10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2012

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.

(Exact name of registrant as specified in its charter)

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

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. R Yes o No

     Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). R Yes o No

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer R Non-accelerated filer o(Do not check if a smaller reporting company) Smaller reporting companyo

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes R No

     Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 38,401,505 shares of Common Stock, par value $0.01 per share, were outstanding November 2, 2012.

IMATION CORP.

TABLE OF CONTENTS

	PAGE
PART I. FINANCIAL INFORMATION	3
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2012 and 2011	3
Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended September 30, 2012 and 2011	4
Condensed Consolidated Balance Sheets as of September 30, 2012 and December 31, 2011	5
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2012 and 2011	6
Notes to Condensed Consolidated Financial Statements	7
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	21
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	32
ITEM 4. CONTROLS AND PROCEDURES	33
PART II. OTHER INFORMATION	33
ITEM 1. LEGAL PROCEEDINGS	33
ITEM 1A. RISK FACTORS	33
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	33
ITEM 3. DEFAULTS UPON SENIOR SECURITIES	34
ITEM 4. MINE SAFETY DISCLOSURES	34
ITEM 5. OTHER INFORMATION	34
ITEM 6. EXHIBITS	34
SIGNATURE	35
EXHIBIT INDEX	36
EX-31.1
EX-31.2
EX-32.1
EX-32.2
EX-101

2

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 Ended
	September 30,						September 30,
	2012			2011			2012			2011
Net revenue	$	248.2		$	308.6		$	800.5		$	948.1
Cost of goods sold	202.5			251.4			646.3			782.9
Gross profit	45.7			57.2			154.2			165.2
Operating expenses:
Selling, general and administrative	50.7			52.7			160.2			150.8
Research and development	5.1			5.3			17.7			15.0
Litigation settlement	—			2.0			—			2.0
Goodwill impairment	—			—			—			1.6
Restructuring and other	(3.6		)	5.5			2.0			16.8
Total	52.2			65.5			179.9			186.2
Operating loss	(6.5		)	(8.3		)	(25.7		)	(21.0		)
Other expense (income):
Interest income	(0.1		)	(0.2		)	(0.4		)	(0.6		)
Interest expense	0.6			0.8			2.4			2.7
Other, net	(0.4		)	3.1			2.2			6.2
Total	0.1			3.7			4.2			8.3
Loss before income taxes	(6.6		)	(12.0		)	(29.9		)	(29.3		)
Income tax (benefit) provision	(0.3		)	2.1			0.6			4.5
Net loss	$	(6.3	)	$	(14.1	)	$	(30.5	)	$	(33.8	)
(Loss) earnings per common share — basic:	(0.17		)	(0.38		)	(0.81		)	(0.89		)
(Loss) earnings per common share — diluted:	(0.17		)	(0.38		)	(0.81		)	(0.89		)
Weighted average shares outstanding — basic:	37.4			37.5			37.6			37.8
Weighted average shares outstanding — diluted:	37.4			37.5			37.6			37.8

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

3

IMATION CORP.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In millions)

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2012			2011			2012			2011
Net loss	$	(6.3	)	$	(14.1	)	$	(30.5	)	$	(33.8	)
Other comprehensive (loss) income, net of tax:
Net unrealized (losses) gains on derivative financial instruments:
Net holding (losses) gains arising during the period	(0.6		)	0.6			0.3			(1.2		)
Reclassification adjustment for net realized (gains) losses included in net loss	(0.5		)	0.3			(1.2		)	0.4
Total net unrealized (losses) gains on derivative financial instruments	(1.1		)	0.9			(0.9		)	(0.8		)
Net pension adjustments:
Reclassification of adjustments for defined benefit plans recorded in net loss	2.5			(11.4		)	3.0			(10.3		)
Unrealized foreign currency translation gains (losses)	3.1			(11.8		)	1.3			(0.8		)
Total other comprehensive income (loss), net of tax	4.5			(22.3		)	3.4			(11.9		)
Comprehensive loss	$	(1.8	)	$	(36.4	)	$	(27.1	)	$	(45.7	)

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

4

IMATION CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)

(Unaudited)

	September 30,		December 31,
	2012		2011
Assets
Current assets
Cash and cash equivalents	$	186.3	$	223.1
Accounts receivable, net	178.2		234.9
Inventories	211.5		208.8
Other current assets	61.0		49.7
Total current assets	637.0		716.5
Property, plant and equipment, net	55.8		55.4
Intangible assets, net	300.6		321.7
Goodwill	31.3		31.3
Other assets	27.4		24.4
Total assets	$	1,052.1	$	1,149.3
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable	$	172.0	$	205.2
Other current liabilities	129.0		151.2
Total current liabilities	301.0		356.4
Other liabilities	51.5		69.2
Total liabilities	352.5		425.6
Commitments and contingencies (Note 15)
Shareholders’ equity	699.6		723.7
Total liabilities and shareholders’ equity	$	1,052.1	$	1,149.3

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

5

IMATION CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

	Nine Months Ended
	September 30,
	2012			2011
Cash Flows from Operating Activities:
Net loss	$	(30.5	)	$	(33.8	)
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation	6.1			8.4
Amortization	21.7			18.8
Stock-based compensation	5.5			5.5
Deferred income taxes, net of valuation allowance	(2.3		)	(0.2		)
Goodwill impairment	—			1.6
Intangible asset abandonment	1.3			—
Asset disposals	—			7.0
Inventory write-offs	—			1.5
Pension settlement	2.0			1.9
Litigation settlement	—			2.0
Contingent consideration adjustment	(8.3		)	—
Other	3.1			10.2
Changes in operating assets and liabilities:
Litigation settlement payments	(18.5		)	(10.9		)
Accounts receivable	56.6			49.7
Inventories	(2.8		)	(32.1		)
Other assets	(14.0		)	(15.7		)
Accounts payable	(33.2		)	(20.6		)
Accrued payroll and other liabilities	(9.3		)	(41.3		)
Restricted cash	—			16.4
Net cash used in operating activities	(22.6		)	(31.6		)
Cash Flows from Investing Activities:
Capital expenditures	(8.4		)	(6.1		)
Proceeds from sale of assets	1.4			—
Proceeds from investments	0.9			—
Acquisitions	—			(26.0		)
Net cash used in investing activities	(6.1		)	(32.1		)
Cash Flows from Financing Activities:
Purchase of treasury stock	(4.9		)	(9.7		)
Debt issuance costs	(2.4		)	—
Contingent consideration payments	(1.2		)	—
Exercise of stock options	—			0.6
Net cash used in financing activities	(8.5		)	(9.1		)
Effect of exchange rate changes on cash and cash equivalents	0.4			0.8
Net change in cash and cash equivalents	(36.8		)	(72.0		)
Cash and cash equivalents — beginning of period	223.1			304.9
Cash and cash equivalents — end of period	$	186.3		$	232.9

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

6

IMATION CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 — Basis of Presentation

The interim Condensed Consolidated Financial Statements of Imation Corp. (Imation, the Company, we, us or our) are unaudited but, in the opinion of management, reflect all adjustments necessary for a fair statement of financial position, results of operations, comprehensive loss and cash flows for the periods presented. Except as otherwise disclosed herein, these adjustments consist of normal, recurring items. The results of operations for any interim period are not necessarily indicative of full year results. The Condensed Consolidated Financial Statements and Notes are presented in accordance with the requirements for Quarterly Reports on Form 10-Q and do not contain certain information included in our annual Consolidated Financial Statements and Notes.

The preparation of the interim Condensed Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim Condensed Consolidated Financial Statements and the reported amounts of revenue and expenses for the reporting periods. Despite our intention to establish accurate estimates and use reasonable assumptions, actual results may differ from our estimates.

The December 31, 2011 Condensed Consolidated Balance Sheet data was derived from the audited Consolidated Financial Statements but does not include all disclosures required by U.S. GAAP. This Form 10-Q should be read in conjunction with our Consolidated Financial Statements and Notes included in our Annual Report on Form 10-K for the year ended December 31, 2011.

Note 2 — Recently Issued or Adopted Accounting Pronouncements

In September 2011, the FASB issued a revised standard intended to reduce the cost and complexity of the annual goodwill impairment test by providing entities an option to perform a “qualitative” assessment to determine whether further impairment testing is necessary. An entity has the option to first assess qualitative factors to determine whether it is necessary to perform the two-step test. If an entity believes, as a result of its qualitative assessment, that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test is required. Otherwise, no further testing is required. The revised standard was effective for Imation for annual and interim goodwill impairment tests performed beginning January 1, 2012, however we have, thus far, chosen to continue to perform a quantitative assessment when evaluating its goodwill for impairment

In June 2011, the FASB issued amended guidance to enhance comparability between entities that report under U.S. GAAP and International Financial Reporting Standards (IFRS) and to provide a more consistent method of presenting non-owner transactions that affect an entity's equity. This guidance eliminates the option to report other comprehensive income and its components in the statement of changes in stockholders' equity and requires an entity to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement or in two separate but consecutive statements. Regardless of whether one or two statements are presented, an entity is required to show reclassification adjustments on the face of the financial statements for items that are reclassified from other comprehensive income to net income. In December 2011, the FASB amended this guidance to indefinitely defer provisions which required entities to present reclassification adjustments out of accumulated other comprehensive income by component in both the statement in which net income is presented and the statement in which other comprehensive income is presented. This guidance was effective for Imation for our first quarter ended March 31, 2012 and we began presenting a separate financial statement which shows the various components of our consolidated comprehensive loss.

In May 2011, the FASB issued amended disclosure requirements to provide a consistent definition of fair value and ensure the fair value measurement and disclosure requirements are similar between U.S. GAAP and IFRS. This guidance changes certain fair value measurement principles and enhances the disclosure requirements particularly for Level 3 fair value measurements. This guidance was effective for Imation for our first quarter ended March 31, 2012 and did not have a material impact on our financial position and results of operations.

A variety of proposed potential accounting standards are currently under study by standard setting organizations and various regulatory agencies. Due to the tentative and preliminary nature of those proposed standards, management has not determined whether implementation of such proposed standards would be material to our Condensed Consolidated Financial Statements.

Note 3 — (Loss) Earnings per Common Share

7

Basic (loss) earnings per common share is calculated using the weighted average number of shares outstanding for the period. Diluted (loss) earnings per common share is computed on the basis of the weighted average basic shares outstanding plus the dilutive effect of our stock-based compensation plans using the “treasury stock” method. Unvested restricted stock and treasury shares are excluded from the calculation of weighted average number of common shares outstanding. Once restricted stock vests, it is included in our common shares outstanding.

Potential common shares are excluded from the computation of diluted (loss) earnings per common share when the effect would be anti-dilutive. All potential common shares are anti-dilutive in periods of net loss available to common shareholders. Stock options are anti-dilutive when the exercise price of these instruments is greater than the average market price of the Company's common stock for the period.

The following table sets forth the computation of the weighted average basic and diluted (loss) earnings per share:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(In millions, except for per share amounts)	2012			2011			2012			2011
Numerator:
Net loss	$	(6.3	)	$	(14.1	)	$	(30.5	)	$	(33.8	)
Denominator:
Weighted average number of common shares outstanding during the period	37.4			37.5			37.6			37.8
Dilutive effect of stock-based compensation plans	—			—			—			—
Weighted average number of diluted shares outstanding during the period	37.4			37.5			37.6			37.8
(Loss) earnings per common share — basic	(0.17		)	(0.38		)	(0.81		)	(0.89		)
(Loss) earnings per common share — diluted	(0.17		)	(0.38		)	(0.81		)	(0.89		)
Anti-dilutive options excluded from calculation	6.5			6.2			6.2			5.0

Note 4 — Acquisitions

On October 4, 2011, we acquired the secure data storage hardware of IronKey Systems Inc. (IronKey) for a cash payment of $19.0 million. During the second quarter of 2012, we recorded an adjustment to the purchase price related to working capital in the amount of $0.6 million. As the purchase accounting for this acquisition was finalized in 2011, the adjustment was recorded as a charge to restructuring and other in the Condensed Consolidated Statements of Operations for the nine months ended September 30, 2012.

On June 4, 2011, we acquired the assets of MXI Security, a leader in high-security and privacy technologies, from Memory Experts International Inc. (MXI). The purchase price included future contingent consideration totaling up to $45.0 million with an estimated fair value of $9.2 million at the time of the acquisition. The amount of contingent consideration was to be based on incremental revenue and gross margin percent from MXI and MXI-based Defender branded products.

During the second quarter of 2012, the MXI Security contingent consideration agreement was amended in light of the IronKey acquisition that occurred late in 2011. Under the amended agreement, the amount of contingent consideration will continue to range up to $45.0 million, and will 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 second earn-out payment ranges up to $25.0 million with the sum of the first and second payments being up to a maximum of $25.0 million. The first earn-out payment was not achieved. The second earn-out payment is based on gross profit and gross margin percent achieved from July 1, 2012 through June 30, 2013. The third earn-out payment ranges up to $20.0 million and is based on gross profit and gross margin percent achieved from January 1, 2013 through December 31, 2013.

We remeasure the remaining contingent consideration each reporting period. During the three months ended June 30, 2012 we adjusted our internal financial forecast for the Mobile Security reporting unit resulting in a change in timing of the expected cash flows. This impacted the value of the MXI Security contingent consideration obligation and at June 30, 2012 the estimated fair value was determined to be $6.4 million, resulting in a decrease of $2.8 million for the three and six months ended June 30, 2012. During the three months ended September 30, 2012, we adjusted our internal financial forecast for the Mobile Security reporting unit reflecting lower expected short-term revenues and slightly lower gross margins as we enter the medium security markets. This impacted the value of the MXI Security contingent consideration obligation and at September 30, 2012, the estimated fair value was determined to be $0.9 million, resulting in a decrease of $5.5 million and $8.3 million for the three and nine months ended September 30, 2012, respectively. These adjustments were recorded as a

8

benefit in restructuring and other in the Condensed Consolidated Statements of Operations. See Note 12 - Fair Value Measurements for further discussion of our valuation technique.

On February 28, 2011, we acquired substantially all of the assets of BeCompliant Corporation, doing business as Encryptx (Encryptx). The purchase price included future contingent consideration with an estimated fair value of $1.3 million at the time of the acquisition. During the nine months ended September 30, 2012, we paid $0.7 million of the consideration. The final contingent consideration payment, up to a maximum of $0.7 million, will be determined based on certain 2012 milestones and any amount due will be paid during the first quarter of 2013. Based on our analysis of fair value as of September 30, 2012, the fair value of the remaining consideration did not change significantly.

Note 5 — Supplemental Balance Sheet Information

9

	September 30,			December 31,
(In millions)	2012			2011
Accounts Receivable
Accounts receivable	$	196.7		$	253.3
Less reserves and allowances1	(18.5		)	(18.4		)
Accounts receivable, net	$	178.2		$	234.9
Inventories
Finished goods	$	191.3		$	186.7
Work in process	9.5			13.5
Raw materials and supplies	10.7			8.6
Total inventories	$	211.5		$	208.8
Other Current Assets
Deferred income taxes	$	6.7		$	6.1
Prepaid expenses	3.1			6.1
Hedging asset	2.6			4.4
Assets held for sale	2.5			3.3
Restricted cash	2.2			2.2
Other	43.9			27.6
Total other current assets	$	61.0		$	49.7
Property, Plant and Equipment
Property, plant and equipment	$	211.1		$	241.4
Less accumulated depreciation	(155.3		)	(186.0		)
Property, plant and equipment, net	$	55.8		$	55.4
Other Assets
Deferred income taxes	$	15.7		$	15.8
Other	11.7			8.6
Total other assets	$	27.4		$	24.4
Other Current Liabilities
Rebates	$	41.7		$	45.2
Accrued copyright levies	26.1			19.7
Litigation settlement — current2	—			18.0
Accrued payroll	10.4			13.2
Accrued royalties	5.9			10.7
Employee separation costs	3.1			5.9
Hedging liability	2.0			1.6
Other	39.8			36.9
Total other current liabilities	$	129.0		$	151.2
Other Liabilities
Pension	$	22.4		$	29.3
Contingent consideration	0.9			9.2
Deferred income taxes	0.1			0.1
Other	28.1			30.6
Total other liabilities	$	51.5		$	69.2

¹Accounts receivable reserves and allowances include estimated amounts for customer returns, discounts on payment terms and the inability of certain customers to make the required payment.

²On July 13, 2012, we made the final $16.5 million payment associated with the settlement agreement of our litigation with Philips Electronics N.V., U.S. Philips Corporation and North American Philips Corporation.

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Note 6 — Intangible Assets and Goodwill

Intangible Assets

The components of our amortizable intangible assets were as follows:

(In millions)	Trade Names			Software			Customer Relationships			Other			Total
September 30, 2012
Gross carrying amount	$	345.8		$	58.9		$	61.0		$	14.6		$	480.3
Accumulated amortization	(67.6		)	(53.4		)	(52.4		)	(6.3		)	(179.7		)
Intangible assets, net	$	278.2		$	5.5		$	8.6		$	8.3		$	300.6
December 31, 2011
Gross carrying amount	$	347.1		$	57.9		$	61.5		$	13.9		$	480.4
Accumulated amortization	(57.5		)	(51.1		)	(45.5		)	(4.6		)	(158.7		)
Intangible assets, net	$	289.6		$	6.8		$	16.0		$	9.3		$	321.7

Amortization expense for intangible assets consisted of the following:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In millions)	2012		2011		2012		2011
Amortization expense	$	7.2	$	6.6	$	21.7	$	18.8

During the second quarter of 2012, we accelerated the amortization of several intangible assets due to certain business decisions to abandon the intangible assets. These intangible assets had a carrying value of $1.3 million. The $1.3 million of accelerated amortization was recorded in restructuring and other in the Condensed Consolidated Statements of Operations for the nine months ended September 30, 2012.

On December 20, 2011, we acquired intellectual property and other assets from Nine Technology, LLC (Nine Technology). The purchase price included future contingent consideration of $1.0 million based on certain 2012 milestones of which $0.5 million was paid in 2011. During the nine months ended September 30, 2012, we paid the remaining $0.5 million contingent consideration payment.

Goodwill

During 2011, we acquired the assets of MXI Security and the assets of IronKey's secure data storage hardware business. These businesses, along with our Imation Defender brand, make up our Mobile Security reporting unit. The carrying value of our Mobile Security reporting unit includes $31.3 million of goodwill.

We test the carrying amount of a reporting unit's goodwill for impairment on an annual basis during the fourth quarter of each year and if an event occurs or circumstances change that would warrant impairment testing during an interim period. During the three months ended June 30, 2012 we adjusted our internal financial forecast for the Mobile Security reporting unit resulting in a change in timing of the expected cash flows. During the three months ended September 30, 2012, we adjusted our internal financial forecast for the Mobile Security reporting unit reflecting lower expected short-term revenues and slightly lower gross margins as we expand into the medium security markets. We considered these factors to be an event that warranted an interim test as to whether the goodwill was impaired. See Note 12 - Fair Value Measurements for further discussion of our valuation technique.

The Mobile Security reporting unit carrying amount as of June 30, 2012 was $50.2 million and the indicated excess in fair value over the carrying amount in Step 1 of the impairment test performed during the three months ended June 30, 2012 was 43.3 percent. The Mobile Security reporting unit carrying amount as of September 30, 2012 was $48.5 million and the indicated excess in fair value over carrying amount in Step 1 of the impairment test performed during the three months ended September 30, 2012 was 17.7 percent.

This analysis indicates that this goodwill is not impaired. The projections utilized in the analysis reflect management's best assumptions regarding Mobile Security. To the extent that our projections or other assumptions about future economic conditions, the industry in which Mobile Security operates, or the potential for our growth and profitability in this business vary from actual results, it is possible that our conclusion regarding the recoverability of the remaining goodwill could change, which could have a material effect on our financial position and results of operations.

11

During the first quarter of 2011, we acquired substantially all of the assets of Encryptx which resulted in goodwill of $1.6 million. The goodwill was allocated to our existing Americas-Commercial reporting unit. Based on an interim goodwill impairment test performed at March 31, 2011, we determined that the goodwill in the Americas-Commercial reporting unit, including the assets of Encryptx, exceeded the implied fair value and, therefore, the goodwill was fully impaired. As a result, a $1.6 million charge was recorded during the nine months ended September 30, 2011 in restructuring and other in the Condensed Consolidated Statements of Operations.

See Note 16 - Subsequent Event for discussion of the acceleration of our strategic transformation that was announced on October 24, 2012. These actions may have a negative impact on the future recoverability of our intangible assets and goodwill. We will evaluate the impact of these actions including the reassessment of our intangible asset useful lives and the recoverability of our intangible assets and goodwill during the fourth quarter of 2012.

Note 7 — Restructuring and Other Expense

The components of our restructuring and other expense included in the Condensed Consolidated Statements of Operations were as follows:

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
(In millions)	2012			2011		2012			2011
Restructuring
Severance and related	$	—		$	2.4	$	2.8		$	3.7
Lease termination costs	—			1.1		0.5			1.5
Other	0.1			0.8		1.2			1.2
Gain on sale of fixed assets held for sale	—			—		(0.7		)	—
Total restructuring	$	0.1		$	4.3	$	3.8		$	6.4
Other
Contingent consideration fair value adjustment	(5.5		)	—		(8.3		)	—
Intangible asset abandonment	—			—		1.3			—
Acquisition and integration related costs	0.1			0.3		1.3			1.5
Pension settlement	0.5			0.9		2.0			1.9
Asset disposals	—			—		—			7.0
Global process improvement consulting	1.0			—		1.0			—
Other	0.2			—		0.9			—
Total	$	(3.6	)	$	5.5	$	2.0		$	16.8

2011 Corporate Strategy Restructuring Program

On January 31, 2011, the Board of Directors approved the 2011 corporate strategy restructuring program which is described in detail in our Annual Report on Form 10-K for the year ended December 31, 2011. During the three and nine months ended September 30, 2012 we recorded restructuring charges of $0.1 million and $3.9 million, respectively, associated with this program. These charges were primarily associated with severance and, to a lesser extent, lease termination and other costs and were included in restructuring and other in our Condensed Consolidated Statements of Operations. Since the inception of this program, we have recorded a total of $13.2 million of severance and related expenses, $3.5 million of lease termination and modification costs, $1.6 million of inventory write-offs, $0.3 million related to a pension curtailment charge and $0.8 million of other charges. Inventory write-offs are included in cost of goods sold in our Condensed Consolidated Statements of Operations.

Changes in the 2011 corporate strategy restructuring program accruals were as follows:

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(In millions)	Severance and Related			Lease Termination Costs		Other			Total
Accrued balance at December 31, 2011	$	4.6		$	0.6	$	—		$	5.2
Charges	0.4			—		0.3			0.7
Usage	(1.8		)	—		(0.3		)	(2.1		)
Currency impacts	0.1			—		—			0.1
Accrued balance at March 31, 2012	$	3.3		$	0.6	$	—		$	3.9
Charges	2.4			0.5		0.2			3.1
Usage	(1.4		)	—		(0.2		)	(1.6		)
Currency impacts	(0.1		)	—		—			(0.1		)
Accrued balance at June 30, 2012	$	4.2		$	1.1	$	—		$	5.3
Charges	—			—		0.1			0.1
Usage	(1.5		)	—		(0.1		)	(1.6		)
Currency impacts	—			—		—			—
Accrued balance at September 30, 2012	$	2.7		$	1.1	$	—		$	3.8

2011 Manufacturing Redesign Restructuring Program

On January 13, 2011, the Board of Directors approved the 2011 manufacturing redesign restructuring program which is described in detail in our Annual Report on Form 10-K for the year ended December 31, 2011. During the three months ended September 30, 2012 no additional costs were incurred related to this program. During the nine months ended September 30, 2012 we recorded a gain on the sale of assets from the Weatherford facility of $0.7 million and $0.6 million of other charges. These costs were included in restructuring and other in our Condensed Consolidated Statements of Operations. This program is substantially complete and as of September 30, 2012 the remaining accrued balance is not material.

See Note 16 - Subsequent Event for discussion of the acceleration of our strategic transformation that was announced on October 24, 2012 which includes the Board of Directors approval of our 2012 global process improvement cost reduction program.

Note 8 — Stock-Based Compensation

Stock compensation consisted of the following:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In millions)	2012		2011		2012		2011
Stock compensation expense	$	1.9	$	1.9	$	5.5	$	5.5

We have stock-based compensation awards consisting of stock options and restricted stock outstanding under four plans (collectively, the Stock Plans) which are described in detail in our 2011 Annual Report on Form 10-K. As of September 30, 2012 there were 2,021,857 shares available for grant under our 2011 Stock Incentive Plan. No further shares were available for grant under any other stock incentive plan.

Stock Options

The following table summarizes our stock option activity:

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	Stock Options		Weighted Average Exercise Price
Outstanding December 31, 2011	5,679,579		$	19.87
Granted	1,158,882		5.82
Exercised	—		—
Canceled	(521,772	)	26.85
Forfeited	(199,406	)	9.84
Outstanding September 30, 2012	6,117,283		$	16.84
Exercisable as of September 30, 2012	3,742,221		$	22.60

The outstanding options are non-qualified and generally have a term of ten years. The weighted average grant date fair value of options that were granted for the nine months ended September 30, 2012 was $2.54 per award. The following table summarizes our weighted average assumptions used in the valuation of options:

	2012
Volatility	45.1	%
Risk-free interest rate	1.1	%
Expected life (months)	71
Dividend yield	—

As of September 30, 2012, there was $6.5 million of total unrecognized compensation expense related to non-vested stock options granted under our Stock Plans. That expense is expected to be recognized over a weighted average period of 2.0 years.

Restricted Stock

The following table summarizes our restricted stock activity:

	Restricted Stock		Weighted Average Grant Date Fair Value Per Share
Nonvested as of December 31, 2011	795,046		$	10.02
Granted	657,916		5.79
Vested	(305,509	)	10.45
Forfeited	(88,806	)	10.24
Nonvested as of September 30, 2012	1,058,647		$	7.24

The cost of the awards is determined using the fair value of the Company’s common stock on the date of the grant and compensation is recognized on a straight-line basis over the requisite vesting period.

As of September 30, 2012, there was $5.9 million of total unrecognized compensation expense related to non-vested restricted stock granted under our Stock Plans. That expense is expected to be recognized over a weighted average period of 1.9 years.

Note 9 — Retirement Plans

Pension Plans

During the nine months ended September 30, 2012 we contributed $4.3 million to our worldwide pension plans.

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 decline. Participants in our U.S. defined benefit pension plan have the option of receiving cash lump sum payments when exiting the plan, which a number of participants exiting the plan have elected to receive. Lump sum payments for the nine months ended September 30, 2012 have exceeded our expected 2012 service and interest costs. As a result, a partial settlement event occurred during the three months ended September 30, 2012 and we recognized a loss of $0.5 million. A settlement loss of $0.9 million was recognized for the three months ended September 30, 2011. Settlement losses of $2.0 million and $1.9 million were recorded for the nine months ended September 30, 2012 and 2011, respectively. These settlement losses are included in restructuring and other in our Condensed Consolidated

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Statements of Operations. Additionally, in connection with the settlement and as required by pension accounting, we remeasured the funded status of our U.S. defined benefit plan as of September 30, 2012.

Components of net periodic pension cost included the following:

	United States						International					United States						International
	Three Months Ended September 30,											Nine Months Ended September 30,
(In millions)	2012			2011			2012		2011			2012			2011			2012		2011
Service cost	$	—		$	—		$	0.1	$	0.1		$	—		$	—		$	0.3	$	0.3
Interest cost	0.8			3.4			—		0.7			2.4			5.6			—		2.1
Expected return on plan assets	(1.4		)	(4.8		)	—		(0.9		)	(4.3		)	(7.9		)	—		(2.6		)
Amortization of net actuarial loss	0.4			0.7			0.1		0.1			1.0			1.1			0.3		0.3
Amortization of prior service (credit) cost	—			—			—		(0.1		)	—			—			—		(0.3		)
Net periodic pension cost (credit)	$	(0.2	)	$	(0.7	)	$	0.2	$	(0.1	)	$	(0.9	)	$	(1.2	)	$	0.6	$	(0.2	)
Settlement	0.5			0.9			—		—			2.0			1.9			—		—
Total pension cost (credit)	$	0.3		$	0.2		$	0.2	$	(0.1	)	$	1.1		$	0.7		$	0.6	$	(0.2	)

Note 10 — Income Taxes

For interim income tax reporting, we are required to estimate our annual effective tax rate and apply it to year-to-date pre-tax ordinary income/loss excluding unusual or infrequently occurring discrete items. Tax jurisdictions with losses for which tax benefits cannot be realized are excluded.

For the three and nine months ended September 30, 2012 we recorded an income tax benefit of $(0.3) million and an income tax provision of $0.6 million, respectively. The effective income tax rate for the three and nine months ended September 30, 2012 was 4.5 percent and (2.0) percent, respectively, compared with (17.5) percent and (15.4) percent in the same periods last year. The effective rate changes were primarily due to the full valuation allowance on U.S. deferred tax assets, lower withholding tax expense, settlements with taxing authorities concluded during 2012 and the mix of taxable income (loss) by country.

The effective income tax rate for the three and nine months ended September 30, 2012 differs from the U.S. federal statutory rate of 35 percent primarily due to the full valuation allowance on U.S. deferred tax assets, the effects of foreign tax rate differential and settlements with taxing authorities concluded during 2012.

We conduct business globally. As a result, we file income tax returns in multiple jurisdictions and are subject to examination by taxing authorities throughout the world. Our U.S. federal income tax returns for 2004 through 2011 remain subject to examination by the Internal Revenue Service (IRS). The IRS completed its field examination of our U.S. federal income tax returns for the years 2006 through 2008 in the second quarter of 2010. The IRS completed its field examination for the 2009 tax year in the fourth quarter of 2011. We have protested certain IRS positions in both audit cycles and the matters are currently pending in the IRS appeals process. With few exceptions, we are no longer subject to examination by foreign tax jurisdictions or state and city tax jurisdictions for years before 2005. In the event that we have determined not to file tax returns with a particular state or city, all years remain subject to examination by the tax jurisdiction.

We accrue for the effects of uncertain tax positions and the related potential penalties and interest. During the nine months ended September 30, 2012 we recognized $0.7 million of previously recorded unrecognized tax benefits due to settlements with taxing authorities. Our liability related to uncertain tax positions, which is presented within the Other liabilities line on our Condensed Consolidated Balance Sheets and which includes interest and penalties, was $16.9 million and $17.6 million as of September 30, 2012 and December 31, 2011, respectively. It is reasonably possible that the amount of the unrecognized tax benefit with respect to certain of our unrecognized tax positions will increase or decrease during the next twelve months; however it is not possible to reasonably estimate the effect upon the unrecognized tax benefits at this time.

Note 11 — Debt

On May 18, 2012, we entered into an amendment (the Amendment) to the Amended and Restated Credit Agreement (as amended to date, Credit Agreement) described in Note 11 - Debt of our Annual Report on Form 10-K for the year ended December 31, 2011. The Amendment modified the Credit Agreement by extending the expiration date of the borrowing arrangement to May 18, 2017, requiring that the equity interests of material foreign subsidiaries be pledged to support the obligations of Imation Europe B.V. (European Borrower), lowering the applicable margin on interest and lowering the

15

minimum Consolidated Fixed Charge Coverage Ratio (as defined in the Credit Agreement) as well as certain other immaterial changes.

The Credit Agreement includes a senior revolving credit facility amount of $200 million, including sub-limits of $150 million in the United States and $50 million in Europe. Advances are limited to the lesser of the sublimit(s) and the borrowing base as defined in the Credit Agreement. As of September 30, 2012, our borrowing capacity under this arrangement was $102.2 million in the United States and $15.2 million in Europe.

Until August 15, 2012, borrowings under the Credit Agreement bore interest at a rate equal to (1) the Eurodollar Rate (as defined in the Credit Agreement) plus 2.00 percent or (2) the Base Rate (as defined in the Credit Agreement) plus 1.00 percent. Since such date the applicable margins for the Eurodollar Rate and the Base Rate have been subject to adjustments based on average daily availability (as defined in the Credit Agreement), as set forth in the definition of the “Applicable Rate” in the Credit Agreement. The Applicable Rate is a reduction of 125 basis points from the rate in effect prior to the Amendment.

The applicable interest rate based on our borrowing capacity at September 30, 2012 was approximately 4.0 percent, however, we had no amounts outstanding under the Credit Agreement as of or during the nine months ended September 30, 2012.

The Credit Agreement contains conditional financial covenants that require Imation Corp. to have a Consolidated Fixed Charge Coverage Ratio (as defined in the Credit Agreement) during certain periods as described in the Credit Agreement and a liquidity requirement during certain periods as described in the Credit Agreement. Previously the Consolidated Fixed Coverage Ratio was set to be not less than 1.20 to 1.00, and the Amendment lowered such ratio to be not less than 1:00. The Amendment also changed the liquidity requirement to a domestic borrowing availability requirement of $30.0 million. We were in compliance with these financial covenants as of September 30, 2012.

In connection with the Credit Agreement, we capitalized $2.6 million of debt issuance costs. These costs were recorded to Other assets in the Condensed Consolidated Balance Sheets as of September 30, 2012 and will be amortized over the term of the Credit Agreement.

Note 12 — Fair Value Measurements

Derivative Financial Instruments

Cash Flow Hedges

We attempt to substantially mitigate the risk that forecasted cash flows denominated in foreign currencies may be adversely affected by changes in the currency exchange rates through the use of option, forward and combination option contracts. Gains and losses related to cash flow hedges are deferred in accumulated other comprehensive loss with a corresponding asset or liability. When the hedged transaction occurs, the gains and losses in accumulated other comprehensive loss are reclassified into the Condensed Consolidated Statements of Operations in the same line as the item being hedged. The following table sets forth our cash flow hedges which are measured at fair value on a recurring basis.

	September 30, 2012							December 31, 2011
(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Unobservable Inputs (Level 3)		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Unobservable Inputs (Level 3)
Derivative assets
Foreign currency option contracts	$	—	$	2.1		$	—	$	—	$	2.3		$	—
Foreign currency forward contracts	—		0.3			—		—		1.1			—
Derivative liabilities
Foreign currency option contracts	—		(1.9		)	—		—		(1.4		)	—
Total	$	—	$	0.5		$	—	$	—	$	2.0		$	—

Other Hedges

We use foreign currency forward contracts to manage the foreign currency exposure related to our monetary assets and liabilities denominated in foreign currencies. We record the estimated fair value of these forward contracts within other current assets or other current liabilities in the Condensed Consolidated Balance Sheets and changes in their value are recognized in the Condensed Consolidated Statements of Operations. For the three months ended September 30, 2012 and 2011, we recorded

16

foreign currency losses of $0.1 million and $2.7 million, respectively, in Other Expenses, net in the Condensed Consolidated Statements of Operations. These losses reflect changes in foreign exchange rates on foreign denominated assets and liabilities and are net of losses of $0.1 million and $4.2 million from the related foreign currency forward contracts for the three months ended September 30, 2012 and 2011, respectively. For the nine months ended September 30, 2012 and 2011, we recorded foreign currency losses of $1.8 million and $4.6 million, respectively, in Other Expenses, net in the Condensed Consolidated Statements of Operations. These losses reflect changes in foreign exchange rates on foreign denominated assets and liabilities and are net of losses of $0.2 million and $4.3 million from the related foreign currency forward contracts for the nine months ended September 30, 2012 and 2011, respectively.

The notional amounts and fair values of our derivative instruments recorded in other current assets and other current liabilities in the Condensed Consolidated Financial Statements were as follows:

	September 30, 2012							December 31, 2011
			Fair Value							Fair Value
(In millions)	Notional Amount		Other Current Assets		Other Current Liabilities			Notional Amount		Other Current Assets		Other Current Liabilities
Cash flow hedges designated as hedging instruments	$	160.8	$	2.4	$	(1.9	)	$	208.2	$	3.4	$	(1.4	)
Other hedges not receiving hedge accounting	51.4		—		—			32.9		—		—
Total	$	212.2	$	2.4	$	(1.9	)	$	241.1	$	3.4	$	(1.4	)

On September 30, 2012, we entered into certain hedges not receiving hedge accounting treatment. In accordance with trade date accounting, these hedges and related exposures are recorded as of September 30, 2012, but do not have a value until the subsequent day.

Goodwill

We test the carrying amount of a reporting unit's goodwill for impairment on an annual basis during the fourth quarter of each year or if an event occurs or circumstances change that would warrant impairment testing during an interim period. In evaluating whether goodwill was impaired, we compare the estimated fair value of the reporting unit to its carrying value. The fair value measurement of goodwill is based on significant inputs not observable in the market and therefore represent Level 3 measurements. See Note 6 - Intangible Assets and Goodwill for further discussion of the goodwill impairment test performed during the third quarter of 2012.

In calculating the estimated fair value, we used the income approach, a valuation technique under which we estimate future cash flows using the reporting unit's financial forecasts. Our expected cash flows are affected by various significant assumptions, including the discount rate, revenue growth, gross margin percentage, and terminal value growth rate. Our analysis utilized discounted forecasted cash flows over a 10 year period with an estimation of residual growth rates thereafter. We use our business plans and projections as the basis for expected future cash flows. A discount rate of 17.6 percent was used to reflect the relevant risks of the higher growth assumed for the Mobile Security reporting unit. The revenue growth rates in 2012 through 2014, which are forecasted to be significant as we grow this business, are important assumptions within the fair value estimations. We utilized a terminal growth rate of 3.5 percent.

Contingent Consideration

Contingent consideration recorded for 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 as further described under the Goodwill section above. The same relevant assumptions were used in the fair value calculation of contingent consideration as those used in the fair value calculation of goodwill. Changes in the fair value of our contingent consideration obligations are recognized as a fair value adjustment within restructuring and other in our Condensed Consolidated Statements of Operations. These fair value measurements are based on significant inputs not observable in the market and therefore represent Level 3 measurements. See Note 4 - Acquisitions for further discussion of the fair value calculation of our contingent consideration as of September 30, 2012.

Note 13 — Shareholders' Equity

Treasury Stock

On May, 2, 2012, our Board of Directors authorized a share repurchase program of 5.0 million shares of common stock. For the nine months ended September 30, 2012 we repurchased 0.8 million shares of common stock for $4.9 million and as of September 30, 2012 we had remaining authorization to repurchase up to 4.2 million shares. The treasury stock held as of September 30, 2012 was acquired at an average price of $23.77 per share.

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Following is a summary of treasury share activity:

	Treasury Shares
Balance as of December 31, 2011	4,663,923
Purchases	840,170
Exercise of stock options	—
Restricted stock grants and other	(518,192	)
401(k) matching contribution	(430,988	)
Balance as of September 30, 2012	4,554,913

Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss consisted of the following:

	September 30,			December 31,
(In millions)	2012			2011
Cumulative currency translation adjustment	$	(46.1	)	$	(47.4	)
Pension adjustments, net of income tax	(23.8		)	(26.8		)
Cash flow hedging and other, net of income tax	0.7			1.6
Total accumulated other comprehensive loss	$	(69.2	)	$	(72.6	)

Comprehensive Loss

Components of comprehensive loss consisted of the following:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(In millions)	2012			2011			2012			2011
Other comprehensive income (loss), net of tax:
Net unrealized (losses) gains on derivative financial instruments:
Net holding (losses) gains arising during the period	$	(1.0	)	$	0.8		$	0.4		$	(1.7	)
Tax benefit (expense)	0.4			(0.2		)	(0.1		)	0.5
Reclassification adjustment for net realized (gains) losses included in net loss	(0.6		)	0.4			(1.7		)	0.6
Tax expense (benefit)	0.1			(0.1		)	0.5			(0.2		)
Total net unrealized (losses) gains on derivative financial instruments	(1.1		)	0.9			(0.9		)	(0.8		)
Net pension adjustments:
Reclassification of adjustments for defined benefit plans recorded in net loss	4.0			(18.4		)	4.9			(16.6		)
Tax (benefit) expense	(1.5		)	7.0			(1.9		)	6.3
Total net pension adjustments	2.5			(11.4		)	3.0			(10.3		)
Unrealized foreign currency translation (losses) gains	$	3.1		$	(11.8	)	$	1.3		$	(0.8	)

Amounts above are presented to show each component of comprehensive loss on a gross basis and the related taxes. Income taxes are not provided for foreign translation relating to permanent investments in international subsidiaries. Reclassification adjustments are made to avoid double counting in comprehensive loss items that are also recorded as part of net loss. These items are presented net of taxes on the Condensed Consolidated Statements of Comprehensive Loss.

Note 14 — Segment Information

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.

We evaluate segment performance based on revenue and operating income (loss). Revenue for each segment is generally based on customer location where the product is shipped. The operating income (loss) reported in our segments excludes

18

corporate and other unallocated amounts. Although such amounts are excluded from the business segment results, they are included in reported consolidated results. Corporate and unallocated amounts include litigation settlement expense, goodwill impairment, intangible asset abandonment, research and development expense, corporate expense, stock-based compensation expense, inventory write-offs related to our restructuring programs and restructuring and other expenses which are not allocated to the segments.

Net revenue and operating income (loss) by segment were as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In millions)	2012		2011		2012		2011
Net Revenue
Americas	$	117.3	$	141.4	$	373.6	$	427.3
Europe	44.3		56.8		149.0		183.2
North Asia	62.0		75.3		194.4		229.6
South Asia	24.6		35.1		83.5		108.0
Total	$	248.2	$	308.6	$	800.5	$	948.1

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(In millions)	2012			2011			2012			2011
Operating Income (Loss)
Americas	$	(0.5	)	$	(0.8	)	$	3.0		$	2.3
Europe	(1.9		)	4.6			(5.8		)	7.8
North Asia	0.7			(0.3		)	2.8			9.1
South Asia	(0.5		)	1.4			0.8			2.3
Corporate and unallocated	(4.3		)	(13.2		)	(26.5		)	(42.5		)
Total	$	(6.5	)	$	(8.3	)	$	(25.7	)	$	(21.0	)

We have three major product categories: traditional storage, secure and scalable storage, and audio and video information. Traditional storage products include optical products, magnetic products and other traditional storage media products. Optical products include primarily 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, including encrypted and biometric universal serial bus (USB) drives, encrypted and biometric hard disk drives, secure portable desktop solutions, and software solutions, including products which contain various security features such as password authentication, encryption and remote manageability, RDX cartridges and drives, and data protection and data archive appliances. Audio and video information products include primarily audio electronics such as portable stereo systems, iPod® docking stations and accessories, and other accessories such as CD and DVD jewel cases and headphones.

Net revenue by major product category was as follows:

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	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In millions)	2012		2011		2012		2011
Net Revenue
Traditional storage
Optical products	$	97.0	$	126.8	$	317.8	$	383.8
Magnetic products	68.3		76.9		215.0		244.7
Other traditional storage	3.2		13.0		11.7		38.6
Total traditional storage	168.5		216.7		544.5		667.1
Secure and scalable storage	44.5		48.2		147.3		156.3
Audio and video information	35.2		43.7		108.7		124.7
Total	$	248.2	$	308.6	$	800.5	$	948.1

See Note 16 - Subsequent Event for discussion of the acceleration of our strategic transformation that was announced on October 24, 2012, which includes the realignment of our global business into two new business units to be effective at year-end. We will be assessing the impact of this realignment on our reporting segments during the fourth quarter of 2012. Any changes in our reporting segments will be reported as of December 31, 2012.

Note 15 — Litigation, Commitments and Contingencies

Litigation

We are the subject of various pending or threatened legal actions in the ordinary course of our business. All such matters are subject to many uncertainties and outcomes that are not predictable with assurance. Additionally, our businesses are subject to allegations of patent infringement by our competitors as well as by non-practicing entities (NPEs), sometimes referred to as “patent trolls,” who may seek monetary settlements from us, our competitors, suppliers and resellers. Consequently, as of September 30, 2012, we are unable to ascertain with certainty the ultimate aggregate amount of any monetary liability or financial impact that we may incur with respect to these matters. While these matters could materially affect operating results depending upon the final resolution in future periods, it is our opinion that after final disposition, any monetary liability beyond that provided in the Condensed Consolidated Balance Sheet as of September 30, 2012 would not be material to our financial position.

On June 14, 2011, Trek 2000 International Ltd and certain of its affiliates (Trek) filed a complaint asking the International Trade Commission (ITC) to commence an investigation against us and various others. Trek alleged that Imation and others unlawfully imported and sold into the United States certain USB portable storage devices that allegedly infringed several of Trek's U.S. patents. On August 15, 2011, we filed an answer to Trek's complaint, denying liability and asserting that Trek failed to meet certain requirements to bring its complaint to the ITC. A hearing with the ITC was scheduled for May 9, 2012. On May 8, 2012, Trek withdrew its complaint and terminated the investigation before the ITC.

On June 19, 2009, Advanced Research Corp. (ARC) sued Imation in Ramsey County District Court for breach of contract relating to a supply agreement under which we purchased our requirements for magnetic heads to write servo patterns on magnetic tape prior to sale of the finished cartridges, requesting the court to order that Imation pay damages and return the purchased heads to ARC. In September 2011, we agreed to a settlement of $2.0 million which was paid during the nine months ended September 30, 2012.

Copyright Levies

In many European Union (EU) member countries, the sale of recordable optical media is subject to a private copying levy. The levies are intended to compensate copyright holders with "fair compensation" for the harm caused by private copies made by natural persons of protected works under the European Copyright Directive, which became effective in 2002 (Directive). Levies are generally charged directly to the importer of the product upon the sale of the products. Payers of levies remit levy payments to collecting societies which in turn distribute funds to copyright holders. Levy systems of EU member countries must comply with the Directive, but individual member countries are responsible for administering their own systems. Since implementation, the levy systems have been the subject of numerous litigation and law making activities. On October 21, 2010, the European Court of Justice (ECJ) ruled that fair compensation is an autonomous European law concept that was introduced by the Directive and must be uniformly applied in all EU member states. The ECJ stated that fair compensation must be calculated based on the harm caused to the authors of protected works by private copying. The ECJ also stated that the indiscriminate application of the private copying levy to devices not made available to private users and clearly reserved for uses other than private copying is incompatible with the Directive. The ECJ ruling made clear that copyright holders are only

20

entitled to fair compensation payments (funded by levy payments made by the Company) when sales of optical media are made to natural persons intending to make private copies. Based on this development, we began in 2010 withholding levy payments to various collecting societies. We continued to accrue a liability for levies arising from consumer sales. As of September 30, 2012 and December 31, 2011, we had recorded a liability of $26.1 million and $19.7 million, respectively.

Since the October 2010 ECJ ruling, quarterly we evaluated on a country-by-country basis whether: (i) levies should be accrued on current period commercial and/or consumer channel sales; and, (ii) levies accrued, but unpaid, on prior period 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. If we determine a levy obligation is remote, then, in the period of such determination we discontinue accruing current period levies and reverse previously accrued but unpaid amounts by reducing cost of goods sold in the Condensed Consolidated Statements of Operations. For the three and nine months ended September 30, 2012, we did not reverse any amounts into cost of goods sold for prior year obligations. For the three and nine months ending September 30, 2011, cost of goods sold was reduced by $7.2 million and $12.7 million, respectively, for the reversal of prior year obligations that were determined to be remote.

We are subject to several pending or threatened legal actions by the individual European national levy collecting societies. Those actions generally seek payment of the commercial and consumer optical levies withheld by Imation. Imation has corresponding claims in those actions seeking reimbursement of levies improperly collected by those collecting societies. Although these actions are subject to the uncertainties inherent in the litigation process, based on the information presently available to us, management does not expect that the ultimate resolution of these actions will have a material adverse effect on our financial condition, results of operations or cash flows.

We anticipate that court decisions may be rendered in early 2013 that may directly or indirectly impact our levy exposure in specific European countries which could trigger a review of our levy exposure in those countries.

Note 16 — Subsequent Event

On October 24, 2012, we announced the acceleration of our strategic transformation, including the realignment of our global business into two new business units, a cost reduction program, and the Company's increased focus on data storage and security including exploring strategic options for its consumer electronics brands and businesses.

The realignment of our global business into two new business units will better align the Company with our key commercial and consumer channels. The two business units will consist of Tiered Storage and Security Solutions (TSS), which will focus on small and medium business, enterprise and government customers; and Consumer Storage and Accessories (CSA), which will focus on retail channels. The realignment will be effective at year-end. We also plan to intensify our focus and investment in data storage and security, and explore strategic alternatives for our consumer electronic brands and businesses currently included in our Audio and video information major product group.

On October 22, 2012, the Board of Directors approved the Company's restructuring program related to this acceleration in order to realign its business structure and reduce operating expenses by approximately 25 percent. This program will address product line rationalization and infrastructure, and include a reduction of approximately 20 percent of our global workforce. These actions will be initiated during our fourth quarter 2012 and implemented during 2013. We anticipate we will incur cash charges up to $40 million, with total charges between $50 million and $60 million, the majority of which will occur in 2013. This restructuring action will include between $15 million and $25 million for severance and one-time termination benefits, between $5 million and $15 million for asset impairments and between $20 million and $25 million for other charges.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Overview

Imation is a global scalable storage and data security company. Our portfolio includes tiered storage and security offerings for business and 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. As used herein, the terms “Imation,” “Company,” “ we,” “us” or “our” mean Imation Corp. and its subsidiaries unless the context indicates otherwise.

We have announced the realignment of our global business into two new business units, a cost reduction program to be initiated during the fourth quarter of 2012 and our increased focus on data storage and security including exploring strategic options for our consumer electronics brands and businesses. See Note 16 - Subsequent Event to the Condensed Consolidated Financial Statements for further information.

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Executive Summary

Consolidated Results of Operations for the Three Months Ended September 30, 2012

• Net revenue of $248.2 million for the three months ended September 30, 2012 was down 19.6 percent compared with $308.6 million in the same period last year.

• Operating loss was $6.5 million for the three months ended September 30, 2012 compared with operating loss of $8.3 million in the same period last year.

• Diluted loss per share was $0.17 for the three months ended September 30, 2012 compared with diluted loss per share of $0.38 for the same period last year.

Consolidated Results of Operations for the Nine Months Ended September 30, 2012

• Net revenue of $800.5 million for the nine months ended September 30, 2012 was down 15.6 percent compared with $948.1 million in the same period last year.

• Operating loss was $25.7 million for the nine months ended September 30, 2012 compared with operating loss of $21.0 million in the same period last year.

• Diluted loss per share was $0.81 for the nine months ended September 30, 2012 compared with diluted loss per share of $0.89 for the same period last year.

Cash Flow/Financial Condition for the Nine Months Ended September 30, 2012

• Cash and cash equivalents totaled $186.3 million as of September 30, 2012 compared with $223.1 million at December 31, 2011.

• Cash used in operating activities was $22.6 million for the nine months ended September 30, 2012 compared with cash used in operating activities of $31.6 million in the same period last year.

Outlook

Overall, we expect revenue in full year 2012 to decline when compared with full year 2011. In addition to revenue declines due to our maturing product lines, there are several continuing macro economic factors in play including the broad-based European economic downturn, a soft global IT environment, negative currency impacts and a weak U.S. retail environment. These factors have made it particularly difficult to project operating income in 2012. In this environment we are also cautious about revenues and we no longer expect that the Company will return to revenue growth as we exit 2012 and enter 2013.

On October 24, 2012, we announced the realignment of our global business into two new business units to be effective at year-end, a cost reduction program to be initiated during the fourth quarter of 2012 and implemented during 2013, and our increased focus on data storage and security including exploring strategic options for our consumer electronics brands and businesses. The cost reduction program will be part of the realignment of our business structure and is expected to reduce operating expenses by approximately 25 percent. The program will address product line rationalization and infrastructure, and include a reduction of approximately 20 percent of our global workforce.

We anticipate we will incur cash charges of up to $40 million, with total charges expected to be between $50 million and $60 million, the majority of which will occur in 2013. This restructuring action will include between $15 million and $25 million for severance and one-time termination benefits, between $5 million and $15 million for asset impairments and between $20 million and $25 million for other charges.

Results of Operations

Net Revenue

	Three Months Ended						Nine Months Ended
	September 30,				Percent Change		September 30,				Percent Change
(Dollars in millions)	2012		2011				2012		2011
Net revenue	$	248.2	$	308.6	(19.6	)%	$	800.5	$	948.1	(15.6	)%

Our worldwide revenue for the three months ended September 30, 2012 decreased compared with the same period last year, driven primarily by declines in our maturing traditional storage products, as well as several continuing macro-economic factors including the broad-based European economic downturn, a soft global IT environment, negative currency impacts and a weak U.S. retail environment. Revenue from secure and scalable storage products decreased due to continued market place

22

price degradation of commodity flash products. From a product perspective, the decrease in revenue included declines in traditional storage products of $48.2 million comprising $29.8 million from optical products, $8.6 million from magnetic products and $9.8 million from other traditional storage products such as audio/video tape, as well as decreased revenue from audio and video information products of $8.5 million and secure and scalable products of $3.7 million.

Our worldwide revenue for the nine months ended September 30, 2012 decreased compared with the same period last year, driven by factors described above. From a product perspective, the decrease in revenue included declines in traditional storage products of $122.6 million comprising $66.0 million from optical products, $29.7 million from magnetic products and $26.9 million from other traditional storage products, as well as $16.0 million from audio and video information products and $9.0 million from secure and scalable storage products. Revenue for the nine months ended September 30, 2012 compared with the same period last year was not significantly impacted by foreign currency translation.

Gross Profit

	Three Months Ended								Nine Months Ended
	September 30,						Percent Change		September 30,						Percent Change
(Dollars in millions)	2012			2011					2012			2011
Gross profit	$	45.7		$	57.2		(20.1	)%	$	154.2		$	165.2		(6.7	)%
Gross margin	18.4		%	18.5		%			19.3		%	17.4		%

Gross profit decreased for the three months ended September 30, 2012 compared with the same period last year primarily due to lower revenue in all major product categories, as well as lower gross margins on traditional storage products, partially offset by higher gross margins on secure and scalable storage products. Gross profit during the three months ended September 30, 2011 included levy benefits of $7.2 million and the sale of certain non-strategic intellectual property which provided a net gain of $2.4 million.

Gross margin was flatfor the three months ended September 30, 2012 compared with the same period last year. Gross margins for traditional storage products decreased 1.9 points to 18.0 percent of sales compared with the same period last year, primarily due to levy benefits in 2011. Gross margins for secure and scalable storage products rose 6.4 points to 22.0 percent of sales compared with the same period last year, primarily due to a shift in product mix to products with higher gross margins such as mobile security. Gross margins for audio and video information products rose 0.8points to 15.9 percent of sales compared with the same period last year, primarily due to product mix as a result of revenue growth in higher margin headphones and other accessories.

Gross profit decreased for the nine months ended September 30, 2012 compared with the same period last year, primarily due to lower revenue from all major product categories, offset partially by higher gross margins on all major product categories. Gross profit during the nine months ended September 30, 2011 was aided by levy benefits of $12.7 million.

Gross margin increased for the nine months ended September 30, 2012 compared with the same period last year due 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 margins for traditional storage products were flat at 19.4 percent of sales compared with the same period last year. Gross margins for secure and scalable storage products rose 6.5 points to 20.6 percent of sales compared with the same period last year due to favorable changes in product mix as a result of revenue growth in our mobile security products. Gross margins for audio and video information products rose 2.4 points to 16.7 percent of sales compared with the same period last year due to favorable changes in product mix as a result of revenue growth in higher margin headphones, cases and other accessories.

Selling, General and Administrative (SG&A)

	Three Months Ended								Nine Months Ended
	September 30,						Percent Change		September 30,						Percent Change
(Dollars in millions)	2012			2011					2012			2011
Selling, general and administrative	$	50.7		$	52.7		(3.8	)%	$	160.2		$	150.8		6.2	%
As a percent of revenue	20.4		%	17.1		%			20.0		%	15.9		%

SG&A expense decreased for the three months ended September 30, 2012 compared with the same period last year primarily due to lower advertising and sales costs and lower employee benefits, partially offset by the additional ongoing SG&A expense of $2.4 million related to our acquired businesses.

SG&A expense increased for the nine months ended September 30, 2012 compared with the same period last year primarily due to the additional ongoing SG&A expense of $10.7 million and intangible amortization of $2.2 million related to

23

our acquired businesses, partially offset by lower sales costs and lower employee benefits. SG&A expense for the nine months ended September 30, 2011 benefited from the reversal of a bad debt reserve of $2.7 million.

Research and Development (R&D)

	Three Months Ended								Nine Months Ended
	September 30,						Percent Change		September 30,						Percent Change
(Dollars in millions)	2012			2011					2012			2011
Research and development	$	5.1		$	5.3		(3.8	)%	$	17.7		$	15.0		18.0	%
As a percent of revenue	2.1		%	1.7		%			2.2		%	1.6		%

R&D expense decreased for the three months ended September 30, 2012 compared with the same period last year due to lower employee benefits, partially offset by our acquisitions and investment to support growth initiatives in secure and scalable storage products.

R&D expense increased for the nine months ended September 30, 2012 compared with the same period last year due to our acquisitions and investment to support growth initiatives in secure and scalable storage products.

Goodwill Impairment

During 2011, we acquired the assets of MXI Security and the assets of IronKey's secure data storage hardware business. These businesses, along with our Imation Defender brand, make up our Mobile Security reporting unit. The carrying value of our Mobile Security reporting unit includes $31.3 million of goodwill.

We test the carrying amount of a reporting unit's goodwill for impairment on an annual basis during the fourth quarter of each year and if an event occurs or circumstances change that would warrant impairment testing during an interim period. During the three months ended June 30, 2012 we adjusted our internal financial forecast for the Mobile Security reporting unit resulting in a change in timing of the expected cash flows. During the three months ended September 30, 2012, we adjusted our internal financial forecast for the Mobile Security reporting unit reflecting lower expected short-term revenues and slightly lower gross margins as we expand into medium security markets. We considered these factors to be an event that warranted an interim test as to whether the goodwill was impaired.

In evaluating whether goodwill was impaired, we compared the estimated fair value of the Mobile Security reporting unit to its carrying value (Step 1 of the impairment test). In calculating the estimated fair value, we used the income approach, a valuation technique under which we estimate future cash flows using the reporting unit's financial forecasts. Our expected cash flows are affected by various significant assumptions, including the discount rate, revenue growth, gross margin percentage, and terminal value growth rate. Our analyses utilized discounted forecasted cash flows over a 10 year period with an estimation of residual growth rates thereafter. We use our business plans and projections as the basis for expected future cash flows. A discount rate of 17.6 percent was used to reflect the relevant risks of the higher growth assumed for this reporting unit. The revenue growth rates in 2012 through 2014, which are forecasted to be significant during that time frame, are important assumptions within the fair value estimations. We utilized a terminal growth rate of 3.5 percent.

The Mobile Security reporting unit carrying amount as of June 30, 2012 was $50.2 million and the indicated excess in fair value over the carrying amount in Step 1 of the impairment test performed during the three months ended June 30, 2012 was 43.3 percent. The Mobile Security reporting unit carrying amount as of September 30, 2012 was $48.5 million and the indicated excess in fair value over carrying amount in Step 1 of the impairment test performed during the three months ended September 30, 2012 was 17.7 percent.

This analysis indicates that this goodwill is not impaired. The projections utilized in the analysis reflect management's best assumptions regarding Mobile Security. To the extent that our projections or other assumptions about future economic conditions, the industry in which Mobile Security operates, or the potential for our growth and profitability in this business vary from actual results, it is possible that our conclusion regarding the recoverability of the remaining goodwill could change, which could have a material effect on our financial position and results of operations.

During the first quarter of 2011, we acquired substantially all of the assets of Encryptx which resulted in goodwill of $1.6 million. The goodwill was allocated to our existing Americas-Commercial reporting unit. Based on an interim goodwill impairment test performed at March 31, 2011, we determined that the goodwill in the Americas-Commercial reporting unit, including the assets of Encryptx, exceeded the implied fair value and, therefore, the goodwill was fully impaired. As a result, a $1.6 million charge was recorded during the nine months ended September 30, 2011 in restructuring and other in the Condensed Consolidated Statements of Operations.

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On October 24, 2012, we announced the acceleration of our strategic transformation, including the realignment of our global business into two new business units, a cost reduction program, and the Company's increased focus on data storage and security including exploring strategic options for its consumer electronics brands and businesses. These actions will be initiated during our fourth quarter 2012 and implemented during 2013. These actions may have a negative impact on the future recoverability of our intangible assets and goodwill. We will evaluate the impact of these actions including the reassessment of our intangible asset useful lives and the recoverability of our intangible assets and goodwill during the fourth quarter of 2012.

Restructuring and Other

	Three Months Ended							Nine Months Ended
	September 30,					Percent Change		September 30,				Percent Change
(Dollars in millions)	2012			2011				2012		2011
Restructuring and other	$	(3.6	)	$	5.5	(165.5	)%	$	2.0	$	16.8	(88.1	)%

Restructuring expense for the three and nine months ended September 30, 2012 was primarily related to our 2011 corporate strategy restructuring program. We incurred severance related costs of $2.8 million and lease termination costs of $0.5 million for the nine months ended September 30, 2012 and other restructuring charges of $0.1 million and $1.2 million for the three and nine months ended September 30, 2012, respectively.

Other charges during the three months ended September 30, 2012 was a benefit of $3.7 million due to the adjustment to the fair value of the contingent consideration related to an acquisition of $5.5 million, partially offset by global process improvement costs of $1.0 million, pension settlement charges of $0.5 million, acquisition and integration costs of $0.1 million and other charges of $0.2 million. Other charges during the three months ended June 30, 2012 totaled $1.2 million, including pension settlement charges of $1.5 million, accelerated amortization related to abandoned intangible assets of $1.3 million, acquisition and integration costs of $0.8 million and other charges of $0.4 million, partially offset by the adjustment to the fair value of the contingent consideration related to an acquisition of $2.8 million. Other charges during the three months ended March 31, 2012 totaled $0.7 million, including acquisition and integration related costs of $0.4 million and charges related to the demolition and site clean-up of our Camarillo, California facility of $0.3 million.

Restructuring expense for the three and nine months ended September 30, 2011 was primarily related to our 2011 corporate strategy restructuring program. During the three and nine months ended September 30, 2011 we incurred severance related costs of $2.4 million and $3.7 million, respectively, lease termination and modification costs of $1.1 million and $1.5 million, respectively, and other charges of $0.8 million and $1.2 million, respectively. Additionally, we incurred other charges unrelated to these programs of $1.2 million and $10.4 million during the three and nine months ended September 30, 2011, respectively. These other charges include a loss on disposal of $7.0 million related to the demolition of our Camarillo, California facility, pension settlements of $1.9 million and acquisition and integration related costs of $1.5 million.

In connection with the acceleration of our strategic transformation, on October 22, 2012, the Board of Directors approved a restructuring program in order to realign our business structure and reduce operating expenses by approximately 25 percent. This program will address product line rationalization and infrastructure, and include a reduction of approximately 20 percent of our global workforce. We anticipate we will incur cash charges up to $40 million, with total charges between $50 million and $60 million, the majority of which will occur in 2013.

Operating Loss

	Three Months Ended								Nine Months Ended
	September 30,						Percent Change		September 30,						Percent Change
(Dollars in millions)	2012			2011					2012			2011
Operating loss	$	(6.5	)	$	(8.3	)	(21.7	)%	$	(25.7	)	$	(21.0	)	22.4	%
As a percent of revenue	(2.6		)%	(2.7		)%			(3.2		)%	(2.2		)%

Operating loss decreased for the three months ended September 30, 2012 and increased for the nine months ended September 30, 2012 compared with the same period last year primarily due to each item discussed above.

Other (Income) and Expense

25

	Three Months Ended								Nine Months Ended
	September 30,						Percent Change		September 30,						Percent Change
(Dollars in millions)	2012			2011					2012			2011
Interest income	$	(0.1	)	$	(0.2	)	(50.0	)%	$	(0.4	)	$	(0.6	)	(33.3	)%
Interest expense	0.6			0.8			(25.0	)%	2.4			2.7			(11.1	)%
Other, net	(0.4		)	3.1			(112.9	)%	2.2			6.2			(64.5	)%
Total	$	0.1		$	3.7		(97.3	)%	$	4.2		$	8.3		(49.4	)%
As a percent of revenue	—		%	1.2		%			0.5		%	0.9		%

Other expense decreased for the three and nine months ended September 30, 2012 compared with the same periods last year. Interest income was relatively flat for the three and nine months ended September 30, 2012 compared with the same periods last year. Our interest expense decreased slightly for the three and nine months ended September 30, 2012 compared with the same periods last year due to lower amortization of capitalized fees related to securing our credit facility and decreased imputed interest related to our liability for a litigation settlement. Other, net includes foreign currency losses and proceeds from investments. We attempt to mitigate the exposure to foreign currency volatility through our hedging program; however, our program is not designed to fully hedge our risk and as a result we experience some volatility in other income, especially in periods of significant foreign currency fluctuation. Other, net for the three and nine months ended September 30, 2012 also includes an investment recovery of $0.9 million.

Income Tax (Benefit) Provision

	Three Months Ended								Nine Months Ended
	September 30,						Percent Change		September 30,						Percent Change
(Dollars in millions)	2012			2011					2012			2011
Income tax (benefit) provision	$	(0.3	)	$	2.1		(114.3	)%	$	0.6		$	4.5		(86.7	)%
Effective tax rate	4.5		%	(17.5		)%			(2.0		)%	(15.4		)%

The change in the effective rate of income tax provision for the three and nine months ended September 30, 2012 compared with the same periods last year was primarily due to the full valuation allowance on U.S. deferred tax assets, lower withholding tax expense, settlements with taxing authorities concluded during 2012 and the mix of taxable income (loss) by country. See Note 10 - Income Taxes to the Condensed Consolidated Financial Statements for further information about the valuation allowance related to the U.S. deferred tax assets.

Segment Results

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.

On October 24, 2012, we announced the realignment of our global business into two new business units to better align the Company with our key commercial and consumer channels. The two business units will consist of Tiered Storage and Security Solutions (TSS), which will focus on small and medium business, enterprise and government customers; and Consumer Storage and Accessories (CSA), which will focus on retail channels. The realignment will be effective at year-end. We also plan to intensify our focus and investment in data storage and security, and explore strategic alternatives for our consumer electronic brands and businesses currently included in our Audio and video information major product group. We will be assessing the impact of this realignment on our reporting segments during the fourth quarter of 2012. Any changes in our reporting segments will be reported as of December 31, 2012.

We evaluate segment performance based on revenue and operating income (loss). Revenue for each segment is generally based on customer location where the product is shipped. The operating income (loss) reported in our segments excludes corporate and other unallocated amounts. Although such amounts are excluded from the business segment results, they are included in reported consolidated results. Corporate and unallocated amounts include litigation settlement expense, goodwill impairment, intangible asset abandonment, research and development expense, corporate expense, stock-based compensation expense, inventory write-offs related to our restructuring programs and restructuring and other expenses which are not allocated to the segments.

In all of our segments, revenue declined for the three and nine months ended September 30, 2012 due to declines in our maturing traditional storage products, as well as several macro-economic factors including the broad-based European economic

26

downturn and its effect on the rest of the world and a soft global IT environment. Revenue from secure and scalable storage decreased due to continued market place price degradation of commodity flash products.

Information related to our segments is as follows:

Americas

	Three Months Ended								Nine Months Ended
	September 30,						Percent Change		September 30,						Percent Change
(Dollars in millions)	2012			2011					2012			2011
Net revenue	$	117.3		$	141.4		(17.0	)%	$	373.6		$	427.3		(12.6	)%
Operating (loss) income	(0.5		)	(0.8		)	(37.5	)%	3.0			2.3			30.4	%
As a percent of revenue	(0.4		)%	(0.6		)%			0.8		%	0.5		%

The Americas segment is our largest segment comprising 47.3 percent of our revenue for the three months ended September 30, 2012. The Americas segment revenue decreased 17.0 percent for the three months ended September 30, 2012 compared with the same period last year driven primarily by declines in our maturing traditional storage products as well as several continuing macro-economic factors and a weak U.S. retail environment. From a product perspective, the decrease in revenue was primarily composed of lower revenue from optical products of $11.6 million and lower revenue from audio and video information products of $7.3 million. Revenue decreased 12.6 percent for the nine months ended September 30, 2012 compared with the same period last year driven primarily by lower revenue from optical products of $27.3 million and audio and video information products of $21.7million, partially offset by higher revenue from secure and scalable storage products of $10.1 million.

Operating loss decreased for the three months ended September 30, 2012 compared with the same period last year driven primarily by higher gross profit due to higher gross margins on optical media and secure and scalable storage products, partially offset by lower gross profit due to lower revenues in other traditional storage products and audio and video information products and higher SG&A and R&D expenses.

Operating income increased for the nine months ended September 30, 2012 compared with the same period last year driven primarily by higher gross profit due to higher gross margins on optical media and secure and scalable storage products, partially offset by higher SG&A and R&D expenses.

Europe

	Three Months Ended								Nine Months Ended
	September 30,						Percent Change		September 30,						Percent Change
(Dollars in millions)	2012			2011					2012			2011
Net revenue	$	44.3		$	56.8		(22.0	)%	$	149.0		$	183.2		(18.7	)%
Operating (loss) income	(1.9		)	4.6			(141.3	)%	(5.8		)	7.8			(174.4	)%
As a percent of revenue	(4.3		)%	8.1		%			(3.9		)%	4.3		%

The Europe segment comprised 17.8 percent of our revenue for the three months ended September 30, 2012. The Europe segment revenue decreased 22.0 percent for the three months ended September 30, 2012 compared with the same period last year driven primarily by declines in our maturing traditional storage products as well as several continuing macro-economic factors including the broad-based European economic downturn, along with unfavorable foreign currency impacts of nine percent. From a product perspective, the decrease in revenue was primarily composed of lower revenue from optical products of $6.9 million, magnetic products of $2.6 million and secure and scalable storage products of $1.8million, driven principally by commodity flash products. Revenue decreased 18.7 percent for the nine months ended September 30, 2012 compared with the same period last year driven primarily by lower revenue from optical products of $14.3 million, magnetic products of $11.7 million and secure and scalable storage products, principally commodity flash products, of $5.1 million. Revenue was negatively impacted seven percent due to foreign currency.

Operating income decreased for the three and nine months ended September 30, 2012 compared with the same period last year driven primarily by lower gross profit due to lower revenue. Operating income during the three and nine months ended September 30, 2011 benefited from levy accrual reversals of $7.2 million and $12.7 million, respectively.

North Asia

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	Three Months Ended								Nine Months Ended
	September 30,						Percent Change		September 30,						Percent Change
(Dollars in millions)	2012			2011					2012			2011
Net revenue	$	62.0		$	75.3		(17.7	)%	$	194.4		$	229.6		(15.3	)%
Operating income (loss)	0.7			(0.3		)	NM		2.8			9.1			(69.2	)%
As a percent of revenue	1.1		%	(0.4		)%			1.4		%	4.0		%

NM - Not meaningful

The North Asia segment comprised 25.0 percent of our revenue for the three months ended September 30, 2012. The North Asia segment revenue decreased 17.7 percent for the three months ended September 30, 2012 compared with the same period last year driven primarily by declines in our maturing traditional storage products as well as the continuation of several macro-economic factors. From a product perspective, the decrease in revenue was primarily composed of lower revenue from optical products of $7.8 million and magnetic products of $3.3 million. Revenue was unfavorably impacted one percent due to foreign currency. Revenue decreased for the nine months ended September 30, 2012 compared with the same period last year driven primarily by lower revenue from optical products of $21.3million. Revenue was favorably impacted one percent due to foreign currency.

Operating income increased for the three months ended September 30, 2012 compared with the same period last year driven primarily by lower SG&A expense. Operating income decreased for the nine months ended September 30, 2012 compared with the same period last year driven primarily by lower gross profit due to lower revenues from traditional data storage products as well as higher SG&A expense.

South Asia

	Three Months Ended								Nine Months Ended
	September 30,						Percent Change		September 30,						Percent Change
(Dollars in millions)	2012			2011					2012			2011
Net revenue	$	24.6		$	35.1		(29.9	)%	$	83.5		$	108.0		(22.7	)%
Operating (loss) income	(0.5		)	1.4			(135.7	)%	0.8			2.3			(65.2	)%
As a percent of revenue	(2.0		)%	4.0		%			1.0		%	2.1		%

The South Asia segment comprised 9.9 percent of our revenue for the three months ended September 30, 2012. The South Asia segment revenue decreased 29.9 percent for the three months ended September 30, 2012 compared with the same period last year driven primarily by declines in our maturing traditional storage products as well as the continuation of several macro-economic factors. From a product perspective, the decrease in revenue was primarily composed of lower revenue from traditional data storage products of $6.5 million. Revenue was negatively impacted one percent due to foreign currency. Revenue decreased for the nine months ended September 30, 2012 compared with the same period last year driven primarily by lower revenue from traditional data storage products of $14.1 million and secure and scalable products, principally commodity flash products, of $9.1 million. Revenue was not impacted by foreign currency.

Operating income decreased for the three months ended September 30, 2012 compared with the same period last year driven by lower gross profit due to lower revenues from all major product categories and lower gross margins from traditional storage products. Operating income decreased for the nine months ended September 30, 2012 compared with the same period last year driven primarily by lower gross profit due to lower revenues from all major product categories.

Corporate and Unallocated

	Three Months Ended								Nine Months Ended
	September 30,						Percent Change		September 30,						Percent Change
(Dollars in millions)	2012			2011					2012			2011
Operating loss	$	(4.3	)	$	(13.2	)	(67.4	)%	$	(26.5	)	$	(42.5	)	(37.6	)%

The corporate and unallocated operating (loss) income includes amounts which are not allocated to the business units in management’s evaluation of segment performance such as litigation settlement charges, goodwill impairment charges, intangible asset abandonment, R&D expense, corporate expense, stock-based compensation expense, inventory write-offs and restructuring and other expense. The corporate and unallocated operating loss decreased for the three and nine months ended September 30, 2012 compared with the same periods last year driven primarily by lower restructuring and other expense.

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Impact of Changes in Foreign Currency Rates

We have a market presence in more than 100 countries and we sell products on a local currency basis through a variety of distribution channels. We source optical, flash and other finished goods from manufacturers located primarily in Asia, although much of this sourcing is on a U.S. dollar basis. During the three months ended March 31, 2011 we transitioned manufacturing operations for magnetic products from our Weatherford, Oklahoma facility to sourcing these products on a Japanese Yen basis from TDK Corporation. Additionally, comparisons of revenue and gross profit from foreign countries are subject to various fluctuations due to the impact of translating results at differing exchange rates in different periods.

Changes in foreign currency translation rates negatively impacted worldwide revenue by two and one percent for the three and nine months ended September 30, 2012, respectively, compared with a four percent benefit to worldwide revenue for each of the same periods last year. The impact on profit is more difficult to determine due to the influence of other factors that we believe are also impacted by currency rate changes.

Our foreign currency hedging program attempts to manage some of the foreign currency risks over near term periods; however, these risk management activities cannot ensure that the program will offset more than a portion of the adverse financial impact resulting from unfavorable movements in foreign exchange rates or that medium and longer term effects of exchange rates will not be significant (see Part 1, Item 3. Quantitative and Qualitative Disclosures about Market Risk in this Form 10-Q).

Financial Position

Our cash and cash equivalents balance as of September 30, 2012 was $186.3 million, a decrease of $36.8 million from $223.1 million as of December 31, 2011. The decrease was primarily attributable to litigation settlement payments of $18.5 million, capital expenditures of $8.4 million, restructuring payments of $7.3 million, pension contributions of $4.3 million and share repurchases of $4.9 million.

Our accounts receivable balance as of September 30, 2012 was $178.2 million, a decrease of $56.7 million from $234.9 million as of December 31, 2011 as a result of lower sales during the period. Days sales outstanding was 62 days as of September 30, 2012, up 4 days from December 31, 2011. Days sales outstanding is calculated using the count-back method, which calculates the number of days of most recent revenue that is reflected in the net accounts receivable balance.

Our inventory balance as of September 30, 2012 was $211.5 million, an increase of $2.7 million from $208.8 million as of December 31, 2011. Days of inventory supply was 86 days as of September 30, 2012, up 1 day from December 31, 2011. 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.

Our accounts payable balance as of September 30, 2012 was $172.0 million, a decrease of $33.2 million from $205.2 million as of December 31, 2011. The decrease in accounts payable was mainly due to reduced purchases compared to the previous quarter, as well as the timing of payments.

Liquidity and Capital Resources

Cash Flows Used In Operating Activities:

	Nine Months Ended
	September 30,
(Dollars in millions)	2012			2011
Net loss	$	(30.5	)	$	(33.8	)
Adjustments to reconcile net loss to net cash provided by operating activities	29.1			56.7
Changes in operating assets and liabilities	(21.2		)	(54.5		)
Net cash used in operating activities	$	(22.6	)	$	(31.6	)

Cash flows from operating activities can fluctuate significantly from period to period as many items can significantly impact cash flows. Cash payments during the nine months ended September 30, 2012 included litigation settlement payments of $18.5 million, restructuring payments of $7.3 million, pension contributions of $4.3 million and other changes in working capital.

Cash used in operating activities was $31.6 million for the nine months ended September 30, 2011. Cash payments included $12.2 million of pension funding, $11.1 million of restructuring payments primarily related to the close of our Weatherford, Oklahoma facility, $7.1 million related to annual incentive payments, $10.9 million related to litigation settlement payments and other changes in working capital.

29

Cash Flows Used in Investing Activities:

	Nine Months Ended
	September 30,
(Dollars in millions)	2012			2011
Capital expenditures	$	(8.4	)	$	(6.1	)
Proceeds from sale of assets	1.4			—
Proceeds from investments	0.9			—
Acquisitions	—			(26.0		)
Net cash used in investing activities	$	(6.1	)	$	(32.1	)

Cash used in investing activities for the nine months ended September 30, 2012 included capital expenditures of $8.4 million and was partially offset by the proceeds of $1.4 million from the sale of fixed assets held for sale as a result of the closure of our Weatherford facility in April 2011 and proceeds of $0.9 million from the recovery of an investment which had no book value.

Cash used in investing activities for the nine months ended September 30, 2011 included capital expenditures of $6.1 million and $26.0 million related to acquisition activities. See Note 4 - Acquisitions to the Condensed Consolidated Financial Statements for further information regarding our acquisitions.

Cash Flows Used in Financing Activities:

	Nine Months Ended
	September 30,
(Dollars in millions)	2012			2011
Purchase of treasury stock	$	(4.9	)	$	(9.7	)
Debt issuance costs	(2.4		)	—
Contingent consideration payments	(1.2		)	—
Exercise of stock options	—			0.6
Net cash used in financing activities	$	(8.5	)	$	(9.1	)

On May 2, 2012, our Board of Directors authorized a share repurchase program of 5.0 million shares of common stock which replaced our previous authorization. During the three months ended September 30, 2012 we repurchased 0.4 million shares for $2.5 million. Since the authorization, we have repurchased a total of 0.8 million shares and have 4.2 million shares remaining outstanding under the authorization as of September 30, 2012.

We have a credit agreement with a group of banks (Credit Agreement) that was most recently amended on May 18, 2012 and expires May 18, 2017. The Credit Agreement includes a senior revolving credit facility amount of $200 million, including sub-limits of $150 million in the United States and $50 million in Europe. Advances are limited to the lesser of the sublimit(s) and the borrowing base as defined in the Credit Agreement. As of September 30, 2012, our borrowing capacity under this arrangement was $102.2 million in the United States and $15.2 million in Europe.

Until August 15, 2012, borrowings under the Credit Agreement bore interest at a rate equal to (1) the Eurodollar Rate (as defined in the Credit Agreement) plus 2.00 percent or (2) the Base Rate (as defined in the Credit Agreement) plus 1.00 percent. Since such date the applicable margins for the Eurodollar Rate and the Base Rate have been subject to adjustments based on average daily availability (as defined in the Credit Agreement), as set forth in the definition of the “Applicable Rate” in the Credit Agreement. The Applicable Rate is a reduction of 125 basis points from the rate in effect prior to the Amendment.

The applicable interest rate based on our borrowing capacity at September 30, 2012 was approximately 4.0 percent, however, we had no amounts outstanding under the Credit Agreement as of or during the nine months ended September 30, 2012.

The Credit Agreement contains covenants which are customary for similar credit arrangements, including covenants relating to financial reporting and notification; payment of indebtedness, taxes and other obligations; compliance with applicable laws; and limitations regarding additional liens, indebtedness, certain acquisitions, investments and dispositions of assets. The Credit Agreement contains a conditional financial covenant that requires Imation Corp. to have a Consolidated Fixed Charge Coverage Ratio (as defined in the Credit Agreement) during certain periods as described in the Credit Agreement and a liquidity requirement during certain periods as described in the Credit Agreement. Previously the Consolidated Fixed Coverage Ratio was set to be not less than 1.20 to 1.00, and the Amendment lowered such ratio to be not less than 1:00. The

30

Amendment also changed the liquidity requirement to a domestic borrowing availability requirement of $30.0 million. We were in compliance with all covenants as of September 30, 2012.

Our liquidity needs for the remaining three months of 2012 as of September 30, 2012 include the following: capital expenditures of $2 million to $4 million, payments related to our 2011 restructuring programs of up to $3 million, operating lease payments of approximately $2 million, any amounts associated with strategic acquisitions, any amounts associated with organic investment opportunities and any amounts associated with the repurchase of common stock under the authorization discussed above. We expect that cash and cash equivalents, together with cash flow from operations and availability of borrowings under our current sources of financing, will provide liquidity sufficient to meet these needs and for our operations.

On July 13, 2012, we made the final $16.5 million payment associated with the settlement agreement of our litigation with Philips Electronics N.V., U.S. Philips Corporation and North American Philips Corporation.

Contractual Obligations

As of September 30, 2012, there have been no material changes to our contractual obligations as of December 31, 2011 as presented in our Annual Report on Form 10-K for the year ended December 31, 2011.

Copyright Levies

In many European Union (EU) member countries, the sale of recordable optical media is subject to a private copying levy. The levies are intended to compensate copyright holders with "fair compensation" for the harm caused by private copies made by natural persons of protected works under the European Copyright Directive, which became effective in 2002 (Directive). Levies are generally charged directly to the importer of the product upon the sale of the products. Payers of levies remit levy payments to collecting societies which in turn distribute funds to copyright holders. Levy systems of EU member countries must comply with the Directive, but individual member countries are responsible for administering their own systems. Since implementation, the levy systems have been the subject of numerous litigation and law making activities. On October 21, 2010, the European Court of Justice (ECJ) ruled that fair compensation is an autonomous European law concept that was introduced by the Directive and must be uniformly applied in all EU member states. The ECJ stated that fair compensation must be calculated based on the harm caused to the authors of protected works by private copying. The ECJ also stated that the indiscriminate application of the private copying levy to devices not made available to private users and clearly reserved for uses other than private copying is incompatible with the Directive. The ECJ ruling made clear that copyright holders are only entitled to fair compensation payments (funded by levy payments made by the Company) when sales of optical media are made to natural persons intending to make private copies. Based on this development, we began in 2010 withholding levy payments to various collecting societies. We continued to accrue a liability for levies arising from consumer sales. As of September 30, 2012 and December 31, 2011, we had recorded a liability of $26.1 million and $19.7 million, respectively.

Since the October 2010 ECJ ruling, quarterly we evaluated on a country-by-country basis whether: (i) levies should be accrued on current period commercial and/or consumer channel sales; and, (ii) levies accrued, but unpaid, on prior period 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. If we determine a levy obligation is remote, then, in the period of such determination we discontinue accruing current period levies and reverse previously accrued but unpaid amounts by reducing cost of goods sold in the Condensed Consolidated Statements of Operations. For the three and nine months ended September 30, 2012, we did not reverse any amounts into cost of goods sold for prior year obligations. For the three and nine months ending September 30, 2011, cost of goods sold was reduced by $7.2 million and $12.7 million, respectively, for the reversal of prior year obligations that were determined to be remote.

We are subject to several pending or threatened legal actions by the individual European national levy collecting societies. Those actions generally seek payment of the commercial and consumer optical levies withheld by Imation. Imation has corresponding claims in those actions seeking reimbursement of levies improperly collected by those collecting societies. Although these actions are subject to the uncertainties inherent in the litigation process, based on the information presently available to us, management does not expect that the ultimate resolution of these actions will have a material adverse effect on our financial condition, results of operations or cash flows.

We anticipate that court decisions may be rendered in early 2013 that may directly or indirectly impact our levy exposure in specific European countries which could trigger a review of our levy exposure in those countries.

Fair Value Measurements

See Note 12 - Fair Value Measurements to the Condensed Consolidated Financial Statements in Part I, Item 1 herein for further information.

Critical Accounting Policies and Estimates

31

A discussion of the Company’s critical accounting policies was provided in Item 7 in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011. There were no significant changes to these accounting policies for the first nine months of 2012.

Recent Accounting Pronouncements

See Note 2 - Recently Issued or Adopted Accounting Pronouncements to the Condensed Consolidated Financial Statements in Part I, Item 1 herein for further information.

Forward-Looking Statements and Risk Factors

We may from time to time make written or oral forward-looking statements with respect to our future goals, including statements contained in this Form 10-Q, in our other filings with the Securities and Exchange Commission (SEC) and in our reports to shareholders.

Certain information 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. The words or phrases "is targeting," "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," "believe," or similar expressions identify "forward looking statements." 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 implement our strategy; our ability to grow our business in new products with profitable margins and the rate of revenue decline for certain existing products; our ability to realize the benefits from our global process improvement cost reduction restructuring plan; the ability to quickly develop, source, introduce and deliver differentiating and innovative products; our potential dependence on third parties for new product introductions or technologies in order to introduce our own new products; the ready availability and price of energy and key raw materials or critical components including due to the effects of natural disasters and our ability to pass along raw materials price increases to our customers; continuing uncertainty in global and regional economic conditions including adverse effects of the ongoing sovereign debt crisis in Europe, increased Euro currency exchange rate volatility, and related austerity measures and their potential impact on European economic growth; our ability to identify, value, integrate and realize the expected benefits from any acquisition which has occurred or may occur in connection with our strategy; the possibility that our goodwill or any goodwill that we acquire may become impaired; the ability of our data security products to withstand cyber-attacks; the seasonality and 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; the possibility that our intangible assets may become impaired; acquisition related contingent consideration, which is recorded at fair value and revalued each period, differs from the obligation recorded during the previous period resulting in income or expense being recorded on the Consolidated Statements of Operations; changes in tax laws, regulations and results of inspections by various tax authorities; our ability to successfully defend our intellectual property rights and the ability or willingness of our suppliers to provide adequate protection against third party intellectual property or product liability claims; the outcome of any pending or future litigation; failure to adequately protect our information systems from cyber-attacks; our ability to meet our revenue growth, gross margin and earnings targets and the volatility of our stock price due to our results or market trends, as well as various other factors set forth in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2011 and from time to time in our filings with the SEC.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Except for the paragraph noted below, there has been no material change since our Annual Report on Form 10-K for the year ended December 31, 2011. For further information, see Item 7A. Quantitative and Qualitative Disclosures about Market Risk included in our Annual Report on Form 10-K for the year ended December 31, 2011.

As of September 30, 2012 we had $212.2 million notional amount of foreign currency forward and option contracts of which $51.4 million hedged recorded balance sheet exposures. This compares to $241.1 million notional amount of foreign currency forward and option contracts as of December 31, 2011, of which $32.9 million hedged recorded balance sheet exposures. An immediate adverse change of 10 percent in quarter-end foreign currency exchange rates with all other variables (including interest rates) held constant would reduce the fair value of foreign currency contracts outstanding as of September 30, 2012 by $4.3 million.

32

Item 4. Controls and Procedures.

Based on an evaluation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act)) as of September 30, 2012, the end of the period covered by this report, the President and Chief Executive Officer, Mark E. Lucas, and the Senior Vice President and Chief Financial Officer, Paul R. Zeller, have concluded that the disclosure controls and procedures were effective.

During the quarter ended September 30, 2012, there was no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

In the normal course of business, we periodically enter into agreements that incorporate general indemnification language. Performance under these indemnities would generally be triggered by a breach of terms of the contract or by a third-party claim. There has historically been no material losses related to such indemnifications. In accordance with accounting principles generally accepted in the United States of America, we record a liability in our Condensed Consolidated Financial Statements for these actions when a loss is known or considered probable and the amount can be reasonably estimated.

We are the subject of various pending or threatened legal actions in the ordinary course of our business. All such matters are subject to many uncertainties and outcomes that are not predictable with assurance. Additionally, our businesses are subject to allegations of patent infringement by our competitors as well as by non-practicing entities (NPEs), sometimes referred to as “patent trolls,” who may seek monetary settlements from us, our competitors, suppliers and resellers. Consequently, as of September 30, 2012, we are unable to ascertain with certainty the ultimate aggregate amount of any monetary liability or financial impact that we may incur with respect to these matters. While these matters could materially affect operating results depending upon the final resolution in future periods, it is our opinion that after final disposition, any monetary liability beyond that provided in the Condensed Consolidated Balance Sheet as of September 30, 2012 would not be material to our Condensed Consolidated Financial Statements.

On June 14, 2011, Trek 2000 International Ltd and certain of its affiliates (Trek) filed a complaint asking the International Trade Commission (ITC) to commence an investigation against us and various others. Trek alleged that Imation and others unlawfully imported and sold into the United States certain USB portable storage devices that allegedly infringed several of Trek's U.S. patents. On August 15, 2011, we filed an answer to Trek's complaint, denying liability and asserting that Trek failed to meet certain requirements to bring its complaint to the ITC. A hearing with the ITC was scheduled for May 9, 2012. On May 8, 2012, Trek withdrew its complaint and terminated the investigation before the ITC.

On June 19, 2009 Advanced Research Corp. (ARC) sued Imation in Ramsey County District Court for breach of contract relating to a supply agreement under which we purchased our requirements for magnetic heads to write servo patterns on magnetic tape prior to sale of the finished cartridges, requesting the court to order that Imation pay damages and return the purchased heads to ARC. In September 2011 we agreed to a settlement of $2.0 million which was paid during the nine months ended September 30, 2012.

Item 1A. Risk Factors.

There has been no material change in the risk factors set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011. For further information, see Item 1A. “Risk Factors” included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 (a) - (b)

Not applicable

(c) Issuer Purchases of Equity Securities

33

					(c)
				Total Number of	Maximum Number
	(a)	(b)		Shares Purchased	of Shares that May
	Total Number	Average		as Part of Publicly	Yet Be Purchased
	of Shares	Price Paid		Announced Plans	Under the Plan or
Period	Purchased	per Share		or Programs	Programs
July 1, 2012 - July 31, 2012	62	$	5.79	—	4,589,207
August 1, 2012 - August 31, 2012	314,113	5.78		312,081	4,277,126
September 1, 2012 - September 30, 2012	117,386	5.94		117,296	4,159,830
Total	431,561	$	5.82	429,377	4,159,830

(a) The purchases in this column include shares repurchased as part of our publicly announced programs and include 2,184 shares that were surrendered to Imation by participants in our stock-based compensation plans (the Plans) to satisfy the tax obligations related to the vesting of restricted stock awards.

(b) The average price paid in this column includes 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.

(c) On May 3, 2012, the Company announced that on May 2, 2012 our Board of Directors authorized a share repurchase program of 5 million shares of common stock. The authorization has no expiration date. The Company's previous authorization, which had 1,216,681 shares remaining for purchase, was canceled with the new authorization.

Item 3. Defaults Upon Senior Securities.

 Not Applicable

Item 4. Mine Safety Disclosures

Not Applicable

Item 5. Other Information.

 Not Applicable

Item 6. Exhibits.

 The following documents are filed as part of this report:

Exhibit Number	Description of Exhibit
31.1	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	The following financial information from Imation Corp.’s Quarterly Report on Form 10-Q for the period ended September 30, 2012, filed with the SEC on November 9, 2012, formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2012 and 2011, (ii) the Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2012 and 2011, (iii) the Condensed Consolidated Balance Sheets as of September 30, 2012 and December 31, 2011, (iv) the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2012 and 2011, and (v) the Notes to Condensed Consolidated Financial Statements.*

*Pursuant to Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed part of a registration statement, prospectus or other document filed under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such filings.

34

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 thereunto duly authorized.

		Imation Corp.
Date:	November 9, 2012	/s/ Paul R. Zeller
		Paul R. Zeller
		Senior Vice President and Chief Financial Officer (duly authorized officer and principal financial officer)

35

EXHIBIT INDEX

The following exhibits are filed as part of this report:

Exhibit Number	Description of Exhibit
31.1	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	The following financial information from Imation Corp.’s Quarterly Report on Form 10-Q for the period ended September 30, 2012, filed with the SEC on November 9, 2012, formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2012 and 2011, (ii) the Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2012 and 2011, (iii) the Condensed Consolidated Balance Sheets as of September 30, 2012 and December 31, 2011, (iv) the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2012 and 2011, and (v) the Notes to Condensed Consolidated Financial Statements.*

*Pursuant to Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed part of a registration statement, prospectus or other document filed under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such filings.

36

EX-31.1

Exhibit 31.1

Certification Pursuant to Section 302

of the Sarbanes-Oxley Act of 2002

     I, Mark E. Lucas, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Imation Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a -15(e) and 15d -15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a -15(f) and 15d -15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses 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 have a significant role in the registrant's internal control over financial reporting.

November 9, 2012
By:	/s/ MARK E. LUCAS
	Mark E. Lucas,
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification Pursuant to Section 302

of the Sarbanes-Oxley Act of 2002

     I, Paul R. Zeller, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Imation Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a -15(e) and 15d -15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a -15(f) and 15d -15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses 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 have a significant role in the registrant's internal control over financial reporting.

November 9, 2012
By:	/s/ PAUL R. ZELLER
	Paul R. Zeller,
	Senior Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

     In connection with the Quarterly Report of Imation Corp. (the “Company”) on Form 10-Q for the period ended September 30, 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 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)  The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

November 9, 2012

/s/ MARK E. LUCAS  

Mark E. Lucas, 

President and Chief Executive Officer 

EX-32.2

Exhibit 32.2

Certification Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

     In connection with the Quarterly Report of Imation Corp. (the “Company”) on Form 10-Q for the period ended September 30, 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 to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

November 9, 2012

/s/ PAUL R. ZELLER  

Paul R. Zeller, 

Senior Vice President and Chief Financial Officer 

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Stock-Based Compensation (Details) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012 plan	Sep. 30, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock compensation expense	$ 1.9	$ 1.9	$ 5.5	$ 5.5
Number of share-based compensation plans			4
Grants in period, weighted average grant date fair value (dollars per share)			$ 2.54
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options expiration term			10 years
Total unrecognized compensation expense related to non-vested stock	6.5		6.5
Total compensation cost not yet recognized, period for recognition			2 years 0 months
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unrecognized compensation expense related to non-vested stock	$ 5.9		$ 5.9
Total compensation cost not yet recognized, period for recognition			1 year 11 months
Stock Incentive Plan 2011 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for grant	2,021,857		2,021,857

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Litigation, Commitments and Contingencies (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended			9 Months Ended			3 Months Ended	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011	Sep. 30, 2012 ARC	Sep. 30, 2012 ECJ Copyright Levy	Dec. 31, 2011 ECJ Copyright Levy	Sep. 30, 2011 ECJ Copyright Levy Cost of Sales	Sep. 30, 2011 ECJ Copyright Levy Cost of Sales
Loss Contingencies [Line Items]
Litigation settlement payments	$ (18.5)	$ (10.9)		$ 2.0
Tax levy liabilities	26.1		19.7		26.1	19.7
Reversal of previous year obligations in cost of good sold							$ 7.2	$ 12.7

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Fair Value Measurements Fair Value Measurements - Goodwill (Details) (Goodwill, Income approach valuation technique)	9 Months Ended
	Sep. 30, 2012
Goodwill | Income approach valuation technique
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Discounted forecasted cash flows period	10 years
Discount rate	17.60%
Terminal growth rate	3.50%

XML

Subsequent Events (Details) (USD $) In Millions, unless otherwise specified	0 Months Ended	3 Months Ended		9 Months Ended
	Oct. 22, 2012	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Subsequent Event [Line Items]
Expected reduction in operating expenses, percent	25.00%
Reduction in global workforce	20.00%
Restructuring Charges		$ 0.1	$ 4.3	$ 3.8	$ 6.4
Restructuring Cash Payments	40
Severance and related		0	2.4	2.8	3.7
Other restructuring charges		0.1	0.8	1.2	1.2
Minimum | Subsequent Event [Member]
Subsequent Event [Line Items]
Asset Impairment Charges	5
Restructuring Charges	50.0
Severance and related	15.0
Other restructuring charges	20.0
Maximum | Subsequent Event [Member]
Subsequent Event [Line Items]
Asset Impairment Charges	15
Restructuring Charges	60.0
Severance and related	25.0
Other restructuring charges	$ 25.0

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Fair Value Measurements - Cash Flow Hedges (Details) (Fair Value, Measurements, Recurring, Cash flow hedges, USD $) In Millions, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	$ 0	$ 0
Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	0.5	2.0
Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	0	0
Foreign currency option contracts | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	0	0
Derivative liabilities	0	0
Foreign currency option contracts | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	2.1	2.3
Derivative liabilities	(1.9)	(1.4)
Foreign currency option contracts | Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	0	0
Derivative liabilities	0	0
Foreign currency forward contracts | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	0	0
Foreign currency forward contracts | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	0.3	1.1
Foreign currency forward contracts | Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	$ 0	$ 0

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Supplemental Balance Sheet Information (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended					0 Months Ended
	Sep. 30, 2012		Sep. 30, 2011	Dec. 31, 2011		Jul. 13, 2012 Subsequent Event [Member] Settled Litigation [Member]
Accounts Receivable
Accounts receivable	$ 196.7			$ 253.3
Less reserves and allowances	(18.5)	[1]		(18.4)	[1]
Accounts receivable, net	178.2			234.9
Inventories
Finished goods	191.3			186.7
Work in process	9.5			13.5
Raw materials and supplies	10.7			8.6
Total inventories	211.5			208.8
Other Current Assets
Deferred income taxes	6.7			6.1
Prepaid expenses	3.1			6.1
Hedging asset	2.6			4.4
Assets held for sale	2.5			3.3
Restricted cash	2.2			2.2
Other	43.9			27.6
Total other current assets	61.0			49.7
Property, Plant and Equipment
Property, plant and equipment	211.1			241.4
Less accumulated depreciation	(155.3)			(186.0)
Property, plant and equipment, net	55.8			55.4
Other Assets
Deferred income taxes	15.7			15.8
Other	11.7			8.6
Total other assets	27.4			24.4
Other Current Liabilities
Rebates	41.7			45.2
Accrued copyright levies	26.1			19.7
Litigation settlement — current	0	[2]		18.0	[2]
Accrued payroll	10.4			13.2
Accrued royalties	5.9			10.7
Employee separation costs	3.1			5.9
Hedging liability	2.0			1.6
Other	39.8			36.9
Total other current liabilities	129.0			151.2
Other Liabilities
Pension	22.4			29.3
Contingent consideration	0.9			9.2
Deferred income taxes	0.1			0.1
Other	28.1			30.6
Total other liabilities	51.5			69.2
Subsequent Event [Line Items]
Litigation settlement payments	$ (18.5)		$ (10.9)			$ 16.5

[1] Accounts receivable reserves and allowances include estimated amounts for customer returns, discounts on payment terms and the inability of certain customers to make the required payment.

[2] On July 13, 2012, we made the final $16.5 million payment associated with the settlement agreement of our litigation with Philips Electronics N.V., U.S. Philips Corporation and North American Philips Corporation.

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Restructuring and Other Expense (Tables)

9 Months Ended

Sep. 30, 2012

Restructuring Cost and Reserve [Line Items]

Schedule of Restructuring and Related Costs

The components of our restructuring and other expense included in the Condensed Consolidated Statements of Operations were as follows:

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
(In millions)	2012			2011		2012			2011
Restructuring
Severance and related	$	—		$	2.4	$	2.8		$	3.7
Lease termination costs	—			1.1		0.5			1.5
Other	0.1			0.8		1.2			1.2
Gain on sale of fixed assets held for sale	—			—		(0.7		)	—
Total restructuring	$	0.1		$	4.3	$	3.8		$	6.4
Other
Contingent consideration fair value adjustment	(5.5		)	—		(8.3		)	—
Intangible asset abandonment	—			—		1.3			—
Acquisition and integration related costs	0.1			0.3		1.3			1.5
Pension settlement	0.5			0.9		2.0			1.9
Asset disposals	—			—		—			7.0
Global process improvement consulting	1.0			—		1.0			—
Other	0.2			—		0.9			—
Total	$	(3.6	)	$	5.5	$	2.0		$	16.8

2011 Corporate Strategy Restructuring Program

Restructuring Cost and Reserve [Line Items]

Schedule of Restructuring Reserve by Type of Cost

Changes in the 2011 corporate strategy restructuring program accruals were as follows:

(In millions)	Severance and Related			Lease Termination Costs		Other			Total
Accrued balance at December 31, 2011	$	4.6		$	0.6	$	—		$	5.2
Charges	0.4			—		0.3			0.7
Usage	(1.8		)	—		(0.3		)	(2.1		)
Currency impacts	0.1			—		—			0.1
Accrued balance at March 31, 2012	$	3.3		$	0.6	$	—		$	3.9
Charges	2.4			0.5		0.2			3.1
Usage	(1.4		)	—		(0.2		)	(1.6		)
Currency impacts	(0.1		)	—		—			(0.1		)
Accrued balance at June 30, 2012	$	4.2		$	1.1	$	—		$	5.3
Charges	—			—		0.1			0.1
Usage	(1.5		)	—		(0.1		)	(1.6		)
Currency impacts	—			—		—			—
Accrued balance at September 30, 2012	$	2.7		$	1.1	$	—		$	3.8

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Shareholders' Equity Shareholders' Equity - Accumulated Other Comprehensive Loss (Details) (USD $) In Millions, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Cumulative currency translation adjustment	$ (46.1)	$ (47.4)
Pension adjustments, net of income tax	(23.8)	(26.8)
Cash flow hedging and other, net of income tax	0.7	1.6
Total accumulated other comprehensive loss	$ (69.2)	$ (72.6)

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Stock-Based Compensation - Restricted Stock (Details) (Restricted Stock, USD $)	9 Months Ended
	Sep. 30, 2012
Restricted Stock
Restricted Stock [Roll Forward]
Nonvested as of December 31, 2011 (shares)	795,046
Granted (shares)	657,916
Vested (shares)	(305,509)
Forfeited (shares)	(88,806)
Nonvested as of September 30, 2012 (shares)	1,058,647
Weighted Average Grant Date Fair Value Per Share [Roll Forward]
Nonvested as of December 31, 2011 (dollars per share)	$ 10.02
Granted (dollars per share)	$ 5.79
Vested (dollars per share)	$ 10.45
Forfeited (dollars per share)	$ 10.24
Nonvested as of September 30, 2012 (dollars per share)	$ 7.24

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Restructuring and Other Expense (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Jun. 30, 2012	Sep. 30, 2012	Sep. 30, 2011
Restructuring and Related Activities [Abstract]
Severance and related	$ 0	$ 2.4		$ 2.8	$ 3.7
Lease termination costs	0	1.1		0.5	1.5
Other	0.1	0.8		1.2	1.2
Gain on sale of fixed assets held for sale	0	0		(0.7)	0
Total restructuring	0.1	4.3		3.8	6.4
Contingent consideration adjustment	(5.5)	0		(8.3)	0
Intangible asset abandonment	0	0	1.3	1.3	0
Acquisition and integration related costs	0.1	0.3		1.3	1.5
Pension settlement	0.5	0.9		2.0	1.9
Asset disposals	0	0		0	7.0
Global process improvement	1.0	0		1.0	0
Other	0.2	0		0.9	0
Total	$ (3.6)	$ 5.5		$ 2.0	$ 16.8

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Segment Information - Segment Information by Geographic Region (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Segment Reporting Information [Line Items]
Net revenue	$ 248.2	$ 308.6	$ 800.5	$ 948.1
Operating Income (Loss)	(6.5)	(8.3)	(25.7)	(21.0)
Americas
Segment Reporting Information [Line Items]
Net revenue	117.3	141.4	373.6	427.3
Operating Income (Loss)	(0.5)	(0.8)	3.0	2.3
Europe
Segment Reporting Information [Line Items]
Net revenue	44.3	56.8	149.0	183.2
Operating Income (Loss)	(1.9)	4.6	(5.8)	7.8
North Asia
Segment Reporting Information [Line Items]
Net revenue	62.0	75.3	194.4	229.6
Operating Income (Loss)	0.7	(0.3)	2.8	9.1
South Asia
Segment Reporting Information [Line Items]
Net revenue	24.6	35.1	83.5	108.0
Operating Income (Loss)	(0.5)	1.4	0.8	2.3
Corporate and unallocated
Segment Reporting Information [Line Items]
Operating Income (Loss)	$ (4.3)	$ (13.2)	$ (26.5)	$ (42.5)

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Fair Value Measurements - Other Hedges (Details) (USD $) In Millions, unless otherwise specified			3 Months Ended		9 Months Ended																		3 Months Ended		9 Months Ended
	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2012 Foreign currency forward contracts	Sep. 30, 2011 Foreign currency forward contracts	Sep. 30, 2012 Foreign currency forward contracts	Sep. 30, 2011 Foreign currency forward contracts	Sep. 30, 2012 Other Current Assets	Dec. 31, 2011 Other Current Assets	Sep. 30, 2012 Other Current Liabilities	Dec. 31, 2011 Other Current Liabilities	Sep. 30, 2012 Hedges designated as hedging instruments Cash flow hedges	Dec. 31, 2011 Hedges designated as hedging instruments Cash flow hedges	Sep. 30, 2012 Hedges designated as hedging instruments Cash flow hedges Other Current Assets	Dec. 31, 2011 Hedges designated as hedging instruments Cash flow hedges Other Current Assets	Sep. 30, 2012 Hedges designated as hedging instruments Cash flow hedges Other Current Liabilities	Dec. 31, 2011 Hedges designated as hedging instruments Cash flow hedges Other Current Liabilities	Sep. 30, 2012 Other hedges not receiving hedge accounting	Dec. 31, 2011 Other hedges not receiving hedge accounting	Sep. 30, 2012 Other hedges not receiving hedge accounting Other Current Assets	Dec. 31, 2011 Other hedges not receiving hedge accounting Other Current Assets	Sep. 30, 2012 Other hedges not receiving hedge accounting Other Current Liabilities	Dec. 31, 2011 Other hedges not receiving hedge accounting Other Current Liabilities	Sep. 30, 2012 Other Expense	Sep. 30, 2011 Other Expense	Sep. 30, 2012 Other Expense	Sep. 30, 2011 Other Expense
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Foreign Currency Transaction Loss, before Tax																							$ 0.1	$ 2.7	$ 1.8	$ 4.6
Loss on foreign currency contracts			0.1	4.2	0.2	4.3
Notional Amount	212.2	241.1									160.8	208.2					51.4	32.9
Derivative assets fair value							2.4	3.4					2.4	3.4					0	0
Derivative liabilities fair value									$ (1.9)	$ (1.4)					$ (1.9)	$ (1.4)					$ 0	$ 0

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Acquisitions

9 Months Ended

Sep. 30, 2012

Business Combinations [Abstract]

Acquisitions

Acquisitions

On October 4, 2011, we acquired the secure data storage hardware of IronKey Systems Inc. (IronKey) for a cash payment of $19.0 million. During the second quarter of 2012, we recorded an adjustment to the purchase price related to working capital in the amount of $0.6 million. As the purchase accounting for this acquisition was finalized in 2011, the adjustment was recorded as a charge to restructuring and other in the Condensed Consolidated Statements of Operations for the nine months ended September 30, 2012.

On June 4, 2011, we acquired the assets of MXI Security, a leader in high-security and privacy technologies, from Memory Experts International Inc. (MXI). The purchase price included future contingent consideration totaling up to $45.0 million with an estimated fair value of $9.2 million at the time of the acquisition. The amount of contingent consideration was to be based on incremental revenue and gross margin percent from MXI and MXI-based Defender branded products.

During the second quarter of 2012, the MXI Security contingent consideration agreement was amended in light of the IronKey acquisition that occurred late in 2011. Under the amended agreement, the amount of contingent consideration will continue to range up to $45.0 million, and will 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 second earn-out payment ranges up to $25.0 million with the sum of the first and second payments being up to a maximum of $25.0 million. The first earn-out payment was not achieved. The second earn-out payment is based on gross profit and gross margin percent achieved from July 1, 2012 through June 30, 2013. The third earn-out payment ranges up to $20.0 million and is based on gross profit and gross margin percent achieved from January 1, 2013 through December 31, 2013.

We remeasure the remaining contingent consideration each reporting period. During the three months ended June 30, 2012 we adjusted our internal financial forecast for the Mobile Security reporting unit resulting in a change in timing of the expected cash flows. This impacted the value of the MXI Security contingent consideration obligation and at June 30, 2012 the estimated fair value was determined to be $6.4 million, resulting in a decrease of $2.8 million for the three and six months ended June 30, 2012. During the three months ended September 30, 2012, we adjusted our internal financial forecast for the Mobile Security reporting unit reflecting lower expected short-term revenues and slightly lower gross margins as we enter the medium security markets. This impacted the value of the MXI Security contingent consideration obligation and at September 30, 2012, the estimated fair value was determined to be $0.9 million, resulting in a decrease of $5.5 million and $8.3 million for the three and nine months ended September 30, 2012, respectively. These adjustments were recorded as a benefit in restructuring and other in the Condensed Consolidated Statements of Operations. See Note 12 - Fair Value Measurements for further discussion of our valuation technique.

On February 28, 2011, we acquired substantially all of the assets of BeCompliant Corporation, doing business as Encryptx (Encryptx). The purchase price included future contingent consideration with an estimated fair value of $1.3 million at the time of the acquisition. During the nine months ended September 30, 2012, we paid $0.7 million of the consideration. The final contingent consideration payment, up to a maximum of $0.7 million, will be determined based on certain 2012 milestones and any amount due will be paid during the first quarter of 2013. Based on our analysis of fair value as of September 30, 2012, the fair value of the remaining consideration did not change significantly.

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Retirement Plans (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Defined Benefit Plan Disclosure [Line Items]
Pension settlement	$ 0.5	$ 0.9	$ 2.0	$ 1.9
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract]
Pension settlement	0.5	0.9	2.0	1.9
Pension Plans, Defined Benefit [Member]
Defined Benefit Plan Disclosure [Line Items]
Employer contributions in current fiscal year			4.3
United States
Defined Benefit Plan Disclosure [Line Items]
Pension settlement	0.5	0.9	2.0	1.9
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract]
Service cost	0	0	0	0
Interest cost	0.8	3.4	2.4	5.6
Expected return on plan assets	(1.4)	(4.8)	(4.3)	(7.9)
Amortization of net actuarial loss	0.4	0.7	1.0	1.1
Amortization of prior service (credit) cost	0	0	0	0
Net periodic pension cost (credit)	(0.2)	(0.7)	(0.9)	(1.2)
Pension settlement	0.5	0.9	2.0	1.9
Total pension cost (credit)	0.3	0.2	1.1	0.7
International
Defined Benefit Plan Disclosure [Line Items]
Pension settlement	0	0	0	0
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract]
Service cost	0.1	0.1	0.3	0.3
Interest cost	0	0.7	0	2.1
Expected return on plan assets	0	(0.9)	0	(2.6)
Amortization of net actuarial loss	0.1	0.1	0.3	0.3
Amortization of prior service (credit) cost	0	(0.1)	0	(0.3)
Net periodic pension cost (credit)	0.2	(0.1)	0.6	(0.2)
Pension settlement	0	0	0	0
Total pension cost (credit)	$ 0.2	$ (0.1)	$ 0.6	$ (0.2)

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Shareholders' Equity (Tables)

9 Months Ended

Sep. 30, 2012

Equity [Abstract]

Schedule of Treasury Stock by Class

Following is a summary of treasury share activity:

	Treasury Shares
Balance as of December 31, 2011	4,663,923
Purchases	840,170
Exercise of stock options	—
Restricted stock grants and other	(518,192	)
401(k) matching contribution	(430,988	)
Balance as of September 30, 2012	4,554,913

Schedule of Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss consisted of the following:

	September 30,			December 31,
(In millions)	2012			2011
Cumulative currency translation adjustment	$	(46.1	)	$	(47.4	)
Pension adjustments, net of income tax	(23.8		)	(26.8		)
Cash flow hedging and other, net of income tax	0.7			1.6
Total accumulated other comprehensive loss	$	(69.2	)	$	(72.6	)

Schedule of Comprehensive Income Loss

Components of comprehensive loss consisted of the following:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(In millions)	2012			2011			2012			2011
Other comprehensive income (loss), net of tax:
Net unrealized (losses) gains on derivative financial instruments:
Net holding (losses) gains arising during the period	$	(1.0	)	$	0.8		$	0.4		$	(1.7	)
Tax benefit (expense)	0.4			(0.2		)	(0.1		)	0.5
Reclassification adjustment for net realized (gains) losses included in net loss	(0.6		)	0.4			(1.7		)	0.6
Tax expense (benefit)	0.1			(0.1		)	0.5			(0.2		)
Total net unrealized (losses) gains on derivative financial instruments	(1.1		)	0.9			(0.9		)	(0.8		)
Net pension adjustments:
Reclassification of adjustments for defined benefit plans recorded in net loss	4.0			(18.4		)	4.9			(16.6		)
Tax (benefit) expense	(1.5		)	7.0			(1.9		)	6.3
Total net pension adjustments	2.5			(11.4		)	3.0			(10.3		)
Unrealized foreign currency translation (losses) gains	$	3.1		$	(11.8	)	$	1.3		$	(0.8	)

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2012

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following table sets forth our cash flow hedges which are measured at fair value on a recurring basis.

	September 30, 2012							December 31, 2011
(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Unobservable Inputs (Level 3)		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Unobservable Inputs (Level 3)
Derivative assets
Foreign currency option contracts	$	—	$	2.1		$	—	$	—	$	2.3		$	—
Foreign currency forward contracts	—		0.3			—		—		1.1			—
Derivative liabilities
Foreign currency option contracts	—		(1.9		)	—		—		(1.4		)	—
Total	$	—	$	0.5		$	—	$	—	$	2.0		$	—

Schedule of Derivative Instruments

The notional amounts and fair values of our derivative instruments recorded in other current assets and other current liabilities in the Condensed Consolidated Financial Statements were as follows:

	September 30, 2012							December 31, 2011
			Fair Value							Fair Value
(In millions)	Notional Amount		Other Current Assets		Other Current Liabilities			Notional Amount		Other Current Assets		Other Current Liabilities
Cash flow hedges designated as hedging instruments	$	160.8	$	2.4	$	(1.9	)	$	208.2	$	3.4	$	(1.4	)
Other hedges not receiving hedge accounting	51.4		—		—			32.9		—		—
Total	$	212.2	$	2.4	$	(1.9	)	$	241.1	$	3.4	$	(1.4	)

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Income Taxes (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Income Tax Disclosure [Abstract]
Income tax (benefit) provision	$ (0.3)	$ 2.1	$ 0.6	$ 4.5
Effective income tax rate	4.50%	(17.50%)	(2.00%)	(15.40%)
Federal statutory income tax rate	35.00%		35.00%
Settlement of previously unrecognized Tax Benefits			0.7
Unrecognized Tax Benefits	$ 16.9		$ 16.9		$ 17.6

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2012

Segment Reporting [Abstract]

Schedule of Revenue and Operating Income, by Segment

Net revenue and operating income (loss) by segment were as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In millions)	2012		2011		2012		2011
Net Revenue
Americas	$	117.3	$	141.4	$	373.6	$	427.3
Europe	44.3		56.8		149.0		183.2
North Asia	62.0		75.3		194.4		229.6
South Asia	24.6		35.1		83.5		108.0
Total	$	248.2	$	308.6	$	800.5	$	948.1

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(In millions)	2012			2011			2012			2011
Operating Income (Loss)
Americas	$	(0.5	)	$	(0.8	)	$	3.0		$	2.3
Europe	(1.9		)	4.6			(5.8		)	7.8
North Asia	0.7			(0.3		)	2.8			9.1
South Asia	(0.5		)	1.4			0.8			2.3
Corporate and unallocated	(4.3		)	(13.2		)	(26.5		)	(42.5		)
Total	$	(6.5	)	$	(8.3	)	$	(25.7	)	$	(21.0	)

Revenue from External Customers by Products and Services

Net revenue by major product category was as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In millions)	2012		2011		2012		2011
Net Revenue
Traditional storage
Optical products	$	97.0	$	126.8	$	317.8	$	383.8
Magnetic products	68.3		76.9		215.0		244.7
Other traditional storage	3.2		13.0		11.7		38.6
Total traditional storage	168.5		216.7		544.5		667.1
Secure and scalable storage	44.5		48.2		147.3		156.3
Audio and video information	35.2		43.7		108.7		124.7
Total	$	248.2	$	308.6	$	800.5	$	948.1

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(Loss) Earnings per Common Share (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Earnings Per Share [Abstract]
Net loss	$ (6.3)	$ (14.1)	$ (30.5)	$ (33.8)
Weighted average number of common shares outstanding during period	37.4	37.5	37.6	37.8
Dilutive effect of stock-based compensation plans (in shares)	0	0	0	0
Weighted average number of diluted shares outstanding during the period	37.4	37.5	37.6	37.8
(Loss) earnings per common share - basic (dollars per share)	$ (0.17)	$ (0.38)	$ (0.81)	$ (0.89)
(Loss) earnings per common share - diluted (dollars per share)	$ (0.17)	$ (0.38)	$ (0.81)	$ (0.89)
Stock Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive options excluded from calculation (in shares)	6.5	6.2	6.2	5.0

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(Loss) Earnings per Common Share

9 Months Ended

Sep. 30, 2012

Earnings Per Share [Abstract]

(Loss) Earnings per Common Share

(Loss) Earnings per Common Share

Basic (loss) earnings per common share is calculated using the weighted average number of shares outstanding for the period. Diluted (loss) earnings per common share is computed on the basis of the weighted average basic shares outstanding plus the dilutive effect of our stock-based compensation plans using the “treasury stock” method. Unvested restricted stock and treasury shares are excluded from the calculation of weighted average number of common shares outstanding. Once restricted stock vests, it is included in our common shares outstanding.

Potential common shares are excluded from the computation of diluted (loss) earnings per common share when the effect would be anti-dilutive. All potential common shares are anti-dilutive in periods of net loss available to common shareholders. Stock options are anti-dilutive when the exercise price of these instruments is greater than the average market price of the Company's common stock for the period.

The following table sets forth the computation of the weighted average basic and diluted (loss) earnings per share:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(In millions, except for per share amounts)	2012			2011			2012			2011
Numerator:
Net loss	$	(6.3	)	$	(14.1	)	$	(30.5	)	$	(33.8	)
Denominator:
Weighted average number of common shares outstanding during the period	37.4			37.5			37.6			37.8
Dilutive effect of stock-based compensation plans	—			—			—			—
Weighted average number of diluted shares outstanding during the period	37.4			37.5			37.6			37.8
(Loss) earnings per common share — basic	(0.17		)	(0.38		)	(0.81		)	(0.89		)
(Loss) earnings per common share — diluted	(0.17		)	(0.38		)	(0.81		)	(0.89		)
Anti-dilutive options excluded from calculation	6.5			6.2			6.2			5.0

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Acquisitions (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended			3 Months Ended		3 Months Ended		6 Months Ended	9 Months Ended							9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011	Jun. 30, 2012 IronKey Systems Inc.	Oct. 04, 2011 IronKey Systems Inc.	Sep. 30, 2012 MXI Security	Jun. 30, 2012 MXI Security	Jun. 30, 2012 MXI Security	Sep. 30, 2012 MXI Security	Jun. 04, 2011 MXI Security	Sep. 30, 2012 MXI Security Minimum Second Earn-out Payment	Jun. 30, 2012 MXI Security Maximum First and Second Earn-out Payment [Member]	Sep. 30, 2012 MXI Security Maximum Second Earn-out Payment	Jun. 30, 2012 MXI Security Maximum Second Earn-out Payment	Jun. 30, 2012 MXI Security Maximum Third Earn-out Payment [Member] [Domain]	Sep. 30, 2012 BeCompliant Corporation (Encryptx)	Feb. 28, 2011 BeCompliant Corporation (Encryptx)
Business Acquisition, Contingent Consideration [Line Items]
Cash paid to acquired entity							$ 19.0
Purchase price adjustment						0.6
Contingent consideration maximum range outcome												45.0
Earn-out payments	0.9		0.9		9.2								0	25.0	25.0	25.0	20.0		0.7
Contingent consideration fair value								0.9	6.4	6.4	0.9	9.2							1.3
Contingent consideration adjustment	(5.5)	0	(8.3)	0				(5.5)	(2.8)	(2.8)	(8.3)
Contingent consideration payments			$ (1.2)	$ 0														$ (0.7)

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Stock-Based Compensation - Stock Options Activity (Details) (USD $)	9 Months Ended
	Sep. 30, 2012
Stock Options [Roll Forward]
Outstanding December 31, 2011 (shares)	5,679,579
Granted (shares)	1,158,882
Exercised (shares)	0
Canceled (shares)	(521,772)
Forfeited (shares)	(199,406)
Outstanding September 30, 2012 (shares)	6,117,283
Exercisable as of September 30, 2012 (shares)	3,742,221
Weighted Average Exercise Price [Roll Forward]
Oustanding December 31, 2011 (dollars per share)	$ 19.87
Granted (dollars per share)	$ 5.82
Exercised (dollars per share)	$ 0.00
Canceled (dollars per share)	$ 26.85
Forfeited (dollars per share)	$ 9.84
Outstanding September 30, 2012 (dollars per share)	$ 16.84
Exercisable as of September 30, 2012 (dollars per share)	$ 22.60

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Segment Information - Segment Information by Product (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Revenue from External Customer [Line Items]
Net revenue	$ 248.2	$ 308.6	$ 800.5	$ 948.1
Traditional Storage
Revenue from External Customer [Line Items]
Net revenue	168.5	216.7	544.5	667.1
Traditional Storage, Optical Products
Revenue from External Customer [Line Items]
Net revenue	97.0	126.8	317.8	383.8
Traditional Storage, Magentic Products
Revenue from External Customer [Line Items]
Net revenue	68.3	76.9	215.0	244.7
Traditional Storage, Other
Revenue from External Customer [Line Items]
Net revenue	3.2	13.0	11.7	38.6
Secure and Scalable Storage
Revenue from External Customer [Line Items]
Net revenue	44.5	48.2	147.3	156.3
Audio and Video Information
Revenue from External Customer [Line Items]
Net revenue	$ 35.2	$ 43.7	$ 108.7	$ 124.7

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Condensed Consolidated Statements of Operations (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Net revenue	$ 248.2	$ 308.6	$ 800.5	$ 948.1
Cost of goods sold	202.5	251.4	646.3	782.9
Gross profit	45.7	57.2	154.2	165.2
Operating expenses:
Selling, general and administrative	50.7	52.7	160.2	150.8
Research and development	5.1	5.3	17.7	15.0
Litigation settlement	0	2.0	0	2.0
Goodwill impairment	0	0	0	1.6
Restructuring and other	(3.6)	5.5	2.0	16.8
Total	52.2	65.5	179.9	186.2
Operating loss	(6.5)	(8.3)	(25.7)	(21.0)
Other expense (income):
Interest income	(0.1)	(0.2)	(0.4)	(0.6)
Interest expense	0.6	0.8	2.4	2.7
Other, net	(0.4)	3.1	2.2	6.2
Total	0.1	3.7	4.2	8.3
Loss before income taxes	(6.6)	(12.0)	(29.9)	(29.3)
Income tax (benefit) provision	(0.3)	2.1	0.6	4.5
Net loss	$ (6.3)	$ (14.1)	$ (30.5)	$ (33.8)
(Loss) earnings per common share - basic (dollars per share)	$ (0.17)	$ (0.38)	$ (0.81)	$ (0.89)
(Loss) earnings per common share - diluted (dollars per share)	$ (0.17)	$ (0.38)	$ (0.81)	$ (0.89)
Weighted average shares outstanding
Weighted average shares outstanding - basic	37.4	37.5	37.6	37.8
Weighted average shares outstanding - diluted	37.4	37.5	37.6	37.8

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Debt (Details) (USD $)	0 Months Ended	1 Months Ended	9 Months Ended
	May 18, 2012	Jun. 30, 2012	Sep. 30, 2012
Line of Credit Facility [Line Items]
Line of Credit Facility, Amount Outstanding			$ 0
Debt Instrument, Interest Rate at Period End			4.00%
Revolving Credit Facility
Line of Credit Facility [Line Items]
Maximum borrowing capacity		200,000,000
Consolidated fixed charge coverage ratio	1.20	1
Debt issuance costs capitalized			2,600,000
Revolving Credit Facility | Eurodollar Rate | From May 18, 2012 to August 15, 2012
Line of Credit Facility [Line Items]
Basis spread on variable rate		2.00%
Revolving Credit Facility | Base Rate | From May 18, 2012 to August 15, 2012
Line of Credit Facility [Line Items]
Basis spread on variable rate		1.00%
Revolving Credit Facility | Applicable Rate | After August 15, 2012
Line of Credit Facility [Line Items]
Reduction in Basis Points from Credit Agreement Due to Average Daily Availability			1.25%
Domestic Line of Credit | United States
Line of Credit Facility [Line Items]
Maximum borrowing capacity		150,000,000
Current borrowing capacity			102,200,000
Covenant liquidity requirement		30,000,000
Foreign Line of Credit | Europe
Line of Credit Facility [Line Items]
Maximum borrowing capacity		50,000,000
Current borrowing capacity			$ 15,200,000

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Basis of Presentation

9 Months Ended

Sep. 30, 2012

Basis of Presentation [Abstract]

Basis of Presentation

Basis of Presentation

The interim Condensed Consolidated Financial Statements of Imation Corp. (Imation, the Company, we, us or our) are unaudited but, in the opinion of management, reflect all adjustments necessary for a fair statement of financial position, results of operations, comprehensive loss and cash flows for the periods presented. Except as otherwise disclosed herein, these adjustments consist of normal, recurring items. The results of operations for any interim period are not necessarily indicative of full year results. The Condensed Consolidated Financial Statements and Notes are presented in accordance with the requirements for Quarterly Reports on Form 10-Q and do not contain certain information included in our annual Consolidated Financial Statements and Notes.

The preparation of the interim Condensed Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim Condensed Consolidated Financial Statements and the reported amounts of revenue and expenses for the reporting periods. Despite our intention to establish accurate estimates and use reasonable assumptions, actual results may differ from our estimates.

The December 31, 2011 Condensed Consolidated Balance Sheet data was derived from the audited Consolidated Financial Statements but does not include all disclosures required by U.S. GAAP. This Form 10-Q should be read in conjunction with our Consolidated Financial Statements and Notes included in our Annual Report on Form 10-K for the year ended December 31, 2011.

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Intangible Assets and Goodwill - Intangible Assets Narrative (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended	9 Months Ended			0 Months Ended	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Jun. 30, 2012	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011	Dec. 31, 2011 Nine Technology LLC [Member]	Sep. 30, 2012 Nine Technology LLC [Member]	Dec. 20, 2011 Nine Technology LLC [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Accelerated amortized intangible assets carrying value			$ 1.3
Intangible asset abandonment	0	0	1.3	1.3	0
Contingent consideration	0.9			0.9		9.2			1.0
Contingent consideration payments				$ 1.2	$ 0		$ (0.5)	$ (0.5)

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(Loss) Earnings per Common Share (Tables)

9 Months Ended

Sep. 30, 2012

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The following table sets forth the computation of the weighted average basic and diluted (loss) earnings per share:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(In millions, except for per share amounts)	2012			2011			2012			2011
Numerator:
Net loss	$	(6.3	)	$	(14.1	)	$	(30.5	)	$	(33.8	)
Denominator:
Weighted average number of common shares outstanding during the period	37.4			37.5			37.6			37.8
Dilutive effect of stock-based compensation plans	—			—			—			—
Weighted average number of diluted shares outstanding during the period	37.4			37.5			37.6			37.8
(Loss) earnings per common share — basic	(0.17		)	(0.38		)	(0.81		)	(0.89		)
(Loss) earnings per common share — diluted	(0.17		)	(0.38		)	(0.81		)	(0.89		)
Anti-dilutive options excluded from calculation	6.5			6.2			6.2			5.0

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Intangible Assets and Goodwill - Goodwill (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended				3 Months Ended	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Jun. 30, 2012	Dec. 31, 2011	Mar. 31, 2012 BeCompliant Corporation (Encryptx)	Sep. 30, 2011 BeCompliant Corporation (Encryptx)	Sep. 30, 2012 Mobil Security reporting unit
Goodwill [Line Items]
Goodwill	$ 31.3		$ 31.3			$ 31.3			$ 31.3
Goodwill acquired							1.6
Goodwill impairment	0	0	0	1.6				1.6
Goodwill Impairment Test, Reporting Unit, at Carrying Value	$ 48.5		$ 48.5		$ 50.2
Goodwill Impairment Test, Estimated Fair Value in Excess of Carrying Value, Percentage	17.70%		17.70%		43.30%

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Intangible Assets and Goodwill (Tables)

9 Months Ended

Sep. 30, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets

The components of our amortizable intangible assets were as follows:

(In millions)	Trade Names			Software			Customer Relationships			Other			Total
September 30, 2012
Gross carrying amount	$	345.8		$	58.9		$	61.0		$	14.6		$	480.3
Accumulated amortization	(67.6		)	(53.4		)	(52.4		)	(6.3		)	(179.7		)
Intangible assets, net	$	278.2		$	5.5		$	8.6		$	8.3		$	300.6
December 31, 2011
Gross carrying amount	$	347.1		$	57.9		$	61.5		$	13.9		$	480.4
Accumulated amortization	(57.5		)	(51.1		)	(45.5		)	(4.6		)	(158.7		)
Intangible assets, net	$	289.6		$	6.8		$	16.0		$	9.3		$	321.7

Schedule of Intangible Asset Amortization Expense

Amortization expense for intangible assets consisted of the following:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In millions)	2012		2011		2012		2011
Amortization expense	$	7.2	$	6.6	$	21.7	$	18.8

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Recently Issued or Adopted Accounting Pronouncements

9 Months Ended

Sep. 30, 2012

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Recently Issued or Adopted Accounting Pronouncements

Recently Issued or Adopted Accounting Pronouncements

In September 2011, the FASB issued a revised standard intended to reduce the cost and complexity of the annual goodwill impairment test by providing entities an option to perform a “qualitative” assessment to determine whether further impairment testing is necessary. An entity has the option to first assess qualitative factors to determine whether it is necessary to perform the two-step test. If an entity believes, as a result of its qualitative assessment, that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test is required. Otherwise, no further testing is required. The revised standard was effective for Imation for annual and interim goodwill impairment tests performed beginning January 1, 2012, however we have, thus far, chosen to continue to perform a quantitative assessment when evaluating its goodwill for impairment

In June 2011, the FASB issued amended guidance to enhance comparability between entities that report under U.S. GAAP and International Financial Reporting Standards (IFRS) and to provide a more consistent method of presenting non-owner transactions that affect an entity's equity. This guidance eliminates the option to report other comprehensive income and its components in the statement of changes in stockholders' equity and requires an entity to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement or in two separate but consecutive statements. Regardless of whether one or two statements are presented, an entity is required to show reclassification adjustments on the face of the financial statements for items that are reclassified from other comprehensive income to net income. In December 2011, the FASB amended this guidance to indefinitely defer provisions which required entities to present reclassification adjustments out of accumulated other comprehensive income by component in both the statement in which net income is presented and the statement in which other comprehensive income is presented. This guidance was effective for Imation for our first quarter ended March 31, 2012 and we began presenting a separate financial statement which shows the various components of our consolidated comprehensive loss.

In May 2011, the FASB issued amended disclosure requirements to provide a consistent definition of fair value and ensure the fair value measurement and disclosure requirements are similar between U.S. GAAP and IFRS. This guidance changes certain fair value measurement principles and enhances the disclosure requirements particularly for Level 3 fair value measurements. This guidance was effective for Imation for our first quarter ended March 31, 2012 and did not have a material impact on our financial position and results of operations.

A variety of proposed potential accounting standards are currently under study by standard setting organizations and various regulatory agencies. Due to the tentative and preliminary nature of those proposed standards, management has not determined whether implementation of such proposed standards would be material to our Condensed Consolidated Financial Statements.

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Condensed Consolidated Statements of Comprehensive Loss (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Net loss	$ (6.3)	$ (14.1)	$ (30.5)	$ (33.8)
Net unrealized (losses) gains on derivative financial instruments:
Net holding (losses) gains arising during the period	(0.6)	0.6	0.3	(1.2)
Reclassification adjustment for net realized (gains) losses included in net loss	(0.5)	0.3	(1.2)	0.4
Total net unrealized (losses) gains on derivative financial instruments	(1.1)	0.9	(0.9)	(0.8)
Reclassification of adjustments for defined benefit plans recorded in net loss	2.5	(11.4)	3.0	(10.3)
Unrealized foreign currency translation gains (losses)	3.1	(11.8)	1.3	(0.8)
Total other comprehensive income (loss), net of tax	4.5	(22.3)	3.4	(11.9)
Comprehensive loss	$ (1.8)	$ (36.4)	$ (27.1)	$ (45.7)

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Fair Value Measurements

9 Months Ended

Sep. 30, 2012

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Derivative Financial Instruments

Cash Flow Hedges

We attempt to substantially mitigate the risk that forecasted cash flows denominated in foreign currencies may be adversely affected by changes in the currency exchange rates through the use of option, forward and combination option contracts. Gains and losses related to cash flow hedges are deferred in accumulated other comprehensive loss with a corresponding asset or liability. When the hedged transaction occurs, the gains and losses in accumulated other comprehensive loss are reclassified into the Condensed Consolidated Statements of Operations in the same line as the item being hedged. The following table sets forth our cash flow hedges which are measured at fair value on a recurring basis.

	September 30, 2012							December 31, 2011
(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Unobservable Inputs (Level 3)		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Unobservable Inputs (Level 3)
Derivative assets
Foreign currency option contracts	$	—	$	2.1		$	—	$	—	$	2.3		$	—
Foreign currency forward contracts	—		0.3			—		—		1.1			—
Derivative liabilities
Foreign currency option contracts	—		(1.9		)	—		—		(1.4		)	—
Total	$	—	$	0.5		$	—	$	—	$	2.0		$	—

Other Hedges

We use foreign currency forward contracts to manage the foreign currency exposure related to our monetary assets and liabilities denominated in foreign currencies. We record the estimated fair value of these forward contracts within other current assets or other current liabilities in the Condensed Consolidated Balance Sheets and changes in their value are recognized in the Condensed Consolidated Statements of Operations. For the three months ended September 30, 2012 and 2011, we recorded foreign currency losses of $0.1 million and $2.7 million, respectively, in Other Expenses, net in the Condensed Consolidated Statements of Operations. These losses reflect changes in foreign exchange rates on foreign denominated assets and liabilities and are net of losses of $0.1 million and $4.2 million from the related foreign currency forward contracts for the three months ended September 30, 2012 and 2011, respectively. For the nine months ended September 30, 2012 and 2011, we recorded foreign currency losses of $1.8 million and $4.6 million, respectively, in Other Expenses, net in the Condensed Consolidated Statements of Operations. These losses reflect changes in foreign exchange rates on foreign denominated assets and liabilities and are net of losses of $0.2 million and $4.3 million from the related foreign currency forward contracts for the nine months ended September 30, 2012 and 2011, respectively.

The notional amounts and fair values of our derivative instruments recorded in other current assets and other current liabilities in the Condensed Consolidated Financial Statements were as follows:

	September 30, 2012							December 31, 2011
			Fair Value							Fair Value
(In millions)	Notional Amount		Other Current Assets		Other Current Liabilities			Notional Amount		Other Current Assets		Other Current Liabilities
Cash flow hedges designated as hedging instruments	$	160.8	$	2.4	$	(1.9	)	$	208.2	$	3.4	$	(1.4	)
Other hedges not receiving hedge accounting	51.4		—		—			32.9		—		—
Total	$	212.2	$	2.4	$	(1.9	)	$	241.1	$	3.4	$	(1.4	)

On September 30, 2012, we entered into certain hedges not receiving hedge accounting treatment. In accordance with trade date accounting, these hedges and related exposures are recorded as of September 30, 2012, but do not have a value until the subsequent day.

Goodwill

We test the carrying amount of a reporting unit's goodwill for impairment on an annual basis during the fourth quarter of each year or if an event occurs or circumstances change that would warrant impairment testing during an interim period. In evaluating whether goodwill was impaired, we compare the estimated fair value of the reporting unit to its carrying value. The fair value measurement of goodwill is based on significant inputs not observable in the market and therefore represent Level 3 measurements. See Note 6 - Intangible Assets and Goodwill for further discussion of the goodwill impairment test performed during the third quarter of 2012.

In calculating the estimated fair value, we used the income approach, a valuation technique under which we estimate future cash flows using the reporting unit's financial forecasts. Our expected cash flows are affected by various significant assumptions, including the discount rate, revenue growth, gross margin percentage, and terminal value growth rate. Our analysis utilized discounted forecasted cash flows over a 10 year period with an estimation of residual growth rates thereafter. We use our business plans and projections as the basis for expected future cash flows. A discount rate of 17.6 percent was used to reflect the relevant risks of the higher growth assumed for the Mobile Security reporting unit. The revenue growth rates in 2012 through 2014, which are forecasted to be significant as we grow this business, are important assumptions within the fair value estimations. We utilized a terminal growth rate of 3.5 percent.

Contingent Consideration

Contingent consideration recorded for 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 as further described under the Goodwill section above. The same relevant assumptions were used in the fair value calculation of contingent consideration as those used in the fair value calculation of goodwill. Changes in the fair value of our contingent consideration obligations are recognized as a fair value adjustment within restructuring and other in our Condensed Consolidated Statements of Operations. These fair value measurements are based on significant inputs not observable in the market and therefore represent Level 3 measurements. See Note 4 - Acquisitions for further discussion of the fair value calculation of our contingent consideration as of September 30, 2012.

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Document and Entity Information Document	9 Months Ended
	Sep. 30, 2012	Nov. 02, 2012
Entity Information [Line Items]
Entity Registrant Name	IMATION CORP.
Entity Central Index Key	0001014111
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Type	10-Q
Document Period End Date	Jun. 30, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding		38,401,505

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Shareholders' Equity

9 Months Ended

Sep. 30, 2012

Equity [Abstract]

Shareholders' Equity

Shareholders' Equity

Treasury Stock

On May, 2, 2012, our Board of Directors authorized a share repurchase program of 5.0 million shares of common stock. For the nine months ended September 30, 2012 we repurchased 0.8 million shares of common stock for $4.9 million and as of September 30, 2012 we had remaining authorization to repurchase up to 4.2 million shares. The treasury stock held as of September 30, 2012 was acquired at an average price of $23.77 per share.

Following is a summary of treasury share activity:

	Treasury Shares
Balance as of December 31, 2011	4,663,923
Purchases	840,170
Exercise of stock options	—
Restricted stock grants and other	(518,192	)
401(k) matching contribution	(430,988	)
Balance as of September 30, 2012	4,554,913

Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss consisted of the following:

	September 30,			December 31,
(In millions)	2012			2011
Cumulative currency translation adjustment	$	(46.1	)	$	(47.4	)
Pension adjustments, net of income tax	(23.8		)	(26.8		)
Cash flow hedging and other, net of income tax	0.7			1.6
Total accumulated other comprehensive loss	$	(69.2	)	$	(72.6	)

Comprehensive Loss

Components of comprehensive loss consisted of the following:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(In millions)	2012			2011			2012			2011
Other comprehensive income (loss), net of tax:
Net unrealized (losses) gains on derivative financial instruments:
Net holding (losses) gains arising during the period	$	(1.0	)	$	0.8		$	0.4		$	(1.7	)
Tax benefit (expense)	0.4			(0.2		)	(0.1		)	0.5
Reclassification adjustment for net realized (gains) losses included in net loss	(0.6		)	0.4			(1.7		)	0.6
Tax expense (benefit)	0.1			(0.1		)	0.5			(0.2		)
Total net unrealized (losses) gains on derivative financial instruments	(1.1		)	0.9			(0.9		)	(0.8		)
Net pension adjustments:
Reclassification of adjustments for defined benefit plans recorded in net loss	4.0			(18.4		)	4.9			(16.6		)
Tax (benefit) expense	(1.5		)	7.0			(1.9		)	6.3
Total net pension adjustments	2.5			(11.4		)	3.0			(10.3		)
Unrealized foreign currency translation (losses) gains	$	3.1		$	(11.8	)	$	1.3		$	(0.8	)

Amounts above are presented to show each component of comprehensive loss on a gross basis and the related taxes. Income taxes are not provided for foreign translation relating to permanent investments in international subsidiaries. Reclassification adjustments are made to avoid double counting in comprehensive loss items that are also recorded as part of net loss. These items are presented net of taxes on the Condensed Consolidated Statements of Comprehensive Loss.

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Condensed Consolidated Balance Sheets (USD $) In Millions, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Current assets
Cash and cash equivalents	$ 186.3	$ 223.1
Accounts receivable, net	178.2	234.9
Inventories	211.5	208.8
Other current assets	61.0	49.7
Total current assets	637.0	716.5
Property, plant and equipment, net	55.8	55.4
Intangible assets, net	300.6	321.7
Goodwill	31.3	31.3
Other assets	27.4	24.4
Total assets	1,052.1	1,149.3
Current liabilities
Accounts payable	172.0	205.2
Other current liabilities	129.0	151.2
Total current liabilities	301.0	356.4
Other liabilities	51.5	69.2
Total liabilities	352.5	425.6
Commitments and contingencies (Note 15)
Shareholders’ equity	699.6	723.7
Total liabilities and shareholders’ equity	$ 1,052.1	$ 1,149.3

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Restructuring and Other Expense

9 Months Ended

Sep. 30, 2012

Restructuring and Related Activities [Abstract]

Restructuring and Other Expense

Restructuring and Other Expense

The components of our restructuring and other expense included in the Condensed Consolidated Statements of Operations were as follows:

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
(In millions)	2012			2011		2012			2011
Restructuring
Severance and related	$	—		$	2.4	$	2.8		$	3.7
Lease termination costs	—			1.1		0.5			1.5
Other	0.1			0.8		1.2			1.2
Gain on sale of fixed assets held for sale	—			—		(0.7		)	—
Total restructuring	$	0.1		$	4.3	$	3.8		$	6.4
Other
Contingent consideration fair value adjustment	(5.5		)	—		(8.3		)	—
Intangible asset abandonment	—			—		1.3			—
Acquisition and integration related costs	0.1			0.3		1.3			1.5
Pension settlement	0.5			0.9		2.0			1.9
Asset disposals	—			—		—			7.0
Global process improvement consulting	1.0			—		1.0			—
Other	0.2			—		0.9			—
Total	$	(3.6	)	$	5.5	$	2.0		$	16.8

2011 Corporate Strategy Restructuring Program

On January 31, 2011, the Board of Directors approved the 2011 corporate strategy restructuring program which is described in detail in our Annual Report on Form 10-K for the year ended December 31, 2011. During the three and nine months ended September 30, 2012 we recorded restructuring charges of $0.1 million and $3.9 million, respectively, associated with this program. These charges were primarily associated with severance and, to a lesser extent, lease termination and other costs and were included in restructuring and other in our Condensed Consolidated Statements of Operations. Since the inception of this program, we have recorded a total of $13.2 million of severance and related expenses, $3.5 million of lease termination and modification costs, $1.6 million of inventory write-offs, $0.3 million related to a pension curtailment charge and $0.8 million of other charges. Inventory write-offs are included in cost of goods sold in our Condensed Consolidated Statements of Operations.

Changes in the 2011 corporate strategy restructuring program accruals were as follows:

(In millions)	Severance and Related			Lease Termination Costs		Other			Total
Accrued balance at December 31, 2011	$	4.6		$	0.6	$	—		$	5.2
Charges	0.4			—		0.3			0.7
Usage	(1.8		)	—		(0.3		)	(2.1		)
Currency impacts	0.1			—		—			0.1
Accrued balance at March 31, 2012	$	3.3		$	0.6	$	—		$	3.9
Charges	2.4			0.5		0.2			3.1
Usage	(1.4		)	—		(0.2		)	(1.6		)
Currency impacts	(0.1		)	—		—			(0.1		)
Accrued balance at June 30, 2012	$	4.2		$	1.1	$	—		$	5.3
Charges	—			—		0.1			0.1
Usage	(1.5		)	—		(0.1		)	(1.6		)
Currency impacts	—			—		—			—
Accrued balance at September 30, 2012	$	2.7		$	1.1	$	—		$	3.8

2011 Manufacturing Redesign Restructuring Program

On January 13, 2011, the Board of Directors approved the 2011 manufacturing redesign restructuring program which is described in detail in our Annual Report on Form 10-K for the year ended December 31, 2011. During the three months ended September 30, 2012 no additional costs were incurred related to this program. During the nine months ended September 30, 2012 we recorded a gain on the sale of assets from the Weatherford facility of $0.7 million and $0.6 million of other charges. These costs were included in restructuring and other in our Condensed Consolidated Statements of Operations. This program is substantially complete and as of September 30, 2012 the remaining accrued balance is not material.

See Note 16 - Subsequent Event for discussion of the acceleration of our strategic transformation that was announced on October 24, 2012 which includes the Board of Directors approval of our 2012 global process improvement cost reduction program.

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Intangible Assets and Goodwill

9 Months Ended

Sep. 30, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets and Goodwill

Intangible Assets and Goodwill

Intangible Assets

The components of our amortizable intangible assets were as follows:

(In millions)	Trade Names			Software			Customer Relationships			Other			Total
September 30, 2012
Gross carrying amount	$	345.8		$	58.9		$	61.0		$	14.6		$	480.3
Accumulated amortization	(67.6		)	(53.4		)	(52.4		)	(6.3		)	(179.7		)
Intangible assets, net	$	278.2		$	5.5		$	8.6		$	8.3		$	300.6
December 31, 2011
Gross carrying amount	$	347.1		$	57.9		$	61.5		$	13.9		$	480.4
Accumulated amortization	(57.5		)	(51.1		)	(45.5		)	(4.6		)	(158.7		)
Intangible assets, net	$	289.6		$	6.8		$	16.0		$	9.3		$	321.7

Amortization expense for intangible assets consisted of the following:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In millions)	2012		2011		2012		2011
Amortization expense	$	7.2	$	6.6	$	21.7	$	18.8

During the second quarter of 2012, we accelerated the amortization of several intangible assets due to certain business decisions to abandon the intangible assets. These intangible assets had a carrying value of $1.3 million. The $1.3 million of accelerated amortization was recorded in restructuring and other in the Condensed Consolidated Statements of Operations for the nine months ended September 30, 2012.

On December 20, 2011, we acquired intellectual property and other assets from Nine Technology, LLC (Nine Technology). The purchase price included future contingent consideration of $1.0 million based on certain 2012 milestones of which $0.5 million was paid in 2011. During the nine months ended September 30, 2012, we paid the remaining $0.5 million contingent consideration payment.

Goodwill

During 2011, we acquired the assets of MXI Security and the assets of IronKey's secure data storage hardware business. These businesses, along with our Imation Defender brand, make up our Mobile Security reporting unit. The carrying value of our Mobile Security reporting unit includes $31.3 million of goodwill.

We test the carrying amount of a reporting unit's goodwill for impairment on an annual basis during the fourth quarter of each year and if an event occurs or circumstances change that would warrant impairment testing during an interim period. During the three months ended June 30, 2012 we adjusted our internal financial forecast for the Mobile Security reporting unit resulting in a change in timing of the expected cash flows. During the three months ended September 30, 2012, we adjusted our internal financial forecast for the Mobile Security reporting unit reflecting lower expected short-term revenues and slightly lower gross margins as we expand into the medium security markets. We considered these factors to be an event that warranted an interim test as to whether the goodwill was impaired. See Note 12 - Fair Value Measurements for further discussion of our valuation technique.

The Mobile Security reporting unit carrying amount as of June 30, 2012 was $50.2 million and the indicated excess in fair value over the carrying amount in Step 1 of the impairment test performed during the three months ended June 30, 2012 was 43.3 percent. The Mobile Security reporting unit carrying amount as of September 30, 2012 was $48.5 million and the indicated excess in fair value over carrying amount in Step 1 of the impairment test performed during the three months ended September 30, 2012 was 17.7 percent.

This analysis indicates that this goodwill is not impaired. The projections utilized in the analysis reflect management's best assumptions regarding Mobile Security. To the extent that our projections or other assumptions about future economic conditions, the industry in which Mobile Security operates, or the potential for our growth and profitability in this business vary from actual results, it is possible that our conclusion regarding the recoverability of the remaining goodwill could change, which could have a material effect on our financial position and results of operations.

During the first quarter of 2011, we acquired substantially all of the assets of Encryptx which resulted in goodwill of $1.6 million. The goodwill was allocated to our existing Americas-Commercial reporting unit. Based on an interim goodwill impairment test performed at March 31, 2011, we determined that the goodwill in the Americas-Commercial reporting unit, including the assets of Encryptx, exceeded the implied fair value and, therefore, the goodwill was fully impaired. As a result, a $1.6 million charge was recorded during the nine months ended September 30, 2011 in restructuring and other in the Condensed Consolidated Statements of Operations.

See Note 16 - Subsequent Event for discussion of the acceleration of our strategic transformation that was announced on October 24, 2012. These actions may have a negative impact on the future recoverability of our intangible assets and goodwill. We will evaluate the impact of these actions including the reassessment of our intangible asset useful lives and the recoverability of our intangible assets and goodwill during the fourth quarter of 2012.

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Supplemental Balance Sheet Information (Tables)

9 Months Ended

Sep. 30, 2012

Supplemental Balance Sheet Information [Abstract]

Supplemental Balance Sheet Disclosures

	September 30,			December 31,
(In millions)	2012			2011
Accounts Receivable
Accounts receivable	$	196.7		$	253.3
Less reserves and allowances1	(18.5		)	(18.4		)
Accounts receivable, net	$	178.2		$	234.9
Inventories
Finished goods	$	191.3		$	186.7
Work in process	9.5			13.5
Raw materials and supplies	10.7			8.6
Total inventories	$	211.5		$	208.8
Other Current Assets
Deferred income taxes	$	6.7		$	6.1
Prepaid expenses	3.1			6.1
Hedging asset	2.6			4.4
Assets held for sale	2.5			3.3
Restricted cash	2.2			2.2
Other	43.9			27.6
Total other current assets	$	61.0		$	49.7
Property, Plant and Equipment
Property, plant and equipment	$	211.1		$	241.4
Less accumulated depreciation	(155.3		)	(186.0		)
Property, plant and equipment, net	$	55.8		$	55.4
Other Assets
Deferred income taxes	$	15.7		$	15.8
Other	11.7			8.6
Total other assets	$	27.4		$	24.4
Other Current Liabilities
Rebates	$	41.7		$	45.2
Accrued copyright levies	26.1			19.7
Litigation settlement — current2	—			18.0
Accrued payroll	10.4			13.2
Accrued royalties	5.9			10.7
Employee separation costs	3.1			5.9
Hedging liability	2.0			1.6
Other	39.8			36.9
Total other current liabilities	$	129.0		$	151.2
Other Liabilities
Pension	$	22.4		$	29.3
Contingent consideration	0.9			9.2
Deferred income taxes	0.1			0.1
Other	28.1			30.6
Total other liabilities	$	51.5		$	69.2

¹Accounts receivable reserves and allowances include estimated amounts for customer returns, discounts on payment terms and the inability of certain customers to make the required payment.

²On July 13, 2012, we made the final $16.5 million payment associated with the settlement agreement of our litigation with Philips Electronics N.V., U.S. Philips Corporation and North American Philips Corporation.

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Segment Information

9 Months Ended

Sep. 30, 2012

Segment Reporting [Abstract]

Segment Information

Segment Information

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.

We evaluate segment performance based on revenue and operating income (loss). Revenue for each segment is generally based on customer location where the product is shipped. The operating income (loss) reported in our segments excludes corporate and other unallocated amounts. Although such amounts are excluded from the business segment results, they are included in reported consolidated results. Corporate and unallocated amounts include litigation settlement expense, goodwill impairment, intangible asset abandonment, research and development expense, corporate expense, stock-based compensation expense, inventory write-offs related to our restructuring programs and restructuring and other expenses which are not allocated to the segments.

Net revenue and operating income (loss) by segment were as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In millions)	2012		2011		2012		2011
Net Revenue
Americas	$	117.3	$	141.4	$	373.6	$	427.3
Europe	44.3		56.8		149.0		183.2
North Asia	62.0		75.3		194.4		229.6
South Asia	24.6		35.1		83.5		108.0
Total	$	248.2	$	308.6	$	800.5	$	948.1

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(In millions)	2012			2011			2012			2011
Operating Income (Loss)
Americas	$	(0.5	)	$	(0.8	)	$	3.0		$	2.3
Europe	(1.9		)	4.6			(5.8		)	7.8
North Asia	0.7			(0.3		)	2.8			9.1
South Asia	(0.5		)	1.4			0.8			2.3
Corporate and unallocated	(4.3		)	(13.2		)	(26.5		)	(42.5		)
Total	$	(6.5	)	$	(8.3	)	$	(25.7	)	$	(21.0	)

We have three major product categories: traditional storage, secure and scalable storage, and audio and video information. Traditional storage products include optical products, magnetic products and other traditional storage media products. Optical products include primarily 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, including encrypted and biometric universal serial bus (USB) drives, encrypted and biometric hard disk drives, secure portable desktop solutions, and software solutions, including products which contain various security features such as password authentication, encryption and remote manageability, RDX cartridges and drives, and data protection and data archive appliances. Audio and video information products include primarily audio electronics such as portable stereo systems, iPod® docking stations and accessories, and other accessories such as CD and DVD jewel cases and headphones.

Net revenue by major product category was as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In millions)	2012		2011		2012		2011
Net Revenue
Traditional storage
Optical products	$	97.0	$	126.8	$	317.8	$	383.8
Magnetic products	68.3		76.9		215.0		244.7
Other traditional storage	3.2		13.0		11.7		38.6
Total traditional storage	168.5		216.7		544.5		667.1
Secure and scalable storage	44.5		48.2		147.3		156.3
Audio and video information	35.2		43.7		108.7		124.7
Total	$	248.2	$	308.6	$	800.5	$	948.1

See Note 16 - Subsequent Event for discussion of the acceleration of our strategic transformation that was announced on October 24, 2012, which includes the realignment of our global business into two new business units to be effective at year-end. We will be assessing the impact of this realignment on our reporting segments during the fourth quarter of 2012. Any changes in our reporting segments will be reported as of December 31, 2012.

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Income Taxes

6 Months Ended

Jun. 30, 2012

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

For interim income tax reporting, we are required to estimate our annual effective tax rate and apply it to year-to-date pre-tax ordinary income/loss excluding unusual or infrequently occurring discrete items. Tax jurisdictions with losses for which tax benefits cannot be realized are excluded.

For the three and nine months ended September 30, 2012 we recorded an income tax benefit of $(0.3) million and an income tax provision of $0.6 million, respectively. The effective income tax rate for the three and nine months ended September 30, 2012 was 4.5 percent and (2.0) percent, respectively, compared with (17.5) percent and (15.4) percent in the same periods last year. The effective rate changes were primarily due to the full valuation allowance on U.S. deferred tax assets, lower withholding tax expense, settlements with taxing authorities concluded during 2012 and the mix of taxable income (loss) by country.

The effective income tax rate for the three and nine months ended September 30, 2012 differs from the U.S. federal statutory rate of 35 percent primarily due to the full valuation allowance on U.S. deferred tax assets, the effects of foreign tax rate differential and settlements with taxing authorities concluded during 2012.

We conduct business globally. As a result, we file income tax returns in multiple jurisdictions and are subject to examination by taxing authorities throughout the world. Our U.S. federal income tax returns for 2004 through 2011 remain subject to examination by the Internal Revenue Service (IRS). The IRS completed its field examination of our U.S. federal income tax returns for the years 2006 through 2008 in the second quarter of 2010. The IRS completed its field examination for the 2009 tax year in the fourth quarter of 2011. We have protested certain IRS positions in both audit cycles and the matters are currently pending in the IRS appeals process. With few exceptions, we are no longer subject to examination by foreign tax jurisdictions or state and city tax jurisdictions for years before 2005. In the event that we have determined not to file tax returns with a particular state or city, all years remain subject to examination by the tax jurisdiction.

We accrue for the effects of uncertain tax positions and the related potential penalties and interest. During the nine months ended September 30, 2012 we recognized $0.7 million of previously recorded unrecognized tax benefits due to settlements with taxing authorities. Our liability related to uncertain tax positions, which is presented within the Other liabilities line on our Condensed Consolidated Balance Sheets and which includes interest and penalties, was $16.9 million and $17.6 million as of September 30, 2012 and December 31, 2011, respectively. It is reasonably possible that the amount of the unrecognized tax benefit with respect to certain of our unrecognized tax positions will increase or decrease during the next twelve months; however it is not possible to reasonably estimate the effect upon the unrecognized tax benefits at this time.

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Stock-Based Compensation

9 Months Ended

Sep. 30, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

Stock-Based Compensation

Stock compensation consisted of the following:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In millions)	2012		2011		2012		2011
Stock compensation expense	$	1.9	$	1.9	$	5.5	$	5.5

We have stock-based compensation awards consisting of stock options and restricted stock outstanding under four plans (collectively, the Stock Plans) which are described in detail in our 2011 Annual Report on Form 10-K. As of September 30, 2012 there were 2,021,857 shares available for grant under our 2011 Stock Incentive Plan. No further shares were available for grant under any other stock incentive plan.

Stock Options

The following table summarizes our stock option activity:

	Stock Options		Weighted Average Exercise Price
Outstanding December 31, 2011	5,679,579		$	19.87
Granted	1,158,882		5.82
Exercised	—		—
Canceled	(521,772	)	26.85
Forfeited	(199,406	)	9.84
Outstanding September 30, 2012	6,117,283		$	16.84
Exercisable as of September 30, 2012	3,742,221		$	22.60

The outstanding options are non-qualified and generally have a term of ten years. The weighted average grant date fair value of options that were granted for the nine months ended September 30, 2012 was $2.54 per award. The following table summarizes our weighted average assumptions used in the valuation of options:

	2012
Volatility	45.1	%
Risk-free interest rate	1.1	%
Expected life (months)	71
Dividend yield	—

As of September 30, 2012, there was $6.5 million of total unrecognized compensation expense related to non-vested stock options granted under our Stock Plans. That expense is expected to be recognized over a weighted average period of 2.0 years.

Restricted Stock

The following table summarizes our restricted stock activity:

	Restricted Stock		Weighted Average Grant Date Fair Value Per Share
Nonvested as of December 31, 2011	795,046		$	10.02
Granted	657,916		5.79
Vested	(305,509	)	10.45
Forfeited	(88,806	)	10.24
Nonvested as of September 30, 2012	1,058,647		$	7.24

The cost of the awards is determined using the fair value of the Company’s common stock on the date of the grant and compensation is recognized on a straight-line basis over the requisite vesting period.

As of September 30, 2012, there was $5.9 million of total unrecognized compensation expense related to non-vested restricted stock granted under our Stock Plans. That expense is expected to be recognized over a weighted average period of 1.9 years.

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Retirement Plans

9 Months Ended

Sep. 30, 2012

Compensation and Retirement Disclosure [Abstract]

Retirement Plans

Retirement Plans

Pension Plans

During the nine months ended September 30, 2012 we contributed $4.3 million to our worldwide pension plans.

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 decline. Participants in our U.S. defined benefit pension plan have the option of receiving cash lump sum payments when exiting the plan, which a number of participants exiting the plan have elected to receive. Lump sum payments for the nine months ended September 30, 2012 have exceeded our expected 2012 service and interest costs. As a result, a partial settlement event occurred during the three months ended September 30, 2012 and we recognized a loss of $0.5 million. A settlement loss of $0.9 million was recognized for the three months ended September 30, 2011. Settlement losses of $2.0 million and $1.9 million were recorded for the nine months ended September 30, 2012 and 2011, respectively. These settlement losses are included in restructuring and other in our Condensed Consolidated Statements of Operations. Additionally, in connection with the settlement and as required by pension accounting, we remeasured the funded status of our U.S. defined benefit plan as of September 30, 2012.

Components of net periodic pension cost included the following:

	United States						International					United States						International
	Three Months Ended September 30,											Nine Months Ended September 30,
(In millions)	2012			2011			2012		2011			2012			2011			2012		2011
Service cost	$	—		$	—		$	0.1	$	0.1		$	—		$	—		$	0.3	$	0.3
Interest cost	0.8			3.4			—		0.7			2.4			5.6			—		2.1
Expected return on plan assets	(1.4		)	(4.8		)	—		(0.9		)	(4.3		)	(7.9		)	—		(2.6		)
Amortization of net actuarial loss	0.4			0.7			0.1		0.1			1.0			1.1			0.3		0.3
Amortization of prior service (credit) cost	—			—			—		(0.1		)	—			—			—		(0.3		)
Net periodic pension cost (credit)	$	(0.2	)	$	(0.7	)	$	0.2	$	(0.1	)	$	(0.9	)	$	(1.2	)	$	0.6	$	(0.2	)
Settlement	0.5			0.9			—		—			2.0			1.9			—		—
Total pension cost (credit)	$	0.3		$	0.2		$	0.2	$	(0.1	)	$	1.1		$	0.7		$	0.6	$	(0.2	)

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Debt

9 Months Ended

Sep. 30, 2012

Debt Disclosure [Abstract]

Debt

Debt

On May 18, 2012, we entered into an amendment (the Amendment) to the Amended and Restated Credit Agreement (as amended to date, Credit Agreement) described in Note 11 - Debt of our Annual Report on Form 10-K for the year ended December 31, 2011. The Amendment modified the Credit Agreement by extending the expiration date of the borrowing arrangement to May 18, 2017, requiring that the equity interests of material foreign subsidiaries be pledged to support the obligations of Imation Europe B.V. (European Borrower), lowering the applicable margin on interest and lowering the minimum Consolidated Fixed Charge Coverage Ratio (as defined in the Credit Agreement) as well as certain other immaterial changes.

The Credit Agreement includes a senior revolving credit facility amount of $200 million, including sub-limits of $150 million in the United States and $50 million in Europe. Advances are limited to the lesser of the sublimit(s) and the borrowing base as defined in the Credit Agreement. As of September 30, 2012, our borrowing capacity under this arrangement was $102.2 million in the United States and $15.2 million in Europe.

Until August 15, 2012, borrowings under the Credit Agreement bore interest at a rate equal to (1) the Eurodollar Rate (as defined in the Credit Agreement) plus 2.00 percent or (2) the Base Rate (as defined in the Credit Agreement) plus 1.00 percent. Since such date the applicable margins for the Eurodollar Rate and the Base Rate have been subject to adjustments based on average daily availability (as defined in the Credit Agreement), as set forth in the definition of the “Applicable Rate” in the Credit Agreement. The Applicable Rate is a reduction of 125 basis points from the rate in effect prior to the Amendment.

The applicable interest rate based on our borrowing capacity at September 30, 2012 was approximately 4.0 percent, however, we had no amounts outstanding under the Credit Agreement as of or during the nine months ended September 30, 2012.

The Credit Agreement contains conditional financial covenants that require Imation Corp. to have a Consolidated Fixed Charge Coverage Ratio (as defined in the Credit Agreement) during certain periods as described in the Credit Agreement and a liquidity requirement during certain periods as described in the Credit Agreement. Previously the Consolidated Fixed Coverage Ratio was set to be not less than 1.20 to 1.00, and the Amendment lowered such ratio to be not less than 1:00. The Amendment also changed the liquidity requirement to a domestic borrowing availability requirement of $30.0 million. We were in compliance with these financial covenants as of September 30, 2012.

In connection with the Credit Agreement, we capitalized $2.6 million of debt issuance costs. These costs were recorded to Other assets in the Condensed Consolidated Balance Sheets as of September 30, 2012 and will be amortized over the term of the Credit Agreement.

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Intangible Assets and Goodwill - Intangible Assets (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Acquired Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	$ 480.3		$ 480.3		$ 480.4
Accumulated amortization	(179.7)		(179.7)		(158.7)
Intangible assets, net	300.6		300.6		321.7
Amortization expense	7.2	6.6	21.7	18.8
Trade Names
Acquired Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	345.8		345.8		347.1
Accumulated amortization	(67.6)		(67.6)		(57.5)
Intangible assets, net	278.2		278.2		289.6
Software
Acquired Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	58.9		58.9		57.9
Accumulated amortization	(53.4)		(53.4)		(51.1)
Intangible assets, net	5.5		5.5		6.8
Customer Relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	61.0		61.0		61.5
Accumulated amortization	(52.4)		(52.4)		(45.5)
Intangible assets, net	8.6		8.6		16.0
Other
Acquired Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	14.6		14.6		13.9
Accumulated amortization	(6.3)		(6.3)		(4.6)
Intangible assets, net	$ 8.3		$ 8.3		$ 9.3

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Shareholders' Equity - Comprehensive Loss (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Net unrealized (losses) gains on derivative financial instruments:
Net holding (losses) gains arising during the period	$ (1.0)	$ 0.8	$ 0.4	$ (1.7)
Tax benefit (expense)	0.4	(0.2)	(0.1)	0.5
Reclassification adjustment for net realized (gains) losses included in net loss	(0.6)	0.4	(1.7)	0.6
Tax expense (benefit)	0.1	(0.1)	0.5	(0.2)
Total net unrealized (losses) gains on derivative financial instruments	(1.1)	0.9	(0.9)	(0.8)
Net pension adjustments:
Reclassification of adjustments for defined benefit plans recorded in net loss	4.0	(18.4)	4.9	(16.6)
Tax benefit	(1.5)	7.0	(1.9)	6.3
Total net pension adjustments	2.5	(11.4)	3.0	(10.3)
Unrealized foreign currency translation gains (losses)	$ 3.1	$ (11.8)	$ 1.3	$ (0.8)

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Subsequent Events

9 Months Ended

Sep. 30, 2012

Subsequent Event [Abstract]

Subsequent Events

Subsequent Event

On October 24, 2012, we announced the acceleration of our strategic transformation, including the realignment of our global business into two new business units, a cost reduction program, and the Company's increased focus on data storage and security including exploring strategic options for its consumer electronics brands and businesses.

The realignment of our global business into two new business units will better align the Company with our key commercial and consumer channels. The two business units will consist of Tiered Storage and Security Solutions (TSS), which will focus on small and medium business, enterprise and government customers; and Consumer Storage and Accessories (CSA), which will focus on retail channels. The realignment will be effective at year-end. We also plan to intensify our focus and investment in data storage and security, and explore strategic alternatives for our consumer electronic brands and businesses currently included in our Audio and video information major product group.

On October 22, 2012, the Board of Directors approved the Company's restructuring program related to this acceleration in order to realign its business structure and reduce operating expenses by approximately 25 percent. This program will address product line rationalization and infrastructure, and include a reduction of approximately 20 percent of our global workforce. These actions will be initiated during our fourth quarter 2012 and implemented during 2013. We anticipate we will incur cash charges up to $40 million, with total charges between $50 million and $60 million, the majority of which will occur in 2013. This restructuring action will include between $15 million and $25 million for severance and one-time termination benefits, between $5 million and $15 million for asset impairments and between $20 million and $25 million for other charges.

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Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs

Stock compensation consisted of the following:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In millions)	2012		2011		2012		2011
Stock compensation expense	$	1.9	$	1.9	$	5.5	$	5.5

Schedule of Share-based Compensation, Stock Options, Activity

The following table summarizes our stock option activity:

	Stock Options		Weighted Average Exercise Price
Outstanding December 31, 2011	5,679,579		$	19.87
Granted	1,158,882		5.82
Exercised	—		—
Canceled	(521,772	)	26.85
Forfeited	(199,406	)	9.84
Outstanding September 30, 2012	6,117,283		$	16.84
Exercisable as of September 30, 2012	3,742,221		$	22.60

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

The following table summarizes our weighted average assumptions used in the valuation of options:

	2012
Volatility	45.1	%
Risk-free interest rate	1.1	%
Expected life (months)	71
Dividend yield	—

Schedule of Share-based Compensation, Restricted Stock Activity

The following table summarizes our restricted stock activity:

	Restricted Stock		Weighted Average Grant Date Fair Value Per Share
Nonvested as of December 31, 2011	795,046		$	10.02
Granted	657,916		5.79
Vested	(305,509	)	10.45
Forfeited	(88,806	)	10.24
Nonvested as of September 30, 2012	1,058,647		$	7.24

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Shareholders' Equity - Treasury Stock (Details) (USD $) In Millions, except Share data, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	May 02, 2012
Equity [Abstract]
Number of shares authorized to be repurchased			5,000,000
Stock Repurchased During Period, Shares	800,000
Payments for Repurchase of Common Stock	$ 4.9	$ 9.7
Remaining number of shares authorized to be repurchased	4,200,000
Average price per share of treasury stock acquired and held	$ 23.77
Movement in Treasury Stock [Roll Forward]
Balance as of December 31, 2011 (shares)	4,663,923
Purchases (shares)	840,170
Exercise of stock options (shares)	0
Restricted stock grants and other (shares)	(518,192)
401(k) matching contribution (shares)	(430,988)
Balance as of September 30, 2012 (shares)	4,554,913

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Stock-Based Compensation - Fair Value Assumptions (Details) (Stock Options)	9 Months Ended
	Sep. 30, 2012
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Volatility	45.10%
Risk free interest rate	1.10%
Expected life (months)	71 months
Dividend yield	0.00%

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Condensed Consolidated Statements of Cash Flows (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Cash Flows from Operating Activities:
Net loss	$ (30.5)	$ (33.8)
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation	6.1	8.4
Amortization	21.7	18.8
Stock-based compensation	5.5	5.5
Deferred income taxes, net of valuation allowance	(2.3)	(0.2)
Goodwill impairment	0	1.6
Intangible asset abandonment	1.3	0
Asset disposals	0	7.0
Inventory write-offs	0	1.5
Pension settlement	2.0	1.9
Litigation settlement	0	2.0
Contingent consideration adjustment	(8.3)	0
Other	3.1	10.2
Changes in operating assets and liabilities:
Litigation settlement payments	(18.5)	(10.9)
Accounts receivable	56.6	49.7
Inventories	(2.8)	(32.1)
Other assets	(14.0)	(15.7)
Accounts payable	(33.2)	(20.6)
Accrued payroll and other liabilities	(9.3)	(41.3)
Restricted cash	0	16.4
Net cash used in operating activities	(22.6)	(31.6)
Cash Flows from Investing Activities:
Capital expenditures	(8.4)	(6.1)
Proceeds from sale of assets	1.4	0
Proceeds from investments	0.9	0
Acquisitions	0	(26.0)
Net cash used in investing activities	(6.1)	(32.1)
Cash Flows from Financing Activities:
Purchase of treasury stock	(4.9)	(9.7)
Debt issuance costs	(2.4)	0
Contingent consideration payments	(1.2)	0
Exercise of stock options	0	0.6
Net cash used in financing activities	(8.5)	(9.1)
Effect of exchange rate changes on cash and cash equivalents	0.4	0.8
Net change in cash and cash equivalents	(36.8)	(72.0)
Cash and cash equivalents — beginning of period	223.1	304.9
Cash and cash equivalents - end of period	$ 186.3	$ 232.9

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Supplemental Balance Sheet Information

9 Months Ended

Sep. 30, 2012

Supplemental Balance Sheet Information [Abstract]

Supplemental Balance Sheet Information

Supplemental Balance Sheet Information

	September 30,			December 31,
(In millions)	2012			2011
Accounts Receivable
Accounts receivable	$	196.7		$	253.3
Less reserves and allowances1	(18.5		)	(18.4		)
Accounts receivable, net	$	178.2		$	234.9
Inventories
Finished goods	$	191.3		$	186.7
Work in process	9.5			13.5
Raw materials and supplies	10.7			8.6
Total inventories	$	211.5		$	208.8
Other Current Assets
Deferred income taxes	$	6.7		$	6.1
Prepaid expenses	3.1			6.1
Hedging asset	2.6			4.4
Assets held for sale	2.5			3.3
Restricted cash	2.2			2.2
Other	43.9			27.6
Total other current assets	$	61.0		$	49.7
Property, Plant and Equipment
Property, plant and equipment	$	211.1		$	241.4
Less accumulated depreciation	(155.3		)	(186.0		)
Property, plant and equipment, net	$	55.8		$	55.4
Other Assets
Deferred income taxes	$	15.7		$	15.8
Other	11.7			8.6
Total other assets	$	27.4		$	24.4
Other Current Liabilities
Rebates	$	41.7		$	45.2
Accrued copyright levies	26.1			19.7
Litigation settlement — current2	—			18.0
Accrued payroll	10.4			13.2
Accrued royalties	5.9			10.7
Employee separation costs	3.1			5.9
Hedging liability	2.0			1.6
Other	39.8			36.9
Total other current liabilities	$	129.0		$	151.2
Other Liabilities
Pension	$	22.4		$	29.3
Contingent consideration	0.9			9.2
Deferred income taxes	0.1			0.1
Other	28.1			30.6
Total other liabilities	$	51.5		$	69.2

¹Accounts receivable reserves and allowances include estimated amounts for customer returns, discounts on payment terms and the inability of certain customers to make the required payment.

²On July 13, 2012, we made the final $16.5 million payment associated with the settlement agreement of our litigation with Philips Electronics N.V., U.S. Philips Corporation and North American Philips Corporation.

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Retirement Plans (Tables)

9 Months Ended

Sep. 30, 2012

Compensation and Retirement Disclosure [Abstract]

Schedule of Net Benefit Costs

Components of net periodic pension cost included the following:

	United States						International					United States						International
	Three Months Ended September 30,											Nine Months Ended September 30,
(In millions)	2012			2011			2012		2011			2012			2011			2012		2011
Service cost	$	—		$	—		$	0.1	$	0.1		$	—		$	—		$	0.3	$	0.3
Interest cost	0.8			3.4			—		0.7			2.4			5.6			—		2.1
Expected return on plan assets	(1.4		)	(4.8		)	—		(0.9		)	(4.3		)	(7.9		)	—		(2.6		)
Amortization of net actuarial loss	0.4			0.7			0.1		0.1			1.0			1.1			0.3		0.3
Amortization of prior service (credit) cost	—			—			—		(0.1		)	—			—			—		(0.3		)
Net periodic pension cost (credit)	$	(0.2	)	$	(0.7	)	$	0.2	$	(0.1	)	$	(0.9	)	$	(1.2	)	$	0.6	$	(0.2	)
Settlement	0.5			0.9			—		—			2.0			1.9			—		—
Total pension cost (credit)	$	0.3		$	0.2		$	0.2	$	(0.1	)	$	1.1		$	0.7		$	0.6	$	(0.2	)

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Restructuring and Other Expense - Restructuring Plans (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended		3 Months Ended			9 Months Ended		3 Months Ended			20 Months Ended	3 Months Ended			20 Months Ended			3 Months Ended			20 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012 2011 Corporate Strategy Restructuring Program	Jun. 30, 2012 2011 Corporate Strategy Restructuring Program	Mar. 31, 2012 2011 Corporate Strategy Restructuring Program	Sep. 30, 2012 2011 Corporate Strategy Restructuring Program	Sep. 30, 2012 2011 Manufacturing Redesign Restructuring Program	Sep. 30, 2012 Severance and Related 2011 Corporate Strategy Restructuring Program	Jun. 30, 2012 Severance and Related 2011 Corporate Strategy Restructuring Program	Mar. 31, 2012 Severance and Related 2011 Corporate Strategy Restructuring Program	Sep. 30, 2012 Severance and Related 2011 Corporate Strategy Restructuring Program	Sep. 30, 2012 Lease Termination Costs 2011 Corporate Strategy Restructuring Program	Jun. 30, 2012 Lease Termination Costs 2011 Corporate Strategy Restructuring Program	Mar. 31, 2012 Lease Termination Costs 2011 Corporate Strategy Restructuring Program	Sep. 30, 2012 Lease Termination Costs 2011 Corporate Strategy Restructuring Program	Sep. 30, 2012 Restructuring Charges, Inventory Write-Off 2011 Corporate Strategy Restructuring Program	Sep. 30, 2012 Pension curtailment charge 2011 Corporate Strategy Restructuring Program	Sep. 30, 2012 Other 2011 Corporate Strategy Restructuring Program	Jun. 30, 2012 Other 2011 Corporate Strategy Restructuring Program	Mar. 31, 2012 Other 2011 Corporate Strategy Restructuring Program	Sep. 30, 2012 Other 2011 Corporate Strategy Restructuring Program
Restructuring Cost and Reserve [Line Items]
Restructuring, cost incurred to date													$ 13.2				$ 3.5	$ 1.6	$ 0.3				$ 0.8
Gain on sale of assets	0	0	0.7	0					0.7
Other restructuring charges	0.1	0.8	1.2	1.2					0.6
Restructuring Reserve [Roll Forward]
Accrued balance, beginning of period					5.3	3.9	5.2	5.2		4.2	3.3	4.6		1.1	0.6	0.6				0	0	0
Restructuring Charges	0.1	4.3	3.8	6.4	0.1	3.1	0.7	3.9		0	2.4	0.4		0	0.5	0				0.1	0.2	0.3
Usage					(1.6)	(1.6)	(2.1)			(1.5)	(1.4)	(1.8)		0	0	0				(0.1)	(0.2)	(0.3)
Currency impacts					0	(0.1)	0.1			0	(0.1)	0.1		0	0	0				0	0	0
Accrued balance, end of period					$ 3.8	$ 5.3	$ 3.9	$ 3.8		$ 2.7	$ 4.2	$ 3.3	$ 2.7	$ 1.1	$ 1.1	$ 0.6	$ 1.1			$ 0	$ 0	$ 0	$ 0

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Litigation, Commitments and Contingencies

9 Months Ended

Sep. 30, 2012

Commitments and Contingencies Disclosure [Abstract]

Litigation, Commitments and Contingencies

Litigation, Commitments and Contingencies

Litigation

We are the subject of various pending or threatened legal actions in the ordinary course of our business. All such matters are subject to many uncertainties and outcomes that are not predictable with assurance. Additionally, our businesses are subject to allegations of patent infringement by our competitors as well as by non-practicing entities (NPEs), sometimes referred to as “patent trolls,” who may seek monetary settlements from us, our competitors, suppliers and resellers. Consequently, as of September 30, 2012, we are unable to ascertain with certainty the ultimate aggregate amount of any monetary liability or financial impact that we may incur with respect to these matters. While these matters could materially affect operating results depending upon the final resolution in future periods, it is our opinion that after final disposition, any monetary liability beyond that provided in the Condensed Consolidated Balance Sheet as of September 30, 2012 would not be material to our financial position.

On June 14, 2011, Trek 2000 International Ltd and certain of its affiliates (Trek) filed a complaint asking the International Trade Commission (ITC) to commence an investigation against us and various others. Trek alleged that Imation and others unlawfully imported and sold into the United States certain USB portable storage devices that allegedly infringed several of Trek's U.S. patents. On August 15, 2011, we filed an answer to Trek's complaint, denying liability and asserting that Trek failed to meet certain requirements to bring its complaint to the ITC. A hearing with the ITC was scheduled for May 9, 2012. On May 8, 2012, Trek withdrew its complaint and terminated the investigation before the ITC.

On June 19, 2009, Advanced Research Corp. (ARC) sued Imation in Ramsey County District Court for breach of contract relating to a supply agreement under which we purchased our requirements for magnetic heads to write servo patterns on magnetic tape prior to sale of the finished cartridges, requesting the court to order that Imation pay damages and return the purchased heads to ARC. In September 2011, we agreed to a settlement of $2.0 million which was paid during the nine months ended September 30, 2012.

Copyright Levies

In many European Union (EU) member countries, the sale of recordable optical media is subject to a private copying levy. The levies are intended to compensate copyright holders with "fair compensation" for the harm caused by private copies made by natural persons of protected works under the European Copyright Directive, which became effective in 2002 (Directive). Levies are generally charged directly to the importer of the product upon the sale of the products. Payers of levies remit levy payments to collecting societies which in turn distribute funds to copyright holders. Levy systems of EU member countries must comply with the Directive, but individual member countries are responsible for administering their own systems. Since implementation, the levy systems have been the subject of numerous litigation and law making activities. On October 21, 2010, the European Court of Justice (ECJ) ruled that fair compensation is an autonomous European law concept that was introduced by the Directive and must be uniformly applied in all EU member states. The ECJ stated that fair compensation must be calculated based on the harm caused to the authors of protected works by private copying. The ECJ also stated that the indiscriminate application of the private copying levy to devices not made available to private users and clearly reserved for uses other than private copying is incompatible with the Directive. The ECJ ruling made clear that copyright holders are only entitled to fair compensation payments (funded by levy payments made by the Company) when sales of optical media are made to natural persons intending to make private copies. Based on this development, we began in 2010 withholding levy payments to various collecting societies. We continued to accrue a liability for levies arising from consumer sales. As of September 30, 2012 and December 31, 2011, we had recorded a liability of $26.1 million and $19.7 million, respectively.

Since the October 2010 ECJ ruling, quarterly we evaluated on a country-by-country basis whether: (i) levies should be accrued on current period commercial and/or consumer channel sales; and, (ii) levies accrued, but unpaid, on prior period 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. If we determine a levy obligation is remote, then, in the period of such determination we discontinue accruing current period levies and reverse previously accrued but unpaid amounts by reducing cost of goods sold in the Condensed Consolidated Statements of Operations. For the three and nine months ended September 30, 2012, we did not reverse any amounts into cost of goods sold for prior year obligations. For the three and nine months ending September 30, 2011, cost of goods sold was reduced by $7.2 million and $12.7 million, respectively, for the reversal of prior year obligations that were determined to be remote.

We are subject to several pending or threatened legal actions by the individual European national levy collecting societies. Those actions generally seek payment of the commercial and consumer optical levies withheld by Imation. Imation has corresponding claims in those actions seeking reimbursement of levies improperly collected by those collecting societies. Although these actions are subject to the uncertainties inherent in the litigation process, based on the information presently available to us, management does not expect that the ultimate resolution of these actions will have a material adverse effect on our financial condition, results of operations or cash flows.

We anticipate that court decisions may be rendered in early 2013 that may directly or indirectly impact our levy exposure in specific European countries which could trigger a review of our levy exposure in those countries.