Memorex 2011 Annual Report Download - page 17

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Item 1B. Unresolved Staff Comments.
None.
Item 2. Properties
Our worldwide headquarters is located in Oakdale, Minnesota, in the United States of America. Our principal facilities,
and the functions at such facilities, are listed below for each reporting segment. Our facilities are in good operating condition
suitable for their respective uses and are adequate for our current needs.
Facility Function
Americas
Oakdale, Minnesota (owned) ......................... Sales/Administrative/Laboratory facility/Corporate
headquarters
Southaven, Mississippi (leased*) ...................... Distribution Center
Europe
Hoofddorp, Netherlands (leased) ...................... Sales/Administrative/European regional headquarters
Neuss, Germany (leased) ............................ Sales/Administrative/Distribution Center
North Asia
Tokyo, Japan (leased) .............................. Sales/Administrative/North Asia regional headquarters
South Asia
Kings Park, Australia (leased) ......................... Sales/Administrative/Distribution Center
Singapore (leased) ................................. South Asia regional headquarters
* Our Southaven lease was transferred on to our logistics provider on January 1, 2012.
Item 3. Legal Proceedings.
In the normal course of business, we periodically enter into agreements that incorporate general indemnification
language. Performance under these indemnities would generally be triggered by a breach of terms of the contract or by a
third-party claim. There has historically been no material losses related to such indemnifications. In accordance with
accounting principles generally accepted in the United States of America, we record a liability in our Consolidated Financial
Statements for these actions when a loss is known or considered probable and the amount can be reasonably estimated.
We are the subject of various pending or threatened legal actions in the ordinary course of our business. All such
matters are subject to many uncertainties and outcomes that are not predictable with assurance. Additionally, our audio and
video information business is subject to allegations of patent infringement by our competitors as well as by non-practicing
entities (NPEs), sometimes referred to as “patent trolls,” who may seek monetary settlements from us, our competitors,
suppliers and resellers. Consequently, as of December 31, 2011, we are unable to ascertain the ultimate aggregate amount of
any monetary liability or financial impact that we may incur with respect to these matters. While these matters could materially
affect operating results depending upon the final resolution in future periods, it is our opinion that after final disposition, any
monetary liability beyond that provided in the Consolidated Balance Sheet as of December 31, 2011 would not be material to
our Consolidated Financial Statements.
On June 14, 2011, Trek 2000 International Ltd and certain of its affiliates (“Trek”) filed a complaint asking the
International Trade Commission (“ITC”) to commence an investigation against us and various others. Trek alleges that
Imation and others unlawfully import and sell into the United States certain universal serial bus (“USB”) portable storage
devices that allegedly infringe several of Trek’s U.S. patents. Trek seeks to block the importation of the allegedly offending
products into the United States. On August 15, 2011, we filed an answer to Trek’s complaint, denying liability and asserting
that Trek fails to meet certain requirements to bring its complaint to the ITC. This investigation is in the discovery phase. The
hearing is scheduled for May 9-16, 2012; the initial determination is expected July 19, 2012; and the target date for the
completion of this investigation is November 19, 2012. Although this proceeding is subject to the uncertainties inherent in the
litigation process, based on the information presently available to us, management does not expect that the ultimate
resolution of this action will have a material adverse effect on our financial condition, results of operations or cash flows.
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