##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2010
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period fromto
 Commission File Number: 1-14310
 
 IMATION CORP.
  Delaware
    
    41-1838504(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)1 Imation Way 
Oakdale, Minnesota
    
    55128(Address of principal executive offices)
    
    (Zip Code)
 (651) 704-4000
 Not Applicable
 
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ




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##### 



IMATION CORP.
TABLE OF CONTENTS
 PAGEPART I FINANCIAL INFORMATION
    
    
    3ITEM 1. FINANCIAL STATEMENTSCondensed Consolidated Statements of Operations for the Three and Nine Months Ended
September 30, 2010 and 2009
    
    
    3Condensed Consolidated Balance Sheets as of September 30, 2010 and December 31, 2009
    
    
    4Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30,
2010 and 2009
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
    
    
    19ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    29ITEM 4. CONTROLS AND PROCEDURES
    
    
    30PART II OTHER INFORMATION
    
    
    31ITEM 1. LEGAL PROCEEDINGS
    
    
    31ITEM 1A. RISK FACTORS
    
    
    31ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
    
    31ITEM 3. DEFAULTS UPON SENIOR SECURITIES
    
    
    31ITEM 4. (REMOVED AND RESERVED)
    
    
    31ITEM 5. OTHER INFORMATION
    
    
    31ITEM 6. EXHIBITS
    
    
    31SIGNATURE
    
    
    33EXHIBIT INDEX
    
    
    34EX-31.1EX-31.2EX-32.1EX-32.2
  2




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1.
    
    Financial Statements.
 IMATION CORP.
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (In millions, except for per share amounts)

(Unaudited)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Net revenue
    
    $
    342.3
    
    
    $
    401.3
    
    
    $
    1,062.5
    
    
    $
    1,197.8Cost of goods sold
    
    
    286.7
    
    
    
    336.8
    
    
    
    886.7
    
    
    
    1,003.0Gross profit
    
    
    55.6
    
    
    
    64.5
    
    
    
    175.8
    
    
    
    194.8Operating expenses:Selling, general and administrative
    
    
    49.3
    
    
    
    50.4
    
    
    
    153.9
    
    
    
    174.3Research and development
    
    
    4.3
    
    
    
    4.9
    
    
    
    12.6
    
    
    
    14.9Goodwill impairment
    
    
    
    
    
    
    
    
    
    
    23.5
    
    
    
    Litigation settlement
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    49.0Restructuring and other
    
    
    4.3
    
    
    
    7.5
    
    
    
    11.7
    
    
    
    22.8Total
    
    
    57.9
    
    
    
    62.8
    
    
    
    201.7
    
    
    
    261.0Operating (loss) income
    
    
    (2.3
    )
    
    
    1.7
    
    
    
    (25.9
    )
    
    
    (66.2
    )Other (income) and expense:Interest income
    
    
    (0.2
    )
    
    
    (0.1
    )
    
    
    (0.6
    )
    
    
    (0.5
    )Interest expense
    
    
    1.2
    
    
    
    0.8
    
    
    
    3.3
    
    
    
    1.5Other, net
    
    
    (0.1
    )
    
    
    1.5
    
    
    
    4.9
    
    
    
    12.2Total
    
    
    0.9
    
    
    
    2.2
    
    
    
    7.6
    
    
    
    13.2Loss before income taxes
    
    
    (3.2
    )
    
    
    (0.5
    )
    
    
    (33.5
    )
    
    
    (79.4
    )Income tax benefit
    
    
    (0.9
    )
    
    
    (0.2
    )
    
    
    (13.0
    )
    
    
    (28.1
    )Loss from continuing operations
    
    
    (2.3
    )
    
    
    (0.3
    )
    
    
    (20.5
    )
    
    
    (51.3
    )Discontinued operations:(Loss) income from operations of discontinued businesses, net of income taxes
    
    
    (0.1
    )
    
    
    (0.1
    )
    
    
    (0.2
    )
    
    
    2.4Loss (income) from discontinued operations
    
    
    (0.1
    )
    
    
    (0.1
    )
    
    
    (0.2
    )
    
    
    2.4Net loss
    
    $
    (2.4
    )
    
    $
    (0.4
    )
    
    $
    (20.7
    )
    
    $
    (48.9
    )(Loss) earnings per common share  basic:Continuing operations
    
    $
    (0.06
    )
    
    $
    (0.01
    )
    
    $
    (0.54
    )
    
    $
    (1.37
    )Discontinued operations
    
    
    
    
    
    
    
    
    
    
    (0.01
    )
    
    
    0.06Net loss
    
    
    (0.06
    )
    
    
    (0.01
    )
    
    
    (0.55
    )
    
    
    (1.30
    )(Loss) earnings per common share  diluted:Continuing operations
    
    $
    (0.06
    )
    
    $
    (0.01
    )
    
    $
    (0.54
    )
    
    $
    (1.37
    )Discontinued operations
    
    
    
    
    
    
    
    
    
    
    (0.01
    )
    
    
    0.06Net loss
    
    
    (0.06
    )
    
    
    (0.01
    )
    
    
    (0.55
    )
    
    
    (1.30
    )Weighted average shares outstandingBasic
    
    
    37.9
    
    
    
    37.6
    
    
    
    37.8
    
    
    
    37.5Diluted
    
    
    37.9
    
    
    
    37.6
    
    
    
    37.8
    
    
    
    37.5
  3




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##### Table of Contents



IMATION CORP.
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (In millions)
 (Unaudited)
 September 30,
    
    
    December 31,2010
    
    
    2009AssetsCurrent assetsCash and cash equivalents
    
    $
    256.8
    
    
    $
    163.4Accounts receivable, net
    
    
    235.4
    
    
    
    314.9Inventories
    
    
    248.8
    
    
    
    235.7Other current assets
    
    
    143.4
    
    
    
    164.4Total current assets
    
    
    884.4
    
    
    
    878.4Property, plant and equipment, net
    
    
    101.1
    
    
    
    109.8Intangible assets, net
    
    
    325.4
    
    
    
    337.3Goodwill
    
    
    
    
    
    
    23.5Other assets
    
    
    71.3
    
    
    
    44.8Total assets
    
    $
    1,382.2
    
    
    $
    1,393.8Liabilities and Shareholders EquityCurrent liabilitiesAccounts payable
    
    $
    225.4
    
    
    $
    201.4Accrued payroll
    
    
    14.6
    
    
    
    19.7Other current liabilities
    
    
    140.6
    
    
    
    150.8Total current liabilities
    
    
    380.6
    
    
    
    371.9Other liabilities
    
    
    87.1
    
    
    
    94.7Total liabilities
    
    
    467.7
    
    
    
    466.6Shareholders equity
    
    
    914.5
    
    
    
    927.2Total liabilities and shareholders equity
    
    $
    1,382.2
    
    
    $
    1,393.8
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IMATION CORP.
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In millions)
 (Unaudited)
 Nine Months EndedSeptember 30,2010
    
    
    2009Cash Flows from Operating Activities:Net loss
    
    $
    (20.7
    )
    
    $
    (48.9
    )Adjustments to reconcile net income to net cash provided by operatingDepreciation
    
    
    13.4
    
    
    
    14.9Amortization
    
    
    17.7
    
    
    
    17.3Deferred income taxes
    
    
    (24.1
    )
    
    
    (12.9
    )Goodwill impairment
    
    
    23.5
    
    
    
    Stock-based compensation
    
    
    5.1
    
    
    
    5.6Pension settlement
    
    
    2.0
    
    
    
    10.9Litigation settlement
    
    
    
    
    
    
    49.0Other
    
    
    3.1
    
    
    
    8.1Changes in operating assets and liabilities:Litigation settlement payment
    
    
    (8.2
    )
    
    
    (20.0
    )Accounts receivable
    
    
    82.2
    
    
    
    88.6Inventories
    
    
    (14.3
    )
    
    
    50.4Other assets
    
    
    17.4
    
    
    
    (25.0
    )Accounts payable
    
    
    21.2
    
    
    
    (81.8
    )Accrued payroll and other liabilities
    
    
    (17.9
    )
    
    
    (31.3
    )Restricted cash
    
    
    2.5
    
    
    
    Net cash provided by operating activities
    
    
    102.9
    
    
    
    24.9Cash Flows from Investing Activities:Capital expenditures
    
    
    (5.7
    )
    
    
    (9.2
    )License agreement payment
    
    
    (5.0
    )
    
    
    Other, net
    
    
    0.2
    
    
    
    0.8Net cash used in investing activities
    
    
    (10.5
    )
    
    
    (8.4
    )Cash Flows from Financing Activities:Debt issuance costs
    
    
    (1.0
    )
    
    
    (2.9
    )Net cash used in financing activities
    
    
    (1.0
    )
    
    
    (2.9
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    2.0
    
    
    
    0.8Net change in cash and cash equivalents
    
    
    93.4
    
    
    
    14.4Cash and cash equivalents  beginning of period
    
    
    163.4
    
    
    
    96.6Cash and cash equivalents  end of period
    
    $
    256.8
    
    
    $
    111.0
  5




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IMATION CORP.
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 Note 1  Basis of Presentation
     Recently Adopted Accounting Pronouncements
  Note 2  Earnings (Loss) per Common Share
  6




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Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(In millions)
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Numerator:Loss from continuing operations
    
    $
    (2.3
    )
    
    $
    (0.3
    )
    
    $
    (20.5
    )
    
    $
    (51.3
    )(Loss) income from discontinued operations
    
    
    (0.1
    )
    
    
    (0.1
    )
    
    
    (0.2
    )
    
    
    2.4Net loss
    
    $
    (2.4
    )
    
    $
    (0.4
    )
    
    $
    (20.7
    )
    
    $
    (48.9
    )Denominator:Weighted average number of common stock outstanding during the period
    
    
    37.9
    
    
    
    37.6
    
    
    
    37.8
    
    
    
    37.5Dilutive effect of stock-based compensation plans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Weighted average number of diluted shares outstanding during the period
    
    
    37.9
    
    
    
    37.6
    
    
    
    37.8
    
    
    
    37.5Basic (loss) earnings per common share:Continuing operations
    
    $
    (0.06
    )
    
    $
    (0.01
    )
    
    $
    (0.54
    )
    
    $
    (1.37
    )Discontinued operations
    
    
    
    
    
    
    
    
    
    
    (0.01
    )
    
    
    0.06Net loss
    
    
    (0.06
    )
    
    
    (0.01
    )
    
    
    (0.55
    )
    
    
    (1.30
    )Diluted (loss) earnings per common share:Continuing operations
    
    $
    (0.06
    )
    
    $
    (0.01
    )
    
    $
    (0.54
    )
    
    $
    (1.37
    )Discontinued operations
    
    
    
    
    
    
    
    
    
    
    (0.01
    )
    
    
    0.06Net loss
    
    
    (0.06
    )
    
    
    (0.01
    )
    
    
    (0.55
    )
    
    
    (1.30
    )Anti-dilutive options excluded from calculation
    
    
    5.5
    
    
    
    5.1
    
    
    
    4.9
    
    
    
    4.7
  Note 3  Supplemental Balance Sheet Information
 September 30,
    
    
    December 31,(In millions)
    
    2010
    
    
    2009(Unaudited)Accounts ReceivableAccounts receivable
    
    $
    255.5
    
    
    $
    343.5Less reserves and allowances*
    
    
    (20.1
    )
    
    
    (28.6
    )Accounts receivable, net
    
    $
    235.4
    
    
    $
    314.9InventoriesFinished goods
    
    $
    225.2
    
    
    $
    210.4Work in process
    
    
    8.6
    
    
    
    8.9Raw materials and supplies
    
    
    15.0
    
    
    
    16.4Total inventories
    
    $
    248.8
    
    
    $
    235.7Other Current AssetsDeferred income taxes
    
    $
    39.5
    
    
    $
    42.7Restricted cash
    
    
    16.6
    
    
    
    19.1Assets held for sale
    
    
    7.2
    
    
    
    7.2Taxes receivable
    
    
    39.8
    
    
    
    35.1Other
    
    
    40.3
    
    
    
    60.3Total other current assets
    
    $
    143.4
    
    
    $
    164.4
 7




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September 30,
    
    
    December 31,(In millions)
    
    2010
    
    
    2009(Unaudited)Property, Plant and EquipmentProperty, plant and equipment
    
    $
    351.1
    
    
    $
    350.8Less accumulated depreciation
    
    
    (250.0
    )
    
    
    (241.0
    )Property, plant and equipment, net
    
    $
    101.1
    
    
    $
    109.8Other AssetsDeferred income taxes
    
    $
    62.6
    
    
    $
    35.5Other
    
    
    8.7
    
    
    
    9.3Total other assets
    
    $
    71.3
    
    
    $
    44.8Other Current LiabilitiesRebates
    
    $
    52.6
    
    
    $
    66.1Litigation settlement  current
    
    
    7.9
    
    
    
    7.9Employee separation costs
    
    
    4.6
    
    
    
    4.3Value added tax
    
    
    10.7
    
    
    
    12.0Other
    
    
    64.8
    
    
    
    60.5Total other current liabilities
    
    $
    140.6
    
    
    $
    150.8Other LiabilitiesPension
    
    $
    36.4
    
    
    $
    36.3Litigation settlement  long-term
    
    
    14.9
    
    
    
    21.8Deferred income taxes
    
    
    3.0
    
    
    
    3.3Unrecognized tax benefits
    
    
    16.5
    
    
    
    16.0Other
    
    
    16.3
    
    
    
    17.3Total other liabilities
    
    $
    87.1
    
    
    $
    94.7
 
 *
    
    Accounts receivable reserves and allowances include estimated amounts for customer
returns, terms discounts and the inability of certain customers to make the required payment. Note 4  Intangible Assets and Goodwill
 Intangible Assets
  Customer(In millions)
    
    Trade Names
    
    
    Software
    
    
    Relationships
    
    
    Other
    
    
    TotalSeptember 30, 2010Gross carrying amount
    
    $
    332.4
    
    
    $
    53.5
    
    
    $
    58.9
    
    
    $
    9.5
    
    
    $
    454.3Accumulated amortization
    
    
    (42.1
    )
    
    
    (48.7
    )
    
    
    (34.1
    )
    
    
    (4.0
    )
    
    
    (128.9
    )Intangible assets, net
    
    $
    290.3
    
    
    $
    4.8
    
    
    $
    24.8
    
    
    $
    5.5
    
    
    $
    325.4December 31, 2009Gross carrying amount
    
    $
    333.2
    
    
    $
    62.3
    
    
    $
    65.5
    
    
    $
    6.6
    
    
    $
    467.6Accumulated amortization
    
    
    (34.4
    )
    
    
    (56.8
    )
    
    
    (33.9
    )
    
    
    (5.2
    )
    
    
    (130.3
    )Intangible assets, net
    
    $
    298.8
    
    
    $
    5.5
    
    
    $
    31.6
    
    
    $
    1.4
    
    
    $
    337.3
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Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(In millions)
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Amortization expense
    
    $
    5.9
    
    
    $
    5.7
    
    
    $
    17.7
    
    
    $
    17.3
 Goodwill
  
    
    Our Americas segment includes North America, South America and the Caribbean.
    
    Our Europe segment includes Europe and most of Africa.
    
    Our North Asia segment includes Japan, China, Hong Kong, Korea and Taiwan.
    
    Our South Asia segment includes Australia, Singapore, India, Egypt and the Middle East.
   Electronic(In millions)
    
    Americas
    
    
    Europe
    
    
    North Asia
    
    
    South Asia
    
    
    Products
    
    
    TotalBalances as of December 31, 2009Goodwill
    
    $
    64.3
    
    
    $
    39.2
    
    
    $
    10.2
    
    
    $
    
    
    
    $
    38.6
    
    
    $
    152.3Accumulated impairment losses
    
    
    (64.3
    )
    
    
    (39.2
    )
    
    
    (10.2
    )
    
    
    
    
    
    
    (15.1
    )
    
    
    (128.8
    )Total goodwill, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23.5
    
    
    
    23.5Operating segment reclassificationGoodwill
    
    
    38.6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (38.6
    )
    
    
    Accumulated impairment losses
    
    
    (15.1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15.1
    
    
    
    Goodwill impairment
    
    
    (23.5
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (23.5
    )Balances as of June 30, 2010Goodwill
    
    
    102.9
    
    
    
    39.2
    
    
    
    10.2
    
    
    
    
    
    
    
    
    
    
    
    152.3Accumulated impairment losses
    
    
    (102.9
    )
    
    
    (39.2
    )
    
    
    (10.2
    )
    
    
    
    
    
    
    
    
    
    
    (152.3
    )Total goodwill, net
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
  9




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##### Table of Contents



Excess of carrying
    
    
    Percentage ofReporting unit
    
    
    amount over fair
    
    
    carrying amount(In millions)
    
    Goodwill
    
    
    carrying amount
    
    
    value
    
    
    over fair valueAmericas-Consumer
    
    $
    23.5
    
    
    $
    336.5
    
    
    $
    173.5
    
    
    
    206
    %
  Note 5  Comprehensive Income (Loss)
  September 30,
    
    
    December 31,(In millions)
    
    2010
    
    
    2009Cumulative currency translation adjustment
    
    $
    (47.9
    )
    
    $
    (50.4
    )Pension adjustments, net of income tax
    
    
    (18.7
    )
    
    
    (18.8
    )Cash flow hedging and other, net of income tax
    
    
    (1.0
    )
    
    
    0.3Total accumulated other comprehensive loss
    
    $
    (67.6
    )
    
    $
    (68.9
    )
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(In millions)
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Net loss
    
    $
    (2.4
    )
    
    $
    (0.4
    )
    
    $
    (20.7
    )
    
    $
    (48.9
    )Cumulative currency translation adjustment
    
    
    17.7
    
    
    
    7.7
    
    
    
    2.5
    
    
    
    6.7Pension adjustments, net of income taxes
    
    
    (0.1
    )
    
    
    4.8
    
    
    
    0.1
    
    
    
    9.3Cash flow hedging and other, net of income tax
    
    
    (1.8
    )
    
    
    (1.0
    )
    
    
    (1.3
    )
    
    
    (0.8
    )Total comprehensive gain (loss)
    
    $
    13.4
    
    
    $
    11.1
    
    
    $
    (19.4
    )
    
    $
    (33.7
    )
 Note 6  Stock-Based Compensation
  10




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##### Table of Contents



Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(In millions)
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Stock compensation expense
    
    $
    1.9
    
    
    $
    1.8
    
    
    $
    5.1
    
    
    $
    5.6
  Stock Options
  WeightedStock
    
    
    AverageOptions
    
    
    Exercise PriceOutstanding December 31, 2009
    
    
    4,594,838
    
    
    $
    27.19Granted
    
    
    871,145
    
    
    
    10.48Exercised
    
    
    (1,000
    )
    
    
    8.11Cancelled
    
    
    (323,853
    )
    
    
    31.32Forfeited
    
    
    (168,794
    )
    
    
    13.66Outstanding September 30, 2010
    
    
    4,972,336
    
    
    $
    24.24Exercisable as of September 30, 2010
    
    
    3,193,737
    
    
    $
    29.95
    2010Volatility
    
    
    42.8
    %Risk-free interest rate
    
    
    2.51
    %Expected life (months)
    
    
    66Dividend yield
    
    
    0.0
    %
  11




---



##### Table of Contents



Restricted Stock
  WeightedAverage GrantRestricted
    
    
    Date Fair ValueStock
    
    
    Per ShareNonvested as of December 31, 2009
    
    
    461,702
    
    
    $
    14.84Granted
    
    
    515,101
    
    
    
    10.47Vested
    
    
    (197,695
    )
    
    
    15.48Forfeited
    
    
    (33,382
    )
    
    
    11.31Nonvested as of September 30, 2010
    
    
    745,726
    
    
    $
    11.33
   Note 7  Retirement Plans
 Employer Contributions
    12




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##### Table of Contents



Components of Net Periodic Pension Cost
 United States
    
    
    International
    
    
    United States
    
    
    InternationalThree Months Ended September 30,
    
    
    Nine Months Ended September 30,(In millions)
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Service cost
    
    $
    0.4
    
    
    $
    0.7
    
    
    $
    0.2
    
    
    $
    0.2
    
    
    $
    1.2
    
    
    $
    2.1
    
    
    $
    0.6
    
    
    $
    0.6Interest cost
    
    
    1.2
    
    
    
    1.4
    
    
    
    0.6
    
    
    
    0.9
    
    
    
    3.6
    
    
    
    4.2
    
    
    
    2.0
    
    
    
    2.5Expected return on plan assets
    
    
    (1.5
    )
    
    
    (1.5
    )
    
    
    (0.6
    )
    
    
    (0.8
    )
    
    
    (4.4
    )
    
    
    (4.9
    )
    
    
    (2.1
    )
    
    
    (2.4
    )Amortization of net actuarial (gain) loss
    
    
    0.1
    
    
    
    
    
    
    
    0.1
    
    
    
    
    
    
    
    0.3
    
    
    
    0.1
    
    
    
    0.2
    
    
    
    0.1Amortization of prior service cost (credit)
    
    
    
    
    
    
    0.1
    
    
    
    
    
    
    
    0.1
    
    
    
    
    
    
    
    0.1
    
    
    
    
    
    
    
    0.1Net periodic pension cost
    
    $
    0.2
    
    
    $
    0.7
    
    
    $
    0.3
    
    
    $
    0.4
    
    
    $
    0.7
    
    
    $
    1.6
    
    
    $
    0.7
    
    
    $
    0.9Settlement
    
    
    2.0
    
    
    
    1.0
    
    
    
    
    
    
    
    4.6
    
    
    
    2.0
    
    
    
    6.2
    
    
    
    
    
    
    
    4.6Total pension costs
    
    $
    2.2
    
    
    $
    1.7
    
    
    $
    0.3
    
    
    $
    5.0
    
    
    $
    2.7
    
    
    $
    7.8
    
    
    $
    0.7
    
    
    $
    5.5
 Note 8  Restructuring and Other Expense
  Three Months Ended
    
    
    Nine Months Ended(In millions)
    
    September 30, 2010
    
    
    September 30, 2010RestructuringSeverance and severance-related expense
    
    $
    1.0
    
    
    $
    5.9Pension settlements
    
    
    2.0
    
    
    
    2.0Lease termination costs
    
    
    1.3
    
    
    
    1.6Total restructuring
    
    
    4.3
    
    
    
    9.5Other
    
    
    
    
    
    
    2.2Total
    
    $
    4.3
    
    
    $
    11.7
 2008 Corporate Redesign Restructuring Program
   13




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##### Table of Contents



LeaseSeverance and
    
    
    Termination(In millions)
    
    Related
    
    
    Costs
    
    
    TotalAccrued balance at December 31, 2009
    
    $
    4.3
    
    
    $
    
    
    
    $
    4.3Charges
    
    
    1.6
    
    
    
    0.2
    
    
    
    1.8Usage
    
    
    (1.9
    )
    
    
    (0.2
    )
    
    
    (2.1
    )Currency impacts
    
    
    (0.1
    )
    
    
    
    
    
    
    (0.1
    )Accrued balance at March 31, 2010
    
    $
    3.9
    
    
    $
    
    
    
    $
    3.9Charges
    
    
    3.3
    
    
    
    0.1
    
    
    
    3.4Usage
    
    
    (2.3
    )
    
    
    (0.1
    )
    
    
    (2.4
    )Currency impacts
    
    
    (0.2
    )
    
    
    
    
    
    
    (0.2
    )Accrued balance at June 30, 2010
    
    $
    4.7
    
    
    $
    
    
    
    $
    4.7Charges
    
    
    1.0
    
    
    
    1.3
    
    
    
    2.3Usage
    
    
    (1.5
    )
    
    
    0.1
    
    
    
    (1.4
    )Currency impacts
    
    
    0.4
    
    
    
    
    
    
    
    0.4Accrued balance at September 30, 2010
    
    $
    4.6
    
    
    $
    1.4
    
    
    $
    6.0
  Other
  Note 9  Income Taxes
    14




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##### Table of Contents



Note 10  Segment Information
  
    
    Our Americas segment includes North America, South America and the Caribbean.
    
    Our Europe segment includes Europe and most of Africa.
    
    Our North Asia segment includes Japan, China, Hong Kong, Korea and Taiwan.
    
    Our South Asia segment includes Australia, Singapore, India, Egypt and the Middle East.
   Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(In millions)
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Net RevenueAmericas
    
    $
    177.5
    
    
    $
    214.4
    
    
    $
    520.4
    
    
    $
    609.0Europe
    
    
    59.9
    
    
    
    86.2
    
    
    
    211.1
    
    
    
    270.2North Asia
    
    
    72.5
    
    
    
    68.0
    
    
    
    226.8
    
    
    
    219.3South Asia
    
    
    32.4
    
    
    
    32.7
    
    
    
    104.2
    
    
    
    99.3Total
    
    $
    342.3
    
    
    $
    401.3
    
    
    $
    1,062.5
    
    
    $
    1,197.8
 15




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##### Table of Contents



Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(In millions)
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Operating Income (Loss)Americas
    
    $
    8.9
    
    
    $
    15.0
    
    
    $
    27.4
    
    
    $
    36.5Europe
    
    
    (1.5
    )
    
    
    1.4
    
    
    
    (1.2
    )
    
    
    3.2North Asia
    
    
    2.1
    
    
    
    2.0
    
    
    
    7.6
    
    
    
    9.6South Asia
    
    
    1.0
    
    
    
    1.1
    
    
    
    3.0
    
    
    
    1.7Corporate and unallocated
    
    
    (12.8
    )
    
    
    (17.8
    )
    
    
    (62.7
    )
    
    
    (117.2
    )Total
    
    $
    (2.3
    )
    
    $
    1.7
    
    
    $
    (25.9
    )
    
    $
    (66.2
    )
    Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(In millions)
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Net RevenueTraditional storageOptical products
    
    $
    147.3
    
    
    $
    182.9
    
    
    $
    457.9
    
    
    $
    543.9Magnetic products
    
    
    83.4
    
    
    
    93.6
    
    
    
    257.6
    
    
    
    297.2Other traditional storage
    
    
    14.8
    
    
    
    17.5
    
    
    
    47.6
    
    
    
    56.4Total traditional storage
    
    
    245.5
    
    
    
    294.0
    
    
    
    763.1
    
    
    
    897.5Emerging storage
    
    
    46.6
    
    
    
    37.8
    
    
    
    153.0
    
    
    
    115.3Electronics and accessories
    
    
    50.2
    
    
    
    69.5
    
    
    
    146.4
    
    
    
    185.0Total
    
    $
    342.3
    
    
    $
    401.3
    
    
    $
    1,062.5
    
    
    $
    1,197.8
 Note 11  Fair Value Measurements
   Assets and Liabilities that are Measured at Fair Value on a Recurring Basis:
  16




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##### Table of Contents



September 30, 2010
    
    
    December 31, 2009(In millions)
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Derivative assetsForeign currency option contracts
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    0.9
    
    
    $
    Foreign currency forward contracts
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.1
    
    
    
    Derivative liabilitiesForeign currency option contracts
    
    
    
    
    
    
    (0.6
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Foreign currency forward contracts
    
    
    
    
    
    
    (0.4
    )
    
    
    
    
    
    
    
    
    
    
    (0.3
    )
    
    
    Total
    
    $
    
    
    
    $
    (1.0
    )
    
    $
    
    
    
    $
    
    
    
    $
    0.7
    
    
    $
    
 Cash Flow Hedges
   Other Hedges
  17




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##### Table of Contents



September 30, 2010
    
    
    December 31, 2009Fair Value
    
    
    
    
    
    
    Fair ValueOther
    
    
    Other
    
    
    
    
    
    
    Other
    
    
    OtherNotional
    
    
    Current
    
    
    Current
    
    
    Notional
    
    
    Current
    
    
    Current(In millions)
    
    Amount
    
    
    Assets
    
    
    Liabilities
    
    
    Amount
    
    
    Assets
    
    
    LiabilitiesCash flow hedges designated as hedging instruments
    
    $
    42.0
    
    
    $
    
    
    
    $
    (1.0
    )
    
    $
    48.0
    
    
    $
    0.8
    
    
    $
    Other hedges not receiving hedge accounting
    
    
    30.0
    
    
    
    
    
    
    
    
    
    
    
    88.8
    
    
    
    0.2
    
    
    
    (0.3
    )Total
    
    $
    72.0
    
    
    $
    
    
    
    $
    (1.0
    )
    
    $
    136.8
    
    
    $
    1.0
    
    
    $
    (0.3
    )
   Pretax Gain
    
    
    Pretax Gain on(Loss)
    
    
    Effective Portion ofRecognized in
    
    
    Derivative
    
    
    Pretax LossOther
    
    
    Reclassification from
    
    
    Recognized in theComprehensive
    
    
    Accumulated Other
    
    
    CondensedIncome on
    
    
    Comprehensive
    
    
    Statement ofEffective Portion
    
    
    Income to Cost of
    
    
    Operations in Other(In millions)
    
    of Derivative
    
    
    Goods Sold, net
    
    
    Expense, netFor the three months ended September 30, 2010Cash flow hedges designated as hedging instruments
    
    $
    (1.6
    )
    
    $
    0.6
    
    
    $
    Other hedges not receiving hedge accounting
    
    
    
    
    
    
    
    
    
    
    (2.3
    )Total
    
    $
    (1.6
    )
    
    $
    0.6
    
    
    $
    (2.3
    )For the three months ended September 30, 2009Cash flow hedges designated as hedging instruments
    
    $
    (1.0
    )
    
    $
    (1.2
    )
    
    $
    Other hedges not receiving hedge accounting
    
    
    
    
    
    
    
    
    
    
    (3.8
    )Total
    
    $
    (1.0
    )
    
    $
    (1.2
    )
    
    $
    (3.8
    )For the nine months ended September 30, 2010Cash flow hedges designated as hedging instruments
    
    $
    (0.8
    )
    
    $
    1.0
    
    
    $
    Other hedges not receiving hedge accounting
    
    
    
    
    
    
    
    
    
    
    (3.5
    )Total
    
    $
    (0.8
    )
    
    $
    1.0
    
    
    $
    (3.5
    )For the nine months ended September 30, 2009Cash flow hedges designated as hedging instruments
    
    $
    (0.4
    )
    
    $
    (0.4
    )
    
    $
    Other hedges not receiving hedge accounting
    
    
    
    
    
    
    
    
    
    
    (13.3
    )Total
    
    $
    (0.4
    )
    
    $
    (0.4
    )
    
    $
    (13.3
    )
 Note 12  Litigation, Commitments and Contingencies
  18




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Managements Discussion and Analysis of Financial Condition and Results of Operations.
 Overview
  Factors Affecting Comparability of our Financial Results
 Discontinued Operations
  Executive Summary
 Consolidated Results of Operations for the Nine Months Ended September 30, 2010
 
    
    Net revenue from continuing operations of $1,062.5 million for the nine months ended
September 30, 2010 was down 11.3 percent compared with $1,197.8 million in the same period
last year.
    
    Goodwill impairment expense of $23.5 million was recorded in the second quarter of 2010.
    
    Operating loss was $25.9 million for the nine months ended September 30, 2010, compared
with operating loss of $66.2 million in the same period last year which included the
Philips litigation settlement of $49.0 million.
    
    Diluted loss per share from continuing operations was $0.54 for the nine months ended
September 30, 2010, compared with diluted loss per share from continuing operations of
$1.37 for the same period last year.
 19




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##### Table of Contents



Cash Flow/Financial Condition for the Nine Months Ended September 30, 2010
 
    
    Cash and cash equivalents totaled $256.8 million as of September 30, 2010, compared with
$163.4 million at December 31, 2009.
    
    Cash flow provided by operating activities was $102.9 million for the nine months ended
September 30, 2010, compared with $24.9 million in the same period last year.
 Results of Operations
 Net Revenue
 Three Months Ended
    
    
    
    
    
    
    Nine Months EndedSeptember 30,
    
    
    Percent
    
    
    September 30,
    
    
    Percent(Dollars in millions)
    
    2010
    
    
    2009
    
    
    Change
    
    
    2010
    
    
    2009
    
    
    ChangeNet revenue
    
    $
    342.3
    
    
    $
    401.3
    
    
    
    -14.7
    %
    
    $
    1,062.5
    
    
    $
    1,197.8
    
    
    
    -11.3
    %
   Gross Profit
 Three Months Ended
    
    
    
    
    
    
    Nine Months EndedSeptember 30,
    
    
    Percent
    
    
    September 30,
    
    
    Percent(Dollars in millions)
    
    2010
    
    
    2009
    
    
    Change
    
    
    2010
    
    
    2009
    
    
    ChangeGross profit
    
    $
    55.6
    
    
    $
    64.5
    
    
    
    -13.8
    %
    
    $
    175.8
    
    
    $
    194.8
    
    
    
    -9.8
    %Gross margin
    
    
    16.2
    %
    
    
    16.1
    %
    
    
    
    
    
    
    16.5
    %
    
    
    16.3
    %
  Selling, General and Administrative (SG&A)
 Three Months Ended
    
    
    
    
    
    
    Nine Months EndedSeptember 30,
    
    
    Percent
    
    
    September 30,
    
    
    Percent(Dollars in millions)
    
    2010
    
    
    2009
    
    
    Change
    
    
    2010
    
    
    2009
    
    
    ChangeSelling, general and administrative
    
    $
    49.3
    
    
    $
    50.4
    
    
    
    -2.2
    %
    
    $
    153.9
    
    
    $
    174.3
    
    
    
    -11.7
    %As a percent of revenue
    
    
    14.4
    %
    
    
    12.6
    %
    
    
    
    
    
    
    14.5
    %
    
    
    14.6
    %
   20




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##### Table of Contents



Research and Development (R&D)
 Three Months Ended
    
    
    
    
    
    
    Nine Months EndedSeptember 30,
    
    
    Percent
    
    
    September 30,
    
    
    Percent(Dollars in millions)
    
    2010
    
    
    2009
    
    
    Change
    
    
    2010
    
    
    2009
    
    
    ChangeResearch and development
    
    $
    4.3
    
    
    $
    4.9
    
    
    
    -12.2
    %
    
    $
    12.6
    
    
    $
    14.9
    
    
    
    -15.4
    %As a percent of revenue
    
    
    1.3
    %
    
    
    1.2
    %
    
    
    
    
    
    
    1.2
    %
    
    
    1.2
    %
  Goodwill impairment
    Litigation Settlement
   Restructuring and Other
 Three Months Ended
    
    
    
    
    
    
    Nine Months EndedSeptember 30,
    
    
    Percent
    
    
    September 30,
    
    
    Percent(Dollars in millions)
    
    2010
    
    
    2009
    
    
    Change
    
    
    2010
    
    
    2009
    
    
    ChangeRestructuring and other
    
    $
    4.3
    
    
    $
    7.5
    
    
    
    -42.7
    %
    
    $
    11.7
    
    
    $
    22.8
    
    
    
    -48.7
    %As a percent of revenue
    
    
    1.3
    %
    
    
    1.9
    %
    
    
    
    
    
    
    1.1
    %
    
    
    1.9
    %
  21




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##### Table of Contents



Operating (Loss) Income
 Three Months Ended
    
    
    
    
    
    
    Nine Months EndedSeptember 30,
    
    
    Percent
    
    
    September 30,
    
    
    Percent(Dollars in millions)
    
    2010
    
    
    2009
    
    
    Change
    
    
    2010
    
    
    2009
    
    
    ChangeOperating (loss) income
    
    $
    (2.3
    )
    
    $
    1.7
    
    
    NM
    
    $
    (25.9
    )
    
    $
    (66.2
    )
    
    NMAs a percent of revenue
    
    
    (0.7
    )%
    
    
    0.4
    %
    
    
    
    
    
    
    (2.4
    )%
    
    
    (5.5
    )%
 
 NM-
    
    Not Meaningful   Other (Income) and Expense
 Three Months Ended
    
    
    
    
    
    
    Nine Months EndedSeptember 30,
    
    
    Percent
    
    
    September 30,
    
    
    Percent(Dollars in millions)
    
    2010
    
    
    2009
    
    
    Change
    
    
    2010
    
    
    2009
    
    
    ChangeInterest income
    
    $
    (0.2
    )
    
    $
    (0.1
    )
    
    
    100.0
    %
    
    $
    (0.6
    )
    
    $
    (0.5
    )
    
    
    20.0
    %Interest expense
    
    
    1.2
    
    
    
    0.8
    
    
    
    50.0
    %
    
    
    3.3
    
    
    
    1.5
    
    
    
    120.0
    %Other, net
    
    
    (0.1
    )
    
    
    1.5
    
    
    
    -106.7
    %
    
    
    4.9
    
    
    
    12.2
    
    
    
    -59.8
    %Total
    
    
    0.9
    
    
    
    2.2
    
    
    
    -59.1
    %
    
    
    7.6
    
    
    
    13.2
    
    
    
    -42.4
    %As a percent of revenue
    
    
    0.3
    %
    
    
    0.5
    %
    
    
    
    
    
    
    0.7
    %
    
    
    1.1
    %
   22




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##### Table of Contents



Income Tax Benefit
 Three Months Ended
    
    
    
    
    
    
    Nine Months EndedSeptember 30,
    
    
    Percent
    
    
    September 30,
    
    
    Percent(Dollars in millions)
    
    2010
    
    
    2009
    
    
    Change
    
    
    2010
    
    
    2009
    
    
    ChangeIncome tax benefit
    
    $
    (0.9
    )
    
    $
    (0.2
    )
    
    
    350.0
    %
    
    $
    (13.0
    )
    
    $
    (28.1
    )
    
    
    -53.7
    %Effective tax rate
    
    
    28.1
    %
    
    
    40.0
    %
    
    
    
    
    
    
    38.8
    %
    
    
    35.4
    %
   Segment Results
  
    
    Our Americas segment includes North America, South America and the Caribbean.
    
    Our Europe segment includes Europe and most of Africa.
    
    Our North Asia segment includes Japan, China, Hong Kong, Korea and Taiwan.
    
    Our South Asia segment includes Australia, Singapore, India, Egypt and the Middle East.
    Americas
 Three Months Ended
    
    
    
    
    
    
    Nine Months EndedSeptember 30,
    
    
    Percent
    
    
    September 30,
    
    
    Percent(Dollars in millions)
    
    2010
    
    
    2009
    
    
    Change
    
    
    2010
    
    
    2009
    
    
    ChangeNet revenue
    
    $
    177.5
    
    
    $
    214.4
    
    
    
    -17.2
    %
    
    $
    520.4
    
    
    $
    609.0
    
    
    
    -14.5
    %Operating income
    
    
    8.9
    
    
    
    15.0
    
    
    
    -40.7
    %
    
    
    27.4
    
    
    
    36.5
    
    
    
    -24.9
    %As a percent of revenue
    
    
    5.0
    %
    
    
    7.0
    %
    
    
    
    
    
    
    5.3
    %
    
    
    6.0
    %
  23




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##### Table of Contents



Europe
 Three Months Ended
    
    
    
    
    
    
    Nine Months EndedSeptember 30,
    
    
    Percent
    
    
    September 30,
    
    
    Percent(Dollars in millions)
    
    2010
    
    
    2009
    
    
    Change
    
    
    2010
    
    
    2009
    
    
    ChangeNet revenue
    
    $
    59.9
    
    
    $
    86.2
    
    
    
    -30.5
    %
    
    $
    211.1
    
    
    $
    270.2
    
    
    
    -21.9
    %Operating
(loss) income
    
    
    (1.5
    )
    
    
    1.4
    
    
    NM
    
    
    (1.2
    )
    
    
    3.2
    
    
    
    137.5
    %As a percent of revenue
    
    
    (2.5
    )%
    
    
    1.6
    %
    
    
    
    
    
    
    (0.6
    )%
    
    
    1.2
    %
 
 NM-
    
    Not Meaningful   North Asia
 Three Months Ended
    
    
    
    
    
    
    Nine Months EndedSeptember 30,
    
    
    Percent
    
    
    September 30,
    
    
    Percent(Dollars in millions)
    
    2010
    
    
    2009
    
    
    Change
    
    
    2010
    
    
    2009
    
    
    ChangeNet revenue
    
    $
    72.5
    
    
    $
    68.0
    
    
    
    6.6
    %
    
    $
    226.8
    
    
    $
    219.3
    
    
    
    3.4
    %Operating income
    
    
    2.1
    
    
    
    2.0
    
    
    
    5.0
    %
    
    
    7.6
    
    
    
    9.6
    
    
    
    -20.8
    %As a percent of revenue
    
    
    2.9
    %
    
    
    2.9
    %
    
    
    
    
    
    
    3.4
    %
    
    
    4.4
    %
   24




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##### Table of Contents



South Asia
 Three Months Ended
    
    
    
    
    
    
    Nine Months EndedSeptember 30,
    
    
    Percent
    
    
    September 30,
    
    
    Percent(Dollars in millions)
    
    2010
    
    
    2009
    
    
    Change
    
    
    2010
    
    
    2009
    
    
    ChangeNet revenue
    
    $
    32.4
    
    
    $
    32.7
    
    
    
    -0.9
    %
    
    $
    104.2
    
    
    $
    99.3
    
    
    
    4.9
    %Operating income
    
    
    1.0
    
    
    
    1.1
    
    
    
    -9.1
    %
    
    
    3.0
    
    
    
    1.7
    
    
    
    76.5
    %As a percent of revenue
    
    
    3.1
    %
    
    
    3.4
    %
    
    
    
    
    
    
    2.9
    %
    
    
    1.7
    %
   Corporate and Unallocated
 Three Months Ended
    
    
    
    
    
    
    Nine Months EndedSeptember 30,
    
    
    Percent
    
    
    September 30,
    
    
    Percent(Dollars in millions)
    
    2010
    
    
    2009
    
    
    Change
    
    
    2010
    
    
    2009
    
    
    ChangeOperating costs
    
    $
    (12.8
    )
    
    $
    (17.8
    )
    
    NM
    
    $
    (62.7
    )
    
    $
    (117.2
    )
    
    NM
 
 NM-
    
    Not Meaningful  Impact of Changes in Foreign Currency Rates
   Quantitative and Qualitative Disclosures about Market Risk
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##### Table of Contents



Financial Position
        Liquidity and Capital Resources
 Cash Flows Provided by Operating Activities:
 Nine Months EndedSeptember 30,(Dollars in millions)
    
    2010
    
    
    2009Net loss
    
    $
    (20.7
    )
    
    $
    (48.9
    )Adjustments to reconcile net loss to net cash provided by operating activities:Depreciation and amortization
    
    
    31.1
    
    
    
    32.2Deferred income taxes
    
    
    (24.1
    )
    
    
    (12.9
    )Goodwill impairment
    
    
    23.5
    
    
    
    Asset impairments
    
    
    
    
    
    
    2.3Stock-based compensation
    
    
    5.1
    
    
    
    5.6Pension settlement
    
    
    2.0
    
    
    
    10.9Note receivable reserve
    
    
    
    
    
    
    4.0Litigation settlement
    
    
    
    
    
    
    49.0Share-based payment modification
    
    
    0.8
    
    
    
    Other
    
    
    2.3
    
    
    
    1.8Changes in operating assets and liabilities:
    
    
    82.9
    
    
    
    (19.1
    )Net cash provided by operating activities
    
    $
    102.9
    
    
    $
    24.9
  26




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##### Table of Contents



Cash Flows Used in Investing Activities:
 Nine Months EndedSeptember 30,(Dollars in millions)
    
    2010
    
    
    2009Capital expenditures
    
    
    (5.7
    )
    
    
    (9.2
    )License agreement payment
    
    
    (5.0
    )
    
    
    Other, net
    
    
    0.2
    
    
    
    0.8Net cash used in investing activities
    
    $
    (10.5
    )
    
    $
    (8.4
    )
  Cash Flows Used in Financing Activities:
 Nine Months EndedSeptember 30,(Dollars in millions)
    
    2010
    
    
    2009Debt issuance costs
    
    
    (1.0
    )
    
    
    (2.9
    )Net cash used in financing activities
    
    $
    (1.0
    )
    
    $
    (2.9
    )
     
    
    up to 85 percent of eligible accounts receivable; plus
 
    
    up to the lesser of 65 percent of eligible inventory or 85 percent of the appraised
net orderly liquidation value of eligible inventory; plus
 
    
    up to 60 percent of the appraised fair market value of eligible real estate (the
Original Real Estate Value), such Original Real Estate Value to be reduced each calendar
month by 1/84th, provided, that the Original Real Estate Value shall not exceed
$40,000,000; plus
 
    
    such other classes of collateral as may be mutually agreed upon and at advance rates
as may be determined by the Agent; minus
 
    
    such reserves as the Agent may establish in good faith.
  27




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##### Table of Contents



Contractual Obligations
  Fair Value Measurements
  Critical Accounting Policies and Estimates
       28




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##### Table of Contents



Excess of carrying
    
    
    Percentage ofReporting unit
    
    
    amount over fair
    
    
    carrying amount(In millions)
    
    Goodwill
    
    
    carrying amount
    
    
    value
    
    
    over fair valueAmericas-Consumer
    
    $
    23.5
    
    
    $
    336.5
    
    
    $
    173.5
    
    
    
    206
    %
  Recent Accounting Pronouncements
  Forward-Looking Statements and Risk Factors
   
 Quantitative and Qualitative Disclosures about Market Risk.
 Quantitative and Qualitative Disclosures about Market Risk
  29




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##### Table of Contents



Controls and Procedures .
   30




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##### Table of Contents



PART II. OTHER INFORMATION
 
 Legal Proceedings
    
 Risk Factors
  
 Unregistered Sales of Equity Securities and Use of Proceeds.
  
 Defaults Upon Senior Securities
  
 (Removed and Reserved)
 
 Other Information.
  
 Exhibits.
  31




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##### Table of Contents



ExhibitNumber
    
    Description of Exhibit10.1
    
    Amended and Restated Credit Agreement among Imation Corp., Imation Enterprises Corp. and
Imation Europe B.V., as borrowers, Bank of America, N.A., as administrative agent and l/c issuer, and
a Consortium of Lenders, dated as of August 3, 2010 (incorporated by reference to Exhibit 10.1 to
Imations Form 8-K Current Report filed on August 6, 2010)10.2
    
    Amended and Restated Severance Agreement (incorporated by reference to Exhibit 10.2 to Imations
Form 8-K Current Report filed on August 6, 2010)31.1
    
    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2
    
    Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 32




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##### Table of Contents



SIGNATURE
  Imation Corp.Date: November 4, 2010
    /s/ Paul R. ZellerPaul R. ZellerSenior Vice President and Chief Financial Officer
(duly authorized officer and principal financial
officer) 33




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##### Table of Contents



EXHIBIT INDEX
  ExhibitNumber
    
    Description of Exhibit10.1
    
    Amended and Restated Credit Agreement among Imation Corp., Imation Enterprises Corp. and Imation
Europe B.V., as borrowers, Bank of America, N.A., as administrative agent and l/c issuer, and a Consortium
of Lenders, dated as of August 3, 2010 (incorporated by reference to Exhibit 10.1 to Imations Form 8-K
Current Report filed on August 6, 2010)10.2
    
    Amended and Restated Severance Agreement (incorporated by reference to Exhibit 10.2 to Imations Form 8-
K Current Report filed on August 6, 2010)31.1
    
    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2
    
    Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 34