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ACCELERATING OUR
STRATEGIC TRANSFORMATION
2012 Annual Report and Form 10-K

Table of contents

  • Page 1
    ACCELERATING OUR STRATEGIC TRANSFORMATION 2012 Annual Report and Form 10-K

  • Page 2
    ... strengths in data storage for growth in new, higher margin product categories that address the world's need to store, protect and connect digital content. We are focused on two high-growth markets-data storage and data security-across all channels. After making several technology acquisitions in...

  • Page 3
    ... Act). Yes ' No Í Aggregate market value of voting and non-voting stock of the registrant held by non-affiliates of the registrant, based on the closing price of $5.91 as reported on the New York Stock Exchange on June 29, 2012, was $220.0 million. The number of shares outstanding of the registrant...

  • Page 4
    ... DATA CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE CONTROLS AND PROCEDURES OTHER INFORMATION PART III DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE EXECUTIVE COMPENSATION SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED...

  • Page 5
    ...I Item 1. General Imation Corp., a Delaware corporation, is a global scalable storage and data security company. Our portfolio includes commercial and consumer data storage and security products as well as products designed to manage audio and video information in the home. Imation reaches customers...

  • Page 6
    ...storage products primarily include optical drives and audio and video tape media. Secure and Scalable Storage Secure storage products and software include USB flash drives and external hard drives designed to meet the most stringent security standards to protect data at rest with Federal Information...

  • Page 7
    ... acquired by Imation in 2007 under an exclusive long-term license from TDK Corporation (TDK). TDK Life on Record brand products include recordable CDs, DVDs and Blu-ray discs, flash drives, tape cartridges, headphones and speakers which are sold to commercial customers and individual consumers. TDK...

  • Page 8
    ...use of the IronKey brand but not the brand itself) for its secure storage management software and service, as well as the IronKey brand for secure storage products. In 2012, we consolidated our mobile security portfolio around the IronKey brand. IronKey products include hardware encrypted USB drives...

  • Page 9
    ... government customers; and Consumer Storage and Accessories (CSA), which will focus on retail channels. The Company continued to manage and evaluate results through December 31, 2012 under our historic regional segment presentation but will begin reporting segment information under the new structure...

  • Page 10
    ..., we acquired substantially all of the assets relating to the marketing, distribution, sales, customer service and support of removable recording media products, accessory products and ancillary products being sold under the TDK Life on Record brand name (TDK Recording Media), from TDK, including...

  • Page 11
    ...focus on data protection and management, storage hardware, audio and video information products, removable hard drive systems, diskbased storage systems and related software. As noted above, we signed a strategic agreement with TDK to jointly develop and manufacture magnetic tape technologies. Under...

  • Page 12
    ... of Altec Lansing Technologies, a manufacturer of consumer audio equipment from June 2001 to August 2005. Mr. Lucas was a member of the Board of Directors of Imation from April 2007 to February 2009 and served as a member of the Company's Audit and Finance Committee and Compensation Committee. Mr...

  • Page 13
    ... a provider of data storage products, a leader in hard disk drives and storage solutions. From 2004 to 2006, he served as director of RAID solutions and external storage for Adaptec Inc. From 2000 to 2004 and following Compaq's acquisition by Hewlett-Packard Company, a computer software and hardware...

  • Page 14
    ... from competitive offerings, timing of new product introductions, effectiveness of marketing programs and maintaining low manufacturing, sourcing and supply chain costs. No assurance can be given with regard to our ability to anticipate and react to changes in market requirements, actions of...

  • Page 15
    ... secular optical market decline. Our security products must provide appropriate levels of security to adequately store and protect our customers' data. Many of our secure storage products include software and hardware security such as user authentication, data encryption, and portable digital...

  • Page 16
    ... of optical levies could impact our operating results. Significant changes in discount rates, rates of return on pension assets, mortality tables and other factors could affect our future earnings, equity and pension funding requirements. Pension obligations and related costs are determined using...

  • Page 17
    ..., especially regarding patents related to our data storage and audio and video information products. We are often indemnified by our suppliers; litigation, however, is always subject to many uncertainties and outcomes that are not predictable. We use legal and appropriate means to contest litigation...

  • Page 18
    ... patents or proprietary rights; • conditions and trends in the consumer electronics and data storage industries; • contraction in our operating results or growth rates; • changes in financial estimates by securities analysts relating specifically to us or the industries in which we participate...

  • Page 19
    ...with Philips Electronics N.V., U.S. Philips Corporation and North American Philips Corporation (collectively, Philips). We had been involved in a complex series of disputes in multiple jurisdictions regarding cross-licensing and patent infringement related to recordable optical media. The settlement...

  • Page 20
    ... actions generally seek payment of the commercial and consumer optical levies withheld by Imation. Imation has corresponding claims in those actions ...specific European countries which could trigger a review of our levy exposure in those countries. Item 4. Mine Safety Disclosures. Not Applicable. 17

  • Page 21
    ... shares repurchased as part of our publicly announced programs and shares that were surrendered to Imation by participants in the Plans to satisfy the tax obligations related to the vesting of restricted stock awards. On May 3, 2012, the Company announced that on May 2, 2012 our Board of Directors...

  • Page 22
    .../31/2011 12/31/2012 (Total Return Index) 12/31/2007 12/31/2008 12/31/2009 12/31/2010 12/31/2011 12/31/2012 Imation Corp...S&P Midcap 400 Index ......be incorporated by reference into any past or future filing under the Securities Act or the Exchange Act, except to the extent we specifically request...

  • Page 23
    ... net accounts receivable balance. Days of inventory supply is calculated using the current period inventory balance divided by an estimate of the inventoriable portion of cost of goods sold expressed in days. Return percentages are calculated using (loss) income from continuing operations. 20 (2)

  • Page 24
    ... security company. Our portfolio includes commercial and consumer data storage and security products as well as products designed to manage audio and video information in the home. Imation reaches customers in more than 100 countries through a global distribution network and well recognized brands...

  • Page 25
    ... in growth platforms in data storage and security solutions with the acquisition of Nexsan Corporation (Nexsan) on December 31, 2012. The acquisition of Nexsan brings us a proven technology platform and a robust portfolio of disk-based and hybrid disk-and-solid-state storage systems and is expected...

  • Page 26
    ... other traditional storage products, as well as decreased revenue from audio and video information products of $32.2 million. Secure and scalable products remained flat in 2012 compared to 2011 as a $20.4 million decline in commodity flash products, driven by continued market place price degradation...

  • Page 27
    ... offset by optical supplier price increases of $12.8 million. Total gross margins increased in 2012 compared with 2011 due primarily to a shift in product mix to higher gross margin products along with improved gross margins in secure and scalable storage and audio and video information. Gross...

  • Page 28
    ...the fair value of our Mobile Security reporting unit was impaired. We recorded an impairment charge of $23.3 million to the Americas reporting segment in the Consolidated Statements of Operations. In determining the estimated fair value of the reporting unit, we used the income approach, a valuation...

  • Page 29
    ... charge of $2.6 million was recognized in 2010. On January 11, 2011, we signed a patent crosslicense agreement with SanDisk Corporation (SanDisk) to settle two patent cases filed by SanDisk in Federal District Court against our flash memory products, including USB drives and solid state disk drives...

  • Page 30
    ... Program On October 22, 2012, the Board of Directors approved the Global Processing Improvement Restructuring Program (GPI Program) relating to the realignment of our business structure and reduction of our operating expenses in excess of 25 percent over time. This program addresses product line...

  • Page 31
    ... product lines as part of this program, which are included in cost of goods sold in our Consolidated Statements of Operations. During 2010, we recorded restructuring charges of $3.4 million for severance and related expenses. Other Prior Programs Substantially Complete We have had activity related...

  • Page 32
    ...met, the sale is expected to close in 2013. During 2010 we recorded $0.2 million of other charges related to the 2008 Corporate Program. Additionally during 2010, other expenses included costs associated with the announced retirement of our former Vice Chairman and Chief Executive Officer, including...

  • Page 33
    ... Our business is organized, managed and internally and externally reported as segments differentiated by the regional markets we serve: Americas, Europe, North Asia and South Asia. Each of these geographic segments has responsibility for selling all of our product lines. • • Our Americas segment...

  • Page 34
    ... lower gross margins on optical and magnetic products and decreases in revenue on audio and video information products, partially offset by higher gross margins on secure and scalable storage products. Europe Years Ended December 31, 2012 2011 2010 (In millions) Percent Change 2012 vs. 2011 2011 vs...

  • Page 35
    ... revenue from optical products of $20.2 million and magnetic products of $12.2 million. Secure and scalable storage products declined $4.3 million, driven principally by commodity flash products. These revenue declines were offset by an increase in audio and video information products revenues of...

  • Page 36
    ... data storage products of $18.6 million, primarily consisting of declines in optical media of $10.7 million and audio video tape of $4.7 million. Secure and scalable products, principally commodity flash products, declined $5.2 million. Revenue was not impacted by foreign currency. Operating income...

  • Page 37
    ... 2012 we recorded a non-cash goodwill impairment charge of $23.3 million and intangible asset impairment charges of $260.5 million. Cash provided by operating activities in 2010 was primarily a result of initiatives to improve working capital by lowering levels of inventory and changing payable...

  • Page 38
    ... used in financing activities ...$ 9.9 $(9.1) $(1.0) On May, 2, 2012 our Board of Directors authorized a share repurchase program of 5.0 million shares of common stock. The Company's previous authorization, which had 1.2 million shares remaining for purchase, was canceled with the new authorization...

  • Page 39
    ..., our borrowing capacity under this arrangement was $76.4 million in the United States and $13.9 million in Europe. Prior to August 15, 2012, borrowings bore interest at an interest rate equal to (1) the Eurodollar Rate (as defined in the Amended Credit Agreement) plus 2.00 percent or (2) the Base...

  • Page 40
    ... laws; and limitations regarding additional liens, indebtedness, certain acquisitions, investments and dispositions of assets. The Amended Credit Agreement contains a conditional financial covenant that requires Imation Corp. to have a Consolidated Fixed Charge Coverage Ratio (as defined in the...

  • Page 41
    ...and local tax laws. From time to time, we contribute additional amounts, as we deem appropriate. We expect to contribute approximately $2 million to $4 million to our pension plans in 2013 and have $28.1 million recorded in other liabilities related to pension plans as of December 31, 2012. Critical...

  • Page 42
    ... in the future. Our income tax returns are subject to review by various U.S. and foreign taxing authorities. As such, we record accruals for items that we believe may be challenged by these taxing authorities. The threshold for recognizing the benefit of a tax return position in the financial...

  • Page 43
    ... between the Americas-Consumer, Americas-Commercial and Mobile Security reporting units as determined by sales channel. During 2011, we acquired the assets of MXI Security, from Memory Experts International Inc., (MXI) and the secure data storage hardware business of IronKey Systems Inc. (IronKey...

  • Page 44
    ...at the date such benefits were communicated to the applicable employees and recognized as expense over the employees' remaining service periods. Copyright Levies. In many European Union (EU) member countries, the sale of recordable optical media is subject to a private copyright levy. The levies are...

  • Page 45
    ... the future rate of return. The rate of return used in calculating the U.S. pension plan expense for 2012, 2011 and 2010 was 8.0 percent. A reduction of 0.25 percent for the expected return on plan assets assumption will increase United States net pension plan expense (pre-tax) by $0.2 million...

  • Page 46
    ...volatility of the markets in which we operate; foreign currency fluctuations; changes in European law or practice related to the imposition or collectability of optical levies; significant changes in discount rates and other assumptions used in the valuation of our pension plans; changes in tax laws...

  • Page 47
    Item 8. Financial Statements and Supplementary Data. REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Shareholders of Imation Corp.: In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, of ...

  • Page 48
    IMATION CORP. CONSOLIDATED STATEMENTS OF OPERATIONS Years Ended December 31, 2012 2011 2010 (In millions, except per share amounts) Net revenue ...Cost of goods sold ...Gross profit ...Operating expenses: Selling, general and administrative ...Research and development ...Intangible impairments ......

  • Page 49
    IMATION CORP. CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS Years Ended December 31, 2012 2011 2010 (In millions) Net loss ...Other comprehensive (loss) income, net of tax...financial instruments ...Net pension adjustments: Reclassification of adjustments for defined benefit plans recorded in net loss...

  • Page 50
    ...Preferred stock, $.01 par value, authorized 25 million shares, none issued and outstanding ...Common stock, $.01 par value, authorized 100 million shares, 42.9 million issued ...Additional paid-in capital ...Retained deficit ...Accumulated other comprehensive loss ...Treasury stock, at cost ...Total...

  • Page 51
    ... ...401(k) matching contribution ...Stock-based compensation related to options Share-based payment modification ...Tax impact of stock-based compensation ...Net change in cumulative translation adjustment ...Pension adjustments, net of tax ...Cash flow hedging, net of tax ...Balance as of December...

  • Page 52
    ... ...Cash Flows from Financing Activities: Purchase of treasury stock ...Debt issuance costs ...Debt borrowings ...Debt repayments ...Contingent consideration payments ...Exercise of stock options ...Net cash provided by (used in) financing activities ...Effect of exchange rate changes on cash and...

  • Page 53
    ...and data security company. Our portfolio includes tiered storage and security offerings for businesses as well as products designed to manage audio and video information in the home. Imation reaches customers in more than 100 countries through a global distribution network and well recognized brands...

  • Page 54
    ... other comprehensive loss in shareholders' equity until the underlying hedged item is recognized in operations. These gains and losses are generally recognized as an adjustment to cost of goods sold for inventory-related hedge transactions, or as adjustments to foreign currency transaction gains...

  • Page 55
    ... costs include only (1) external direct costs of materials and services consumed in developing or obtaining internal-use software, (2) payroll and payroll-related costs for employees who are directly associated with and who devote time to the internal-use software project and (3) interest costs...

  • Page 56
    ... data storage media products as well as certain consumer electronic products. Net revenue consists primarily of magnetic, optical, flash media, consumer electronics and accessories sales. We recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred or services...

  • Page 57
    ... will be charged to earnings in the period such determination is made. Our income tax returns are subject to review by various U.S. and foreign taxing authorities. As such, we record accruals for items that we believe may be challenged by these taxing authorities. The threshold for recognizing the...

  • Page 58
    ...19) 4.9 On December 31, 2012, we acquired Nexsan Corporation (Nexsan) which is a provider of disk-based storage systems and has a portfolio of disk-based and hybrid disk-and-solid-state storage systems with existing customers worldwide. This acquisition is intended to significantly accelerate our...

  • Page 59
    .... During 2012, we purchased the IronKey license for its secure storage management software and service, as well as the IronKey brand for secure storage products, for $4.0 million (we held a license for brand use in 2011 with the acquisition of IronKey). The purchase price allocation, associated...

  • Page 60
    ... sells encrypted and biometric USB drives, encrypted and biometric hard disk drives, secure portable desktop solutions, and software solutions. MXI products contain various security features such as password authentication, encryption and remote manageability. The purchase price consisted of a cash...

  • Page 61
    ... be based on incremental gross profit (revenue less cost of goods sold) and gross margin percent from MXI branded products, IronKey products and all other Defender branded products as well as future Imation mobile security products. The contingent consideration arrangement included the potential for...

  • Page 62
    ... is recorded as of December 31, 2012. Note 5 - Supplemental Balance Sheet Information As of December 31, 2012 2011 (In millions) \ Inventories Finished goods ...Work in process ...Raw materials and supplies ...Total inventories ...Other Current Assets Non-trade receivables ...Deferred income taxes...

  • Page 63
    ......Employee separation costs (Note 7) ...Litigation settlement - current ...Accrued payroll ...Accrued royalties ...Deferred revenue ...Hedging liability (Note 12) ...Deferred income taxes (Note 10) ...Other ...Total other current liabilities ...Other Liabilities Pension liabilities ...Uncertain tax...

  • Page 64
    ...31, 2012, all of our long-lived assets were evaluated for impairment under the "held and used" impairment model and, while we were in the process of exploring strategic options (including potential disposition) of our XtremeMac and Memorex brands (pertaining only to the consumer electronics products...

  • Page 65
    ... table presents the changes in goodwill allocated to our reportable segments: Americas Europe North Asia (In millions) Total Balance as of December 31, 2010: Goodwill ...Accumulated impairment losses ...Encryptx acquisition ...MXI Security acquisition ...IronKey acquisition ...Goodwill impairment...

  • Page 66
    ... for impairment during 2012 as it was acquired on December 31, 2012 and represents fair value based on the acquisition. During the second and third quarters of 2012, we adjusted our internal financial forecast for our Americas-Mobile Security reporting unit due to changes in the timing of expected...

  • Page 67
    ... Program On October 22, 2012, the Board of Directors approved the Global Process Improvement Restructuring Program (GPI Program) related to the realignment of our business structure and the reduction of our operating expenses in excess of 25 percent over time. This program addresses product line...

  • Page 68
    ... planned rationalization of certain product lines as part of this program, which are included in cost of goods sold in the Consolidated Statements of Operations. During 2010, we recorded restructuring charges of $3.4 million for severance and related expenses. Changes in the 2011 Corporate Program...

  • Page 69
    ...-offs of $2.3 million related to the planned rationalization of certain product lines, which are included in cost of goods sold in our Consolidated Statements of Operations. During 2011, we recorded acquisition and integration related costs as a result of our acquisition activities of $2.6 million...

  • Page 70
    ...activity by restructuring program: 2011 Manufacturing Redesign Program 2011 Corporate Strategy Program (In millions) Other Total Restructuring Severance and related ...Lease termination costs ...Other ...Total restructuring ...Other Pension settlement/curtailment ...Asset disposals ...Acquisition...

  • Page 71
    ... and other activity by restructuring program: 2011 Manufacturing Redesign Program 2011 2008 Corporate Corporate Strategy Redesign Program Program (In millions) Other Total Restructuring Severance and related ...Lease termination costs ...Total restructuring ...Other Pension settlement/curtailment...

  • Page 72
    ...-based awards and remove the limitation on the number of shares that can be issued pursuant to full value awards. Stock Options The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model. The assumptions used in the valuation model are...

  • Page 73
    ... FINANCIAL STATEMENTS - (Continued) The following table summarizes our stock option activity: Weighted Average Remaining Contractual Life (Years) Stock Options Weighted Average Exercise Price Aggregate Intrinsic Value (millions) Outstanding December 31, 2009 ...Granted ...Exercised ...Canceled...

  • Page 74
    ... 1.8 years. No related stock-based compensation was capitalized as part of an asset for the years ended December 31, 2012, 2011 or 2010. Restricted Stock The following table summarizes our restricted stock activity: Weighted Average Grant Date Fair Value Per Share Restricted Stock Nonvested as of...

  • Page 75
    ... percent for 2012. In accordance with the annual update process, the interest credit rate will be 2.80 percent for 2013. In connection with actions taken under our announced restructuring programs, the number of employees accumulating benefits under our pension plan in the United States continues to...

  • Page 76
    ..., and the funded status of the defined benefit pension plans were as follows: United States International As of December 31, As of December 31, 2012 2011 2012 2011 (In millions) Change in benefit obligation Benefit obligation, beginning of year ...Service cost ...Interest cost ...Actuarial (gain...

  • Page 77
    ... pension cost included the following: $88.3 88.3 71.7 $92.2 92.2 69.6 $37.3 36.9 25.8 $31.7 31.4 25.1 United States International Years Ended December 31, Years Ended December 31, 2012 2011 2010 2012 2011 2010 (In millions) Service cost ...Interest cost ...Expected return on plan assets...

  • Page 78
    ... used to determine net periodic benefit costs were as follows (international assumptions are a weighted average of all of our international plans): United States As of December 31, 2012 2011 2010 International As of December 31, 2012 2011 2010 Discount rate ...Expected return on plan assets ...Rate...

  • Page 79
    ...in common stock are valued at the closing price reported on major markets on which the individual securities are traded. Accordingly, these investments are classified as Level 1 financial instruments. Comingled trust funds. These assets are valued using the NAV of shares as of December 31, 2012. The...

  • Page 80
    ... Inputs (Level 3) United States December 31, 2012 Short-term investments Money market securities ...Mutual Funds Equity securities Large-cap growth funds ...International growth fund ...Fixed income securities ...Absolute return strategy funds ...Common stocks ...Commingled trust funds ...Total...

  • Page 81
    ...) Quoted Prices in Active Markets for Significant Other Identical Assets Observable (Level 1) Inputs (Level 2) (In millions) Unobservable Inputs (Level 3) International December 31, 2011 Short-term investments Other ...Mutual Funds Equity securities - blended funds ...Fixed income securities...

  • Page 82
    ... In 2012, 2011 and 2010 the net cash received (or paid) for income taxes, relating to both continuing and discontinued operations, was ($4.4) million, ($4.9) million and $6.4 million, respectively. Tax laws require certain items to be included in our tax returns at different times than the items are...

  • Page 83
    ... December 31, 2012, approximately $92.8 million of earnings attributable to foreign subsidiaries were considered to be permanently invested in those operations. Our income tax returns are subject to review by various U.S. and foreign taxing authorities. As such, we record accruals for items that we...

  • Page 84
    ... at December 31, 2012, 2011 and 2010, respectively. The reversal of accrued interest and penalties would affect income tax expense and our related effective tax rate. Our federal income tax returns for 2010 through 2011 are subject to examination by the Internal Revenue Service (IRS). The IRS...

  • Page 85
    ..., our borrowing capacity under this arrangement was $76.4 million in the United States and $13.9 million in Europe. Prior to August 15, 2012, borrowings bore interest at an interest rate equal to (1) the Eurodollar Rate (as defined in the Amended Credit Agreement) plus 2.00 percent or (2) the Base...

  • Page 86
    ... Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability, or the exit price in an orderly transaction between market participants on the measurement date. A three-level hierarchy is used for fair value measurements based...

  • Page 87
    ... prices (Level 2). We are exposed to the risk of nonperformance by our counter-parties, but we do not anticipate nonperformance by any of these counter-parties. We actively monitor our exposure to credit risk through the use of credit approvals and credit limits and by using major international...

  • Page 88
    ...losses being recognized in current period operations. The following table sets forth our cash flow hedges which are measured at fair value on a recurring basis. December 31, 2011 December 31, 2012 Quoted Prices in Significant Quoted Prices in Significant Active Markets Other Active Markets Other for...

  • Page 89
    ... earn-out payments related to our acquisitions is recorded at fair value and remeasured on a recurring basis. We use the income approach in calculating the fair value of our contingent consideration. Changes in the fair value of our contingent consideration obligations are recognized as a fair value...

  • Page 90
    ... - (Continued) shares. The treasury stock held as of December 31, 2012 was acquired at an average price of $24.11 per share. Following is a summary of treasury share activity: Treasury Shares Balance as of December 31, 2009 ...Purchases ...Exercise of stock options ...Restricted stock grants and...

  • Page 91
    ... 31, 2012, 2011 and 2010, our business was organized, managed and internally and externally reported as segments differentiated by the regional markets we serve: Americas, Europe, North Asia and South Asia. Each of these geographic segments has responsibility for selling all of our product lines...

  • Page 92
    ... DVDs, CDs and Blu-ray disc recordable media. Magnetic products include primarily data storage tape media. Other traditional storage products include primarily optical drives and audio and video tape media. Secure and scalable storage products include flash memory and hard disk drive products...

  • Page 93
    ... was as follows: Years Ended December 31, 2012 2011 2010 (In Millions) Net Revenue Traditional storage ...Optical products ...Magnetic products ...Other traditional storage ...Total traditional storage ...Secure and scalable storage ...Audio and video information ...Total ... $ 426.8 286.2 15.4 728...

  • Page 94
    ... 11, 2011, we signed a patent cross-license agreement with SanDisk Corporation (SanDisk) to settle two patent cases filed by SanDisk in Federal District Court against our flash memory products, including USB drives and solid state disk (SSD) drives. Under the terms of the cross-license, we will pay...

  • Page 95
    ... prior period consumer product sales should be reversed. Our evaluation is made on a jurisdiction-by-jurisdiction basis and considers ongoing and cumulative developments related to levy litigation and law making activities within each jurisdiction as well as throughout the EU. Cost of goods sold for...

  • Page 96
    ... connection with this arrangement we entered into a Supply Agreement with TDK. In 2012, 2011 and 2010 we purchased products and services under the Supply Agreement which allows us to purchase a limited number of LTO Tape media and Blu-ray removable recording media products and accessory products for...

  • Page 97
    ... the acquired company under guidelines established by the SEC. Our independent registered public accounting firm, PricewaterhouseCoopers LLP, has audited the effectiveness of our internal control over financial reporting, as stated in their report which appears herein. Item 9B. Other Information...

  • Page 98
    ... Executive Officer, Imation Corp. See Executive Officers of the Registrant in Item 1. Business herein for further information. L. White Matthews, III, retired Executive Vice President and Chief Financial Officer, Ecolab Inc. (a developer and marketer of cleaning and sanitizing products and services...

  • Page 99
    ... Analysis," "Compensation Committee Report," "Compensation of Named Executive Officers" and "Board of Directors - Compensation of Directors" are incorporated by reference into this Form 10-K. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The...

  • Page 100
    ... Agreement, dated January 19, 2006, among Hanny Holding Limited, Hanny Magnetics (B.V.I.) Limited, Investor Capital Management Asia Limited, Investor Capital Partners - Asia Fund L.P, Global Media Limited, Memorex Holdings Limited and Imation Corp. (incorporated by reference to Exhibit 2.2 to...

  • Page 101
    ... on August 3, 2007) IMN Trademark License Agreement, dated July 31, 2007, by and between IMN Data Storage Holdings C.V. and TDK Corporation (incorporated by reference to Exhibit 10.3 to Imation's Form 8-K Current Report filed on August 3, 2007) Supply Agreement, dated July 31, 2007, by and between...

  • Page 102
    ..., 1996) 1996 Directors Stock Compensation Program, as amended May 8, 2002 (incorporated by reference to Exhibit 10.1 of Imation's Form 10-Q for the quarter ended June 30, 2002) Imation Corp. 2000 Stock Incentive Plan, as amended (incorporated by reference to Exhibit 10.7 to Annual Report on Form 10...

  • Page 103
    ... Form of 2005 Stock Incentive Plan Non-Qualified Stock Option Agreement for Executive Officers (incorporated by reference to Exhibit 10.2 to Imation's Form 8-K Current Report filed on May 12, 2008) Form of 2005 Stock Incentive Plan Non-Employee Director Restricted Stock Award Agreement (incorporated...

  • Page 104
    ...the Sarbanes-Oxley Act of 2002 The following financial information from Imation Corp.'s Annual Report on Form 10-K for the year ended December 31, 2012, filed with the SEC on March 13, 2013, formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Statements of Operations for...

  • Page 105
    ... 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. Imation Corp. By: /S/ MARK E. LUCAS Mark E. Lucas President and Chief Executive Officer Date: March 13, 2013 102

  • Page 106
    ...2013 Vice President, Corporate Controller and Chief Accounting Officer (Principal Accounting Officer) March 13, 2013 Director March 13, 2013 Director March 13, 2013 Director March 13, 2013 Director March 13, 2013 Director March 13, 2013 Director March 13, 2013 Director March 13, 2013...

  • Page 107
    ...as part of this report: Exhibit Number Description of Exhibit 10.54* 10.55* 10.61* 21.1 23.1 24.1 31.1 31.2 32.1 32.2 101 Director Compensation Program, effective May 2, 2005 (as amended effective January 1, 2013) Form of 2011 Stock Incentive Plan Performance Award Agreement for Executive Officers...

  • Page 108
    ... America Marketing S.A. Imation Mercosur Trading S.A. Imation Funding Corp Imation Government LLC Memorex Products Inc. Imation Online Services Corporation IMN Data Storage LLC Imation Data Storage Holdings CV Imation Holding BV Imation Europe BV TME GmbH Imation U.K. Limited Imation S.r.l. Imation...

  • Page 109
    ... Statement on Form S-3 (Registration No. 333-186061) of Imation Corp. of our report dated March 13, 2013, relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in this Form 10-K. /s/ PricewaterhouseCoopers LLP PricewaterhouseCoopers...

  • Page 110
    ...in his or her name, place and stead, in any and all capacities, to sign the 2012 Annual Report on Form 10-K of Imation Corp., and any and...Name Title Date /S/ SCOTT J. ROBINSON Scott J. Robinson Vice President, Corporate Controller and Chief Accounting Officer (Principal Accounting Officer) Director...

  • Page 111
    ...in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who...

  • Page 112
    ...in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who...

  • Page 113
    ... Act of 2002 In connection with the Annual Report of Imation Corp. (the "Company") on Form 10-K for the period ended December 31, 2012, as filed with the Securities and Exchange Commission (the "Report"), I, Mark E. Lucas, President and Chief Executive Officer of the Company, certify, pursuant to 18...

  • Page 114
    ... 2002 In connection with the Annual Report of Imation Corp. (the "Company") on Form 10-K for the period ended December 31, 2012, as filed with the Securities and Exchange Commission (the "Report"), I, Paul R. Zeller, Senior Vice President and Chief Financial Officer of the Company, certify, pursuant...

  • Page 115
    ... tape. The Consumer Storage and Accessories (CSA) business segment encompasses optical and flash media, external hard disk, TDK electronics and storage media accessories. The Company has a 60-year legacy of technology leadership, and maintains the number one global market share in recordable optical...

  • Page 116
    ..., President and Director AboveNet, Inc. imationcorp.com: click on Investor Relations click on Financial and Investor Information click on Shareholder Information follow the prompts to submit your electronic consent Mark E. Lucas President and Chief Executive Officer Imation Corp. Trudy A. Rautio...