8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 21, 2008

Imation Corp.

(Exact name of registrant as specified in its charter)

DELAWARE	1-14310	41-1838504
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification Number)
1 IMATION WAY
OAKDALE, MINNESOTA		55128
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (651) 704-4000


None

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition

Reference is made to the Registrant’s press release discussing the Company’s financial results for the quarter ended June 30, 2008, dated July 22, 2008, which is furnished herewith as Exhibit 99.1 to this Current Report on Form 8-K.

Item 2.05. Costs Associated with Exit or Disposal Activities

On July 21, 2008, the Board of Directors approved the Company’s restructuring plan for its Camarillo, California plant as a further implementation of the Company’s manufacturing strategy. The Company will end manufacturing operations at its Camarillo plant, which it plans to exit by year-end 2008. The Company will focus its manufacturing efforts on magnetic tape coating operations at its existing plant in Weatherford, Oklahoma.

The restructuring will result in the elimination of approximately 140 positions by the end of 2008 out of a current worldwide total of 1,950. The Company anticipates it will incur up to $20 million in restructuring and related charges associated with the Camarillo closure, the majority of which will occur in the second half of 2008. Approximately half of the charges will be non-cash asset write-offs. The remaining half of the charges will be divided equally between cash payments associated with severance benefits and costs of exiting the site.

Reference is made to the Registrant’s press release dated July 22, 2008, which is furnished herewith as Exhibit 99.2 to this Current Report on Form 8-K.

Item 9.01. Financial Statements and Exhibits

     (d) Exhibits

99.1	Press Release dated July 22, 2008, announcing the Company’s financial results for the quarter ended June 30, 2008
99.2	Press Release dated July 22, 2008, announcing the Company’s Further Manufacturing Optimization Steps

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Imation Corp. (REGISTRANT)
Date: July 22, 2008	By:	/s/ Paul R. Zeller
		Paul R. Zeller
		Vice President and Chief Financial Officer

EXHIBIT INDEX

Exhibit	Description of Exhibit
99.1	Press Release dated July 22, 2008, announcing the Company’s financial results for the quarter ended June 30, 2008
99.2	Press Release dated July 22, 2008, announcing the Company’s Further Manufacturing Optimization Steps

EX-99.1

Exhibit 99.1

Imation Q2 2008 Revenue up 32.5 percent to $547.0 Million
Diluted EPS of $0.19 includes $0.07 per share of Restructuring Charges

Oakdale, MN (July 22, 2008) — Imation Corp. (NYSE:IMN) today released financial results for the second quarter ended June 30, 2008.

Highlights for Q2 include the following:

• Revenue of $547.0 million was up 32.5 percent compared with Q2 2007 revenue of $412.8 million. Growth was driven by optical and consumer electronic products primarily due to the TDK Recording Media and Memcorp acquisitions which closed in Q3 2007.

• Gross margin was 17.3 percent for the quarter, relatively unchanged from last year’s second quarter.

• Q2 2008 operating income of $12.2 million and diluted earnings per share of $0.19 are compared with $2.6 million of operating loss and diluted loss per share of $0.04 in Q2 2007. Operating income in Q2 2008 included restructuring and other charges of $4.0 million or $0.07 per diluted share, compared with charges of $20.8 million, or $0.37 per share in Q2 2007.

• Cash generated from operations for the quarter was $45.5 million compared to $9.3 million in Q2 2007. Approximately 269,000 shares were repurchased during the quarter for $7.0 million.

The Company also announced today further steps to optimize its manufacturing operation by focusing all tape coating in its Weatherford, OK plant. As a result, the Company will exit its Camarillo, CA facility and incur associated future restructuring and related charges of up to $20 million, the majority of which will be incurred in 2008 (see press release issued today: Imation Announces Further Manufacturing Optimization Steps).

Commenting on the results, Imation President and CEO Frank Russomanno said: “While we faced a challenging economic environment during the quarter, especially with our enterprise class customers, our broad product portfolio, multiple brands and global footprint enabled us to deliver an acceptable quarter with strong operational cash flows. U.S. and Europe were weak especially in magnetic tape; however, we saw strong results in Asia Pacific most notably in Japan and also in Latin America. We also were pleased with our improved margins in optical and flash products, which offset pressure resulting from declines in higher margin tape products.”

“Our tape media business experienced continued softness in the quarter driven by declines in legacy data center and entry level formats. We expect this trend to continue. This morning we announced another step in our strategy to optimize the magnetic tape business and maintain our leadership position as we shift all coating operations to our facility in Weatherford. This will result in the exit of our Camarillo coating operation by year-end.”

“We saw growth in optical media driven by our acquisition of the TDK recording media business. Our multi- brand strategy is working as it is enabling us to gain share and improve profitability in an overall declining market. For example, TDK Life on Record has now become the leading optical media brand in Japan.”

“Our consumer electronics and accessories business posted strong performance during the quarter and is well positioned for the busy year-end season. We also have a focused effort to expand this business initially in North America. Our recent acquisition of XtremeMac further strengthens our brand and product portfolio and adds a new dimension of product design in consumer electronics and related accessories, especially for Apple enthusiasts. This acquisition is another building block in our strategy as we build a portfolio of strong brands that resonate with consumers.”

“We have adjusted our 2008 outlook reflecting the restructuring and related costs associated with our plant exit announced today. Excluding these impacts, we remain committed to our previously communicated 2008 outlook though we are aware of increasing concerns about possible further economic weakness near term. We will continue to closely monitor the external environment and its possible impact on our business as we head into the critical second half,”. (See 2008 Business Outlook at the end of this release.)

“The results for the second quarter reflect the initial benefits of our strategy and our operational discipline, further reinforcing our confidence in the long-term value of our strategic direction.” Russomanno concluded.

A teleconference is scheduled for 9:00 AM Central Daylight Time today, July 22, 2008. (See Webcast and Replay Information at the bottom of this release).

Q2 and YTD 2008 and 2007 Financial Highlights

(Dollars in millions, except per share amounts)	Q2 08			Q2 07			YTD 08			YTD 07
Net Revenue	$	547.0		$	412.8		$	1,077.9		$	834.7
Gross Profit	$	94.9		$	72.5		$	193.6		$	154.3
% of Revenue		17.3	%		17.6	%		18.0	%		18.5	%
SG&A	$	72.7		$	44.7		$	144.6		$	89.9
% of Revenue		13.3	%		10.8	%		13.4	%		10.8	%
R&D	$	6.0		$	9.6		$	12.6		$	22.0
% of Revenue		1.1	%		2.4	%		1.2	%		2.6	%
Restructuring and Other	$	4.0		$	20.8		$	4.7		$	21.4
Operating Income (Loss)	$	12.2		$	(2.6	)	$	31.7		$	21.0
% of Revenue		2.2	%		-0.6	%		2.9	%		2.5	%
Net Income	$	7.2		$	(1.4	)	$	18.2		$	14.3
Diluted Earnings per Share	$	0.19		$	(0.04	)	$	0.48		$	0.41
Operating Cash Flows	$	45.5		$	9.3		$	78.3		$	15.5

Reconciliation of GAAP to Adjusted Results

	Q2 08				Q2 07
	Operating				Operating
(Dollars in millions, except per share amounts)	Income		Diluted EPS		Income			Diluted EPS
As Reported — GAAP	$	12.2	$	0.19	$	(2.6	)	$	(0.04	)
Restructuring and other		4.0		0.07		20.8			0.37
Adjusted — Non-GAAP	$	16.2	$	0.26	$	18.2		$	0.33

	YTD 08				YTD 07
	Operating				Operating
(Dollars in millions, except per share amounts)	Income		Diluted EPS		Income		Diluted EPS
As Reported — GAAP	$	31.7	$	0.48	$	21.0	$	0.41
Restructuring and other		4.7		0.11		21.4		0.37
Adjusted — Non-GAAP	$	36.4	$	0.59	$	42.4	$	0.78

Comparison of GAAP to Non-GAAP Financial Measures

The Non-GAAP financial measurements are provided to assist in understanding the impact of restructuring and other charges on our actual results of operations when compared with prior periods. We believe that adjusting for these items will assist investors in making an evaluation of our performance on a comparable basis against prior periods. This information should not be construed as an alternative to the reported results, which have been determined in accordance with accounting principles generally accepted in the United States of America.

     Net Revenue was $547.0 million, up 32.5 percent from Q2 2007 of $412.8 million, driven by the TDK recording media and Memcorp acquisitions which closed in Q3 2007. Our Americas region revenue totaled $190 million in the quarter, down 17 percent from last year. The additional revenue from the TDK recording media business acquisition was more than off-set by declines in other areas. European revenue grew 46 percent and totaled $185 million with growth driven by our TDK recording media business and the GDM joint venture. Asia Pacific revenue totaled $113 million, up nearly 100 percent over last year driven by TDK recording media revenue especially in Japan. Revenue from the Electronic Products segment, the operating segment resulting from the Memcorp acquisition, was 10.6 percent of total revenue in the quarter. The Q2 2008 total revenue growth as compared with Q2 2007 was generated by overall volume growth including the impact of the acquisitions of approximately 34 percent and favorable currency impact of six percent, partially offset by price erosion of approximately seven percent. For the six-month period ended June 30, 2008, revenue was $1,077.9 million, up 29.1 percent from revenue of $834.7 million for the comparable period last year driven primarily by the TDK recording media and Memcorp acquisitions.

     Gross Margin of 17.3 percent in the current quarter was relatively unchanged from 17.6 percent in Q2 2007.

     Selling, General & Administrative (SG&A) spending was $72.7 million or 13.3 percent of revenue, compared with $44.7 million or 10.8 percent of revenue in Q2 2007. The increase in expense from Q2 2007 was due to several factors including the addition of expenses and intangible asset amortization from acquired businesses as well as spending for acquisition integration and incremental brand investments. These items were partially offset by synergies achieved to date from acquisition integration as well as spending declines elsewhere.

     Research & Development (R&D) spending was $6.0 million or 1.1 percent of revenue, compared with $9.6 million or 2.4 percent of revenue reported in Q2 2007. The favorable comparisons were primarily due to savings from restructuring actions initiated in the second quarter of 2007 as the Company focuses its R&D activities primarily on development of new magnetic tape formats.

     Restructuring and Other Charges of $4.0 million were recorded in the second quarter of 2008 compared with charges of $20.8 million in the second quarter of 2007. These charges related to costs from our previously announced restructuring programs.

     Operating Income for the quarter of $12.2 million included restructuring and other charges of $4.0 million, compared with an operating loss of $2.6 million including restructuring and other charges of $20.8 million in Q2 2007. Excluding restructuring and other charges noted above, operating income would have been $16.2 million in Q2 2008 as compared with $18.2 million in Q2 2007 (see table entitled Reconciliation of GAAP to Adjusted Results above).

     Non-Operating Income/Expense and Income Taxes: Non-operating expense of $1.6 million in Q2 2008 is compared with $0.7 million of non-operating income in Q2 2007 due primarily to a reduction in interest income. The effective tax rate in Q2 2008 was 32.1 percent compared with 26.3 percent in Q2 2007 which included tax benefits associated with restructuring and other charges in Q2 2007.

     Diluted Earnings per Share was $0.19 for Q2 2008 compared with a $0.04 loss per diluted share for Q2 2007. Adjusting for the above noted impacts of restructuring and other charges, diluted earnings per share would have been $0.26 for Q2 2008 compared with $0.33 for Q2 2007 (see table entitled Reconciliation of GAAP to Adjusted Results above).

     Cash Flow, Working Capital and Balance Sheet: Ending cash and cash equivalents totaled $117.7 million as of June 30, 2008. Cash flow from operations for Q2 2008 was $45.5 million, driven by earnings and improvements in working capital. During the quarter we repurchased approximately 269,000 shares of common stock for $7.0 million and paid dividends of $6.0 million. We also paid $7.0 million to acquire XtremeMac. Capital spending was $4.1 million and depreciation and amortization was $12.7 million for the quarter.

2008 Business Outlook

This business outlook, except where noted, is unchanged from the outlook issued in January 2008, and is subject to the risks and uncertainties described below.

• Revenue is targeted at approximately $2.4 billion, representing growth of approximately 16 percent over 2007.

• Operating income, including restructuring and other charges, is targeted to be in the range of $80 million to $90 million. We anticipate restructuring and other charges to be in the range of $17 million to $22 million for 2008. This change in outlook is the result of the anticipated 2008 restructuring and related charges of $13 million to $16 million associated with the manufacturing restructuring announced today. Previously, operating income was targeted to be in the range of $95 million to $105 million with restructuring and other charges in the range of $4 million to $6 million for 2008. Our outlook for operating income excluding restructuring and related charges is unchanged.

• Diluted earnings per share is targeted between $1.26 and $1.43 which includes the negative impact of approximately $0.33 from restructuring and related charges. This outlook reflects the restructuring and related charges discussed above. Previously, diluted earnings per share was targeted between $1.51 and $1.68 which included the negative impact of approximately $0.08 from restructuring and other charges. Our outlook for diluted earnings per share excluding the impacts of restructuring and related charges is unchanged.

• Capital spending is targeted in the range of $15 million to $20 million.

• The tax rate is anticipated to be in the range of 35 percent to 37 percent, absent any one-time tax items that may occur in the future.

• Depreciation and amortization expense is targeted in the range of $48 million to $52 million.

Webcast and Replay Information

A webcast of Imation Corp.’s second quarter teleconference will be available on the Internet on a listen-only basis at http://ir.Imation.com or http://www.streetevents.com. A taped replay of the teleconference will be available beginning at 1:00 PM Central Daylight Time on July 22, 2008 until 5:00 PM Central Daylight Time on July 28, 2008 by dialing 866-837-8032 (access code 1249095). All remarks made during the teleconference will be current at the time of the call and the replay will not be updated to reflect any subsequent developments.

About Imation Corp.

Imation is a leading global marketer of brands and developer of products in digital storage and audio and video electronics. Imation Corp.’s global brand portfolio, in addition to the Imation brand, includes the Memorex brand, one of the most widely recognized names in the consumer electronics industry, famous for the slogan, “Is it live or is it Memorex?” and the XtremeMac brand. Imation is also the exclusive licensee of the TDK Life on Record brand, one of the world’s leading recording media brands. Additional information about Imation is available at www.imation.com.

Risk and Uncertainties

Certain information contained in this press release which does not relate to historical financial information may be deemed to constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties that could cause our actual results in the future to differ materially from our historical results and those presently anticipated or projected. We wish to caution investors not to place undue reliance on any such forward-looking statements. Any forward-looking statements speak only as of the date on which such statements are made, and we undertake no obligation to update such statements to reflect events or circumstances arising after such date. Risk factors include our ability to successfully integrate our recent acquisitions and achieve the anticipated benefits, including synergies, in a timely manner; our ability to successfully manage multiple brands globally; our ability to successfully defend our intellectual property rights; continuing uncertainty in global and regional economic conditions; the volatility of the markets in which we operate; our ability to meet our revenue growth and cost reduction targets; our ability to successfully implement our global manufacturing strategy for magnetic data storage products and to realize the benefits expected from the related restructuring; our ability to introduce new offerings in a timely manner either independently or in association with OEMs or other third parties; our ability to efficiently source, warehouse and distribute our products globally; our ability to secure and maintain adequate shelf and display space over time at retailers which conduct semi-annual or annual line reviews; our ability to achieve the expected benefits from our strategic relationships and distribution agreements; the competitive pricing environment and its possible impact on profitability and inventory valuations; foreign currency fluctuations; the outcome of any pending or future litigation, including the pending Philips litigation; our ability to secure adequate supply of certain high demand products at acceptable prices; the ready availability and price of energy and key raw materials or critical components; the market acceptance of newly introduced product and service offerings; the rate of decline for certain existing products; the possibility that our goodwill or other assets may become impaired, as well as various factors set forth from time to time in our filings with the Securities and Exchange Commission.

IMATION CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except for per share amounts)
(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2008			2007			2008			2007
Net revenue	$	547.0		$	412.8		$	1,077.9		$	834.7
Cost of goods sold		452.1			340.3			884.3			680.4
Gross profit		94.9			72.5			193.6			154.3
Selling, general and administrative		72.7			44.7			144.6			89.9
Research and development		6.0			9.6			12.6			22.0
Restructuring and other		4.0			20.8			4.7			21.4
Total		82.7			75.1			161.9			133.3
Operating income (loss)		12.2			(2.6	)		31.7			21.0
Other (income) and expense
Interest income		(0.7	)		(2.5	)		(1.6	)		(5.0	)
Interest expense		0.3			0.3			1.0			0.6
Other, net		2.0			1.5			3.4			2.2
Total		1.6			(0.7	)		2.8			(2.2	)
Income before income taxes		10.6			(1.9	)		28.9			23.2
Income tax provision (benefit)		3.4			(0.5	)		10.7			8.9
Net income (loss)	$	7.2		$	(1.4	)	$	18.2		$	14.3
Earning per common share
Basic	$	0.19		$	(0.04	)	$	0.48		$	0.41
Diluted	$	0.19		$	(0.04	)	$	0.48		$	0.41
Weighted average shares outstanding
Basic		37.4			34.9			37.6			34.9
Diluted		37.5			34.9			37.7			35.3
Cash dividend paid per common share	$	0.16		$	0.16		$	0.32		$	0.30

IMATION CORP.
CONSOLIDATED BALANCE SHEETS
(In millions)

	June 30,		December 31,
	2008		2007
	(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	117.7	$	135.5
Accounts receivable, net		394.7		507.1
Inventories, net		346.3		366.1
Other current assets		111.8		109.9
Total current assets		970.5		1,118.6
Property, plant and equipment, net		163.1		171.5
Intangible assets, net		366.5		371.0
Goodwill		60.7		55.5
Other assets		36.2		34.4
Total assets	$	1,597.0	$	1,751.0
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	287.1	$	350.1
Accrued payroll		15.8		13.5
Other current liabilities		197.2		257.3
Current maturities of long-term debt		—		10.0
Total current liabilities		500.1		630.9
Other liabilities		44.8		45.0
Long-term debt, less current maturities		—		21.3
Shareholders’ equity		1,052.1		1,053.8
Total liabilities and shareholders’ equity	$	1,597.0	$	1,751.0

IMATION CORP.
SUPPLEMENTAL INFORMATION
(Dollars in millions)
(Unaudited)

Segment and Product Information

	Three months ended					Three months ended
	June 30, 2008					June 30, 2007
	Rev $		% Total			Rev $		% Total			% Change
Americas		190.2		34.8	%		229.4		55.6	%		-17.1	%
Europe		185.3		33.9	%		126.7		30.7	%		46.3	%
Asia Pacific		113.3		20.7	%		56.7		13.7	%		99.8	%
Electronic Products		58.2		10.6	%		—	NM			NM
Total		547.0		100.0	%		412.8		100.0	%

	Rev $		% Total			Rev $		% Total
Optical products		264.3		48.3	%		192.6		46.7	%	37.2	%
Magnetic products		166.4		30.4	%		150.4		36.4	%	10.6	%
Flash media products		27.0		4.9	%		42.8		10.4	%	-36.9	%
Electronic products, accessories and other		89.3		16.3	%		27.0		6.5	%	230.7	%
Total		547.0		100.0	%		412.8		100.0	%

	Op Inc $			OI %			Op Inc (Loss) $			OI %
Americas		17.5			9.2	%		22.1			9.6	%		-20.8	%
Europe		7.2			3.9	%		7.9			6.2	%		-8.9	%
Asia Pacific		8.0			7.1	%		4.0			7.1	%		100.0	%
Electronic Products		0.6		NM				—		NM			NM
Corp/Unallocated (1)		(21.1	)	NM				(36.6	)	NM			NM
Total		12.2			2.2	%		(2.6	)		-0.6	%

	Six months ended					Six months ended
	June 30, 2008					June 30, 2007
	Rev $		% Total			Rev $		% Total			% Change
Americas		404.9		37.6	%		444.5		55.6	%		-8.9	%
Europe		361.4		33.5	%		269.4		30.7	%		34.1	%
Asia Pacific		227.6		21.1	%		120.8		13.7	%		88.4	%
Electronic Products		84.0		7.8	%		—	NM			NM
Total		1,077.9		100.0	%		834.7		100.0	%

	Rev $		% Total			Rev $		% Total
Optical products		525.9		48.8	%		385.3		46.2	%	36.5	%
Magnetic products		344.5		32.0	%		312.8		37.5	%	10.1	%
Flash media products		53.9		5.0	%		78.5		9.4	%	-31.3	%
Electronic products, accessories and other		153.6		14.2	%		58.1		6.9	%	164.4	%
Total		1077.9		100.0	%		834.7		100.0	%

	Op Inc $			OI %			Op Inc $			OI %
Americas		41.3			10.2	%		46.6			10.5	%		-11.4	%
Europe		12.9			3.6	%		19.0			7.1	%		-32.1	%
Asia Pacific		15.7			6.9	%		10.4			8.6	%		51.0	%
Electronic Products		(2.1	)	NM				—		NM			NM
Corp/Unallocated (1)		(36.1	)	NM				(55.0	)	NM			NM
Total		31.7			2.9	%		21.0			2.5	%

	NM — Not meaningful
(1)	Corporate and unallocated amounts include research and development expense, corporate expense, stock-based compensation expense and restructuring and other expense that are not allocated to the segments we serve. We believe this avoids distorting the operating income for the segments.

IMATION CORP.
SUPPLEMENTAL INFORMATION
(Dollars in millions)
(Unaudited)

Operations & Cash Flow — Additional Information

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(Dollars in millions)	2008			2007			2008			2007
Gross Profit	$	94.9		$	72.5		$	193.6		$	154.3
Gross Margin %		17.3	%		17.6	%		18.0	%		18.5	%
Operating Income (Loss)	$	12.2		$	(2.6	)	$	31.7		$	21.0
Operating Income %		2.2	%		-0.6	%		2.9	%		2.5	%
Capital Spending	$	4.1		$	4.0		$	6.5		$	9.4
Depreciation	$	6.7		$	7.0		$	13.4		$	14.0
Amortization	$	6.0		$	3.5		$	11.9		$	7.0
Tax Rate %		32	%		26	%		37	%		38	%

Asset Utilization Information *

	June 30,			December 31,
	2008			2007
Days Sales Outstanding (DSO)		61			64
Days of Inventory Supply		66			65
Debt to Total Capital		0.0	%		3.0	%
Other Information
Approximate employee count as of June 30, 2008:					1,950
Approximate employee count as of December 31, 2007:					2,250
Book value per share as of June 30, 2008:				$	28.21
Shares used to calculate book value per share (millions):					37.3

Imation repurchased approximately 269,000 shares of its stock in the second quarter of 2008 for $7.0 million. Authorization for repurchase of 2.3 million shares remains outstanding as of June 30, 2008.

*	These operational measures, which we regularly use, are provided to assist in the investor’s further understanding of our operations.
	Days Sales Outstanding is calculated using the count-back method, which calculates the number of days of most recent revenue that are reflected in the net accounts receivable balance.
	Days of Inventory Supply is calculated using the current period inventory balance divided by the average of the inventoriable portion of cost of goods sold for the previous 12 months expressed in days.
	Debt to Total Capital is calculated by dividing total debt (long term plus short term) by total shareholders’ equity and total debt.

EX-99.2

Exhibit 99.2

Imation Announces Further Manufacturing
Optimization Steps

Company to Focus Tape Coating Operations in Weatherford, OK and Exit Camarillo, CA Plant by Year End

OAKDALE, MN (July 22, 2008) — Imation Corp. (NYSE: IMN) today announced additional steps to optimize its magnetic tape manufacturing by focusing all tape coating in its state-of-the-art Weatherford, OK plant as a further implementation of the Company’s manufacturing strategy. This will result in the exit from its Camarillo, CA plant by the end of this year. This follows the announcement in May 2007 of the consolidation and outsourcing of tape converting operations, resulting in the exit of its Wahpeton, ND plant by year end 2008. Imation’s manufacturing plant in Weatherford, OK will remain dedicated to magnetic tape coating operations.

Key elements of today’s announcements include the following:

• Imation will focus all tape coating operations in its Weatherford plant and cease manufacturing operations at its Camarillo plant, which it plans to exit by year-end 2008. This will result in approximately 140 positions out of a current worldwide total of 1,950 being eliminated by year-end.

• The Company anticipates it will incur up to $20 million in restructuring and related charges associated with the Camarillo closure, the majority of which will occur in the second half of 2008. Approximately half of the charges are anticipated to be cash payments associated with severance benefits and costs of exiting the site. The remaining charges will be non-cash asset write-offs.

• These actions are expected to result in approximately $15 million to $20 million in annualized cost eliminations intended to mitigate projected declines in tape gross profits in future years. However, these benefits will not be completely realized until the program is fully implemented.

Commenting on today’s announcement, Imation’s President and Chief Executive Officer, Frank Russomanno said: “Imation remains committed to maintaining our leadership position in the removable data storage industry serving commercial customers. As we said in the past, this management team will take all steps necessary to maintain our competitive advantage.”

“At last year’s analyst strategy briefing, we announced steps to optimize our magnetic business with the consolidation and outsourcing of our tape converting operations and our planned exit from our Wahpeton plant by the end of 2008. This morning we accelerated our optimization strategy as we announced our plan to focus coating in Weatherford and the exit of our Camarillo operation by year-end.”

“The tape industry has consistently addressed the growth in demand for storage capacity with higher capacity cartridges resulting in lower cost per gigabyte. In addition, open format LTO tape continues to gain share with legacy formats declining at an increasing rate. In the current economic environment we have seen this trend accelerate, especially among some of our enterprise class customers. Finally, lower cost disk and optimization strategies such as virtual tape and de-duplication remain a factor in certain sectors of the market. As a result, we expect tape revenue and margins to continue to be under pressure.”

“Given these trends, we recognize that excess manufacturing capacity exists, so we are taking aggressive actions as part of our strategy to optimize our tape business and maintain our leadership position.”

“Several years ago, we invested $55 million in the most modern coater in the industry, our TeraÅngstrom coater in Weatherford. At that time, we said we would deliver a Terabyte (TB) of capacity in a cartridge before the end of the decade. Last week, we passed that milestone. Our Weatherford plant will be the manufacturing site for all our coating operations going forward.”

“Imation is well known and trusted as a leading developer and manufacturer of magnetic tape formats. That will not change. We expect the tape business to be an important market for us in the future and we intend to remain a leader,” Russomanno concluded.

About Imation Corp.

Imation is a leading global marketer of brands and developer of products in digital storage and audio and video electronics. Imation Corp.’s global brand portfolio, in addition to the Imation brand, includes the Memorex brand, one of the most widely recognized names in the consumer electronics industry, famous for the slogan, “Is it live or is it Memorex?” and the XtremeMac brand. Imation is also the exclusive licensee of the TDK Life on Record brand, one of the world’s leading recording media brands. Additional information about Imation is available at www.imation.com.

Risk and Uncertainties

Certain information contained in this press release which does not relate to historical financial information may be deemed to constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties that could cause our actual results in the future to differ materially from our historical results and those presently anticipated or projected. We wish to caution investors not to place undue reliance on any such forward-looking statements. Any forward-looking statements speak only as of the date on which such statements are made, and we undertake no obligation to update such statements to reflect events or circumstances arising after such date.

Risk factors include our ability to successfully integrate our recent acquisitions and achieve the anticipated benefits, including synergies, in a timely manner; our ability to successfully manage multiple brands globally; our ability to successfully defend our intellectual property rights; continuing uncertainty in global and regional economic conditions; the volatility of the markets in which we operate; our ability to meet our revenue growth and cost reduction targets; our ability to successfully implement our global manufacturing strategy for magnetic data storage products and to realize the benefits expected from the related restructuring; our ability to introduce new offerings in a timely manner either independently or in association with OEMs or other third parties; our ability to efficiently source, warehouse and distribute our products globally; our ability to secure and maintain adequate shelf and display space over time at retailers which conduct semi-annual or annual line reviews; our ability to achieve the expected benefits from our strategic relationships and distribution agreements; the competitive pricing environment and its possible impact on profitability and inventory valuations; foreign currency fluctuations; the outcome of any pending or future litigation, including the pending Philips litigation; our ability to secure adequate supply of certain high demand products at acceptable prices; the ready availability and price of energy and key raw materials or critical components; the market acceptance of newly introduced product and service offerings; the rate of decline for certain existing products; the possibility that our goodwill or other assets may become impaired, as well as various factors set forth from time to time in our filings with the Securities and Exchange Commission.