Symptom 

A known issue exists where the output to the Local Backup Copy folder fails the backup with the following error message:

ERROR : 15:21:35 Backup failed: Could not create output directory at Y:\55cda218-35de-4e26-9efa-a6198312f3ce\20161018132128 (Y:\55cda218-35de-4e26-9efa-a6198312f3ce\20161018132128: Unable to determine if root directory exists)

Cause 

Due to a Windows limitation, a newly formatted NTFS drive cannot be used for Local Backup Copy output by the Agent until the drive has had other folder activity.

Solution 

Create a random folder on the drive before performing a backup.