with
insurers that it believes to be reputable and in amounts that it believes to be
appropriate, covering the replacement cost of real and personal property,
including improvements. Subject to sub-limits, the policy also covers
extraordinary expenses associated with business interruption and damage or loss
from flood or earthquake, subject to certain deductibles. Separate policies for
California earthquake insurance carry other deductibles that may be
significant. Iron Mountain also maintains general liability and excess
liability insurance covering bodily injury, property damage and personal
injury.

     The Company's standard form of contract sets forth an agreed maximum value
for each carton or other storage unit held by the Company as a limitation on
liability for loss or damage, as permitted under the Uniform Commercial Code.
In contracts containing such limits, such values are nominal, and the Company
believes that in typical circumstances its liability would be so limited in the
event of loss or damage relating to the value of information stored on media
held by the Company. However, some of the Company's agreements with large
volume accounts and some of the contracts assumed in the Company's acquisitions
contain no such limits or contain higher limits or supplemental insurance
arrangements. See "Item 3. Legal Proceedings" for a description of claims by
particular customers seeking to rescind their contracts, including limitations
on liability, as a result of the fires experienced in the Company's South
Brunswick Township, New Jersey facilities.

Environmental Matters
     Under various environmental laws, an owner of real estate or a lessee
conducting operations thereon may become liable for the costs of investigation,
removal or remediation of soil and groundwater contaminated by certain
hazardous substances or wastes or petroleum products. Some of such laws impose
cleanup responsibility and liability without regard to whether the owner or
operator of the real estate or operations thereon was responsible for the
contamination, and whether or not operations at the property have been
discontinued or title to the property has been transferred. In addition, the
presence of such substances, or the failure to properly remediate affected
property, may adversely affect the current property owner's or operator's
ability to sell or rent such property or to borrow using such property as
collateral. The owner or operator of contaminated real estate also may be
subject to common law claims by third parties based on damages and costs
resulting from off-site migration of the contamination.


                                       15
<PAGE>

     Additional environmental laws govern the removal, encapsulation or
disturbance of asbestos-containing materials ("ACMs"). Such laws may impose
liability for the release of ACMs and may enable third parties to seek recovery
from owners or operators of real estate for personal injury associated with
exposure to such substances. The Company is aware of the presence of ACMs at
some of its facilities, but believes that such materials are in acceptable
condition at this time. The Company believes that future costs related to any
removal and disposal of ACMs at these facilities will not be material, either
on an annual basis or in the aggregate, although there can be no assurance with
respect thereto.

     In addition, certain of the properties formerly or currently owned or
operated by the Company were previously used for industrial or other purposes
that involved the use or storage of hazardous substances or petroleum products
or the generation and disposal of hazardous wastes and, in some instances,
included the operation of underground storage tanks. In addition, some of these
properties are adjacent to or near Superfund sites or other contaminated
properties. In connection with its former and current ownership or operation of
certain properties, the Company may be potentially liable for environmental
costs such as those discussed above.

     The Company has from time to time conducted environmental investigations
and remedial activities at certain of its former and current facilities, but
the Company has not conducted an in-depth environmental review of all of its
properties. The Company believes that it is in substantial compliance with all
applicable material environmental laws. The Company has not received any
written notice from any governmental authority or third party asserting, and is
not otherwise aware of, any material noncompliance, liability or claim relating
to hazardous substances or wastes, petroleum products or material environmental
laws applicable to Company operations in connection with any of its present or
former properties. However, no assurance can be given that there are no
environmental conditions for which the Company might be liable in the future or
that future regulatory action, as well as compliance with future environmental
laws, will not require the Company to incur costs for or at its properties that
could have a material adverse effect on the Company's financial condition and
results of operations.


                                       16
<PAGE>

Item 2. Properties.
     As of March 1, 1999, Iron Mountain conducted operations through 222 leased
and 45 owned facilities containing a total of 16.4 million square feet of
space. The leased facilities typically have initial lease terms of 10 years
with options to renew for an additional ten years. The weighted average
remaining term of the leases on these facilities is approximately seven years.
In addition, many of the leases contain either a purchase option or a right of
first refusal upon the sale of the property.

     The following table sets forth the RIMS facilities the Company either owns
or leases (directly or through its subsidiaries) in the geographic locations
indicated below as of March 1, 1999:


Location                               Number of Facilities
--------                               --------------------
  Alabama .........................              1
  Arizona .........................              9
  California ......................             42
  Colorado ........................              6
  Connecticut .....................              4
  Delaware ........................              1
  Florida .........................             16
  Georgia .........................              9
  Illinois ........................              9
  Indiana .........................              1
  Kansas ..........................              1
  Louisiana .......................              5
  Maine ...........................              1
  Maryland ........................              7
  Massachusetts ...................             10
  Michigan ........................             15
  Minnesota .......................              6
  Missouri ........................              4
  Nebraska ........................              5
  Nevada ..........................              1
  New Hampshire ...................              1
  New Jersey ......................             12
  New Mexico ......................              3
  New York ........................             17
  North Carolina ..................              2
  Ohio ............................             13
  Oklahoma ........................              1
  Oregon ..........................              8
  Pennsylvania ....................              6
  Rhode Island ....................              1
  Tennessee .......................              2
  Texas ...........................             16
  Utah ............................              1
  Virginia ........................              8
  Washington ......................              5
  Wisconsin .......................              2
  United Kingdom ..................             16
                                                --
    Total .........................            267
                                               ===

     The Company leases an additional 11 office facilities in connection with
its IT Staffing services in Arizona, California, Colorado, Florida,
Pennsylvania and Washington.

     The Company or a principal operating subsidiary is a guarantor of a
substantial portion of the leases to which other subsidiaries are party. See
Note 11 of Notes to Consolidated Financial Statements for information regarding
the minimum annual rental commitments of the Company. The stock of
substantially all of the Company's subsidiaries is pledged as security for the
lenders under the Company's revolving credit facility (the "Credit Agreement").
In addition, substantially all of the property and assets of BDM


                                       17
<PAGE>

and its subsidiaries and the stock of BDM's subsidiaries are pledged as
security for the lenders under BDM's credit facility.


Item 3. Legal Proceedings.
     In March 1997, the Company experienced three fires, all of which
authorities have determined were caused by arson. The fires resulted in damage
to one and destruction of the Company's other RIMS facility in South Brunswick
Township, New Jersey.

     Approximately 61 of the Company's customers or their insurance carriers
have asserted claims as a consequence of the destruction of or damage to their
records as a result of the fires, some of which claims allege negligence or
other culpability on the part of the Company. The Company and its insurers have
denied any liability on the part of the Company as to all of these claims. The
Company is presently aware of six lawsuits filed against the Company by certain
of its customers and/or their insurers, and of two lawsuits filed by the
insurers of abutters of the South Brunswick facility, all alleging damages in
unspecified amounts arising out of the fires. Those lawsuits were filed in the
U.S. District Court for the District of New Jersey; the New Jersey Superior
Court, Middlesex County, Law Division; and the Supreme Court for New York
County, New York.

     The Company has denied liability and asserted various affirmative defenses
in each of these cases. The Company has also moved for dismissal of certain of
the customer claims, and has asserted counterclaims for indemnification against
certain of the plaintiffs. Discovery is ongoing in all eight cases, and six of
the cases in New Jersey state court have been consolidated for purposes of
discovery and pre-trial administration. Iron Mountain denies any liability as a
result of the destruction of or damage to customer records as a result of the
fires, which were beyond its control, and intends to vigorously defend itself
against these and any other lawsuits that may arise. The Company is also
pursuing coverage of these claims and proceedings with its various insurers.

     The Company has been paid by its general liability and property insurance
carrier for costs incurred as a result of business interruption and property
damage due to the fires. However, the Company's errors and omissions carrier
has made an initial determination denying coverage as to these claims. On
November 19, 1998, Iron Mountain filed an action in the United States District
Court for the District of Massachusetts (Iron Mountain Incorporated and Iron
Mountain Records Management, Inc. v. National Union Fire Insurance Co. of
Pittsburgh, PA) seeking a declaration of coverage and other relief. The parties
are currently in active negotiations, together with the general liability and
property carrier, to resolve all coverage issues.

     The outcome of these proceedings cannot be predicted. Based on its present
assessment of the situation, after consultation with legal counsel, management
does not believe that the outcome of these proceedings will have a material
adverse effect on Iron Mountain's financial condition or results of operations,
although there can be no assurance in this regard.


     On June 5, 1997, Arcus Group filed a complaint for a refund of federal
taxes paid for the year 1995 in the amount of $0.8 million against the United
States in the Court of Federal Claims. This claim is based on the utilization
of Arcus Group's net operating loss carryforwards for the tax year ended
December 31, 1995. On September 3, 1997, the United States filed its answer in
the case, denying Arcus Group's use of its net operating losses. The lawsuit is
in the discovery stage. If Arcus Group prevails in the litigation, Iron
Mountain will be able to use $8.0 million in loss carryforwards per year
against income generated by the former Arcus group of companies each year
through at least the year 2002. If Arcus Group does not prevail, then Iron
Mountain may have to pay taxes for the years 1996 and 1997, in which years
Arcus Group did claim the benefit of its loss carryforwards, and these
additional taxes would be added to goodwill as additional purchase price.
Management does not believe that the amount of taxes which Iron Mountain would
have to pay in such event would have a material adverse effect on Iron
Mountain's financial condition or results of operations, although there can be
no assurance in this regard.


     In addition to the matters discussed above, the Company is involved in
litigation from time to time in the ordinary course of business, and in the
opinion of management, no other material legal proceedings are pending to which
the Company, or any of its properties, is subject.


                                       18
<PAGE>

Item 4. Submission of Matters to a Vote of Security Holders.
     There were no matters submitted to a vote of security holders of the
Company during the fourth quarter of the fiscal year ended December 31, 1998.


                                       19
<PAGE>

                                    PART II

Item 5. Market for the Registrant's Common Stock and Related Stockholder
Matters.
     The Common Stock is traded on the Nasdaq National Market under the symbol
"IMTN." Iron Mountain first issued its Common Stock to the public in February
1996. On June 30, 1998, the Company's Board of Directors (the "Iron Mountain
Board") authorized and approved a three-for-two split effected in the form of a
dividend on the Company's Common Stock. Such additional shares of Common Stock
were issued on July 31, 1998 to all stockholders of record as of the close of
business on July 17, 1998. The following table sets forth the high and low
sales prices on the Nasdaq National Market, for the years 1997 and 1998, giving
effect to such stock split:


                                    High          Low
                                    ----          ---
                                       Sale Prices
                                       -----------
   1997
     First Quarter ..........    $  20.67      $  14.33
     Second Quarter .........       20.00         15.50
     Third Quarter ..........       24.17         19.50
     Fourth Quarter .........       26.50         21.29
   1998
     First Quarter ..........    $  25.08      $  20.92
     Second Quarter .........       30.67         24.58
     Third Quarter ..........       30.50         22.50
     Fourth Quarter .........       36.25         23.00

     The closing price of the Common Stock on the Nasdaq National Market on
March 1, 1999 was $31.25. As of March 1, 1999, there were 298 holders of record
of Common Stock and no holders of record of the Company's Nonvoting Common
Stock, par value $.01 per share. The Company believes that there are more than
2,900 beneficial owners of the Common Stock.

     Iron Mountain does not currently pay dividends on shares of Common Stock.
The Iron Mountain Board currently intends to retain future earnings, if any,
for the development of Iron Mountain's businesses and does not anticipate
paying cash dividends on the Common Stock in the foreseeable future. Future
determinations by the Iron Mountain Board to pay dividends on the Common Stock
would be based primarily upon the financial condition, results of operations
and business requirements of Iron Mountain. Dividends, if any, would be payable
in the sole discretion of the Iron Mountain Board out of the funds legally
available for that purpose. Some of the Company's agreements, pursuant to which
the Company has borrowed funds, contain provisions that limit the amount of
dividends and stock repurchases that the Company may make.


                                       20
<PAGE>

Item 6. Selected Consolidated Financial and Operating Information.
     The following selected consolidated statements of operations and balance
sheet data of the Company as of and for each of the years ended December 31,
1994, 1995, 1996, 1997 and 1998 have been derived from the Company's audited
consolidated financial statements. The selected consolidated financial and
operating information set forth below should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and with Iron Mountain's Consolidated Financial Statements and the
Notes thereto included elsewhere in this filing.

     On June 30, 1998, the Iron Mountain Board authorized and approved a
three-for-two stock split effected in the form of a dividend on the Company's
Common Stock. Such additional shares of Common Stock were issued on July 31,
1998 to all stockholders of record as of the close of business on July 17,
1998. All share and per share amounts in the accompanying Selected Consolidated
Financial and Operating Information have been restated to reflect the stock
split.


           Selected Consolidated Financial and Operating Information
                     (In thousands, except per share data)


<TABLE>
<CAPTION>
                                                                            Year Ended December 31,
                                                       ------------------------------------------------------------------
                                                           1994         1995         1996          1997          1998
                                                       ------------ ------------ ------------ ------------- -------------
<S>                                                    <C>          <C>          <C>          <C>           <C>
Consolidated Statements of Operations Data:
Revenues:
 Storage .............................................   $54,098      $ 64,165     $85,826      $125,968      $230,702
 Service and Storage Material Sales ..................    33,520        40,271      52,892        82,797       192,810
                                                         -------      --------     -------       --------      --------
   Total Revenues ....................................    87,618       104,436     138,718       208,765       423,512
Operating Expenses:
 Cost of Sales (Excluding Depreciation) ..............    45,880        52,277      70,747       106,879       220,980
 Selling, General and Administrative .................    20,853        26,035      34,342        51,668       105,025
 Depreciation and Amortization .......................     8,690        12,341      16,936        27,107        49,152
                                                         -------      --------     -------       --------      --------
   Total Operating Expenses ..........................    75,423        90,653     122,025       185,654       375,157
                                                         -------      --------     -------       --------      --------
Operating Income .....................................    12,195        13,783      16,693        23,111        48,355
Interest Expense, Net ................................     8,954        11,838      14,901        27,712        45,756
Other Income, Net (1) ................................        --            --          --            --         1,384
                                                         -------      --------     -------       --------      --------
Income (Loss) Before Provision (Benefit) for
 Income Taxes ........................................     3,241         1,945       1,792        (4,601)        3,983
Provision (Benefit) for Income Taxes .................     1,957         1,697       1,435           (80)        6,949
                                                         -------      --------     -------       --------      --------
Income (Loss) Before Extraordinary Charge ............     1,284           248         357        (4,521)       (2,966)
Extraordinary Charge, Net of Tax Benefit (2) .........        --            --       2,126            --            --
                                                         -------      --------     -------       --------      --------
Net Income (Loss) ....................................     1,284           248      (1,769)       (4,521)       (2,966)
Accretion of Redeemable Put Warrant ..................     1,412         2,107         280            --            --
                                                         -------      --------     -------       --------      --------
Net Loss Applicable to Common Stockholders               $  (128)     $ (1,859)    $(2,049)      $(4,521)      $(2,966)
                                                         =======      ========     =======       ========      ========
Income (Loss) per Common Share--Basic
 and Diluted:
 Income (Loss) Before Extraordinary Charge               $ (0.40)     $ (32.61)    $  0.00       $ (0.26)      $ (0.11)
 Extraordinary Charge, Net of Tax Benefit (2)                 --            --       (0.15)           --            --
                                                         -------      --------     -------       --------      --------
 Net Loss Applicable to Common
  Stockholders .......................................   $ (0.40)     $ (32.61)    $ (0.15)      $ (0.26)      $ (0.11)
                                                         =======      ========     =======       ========      ========
 Weighted Average Common Shares
  Outstanding ........................................       321            57      13,911        17,172        27,470
                                                         =======      ========     =======       ========      ========
Pro Forma (3):
 Net Loss Applicable to Common
  Stockholders .......................................   $ (0.01)     $  (0.16)    $ (0.13)      $ (0.26)      $ (0.11)
                                                         =======      ========     =======       ========      ========
 Weighted Average Common Shares
  Outstanding ........................................    11,976        11,676      15,206        17,172        27,470
                                                         =======      ========     =======       ========      ========
Other Data:
EBITDA (4) ...........................................   $20,885      $ 26,124     $33,629       $50,218       $97,507
EBITDA as a Percentage of Total Revenues .............      23.8%         25.0%       24.2%         24.1%         23.0%
Capital Expenditures:
 Growth (5)(6) .......................................   $15,829      $ 14,395     $23,334       $37,082       $54,566
 Maintenance (7) .....................................     1,151           858       1,112         1,238         1,888
                                                         -------      --------     -------       --------      --------
  Total Capital Expenditures (6) .....................   $16,980      $ 15,253     $24,446       $38,320       $56,454
                                                         =======      ========     =======       ========      ========
</TABLE>

                                       21
<PAGE>


<TABLE>
<CAPTION>
                                                            As of December 31,
                                      --------------------------------------------------------------
                                         1994         1995         1996         1997         1998
                                      ----------   ----------   ----------   ----------   ----------
<S>                                   <C>          <C>          <C>          <C>          <C>
Consolidated Balance Sheet Data:
Cash and Cash Equivalents .........    $  1,303     $  1,585     $  3,453     $ 24,510     $  1,715
Total Assets ......................     136,859      186,881      281,799      636,786      967,385
Total Debt ........................      86,258      121,874      184,733      428,018      456,178
Stockholders' Equity ..............      22,869       21,011       52,384      137,733      338,882
</TABLE>

----------------
(1) Other income, net includes a $1.7 million gain resulting from the
    settlement of several insurance claims related to the March 1997 fires at
    Iron Mountain's South Brunswick Township, New Jersey facilities.

(2) The extraordinary charge consists of a prepayment penalty, the write-off of
    deferred financing costs, original issue discount and loss on termination
    of interest rate protection agreements.

(3) Represents pro forma earnings per share as if the preferred stock that was
    converted into Common Stock in connection with the Company's Initial
    Public Offering (as defined herein) had been converted for all periods
    presented. See Notes 6 and 7 of Notes to Consolidated Financial
    Statements.

(4) Based on its experience in the RIMS industry, the Company believes that
    EBITDA is an important tool for measuring the performance of RIMS
    companies (including potential acquisition targets) in several areas, such
    as liquidity, operating performance and leverage. In addition, lenders use
    EBITDA as a criterion in evaluating RIMS companies, and substantially all
    of the Company's financing agreements contain covenants in which EBITDA is
    used as a measure of financial performance. However, EBITDA should not be
    considered an alternative to operating or net income (as determined in
    accordance with generally accepted accounting principles ("GAAP")) as an
    indicator of the Company's performance or to cash flow from operations (as
    determined in accordance with GAAP) as a measure of liquidity. See
    "Management's Discussion and Analysis of Financial Condition and Results
    of Operations--Overview" and "--Liquidity and Capital Resources" for
    discussions of other measures of performance determined in accordance with
    GAAP and the Company's sources and applications of cash flow.

(5) Growth capital expenditures consist primarily of investments in racking
    systems, management information systems, new buildings and improvements to
    existing facilities. See "Management's Discussion and Analysis of
    Financial Condition and Results of Operations--Liquidity and Capital
    Resources--Capital Investments."

(6) Includes $2,901 in 1994 related to the cost of constructing a RIMS facility
    which was sold in a sale and leaseback transaction in 1994.

(7) Consists of capital expenditures made in order to maintain the Company's
    current revenue stream.

                                       22
<PAGE>

Item 7. Management's Discussion and Analysis of Financial Condition and Results
      of Operations.
     The following discussion should be read in conjunction with "Item 6.
Selected Consolidated Financial and Operating Information" and the Company's
Consolidated Financial Statements and the Notes thereto and the other financial
and operating information included elsewhere in this filing.

Overview
     The primary financial objective of the Company is to increase its
consolidated EBITDA, which is a source of funds for investment in continued
internal growth and growth through acquisitions and to service indebtedness.
The Company has benefited from growth in consolidated EBITDA, which has
increased from $33.6 million for 1996 to $97.5 million for 1998 (a compound
annual growth rate of 70.3%). However, other measures of the Company's
financial performance, such as consolidated net income and consolidated net
income applicable to common stockholders, have been negatively affected by this
objective.

     For the years ended December 31, 1996 through 1998, the Company
experienced consolidated net losses applicable to common stockholders. Such net
losses are attributable in part to significant charges associated with the
Company's pursuit of its growth strategy, namely: (i) increases in depreciation
and amortization expenses associated with expansion of the Company's storage
capacity, (ii) increases in goodwill amortization associated with acquisitions
accounted for under the purchase method and (iii) increases in interest expense
associated with the borrowings used to fund its acquisitions. In addition,
consolidated net income applicable to common stockholders was negatively
affected in 1996 by an extraordinary charge related to the early retirement of
debt.

     The Company classifies its operations into two fundamental businesses:
RIMS and IT Staffing. The Company acquired its IT Staffing business in the
Arcus Merger. The reportable segments are managed separately since each
business has different economic characteristics based on the differing customer
requirements and the nature of the services provided.

     The Company's RIMS revenues consist of storage revenues as well as service
and storage material sales revenues. Storage revenues consist of periodic
charges related to the storage of materials (either on a per unit or per cubic
foot of records basis) and have accounted for approximately 60% of total RIMS
revenues in each of the last five years. In certain circumstances, based upon
customer requirements, storage revenues include periodic charges associated
with normal, recurring service activities. Service and storage material sales
revenues are comprised of charges for related service activities and the sale
of storage materials and are derived primarily from the Company's courier
operations (consisting primarily of the pickup and delivery of records upon
customer request), additions of new records, temporary removal of records from
storage, refiling of removed records, destructions of records, permanent
withdrawals from storage and sales of specially designed storage containers,
magnetic media, including computer tapes, and related supplies. Customers are
generally billed on a monthly basis on contractually agreed-upon terms.

     The Company's IT Staffing business generates revenues by supplying
information technology professionals to its clients on either a contract or
temporary basis. The Company also recruits information technology professionals
for permanent placement with its clients.

     Cost of sales (excluding depreciation) for the RIMS segment consists
primarily of wages and benefits, facility occupancy costs, vehicle and other
equipment costs and supplies. Of these, the most significant are wages and
benefits and facility occupancy costs. Over the past several years, the Company
has been able to reduce per Carton storage costs by: (i) designing racking
systems and operating space to maximize facility storage efficiency, (ii)
negotiating favorable facility leases and having facilities built to its custom
specifications and (iii) occupying larger facilities, which, when filled, are
less expensive per Carton to operate. For the IT Staffing segment, cost of
sales (excluding depreciation) consists primarily of wages and benefits.

     Selling, general and administrative expenses for both the RIMS and IT
Staffing segments consist primarily of management, administrative, sales and
marketing wages and benefits, as well as travel, communications, professional
fees, bad debts, training, office equipment and supplies expenses.


                                       23
<PAGE>

     The Company's consolidated depreciation and amortization charges result
primarily from the capital-intensive nature of the RIMS business and the
acquisitions the Company has completed. The principal components of
depreciation relate to racking systems and related equipment, new buildings and
leasehold improvements, equipment for new facilities and computer system
hardware and software. Amortization primarily relates to goodwill and
noncompetition agreements arising from acquisitions and customer acquisition
costs. The Company has accounted for all of its acquisitions under the purchase
method. Since the purchase price for RIMS companies is usually substantially in
excess of the fair value of their net assets, these purchases have given rise
to significant goodwill and, accordingly, significant levels of amortization.
Although amortization is a non-cash charge, it does decrease reported
consolidated net income. The Company has not acquired any IT Staffing companies
other than through its acquisition of Arcus Group.

     EBITDA is an important financial performance measure in the RIMS industry,
both for determining the value of companies within the industry and for
defining standards for borrowing from institutional lenders. For 1996, 1997 and
1998, the Company's RIMS EBITDA margins were 24.2%, 24.1% and 25.0%,
respectively. The Company acquired 16, 18 and 15 RIMS businesses in 1996, 1997
and 1998, respectively, most of which had lower EBITDA margins than the rest of
the Company's RIMS business. The anticipated synergies relating to such
acquisitions were generally not realized immediately. Nonetheless, the Company
has been able to maintain its recent RIMS EBITDA margins through increased
overall operating efficiencies and economies of scale and the realization of
synergies in connection with earlier acquisitions.

     Although the EBITDA margins for the Company's IT Staffing business are
lower than for the Company's RIMS business, the capital requirements in the IT
Staffing business are minimal. The EBITDA margin of the Company's IT Staffing
business for 1998 was 3.9%. This resulted in the Company's 1998 consolidated
EBITDA margin being lower than it was in prior years. The Company's
consolidated EBITDA margin for 1998 was 23.0%, as compared to 24.1% for 1997
and to the Company's RIMS EBITDA margin of 25.0% for 1998.

     In March 1997, the Company experienced three fires that resulted in damage
to one and destruction of the Company's other RIMS facility in South Brunswick
Township, New Jersey. The affected facilities represented less than three
percent of revenues and less than two percent of consolidated EBITDA for 1996.
The results for the year ended December 31, 1997 do not include any gain or
loss resulting from the fires. In June 1998, the Company settled several
insurance claims, including a significant claim under its business interruption
insurance policy, related to the fires. Other income, net, for the year ended
December 31, 1998 includes a $1.7 million gain related to this settlement. The
calculation of EBITDA does not include this gain. See "Item 3. Legal
Proceedings" and Note 11 of Notes to Consolidated Financial Statements for a
description of certain claims and proceedings against the Company relating to
these fires.

     In June 1998, the Iron Mountain Board authorized and approved a
three-for-two stock split effected in the form of a dividend on the Company's
Common Stock. Such additional shares of Common Stock were issued on July 31,
1998 to all stockholders of record as of the close of business on July 17,
1998. All issued and outstanding share and per share amounts included herein
have been restated to reflect the stock split.

     In March 1998, the American Institute of Certified Public Accountants
issued Statement of Position 98-1, "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use" ("SOP 98-1"). SOP 98-1
requires computer software costs associated with internal use software to be
expensed as incurred until certain capitalization criteria are met. SOP 98-1
also defines which types of costs should be capitalized and which should be
expensed. The Company will adopt SOP 98-1 prospectively beginning January 1,
1999. Based on the Company's current budget, it expects net income and EBITDA
to be negatively impacted by approximately $2 million and $4 million per year,
respectively.


Results of Operations
     The following table sets forth, for the periods indicated, information
derived from the Company's consolidated statements of operations, expressed as
a percentage of total consolidated revenues.


                                       24
<PAGE>


<TABLE>
<CAPTION>
                                                                     Year Ended December 31,
                                                            ------------------------------------------
                                                                1996           1997           1998
                                                            ------------   ------------   ------------
<S>                                                         <C>            <C>            <C>
Revenues:
 Storage ................................................        61.9%          60.3%          54.5%
 Service and Storage Material Sales .....................        38.1           39.7           45.5
                                                                -----          -----          -----
  Total Revenues ........................................       100.0          100.0          100.0
                                                                -----          -----          -----
Operating Expenses:
 Cost of Sales (Excluding Depreciation) .................        51.0           51.2           52.2
 Selling, General and Administrative ....................        24.8           24.7           24.8
 Depreciation and Amortization ..........................        12.2           13.0           11.6
                                                                -----          -----          -----
  Total Operating Expenses ..............................        88.0           88.9           88.6
                                                                -----          -----          -----
Operating Income ........................................        12.0           11.1           11.4
Interest Expense ........................................        10.7           13.3           10.8
Other Income, Net .......................................          --             --            0.3
                                                                -----          -----          -----
Income (Loss) before Provision for Income Taxes .........         1.3          ( 2.2)           0.9
Provision for Income Taxes ..............................         1.0             --            1.6
                                                                -----          -----          -----
Income (Loss) Before Extraordinary Charge ...............         0.3          ( 2.2)         ( 0.7)
Extraordinary Charge, Net of Tax Benefit ................         1.6             --             --
                                                                -----          -----          -----
Net Loss ................................................       ( 1.3)         ( 2.2)         ( 0.7)
Accretion of Redeemable Put Warrant .....................         0.2             --             --
                                                                -----          -----          -----
Net Loss Applicable to Common Stockholders ..............       ( 1.5)%        ( 2.2)%        ( 0.7)%
                                                                =====          =====          =====
EBITDA ..................................................        24.2%          24.1%          23.0%
                                                                =====          =====          =====
</TABLE>

     The following table sets forth, for the year ended December 31, 1998,
information derived from the Company's consolidated statements of operations,
as it relates to the Company's RIMS and IT Staffing business segments,
expressed as a percentage of total revenues for each such segment.


<TABLE>
<CAPTION>
                                                       RIMS       IT Staffing
                                                    ----------   -------------
<S>                                                    <C>       <C>
Segment Revenues:
 Storage ........................................       60.1%       --%
 Service and Storage Material Sales .............       39.9     100.0
                                                       -----     -----
  Total Segment Revenues ........................      100.0     100.0
                                                       -----     -----
Operating Expenses:
 Cost of Sales (Excluding Depreciation) .........       50.0      73.1
 Selling, General and Administrative ............       25.0      23.0
 Depreciation and Amortization ..................       12.6       2.0
                                                       -----     -----
  Total Operating Expenses ......................       87.6      98.1
                                                       -----     -----
Operating Income ................................       12.4       1.9
                                                       =====     =====
EBITDA ..........................................       25.0       3.9
                                                       =====     =====
</TABLE>

Year Ended December 31, 1998 Compared to Year Ended December 31, 1997

     Consolidated storage revenues increased $104.7 million, or 83.1%, to
$230.7 million for the year ended December 31, 1998 from $126.0 million for the
year ended December 31, 1997, primarily due to the completion of 33
acquisitions during 1998 and 1997. Consolidated and RIMS internal revenue
growth was 10.2% and resulted primarily from net increases in records and other
media stored by existing customers and from sales to new customers. The RIMS
business accounted for all of the storage revenues for the years ended December
31, 1998 and 1997.

     Consolidated service and storage material sales revenues increased $110.0
million, or 132.9%, to $192.8 million for the year ended December 31, 1998 from
$82.8 million for the year ended December 31, 1997, primarily due to
acquisitions. Consolidated and RIMS internal revenue growth was 14.6% and
resulted from increases in service and storage material sales to existing
customers and the addition of


                                       25
<PAGE>

new customer accounts. Included within the $110.0 million increase is $39.6
million attributable to the IT Staffing business. Service and storage material
sales revenues for the Company's RIMS business increased $70.4 million, or
85.0%, to $153.2 million from $82.8 million for the year ended December 31,
1997.

     For the reasons discussed above, total consolidated revenues increased
$214.7 million, or 102.9%, to $423.5 million for the year ended December 31,
1998 from $208.8 million for the year ended December 31, 1997. Total revenues
for the RIMS business increased $175.1 million, or 83.9%, to $383.9 million for
the year ended December 31, 1998 from $208.8 million for the year ended
December 31, 1997. Total IT Staffing revenues amounted to $39.6 million for the
year ended December 31, 1998. Consolidated and RIMS internal revenue growth was
11.9%.

     Consolidated cost of sales (excluding depreciation) increased $114.1
million, or 106.8%, to $221.0 million (52.2% of consolidated revenues) for the
year ended December 31, 1998 from $106.9 million (51.2% of consolidated
revenues) for the year ended December 31, 1997. The dollar increase was
primarily attributable to the increase in records and other media stored,
expenses related to certain facility relocations and costs associated with the
Company's new IT Staffing business. The increase as a percentage of
consolidated revenues was primarily attributable to the IT Staffing business
having a lower gross margin than the RIMS business. Cost of sales (excluding
depreciation) for the Company's RIMS business increased $85.2 million to $192.1
million (50.0% of RIMS revenues) for the year ended December 31, 1998 from
$106.9 million (51.2% of RIMS revenues) for the same period last year. The
decrease as a percentage of revenues was primarily attributable to: (i) certain
data security acquisitions, including the Arcus Merger, and the acquisition of
a software escrow business, acquired in the third quarter of 1997, having a
higher gross margin than the rest of the Company and (ii) the closing of
redundant facilities associated with certain acquisitions. The IT Staffing
business reported cost of sales (excluding depreciation) of $28.9 million
(73.1% of IT Staffing revenues).

     Consolidated selling, general and administrative expenses increased $53.4
million, or 103.3%, to $105.0 million (24.8% of consolidated revenues) for the
year ended December 31, 1998 from $51.7 million (24.7% of consolidated
revenues) for the year ended December 31, 1997. The dollar increase was
primarily attributable to: (i) the addition of overhead attributable to the
Arcus Merger, (ii) additional salespeople, primarily related to the
acquisitions of Arcus Group and Safesite Records Management Corporation
("Safesite") and the decision by the Company to significantly increase its
selling resources, (iii) increased personnel, office and overhead costs to
support the Company's growth and (iv) recruiting, relocation and training
expenses associated with acquisition integration. As a result, selling, general
and administrative expenses for the RIMS business increased $44.2 million to
$95.9 million (25.0% of RIMS revenues) for the year ended December 31, 1998
from $51.7 million (24.7% of RIMS revenues) for the year ended December 31,
1997. The IT Staffing business reported selling, general and administrative
expenses of $9.1 million (23.0% of IT Staffing revenues).

     Consolidated depreciation and amortization expense increased $22.1
million, or 81.5%, to $49.2 million (11.6% of consolidated revenues) for the
year ended December 31, 1998 from $27.1 million (13.0% of consolidated
revenues) for the year ended December 31, 1997. The dollar increase was
primarily attributable to the additional depreciation and amortization expense
related to the Company's acquisitions and capital expenditures for the
Company's RIMS businesses, including racking systems, information systems and
improvements to existing facilities. As a result, depreciation and amortization
expense for the RIMS business increased $21.2 million to $48.3 million (12.6%
of RIMS revenues) for the year ended December 31, 1998 from $27.1 million
(13.0% of RIMS revenues) for the year ended December 31, 1997. The IT Staffing
business reported depreciation and amortization expenses of $0.8 million (2.0%
of IT Staffing revenues).

     As a result of the foregoing factors, consolidated operating income
increased $25.3 million, or 109.5%, to $48.4 million (11.4% of consolidated
revenues) for the year ended December 31, 1998 from $23.1 million (11.1% of
consolidated revenues) for the year ended December 31, 1997. Operating income
for the RIMS business increased $24.6 million, or 106.3%, to $47.7 million
(12.4% of RIMS revenues) for the year ended December 31, 1998 from $23.1
million (11.1% of RIMS revenues) for the year ended December 31, 1997.
Operating income for the IT Staffing business was $0.8 million (1.9% of IT
Staffing revenues) for the year ended December 31, 1998.


                                       26
<PAGE>

     Consolidated interest expense increased $18.0 million, or 65.1%, to $45.7
million for the year ended December 31, 1998 from $27.7 million for the year
ended December 31, 1997. The increase was primarily attributable to increased
indebtedness related to the financing of acquisitions and capital expenditures.
Such increase was partially offset by lower effective interest rates for the
year ended December 31, 1998 compared to the same period in 1997.


     Consolidated other income for the year ended December 31, 1998 is
comprised of a $1.7 million gain resulting from the settlement of several
insurance claims, including a significant claim under the Company's business
interruption insurance policy, related to the March 1997 fires at the Company's
South Brunswick Township, New Jersey facilities. Such gain is partially offset
by a $0.3 million loss on a foreign currency transaction in connection with the
acquisition of BDM.


     As a result of the foregoing factors, consolidated income (loss) before
the provision (benefit) for income taxes increased $8.6 million to income of
$4.0 million (0.9% of consolidated revenues) for the year ended December 31,
1998 from a loss of $4.6 million (2.2% of consolidated revenues) for the year
ended December 31, 1997. The provision for income taxes was $6.9 million for
the year ended December 31, 1998 compared to a credit of $0.1 million for the
year ended December 31, 1997. The Company's effective tax rate is higher than
statutory rates primarily due to the amortization of the nondeductible portion
of goodwill associated with certain acquisitions (the tax laws generally permit
deduction of such expenses for asset purchases, but not for acquisitions of
stock). In connection with the 1998 Acquisitions, the Company recorded
approximately $128.1 million in nondeductible goodwill.


     Consolidated net loss decreased $1.5 million to a net loss of $3.0 million
(0.7% of consolidated revenues) for the year ended December 31, 1998 from a
consolidated net loss of $4.5 million (2.2% of consolidated revenues) for the
year ended December 31, 1997.


     As a result of the foregoing factors, consolidated EBITDA increased $47.3
million, or 94.2%, to $97.5 million (23.0% of consolidated revenues) for the
year ended December 31, 1998 from $50.2 million (24.1% of consolidated
revenues) for the year ended December 31, 1997. EBITDA for the RIMS business
increased $45.8 million, or 91.2%, to $96.0 million (25.0% of RIMS revenues)
for the year ended December 31, 1998 from $50.2 million (24.1% of RIMS
revenues) for the year ended December 31, 1997. EBITDA for the IT Staffing
business was $1.6 million (3.9% of IT Staffing revenues) for the year ended
December 31, 1998.


Year Ended December 31, 1997 Compared to Year Ended December 31, 1996

     Consolidated storage revenues increased $40.2 million, or 46.8%, to $126.0
million for the year ended December 31, 1997 from $85.8 million for the year
ended December 31, 1996. Thirty-four acquisitions completed by the Company in
1996 and 1997 accounted for $34.0 million, or 84.7%, of such increase. The
balance of such increase resulted from net Carton growth from existing
customers and from sales to new customers.


     Consolidated service and storage material sales revenues increased $29.9
million, or 56.5% to $82.8 million for the year ended December 31, 1997 from
$52.9 million for the year ended December 31, 1996. Acquisitions completed by
the Company in 1996 and 1997 accounted for $25.9 million, or 86.8%, of such
increase. The balance of such increase resulted from increases in service and
storage material sales to existing customers and the addition of new customer
accounts. The greater percentage increase in service and storage material sales
revenues, as compared to storage revenues, for the year ended December 31, 1997
was primarily attributable to certain businesses acquired in 1997 that have a
higher component of service and storage material sales revenues, compared to
storage revenues, than the rest of the Company's RIMS business.


     For the reasons discussed above, total consolidated revenues increased
$70.1 million, or 50.5%, to $208.8 million for the year ended December 31, 1997
from $138.7 million for the year ended December 31, 1996. An increase of $59.9
million, or 42.3 percentage points, was attributable to acquisitions completed
by the Company in 1996 and 1997, and an increase of $10.2 million, or 8.2
percentage points, was attributable to internal growth. The internal growth
percentage includes the loss of revenues resulting


                                       27
<PAGE>

from the fires in South Brunswick Township, New Jersey in March 1997. Excluding
the Company's South Brunswick operations for both years, internal growth for
the year was 10.1%.


     Consolidated cost of sales (excluding depreciation) increased $36.2
million, or 51.1%, to $106.9 million (51.2% of revenues) for the year ended
December 31, 1997 from $70.7 million (51.0% of revenues) for the year ended
December 31, 1996. The dollar increase was primarily attributable to the
increase in Cartons stored and expenses related to certain facility
relocations. The increase as a percentage of revenues was primarily
attributable to recent acquisitions, which initially have lower gross margins
than the rest of the Company.


     Consolidated selling, general and administrative expenses increased $17.4
million, or 50.5%, to $51.7 million (24.7% of revenues) for the year ended
December 31, 1997 from $34.3 million (24.8% of revenues) for the year ended
December 31, 1996. The dollar increase was primarily attributable to: (i)
increased personnel, office and overhead costs needed to support the Company's
growth, (ii) the addition of overhead, primarily salespeople, related to the
acquisition of Safesite and (iii) the integration, training and redeployment of
personnel principally related to the Safesite acquisition.


     Consolidated depreciation and amortization increased $10.2 million, or
60.1%, to $27.1 million (13.0% of revenues) for the year ended December 31,
1997 from $16.9 million (12.2% of revenues) for the year ended December 31,
1996. The dollar increase was primarily attributable to the additional
depreciation and amortization related to the Company's acquisitions and capital
expenditures including racking systems, information systems and improvements to
existing facilities.


     As a result of the foregoing factors, consolidated operating income
increased $6.4 million, or 38.4%, to $23.1 million (11.1% of revenues) for the
year ended December 31, 1997 from $16.7 million (12.0% of revenues) for the
year ended December 31, 1996.


     Consolidated interest expense increased $12.8 million, or 86.0%, to $27.7
million for the year ended December 31, 1997 from $14.9 million for the year
ended December 31, 1996. The increase was primarily attributable to increased
indebtedness related to the financing of acquisitions. Such increase was
partially offset by lower effective interest rates for the year ended December
31, 1997 as compared to the same period for 1996.


     As a result of the foregoing factors, consolidated income (loss) before
provision (benefit) for income taxes decreased $6.4 million to a loss of $4.6
million (2.2% of revenues) for the year ended December 31, 1997 from income of
$1.8 million (1.3% of revenues) for the year ended December 31, 1996. Provision
(benefit) for income taxes was a credit of $0.1 million for the year ended
December 31, 1997 compared with a provision of $1.4 million for the year ended
December 31, 1996. The Company's effective tax rate is less favorable than
statutory rates primarily due to the amortization of the nondeductible portion
of goodwill associated with certain acquisitions (the tax laws generally permit
deduction of such expenses for asset purchases, but not for acquisitions of
stock). In connection with the 1997 Acquisitions, the Company recorded
approximately $145 million in nondeductible goodwill.


     Consolidated net loss increased $2.7 million to a net loss of $4.5 million
(2.2% of revenues) for the year ended December 31, 1997 from a net loss of $1.8
million (1.3% of revenues) for the year ended December 31, 1996. Net loss
applicable to common stockholders increased $2.5 million to a net loss of $4.5
million (2.2% of revenues) for the year ended December 31, 1997 from a net loss
of $2.0 million (1.5% of revenues) after accretion of $0.3 million related to a
redeemable put warrant to acquire 666,578 shares of Common Stock (the
"Warrant") for the year ended December 31, 1996. The Warrant was redeemed in
full in February 1996, with a portion of the proceeds from the Company's
initial public offering (the "Initial Public Offering"). As a result of such
redemption, there will be no future charges for such accretion.


     As a result of the foregoing factors, consolidated EBITDA increased $16.6
million, or 49.3%, to $50.2 million (24.1% of revenues) for the year ended
December 31, 1997 from $33.6 million (24.2% of revenues) for the year ended
December 31, 1996.


                                       28
<PAGE>

Recent Consolidated Quarterly Financial Data

     The following table sets forth, for the quarterly periods indicated,
information derived from the Company's consolidated statements of operations.
The unaudited quarterly information has been prepared on the same basis as the
annual financial information and, in management's opinion, includes all
adjustments (consisting of normal recurring accruals) necessary to present
fairly the information for the quarters presented. The operating results for
any quarter are not necessarily indicative of results for the year or for any
future period.


<TABLE>
<CAPTION>
                                                             Three Months Ended
                         ------------------------------------------------------------------------------------------
                                             1997                                         1998
                         -------------------------------------------- ---------------------------------------------
                           Mar. 31     June 30    Sept. 30   Dec. 31    Mar. 31    June. 30   Sept. 30    Dec. 31
                         ----------- ----------- ---------- --------- ----------- ---------- ---------- -----------
                                                               (In thousands)
<S>                      <C>         <C>         <C>        <C>       <C>         <C>        <C>        <C>
Revenues:
 Storage ...............  $ 25,823    $ 27,987    $ 32,390   $39,768   $ 52,948    $ 55,592   $ 59,506   $ 62,656
 Service and,
  Storage Material
  Sales ................    16,331      18,598      22,265    25,603     46,536      47,471     48,454     50,349
                          --------    --------    --------   -------   --------    --------   --------   --------
  Total Revenues .......    42,154      46,585      54,655    65,371     99,484     103,063    107,960    113,005
Operating Expenses:
 Cost of Sales
  (Excluding
  Depreciation) ........    21,764      24,108      27,870    33,137     52,610      53,664     56,335     58,371
Selling, General and
 Administrative ........    10,207      11,296      14,180    15,985     24,418      25,801     26,447     28,359
Depreciation and
 Amortization ..........     5,722       6,243       6,530     8,612     11,264      12,122     12,839     12,927
                          --------    --------    --------   -------   --------    --------   --------   --------
  Total Operating
   Expenses ....... ....    37,693      41,647      48,580    57,734     88,292      91,857     95,621     99,657
                          --------    --------    --------   -------   --------    --------   --------   --------
Operating Income .......  $  4,461    $  4,938    $  6,075   $ 7,637   $ 11,192    $ 11,476   $ 12,339   $ 13,348
                          ========    ========    ========   =======   ========    ========   ========   ========
EBITDA .................  $ 10,183    $ 11,181    $ 12,605   $16,249   $ 22,456    $ 23,598   $ 25,178   $ 26,275
                          ========    ========    ========   =======   ========    ========   ========   ========
</TABLE>

Liquidity and Capital Resources

Recent Financings and Sources of Funds

     In connection with certain of the 1998 Acquisitions, the Company issued
2,645,913 shares of its Common Stock and options to acquire approximately
885,000 shares of its Common Stock with fair values of approximately $51.4
million and $15.7 million, respectively.

     In April 1998, the Company issued and sold an aggregate of 6,037,500
shares (including 787,500 to cover over-allotments) of its Common Stock in an
underwritten public offering (the "1998 Equity Offering"). Net proceeds after
deducting underwriters' discounts were $132.9 million and were used to repay
outstanding bank debt, to fund the cash portion of the purchase price of
certain of the 1998 Acquisitions and for general corporate purposes.

     Net cash provided by financing activities was (i) $80.6 million for the
year ended December 31, 1996, consisting primarily of the net proceeds of
$160.1 million from the sale of the Company's 10 1/8% Senior Subordinated Notes
due 2006 and $33.3 million from the Initial Public Offering, offset by $102.2
million of repayment of indebtedness and $6.6 million used to retire the
Warrant, (ii) $231.2 million for the year ended December 31, 1997, consisting
primarily of the net proceeds of $242.6 million from the sale of the Company's
8 3/4% Senior Subordinated Notes due 2009 (the "1997 Notes") offset by $10.3
million of repayment of indebtedness and (iii) $159.3 million for the year
ended December 31, 1998, consisting primarily of the net proceeds of $132.9
million from 1998 Equity Offering and additional borrowings under the Credit
Agreement of $23.7 million. As of December 31, 1998, outstanding borrowings
under the Credit Agreement amounted to $35.3 million.


                                       29
<PAGE>

     The annual maturities of the Company's indebtedness for the years ending
December 31, 1999, 2000, 2001, 2002 and 2003 are $1.7 million, $0.8 million,
$1.7 million, $35.9 million and $0.4 million, respectively. As of March 1,
1999, the Company had outstanding borrowings of approximately $85.5 million
under the Credit Agreement, which were used to fund, among other things, the
purchase price of the acquisition of four RIMS businesses, including BDM, and
general corporate purposes.

     As of March 1, 1999, the Company had $506.1 million of total debt, of
which $420.6 million had fixed interest rates and $85.5 million had variable
interest rates. See Note 4 of Notes to Consolidated Financial Statements.

     Net cash provided by operations was $67.1 million for the year ended
December 31, 1998 compared to $22.4 million for the same period in 1997. The
increase was primarily attributable to the increase in EBITDA, accounts
payable, other long-term liabilities and deferred income and the decrease in
inventory, prepaid expenses and other current assets.

     At December 31, 1998, the Company had estimated net operating loss
carryforwards of approximately $46.2 million for federal income tax purposes.
As a result of such loss carryforwards, cash paid for income taxes has
historically been substantially lower than the provision for income taxes. The
preceding net operating loss carryforwards do not include preacquisition net
operating loss carryforwards of Arcus Group. As a result of the litigation
relating to Arcus Group's net operating loss carryforwards, the Company has not
recognized the deferred tax asset generated by such loss carryforwards. If the
litigation is resolved favorably, any tax benefit realized will be recorded as
a reduction of goodwill.

Capital Investments

     As the Company has sought to increase its EBITDA, it has made significant
capital investments, consisting primarily of: (i) acquisitions, (ii) capital
expenditures, primarily related to growth, including investments in real
estate, racking systems, management information systems and improvements to
existing facilities, and (iii) customer acquisition costs. Cash paid for these
investments during 1998 amounted to $189.7 million, $56.5 million and $3.0
million, respectively. These investments have been primarily funded through
cash flows from operations, borrowings under the Credit Agreement, a portion of
the net proceeds from the sale of the 1997 Notes and the net proceeds from the
1998 Equity Offering.

     As a result of the Company implementing its acquisition strategy, cash
paid for acquisitions was $68.5 million, $192.2 million, and $189.7 million for
1996, 1997 and 1998, respectively. In addition, in connection with certain of
the 1997 Acquisitions and 1998 Acquisitions, the Company issued Common Stock
and options to purchase Common Stock with an aggregate fair value of $88.9 and
$67.1 million, respectively. From January 1, 1999 through March 1, 1999, the
Company acquired four additional RIMS businesses for total consideration of
approximately $55 million.

     In February 1999, the Company entered into definitive agreements to
acquire all of the outstanding capital stock of Data Base and related real
estate, a RIMS company based in Bellevue, Washington, operating in 12 markets,
for total consideration of approximately $115 million. The consideration will
consist of $46 million in Common Stock (1,476,577 shares), and the balance in
cash and assumed indebtedness.

     For 1996, 1997 and 1998, the Company's growth-related capital expenditures
were $23.3 million, $37.1 million and $54.6 million, respectively.
Growth-related capital expenditures consist primarily of investments in racking
systems, management information systems, new buildings and improvements to
existing facilities. For 1996, 1997 and 1998, the Company's capital
expenditures made in order to maintain the Company's current revenue stream
were $1.1 million, $1.2 million and $1.9 million, respectively.

     The Company currently estimates that its capital expenditures (other than
capital expenditures related to future acquisitions, which cannot be presently
estimated) for 1999 will be approximately $65 million. The Company expects to
fund these expenditures with cash flows from operations.

     In addition, the Company incurs costs (net of revenues received for the
initial transfer of records) related to the acquisition of large volume
accounts. For 1996, 1997 and 1998, the Company's additions to customer
acquisition costs were $1.6 million, $1.6 million and $3.0 million,
respectively.


                                       30
<PAGE>

Acquisitions

     The Company's liquidity and capital resources have been significantly
impacted by acquisitions within the RIMS industry and, given the Company's
acquisition strategy, may be significantly impacted for the foreseeable future.
 

     The Company has historically financed the cash portion of its acquisitions
with borrowings under its credit agreements in conjunction with cash flows
provided by operations and with the net proceeds of issuances of debt
securities and Common Stock. The Company's future interest expense may increase
significantly as a result of the additional indebtedness the Company may incur
to finance possible future acquisitions. To the extent that future acquisitions
are financed by additional borrowings under the Credit Agreement or other
credit facilities, or the future issuance of debt securities, the resulting
increase in debt and interest expense could have a negative effect on such
measures of liquidity as debt to equity, EBITDA to debt and EBITDA to interest
expense.

     In connection with its acquisition program, the Company undertakes certain
restructurings of the acquired businesses. Formalized restructuring plans for
acquisitions are completed within one year of the date of acquisition. The
restructuring activities include reductions in staffing levels, elimination of
duplicate facilities and other costs associated with exiting certain activities
of the acquired businesses. In connection with these restructuring activities,
the Company established reserves of $6.6 million and $11.4 million in 1997 and
1998, respectively, as part of the purchase accounting for the acquisitions.
During 1997 and 1998, the Company expended $2.2 million and $4.7 million,
respectively, for restructuring costs. In addition, the Company made $0.3
million and $1.6 million of adjustments in 1997 and 1998, respectively, which
reduced goodwill, as a result of management finalizing restructuring plans
within one year of acquisition. These expenditures consisted primarily of
severance costs and costs relating to exiting facilities. At December 31, 1998,
the Company had a total of $10.5 million accrued for restructuring costs for
all of its then completed acquisitions. The Company expects to record reserves
for the acquisitions completed between January 1, 1999 and March 1, 1999 and is
currently evaluating its restructuring plans. The Company will continue to
re-evaluate its restructuring plans regarding these acquisitions during the
year following their consummation.


Future Capital Needs

     The Company's ability to generate sufficient cash to fund its needs
depends generally on the results of its operations and the availability of
financing. Management believes that cash flows from operations in conjunction
with borrowings from existing and possible future debt financings will be
sufficient for the foreseeable future to meet debt service requirements and to
make possible future acquisitions and capital expenditures. However, there can
be no assurance in this regard or that the terms available for any future
financing, if required, would be favorable to the Company.


Seasonality

     Historically, the Company's businesses have not been subject to
seasonality in any material respect.


Inflation

     Certain of the Company's expenses, such as wages and benefits, occupancy
costs and equipment repair and replacement, are subject to normal inflationary
pressures. Although the Company to date has been able to offset inflationary
cost increases through increased operating efficiencies, the Company cannot
assure that it will be able to offset any future inflationary cost increases
through similar efficiencies or increased storage or service charges.


Year 2000 Readiness


General

     The Year 2000 ("Y2K") problem refers to the inability of systems,
primarily software systems, to properly recognize and process date sensitive
information relating to the year 2000 and beyond. In order to respond to this
problem, the Company has established a Y2K Project Plan (the "Plan"). The Plan
is


                                       31
<PAGE>

comprised of five major phases: awareness, assessment, renovation, validation
and implementation. These phases are applied to three general categories:
operational systems (consisting primarily of inventory and billing systems),
financial accounting systems and other products and services obtained from
third parties.

Operational Systems

     The Company's primary operational systems for its RIMS segment are
Safekeeper, an internally developed software application used mainly in its
business records operations, and MediaLink, a software application obtained
from a third party used mainly in the Company's data security operations.
Additionally, as an active acquirer of businesses, the Company currently uses,
and will continue to use, several different legacy operational systems that
have been, and will be, inherited through its ongoing acquisition program. Both
Safekeeper and MediaLink are Y2K compliant. Based on the Company's assessment,
management believes that approximately 85% of its business units are currently
operating with an operational system that is Y2K compliant or upgradable to a
currently available Y2K compliant version of the existing software. Conversion
of the remaining business units to a Y2K compliant operational system is
currently underway.

     The Company's IT Staffing business uses commercially available,
off-the-shelf software packages from nationally recognized vendors for its
primary software applications, which include its financial accounting, time and
billing and resume retrieval database systems. Based on publicly available
certifications from the vendors, the Company believes that these software
packages are Y2K compliant. The IT Staffing business upgraded its accounting
software to the Y2K compliant release in December 1998, and expects to complete
the upgrade of its time and billing software to the Y2K compliant releases by
the end of the second quarter of 1999.

Financial Accounting Systems

     As part of its normal course of business, the Company has several system
improvement initiatives underway. One such initiative involves the installation
of new financial accounting software from Oracle Corporation ("Oracle"). Oracle
has certified that its accounting software is Y2K compliant. The installation
of the Oracle software is substantially complete and is expected to be
concluded by the end of the third quarter of 1999.

     The Company currently uses, and will continue to use, several different
legacy accounting systems that have been, and will be, inherited through its
ongoing acquisition program. Accordingly, the Company continues to assess these
newly acquired legacy systems and, based on vendor certifications, believes
that substantially all of these systems are Y2K compliant. The Company is in
the process of remediating the remaining systems and expects to complete such
remediation before the end of the third quarter of 1999.

Products and Services Obtained from Third Parties

     Products and services obtained from third parties are comprised mainly of
(i) facility systems, including telecommunications, climate control systems,
security systems, fire and safety systems ("Facility Systems"), and (ii)
products and services purchased from vendors, including third party payroll
processing and products for resale such as cartons and operating supplies. The
Company has substantially completed assessment of its telecommunications
systems and is in the process of implementing its remediation plan for such
systems that are not Y2K compliant. With respect to its other Facility Systems
and products and services purchased from vendors, the Company's assessment
phase is substantially complete and its implementation phase is expected to be
completed by the end of the third quarter of 1999.

Customers

     The Company's customer base is diversified in terms of revenue and
industry concentration. Only two customers account for more than 1% of total
revenues and no customer accounts for more than 2% of total revenues. Given the
nature of the services the Company provides to its customers, as well as the
diversification of its customer base, the Company does not believe that Y2K
issues associated with its customers will have a material adverse effect on its
financial condition or results of operations.


                                       32
<PAGE>

Costs

     Based on the Company's current assessment of its Y2K issues, the total
cost associated with required modifications to become Y2K compliant is not
expected to be material to the Company's financial position. Certain costs
associated with the Company's pre-existing system improvement initiatives and
the purchase of equipment (including the financial accounting software
developed by Oracle, Safekeeper and MediaLink) will be capitalized and
amortized over their useful lives. Certain payroll and related costs represent
the redeployment of existing staff resources rather than incremental costs to
the Company. All other costs associated with the Plan will be expensed as
incurred. Costs associated with the Plan to be incurred in 1999 are estimated
to be under $3 million and are included in the Company's operating and capital
budgets for 1999.

Contingency Plans

     As part of its Y2K project, the Company has analyzed its points of major
risk and is developing contingency plans as a backup to its remediation effort.
 

Year 2000 Risks

     The failure on the part of the Company or one of its suppliers to correct
a material Y2K problem could result in an interruption in, or a failure of,
certain normal business activities or operations, although the extent of such a
business disruption is not known at this time. The implementation of the Plan
is expected to significantly reduce the Company's level of uncertainty about
the Y2K problem. The Company believes that, with the completion of its existing
system improvement initiatives and the successful execution of the Plan, the
likelihood of significant interruptions of normal operations will be
substantially reduced. However, the Company cannot assure that it will be able
to address the Y2K issues for all of its software applications and major
operating systems in a timely manner or that it will not encounter unexpected
difficulties or significant expenses. If the Company or its major third party
suppliers of products and services fail to adequately address their Y2K issues,
or the Company fails to successfully integrate or convert its computer systems
generally, the Company's business, financial condition or results of operations
could be materially adversely affected.

Item 7A. Quantitative and Qualitative Disclosure About Market Risk.
     The Company does not hold any derivative financial instruments, derivative
commodity instruments or other financial instruments. The acquisition of BDM,
which was financed with British pounds, as described in Note 2 to the
Consolidated Financial Statements, and any other international investments, if
completed, may be subject to risks and uncertainties relating to fluctuations
in currency valuation.

     The Company engages neither in speculative nor derivative trading
activities. As of December 31, 1998, the Company had $35.3 million of debt
outstanding with a weighted average variable interest rate of 6.45% and $420.9
million of fixed rate debt. If the weighted average variable interest rate had
increased by 1% to 7.45%, such increase would have had a negative impact on the
Company's net income for the year ended December 31, 1998 of approximately
$212,000. See Note 4 to the Consolidated Financial Statements for a discussion
of the Company's long-term indebtedness, including the fair values of such
indebtedness as of December 31, 1998.


                                       33
<PAGE>

Item 8. Financial Statements and Supplementary Data.


                         INDEX TO FINANCIAL STATEMENTS


<TABLE>
<CAPTION>
                                                                                          Page
                                                                                         -----
<S>                                                                                      <C>
Report of Independent Public Accountants ...............................................  35
Consolidated Balance Sheets, December 31, 1997 and 1998 ................................  36
Consolidated Statements of Operations, Years ended December 31, 1996, 1997 and 1998 ....  37
Consolidated Statements of Stockholders' Equity, Years ended December 31, 1996, 1997 and
 1998 ..................................................................................  38
Consolidated Statements of Cash Flows, Years ended December 31, 1996, 1997 and 1998 ....  39
Notes to Consolidated Financial Statements .............................................  40
Financial Statement Schedule:
 Report of Independent Public Accountants ..............................................  58
 Schedule II--Valuation and Qualifying Accounts ........................................  59
</TABLE>

                                       34
<PAGE>

                   REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To the Board of Directors of Iron Mountain Incorporated:

     We have audited the accompanying consolidated balance sheets of Iron
Mountain Incorporated (a Delaware corporation) and its subsidiaries as of
December 31, 1997 and 1998, and the related consolidated statements of
operations, stockholders' equity and cash flows for each of the three years in
the period ended December 31, 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

     We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Iron Mountain Incorporated
and its subsidiaries as of December 31, 1997 and 1998, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1998, in conformity with generally accepted accounting principles.
 




                                              /s/ ARTHUR ANDERSEN LLP


Boston, Massachusetts

February 19, 1999

 

                                       35
<PAGE>

                           IRON MOUNTAIN INCORPORATED
                           CONSOLIDATED BALANCE SHEETS
                                (In thousands)

<TABLE>
<CAPTION>
                                                                    December 31,
                                                             ---------------------------
                                                                 1997           1998
                                                             ------------   ------------
<S>                                                          <C>            <C>
                                                ASSETS
Current Assets:
 Cash and cash equivalents ...............................    $  24,510      $   1,715
 Accounts receivable (less allowances of $1,929 and $3,316
  as of 1997 and 1998, respectively) .....................       40,545         75,565
 Receivable from insurance company .......................        5,410            329
 Foreign currency transaction receivable .................           --         45,885
 Deferred income taxes ...................................        5,896         10,474
 Prepaid expenses and other ..............................        5,566          9,969
                                                              ---------      ---------
  Total Current Assets ...................................       81,927        143,937
Property, Plant and Equipment:
 Property, plant and equipment ...........................      245,174        354,101
 Less--Accumulated depreciation ..........................      (61,276)       (87,358)
                                                              ---------      ---------
  Net Property, Plant and Equipment ......................      183,898        266,743
Other Assets:
 Goodwill, net ...........................................      340,852        527,235
 Customer acquisition costs, net .........................        7,319          9,574
 Deferred financing costs, net ...........................       14,429         13,392
 Other ...................................................        8,361          6,504
                                                              ---------      ---------
  Total Other Assets .....................................      370,961        556,705
                                                              ---------      ---------
  Total Assets ...........................................    $ 636,786      $ 967,385
                                                              =========      =========
                             LIABILITIES AND STOCKHOLDERS'EQUITY
Current Liabilities:
 Current portion of long-term debt .......................    $     520      $   1,731
 Note payable ............................................        3,000             --
 Accounts payable ........................................       11,022         20,620
 Accrued expenses ........................................       28,131         48,539
 Foreign currency transaction payable ....................           --         46,200
 Deferred income .........................................       11,931         26,043
 Other current liabilities ...............................        1,149            339
                                                              ---------      ---------
  Total Current Liabilities ..............................       55,753        143,472
Long-term Debt, net of current portion ...................      424,498        454,447
Other Long-Term Liabilities ..............................        5,336          8,925
Deferred Rent ............................................        8,202          9,616
Deferred Income Taxes ....................................        5,264         12,043
Commitments and Contingencies (see Note 11)
Stockholders' Equity:
 Preferred stock .........................................           --             --
 Common stock ............................................          202            294
 Additional paid-in capital ..............................      151,904        355,927
 Accumulated deficit .....................................      (14,373)       (17,339)
                                                              ---------      ---------
  Total Stockholders' Equity .............................      137,733        338,882
                                                              ---------      ---------
  Total Liabilities and Stockholders' Equity .............    $ 636,786      $ 967,385
                                                              =========      =========
</TABLE>


The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       36
<PAGE>

                           IRON MOUNTAIN INCORPORATED
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (In thousands, except per share data)



<TABLE>
<CAPTION>
                                                                    Year Ended December 31,
                                                              1996            1997            1998
<S>                                                      <C>             <C>             <C>
Revenues:
 Storage .............................................     $  85,826       $ 125,968       $ 230,702
 Service and storage material sales ..................        52,892          82,797         192,810
                                                           ---------       ---------       ---------
  Total Revenues .....................................       138,718         208,765         423,512
Operating Expenses:
 Cost of sales (excluding depreciation) ..............        70,747         106,879         220,980
 Selling, general and administrative .................        34,342          51,668         105,025
 Depreciation and amortization .......................        16,936          27,107          49,152
                                                           ---------       ---------       ---------
  Total Operating Expenses ...........................       122,025         185,654         375,157
                                                           ---------       ---------       ---------
Operating Income .....................................        16,693          23,111          48,355
Interest Expense .....................................        14,901          27,712          45,756
Other Income, net ....................................            --              --           1,384
                                                           ---------       ---------       ---------
  Income (Loss) Before Provision (Benefit) for
   Income Taxes ......................................         1,792          (4,601)          3,983
Provision (Benefit) for Income Taxes .................         1,435             (80)          6,949
                                                           ---------       ---------       ---------
  Income (Loss) Before Extraordinary Charge ..........           357          (4,521)         (2,966)
Extraordinary Charge from Early Retirement of Debt
 (Net of Tax Benefit of $1,413).......................         2,126              --              --
                                                           ---------       ---------       ---------
  Net Loss ...........................................        (1,769)         (4,521)         (2,966)
Accretion of Redeemable Put Warrant ..................           280              --              --
                                                           ---------       ---------       ---------
  Net Loss Applicable to Common Stockholders .........     $  (2,049)      $  (4,521)      $  (2,966)
                                                           =========       =========       =========
Income (Loss) per Common Share--Basic and Diluted
 (See Notes 6 and 7):
 Income (loss) before extraordinary charge ...........     $    0.00       $   (0.26)      $   (0.11)
 Extraordinary charge (net of tax benefit) ...........       (  0.15)             --              --
                                                           ---------       ---------       ---------
 Net Loss Applicable to Common Stockholders ..........     $   (0.15)      $   (0.26)      $   (0.11)
                                                           =========       =========       =========
Weighted Average Common Shares Outstanding ...........        13,911          17,172          27,470
                                                           =========       =========       =========
</TABLE>

 

The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       37
<PAGE>


                           IRON MOUNTAIN INCORPORATED
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                        (In thousands, except share data)


<TABLE>
<CAPTION>
                                                                       Common Stock
                                                       --------------------------------------------
                                   Preferred Stock        Class A Voting             Voting
                                ---------------------- --------------------- ----------------------
                                    Shares     Amount     Shares     Amount      Shares     Amount
                                ------------- -------- ------------ -------- ------------- --------
<S>                             <C>           <C>      <C>          <C>      <C>           <C>
Balance, December 31, 1995          499,395   5            44,888     --              --       --
Conversion of preferred stock
 to common stock                   (499,395)   (5)        (44,888)    --      10,915,712      109
Issuance of shares in initial
 public offering                         --   --               --     --       3,525,000       36
Exercise of stock options                --   --               --     --          10,344       --
Issuance of shares for
 services                                --   --               --     --           1,372       --
Conversion of common
 stock--nonvoting to
 common stock--voting                    --   --               --     --          34,058       --
Net loss                                 --   --               --     --              --       --
Warrant accretion                        --   --               --     --              --       --
                                   --------   ---         -------     --      ----------      ---
Balance, December 31, 1996               --   --               --     --      14,486,486      145
Exercise of stock options                --   --               --     --         123,657        1
Issuance of shares for
 services                                --   --               --     --           2,751       --
Shares and options issued in
 connection with acquisitions,
 net of issuance costs                   --   --               --     --       4,851,341       49
Conversion of common
 stock--nonvoting to
 Common Stock--voting                    --   --               --     --         715,942        7
Net loss                                 --   --               --     --              --       --
                                   --------   ---         -------     --      ----------      ---
Balance, December 31, 1997               --   --               --     --      20,180,177      202
Shares and options issued in
 connection with acquisitions,
 net of issuance costs                   --   --               --     --       2,645,913       26
Issuance of shares in
 secondary public offering               --   --               --     --       6,037,500       60
Exercise of stock options                --   --               --     --         566,615        6
Net loss                                 --   --               --     --              --       --
                                   --------   ---         -------     --      ----------      ---
Balance, December 31, 1998               --   --               --     --      29,430,205      294
                                   ========   ===         =======     ==      ==========      ===



<CAPTION>
                                    Common Stock
                                ---------------------
                                      Non-Voting       Additional                     Total
                                ---------------------    Paid-in    Accumulated   Stockholders'
                                   Shares     Amount     Capital      Deficit        Equity
                                ------------ -------- ------------ ------------- --------------
<S>                             <C>          <C>      <C>          <C>           <C>
Balance, December 31, 1995              --   --          28,809        (7,803)       21,011
Conversion of preferred stock
 to common stock                   750,000   7             (111)           --            --
Issuance of shares in initial
 public offering                        --   --          33,249            --        33,285
Exercise of stock options               --   --             118            --           118
Issuance of shares for
 services                               --   --              19            --            19
Conversion of common
 stock--nonvoting to
 common stock--voting              (34,058)  --              --            --            --
Net loss                                --   --              --        (1,769)       (1,769)
Warrant accretion                       --   --              --          (280)         (280)
                                   -------   --          ------        ------        ------
Balance, December 31, 1996         715,942   7           62,084        (9,852)       52,384
Exercise of stock options               --   --           1,532            --         1,533
Issuance of shares for
 services                               --   --              52            --            52
Shares and options issued in
 connection with acquisitions,
 net of issuance costs                  --   --          88,236            --        88,285
Conversion of common
 stock--nonvoting to
 Common Stock--voting             (715,942)   (7)            --            --            --
Net loss                                --   --              --        (4,521)       (4,521)
                                  --------   ---         ------        ------        ------
Balance, December 31, 1997              --   --         151,904       (14,373)      137,733
Shares and options issued in
 connection with acquisitions,
 net of issuance costs                  --   --          66,888            --        66,914
Issuance of shares in
 secondary public offering              --   --         131,961            --       132,021
Exercise of stock options               --   --           5,174            --         5,180
Net loss                                --   --              --        (2,966)       (2,966)
                                  --------   ---        -------       -------       -------
Balance, December 31, 1998              --   --         355,927       (17,339)      338,882
                                  ========   ===        =======       =======       =======
</TABLE>


The accompanying notes are an integral part of these consolidated financial
                                   statements.
 

                                       38
<PAGE>

                           IRON MOUNTAIN INCORPORATED
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                       Year Ended December 31,
                                                            ---------------------------------------------
                                                                 1996            1997            1998
                                                            -------------   -------------   -------------
<S>                                                         <C>             <C>             <C>
Cash Flows from Operating Activities:
 Net loss ...............................................    $   (1,769)     $   (4,521)     $   (2,966)
 Adjustments to reconcile net loss to cash flows
   provided by operating activities:
  Depreciation and amortization .........................        16,936          27,107          49,152
  Amortization of financing costs .......................           857           1,095           1,801
  Provision for doubtful accounts .......................           639             874           1,735
  Extraordinary loss on early retirement of debt ........         3,539              --              --
  Loss on foreign currency transaction ..................            --              --             316
  Other, net ............................................            --              52              --
Changes in Assets and Liabilities (exclusive of acquisitions):
  Accounts receivable ...................................        (4,395)         (4,433)        (14,064)
  Inventory, prepaid expenses and other assets ..........          (878)         (2,949)          4,340
  Deferred income taxes .................................          (973)          1,190           9,058
  Accounts payable ......................................        (1,278)          4,653           5,018
  Accrued expenses ......................................         3,642          (1,115)            370
  Other long-term liabilities ...........................          (193)         (1,240)          3,587
  Deferred rent .........................................          (332)            551           1,414
  Deferred income .......................................           161             671           7,369
  Other liabilities .....................................           (56)            485              --
                                                             ----------      ----------      ----------
   Cash Flows Provided by Operating Activities ..........        15,900          22,420          67,130
                                                             ----------      ----------      ----------
Cash Flows from Investing Activities:
 Cash paid for acquisitions .............................       (68,496)       (192,230)       (189,729)
 Capital expenditures ...................................       (24,446)        (38,320)        (56,454)
 Additions to customer acquisition costs ................        (1,642)         (1,635)         (3,024)
 Other, net .............................................           (25)           (333)             --
                                                             ----------      ----------      ----------
   Cash Flows Used in Investing Activities ..............       (94,609)       (232,518)       (249,207)
                                                             ----------      ----------      ----------
Cash Flows from Financing Activities:
 Repayment of debt ......................................      (171,730)       (178,181)       (171,080)
 Net proceeds from borrowings ...........................        69,570         167,850         194,811
 Net proceeds from sale of senior subordinated notes.....       160,050         242,640              --
 Net proceeds from initial public offering ..............        33,285              --              --
 Proceeds from secondary equity offering, net of ........
   underwriting discount ................................            --              --         132,905
 Retirement of redeemable put warrant ...................        (6,612)             --              --
 Prepayment penalties on early retirement of debt .......        (1,785)             --              --
 Exercise of stock options ..............................            66             786           4,482
 Financing costs ........................................        (2,267)         (1,291)           (764)
 Stock issuance costs ...................................            --            (649)         (1,072)
                                                             ----------      ----------      ----------
  Cash Flows Provided by Financing Activities ...........        80,577         231,155         159,282
                                                             ----------      ----------      ----------
Increase (decrease) in Cash and Cash Equivalents ........         1,868          21,057         (22,795)
Cash and Cash Equivalents, Beginning of Year ............         1,585           3,453          24,510
                                                             ----------      ----------      ----------
Cash and Cash Equivalents, End of Year ..................    $    3,453      $   24,510      $    1,715
                                                             ==========      ==========      ==========
Supplemental Information:
Cash Paid for Interest ..................................    $   11,590      $   22,440      $   42,407
                                                             ==========      ==========      ==========
Cash Paid for Income Taxes ..............................    $      197      $    1,306      $    1,700
                                                             ==========      ==========      ==========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       39
<PAGE>

                          IRON MOUNTAIN INCORPORATED


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               DECEMBER 31, 1998
                        (In thousands except share data)

1. Nature of Business

     The accompanying financial statements represent the consolidated accounts
of Iron Mountain Incorporated and its subsidiaries (collectively "Iron
Mountain" or the "Company"). Iron Mountain is an international full-service
provider of records and information management and related services for all
media in various locations throughout the United States and the United Kingdom
to Fortune 500 companies and numerous legal, banking, health care, accounting,
insurance, entertainment and government organizations. The Company also
provides information technology staffing ("IT Staffing") services.



2. Summary of Significant Accounting Policies

     a. Principles of Consolidation

     The accompanying financial statements reflect the financial position and
results of operations of Iron Mountain on a consolidated basis. All significant
intercompany account balances have been eliminated.

     b. Use of Estimates

     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

     c. Cash and Cash Equivalents

     The Company defines cash and cash equivalents to include cash on hand and
cash invested in short-term securities which have original maturities of less
than 90 days. Cash and cash equivalents are carried at cost, which approximates
fair market value.

     d. Foreign Currency Transaction

     On December 31, 1998, the Company had a receivable denominated in British
pounds from, and a payable in U.S. dollars to, a bank as a result of exercising
a foreign exchange agreement on December 30, 1998. Included in other income,
net, for the year ended December 31, 1998 is a $316 loss on the remeasurement
of the receivable based on the applicable exchange rate on December 31, 1998.
The British pounds were being acquired to finance the BDM acquisition discussed
in Note 15.

     In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133 establishes new standards
regarding accounting and reporting requirements for derivative instruments and
hedging activities. It requires that entities recognize all derivatives as
either assets or liabilities in the statement of financial position and measure
those instruments at fair value. The new standard is effective for fiscal years
beginning after June 15, 1999. The Company is presently studying the effect of
the new pronouncement and, as required, expects to adopt SFAS No. 133 beginning
January 1, 2000. As of December 31, 1998, the Company did not own any
derivative instruments.

     e. Property, Plant and Equipment

     Property, plant and equipment are stated at cost and depreciated using the
straight-line method with the following useful lives:


                                       40
<PAGE>

                          IRON MOUNTAIN INCORPORATED


           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)
2. Summary of Significant Accounting Policies (continued)


<TABLE>
<S>                                            <C>
      Buildings .............................. 40 to 50 years
      Leasehold improvements ................. 8 to 10 years or the life of the
                                                lease, whichever is shorter
      Racking ................................ 10 to 20 years
      Warehouse equipment/vehicles ........... 5 to 10 years
      Furniture and fixtures ................. 3 to 5 years
      Computer hardware and software ......... 3 years
</TABLE>

     Property, plant and equipment consist of the following:

<TABLE>
<CAPTION>
                                                       December 31,
                                                 -------------------------
                                                     1997          1998
                                                 -----------   -----------
<S>                                              <C>           <C>
      Land and buildings .....................   $ 67,870      $ 99,678
      Leasehold improvements .................     19,583        27,509
      Racking ................................     94,960       127,287
      Warehouse equipment/vehicles ...........     12,290        23,239
      Furniture and fixtures .................      4,875         9,241
      Computer hardware and software .........     29,913        47,400
      Construction in progress ...............     15,683        19,747
                                                 --------      --------
                                                 $245,174      $354,101
                                                 --------      --------
</TABLE>

     The Company develops various software applications for internal use.
Payroll and related costs for employees who are directly associated with and
who devote time to the development of internal-use computer software projects
(to the extent of the time spent directly on the project) are capitalized and
amortized over the useful life of the software. Capitalization begins when the
design stage of the application has been completed, it is probable that the
project will be completed and the application will be used to perform the
function intended. Amortization begins when the software is placed in service.

     In March 1998, the American Institute of Certified Public Accountants
issued Statement of Position 98-1, "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use" ("SOP 98-1"). SOP 98-1
requires computer software costs associated with internal use software to be
expensed as incurred until certain capitalization criteria are met. SOP 98-1
also defines which types of costs should be capitalized and which should be
expensed. The Company will adopt SOP 98-1 prospectively beginning January 1,
1999. The new accounting will result in certain costs being expensed starting
in 1999 that would have been capitalized under the previous policy.

     Minor maintenance costs are expensed as incurred. Major improvements to
the leased buildings are capitalized as leasehold improvements and depreciated.
 

     f. Goodwill

     Goodwill reflects the cost in excess of fair value of the net assets of
companies acquired in purchase transactions. Goodwill is amortized using the
straight-line method from the date of acquisition over the expected period to
be benefited, currently estimated at 25 to 30 years. The Company assesses the
recoverability of goodwill, as well as other long-lived assets based upon
expectations of future undiscounted cash flows in accordance with SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to Be Disposed Of." Accumulated amortization of goodwill was $26,931 and
$46,333 as of December 31, 1997 and 1998, respectively.


                                       41
<PAGE>

                          IRON MOUNTAIN INCORPORATED


           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)
2. Summary of Significant Accounting Policies (continued)

     g. Customer Acquisition Costs

     Costs related to the acquisition of large volume accounts, net of revenues
received for the initial transfer of the records, are capitalized and amortized
for an appropriate period not to exceed 12 years. If the customer terminates
its relationship with the Company, the unamortized cost is charged to expense.
However, in the event of such termination, the Company collects, and records as
income, permanent removal fees that generally equal or exceed the amount of the
unamortized costs. As of December 31, 1997 and 1998, those costs were $9,769
and $12,793, respectively, and accumulated amortization of those costs were
$2,450 and $3,219, respectively.

     h. Deferred Financing Costs

     Deferred financing costs are amortized over the life of the related debt
using the effective interest rate method. If debt is retired early, unamortized
deferred financing costs are written off as an extraordinary charge in the
period the debt is retired. As of December 31, 1997 and 1998, deferred
financing costs were $16,163 and $16,928, respectively, and accumulated
amortization of those costs were $1,734 and $3,536, respectively.

     i. Other Assets

     In April 1998, the American Institute of Certified Public Accountants
issued Statement of Position 98-5, "Reporting on the Costs of Start-Up
Activities" ("SOP 98-5"). SOP 98-5 requires the costs of start-up activities,
including organization costs, to be expensed as incurred. The Company will
adopt SOP 98-5 beginning January 1, 1999. Management believes that the adoption
of SOP 98-5 will not have a material impact on the Company's financial
statements.

     j. Accrued Expenses

     Accrued expenses consist of the following:

<TABLE>
<CAPTION>
                                           December 31,
                                      -----------------------
                                         1997         1998
                                      ----------   ----------
<S>                                   <C>          <C>
   Incentive compensation .........    $ 3,932      $ 5,934
   Interest .......................      8,427        9,975
   Workers' compensation ..........      3,022        2,948
   Payroll and vacation ...........      3,432        7,451
   Restructuring costs ............      5,443       10,482
   Other ..........................      3,875       11,749
                                       -------      -------
                                       $28,131      $48,539
                                       -------      -------
</TABLE>

     k. Revenues

     The Company's revenues consist of storage revenues and service and storage
material sales revenues. Storage revenues consist of periodic charges related
to the storage of materials (either on a per unit or per cubic foot of records
basis). In certain circumstances, based upon customer requirements, storage
revenues include periodic charges associated with normal, recurring service
activities. Service and storage material sales revenues are comprised of
charges for related service activities and the sale of storage materials. In
certain circumstances, storage material sales are recorded net of product costs
when the Company functions as a sales representative of the product
manufacturer and does not receive or take title to the products. Customers are
generally billed on a monthly basis on contractually agreed-upon terms.

     Storage and service revenues are recognized in the month the respective
service is provided. Storage material sales are recognized when shipped to the
customer. Amounts related to future storage


                                       42
<PAGE>

                          IRON MOUNTAIN INCORPORATED


           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)
2. Summary of Significant Accounting Policies (continued)

for customers where storage fees are billed in advance are accounted for as
deferred income and amortized over the applicable period.


     In 1998, service revenues include IT Staffing revenues which are
recognized as the services are rendered.


     l. Deferred Rent


     The Company has entered into various leases for buildings used in the
storage of records. Certain leases have fixed escalation clauses or other
features which require normalization of the rental expense over the life of the
lease resulting in deferred rent being reflected in the accompanying balance
sheets. In addition, the Company has assumed various unfavorable leases in
connection with certain of its acquisitions. The discounted present value of
these lease obligations in excess of market rate at the date of the acquisition
was recorded as a deferred rent liability and is being amortized over the
remaining lives of the respective leases.


     m. Stock-Based Compensation


     Effective January 1, 1996, the Company adopted the provisions of SFAS No.
123, "Accounting for Stock-Based Compensation." The Company has elected to
continue to account for stock options at their intrinsic value with disclosure
of the effects of fair value accounting on net income (loss) and earnings
(loss) per share on a pro forma basis.


     n. Interest Rate Caps


     Premiums paid for interest rate cap agreements are amortized to interest
expense over the terms of the cap. Unamortized premiums are included in other
assets in the accompanying consolidated balance sheets. Amounts receivable, if
any, under cap agreements are accounted for as a reduction of interest expense.
As of December 31, 1998, there were no interest rate cap agreements
outstanding.


     o. Income (Loss) Per Common Share


     During 1997, the Company adopted SFAS No. 128, "Earnings Per Share," and
restated its net income (loss) per share for the year ended 1996 (see Note 7).


     p. Reclassifications


     Certain reclassifications have been made to the 1996 and 1997 financial
statements to conform to the 1998 presentation.


3. Common Stock Split


     On June 30, 1998, the Company's Board of Directors authorized and approved
a three-for-two stock split effected in the form of a dividend on the Company's
Common Stock. Such additional shares of Common Stock were issued on July 31,
1998 to all stockholders of record as of the close of business on July 17,
1998. All issued and outstanding share and per share amounts in the
accompanying financial statements and Notes thereto have been restated to
reflect the stock split.


4. Debt


     Long-term debt consists of the following:

                                       43
<PAGE>

                          IRON MOUNTAIN INCORPORATED


           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)
4. Debt (continued)


<TABLE>
<CAPTION>
                                                                              December 31,
                                                                       --------------------------
                                                                           1997           1998
                                                                       ------------   -----------
<S>                                                                    <C>            <C>
   Revolving Credit Facility .......................................     $     --      $ 35,300
   10-1/8% Senior Subordinated Notes due 2006 (the "1996 Notes")....      165,000       165,000
   8-3/4% Senior Subordinated Notes due 2009 (the "1997 Notes") ....      249,525       249,566
   Real Estate Mortgages ...........................................       10,312         2,349
   Other ...........................................................          181         3,963
                                                                         --------      --------
   Long-term debt ..................................................      425,018       456,178
   Less current portion ............................................         (520)       (1,731)
                                                                         --------      --------
   Long-term debt, net of current portion ..........................     $424,498      $454,447
                                                                         ========      ========
</TABLE>

     a. Revolving Credit Facility


     Iron Mountain has a $250 million revolving credit facility, as amended
(the "Credit Agreement"), which is scheduled to mature on September 30, 2002.
The amendments amended and restated, among other terms, interest rates,
commitment fees and financial covenants.


     The Credit Agreement specifies certain minimum or maximum relationships
between operating cash flows (earnings before interest, taxes, depreciation,
amortization, extraordinary charges and other income) and interest, total debt
and fixed charges. There are restrictions on dividends declared by the Company,
sales or pledging of assets, acquisitions, capital expenditures and changes in
business and ownership; cash dividends are effectively prohibited. As of
December 31, 1998, the Company was in compliance with all of its debt
covenants. Loans under the Credit Agreement are secured by the capital stock of
all of the Company's domestic subsidiaries.


     The interest rate on loans under the Credit Agreement varies, at the
Company's option, on a choice of base rates plus an applicable margin. The
applicable margin varies depending on the base rate selected and certain debt
ratios. The timing of interest payments also varies with the base rate
selected. At December 31, 1998, the effective interest rate was 6.45%.


     b. 1996 Notes


     On October 1, 1996, the Company issued $165 million of 10 1/8% Senior
Subordinated Notes due 2006. Interest on the 1996 Notes is payable semiannually
on April 1 and October 1 and commenced on April 1, 1997. The net proceeds of
$160.1 million after underwriting discounts and commissions were used to repay
outstanding bank debt under the Credit Agreement and certain other
indebtedness, to fund the purchase price of an acquisition and for general
corporate purposes. In connection with the prepayment of such indebtedness, the
Company incurred an extraordinary charge of $3,539, not including related tax
benefit of $1,413, during the fourth quarter of 1996. The charge consists of a
prepayment penalty, the write-off of deferred financing costs and an original
issue discount and a loss on the termination of interest rate protection
agreements.


     The 1996 Notes contain covenants and restrictions similar to, or less
restrictive than, the Credit Agreement. During the first 36 months after the
date of issuance of the 1996 Notes, and subject to certain restrictions, the
Company may, with the net proceeds of one or more Qualified Equity Offerings,
as defined, redeem up to 35% of the 1996 Notes at a redemption price of
109.125% of their initial principal amount. After September 30, 2001, and
subject to certain restrictions, the Company may, at its option,


                                       44
<PAGE>

                          IRON MOUNTAIN INCORPORATED


           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)
4. Debt (continued)

redeem any or all of the 1996 Notes at face value, plus a premium ranging from
approximately 2% to 5% through September 30, 2004. Thereafter, the 1996 Notes
may be redeemed at face value. Additionally, under certain circumstances,
including a change of control or following certain asset sales, the holders of
the 1996 Notes may require the Company to repurchase the 1996 Notes.

     c. 1997 Notes

     On October 24, 1997, the Company issued $250 million of 8 3/4% Senior
Subordinated Notes due 2009. Interest on the 1997 Notes is payable semiannually
on March 31 and September 30 and commenced on March 31, 1998. The net proceeds
were $242.6 million after an original issue discount of $485 and underwriting
discounts and commissions.

     The 1997 Notes contain covenants and restrictions similar to, or less
restrictive than, the Credit Agreement. Prior to September 30, 2002, and
subject to certain restrictions, the Company may, at its option, redeem any or
all of the 1997 Notes at a make-whole price, as defined. On or after September
30, 2002, and subject to certain restrictions, the Company may, at its option,
redeem any or all of the 1997 Notes at face value, plus a premium of up to
approximately 4% through September 30, 2005. Thereafter, the 1997 Notes may be
redeemed at face value. Also, any time through October 23, 2000, the Company
may redeem a portion of the 1997 Notes, subject to restrictions, with the net
proceeds of one or more Qualified Equity Offerings, as defined, at a redemption
price of 108.75% of the principal amount of such 1997 Notes. Additionally,
under certain circumstances, including a change of control or following certain
asset sales, the holders of the 1997 Notes may require the Company to
repurchase the 1997 Notes.

     d. Real Estate Mortgages

     The real estate mortgages include an $8,037, 10 year, 11% mortgage based
on a 30 year amortization with a $7,495 balloon payment due October 2000. The
mortgage was repaid in full during 1998. Also included in real estate mortgages
is a $3,000, 8% note that is payable in various installments commencing in 1997
and maturing in November 2006.

     e. Other

     Other long-term debt includes various notes and obligations assumed by the
Company as a result of certain acquisitions completed by the Company during
1998.


     Maturities of long-term debt are as follows:


  Year                       Amount
  ----                      --------
  1999 .................... $  1,731
  2000 ....................      807
  2001 ....................    1,661
  2002 ....................   35,899
  2003 ....................      419
  Thereafter ..............  415,661
                            --------
                            $456,178
                            ========


     As of December 31, 1998, the 1996 and 1997 Notes were fully and
unconditionally guaranteed, on a joint and several basis, on a senior
subordinated basis, by all of the Company's direct and indirect domestic
subsidiaries (the "Subsidiary Guarantors"). The Company is a holding company
and during the periods presented substantially all of the assets of which were
the stock of the Subsidiary Guarantors,


                                       45
<PAGE>

                          IRON MOUNTAIN INCORPORATED


           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)
4. Debt (continued)

and substantially all of the operations of which were conducted by the
Subsidiary Guarantors. Accordingly, the aggregate assets, liabilities, earnings
and equity of the Subsidiary Guarantors were substantially equivalent to the
assets, liabilities, earnings and equity of the Company on a consolidated
basis. Management of the Company believes that separate financial statements
of, and other disclosures with respect to, the Subsidiary Guarantors are not
meaningful or material to investors.

     Based on the borrowing rates currently available to the Company for loans
with similar terms and average maturities, the Company has estimated the
following fair values for its long-term debt as of December 31:


<TABLE>
<CAPTION>
                                                   1997                      1998
                                          -----------------------   -----------------------
                                           Carrying       Fair       Carrying       Fair
                                            Amount        Value       Amount        Value
                                          ----------   ----------   ----------   ----------
<S>                                       <C>          <C>          <C>          <C>
   Revolving Credit Facility. .........   $    --      $    --      $ 35,300     $35,300
   1996 Notes. ........................   165,000      179,850       165,000     178,200
   1997 Notes .........................   249,525      255,000       249,566     257,500
   Real estate mortgages ..............    10,312       11,322         2,349       2,349
   Other ..............................       181          181         3,963       3,963
</TABLE>

5. Acquisitions

     The Company purchased substantially all of the assets and assumed certain
liabilities of 16, 18 and 15 records management businesses during 1996, 1997
and 1998, respectively. Each of these acquisitions was accounted for using the
purchase method of accounting, and accordingly, the results of operations for
each acquisition have been included in the consolidated results of the Company
from their respective acquisition dates. The excess of the purchase price over
the underlying fair value of the assets and liabilities of each acquisition has
been assigned to goodwill and is being amortized over the estimated benefit
period of 25 to 30 years. Consideration for the various acquisitions included:
(i) cash which was provided through the Company's Credit Agreement, a portion
of the net proceeds from the initial public offering of its common stock (the
"Initial Public Offering"), the Company's 1998 equity offering and the issuance
of the 1996 Notes and the 1997 Notes; (ii) issuance of the Company's common
stock and options to purchase the Company's common stock; and (iii) certain net
assets of a business acquired in 1997.

     A summary of the consideration paid and the allocation of the purchase
price of the acquisitions is as follows:


<TABLE>
<CAPTION>
                                                      1996          1997          1998
                                                   ----------   -----------   -----------
<S>                                                <C>          <C>           <C>
Cash Paid ......................................    $ 68,496    $192,230      $189,729
Fair Value of Common Stock Issued ..............          --      85,863        51,448
Fair Value of Options Issued ...................          --       3,071        15,655
Fair Value of Certain Net Assets of a Business
 Acquired in 1997 ..............................          --          --         3,000
                                                    --------    --------      --------
    Total Consideration ........................      68,496     281,164       259,832
                                                    --------    --------      --------
Fair Value of Assets Acquired ..................      19,476      68,774        89,053
Liabilities Assumed ............................      (4,874)    (26,932)      (38,165)
                                                    --------    --------      --------
    Fair Value of Net Assets Acquired ..........      14,602      41,842        50,888
                                                    --------    --------      --------
Recorded Goodwill ..............................    $ 53,894    $239,322      $208,944
                                                    ========    ========      ========
</TABLE>

                                       46
<PAGE>

                          IRON MOUNTAIN INCORPORATED


           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)
5. Acquisitions (continued)

     The following unaudited pro forma combined information shows the results
of the Company's operations for the years ended December 31, 1997 and 1998 as
though each of the significant acquisitions completed during 1997 and 1998 had
occurred on January 1, 1997:


<TABLE>
<CAPTION>
                                                             1997          1998
                                                         -----------   -----------
<S>                                                      <C>           <C>
   Revenues ..........................................   $393,753      $439,679
   Net Loss ..........................................    (9,013)       (4,604)
   Loss per Common Share--Basic and Diluted ..........     (0.31)        (0.16)
</TABLE>

     The pro forma results have been prepared for comparative purposes only and
are not necessarily indicative of the actual results of operations had the
acquisitions taken place as of January 1, 1997 or the results that may occur in
the future. Furthermore, the pro forma results do not give effect to all cost
savings or incremental costs which may occur as a result of the integration and
consolidation of the acquired businesses. Certain acquisitions completed in
1997 are not included in the pro forma results as their effect was immaterial.

     In connection with the acquisitions completed in 1997 and 1998, the
Company has undertaken certain restructurings of the acquired businesses. The
restructuring activities include certain reductions in staffing levels,
elimination of duplicate facilities, and other costs associated with exiting
certain activities of the acquired businesses. These restructuring activities
were recorded as costs of the acquisitions and were provided in accordance with
Emerging Issues Task Force Issue No. 95-3, "Recognition of Liabilities in
Connection with a Purchase Business Combination."

     The following is a summary of reserves related to such restructuring
activities:


<TABLE>
<CAPTION>
                                                   1997         1998
                                                ----------   ----------
<S>                                             <C>          <C>
   Reserves, beginning of the year ..........    $  1,340     $  5,443
   Reserves established .....................       6,574       11,368
   Expenditures .............................      (2,163)      (4,690)
   Adjustments to goodwill ..................        (308)      (1,639)
                                                 --------     --------
   Reserves, end of the year ................    $  5,443     $ 10,482
                                                 ========     ========
</TABLE>

6. Capital Stock, Redeemable Put Warrant and Stock Options


     a. Capital Stock


     On February 6, 1996, the Company completed its Initial Public Offering and
issued 3,525,000 shares of common stock--voting.


     In connection with the Initial Public Offering, the Board of Directors
approved, and the stockholders ratified, a recapitalization and the designation
of three new classes of stock as follows:


<TABLE>
<CAPTION>
                                                       Authorized
   Class                                                 Shares
   -----                                              -----------
   <S>                                                <C>
   Preferred stock, $.01 par value..................   2,000,000
   Common stock--voting, $.01 par value.............  13,000,000
   Common stock--nonvoting, $.01 par value..........   1,000,000
</TABLE>

     Upon consummation of the Initial Public Offering, all shares of capital
stock were automatically converted into shares of common stock--voting and, in
the case of one stockholder, common stock--nonvoting. The number of common
shares received upon conversion were as follows:

                                       47
<PAGE>

                          IRON MOUNTAIN INCORPORATED


           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)
6. Capital Stock, Redeemable Put Warrant and Stock Options (continued)


<TABLE>
<CAPTION>
                                                           Common
                                                  -------------------------
                                     Preferred       Voting       Nonvoting
                                    -----------   ------------   ----------
<S>                                 <C>           <C>            <C>
Series A1 and Series A3 .........      50,000      1,480,971           --
Series A2 .......................      98,000      2,152,719      750,000
Series C ........................     351,395      7,214,690           --
                                      -------      ---------      -------
Total ...........................     499,395     10,848,380      750,000
                                      =======     ==========      =======
</TABLE>

     On March 3, 1997, the Board of Directors approved, and the stockholders
ratified, an increase in the number of authorized shares of common
stock--voting, $.01 par value, from 13,000,000 shares to 20,000,000 shares. On
January 5, 1998, the stockholders voted to increase the number of authorized
shares of common stock to 100,000,000 shares.

     On April 3, 1998, the Company issued and sold an aggregate of 6,037,500
shares (including 787,500 to cover over-allotments) of its Common Stock in an
underwritten public offering. Net proceeds to the Company after deducting
underwriters' discounts and commissions were $132.9 million and were used to
repay outstanding bank debt, to fund the cash portion of the purchase price of
certain acquisitions completed in 1998 and for general corporate purposes.

     The following table summarizes the number of shares authorized, issued and
outstanding for each issue of the Company's capital stock as of December 31:
issue of the Company's capital stock as of December 31:


<TABLE>
<CAPTION>
                                                                         Number of Shares
                                                -------------------------------------------------------------------
                                                         Authorized                   Issued and Outstanding
                                                -----------------------------   -----------------------------------
                                       Par
           Equity Type                Value         1997            1998                1997               1998
           -----------                -----     ------------   --------------   -------------------   -------------
   <S>                               <C>         <C>           <C>                   <C>              <C>
   Preferred stock ..............    $  .01      2,000,000       2,000,000                   --               --
   Common stock--voting .........       .01     20,000,000     100,000,000           20,180,177(1)    29,430,205
   Common stock--nonvoting              .01      1,000,000       1,000,000                   --               --
</TABLE>

----------------
(1) This amount gives effect to the stock dividend discussed in Note 3. The
    actual number of issued and outstanding shares as of December 31, 1997 was
    13,453,451.


     b. Redeemable Put Warrant


     In connection with the issuance of certain debt, the Company also issued a
put warrant, dated December 14, 1990 (the "Warrant"), exercisable for 666,578
shares of common stock for nominal consideration upon the occurrence of certain
specified events. On February 7, 1996, in connection with the Initial Public
Offering, the Warrant was redeemed for $6,612. This Warrant was accreted each
year using the effective interest rate method based on the Warrant's estimated
redemption value at its estimated redemption date of February 15, 1996.


     c. Stock Options


     Effective November 30, 1995, the Board of Directors approved the adoption
of the 1995 Stock Incentive Plan (the "Stock Incentive Plan"). A total of
1,500,000 shares of common stock were available for grant as options and other
rights under the Stock Incentive Plan. On March 3, 1997 and March 23, 1998, the
number of shares of common stock available for grant as options under the Stock
Incentive Plan increased to 2,100,000 and 3,000,000, respectively.


     Effective December 21, 1995, the Board of Directors approved the 1995
Stock Option Plan for Non-Employee Directors (the "Non-Employee Director Plan")
that permitted non-employee directors to elect to receive all or a portion of
their compensation in the form of common stock. Directors electing to receive


                                       48
<PAGE>

                          IRON MOUNTAIN INCORPORATED


           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)
6. Capital Stock, Redeemable Put Warrant and Stock Options (continued)

common stock received, as an incentive, an amount of stock equivalent to 110%
of the director's compensation otherwise due to be paid in cash. During 1997,
the Company issued 2,226 shares under the Non-Employee Director Plan. On June
30, 1997, the Non-Employee Director Plan was terminated.

     During 1997, the Company issued options to employees of two acquired
companies to purchase 218,879 shares of the Company's common stock. The options
replaced options held by the employees for the acquired companies' common
stock. The options were accounted for as additional purchase price based on the
fair value of the options when issued.

     During 1998, the Company assumed two existing stock option plans from an
acquired company and options under the existing plans were converted into
options to purchase 885,000 shares of the Company's common stock under such
plans. No new options may be issued under these plans. The options were
accounted for as additional purchase price based on the fair value of the
options when issued.

     The following is a summary of stock option transactions, including those
issued to employees of acquired companies, during the applicable periods:

<TABLE>
<CAPTION>
                                                                       Weighted Average
                                                         Options        Exercise Price
                                                      -------------   -----------------
<S>                                                   <C>             <C>
   Options outstanding, December 31, 1995 .........       501,461             5.44
   Granted ........................................       680,781            10.99
   Exercised ......................................       (10,344)            6.39
   Canceled .......................................       (27,606)            7.84
                                                          -------            -----
   Options outstanding, December 31, 1996 .........     1,144,292             8.68
   Granted ........................................       703,670            17.01
   Exercised ......................................      (125,711)            6.59
   Canceled .......................................       (46,203)           14.73
                                                        ---------            -----
   Options outstanding, December 31, 1997 .........     1,676,048            12.17
   Granted ........................................     1,173,018            12.02
   Exercised ......................................      (566,615)            7.88
   Canceled .......................................      (116,132)           12.36
                                                        ---------            -----
   Options outstanding, December 31, 1998 .........     2,166,319            13.21
                                                        =========            =====
</TABLE>

     Except for the options granted in connection with acquisitions, the stock
options were granted with exercise prices equal to or greater than the market
price of the stock at the date of grant. The majority of options become
exercisable ratably over a period of five years unless the holder terminates
employment. The number of options available for grant at December 31, 1998 was
894,994.

     Effective January 1, 1996, the Company adopted the provisions of SFAS No.
123, "Accounting for Stock-Based Compensation." The Company has elected to
continue to account for stock options issued to employees at their intrinsic
value with disclosure of fair value accounting on net income (loss) and
earnings (loss) per share on a pro forma basis. Had the Company elected to
recognize compensation cost based on the fair value of the options granted at
grant date as prescribed by SFAS No. 123, net loss applicable to common
stockholders and net loss per common share would have been increased to the pro
forma amounts indicated in the table below:

<TABLE>
<CAPTION>
                                                                               Year Ended December 31,
                                                                      ------------------------------------------
                                                                          1996           1997           1998
<S>                                                                   <C>            <C>            <C>
Net loss applicable to common stockholders, as reported ...........     $ (2,049)      $ (4,521)      $ (2,966)
Net loss applicable to common stockholders, pro forma .............       (2,614)        (5,411)        (3,870)
Net loss per common share--basic and diluted, as reported .........        (0.15)         (0.26)         (0.11)
Net loss per common share--basic and diluted, pro forma ...........        (0.19)         (0.31)         (0.14)
</TABLE>

                                                                                

                                       49
<PAGE>

                          IRON MOUNTAIN INCORPORATED


           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)
6. Capital Stock, Redeemable Put Warrant and Stock Options (continued)

     The weighted average fair value of options granted in 1996, 1997 and 1998
was $4.92, $11.06 and $8.92 per share, respectively. The values were estimated
on the date of grant using the Black-Scholes option pricing model. The
following table summarizes the weighted average assumptions used for grants in
the year ended December 31:



<TABLE>
<CAPTION>
              Assumption                   1996        1997       1998
-------------------------------------- ----------- ----------- ----------
<S>                                    <C>         <C>         <C>
Expected volatility .................. 24.2%       29.2%       28.4%
Risk-free interest rate ..............  6.34        5.91        5.11
Expected dividend yield .............. None        None        None
Expected life of the option .......... 7.5 years   7.0 years   5.0 years
</TABLE>

     The following table summarizes additional information regarding options
outstanding and exercisable at December 31, 1998:

<TABLE>
<CAPTION>
                                              Outstanding                              Exercisable
                             ----------------------------------------------   -----------------------------
                                                 Weighted
                                                  Average         Weighted                     Weighted
                                                 Remaining         Average                     Average
         Range of                            Contractual Life     Exercise                     Exercise
      Exercise Prices           Number          (in Years)          Price        Number         Price
--------------------------   ------------   ------------------   ----------   ------------   -----------
<S>                          <C>            <C>                  <C>          <C>            <C>
$0.75 to $0.87............       31,374              8.0         $   0.87         18,241      $   0.87
$4.32 to $5.77............      486,771              3.6             4.86        455,699          4.80
$6.63 to $9.10............      232,971              6.9             8.02        130,391          8.07
$10.25 to $10.94..........      633,993              7.4            10.42        296,739         10.50
$17.17 to $25.03..........      668,475              8.8            21.83        111,487         21.21
$26.79 to $29.19..........      112,735              9.5            28.03          4,291         27.17
                                -------              ---         --------        -------      --------
                              2,166,319              7.0         $  13.21      1,016,848      $   8.71
                              =========              ===         ========      =========      ========
</TABLE>

7. Income (Loss) Per Common Share--Basic and Diluted


     In accordance with SFAS No. 128, basic income (loss) per common share is
calculated by dividing income (loss) available to common stockholders by the
weighted average number of common shares outstanding. The calculation of
diluted income (loss) per share is consistent with that of basic income (loss)
per share but gives effect to all dilutive potential common shares (that is,
securities such as options, warrants or convertible securities) that were
outstanding during the period, unless the effect is antidilutive.


     Income (loss) per common share--basic and diluted has been calculated as
follows:


<TABLE>
<CAPTION>
                                                                           1996          1997           1998
                                                                       -----------   ------------   ------------
<S>                                                                    <C>           <C>            <C>
Income (loss) before extraordinary charge ..........................    $    357       $ (4,521)      $ (2,966)
Accretion of redeemable put warrant ................................        (280)            --             --
                                                                        --------       --------       --------
Income (loss) applicable to common stockholders, before
 extraordinary charge ..............................................          77         (4,521)        (2,966)
Extraordinary charge (net of tax benefit) ..........................      (2,126)            --             --
                                                                        --------       --------       --------
Net loss applicable to common stockholders .........................    $ (2,049)      $ (4,521)      $ (2,966)
                                                                        ========       ========       ========
Weighted average common shares outstanding (in thousands) ..........      13,911         17,172         27,470
                                                                        ========       ========       ========
</TABLE>

                                       50
<PAGE>

                          IRON MOUNTAIN INCORPORATED


           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)
7. Income (Loss) Per Common Share--Basic and Diluted (continued)


<TABLE>
<CAPTION>
                                                            1996          1997           1998
                                                        -----------   ------------   ------------
<S>                                                     <C>           <C>            <C>
Income (loss) per common share--basic and diluted:
 Income (loss) before extraordinary charge ..........    $   0.00      $   (0.26)     $   (0.11)
 Extraordinary charge (net of tax benefit) ..........     (  0.15)            --             --
                                                         --------      ---------      ---------
 Net loss applicable to common stockholders .........   $   (0.15)     $   (0.26)     $   (0.11)
                                                        =========      =========      =========
</TABLE>

     Because their effect is antidilutive, 1,144,929, 1,676,048 and 2,166,319
shares of common stock underlying outstanding options have been excluded from
the above calculation for the years ended December 31, 1996, 1997 and 1998,
respectively.

     The effect of adopting SFAS No.128 on the previously reported loss per
share data for the year ended 1996 was as follows:


<TABLE>
<CAPTION>
                                                                                1996
                                                                            -----------
<S>                                                                         <C>
   Primary and fully diluted net loss per share (as previously reported)      $ (0.14)
   Effect of SFAS No. 128 ...............................................       (0.01)
   Net loss per common share--basic and diluted .........................       (0.15)
                                                                              =======
</TABLE>

8. Income Taxes

     The Company accounts for income taxes in accordance with SFAS No. 109,
which requires the recognition of deferred tax assets and liabilities for the
expected tax consequences of temporary differences between the tax and
financial reporting bases of assets and liabilities.

     The Company has estimated federal net operating loss carryforwards of
$46,153 at December 31, 1998 to reduce future federal income taxes, if any,
which begin to expire in 2005. The preceding net operating loss carryforwards
do not include preacquisition net operating loss carryforwards of Arcus Group.
As a result of the litigation relating to Arcus Group's net operating loss
carryforwards, the Company has not recognized the deferred tax asset generated
by such loss carryforwards. If the litigation is resolved favorably, any tax
benefit realized will be recorded as a reduction of goodwill. The Company also
has estimated state net operating loss carryforwards of approximately $17,951
to reduce future state income taxes, if any. Additionally, the Company has
alternative minimum tax credit carryforwards of $587, which have no expiration
date and are available to reduce future income taxes, if any.


                                       51
<PAGE>

                          IRON MOUNTAIN INCORPORATED


           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)
8. Income Taxes (continued)

     The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities are presented
below:


<TABLE>
<CAPTION>
                                                                                    December 31,
                                                                             ---------------------------
                                                                                 1997           1998
                                                                             ------------   ------------
<S>                                                                          <C>            <C>
   Deferred Tax Assets:
    Accrued liabilities ..................................................    $   4,726      $   8,033
    Deferred rent ........................................................        3,411          3,767
    Net operating loss carryforwards .....................................        7,360         16,759
    AMT credit ...........................................................          587            587
    Other ................................................................        2,317          6,151
                                                                              ---------      ---------
                                                                                 18,401         35,297
    Valuation Allowance ..................................................           --         (4,369)
                                                                              ---------      ---------
                                                                                 18,401         30,928
                                                                              ---------      ---------
   Deferred Tax Liabilities:
    Other assets, principally due to differences in amortization .........       (2,693)        (6,389)
    Plant and equipment, principally due to differences in
     depreciation ........................................................      (11,217)       (22,284)
    Customer acquisition costs ...........................................       (3,859)        (3,824)
                                                                              ---------      ---------
                                                                                (17,769)       (32,497)
                                                                              ---------      ---------
   Net deferred tax asset (liability) ....................................    $     632      $  (1,569)
                                                                              =========      =========
</TABLE>

     The Company receives a tax deduction upon exercise of non-qualified stock
options by employees for the difference between the exercise price and the
market price of the underlying common stock on the date of exercise which is
included in the net operating loss carryforwards above. A valuation allowance
has been recorded for this tax asset because of uncertainty of its realization.
If the assets are realized, they will be credited to either additional paid-in
capital ($1,873) or, for options granted for acquisitions, to goodwill
($2,496).

     The Company and its subsidiaries file a consolidated federal income tax
return. The provision (benefit) for income tax consists of the following
components:

<TABLE>
<CAPTION>
                                    Year Ended December 31,
                              -----------------------------------
                                  1996         1997        1998
                              -----------   ---------   ---------
<S>                           <C>           <C>         <C>
Federal--current ..........    $    958      $   --      $   --
Federal--deferred .........          57        (459)      4,811
State--current ............       1,450         399         505
State--deferred ...........      (1,030)        (20)      1,633
                               --------      ------      ------
                               $  1,435      $  (80)     $6,949
                               ========      ======      ======
</TABLE>

 

                                       52
<PAGE>

                          IRON MOUNTAIN INCORPORATED


           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)
8. Income Taxes (continued)

     A reconciliation of total income tax expense (benefit) and the amount
computed by applying the federal income tax rate of 34% to income (loss) before
income taxes is as follows:


<TABLE>
<CAPTION>
                                                               Year Ended December 31,
                                                        -------------------------------------
<S>                                                     <C>         <C>            <C>
                                                           1996           1997         1998
                                                           ----           ----         ----
Computed "expected" tax provision (benefit) .........    $  609       $ (1,564)     $ 1,354
Increase in income taxes resulting from:
 State taxes (net of federal tax benefit) ...........       278            250        1,406
 Nondeductible goodwill amortization ................       602          1,221        3,806
 Other ..............................................       (54)            13          383
                                                         ------       --------      -------
                                                         $1,435       $    (80)     $ 6,949
                                                         ======       ========      =======
</TABLE>

9. Quarterly Results of Operations (Unaudited)


<TABLE>
<CAPTION>
                  Quarter Ended                    March 31     June 30     Sept. 30      Dec. 31
------------------------------------------------ ----------- ------------ ------------ ------------
<S>                                              <C>         <C>          <C>          <C>
   1997
   Revenues ....................................   $42,154     $ 46,585     $ 54,655     $ 65,371
   Gross profit ................................    20,390       22,477       26,785       32,233
   Net loss ....................................      (516)        (969)        (325)      (2,711)
   Net loss per common share--basic and diluted      (0.04)       (0.06)       (0.02)       (0.14)
   1998
   Revenues ....................................   $99,484     $103,063     $107,960     $113,005
   Gross profit ................................    46,874       49,399       51,625       54,634
   Net loss ....................................      (314)        (261)      (1,069)      (1,322)
   Net loss per common share--basic and diluted      (0.01)       (0.01)       (0.04)       (0.05)
</TABLE>

10. Segment Information

     On December 31, 1998, Iron Mountain adopted SFAS No. 131, "Disclosures
about Segments of an Enterprise and Related Information" ("SFAS 131"). The new
rules establish revised standards for public companies relating to the
reporting of financial and descriptive information about their operating
segments in financial statements. The adoption of SFAS 131 did not have a
material effect on the Company's primary financial statements, but did affect
the disclosure of segment information contained herein.

     Iron Mountain classifies its operations into two fundamental businesses:
records and information management services ("RIMS") and information technology
staffing ("IT Staffing"). The reportable segments are managed separately since
each business has different economic characteristics based on the differing
customer requirements and the nature of the services provided. The accounting
policies of the segments are the same as those described in the summary of
significant accounting policies (see Note 2). The Company assesses performance
based on earnings before interest, taxes, depreciation, amortization,
extraordinary items and other income ("EBITDA").


                                       53
<PAGE>

                          IRON MOUNTAIN INCORPORATED


           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)
10. Segment Information (continued)


<TABLE>
<CAPTION>
                                                                               IT
                                                                RIMS        Staffing        Total
                                                            ------------   ----------   ------------
<S>                                                         <C>            <C>          <C>
1998:
Revenues from External Customers ........................    $ 383,961      $ 39,551     $ 423,512
Revenues from Other Operating Segments ..................           --           268           268
                                                             ---------      --------     ---------
Total Reportable Segment Revenues .......................    $ 383,961      $ 39,819     $ 423,780
                                                             =========      ========     =========
EBITDA ..................................................    $  95,981      $  1,526     $  97,507
Segment Assets ..........................................      940,698        26,687       967,385
Capital Expenditures, Exclusive of Acquisitions .........       55,898           556        56,454
</TABLE>

     A reconciliation of the totals reported for the reportable operating
segments to the applicable line items in the consolidated financial statements
for the year ended December 31, 1998 is as follows:



<TABLE>
<S>                                                           <C>
     Total Revenues:
     Total Revenues from Reportable Segments ..............    $ 423,780
     Intercompany Eliminations and Other Revenues .........         (268)
                                                               ---------
       Total Consolidated Revenues ........................    $ 423,512
                                                               =========
     Income Before Provision for Income Taxes:
     Total EBITDA from Reportable Segments ................    $  97,507
     Depreciation and Amortization ........................      (49,152)
     Interest Expense .....................................      (45,756)
     Other Income, net ....................................        1,384
                                                               ---------
       Income Before Provision for Income Taxes ...........    $   3,983
                                                               =========
</TABLE>

     Information as to Iron Mountain's products and services and operations in
different geographical areas is as follows:



<TABLE>
<S>                                                 <C>
     Revenues by Product and Services:
     Storage Revenues ...........................    $ 230,702
     Service and Storage Material Sales .........      153,259
     IT Staffing Revenues .......................       39,551
                                                     ---------
       Total Revenues ...........................    $ 423,512
                                                     =========
     Revenues:
     United States ..............................    $ 421,510
     International ..............................        2,002
                                                     ---------
       Total Revenues ...........................    $ 423,512
                                                     =========
     Long-lived Assets:
     United States ..............................    $ 821,929
     International ..............................          485
                                                     ---------
       Total Long-lived Assets ..................    $ 822,414
                                                     =========
</TABLE>

     Information is not provided for 1996 and 1997 because the IT Staffing
business was not acquired until 1998 and the Company had no international
operations in those years.


                                       54
<PAGE>

                          IRON MOUNTAIN INCORPORATED


           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

11. Commitments and Contingencies


     a. Leases


     Iron Mountain leases most of its facilities under various operating
leases. A majority of these leases have renewal options of five to ten years
and have either fixed or Consumer Price Index escalation clauses. The Company
also leases equipment under operating leases, primarily computers which have an
average lease life of three years. Trucks and office equipment are also leased
and have remaining lease lives ranging from one to seven years. Rent expense
was $21,114, $29,332 and $47,049 for the years ended December 31, 1996, 1997
and 1998, respectively.


     Minimum future lease payments are as follows:



<TABLE>
<CAPTION>
Year                                            Operating
--------------------------------------------   ----------
<S>                                            <C>
     1999 ..................................   $ 41,700
     2000 ..................................     39,999
     2001 ..................................     36,928
     2002 ..................................     33,545
     2003 ..................................     29,442
     Thereafter ............................    141,339
                                               --------
     Total minimum lease payments ..........   $322,953
                                               ========
</TABLE>

     Included in the lease commitments disclosed in the preceding paragraph are
certain five-year operating lease agreements signed in 1998 for specified
records storage warehouses. At the end of the lease term, the Company, at its
option, may: (i) negotiate a renewal of the lease; (ii) purchase the properties
at a price equal to the lessor's original cost (approximately $47.5 million);
or (iii) allow the lease to expire and cause the properties to be sold. The
Company's ability to cause the properties to be sold depends upon its
compliance with certain terms of the lease. Under certain conditions, the
Company would receive any excess of the net sales proceeds over the properties'
original cost. In the event that the net sales proceeds are less than 85% of
the properties' original cost, the Company would make contingent rental
payments to the lessor equal to that difference.


     b. Facility Fire


     In March 1997, the Company experienced three fires, all of which
authorities have determined were caused by arson. These fires resulted in
damage to one and destruction of the Company's other RIMS facility in South
Brunswick Township, New Jersey.


     Some of Iron Mountain's customers or their insurance carriers have
asserted claims as a consequence of the destruction of or damage to their
records as a result of the fires, some of which allege negligence or other
culpability on the part of Iron Mountain. The Company has received notices of
claims and lawsuits filed by customers and abutters seeking damages against the
Company and to rescind their written contracts with Iron Mountain. Iron
Mountain denies any liability as a result of the destruction of or damage to
customer records as a result of the fires, which were beyond its control, and
intends to vigorously defend itself against these and any other lawsuits that
may arise. The Company is also pursuing coverage of these claims and lawsuits
with its various insurers. The claims process is lengthy and its outcome cannot
be predicted with certainty.


                                       55
<PAGE>

                          IRON MOUNTAIN INCORPORATED


           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)
11. Commitments and Contingencies (continued)

     Based on its present assessment of the situation, management, after
consultation with legal counsel, does not believe that the fires will have a
material adverse effect on Iron Mountain's financial condition or results of
operations, although there can be no assurance in this regard.

     In June 1998, the Company settled several insurance claims, including a
significant claim under its business interruption policy, related to the fires.
Other income, net, for the year ended December 31, 1998 includes a $1.7 million
gain related to the settlement.

     c. Other Litigation

     Iron Mountain is presently involved as a defendant in various litigation
which has occurred in the normal course of business. Management believes it has
meritorious defenses in all such actions, and in any event, the amount of
damages, if such matters were decided adversely, would not have a material
adverse effect on Iron Mountain's financial condition or results of operations.
 


12. Related Party Transactions

     Iron Mountain leases space to an affiliated company, Schooner Capital LLC
("Schooner") for its corporate headquarters located in Boston, Massachusetts.
For the years ended December 31, 1996, 1997 and 1998, Schooner paid Iron
Mountain rent totaling $68, $85 and $90, respectively. Iron Mountain leased one
facility from a landlord which was a related party. Total rental payments for
the years ended December 31, 1996, 1997 and 1998, for this facility totaled
$94, $99 and $99, respectively. In the opinion of management, both of these
leases were entered into at market prices and terms.


13. Employee Benefit Plans

     a. Profit Sharing Retirement Plan

     The Company has a defined contribution plan which covers all non-union
employees meeting certain service requirements. Eligible employees may elect to
defer from 1% to 15% of compensation per pay period up to the amount allowed by
the Internal Revenue Code. The Company makes matching contributions based on
the amount of the employee contribution and years of credited service,
according to a schedule as described in the plan documents. The Company has
expensed $419, $642 and $910 for the years ended December 31, 1996, 1997 and
1998, respectively.

     b. Employee Stock Purchase Plan

     During 1998, the Company introduced an employee stock purchase plan (the
"ESPP") which is available for participation by substantially all employees who
have met certain service requirements. Eligible employees may elect to
contribute from 1% to 15% of their gross compensation per pay period to the
ESPP. Such contributions are accumulated throughout the year until September
30, the end of the fiscal year of the ESPP, and are then invested in the
Company's Common Stock. Such shares are purchased at 85% of the lower of the
fair value at the beginning or end of the fiscal year of the ESPP. Once
purchased, such shares are subject to a one year resale restriction. There were
no shares granted under the ESPP during 1998.


                                       56
<PAGE>

                          IRON MOUNTAIN INCORPORATED


           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

14. Noncash Transactions

     The Company used the following as part of the consideration paid for
certain acquisitions:


<TABLE>
<CAPTION>
                                                                              1996        1997          1998
                                                                             ------   -----------   -----------
<S>                                                                          <C>      <C>           <C>
Fair Value of Common Stock Issued ........................................    --       $ 85,863      $ 51,448
Fair Value of Options Issued .............................................    --          3,071        15,655
Fair Value of Certain Net Assets of a Business Acquired in 1997 ..........    --             --         3,000
</TABLE>

     In December 1998, the Company entered into a foreign currency exchange
agreement and has recorded an asset and a liability based upon the exchange
rates as of December 31, 1998. A cash settlement of the agreement occurred in
January 1999.

     During 1997, $3,086 of property and equipment, destroyed in a fire, was
transferred to receivable from insurance company.

     See Note 5 for liabilities assumed in acquisitions.


15. Subsequent Events

     a. Completed Acquisitions

     In January 1999, the Company completed the acquisition of a majority
interest in Britannia Data Management Limited ("BDM"), a provider of records
management services in the United Kingdom. Total consideration for the 50.1
percent interest in BDM consisted of $49.8 million, including $47.3 million in
cash and the balance in the capital stock of the Company's pre-existing United
Kingdom subsidiary. The acquisition will be accounted for as a purchase.

     In February 1999, the Company acquired a records management business for
approximately $3 million in cash and accounted for such acquisition as a
purchase.

     b. Pending Acquisitions (Unaudited)

     In February 1999, the Company signed definitive agreements to acquire two
records management business for aggregate consideration of approximately $2
million in cash. The acquisitions will be accounted for as purchases and closed
in March 1999.

     In February 1999, the Company signed definitive agreements to acquire all
of the outstanding common stock of Data Base, Inc. and certain real estate for
approximately $115 million, including $46 million (1,476,577 shares) of the
Company's common stock. The acquisition, which is subject to regulatory
approval and other customary closing conditions, will be accounted for as a
purchase and is expected to close in April 1999.

     c. Line of Credit Agreement

     In January 1999, the Company entered into a $10 million credit facility
with a bank that matures on September 30, 1999. Interest on borrowings under
this facility will be paid monthly at the lender's index rate plus one-half of
one percent. Restrictive covenants under this agreement are similar to those on
the Company's $250 million revolving credit facility discussed in Note 4.
 

                                       57
<PAGE>

                                        

                   REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



To the Board of Directors of
Iron Mountain Incorporated:

     We have audited, in accordance with generally accepted auditing standards,
the consolidated financial statements of Iron Mountain Incorporated for each of
the three years in the period ended December 31, 1998 and have issued our
report thereon dated February 19, 1999. Our audits were made for the purpose of
forming an opinion on those statements taken as a whole. The supplemental
schedule listed in the accompanying index is the responsibility of the
Company's management and is presented for purposes of complying with the
Securities and Exchange Commission's rules and regulations under the Securities
Exchange Act of 1934 and is not a required part of the basic financial
statements. The supplemental schedule has been subjected to the auditing
procedures applied in our audits of the basic financial statements and, in our
opinion, is fairly stated, in all material respects, in relation to the basic
financial statements taken as a whole.




                                                            ARTHUR ANDERSEN LLP


Boston, Massachusetts
February 19, 1999

                                       58
<PAGE>

                                        

                                                                    Schedule II


                          IRON MOUNTAIN INCORPORATED


                       Valuation and Qualifying Accounts
                                (In thousands)


<TABLE>
<CAPTION>
                                             Balance at                                          Balance at
                                            Beginning of   Charged to     Other                  End of the
Year Ended December 31,                       the Year       Expense    Additions   Deductions      Year
------------------------------------------ -------------- ------------ ----------- ------------ -----------
<S>                                        <C>            <C>          <C>         <C>          <C>
Allowance for doubtful accounts and credit
 memos:
 1996 ....................................     $  651        $  639        $ 61         (290)      $1,061
 1997 ....................................      1,061           874         483         (489)       1,929
 1998 ....................................      1,929         1,735         829       (1,177)       3,316
</TABLE>


<TABLE>
<CAPTION>
                                        Balance at                                              Balance at
                                       Beginning of                                             End of the
Year Ended December 31,                  the Year     Additions   Deductions   Adjustments(1)      Year
------------------------------------- -------------- ----------- ------------ ---------------- -----------
<S>                                   <C>            <C>         <C>          <C>              <C>
Reserve for restructuring activities:
 1996 ...............................     $   59       $ 1,883     $   (602)      $     --       $ 1,340
 1997 ...............................      1,340         6,574       (2,163)          (308)        5,443
 1998 ...............................      5,443        11,368       (4,690)        (1,639)       10,482
</TABLE>

----------------
(1) The adjustments represent changes to goodwill as a result of management
    finalizing its restructuring plan within one year of each acquisition.


                                       59
<PAGE>

Item 9. Changes in and Disagreements with Accountants
      on Accounting and Financial Disclosure.
     None.

                                       60
<PAGE>

                                   PART III


Item 10. Directors and Executive Officers of the Registrant.

     The Directors and executive officers of Iron Mountain are as follows (all
information is as of March 30, 1999):


<TABLE>
<CAPTION>
Names of Directors and Executive Officers      Age                      Position
-------------------------------------------   -----   --------------------------------------------
<S>                                           <C>     <C>
C. Richard Reese(1) .......................    53     Chairman of the Board of Directors and
                                                      Chief Executive Officer
David S. Wendell ..........................    45     President, Chief Operating Officer and
                                                      Director
John F. Kenny, Jr. ........................    41     Executive Vice President and Chief
                                                      Financial Officer
Harold E. Ebbighausen .....................    44     President of Arcus Data Security, Inc.
George P. Groff ...........................    49     President of Arcus Staffing Resources, Inc.
Christophe M. Giecold .....................    41     President of International Division of IMRM
Richard A. Drutman ........................    56     Executive Vice President of Arcus Data
                                                      Security, Inc.
Robert G. Miller ..........................    42     Executive Vice President of IMRM
Christopher Neefus ........................    43     Executive Vice President of IMRM
Kenneth F. Radtke, Jr. ....................    53     Executive Vice President of IMRM
Robert P. Swift ...........................    57     Executive Vice President of IMRM
Clarke H. Bailey(1)(3) ....................    44     Director
Constantin R. Boden(2)(3) .................    62     Director
Kent P. Dauten(2) .........................    43     Director
Eugene B. Doggett .........................    62     Director
B. Thomas Golisano ........................    57     Director
Arthur D. Little(2)(3) ....................    55     Director
Vincent J. Ryan(1)(3) .....................    63     Director
</TABLE>

----------------

(1) Member of the Executive Committee; Mr. Ryan is the Chairman of the
Executive Committee.

(2) Member of the Audit Committee; Mr. Boden is the Chairman of the Audit
Committee.

(3) Member of the Compensation Committee; Mr. Little is the Chairman of the
 Compensation Committee.


     The Iron Mountain Board currently consists of nine directors. There are
three classes of directors who serve for three-year terms and are elected on a
staggered basis, one class of directors standing for election each year.
Directors of each class will thereafter hold office until the third annual
meeting of the stockholders of the Company following their election or until
their successors are elected and qualified.


     The executive officers were elected by the Iron Mountain Board on May 28,
1998, other than Mr. Giecold, who was elected on March 30, 1999. All executive
officers hold office at the discretion of the Iron Mountain Board until the
first meeting of the Iron Mountain Board following the next annual meeting of
stockholders and until their successors are chosen and qualified.


Directors and Executive Officers
     C. Richard Reese is the Chairman of the Iron Mountain Board, a position
that he has held since November 1995, and the Chief Executive Officer of Iron
Mountain, a position that he has held since 1981. Prior to November 1995, Mr.
Reese was the President of Iron Mountain, a position he had held since 1981.
Mr. Reese is also a member of the investment committee of Schooner Capital LLC
("Schooner"), which owns approximately 9.3% of the outstanding stock of the
Company. Prior to joining Iron Mountain, he lectured at Harvard Business School
in "Entrepreneurship" and provided consulting services to small and
medium-sized emerging enterprises. Mr. Reese has also served as president and a
Director of PRISM. He holds a Master of Business Administration degree from
Harvard Business School.


                                       61
<PAGE>

     David S. Wendell is the President and Chief Operating Officer and a
Director of Iron Mountain, positions that he has held since November 1995.
After practicing law with Brown & Wood, Mr. Wendell joined Iron Mountain in
1984, where he has served in a variety of positions. Prior to November 1995, he
was Executive Vice President, Atlantic Area and prior to 1991, he was Vice
President, New England Region. He holds a Master of Business Administration
degree from Harvard Business School and a Juris Doctor degree from the
University of Virginia.

     John F. Kenny, Jr. is an Executive Vice President and the Chief Financial
Officer of Iron Mountain, positions that he has held since May 1997. Mr. Kenny
joined Iron Mountain in 1991, and held operating responsibilities as Regional
Vice President of New England and later Northeast operations before assuming
the position of Vice President of Corporate Development in 1995. Prior to 1991,
he was Vice President of CS First Boston Merchant Bank, New York, with
responsibility for risk capital investments. Mr. Kenny has also served as a
Director and the Treasurer of PRISM. He holds a Master of Business
Administration degree from Harvard Business School.

     Harold E. Ebbighausen is the President of Arcus Data Security, Inc., a
subsidiary of Iron Mountain conducting data security services, a position that
he has held since May 1998. Prior to 1997, he had been serving as Vice
President of Data Security Services since joining the Company in September
1996. Prior to joining Iron Mountain, Mr. Ebbighausen was Vice President of
Document Management Services with INSCI Corporation, a software provider for
computer output and data storage solutions to optical and CD technology.
Previously, he held a number of field management positions with Anacomp, Inc.,
a service bureau provider in the micrographics industry.

     George P. Groff is the President of Arcus Staffing Resources, Inc., a
subsidiary of the Company conducting IT Staffing services, a position that he
has held since March 1998. From 1993 to March 1998, Mr. Groff served as a Vice
President of Arcus Staffing Resources, Inc. and of Wolf Advisory International,
Inc., a company that he joined in 1989 that was acquired by Arcus Group in
1996. He holds a Master of Business Administration degree from Golden Gate
University.

     Christophe M. Giecold is the President of the International Division of
Iron Mountain Records Management, Inc., Iron Mountain's principal RIMS
subsidiary ("IMRM"), a position that he has held since March 1999. Mr. Giecold
was the General Manager--Records Management Continental Europe for Brambles
Europe, from 1996 until joining Iron Mountain. From 1993 to 1996, Mr. Giecold
was Managing Director of DERBIT, an international manufacturer and distributor
of waterproofing materials, in Bologna, Italy. He holds a Master of Business
Administration degree from Solvay Business School in Brussels, Belgium.

     Richard A. Drutman is an Executive Vice President of Arcus Data Security,
Inc., a subsidiary of Iron Mountain conducting data security services, a
position that he has held since March 1998. Mr. Drutman joined the Company in
January 1998 as a result of the consummation of the Arcus Merger. Mr. Drutman
joined Arcus Data Security, Inc. in 1976 and held various positions, including
Senior Vice President and Chief Operating Officer from 1991 to 1996 and
President and Chief Executive Officer from 1996 to January 1998. He holds a
Bachelor of Arts degree from California State University at Los Angeles.

     Robert G. Miller is an Executive Vice President of IMRM, a position that
he has held since December 1996. Mr. Miller joined Iron Mountain in 1988 and
held various positions including District Manager from 1988 through 1991 and
regional Vice President from 1991 through 1996. Prior to 1988, Mr. Miller was
employed as a District Manager at Bell & Howell Records Management Company.

     Christopher Neefus is an Executive Vice President of IMRM, a position that
he has held since July 1997. Mr. Neefus was a Vice President of Sales and
Customer Service for ASI, Inc., a software provider for the storage of computer
generated information, from 1995 until joining the Company. From 1990 to 1995,
Mr. Neefus was the Region Vice President of Anacomp, Inc., a service bureau
provider in the micrographics industry. Mr. Neefus holds a Bachelor of Arts
degree in Communications Arts from Hofstra University.

     Kenneth F. Radtke, Jr. is an Executive Vice President of IMRM, a position
that he has held since June 1996. Prior to June 1996, Mr. Radtke was Northeast
Regional Vice President and prior to 1995 was Sales


                                       62
<PAGE>

Manager, New York Region. Mr. Radtke has worked in the records and information
services industry since 1988 as President and Chief Executive Officer of
Dataport Company, Inc. and Senior Vice President of a subsidiary of Arcus
Group. He holds a graduate degree from the University of Wisconsin, Graduate
School of Banking.

     Robert P. Swift is an Executive Vice President of IMRM, a position that he
has held since November 1995. Prior to November 1995, Mr. Swift was the
Executive Vice President, Western Area of Iron Mountain and prior to 1988, Mr.
Swift was employed in various positions at Bell & Howell Records Management
Company.

     Clarke H. Bailey is a Director of Iron Mountain, a position that he has
held since January 1998, when he was appointed to the Iron Mountain Board in
accordance with the terms of the Arcus Merger. He is Co-Chairman and Director
of Hudson River Capital LLC, a private equity firm specializing in middle
market acquisitions, recapitalizations and expansion capital investments and
Chairman, Chief Executive Officer and a Director of National Fulfillment, Inc.,
a private company specializing in literature fulfillment, marketing support and
textbook depository services. Mr. Bailey was the Chairman and Chief Executive
Officer of each of Arcus Group, United Acquisition Company and Arcus Technology
Services, Inc., positions that he had held since 1995, until the consummation
of the Arcus Merger, and is a Director of Connectivity Technologies Inc., Swiss
Army Brands, Inc. and SWWT, Inc. (formerly known as Sweetwater, Inc.). Mr.
Bailey also serves as a Director of Glenayre Technologies, Inc. (formerly N-W
Group, Inc.), a manufacturing company in the telecommunications industry. Prior
to joining Glenayre in 1990, Mr. Bailey was a Managing Director at Oppenheimer
& Co., Inc. He holds a Master of Business Administration degree from The
Wharton School, University of Pennsylvania.

     Constantin R. Boden is a Director of Iron Mountain, a position that he has
held since December 1990. Mr. Boden is the principal of Boden Partners LLC and
chairman of the advisory board of Boston Capital Ventures, a risk capital
concern. For 34 years, until January 1995, Mr. Boden was employed by The First
National Bank of Boston, most recently as Executive Vice President,
International Banking. He holds a Master of Business Administration degree from
Harvard Business School.

     Kent P. Dauten is a Director of Iron Mountain, a position that he has held
since November 1997, when he was appointed to the Iron Mountain Board in
accordance with the terms of the merger of Record Masters with and into a
wholly owned subsidiary of the Company (the "Record Masters Merger"). He also
serves as President of Keystone Capital, Inc. ("Keystone"), a management and
consulting advisory service firm, a position he has held since March 1994. In
February 1995, Mr. Dauten founded and served as President of Records Masters
until the consummation of the Record Masters Merger. From 1993 to 1994, he was
employed in various investment management positions, most recently as Senior
Vice President of Madison Dearborn Partners, Inc. and from 1979 to 1992, he was
Senior Vice President of First Chicago Venture Capital. Mr. Dauten currently
serves as a director of Health Management Associates, Inc., a hospital
management firm, and is a Trustee of ElderTrust, a health care real estate
investment trust. Mr. Dauten holds a Master of Business Administration degree
from Harvard Business School.

     Eugene B. Doggett is a Director of Iron Mountain, a position that he has
held since 1990. From 1987 until May 1997, Mr. Doggett was the Chief Financial
Officer of Iron Mountain, and from 1990 until May 1998, Mr. Doggett was an
Executive Vice President of Iron Mountain. Mr. Doggett is also a Director of
Mac-Gray Corporation, a publicly held supplier of card and coin-operated
laundry services in multiple housing facilities. Prior to joining the Company,
he had extensive experience in commercial and investment banking, as well as
financial and general management experience at senior levels. He holds a Master
of Business Administration degree from Harvard Business School.

     B. Thomas Golisano is a Director of Iron Mountain, a position that he has
held since June 1997, when he was appointed to the Iron Mountain Board in
accordance with the terms of the merger with Safesite. He founded Paychex Inc.,
a publicly held, national payroll service company, in 1971 and serves as its
Chairman, President and Chief Executive Officer. Mr. Golisano serves on the
Board of Trustees of Rochester Institute of Technology and on the boards of
several privately held companies. He has also served on the boards of numerous
non-profit organizations and is the founder of the B. Thomas Golisano
Foundation.


                                       63
<PAGE>

     Arthur D. Little is a Director of Iron Mountain, a position that he has
held since November 1995. Mr. Little is a principal of The Little Investment
Company, which he founded in 1992. Prior to that, he was Managing Director of
and also a partner in Narragansett Capital, Inc., a private investment firm. He
holds a Bachelor of Arts degree in history from Stanford University.

     Vincent J. Ryan is a Director of Iron Mountain. Mr. Ryan is the founder of
Schooner and has served as Chairman and Chief Executive Officer of Schooner
since 1971. Prior to November 1995, Mr. Ryan served as Chairman of the Iron
Mountain Board.

Section 16(a) Beneficial Ownership Reporting Compliance
     Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and Directors, and persons who own more than 10
percent of a registered class of the Company's equity securities, to file
reports of ownership on Form 3 and changes in ownership on Form 4 or 5 with the
Securities and Exchange Commission (the "Commission"). Such executive officers,
Directors and 10 percent stockholders are also required by Commission rules to
furnish the Company with copies of all Section 16(a) reports they file. Based
solely on its review of the copies of such forms received by it, or written
representations from certain reporting persons that they were not required to
file a Form 5, the Company believes that, during the fiscal year ended December
31, 1998, its executive officers, Directors and 10 percent stockholders
complied with all Section 16(a) filing requirements applicable to such persons,
except that Richard A. Drutman, an executive officer of the Company, did not
timely file a statement of changes in beneficial ownership on Form 4 pertaining
to a distribution of Common Stock to Mr. Drutman from a limited liability
company of which Mr. Drutman is a member.


                                       64
<PAGE>

Item 11. Executive Compensation.
     The following table provides certain information concerning compensation
earned by the Chief Executive Officer and the other four most highly
compensated executive officers who received compensation in excess of $100,000
in 1998 (the "Named Executive Officers") for the years ended December 31, 1996,
1997 and 1998.


                          Summary Compensation Table


<TABLE>
<CAPTION>
                                              Annual Compensation              Long-Term Compensation
                                           --------------------------   ------------------------------------
                                                                         Number of Shares
            Name and                                                        Underlying          All Other
       Principal Position          Year       Salary         Bonus          Options(1)       Compensation(2)
-------------------------------   ------   -----------   ------------   -----------------   ----------------
<S>                               <C>      <C>           <C>            <C>                 <C>
C. Richard Reese ..............   1998      $308,538       $190,000                0             $4,000
 Chairman of the Board and        1997      $298,381       $200,000                0             $4,000
  Chief Executive Officer         1996      $268,958       $165,000                0             $1,941
David S. Wendell ..............   1998      $224,981       $138,588                0             $4,000
 President and Chief              1997      $221,723       $150,000           47,244             $4,000
  Operating Officer               1996      $203,550       $125,000           60,000             $1,941
John F. Kenny, Jr. ............   1998      $192,788       $135,000                0             $2,400
 Executive Vice President and     1997      $166,723       $150,000          158,268             $2,400
  Chief Financial Officer         1996      $129,723       $ 49,999           49,500             $1,618
George P. Groff ...............   1998      $156,667       $ 60,000                0             $2,400
 President of Arcus Staffing      1997         N/A            N/A              N/A                 N/A
  Resources, Inc.                 1996         N/A            N/A              N/A                 N/A
Harold E. Ebbighausen .........   1998      $148,269       $110,000                0             $2,400
 President of Arcus Data          1997      $123,413       $ 49,365           16,536             $    0
  Security, Inc.                  1996      $ 29,856       $ 14,000           30,250             $    0
</TABLE>

----------------

(1) Reflects a three-for two stock split effected in the form of a dividend on
    the Company's Common Stock that occurred in July 1998.

(2) Reflects the Company's matching contribution to The Iron Mountain Companies
    401(k) Plan for each individual. Amounts shown for 1998 are estimated
    maximum contributions; the actual contributions have not yet been
    calculated.


                                       65
<PAGE>

     The following table sets forth certain information with respect to the
exercise of stock options during the year ended December 31, 1998 by, and the
unexercised options to purchase Common Stock of, the Named Executive Officers.
Mr. Reese does not have any options.

     Aggregate Option Exercises in Last Fiscal Year and Fiscal Year End Option
Values


<TABLE>
<CAPTION>
                                                               Number of Unexercised         Value of Unexercised
                                                                    Options at             In-the-Money-Options at
                                      Shares                     December 31, 1998            December 31, 1998(1)
             Name and              Acquired on     Value   ----------------------------- -----------------------------
       Principal Positions           Exercise    Realized   Exercisable   Unexercisable   Exercisable   Unexercisable
--------------------------------- ------------- ---------- ------------- --------------- ------------- --------------
<S>                               <C>           <C>        <C>           <C>             <C>           <C>
David S. Wendell ................     2,985      $56,109      180,555        105,720      $5,305,472     $2,296,365
 President and Chief
  Operating Officer
John F. Kenny, Jr. ..............         0      $     0      102,047        182,334      $2,438,582     $3,349,540
 Executive Vice President
  and Chief Financial Officer
George P. Groff .................         0      $     0       11,407         25,379      $  176,914     $  388,226
 President of Arcus Data
  Security, Inc.
Harold E. Ebbighausen ...........         0      $     0       13,988          8,208      $  396,583     $  232,863
 President of Arcus
   Staffing Resources, Inc.
</TABLE>

----------------
(1) Based on a year-end value of $36.0625 per share, less the exercise price.


Director Compensation

     Directors who are employees of Iron Mountain do not receive additional
compensation for serving as Directors. Each Director who is not an employee of
Iron Mountain receives an annual retainer fee of $5,000 as compensation for his
or her services as a member of the Iron Mountain Board, $500 for attendance at
committee meetings and an option to purchase $100,000 of Common Stock (the
"Director's Compensation"). Each option is granted under the Iron Mountain
Incorporated 1995 Stock Incentive Plan (the "Stock Incentive Plan"), has an
exercise price equal to fair market value (as defined in the Stock Incentive
Plan), vests in equal amounts over a period of twelve quarters and has a ten
year term. Each Director is granted a new option to acquire $100,000 of Common
Stock every three years. All Directors are reimbursed for out-of-pocket
expenses incurred in attending meetings of the Iron Mountain Board or
committees thereof, and for other expenses incurred in their capacities as
Directors.

     The Company paid a total of $39,000 in cash for Directors fees in respect
of services for 1998.

Change of Control Arrangement
     The Stock Incentive Plan provides for acceleration of the vesting of
options and stock appreciation rights ("SARs") if the Company or any wholly
owned subsidiary of the Company is a party to a merger or consolidation
(whether or not the Company is the surviving corporation) in any transaction or
series of related transactions and there is a "Limited Change of Control" of
the Company. A Limited Change of Control occurs if after the merger or
consolidation (a) individuals who immediately prior to the merger or
consolidation served as members of the Iron Mountain Board no longer constitute
a majority of the Iron Mountain Board or the board of directors of the
surviving corporation and (b) the voting securities of the Company outstanding
immediately prior to the merger or consolidation do not represent (either by
remaining outstanding or upon conversion into securities of the surviving
corporation) more than 50% of the voting power of the securities of the Company
or the surviving corporation immediately after the merger or consolidation. In
addition, if the Company is not the surviving corporation, a holder of options
or SARs is entitled to receive upon exercise of his or her options or SARs the
number and class of shares of stock or other securities and any other
consideration of the surviving or resulting corporation that the optionee or
holder of SARs would have been entitled to receive pursuant to the merger or
consolidation had the optionee or holder of SARs held the shares of Common
Stock subject to the option or SAR.


                                       66
<PAGE>

Compensation Committee Interlocks and Insider Participation
     The Compensation Committee of the Iron Mountain Board consists of Mr.
Little, who is the Chairman, and Messrs. Boden, Ryan and Bailey. Mr. Reese is a
member of the investment committee of Schooner and a trustee of Schooner
Capital Trust, the sole member of Schooner. Mr. Ryan is the Chairman of the
Board and principal stockholder of Schooner Capital Trust.

Item 12. Security Ownership of Certain Beneficial Owners and Management.
     The following table sets forth certain information known to the Company
with respect to beneficial ownership of Common Stock by (i) each stockholder
known by the Company to be the beneficial owner of more than five percent of
the Common Stock, (ii) each Director, (iii) the Named Executive Officers and
(iv) all executive officers and Directors of the Company as a group. Such
information is presented as of March 30, 1999. The following table reflects a
three-for-two stock split effected in the form of a dividend on the Company's
Common Stock that occurred in July 1998.


<TABLE>
<CAPTION>
                                                          Amount of Beneficial
                                                              Ownership(1)
                                                       --------------------------
Name (1)                                                  Shares    Percent Owned
------------------------------------------------------ ----------- --------------
<S>                                                    <C>         <C>
   Directors and Executive Officers
   C. Richard Reese(2) ...............................  1,690,694        5.7%
   David S. Wendell(3) ...............................    210,787          *
   John F. Kenny, Jr.(4) .............................    131,409          *
   Harold E. Ebbighausen(5) ..........................     11,407          *
   George P. Groff(6) ................................     13,988          *
   Clarke H. Bailey(7) ...............................     55,698          *
   Constantin R. Boden(8) ............................     32,547          *
   Kent P. Dauten(9) .................................  1,410,454        4.8%
   Eugene B. Doggett(10) .............................    113,727          *
   B. Thomas Golisano(11) ............................  1,521,867        5.2%
   Arthur D. Little(12) ..............................     40,624          *
   Vincent J. Ryan(13) ...............................  5,041,852       17.1%
   All Directors and executive officers as a group
    (18 persons)(14) .................................  9,563,752       31.8%
   Five Percent Stockholders
   Baron Capital Group, Inc./Ronald Baron(15) ........  1,675,750        5.7%
   Schooner Capital LLC(16) ..........................  2,736,076        9.3%
</TABLE>

----------------
* Less than 1%

 (1) Except as otherwise indicated, the persons named in the table above have
     sole voting and investment power with respect to all shares of Common
     Stock shown as beneficially owned by them.

 (2) Mr. Reese is a Director and Chairman of the Board and Chief Executive
     Officer of Iron Mountain. Includes 22,995 shares of Common Stock held by
     trusts for the benefit of Mr. Reese's children, as to which Mr. Reese
     disclaims beneficial ownership. Also includes 874,249 shares of Common
     Stock as to which Mr. Reese shares beneficial ownership with Schooner as a
     result of a 1988 deferred compensation arrangement, as amended, between
     Schooner and Mr. Reese relating to Mr. Reese's former services as
     President of the predecessor corporation to Schooner. Pursuant to such
     arrangement, upon the earlier to occur of (i) Schooner's sale or exchange
     of substantially all of the shares of Common Stock held by Schooner or
     (ii) the cessation of Mr. Reese's employment with Iron Mountain, Schooner
     is required to transfer such shares of Common Stock to Mr. Reese or remit
     to Mr. Reese cash in an amount equal to the then current fair value of
     such shares of Common Stock. Schooner has agreed to vote the shares of
     Common Stock subject to such arrangement at the direction of Mr. Reese.
     Mr. Reese's address is c/o Iron Mountain Incorporated, 745 Atlantic
     Avenue, Boston, Massachusetts 02111.

 (3) Mr. Wendell is a Director and President and Chief Operating Officer of
     Iron Mountain. Includes 203,670 shares that Mr. Wendell has the right to
     acquire pursuant to currently exercisable options.

 (4) Mr. Kenny is an Executive Vice President and Chief Financial Officer of
     Iron Mountain. Includes 123,799 shares that Mr. Kenny has the right to
     acquire pursuant to currently exercisable options.

 (5) Mr. Ebbighausen is the President of Arcus Data Security, Inc., a
     subsidiary of Iron Mountain. Consists solely of shares that Mr.
     Ebbighausen has the right to acquire pursuant to currently exercisable
     options.

 (6) Mr. Groff is the President of Arcus Staffing Resources, Inc., a subsidiary
     of Iron Mountain. Consists solely of shares that Mr. Groff has the right
     to acquire pursuant to currently exercisable options.


                                       67
<PAGE>

 (7) Mr. Bailey is a Director of Iron Mountain. Includes 1,227 shares that Mr.
     Bailey has the right to acquire pursuant to currently exercisable options.
      

 (8) Mr. Boden is a Director of Iron Mountain. Includes 1,227 shares that Mr.
     Boden has the right to acquire pursuant to currently exercisable options.

 (9) Mr. Dauten is a Director of Iron Mountain. Includes 1,227 shares that Mr.
     Dauten has the right to acquire pursuant to currently exercisable options.
      

(10) Mr. Doggett is a Director of Iron Mountain. Includes 1,227 shares that Mr.
     Doggett has the right to acquire pursuant to currently exercisable
     options.

(11) Mr. Golisano is a Director of Iron Mountain. Includes 6,654 shares that
     Mr. Golisano has the right to acquire pursuant to currently exercisable
     options. Mr. Golisano's address is c/o Paychex Inc., 911 Panorama Trail
     South, Rochester, New York 14625.

(12) Mr. Little is a Director of Iron Mountain. Includes 37,500 shares held by
     The Little Family Trust, as to which Mr. Little disclaims beneficial
     ownership, as well as 1,227 shares that Mr. Little has the right to
     acquire pursuant to currently exercisable options.

(13) Mr. Ryan is a Director of Iron Mountain. Mr. Ryan holds 2,304,549 shares
     of Common Stock. Also includes 1,227 shares that Mr. Ryan has the right to
     acquire pursuant to currently exercisable options. The remaining shares of
     Common Stock listed as being beneficially owned by Mr. Ryan are held by
     Schooner, as to which Mr. Ryan has sole voting power and investment power
     as the Chairman of the Board of Schooner and the principal stockholder of
     Schooner Capital Trust, the sole member of Schooner. Mr. Ryan's address is
     c/o Schooner Capital LLC, 745 Atlantic Avenue, Boston, Massachusetts
     02111. See footnote (16) regarding shares held by Schooner.

(14) Includes 519,596 shares that Directors and executive officers have the
     right to acquire pursuant to currently exercisable options.

(15) Includes 1,650,000 shares held by BAMCO, Inc. ("BAMCO") and 25,750 shares
     held by Baron Capital Management, Inc. ("BCM"), both of which are
     subsidiaries of Baron Capital Group, Inc. ("BCG"), in which Ronald Baron
     owns a controlling interest. BCG and Ronald Baron disclaim beneficial
     ownership of shares held by their controlled entities or the investment
     advisory clients thereof to the extent such shares are held by persons
     other than BCG and Ronald Baron. BAMCO and BCM disclaim beneficial
     ownership of shares held by their investment advisory clients to the
     extent such shares are held by persons other than BAMCO, BCM and their
     affiliates. The address of Baron Capital Group, Inc. and Ronald Baron is
     767 Fifth Avenue, New York, New York 10153.

(16) Mr. Ryan is the Chairman of the Board of Schooner and the principal
     stockholder of Schooner Capital Trust, the sole member of Schooner, and,
     accordingly, has sole voting and investment power with respect to the
     shares of Common Stock held by Schooner. Includes 874,249 shares of Common
     Stock as to which Schooner shares beneficial ownership with Mr. Reese as
     described in footnote (2). Schooner has agreed to vote the shares of
     Common Stock subject to such arrangements at the direction of Mr. Reese.
     The address of Schooner Capital LLC is 745 Atlantic Avenue, Boston,
     Massachusetts 02111.


                                       68
<PAGE>

Item 13. Certain Relationships and Related Transactions.

Real Estate Transactions

     IMRM was the tenant under a lease dated January 1, 1991 for a 31,500
square-foot building in Houston, Texas. The owner of the building was IM
Houston (CR) Limited Partnership, a Texas limited partnership, of which
Mountain Realty, Inc., a Massachusetts corporation whose sole stockholder is
Mr. Ryan, is the sole general partner, and the limited partners of which are
Messrs. Reese and Doggett. IMRM paid annual rent of approximately $99,326 for
the year ended December 31, 1998. As tenant, IMRM was responsible for taxes,
insurance and maintenance. Iron Mountain Statutory Trust-1998 ("IMST"), a non-
affiliated entity formed to acquire and lease records storage properties to
IMRM, purchased the property from IM Houston (CR) Limited Partnership in
January 1999 for a purchase price of approximately $930,000. The purchase price
was determined through an independent appraisal of the property. IMRM leases
the space from IMST and will continue to use the space as a RIMS facility. The
prior lease and the acquisition of the property by IMST were, in the opinion of
management, on commercially reasonable terms and no less favorable to IMRM and
IMST than could have been obtained from an unaffiliated party at the time of
the transactions.

     Schooner leases space from the Company at the Company's corporate
headquarters. Such lease is a tenancy-at-will and may be terminated by either
the Company or Schooner at any time. As consideration for such lease, Schooner
pays rent to the Company based on its pro rata share of all expenses related to
the use and occupancy of the premises. The rent paid by Schooner to Iron
Mountain under such lease was approximately $90,375 in the year ended December
31, 1998, and Schooner currently pays annual rent of approximately $90,375. The
Company believes that the terms of this lease are no less favorable to it than
would have been negotiated with an unrelated third party.

Other Transactions

     The Company paid compensation of approximately $165,984 for the year ended
December 31, 1998 to Mr. T. Anthony Ryan. Mr. Ryan is Vice President, Real
Estate, of the Company and is the brother of Mr. Vincent J. Ryan, a Director of
the Company. The Company believes that the terms of Mr. Ryan's employment are
no less favorable to it than would be negotiable with an unrelated third party.
 

     In November 1997, the Company entered into a management advisory agreement
with Keystone, of which Kent P. Dauten, a Director of the Company, is
president. Keystone received fees of approximately $20,000 per month under such
agreement relating to consulting with respect to medical records management
services. The Company paid Keystone fees totaling $60,000 in 1998 for
consulting services through March 1998, after which time the agreement was
terminated. In addition, Keystone provided acquisition and divestiture
investment banking consulting services to the Company from May 1998 through
September 1998 in connection with the exchange of assets between a subsidiary
of the Company and a third party. The Company paid Keystone a contingent fee of
$92,000 in October 1998 for such services. The Company believes that the terms
of each of these agreements were no less favorable to it than would have been
negotiated with an unrelated third party.


                                       69
<PAGE>

                                    PART IV

Item 14. Exhibits, Financial Statements Schedules and Reports on Form 8-K.

(a)(1) and (2) Financial Statements and Financial Statement Schedule filed as
part of this report:

     As listed in the Index to Financial Statements and Financial Statement
Schedule on page 34 hereof.

(a)(3) Exhibits filed as part of this report:

     As listed in the Exhibit Index following the signature page hereof.

(b) Reports on Form 8-K:
     On November 23, 1998, the Company filed a current report on Form 8-K under
Item 7 pertaining to unaudited condensed consolidated pro forma financial
statements with respect certain businesses acquired during 1998 and 1997,
including the RIMS business of Wellington Financial Services, Inc. (d/b/a
Michigan Data Storage), Safesite, Concorde Group, Inc., Data Securities
International, Inc., Records Retention/FileSafe, L.P., Allegiance Business
Archives, Ltd., Record Masters, Arcus Group, Midwest Records Management (a
division of I-GO Van & Storage Co.), Sloan Vaults (d/b/a The Vault),
InterMation, Inc. and National Underground Storage, Inc. for the nine months
ended September 30, 1998 and for the year ended December 31, 1997.

     On December 9, 1998, the Company filed a current report on Form 8-K under
Item 5 pertaining to the Company's entrance into a definitive agreement to
purchase a majority interest in BDM from Mentmore Abbey plc. No financial
statements were filed therewith.


                                       70
<PAGE>

                                  SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

                                          IRON MOUNTAIN INCORPORATED



                                          By: /s/ Richard Reese
                                             ----------------------------------
                                             C. Richard Reese, Chairman of the
                                             Board and Chief Executive Officer

Dated: March 31, 1999

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.


<TABLE>
<CAPTION>
         Signature                                Title                             Date
         ---------                                -----                             ----
<S>                           <C>                                             <C>
/s/ C. Richard Reese          Chairman of the Board                           March 31, 1999
-------------------------       and Chief Executive Officer
C. Richard Reese


/s/ David S. Wendell          President, Chief Operating                      March 31, 1999
-------------------------       Officer and Director
David S. Wendell


/s/John F. Kenny, Jr          Executive Vice President and                    March 31, 1999
-------------------------       Chief Financial Officer
/s/John F. Kenny, Jr


/s/ Jean A. Bua               Vice President and Corporate                    March 31, 1999
-------------------------       Controller (principal accounting officer)
Jean A. Bua


/s/ Clarke H. Bailey          Director                                        March 31, 1999
-------------------------
Clarke H. Bailey


/s/ Constantin R. Boden       Director                                        March 31, 1999
-------------------------
Constantin R. Boden


/s/ Kent P. Dauten            Director                                        March 31, 1999
-------------------------
Kent P. Dauten


/s/ Eugene B. Doggett         Director                                        March 31, 1999
-------------------------
Eugene B. Doggett


/s/ B. Thomas Golisano        Director                                        March 31, 1999
-------------------------
B. Thomas Golisano


/s/ Arthur D. Little          Director                                        March 31, 1999
-------------------------
Arthur D. Little


/s/ Vincent J. Ryan           Director                                        March 31, 1999
-------------------------
Vincent J. Ryan
</TABLE>

                                        


                                       71
<PAGE>

                               INDEX TO EXHIBITS


     Exhibits indicated below are incorporated by reference to documents of the
Company on file with the Commission. Exhibit numbers in parentheses refer to
the Exhibit numbers in the applicable filing (which are identified in the
footnotes appearing at the end of this index). All other exhibits are filed
herewith. Each exhibit marked by a pound sign (#) is a management contract or
compensatory plan.



<TABLE>
<CAPTION>
Exhibit No.                                    Item                                     Exhibit
-----------                                    ----                                     -------
  <S>         <C>                                                                        <C>
  2.1         Agreement and Plan of Merger, dated as of September 26, 1997, by            (2.2)(7)
              and among Iron Mountain, Arcus Group, United Acquisition
              Company and Arcus Technology Services, Inc. (collectively, the
              "Arcus Parties")
   2.2        Amendment No. 1 to Agreement and Plan of Merger, dated as of               (2.1A)(9)
              November 25, 1997, by and among Iron Mountain and each of the
              Arcus Parties
   2.3        Agreement and Plan of Merger, dated as of February 19, 1997, by               (2)(4)
              and among Iron Mountain, IM-1 Acquisition Corp. and Safesite
   2.4        Amendment No. 1 to Agreement and Plan of Merger, dated as of                 (2A)(5)
              April 1, 1997, by and among Iron Mountain, IM-1 Acquisition Corp.
              and Safesite
   2.5        Amendment No. 2 to Agreement and Plan of Merger, dated as of                 (2B)(5)
              May 7, 1997, by and among Iron Mountain, IM-1 Acquisition Corp.
              and Safesite
   2.6        Agreement and Plan of Merger, dated as of August 25, 1997, by               (2.3)(7)
              and among Iron Mountain, DSI Acquisition Corporation and Data
              Securities International, Inc.
   2.7        Agreement and Plan of Merger, dated as of September 17, 1997, by            (2.2)(8)
              and among Iron Mountain, IM-3 Acquisition Corp. and HIMSCORP,
              Inc.
   2.8        Agreement and Plan of Merger, dated as of February 24, 1998, by             (2.7)(12)
              and among Iron Mountain, IM-3 Acquisition Corp. and InterMation,
              Inc. (confidential treatment granted as to certain portions)
   2.9        Agreement and Plan of Merger, dated as of June 5, 1998, by and              (2.1)(13)
              among IMRM, Iron Mountain/NUS, Inc. and National Underground
              Storage, Inc. (confidential treatment granted as to certain portions)
   2.10       Stock Purchase Agreement, dated as of February 28, 1999, by and             Filed herewith
              among Iron Mountain, Data Base and all of the stockholders of Data          as Exhibit 2.10
              Base (portions of this exhibit have been omitted pursuant to a
              request for confidential treatment)
   3.1        Amended and Restated Certificate of Incorporation of Iron Mountain,         (3.1)(10)
              as amended
   3.2        Amended and Restated By-Laws of Iron Mountain, as amended                   (3.2)(10)
  10.1        Second Amended and Restated Credit Agreement, dated as of                  (10.1)(7)
              September 26, 1997, among Iron Mountain, the lenders party thereto
              and The Chase Manhattan Bank, as Administrative Agent
  10.2        Amendment No. 1 to the Second Amended and Restated Credit                  (10.1)(14)
              Agreement, dated as of December 31, 1997, among Iron Mountain,
              the lenders party thereto and The Chase Manhattan Bank, as
              Administrative Agent
  10.3        Amendment No. 2 to the Second Amended and Restated Credit                  (10.1)(16)
              Agreement, dated as of November 9, 1998, among Iron Mountain,
              the lenders party thereto and The Chase Manhattan Bank, as
              Administrative Agent
</TABLE>

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<PAGE>


<TABLE>
<CAPTION>

Exhibit No.                                     Item                                         Exhibit
-----------                                     ----                                         -------
<S>             <C>                                                                          <C>
 10.4           Indenture for 101/8% Senior Subordinated Notes due 2006 by and             (10.3)(4)
                among Iron Mountain, certain of its subsidiaries and First National
                Association, as trustee, dated October 1, 1996
 10.5           Indenture of 83/4% Senior Subordinated Notes due 2009 by and                (4.1)(6)
                among Iron Mountain, certain of its subsidiaries and The Bank of
                New York, as trustee, dated October 24, 1997
 10.6           Iron Mountain Incorporated 1995 Stock Incentive Plan, as amended #         (10.1)(3)
 10.7           Iron Mountain/UAC 1995 Stock Option Plan #                                 (10.1)(11)
 10.8           Iron Mountain/ATSI 1995 Stock Option Plan #                                (10.2)(11)
 10.9           Iron Mountain Incorporated 1998 Employee Stock Purchase Plan #             (10.8)(14)
 10.10          Record Center Storage Services Agreement between IMRM and                 (10.18)(1)
                Resolution Trust Corporation, dated July 31, 1992, as renewed by
                letter agreement effective July 26, 1998 between Iron Mountain and
                the Federal Deposit Insurance Corporation
 10.11          Amended and Restated Registration Rights Agreement, dated as of            (10.2)(3)
                June 12, 1997, between Iron Mountain and certain stockholders of
                Iron Mountain #
 10.12          Joinder to Registration Rights Agreement, dated as of October 31,         (10.12)(9)
                1997, by and between Iron Mountain and Kent P. Dauten #
 10.13          Stockholders' Agreement, dated September 17, 1997, by and                 (10.13)(10)
                between Iron Mountain and Kent P. Dauten #
 10.14          Stockholders' Agreement, dated as of February 19, 1997, by and            (10.20)(4)
                between Iron Mountain and certain stockholders of Safesite #
 10.15          Asset Purchase and Sale Agreement, dated as of August 20, 1997,            (10.2)(7)
                by and between IMRM and Records Retention/FileSafe, L.P.
 10.16          Stockholders' Agreement, dated as of September 26, 1997, by and           (10.16)(9)
                among Iron Mountain and certain stockholders of the Arcus Parties #
 10.17          Lease Agreement, dated as of October 1, 1998, between Iron                (10.20)(15)
                Mountain Statutory Trust--1998 and IMRM
 10.18          Unconditional Guaranty, dated as of October 1, 1998, from Iron            (10.21)(15)
                Mountain to Iron Mountain Statutory Trust--1998
 10.19          Amended and Restated Agency Agreement, dated October 1, 1998,             (10.22)(15)
                by and between Iron Mountain Statutory Trust--1998 and IMRM
 10.20          Agreement, dated as of December 2, 1998, by and between Iron                (2.1)(16)
                Mountain and Mentmore Abbey plc
 10.21          Strategic Alliance Agreement, dated as of January 4, 1999, by and          (10.2)(16)
                among Iron Mountain, Iron Mountain (U.K.) Limited, Britannia Data
                Management Limited and Mentmore Abbey plc
 10.22          Amendment and Agreement Re: Leasehold Improvements,                     Filed herewith
                dated as of January 28, 1999, by and among Iron Mountain,               as Exhibit 10.22
                Statutory Trust--1998 First Union National Bank, Scotiabanc Inc.,
                IMRM, Iron Mountain, the lenders party thereto, The Bank of Nova
                Scotia, as Agent for the lenders, and BTM Capital Corporation, as
                LC Issuer
   12           Schedule of computation of ratio of earnings to fixed charges           Filed herewith
                                                                                        as Exhibit 12
   21           Subsidiaries of Iron Mountain                                           Filed herewith
                                                                                        as Exhibit 21
   23           Consent of Arthur Andersen LLP                                          Filed herewith
                                                                                        as Exhibit 23
   27           Financial Data Schedule -- December 31, 1998                            Filed herewith
                                                                                        as Exhibit 27
</TABLE>

 

                                       73
<PAGE>

----------------

(1)   Filed as an Exhibit to Iron Mountain's Registration Statement No. 33-99950
      filed with the Commission on December 1, 1995.

(2)   Filed as an Exhibit to Iron Mountain's Registration Statement No.
      333-10359 filed with the Commission on August 16, 1996.

(3)   Filed as an Exhibit to Iron Mountain's Quarterly Report on Form 10-Q for
      the quarter ended September 30, 1996, filed with the Commission, File No.
      0-27584.

(4)   Filed as an Exhibit to Iron Mountain's Annual Report on Form 10-K for the
      year ended December 31, 1996, filed with the Commission, File No. 0-27584.
     

(5)   Filed as an Exhibit to Iron Mountain's Registration Statement No.
      333-24635 filed with the Commission on April 4, 1997, as amended on May 7,
      1997 and May 13, 1997.

(6)   Filed as an Exhibit to Iron Mountain's Current Report on Form 8-K dated
      October 30, 1997, filed with the Commission, File No. 0-27584.

(7)   Filed as an Exhibit to Iron Mountain's Quarterly Report on Form 10-Q for
      the quarter ended September 30, 1997, filed with the Commission, File No.
      0-27584.

(8)   Filed as an Exhibit to Iron Mountain's Current Report on Form 8-K/A dated
      November 10, 1997, filed with the Commission, File No. 0-27584.

(9)   Filed as an Exhibit to Iron Mountain's Registration Statement No.
      333-41045 filed with the Commission on November 26, 1997.

(10)  Filed as an Exhibit to Iron Mountain's Registration Statement No.
      333-44185 filed with the Commission on January 13, 1998.

(11)  Filed as an Exhibit to Iron Mountain's Current Report on Form 8-K dated
      March 9, 1998, filed with the Commission, File No. 0-27584.

(12)  Filed as an Exhibit to Iron Mountain's Annual Report on Form 10-K for the
      year ended December 31, 1997, filed with the Commission, File No. 0-27584.
      

(13)  Filed as an Exhibit to Iron Mountain's Current Report on Form 8-K dated
      July 10, 1998, filed with the Commission, File No. 0-27584.

(14)  Filed as an Exhibit to Amendment No. 1 to Iron Mountain's Registration
      Statement No. 333-44187 filed with the Commission on August 3, 1998.

(15)  Filed as an Exhibit to Iron Mountain's Registration Statement No.
      333-67765 filed with Commission on November 23, 1998.

(16)  Filed as an Exhibit to Iron Mountain's Current Report on Form 8-K dated
      January 19, 1999, filed with the Commission, File No. 0-27584.


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