Memorex 2013 Annual Report Download - page 21

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$45.6 million that we believe is owed to us by Copie France for our historical over payment on levies associated with
commercial channel sales as we are not assured of its collectability. Rather, going forward, such amount will be realized as a
reduction to cost of sales upon the incurrence of (and for the same amount of) valid levies for consumer channel sales.
We believe that we have utilized a methodology, and have sufficient documentation and evidence, to fully support our
estimates that we have overpaid $55.1 million to the French collection society of levies on commercial channel sales and that
we have incurred (but not paid) $9.5 million of levies on consumer channel sales in France. However, such amounts could be
subject to challenge in court and there is no certainty that our estimates would be upheld and supported. Additionally, due to
the expected continued decline in our sales associated with optical media products, we cannot be assured that we will ever be
able to fully realize the estimated amounts owed to us by the French collection society through offsetting such amounts
against levies incurred on future consumer channel sales or other measures.
Other Jurisdictions. At December 31, 2013, the recovery of some or all of the copyright levies previously paid on
commercial sales in EU jurisdictions other than Italy and France represents a gain contingency that has not yet met the
required criteria for recognition in our financial statements. There is no assurance that we will realize any of this gain
contingency. We also have an estimated $9.4 million of accrued but unpaid levies associated with consumer sales in EU
jurisdictions other than Italy and France that we continue to carry on our books.
We are subject to several pending or threatened legal actions by the individual European national levy collecting
societies in relation to private copyright levies under the Directive. Those actions generally seek payment of the commercial
and consumer optical levies withheld by Imation. Imation has corresponding claims in those actions seeking reimbursement of
levies improperly collected by those collecting societies. We are subject to threatened actions by certain customers of Imation
seeking reimbursement of funds they allege relate to commercial levies that they claim they should not have paid. Although
these actions are 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 these actions will have a material adverse effect on our
financial condition, results of operations or cash flows. We anticipate that additional court decisions may be rendered in 2014
that may directly or indirectly impact our levy exposure in specific European countries which could trigger a review of our levy
exposure in those countries.
Item 4. Mine Safety Disclosures.
Not Applicable.
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