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 March 31, 2013

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: 41,512,668 shares of Common Stock, par value $0.01 per share, were outstanding May 3, 2013.

IMATION CORP.

TABLE OF CONTENTS

	PAGE
PART I. FINANCIAL INFORMATION	3
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2013 and 2012	3
Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2013 and 2012	4
Condensed Consolidated Balance Sheets as of March 31, 2013 and December 31, 2012	5
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2013 and 2012	6
Notes to Condensed Consolidated Financial Statements	7
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	18
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	26
ITEM 4. CONTROLS AND PROCEDURES	26
PART II. OTHER INFORMATION	26
ITEM 1. LEGAL PROCEEDINGS	26
ITEM 1A. RISK FACTORS	27
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	27
ITEM 3. DEFAULTS UPON SENIOR SECURITIES	27
ITEM 4. MINE SAFETY DISCLOSURES	27
ITEM 5. OTHER INFORMATION	27
ITEM 6. EXHIBITS	27
SIGNATURE	29
EXHIBIT INDEX	30
EX-10.1
EX-10.2
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
	March 31,
	2013			2012
Net revenue	$	224.4		$	263.3
Cost of goods sold	182.3			209.7
Gross profit	42.1			53.6
Operating expenses:
Selling, general and administrative	49.3			52.3
Research and development	5.4			5.6
Restructuring and other	2.1			1.3
Total	56.8			59.2
Operating loss	(14.7		)	(5.6		)
Other (income) expense:
Interest income	—			(0.1		)
Interest expense	0.7			0.9
Other, net	(0.2		)	1.5
Total	0.5			2.3
Loss from continuing operations before income taxes	(15.2		)	(7.9		)
Income tax provision	0.4			1.3
Loss from continuing operations	(15.6		)	(9.2		)
Discontinued operations:
Loss from operations of discontinued businesses, net of income taxes	(5.5		)	(3.0		)
Net loss	$	(21.1	)	$	(12.2	)
Loss per common share — basic:
Continuing operations	$	(0.39	)	$	(0.25	)
Discontinued operations	(0.14		)	(0.08		)
Net loss	(0.52		)	(0.33		)
Loss per common share — diluted:
Continuing operations	$	(0.39	)	$	(0.25	)
Discontinued operations	(0.14		)	(0.08		)
Net loss	(0.52		)	(0.33		)
Weighted average shares outstanding — basic:	40.4			37.5
Weighted average shares outstanding — diluted:	40.4			37.5

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
	March 31,
	2013			2012
Net loss	$	(21.1	)	$	(12.2	)
Other comprehensive (loss) income, net of tax:
Net unrealized gains on derivative financial instruments:
Net holding gains arising during the period	2.8			0.5
Reclassification adjustment for net realized (gains) losses included in net loss	(1.3		)	0.4
Total net unrealized gains on derivative financial instruments	1.5			0.9
Net pension adjustments:
Reclassification of adjustments for defined benefit plans recorded in net loss	0.4			0.2
Unrealized foreign currency translation (losses) gains	(4.2		)	0.6
Total other comprehensive (loss) income, net of tax	(2.3		)	1.7
Comprehensive loss	$	(23.4	)	$	(10.5	)

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)

	March 31,		December 31,
	2013		2012
Assets
Current assets
Cash and cash equivalents	$	98.2	$	108.7
Accounts receivable, net	176.2		220.8
Inventories	133.6		166.0
Other current assets	92.2		61.6
Total current assets	500.2		557.1
Property, plant and equipment, net	55.8		58.9
Intangible assets, net	75.8		81.9
Goodwill	70.6		73.5
Other assets	22.7		22.1
Total assets	$	725.1	$	793.5
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable	$	136.5	$	162.7
Short-term debt	20.0		20.0
Other current liabilities	138.4		158.4
Total current liabilities	294.9		341.1
Other liabilities	50.6		52.0
Total liabilities	345.5		393.1
Commitments and contingencies (Note 15)
Shareholders’ equity	379.6		400.4
Total liabilities and shareholders’ equity	$	725.1	$	793.5

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)

	Three Months Ended
	March 31,
	2013			2012
Cash Flows from Operating Activities:
Net loss	$	(21.1	)	$	(12.2	)
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization	6.4			9.3
Stock-based compensation	1.8			1.9
Other, net	1.1			1.7
Changes in operating assets and liabilities:	2.8			(6.7		)
Net cash used in operating activities	(9.0		)	(6.0		)
Cash Flows from Investing Activities:
Capital expenditures	(1.4		)	(2.0		)
Purchase price adjustment	1.6			—
Proceeds from sale of assets	—			1.4
Net cash provided by (used in) investing activities	0.2			(0.6		)
Cash Flows from Financing Activities:
Contingent consideration payments	(0.5		)	(0.7		)
Net cash used in financing activities	(0.5		)	(0.7		)
Effect of exchange rate changes on cash and cash equivalents	(1.2		)	0.4
Net change in cash and cash equivalents	(10.5		)	(6.9		)
Cash and cash equivalents — beginning of period	108.7			223.1
Cash and cash equivalents — end of period	$	98.2		$	216.2

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, 2012 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, 2012.

On February 13, 2013, we announced our plans to divest our XtremeMac and Memorex consumer electronics businesses. The results of operations for these businesses are presented in our Condensed Consolidated Statements of Operations as discontinued operations for all periods presented. The consumer storage business under the Memorex^TM and TDK Life on Record^TM brands will be retained. See Note 4 - Acquisitions and Divestitures for further information.

We have revised the Statement of Cash Flows for the three months ended March 31, 2012 from amounts previously filed to reclassify $0.7 million of payments made for contingent consideration as a financing activity from its previous presentation as an investing activity. We believe this revision is immaterial to the previously issued Statement of Cash Flows for the three months ended March 31, 2012.

Note 2 — Recently Issued or Adopted Accounting Pronouncements

Management has assessed the potential impact of accounting standards that have been issued but are not yet effective and has determined that no such standards are expected to have a material impact to our Condensed Consolidated Financial Statements.

Note 3 — (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 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:

7

	Three Months Ended
	March 31,
(In millions, except for per share amounts)	2013			2012
Numerator:
Loss from continuing operations	$	(15.6	)	$	(9.2	)
Loss from discontinued operations	(5.5		)	(3.0		)
Net loss	$	(21.1	)	$	(12.2	)
Denominator:
Weighted average number of common shares outstanding during the period	40.4			37.5
Dilutive effect of stock-based compensation plans	—			—
Weighted average number of diluted shares outstanding during the period	40.4			37.5
(Loss) earnings per common share — basic
Continuing operations	$	(0.39	)	$	(0.25	)
Discontinued operations	(0.14		)	(0.08		)
Net loss	(0.52		)	(0.33		)
(Loss) earnings per common share — diluted
Continuing operations	$	(0.39	)	$	(0.25	)
Discontinued operations	(0.14		)	(0.08		)
Net loss	(0.52		)	(0.33		)
Anti-dilutive shares excluded from calculation	6.5			5.9

Note 4 — Acquisitions and Divestitures

Acquisitions

On December 31, 2012, we acquired Nexsan Corporation (Nexsan), a provider of disk-based storage systems with a portfolio of disk-based and hybrid disk-and-solid-state storage systems, for a purchase price of $120.1 million. The acquisition resulted in $65.5 million of goodwill. During the three months ended March 31, 2013, the purchase price was adjusted to reflect working capital variances in accordance with the merger agreement. This adjustment resulted in a decrease to goodwill of $1.6 million and a cash receipt for this amount. As of March 31, 2013, our purchase price allocation is preliminary pending final evaluation of income tax balances. See Note 6 - Intangible Assets and Goodwill for more information regarding goodwill. We have not shown proforma results for the comparative period for the acquisition of Nexsan as it is not material to our Condensed Consolidated Results of Operations.

On June 4, 2011, we acquired the assets of MXI Security (MXI). The purchase price included a contingent consideration arrangement with an estimated fair value of $0.6 million at December 31, 2012. See Note 4 - Acquisitions in our 2012 Annual Report on Form 10-K for further information regarding the contingent consideration.

We remeasure the estimated fair value of the remaining contingent consideration each reporting period. At March 31, 2013, our estimated fair value of this contingent consideration obligation was determined to be $0.5 million. The $0.1 million decrease in the fair value of this contingent consideration obligation from December 31, 2012 was recorded as a benefit in the restructuring and other line 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 $0.6 million at December 31, 2012. The final contingent consideration payment of $0.8 million was determined based on certain 2012 milestones and was paid during the first quarter of 2013. In the Condensed Consolidated Statement of Cash Flows, $0.5 million was presented in cash flows from financing activities and the remaining $0.3 million was presented in cash flows from operating activities as it pertains to the excess of actual payments over the initially recognized fair value of the contingent consideration.

Discontinued Operations

On February 13, 2013, we announced our plans to divest our XtremeMac and Memorex consumer electronics businesses. The consumer storage business under the Memorex^TM and TDK Life on Record^TM brands will be retained. These divestitures

8

are part of the acceleration of our strategic transformation that we announced during the fourth quarter of 2012 in conjunction with our plan to increase focus on data storage and security. As a part of exiting these disposal groups, we plan to sell the assets directly associated with these businesses, which primarily include inventory, tooling and intangible assets. We are in varying degrees of negotiations for the sale of these assets and believe such sales are probable to be consummated in the next 12 months. We have classified inventory of $24.8 million, intangible assets of $1.7 million and tooling of $1.6 million as assets held for sale as of March 31, 2013. The operating results for these businesses are presented in our Condensed Consolidated Statements of Operations as discontinued operations for all periods presented and only reflect revenues and expenses that are directly attributable to these businesses that will be eliminated from ongoing operations. Activity from the operations of these businesses will continue to be recorded and classified as discontinued operations until the sale of each business is consummated.

The key components from discontinued operations were as follows:

	Three Months Ended
	March 31,
(In millions)	2013			2012
Net revenue	$	11.2		$	18.4
Loss from operations of discontinued businesses, before income taxes	$	(5.5	)	$	(3.3	)
Income tax benefit	—			(0.3		)
Discontinued operations	$	(5.5	)	$	(3.0	)

Note 5 — Supplemental Balance Sheet Information

	March 31,			December 31,
(In millions)	2013			2012
Accounts Receivable
Accounts receivable	$	193.5		$	238.8
Less reserves and allowances1	(17.3		)	(18.0		)
Accounts receivable, net	$	176.2		$	220.8
Inventories
Finished goods	$	118.4		$	146.9
Work in process	6.9			6.4
Raw materials and supplies	8.3			12.7
Total inventories	$	133.6		$	166.0
Other Current Assets
Non-trade receivables	$	15.4		$	15.1
Deferred income taxes	6.1			4.7
Prepaid expenses	4.5			5.4
Hedging asset	7.7			5.5
Assets held for sale	30.5			2.5
Restricted cash	2.4			7.5
Other	25.6			20.9
Total other current assets	$	92.2		$	61.6
Property, Plant and Equipment
Property, plant and equipment	$	221.8		$	222.6
Less accumulated depreciation	(166.0		)	(163.7		)
Property, plant and equipment, net	$	55.8		$	58.9

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.

9

	March 31,		December 31,
(In millions)	2013		2012
Other Assets
Deferred income taxes	$	11.3	$	9.3
Pension assets	5.9		6.6
Credit facility fees	2.3		2.3
Other	3.2		3.9
Total other assets	$	22.7	$	22.1
Other Current Liabilities
Rebates	$	33.1	$	44.8
Accrued copyright levies	29.1		27.7
Accrued payroll	10.0		11.4
Accrued royalties	6.4		7.5
Deferred revenue	7.2		6.9
Employee separation costs	11.9		16.7
Hedging liability	0.6		1.3
Other	40.1		42.1
Total other current liabilities	$	138.4	$	158.4
Other Liabilities
Pension liabilities	$	27.1	$	28.1
Deferred revenue	2.5		2.5
Deferred income taxes	3.5		2.1
Other	17.5		19.3
Total other liabilities	$	50.6	$	52.0

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
March 31, 2013
Gross carrying amount	$	34.2		$	57.6		$	20.3		$	26.3		$	138.4
Accumulated amortization	(5.5		)	(52.0		)	(1.0		)	(4.1		)	(62.6		)
Intangible assets, net	$	28.7		$	5.6		$	19.3		$	22.2		$	75.8
December 31, 2012
Gross carrying amount	$	37.7		$	58.4		$	21.2		$	26.8		$	144.1
Accumulated amortization	(6.0		)	(52.0		)	(1.0		)	(3.2		)	(62.2		)
Intangible assets, net	$	31.7		$	6.4		$	20.2		$	23.6		$	81.9

As of March 31, 2013, $1.7 million of net intangible assets have been reclassified from intangible assets to assets held for sale as a result of the planned divestiture of our XtremeMac and Memorex consumer electronics businesses. See Note 4 - Acquisitions and Divestitures for further information of these divestitures.

Amortization expense for intangible assets consisted of the following:

10

	Three Months Ended
	March 31,
(In millions)	2013		2012
Amortization expense	$	3.6	$	7.2

Goodwill

During the three months ended March 31, 2013, we recorded a decrease in goodwill of $1.6 million due to the working capital adjustment to the Nexsan acquisition purchase price. Additionally, goodwill decreased $1.3 million due to foreign currency translation. See Note 4 - Acquisitions and Divestitures for further information regarding the Nexsan acquisition and this adjustment.

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
	March 31,
(In millions)	2013			2012
Restructuring
Severance and related	$	0.6		$	0.4
Lease termination costs	0.1			—
Gain on sale of fixed assets held for sale	—			(0.7		)
Other	0.8			0.9
Total restructuring	$	1.5		$	0.6
Other
Contingent consideration fair value adjustment	(0.1		)	—
Acquisition and integration related costs	0.4			0.4
Other	0.3			0.3
Total	$	2.1		$	1.3

Severance expense of $1.1 million related to our planned divestiture of the XtremeMac and Memorex consumer electronics businesses was recorded in discontinued operations during the quarter ended March 31, 2013. See Note 4 - Acquisitions and Divestituresfor additional information related to our discontinued operations. This expense is excluded from the table above.

2012 Global Process Improvement Restructuring Program

On October 22, 2012, the Board of Directors approved the Global Process Improvement Restructuring Program (GPI Program) related to the realignment of our business structure and the reduction of our operating expenses in excess of 25 percent over time. This program addresses product line rationalization and infrastructure, and is anticipated to include a reduction of approximately 20 percent of our global workforce. Restructuring charges under this plan will continue to be incurred throughout the remainder of 2013.

Changes in the 2012 GPI Program accruals were as follows:

(In millions)	Severance and Related			Lease Termination Costs			Other			Total
Accrued balance at December 31, 2012	$	15.4		$	0.5		$	1.0		$	16.9
Charges	1.7			0.1			0.8			2.6
Usage and payments	(5.0		)	(0.1		)	(0.2		)	(5.3		)
Currency impacts	(0.2		)	—			(0.1		)	(0.3		)
Accrued balance at March 31, 2013	$	11.9		$	0.5		$	1.5		$	13.9

Note 8 — Stock-Based Compensation

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Stock compensation consisted of the following:

	Three Months Ended
	March 31,
(In millions)	2013		2012
Stock compensation expense	$	1.8	$	1.9

We have stock-based compensation awards consisting of stock options and restricted stock outstanding under five plans (collectively, the Stock Plans) which are described in detail in our 2012 Annual Report on Form 10-K. As of March 31, 2013 there were 1,293,247 shares available for grant under our 2011 Stock Incentive Plan (2011 Incentive Plan). On May 8, 2013, at the Company's 2013 Annual Meeting of Shareholders, the Company's shareholders approved various amendments to 2011 Incentive Plan including increasing the number of shares of our common stock that may be issued pursuant to stock-based awards made under the 2011 Incentive Plan by 1,543,000 shares to a total of 6,043,000 shares. 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, 2012	5,818,472		$	16.57
Granted	882,602		3.86
Exercised	—		—
Canceled	(201,772	)	24.53
Forfeited	(121,738	)	7.39
Outstanding March 31, 2013	6,377,564		$	14.73
Exercisable as of March 31, 2013	3,385,768		$	21.90

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 three months ended March 31, 2013 was $1.61 per award. The following table summarizes our weighted average assumptions used in the valuation of options:

	2013
Volatility	42.9	%
Risk-free interest rate	1.1	%
Expected life (months)	71
Dividend yield	—

As of March 31, 2013, there was $5.5 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 1.9 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, 2012	1,025,804		$	7.12
Granted	4,967		3.48
Vested	(6,150	)	8.16
Forfeited	(56,452	)	7.36
Nonvested as of March 31, 2013	968,169		$	7.09

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.

12

As of March 31, 2013, there was $3.5 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 1.6 years.

Note 9 — Retirement Plans

Pension Plans

During the three months ended March 31, 2013 we contributed $0.4 million to our worldwide pension plans. We presently anticipate contributing approximately $1.0 million to $3.0 million to fund our worldwide pension plans during the remainder of 2013.

Components of net periodic pension cost included the following:

	United States						International
	Three Months Ended March 31,
(In millions)	2013			2012			2013		2012
Service cost	$	—		$	—		$	0.1	$	0.1
Interest cost	0.7			0.8			—		—
Expected return on plan assets	(1.3		)	(1.5		)	—		—
Amortization of net actuarial loss	0.4			0.3			0.1		0.1
Total pension cost (credit)	$	(0.2	)	$	(0.4	)	$	0.2	$	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 months ended March 31, 2013 we recorded income tax expense of $0.4 million. The effective income tax rate for the three months ended March 31, 2013 was (2.6) percent, compared with (16.5) percent in the same period last year. The effective rate change was primarily due to a full valuation allowance on U.S. deferred tax assets, lower withholding tax expense and the mix of taxable income (loss) by country. The effective income tax rate for the three months ended March 31, 2013 differs from the U.S. federal statutory rate of 35 percent primarily due to the full valuation allowance on U.S. deferred tax assets and the effects of foreign tax rate differential.

We conduct business globally. As a result, we file income tax returns in multiple jurisdictions and are subject to review by various U.S and foreign taxing authorities. Our U.S. federal income tax returns for 2010 and 2011 are subject to examination by the Internal Revenue Service (IRS). With few exceptions, we are no longer subject to examination by foreign tax jurisdictions or state and city tax jurisdictions for years before 2006. 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. 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 $4.6 million and $4.7 million as of March 31, 2013 and December 31, 2012, 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

Our Credit Agreement and its terms are described in Note 11 - Debt of our Annual Report on Form 10-K for the year ended December 31, 2012. As of March 31, 2013, our borrowing capacity under this arrangement, after consideration of amounts outstanding, was $78.4 million, consisting of $66.0 million in the United States and $12.4 million in Europe.

As of March 31, 2013, we had $20.0 million of borrowings outstanding under the Credit Agreement, all of which was borrowed in the United States and bears an interest rate of 2.2 percent. We are in compliance with all covenant requirements as of March 31, 2013.

Note 12 — Fair Value Measurements

Derivative Financial Instruments

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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.

	March 31, 2013							December 31, 2012
(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	$	—	$	7.7		$	—	$	—	$	5.5		$	—
Foreign currency forward contracts	—		—			—		—		—			—
Derivative liabilities
Foreign currency option contracts	—		(0.5		)	—		—		(1.2		)	—
Foreign currency forward contracts	—		(0.1		)	—		—		(0.1		)	—
Total	$	—	$	7.1		$	—	$	—	$	4.2		$	—

Other Derivative Instruments

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 on our Condensed Consolidated Balance Sheets and because we do not receive hedge accounting for these derivatives, changes in their value are recognized every reporting period in the Condensed Consolidated Statements of Operations.

For the three months ended March 31, 2013 and 2012, we recorded foreign currency gains of $0.5 million and losses of $1.0 million, respectively, in other expense (income) in the Condensed Consolidated Statements of Operations. These gains and losses reflect changes in foreign exchange rates on foreign denominated assets and liabilities and are net of gains of $0.3 million and $0.4 million from the related foreign currency forward contracts for the three months ended March 31, 2013 and 2012, 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:

	March 31, 2013							December 31, 2012
			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	$	179.7	$	7.7	$	(0.6	)	$	248.6	$	5.5	$	(1.3	)
Other hedges not receiving hedge accounting	47.3		—		—			46.5		—		—
Total	$	227.0	$	7.7	$	(0.6	)	$	295.1	$	5.5	$	(1.3	)

On March 31, 2013, we entered into certain hedges not receiving hedge accounting treatment and the estimated fair value of these hedges was inconsequential as of March 31, 2013.

Contingent Consideration

Contingent consideration recorded for earn-out payments related to our acquisitions is immaterial as of March 31, 2013 and December 31, 2012, and is recorded at fair value and remeasured on a recurring basis. We use the income approach in calculating the fair value of our contingent consideration. Changes in the fair value of our contingent consideration obligations are recognized as a fair value adjustment within restructuring and other in our Condensed Consolidated Statements of Operations. These fair value measurements are calculated using the income approach with cash flow projections based on

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significant inputs not observable in the market and therefore represent Level 3 measurements. See Note 4 - Acquisitions and Divestitures for further discussion of the fair value calculation of our contingent consideration as of March 31, 2013. The following table sets forth a summary of changes in fair value of our contingent consideration Level 3 liabilities:

(In millions)	MXI Security			Encryptx			Total
Balance as of December 31, 2012	$	0.6		$	0.6		$	1.2
Fair value adjustment	(0.1		)	0.2			0.1
Payments	—			(0.8		)	(0.8		)
Balance as of March 31, 2012	$	0.5		$	—		$	0.5

Note 13 — Shareholders' Equity

Treasury Stock

On May 2, 2012, our Board of Directors authorized a share repurchase program that allowed for the repurchase of 5.0 million shares of common stock. Since the authorization of this program we have repurchased 1.2 million shares of common stock for $6.5 million, and as of March 31, 2013 we had remaining authorization to repurchase up to 3.8 million additional shares. The treasury stock held as of March 31, 2013 was acquired at an average price of $24.15 per share.

Following is a summary of treasury share activity:

	Treasury Shares
Balance as of December 31, 2012	1,563,321
Purchases	—
Exercise of stock options	—
Restricted stock grants and other	51,718
401(k) matching contribution	(200,080	)
Balance as of March 31, 2013	1,414,959

Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss and related activity consisted of the following:

(In millions)	Gains (Losses) on Derivative Financial Instruments			Defined Benefit Plans			Foreign Currency Translation			Total
Balance as of December 31, 2012	$	2.7		$	(27.8	)	$	(49.1	)	$	(74.2	)
Other comprehensive (loss) income before reclassifications, net of tax1	2.8			—			(4.2		)	(1.4		)
Amounts reclassified from accumulated other comprehensive loss, net of tax	(1.3		)	0.4			—			(0.9		)
Net current-period other comprehensive income (loss)	1.5			0.4			(4.2		)	(2.3		)
Balance as of March 31, 2013	$	4.2		$	(27.4	)	$	(53.3	)	$	(76.5	)

¹Income tax expense of $2.0 million was recorded for gains on derivative financial instruments for the three months ended March 31, 2013.

Details of amounts reclassified from Accumulated other comprehensive loss and the line item in the Condensed Consolidated Statement of Operations are as follows:

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(In millions)	Amounts Reclassified from Accumulated Other Comprehensive Loss			Affected Line Item in the Statement Where Net Loss is Presented
(Gains) Losses on cash flow hedges	$	(2.1	)	Cost of goods sold
	0.8			Income tax provision
	(1.3		)	Net of tax
Amortization of net actuarial loss	0.4			Selling, general and administrative
	—			Income tax provision
	0.4			Net of tax
Total reclassifications for the period	$	(0.9	)

Note 14 — Segment Information

As of January 1, 2013, we revised our segment reporting to reflect changes in how we manage our business, review operating performance and allocate resources. We now manage our business through two reporting segments, Tiered Storage and Security Solutions (TSS) and Consumer Storage and Accessories (CSA). Our new reporting segments are aligned with our key commercial and consumer channels.

We have two major product categories under our CSA segment: Consumer storage media and Audio and accessories. Consumer storage media products include primarily optical products such as DVDs, CDs and Blu-ray disc recordable media as well as flash media. Audio and accessories include primarily headphones, audio electronics and accessories. We have two major product categories under our TSS segment: Commercial storage media and Storage and security solutions. Commercial storage media products consist mainly of magnetic data storage tape media and RDX media.Storage and security solutions includes storage hardware products, services and software for primary storage as well as backup and archiving; encrypted and biometric universal serial bus (USB) drives and 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.

We evaluate segment performance based on revenue and operating income (loss). 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 depreciation and amortization, litigation settlement expense, goodwill impairment, intangible impairments, intangible asset abandonment, corporate expense, contingent consideration adjustments, inventory write-offs related to our restructuring programs and restructuring and other expenses which are not allocated to the segments.

On February 13, 2013, we announced our plans to divest our XtremeMac and Memorex consumer electronics businesses. The operating results for these businesses are presented in our Condensed Consolidated Statements of Operations as discontinued operations and are not included in segment results for any periods presented. The consumer storage business under the Memorex and TDK Life on Record brands will be retained. See Note 4 - Acquisitions and Divestitures for further information.

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

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	Three Months Ended
	March 31,
(In millions)	2013		2012
Net Revenue
Consumer Storage and Accessories
Consumer storage media	$	114.2	$	152.7
Audio and accessories	7.6		9.4
Total Consumer Storage and Accessories	121.8		162.1
Tiered Storage and Security Solutions
Commercial storage media	66.9		86.2
Storage and security solutions	35.7		15.0
Total Tiered Storage and Security Solutions	102.6		101.2
Total Net Revenue	$	224.4	$	263.3

	Three Months Ended
	March 31,
(In millions)	2013			2012
Operating Income (Loss)
Consumer Storage and Accessories	$	5.9		$	16.6
Tiered Storage and Security Solutions	(3.0		)	(6.5		)
Total segment operating income	2.9			10.1
Corporate and unallocated	(17.6		)	(15.7		)
Total operating loss	(14.7		)	(5.6		)
Interest income	—			(0.1		)
Interest expense	0.7			0.9
Other, net	(0.2		)	1.5
Loss from continuing operations before income taxes	$	(15.2	)	$	(7.9	)

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 March 31, 2013, we are unable to reasonably estimate the ultimate aggregate amount of any monetary liability or financial impact that we may incur with respect to these matters. It is reasonably possible that the ultimate resolution of these matters could materially affect our operating results.

Copyright Levies

In many European Union (EU) member countries, the sale of recordable optical media is subject to a private copyright levy. The levies are 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, are intended to 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

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copyright holders are only entitled to fair compensation payments (funded by importers of levy payments made by importers of applicable products, including the Company) when sales of optical media are made to natural persons intending to make private copies.

Since the Directive was implemented in 2002, we have paid in excess of $100 million in levies to various ongoing collecting societies related to commercial channel sales. Based on the ECJ's October 2010 ruling and subsequent litigation and law making activities, we believe that these payments were not consistent with the Directive and should not have been paid to the various collecting societies. Accordingly, in 2010 we began withholding levy payments to the various collecting societies on commercial and consumer channel sales. We released accruals for levy payments related to commercial channel sales in 2011. However, we continue to accrue a liability for levies arising from consumer channel sales. As of March 31, 2013 and December 31, 2012, we are carrying a liability of $29.1 million and $27.7 million, respectively, associated with levies related to consumer channel sales for which we are withholding payment. At March 31, 2013, the recovery of some or all of the approximately $100 million of copyright levies previously paid on professional and commercial sales represents a gain contingency that has not yet met the required criteria for recognition in our financial statements. There is no assurance that we will realize any of this gain contingency.

Since the October 2010 ECJ ruling, we evaluate quarterly on a country-by-country basis whether: (i) levies should be accrued on current period commercial and/or consumer channel sales; and, (ii) accrued, but unpaid, copyright levies on prior period consumer product sales should be reversed. Our evaluation is made on a jurisdiction-by-jurisdiction basis and considers ongoing and cumulative developments related to levy litigation and law making activities within each jurisdiction as well as throughout the EU. 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 months ended March 31, 2013 and March 31, 2012, we did not reverse any amounts into cost of goods sold for prior period obligations.

We are subject to several pending or threatened legal actions by the individual European national levy collecting societies in relation to private copyright levies under the Directive. Those actions generally seek payment of the commercial and consumer optical levies withheld by Imation. Imation has corresponding claims in those actions seeking reimbursement of levies improperly collected by those collecting societies. 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 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.

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 mobile and other security offerings for business as well as storage media for the individual consumer. Imation leverages a powerful global distribution network and well recognized brands to reach customers in more than 100 countries operating through two business segments, Tiered Storage and Security Solutions (TSS) and Consumer Storage and Accessories (CSA). As used herein, the terms “Imation,” “Company,” “ we,” “us” or “our” mean Imation Corp. and its subsidiaries unless the context indicates otherwise.

Executive Summary

Consolidated Results of Operations for the Three Months Ended March 31, 2013

• Net revenue from continuing operations of $224.4 million for the three months ended March 31, 2013 was down 14.8 percent compared with $263.3 million in the same period last year.

• Operating loss from continuing operations was $14.7 million for the three months ended March 31, 2013 compared with operating loss of $5.6 million in the same period last year.

• Diluted loss per share from continuing operations was $0.39 for the three months ended March 31, 2013 compared with diluted loss per share of $0.25 for the same period last year.

Cash Flow/Financial Condition for the Three Months Ended March 31, 2013

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• Cash and cash equivalents totaled $98.2 million as of March 31, 2013 compared with $108.7 million at December 31, 2012.

• Cash used in operating activities was $9.0 million for the three months ended March 31, 2013 compared with cash used in operating activities of $6.0 million in the same period last year.

Results of Operations

On February 13, 2013, we announced our plans to divest our XtremeMac and Memorex consumer electronics businesses which were historically part of our CSA segment. The operating results for these businesses are presented in our Condensed Consolidated Statements of Operations as discontinued operations. The consumer storage business under the Memorex^TM and TDK Life on Record^TM brands will be retained. See Note 4 - Acquisitions and Divestitures for further information. The following discussion relates to continuing operations unless indicated otherwise.

Net Revenue

	Three Months Ended
	March 31,				Percent Change
(Dollars in millions)	2013		2012
Net revenue	$	224.4	$	263.3	(14.8	)%

Our worldwide revenue for the three months ended March 31, 2013 decreased compared with the same period last year, driven primarily by a decline of 25.2 percent in our consumer storage media products in our CSA segment. Revenue in our TSS segment increased 1.4 percent compared to the first quarter of 2012 as an increase in revenue from the addition of Nexsan Corp (Nexsan), which was acquired on December 31, 2012, was partially offset by declines in commercial storage media products. See Segment Results for further discussion of our reporting segments including the revision of our segments as of January 1, 2013. From a product perspective, the decrease in revenue included declines in our consumer storage media products and our commercial storage media products of $38.5 million and $19.3 million, respectively. This decrease was partially offset by an increase in storage and security solutions products of $20.7 million due to the addition of Nexsan. Revenue for the three months ended March 31, 2013 compared with the same period last year was negatively impacted by foreign currency translation of 2.5 percent.

Gross Profit

	Three Months Ended
	March 31,						Percent Change
(Dollars in millions)	2013			2012
Gross profit	$	42.1		$	53.6		(21.5	)%
Gross margin	18.8		%	20.4		%

Gross profit decreased for the three months ended March 31, 2013 compared with the same period last year primarily due to lower overall revenue. Gross profit in the CSA segment decreased $12.4 million and was partially offset by a $3.0 million increase in the TSS segment. From a product perspective, lower gross profits and margins on our storage media products in the consumer and commercial channels were partially offset by higher gross profits in our Storage and security solutions products driven by the addition of hardware solutions products from the Nexsan acquisition. Gross profit during the three months ended March 31, 2013 included inventory write-offs of $2.1 million related to our restructuring programs which was driven by the rationalization of certain product lines.

Gross margin decreased for the three months ended March 31, 2013 compared with the same period last year. Gross margins in the CSA reporting segment decreased 3.3 points to 17.7 percent driven by lower gross margins on our Consumer storage media products related primarily to optical media. Gross margins in the TSS reporting segment increased 2.6 points to 22.0 percent as lower gross margins on our Commercial storage media were more than offset by higher gross margins on our hardware solutions products from the addition of Nexsan.

Selling, General and Administrative (SG&A)

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	Three Months Ended
	March 31,						Percent Change
(Dollars in millions)	2013			2012
Selling, general and administrative	$	49.3		$	52.3		(5.7	)%
As a percent of revenue	22.0		%	19.9		%

SG&A expense decreased for the three months ended March 31, 2013 compared with the same period last year primarily due to our focus on significantly reducing our costs. Reductions specifically related to lower advertising and sales costs, lower intangible amortization expense as a result of write-offs at the end of 2012, lower employee benefits as well as lower professional fees. These decreases were partially offset by incremental SG&A from the Nexsan acquisition.

Research and Development (R&D)

	Three Months Ended
	March 31,						Percent Change
(Dollars in millions)	2013			2012
Research and development	$	5.4		$	5.6		(3.6	)%
As a percent of revenue	2.4		%	2.1		%

R&D expense decreased slightly for the three months ended March 31, 2013 compared with the same period last year due to our cost reduction efforts, partially offset by incremental R&D from the Nexsan acquisition.

Restructuring and Other

	Three Months Ended
	March 31,				Percent Change
(Dollars in millions)	2013		2012
Restructuring and other	$	2.1	$	1.3	61.5	%

Restructuring expense for the three months ended March 31, 2013 related solely to our 2012 Global Process Improvement Restructuring Program. We incurred severance related costs of $0.6 million, lease termination costs of $0.1 million and other restructuring charges of $0.8 million. Additionally, we incurred acquisition and integration related costs of $0.4 million, other costs of $0.3 million, and a contingent consideration benefit adjustment of $0.1 million during the three months ended March 31, 2013.

Restructuring and other expense for the three months ended March 31, 2012 was primarily related to our 2011 Corporate Strategy Restructuring program. We incurred severance related costs of $0.4 million and other restructuring charges of $0.2 million. Additionally, we incurred other charges of $0.7 million during the three months ended March 31, 2012 consisting of $0.3 million for demolition and site clean-up at our Camarillo, California facility, and acquisition and integration related costs of $0.4 million.

Operating Loss

	Three Months Ended
	March 31,						Percent Change
(Dollars in millions)	2013			2012
Operating loss	$	(14.7	)	$	(5.6	)	162.5	%
As a percent of revenue	(6.6		)%	(2.1		)%

Operating loss increased for the three months ended March 31, 2013 compared with the same period last year primarily due to the items discussed above.

Other (Income) and Expense

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	Three Months Ended
	March 31,						Percent Change
(Dollars in millions)	2013			2012
Interest income	$	—		$	(0.1	)	(100.0	)%
Interest expense	0.7			0.9			(22.2	)%
Other, net	(0.2		)	1.5			(113.3	)%
Total	$	0.5		$	2.3		(78.3	)%
As a percent of revenue	0.2		%	0.9		%

Other (income) and expense decreased for the three months ended March 31, 2013 compared with the same period last year. Other, net primarily includes foreign currency (gains) losses from changes in foreign exchange rates on foreign denominated assets and liabilities. Foreign currency gains of $0.5 million and losses of $1.0 million were recorded for the three months ended March 31, 2013 and 2012, respectively. 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.

Income Tax Provision

	Three Months Ended
	March 31,						Percent Change
(Dollars in millions)	2013			2012
Income tax provision	$	0.4		$	1.3		(69.2	)%
Effective tax rate	(2.6		)%	(16.5		)%

The change in the effective income tax rate for the three months ended March 31, 2013 compared with the same period last year was primarily due to the full valuation allowance on U.S. deferred tax assets, lower withholding tax expense and the mix of taxable income (loss) by country.

Loss from Discontinued Operations

	Three Months Ended
	March 31,						Percent Change
(Dollars in millions)	2013			2012
Loss from operations of discontinued businesses, net of income taxes	$	(5.5	)	$	(3.0	)	83.3	%

Loss from discontinued operations represents operations from our XtremeMac and Memorex consumer electronics businesses which we plan to divest. The increase in operating loss for the three months ended March 31, 2013 compared with the same period last year reflects lower revenues and lower gross margins in these businesses in addition to restructuring expense of $1.1 million.

Segment Results

As of January 1, 2013, we revised our segment reporting to reflect changes in how we manage our business, review operating performance and allocate resources. We now manage our business through two reporting segments, Tiered Storage and Security Solutions (TSS) and Consumer Storage and Accessories (CSA). Our new reporting segments are aligned with our key commercial and consumer channels.

We have two major product categories under our CSA segment: Consumer storage media and Audio and accessories. Consumer storage media products include primarily optical products such as DVDs, CDs and Blu-ray disc recordable media as well as flash media. Audio and accessories include primarily headphones, audio electronics and accessories. We have two major product categories under our TSS segment: Commercial storage media and Storage and security solutions. Commercial storage media products consist mainly of magnetic data storage tape media and RDX media.Storage and security solutions includes storage hardware products, services and software for primary storage as well as backup and archiving; encrypted and biometric universal serial bus (USB) drives and 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.

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We evaluate segment performance based on revenue and operating income (loss). 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 depreciation and amortization, litigation settlement expense, goodwill impairment, intangible impairments, intangible asset abandonment, corporate expense, contingent consideration adjustments, inventory write-offs related to our restructuring programs and restructuring and other expenses which are not allocated to the segments.

Information related to our segments is as follows:

Consumer Storage and Accessories

	Three Months Ended
	March 31,						Percent Change
(Dollars in millions)	2013			2012
Net revenue	$	121.8		$	162.1		(24.9	)%
Operating income	5.9			16.6			(64.5	)%
As a percent of revenue	4.8		%	10.2		%

The CSA segment revenue decreased 24.9 percent for the three months ended March 31, 2013 compared with the same period last year. The decrease was driven by a revenue decline in consumer storage media products of 25.2 percent. From a product perspective, optical media products decreased $38.5 million and audio and accessories decreased $1.8 million compared with the same period last year.

Operating income decreased for the three months ended March 31, 2013 compared with the same period last year driven primarily by lower gross profit in consumer storage media products partially offset by lower SG&A and R&D for the three months ended March 31, 2013. We plan to continue our operating expense reduction efforts in this segment.

Tiered Storage and Security Solutions

	Three Months Ended
	March 31,						Percent Change
(Dollars in millions)	2013			2012
Net revenue	$	102.6		$	101.2		1.4	%
Operating (loss)	(3.0		)	(6.5		)	(53.8	)%
As a percent of revenue	(2.9		)%	(6.4		)%

The TSS segment revenue increased 1.4 percent for the three months ended March 31, 2013 compared with the same period last year. The increase was driven by the addition of $20.9 million from Nexsan, which was acquired on December 31, 2012, partially offset by declines in commercial storage media products. From a product perspective, the decrease in commercial storage media product revenue was primarily composed of lower revenue from magnetic tape products and other commercial storage media products of $16.6 million and $2.7 million, respectively. Additionally, revenue from secure storage products decreased due to continued market place price degradation of commodity flash products.

Operating loss decreased for the three months ended March 31, 2013 compared with the same period last year driven primarily by higher gross profit from the addition of Nexsan, partially offset by lower gross margins on storage media products and secure storage solutions.

Corporate and Unallocated

	Three Months Ended
	March 31,						Percent Change
(Dollars in millions)	2013			2012
Operating loss	$	(17.6	)	$	(15.7	)	12.1	%

The corporate and unallocated operating loss increased $1.9 million for the three months ended March 31, 2013 compared with the same period last year driven primarily by higher restructuring costs and other expense.

Impact of Changes in Foreign Currency Rates

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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. 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 2.5 percent for the three months ended March 31, 2013 while changes in foreign currency translation rates for the three months ended March 31, 2012 did not significantly impact worldwide revenue. 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 March 31, 2013 was $98.2 million, a decrease of $10.5 million from $108.7 million as of December 31, 2012. The decrease was primarily attributable to restructuring payments of $4.5 million and capital expenditures of $1.4 million as well as seasonal rebate payments.

Our accounts receivable balance as of March 31, 2013 was $176.2 million, a decrease of $44.6 million from $220.8 million as of December 31, 2012 as a result of lower sales during the period. Days sales outstanding was 63 days as of March 31, 2013, up 4 days from December 31, 2012. 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 March 31, 2013 was $133.6 million, a decrease of $32.4 million from $166.0 million as of December 31, 2012 partially due to reclassifying inventory as assets held for sale related to our divestitures of XtremeMac and Memorex consumer electronics businesses. Days of inventory supply was 76 days as of March 31, 2013, down 13 days from December 31, 2012 due primarily to the reclassification of inventory for discontinued operations for the businesses being divested which hold higher than average inventory balances. 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 March 31, 2013 was $136.5 million, a decrease of $26.2 million from $162.7 million as of December 31, 2012. 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:

	Three Months Ended
	March 31,
(Dollars in millions)	2013			2012
Net loss	$	(21.1	)	$	(12.2	)
Adjustments to reconcile net loss to net cash provided by operating activities	9.3			12.9
Changes in operating assets and liabilities	2.8			(6.7		)
Net cash used in operating activities	$	(9.0	)	$	(6.0	)

Cash flows from operating activities can fluctuate significantly from period to period as many items can significantly impact cash flows. Cash used in operating activities was $9.0 million for the three months ended March 31, 2013 and included restructuring payments of $4.5 million.

Cash used in operating activities was $6.0 million for the three months ended March 31, 2012 including payments for incentive compensation of $3.1 million, restructuring payments of $2.4 million and a litigation settlement payment of $2.0 million.

Cash Flows Provided by (Used in) Investing Activities:

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	Three Months Ended
	March 31,
(Dollars in millions)	2013			2012
Capital expenditures	$	(1.4	)	$	(2.0	)
Purchase price adjustment	1.6			—
Proceeds from sale of assets	—			1.4
Net cash provided by (used in) investing activities	$	0.2		$	(0.6	)

Cash used in investing activities for the three months ended March 31, 2013 included capital expenditures of $1.4 million and was offset by $1.6 million received as a result of a working capital adjustment to the Nexsan purchase price. See Note 4 - Acquisitions and Divestitures to the Condensed Consolidated Financial Statements for further information regarding our acquisitions.

Cash used in investing activities for the three months ended March 31, 2012 included capital expenditures of $2.0 million, partially offset by 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.

Cash Flows Used in Financing Activities:

	Three Months Ended
	March 31,
(Dollars in millions)	2013			2012
Contingent consideration payments	$	(0.5	)	$	(0.7	)
Net cash used in financing activities	$	(0.5	)	$	(0.7	)

On May 2, 2012, our Board of Directors authorized a share repurchase program that allowed for the repurchase of 5.0 million shares of common stock which replaced our previous authorization. During the three months ended March 31, 2013 and March 31, 2012, no shares were repurchased. Since the authorization of this program we have repurchased 1.2 million shares of common stock for $6.5 million, and as of March 31, 2013 we had remaining authorization to repurchase up to 3.8 million additional shares.

Our Credit Agreement and its terms are described in Note 11 - Debt of our Annual Report on Form 10-K for the year ended December 31, 2012. As of March 31, 2013, our borrowing capacity under this arrangement, after consideration of amounts outstanding, was $78.4 million, consisting of $66.0 million in the United States and $12.4 million in Europe.

As of March 31, 2013, we had $20.0 million of borrowings outstanding under the Credit Agreement, all of which was borrowed in the United States and bears an interest rate of 2.2 percent. We are in compliance with all covenant requirements as of March 31, 2013.

Our liquidity needs for the remaining nine months of 2013 include the following: capital expenditures of $6 million to $8 million, payments related to our previously announced restructuring programs of $30 million, $20 million to repay borrowings under our credit facility, operating lease payments of approximately $6 million, pension funding of $1 million to $3 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.

Contractual Obligations

As of March 31, 2013, there have been no material changes to our contractual obligations as of December 31, 2012 as presented in our Annual Report on Form 10-K for the year ended December 31, 2012.

Copyright Levies

In many European Union (EU) member countries, the sale of recordable optical media is subject to a private copyright levy. The levies are 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, are intended to 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

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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 importers of applicable products, including the Company) when sales of optical media are made to natural persons intending to make private copies.

Since the Directive was implemented in 2002, we have paid in excess of $100 million in levies to various ongoing collecting societies related to commercial channel sales. Based on the ECJ's October 2010 ruling and subsequent litigation and law making activities, we believe that these payments were not consistent with the Directive and should not have been paid to the various collecting societies. Accordingly, in 2010 we began withholding levy payments to the various collecting societies on commercial and consumer channel sales. We released accruals for levy payments related to commercial channel sales in 2011. However, we continue to accrue a liability for levies arising from consumer channel sales. As of March 31, 2013 and December 31, 2012, we are carrying a liability of $29.1 million and $27.7 million, respectively, associated with levies related to consumer channel sales for which we are withholding payment. At March 31, 2013, the recovery of some or all of the approximately $100 million of copyright levies previously paid on professional and commercial sales represents a gain contingency that has not yet met the required criteria for recognition in our financial statements. There is no assurance that we will realize any of this gain contingency.

Since the October 2010 ECJ ruling, we evaluate quarterly on a country-by-country basis whether: (i) levies should be accrued on current period commercial and/or consumer channel sales; and, (ii) accrued, but unpaid, copyright levies on prior period consumer product sales should be reversed. Our evaluation is made on a jurisdiction-by-jurisdiction basis and considers ongoing and cumulative developments related to levy litigation and law making activities within each jurisdiction as well as throughout the EU. 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 months ended March 31, 2013 and March 31, 2012, we did not reverse any amounts into cost of goods sold for prior period obligations.

We are subject to several pending or threatened legal actions by the individual European national levy collecting societies in relation to private copyright levies under the Directive. Those actions generally seek payment of the commercial and consumer optical levies withheld by Imation. Imation has corresponding claims in those actions seeking reimbursement of levies improperly collected by those collecting societies. 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 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

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, 2012. There were no significant changes to these accounting policies for the first three months of 2013.

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,"

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"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 including our global restructuring plan; our ability to grow our business in new products with profitable margins and the rate of revenue decline for certain existing products; the ability to quickly develop, source, introduce and deliver differentiated and innovative products; our potential dependence on third parties for new product introductions or technologies in order to introduce our own new products; foreign currency fluctuations; the ready availability and price of energy and key raw materials or critical components including 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 austerity measures and the ongoing sovereign debt crisis in Europe; 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 and intangible assets or any goodwill or intangible assets that we acquire may become impaired; the ability of our security products to withstand cyber-attacks; the seasonality and volatility of the markets in which we operate; changes in European law or practice related to the imposition or collectability of optical levies; significant changes in discount rates and other assumptions used in the valuation of our pension plans; changes in tax laws, 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; ability to access financing to achieve strategic objectives and growth due to changes in the capital and credit markets; limitations in our operations that could arise from compliance with the debt covenants in our credit facility; increased compliance with changing laws and regulations potentially affecting our operating results; 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 factors set forth in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2012 and 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, 2012. 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, 2012.

As of March 31, 2013 we had $227.0 million notional amount of foreign currency forward and option contracts of which $47.3 million hedged recorded balance sheet exposures. This compares to $295.1 million notional amount of foreign currency forward and option contracts as of December 31, 2012, of which $46.5 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 March 31, 2013 by $3.1 million.

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 March 31, 2013, 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 March 31, 2013, 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.

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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 March 31, 2013, we are unable to reasonably estimate the ultimate aggregate amount of any monetary liability or financial impact that we may incur with respect to these matters. It is reasonably possible that the ultimate resolution of these matters could materially affect our operating results.

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, 2012. For further information, see Item 1A. “Risk Factors” included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

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

 (a) - (b)

Not applicable

(c) Issuer Purchases of Equity Securities

					(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
January 1, 2013 - January 31, 2013	148	$	3.85	—	3,763,839
February 1, 2013 - February 28, 2013	710	3.80		—	3,763,839
March 1, 2013 - March 31, 2013	814	3.68		—	3,763,839
Total	1,672	$	3.75	—	3,763,839

(a) The purchases in this column were 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 relates to 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 its 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 1.2 million 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:

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Exhibit Number	Description of Exhibit
10.1	Fourth Amendment, dated as of April 12, 2013, to the Amended and restated Credit Agreement among Imation Corp., Imation Enterprises Corp. and Imation Europe B.V., as borrowers, Bank of America, N.A., as administrative agent and l/c issuer, and a consortium of Lenders, dated as of August 3, 2010
10.2	Director Compensation Program, effective May 2, 2005 (as amended effective January 1, 2013)
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 March 31, 2013, filed with the SEC on May 9, 2013, formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Statements of Operations for the three months ended March 31, 2013 and 2012, (ii) the Condensed Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2013 and 2012, (iii) the Condensed Consolidated Balance Sheets as of March 31, 2013 and December 31, 2012, (iv) the Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2013 and 2012, 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.

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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:	May 9, 2013	/s/ Paul R. Zeller
		Paul R. Zeller
		Senior Vice President and Chief Financial Officer (duly authorized officer and principal financial officer)

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EXHIBIT INDEX

The following exhibits are filed as part of this report:

Exhibit Number	Description of Exhibit
10.1	Fourth Amendment, dated as of April 12, 2013, to the Amended and restated Credit Agreement among Imation Corp., Imation Enterprises Corp. and Imation Europe B.V., as borrowers, Bank of America, N.A., as administrative agent and l/c issuer, and a consortium of Lenders, dated as of August 3, 2010
10.2	Director Compensation Program, effective May 2, 2005 (as amended effective January 1, 2013)
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 March 31, 2013, filed with the SEC on May 9, 2013, formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Statements of Operations for the three months ended March 31, 2013 and 2012, (ii) the Condensed Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2013 and 2012, (iii) the Condensed Consolidated Balance Sheets as of March 31, 2013 and December 31, 2012, (iv) the Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2013 and 2012, 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.

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EX-10.1

FINAL

FOURTH AMENDMENT AND CONSENT TO CREDIT AGREEMENT AND

FIRST AMENDMENT TO AMENDED AND RESTATED GUARANTY

This FOURTH AMENDMENT AND CONSENT TO CREDIT AGREEMENT AND FIRST AMENDMENT TO AMENDED AND RESTATED GUARANTY (this “Amendment”), dated as of April 12, 2013, among IMATION CORP., a Delaware corporation (“Imation”), IMATION ENTERPRISES CORP., a Delaware corporation (“Enterprises”) (each of Imation and Enterprises being referred to herein as a “US Borrower” and together as the “US Borrowers”), IMATION EUROPE B.V., a company organized under the laws of the Netherlands with a corporate seat in Amsterdam, the Netherlands (the “European Borrower” and together with the US Borrowers, each a “Borrower” and collectively, the “Borrowers”), each lender from time to time party to the Credit Agreement referred to below (each, a “Lender”, and collectively, the “Lenders”), and BANK OF AMERICA, N.A., as Administrative Agent (in such capacity, the “Administrative Agent”) and L/C Issuer.

RECITALS

A.The Borrowers, the Lenders, and the Administrative Agent are party to the Amended and Restated Credit Agreement dated as of August 3, 2010 (as amended by the First Amendment dated as of June 28, 2011, the Second Amendment and Consent dated as of December 29, 2011, the Third Amendment dated as of May 18, 2012, and this Amendment, and as may be further amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), pursuant to which the Administrative Agent and the Lenders have extended certain credit facilities to the Borrowers.

B.The US Borrowers and certain of their respective Subsidiaries have executed the Amended and Restated Guaranty dated as of August 3, 2010 (as may be further amended, restated, supplemented or otherwise modified from time to time, the “Guaranty”), pursuant to which the Guarantors (as defined therein) have guaranteed, to the Guaranteed Parties (as defined therein) the payment and performance of the Obligations.

C.The Borrowers have requested that the Administrative Agent and the Lenders (i) consent to the Memorex Divestiture (as defined below) on terms and conditions set forth in an asset purchase agreement delivered to the Administrative Agent on or prior to the Effective Date (the “Asset Purchase Agreement”) to be entered into by Imation and its Affiliates (as defined in the Asset Purchase Agreement, and together with Imation, the “Seller”) and (ii) agree to certain amendments with respect to the Credit Agreement and the Guaranty, and, subject to the terms and conditions set forth herein, the Administrative Agent and each of the Lenders party hereto have agreed to grant such requests of the Borrowers.

NOW, THEREFORE, for valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows:

1.Defined Terms. Unless otherwise defined herein, capitalized terms used herein (including, without limitation, in the introductory paragraph and the recitals hereto) shall have the meanings assigned to such terms in the Credit Agreement or the Guaranty, as applicable (in each case, as amended by this Amendment). “Amendment Documents” means this Amendment, the Credit Agreement (as amended by this Amendment), the Guarantor Consent, the Guaranty (as amended by this Amendment)

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and each certificate and other document executed and delivered by the Borrowers or any Guarantor pursuant to Section 5 hereof.

2.Interpretation. The rules of interpretation set forth in Sections 1.02 - 1.10 of the Credit Agreement shall be applicable to this Amendment and are incorporated herein by this reference.

3.Consent. Subject to the terms and conditions hereof, the Lenders party hereto consent to the Disposition by the Seller of certain assets related to the Memorex brand consumer electronics business on the terms and conditions set forth in the Asset Purchase Agreement (the “Memorex Divesture”); provided that, the aggregate amount of cash and Cash Equivalents received by the Loan Parties as consideration for the Memorex Divesture shall be not less than $12,500,000. The Memorex Divesture shall not be included in calculations of the aggregate amount of Dispositions made pursuant to Section 7.05(k) of the Credit Agreement.

4.Credit Agreement Amendments. The Credit Agreement is hereby amended as follows:

(i)The definition of “Bank Product” is hereby amended by (x) inserting in the introductory clause the words “(and in the cases of clauses (a) and (c) below, to any Subsidiary thereof)” immediately following the words “products, services or facilities” and inserting in clause (i) the words “(or Subsidiary thereof, if applicable)” immediately following the words “Bank Product Provider and Loan Party” and (y) deleting in clause (i) the words “Third Amendment”.

(ii)The definition of “Bank Product Debt” is hereby amended by inserting (x) in the first sentence the words “(or Subsidiary thereof, if applicable)” immediately following the words “of a Loan Party” and (y) in the second sentence the words “(or Subsidiary thereof, if applicable)” immediately following the words “and the Loan Party”.

(iii)The definition of “European Obligations” is hereby amended by inserting the words “(including all advances to, and debts, liabilities, obligations, covenants and duties of, any Subsidiary of the European Borrower constituting Bank Product Debt)” immediately following the words “or Bank Product Debt”.

(iv)The definition of “US Obligations” is hereby amended by inserting the words “(including all advances to, and debts, liabilities, obligations, covenants and duties of, any Subsidiary of any US Loan Party constituting Bank Product Debt)” immediately following the words “or Bank Product Debt”.

(v)Section 8.03(a) of the Credit Agreement is hereby amended by inserting (x) in clause Seventh thereof the words “extended to any Loan Party” immediately following the words “to payment of other Bank Product Debt” and (y) in clause Tenth thereof the words “extended to any Loan Party” immediately following the words “to payment of other Bank Product Debt”.

(vi)Section 8.03(a) of the Credit Agreement is hereby amended by inserting new clauses Thirteenth and Fourteenth immediately following clause Twelfth and renumbering the existing clauses Thirteenth and Fourteenth to read Fifteenth and Sixteenth, respectively, such new clauses Thirteenth and Fourteenth to read as follows:

“Thirteenth, to payment of other Bank Product Debt extended to any Subsidiary of a Loan Party constituting US Obligations other than US Obligations due and owing to Defaulting Lenders;

2

Fourteenth, to payment of other Bank Product Debt extended to any Subsidiary of a Loan Party constituting European Obligations other than European Obligations due and owing to Defaulting Lenders;”

(vii)Section 8.03(b) of the Credit Agreement is hereby amended by inserting in clause Seventh thereof the words “extended to any Loan Party” immediately following the words “to payment of other Bank Product Debt”.

(viii)Section 8.03(b) of the Credit Agreement is hereby amended by inserting new clause Ninth immediately following clause Eighth and renumbering existing clause Ninth to read Tenth, and such new clause Ninth to read as follows:

“Ninth, to payment of other Bank Product Debt extended to any Subsidiary of a Loan Party constituting European Obligations other than European Obligations due and owing to Defaulting Lenders;”

Each of the Loan Parties acknowledges and agrees that its obligations under the Loan Documents are, effective as of the Effective Date, modified as necessary to accommodate the amendment of the Credit Agreement pursuant hereto.

5.Amended and Restated Guaranty Amendment. The Guaranty is hereby amended by (x) in Section 2(a)(i), deleting the words “and performance of the” and inserting in lieu thereof the words “and performance of the US Obligations, including, without limitation, the” and (y) in Section 2(a)(ii), deleting the words “and performance of the” and inserting in lieu thereof the words “and performance of the European Obligations, including, without limitation, the”.

6.Conditions to Effectiveness. Upon the satisfaction of each of the following conditions, this Amendment shall be deemed to be effective (the date such conditions are satisfied, the “Effective Date”):

(a)the Administrative Agent shall have received counterparts of this Amendment executed by the Administrative Agent, the Lenders and the Borrowers;

(b)the Administrative Agent shall have received counterparts of the Guarantor Consent (substantially the form attached hereto as Exhibit A) executed by each Guarantor;

(c)the Administrative Agent shall have received a copy of the Asset Purchase Agreement, substantially in the form to be executed by the Seller;

(d)the Administrative Agent shall have received a certificate of a Responsible Officer of each Borrower, certifying (i) that there has been no change to such Borrower's Organization Documents, other than as attached to the certificate, since true and complete copies of the same were delivered to the Administrative Agent on May 18, 2012 or February 28, 2013, as applicable and (ii) that there has been no change to the titles, names and signatures of each Person authorized to sign the Loan Documents since an incumbency certificate of such Borrower was delivered to the Administrative Agent on May 18, 2012 or February 28, 2013, as applicable (the Administrative Agent may conclusively rely on this certificate until it is otherwise notified by the applicable Borrower in writing);

(e)the Administrative Agent shall have received good standing certificates for each Borrower, issued by the Secretary of State or other appropriate official of such Borrower's jurisdiction of

organization and each other jurisdiction reasonably requested by the Administrative Agent where such Borrower's conduct of business or ownership of Property necessitates qualification;

3

(f)the Administrative Agent shall have received pro forma Borrowing Base Certificates in respect of each of the US Borrowing Base and the European Borrowing Base, in each case after giving effect to the Memorex Divesture and prepared as of February 28, 2013;

(g)Total Availability (after giving effect to all fees and expenses paid on the Effective Date pursuant to this Amendment, the Credit Agreement and the other Loan Documents) shall be greater than or equal to $75,000,000; and

(h)the Borrowers shall have paid all fees and expenses to be paid to the Administrative Agent pursuant to the Credit Agreement and the other Loan Documents, including without limitation, all reasonable out-of-pocket costs and expenses of the Administrative Agent incurred in connection with the development, preparation, negotiation, execution and delivery of this Amendment and the reasonable fees and expenses of Winston & Strawn LLP.

7.Effect of the Agreement. Except as expressly provided herein, the Credit Agreement and the other Loan Documents shall remain unmodified and in full force and effect. Except as expressly set forth herein, this Amendment shall not be deemed (a) to be a waiver of, or consent to, a modification or amendment of, any other term or condition of the Credit Agreement or any other Loan Document, (b) to prejudice any other right or rights which the Administrative Agent or the Lenders may now have or may have in the future under or in connection with the Credit Agreement or the other Loan Documents or any of the instruments or agreements referred to therein, as the same may be amended, restated, supplemented or otherwise modified from time to time, (c) to be a commitment or any other undertaking or expression of any willingness to engage in any further discussion with the Borrowers or any other Person with respect to any waiver, amendment, modification or any other change to the Credit Agreement or the Loan Documents or any rights or remedies arising in favor of the Lenders or the Administrative Agent, or any of them, under or with respect to any such documents or (d) to be a waiver of, or consent to or a modification or amendment of, any other term or condition of any other agreement by and among the Borrowers, on the one hand, and the Administrative Agent or any other Lender, on the other hand.

8.Representations and Warranties. Each Borrower hereby represents and warrants to the Administrative Agent and the Lenders as follows:

(a)Both before and after giving effect to this Amendment, no Default or Event of Default has occurred and is continuing.

(b)The execution, delivery and performance by each Borrower of this Amendment and each other document executed in connection herewith, and by each Guarantor of the Guarantor Consent and each other document executed in connection herewith, have been duly authorized by all necessary corporate and other action and do not and will not require any registration with, consent or approval of, or notice to or action by, any Person (including any Governmental Authority) in order to be effective and enforceable.

(c)The Amendment Documents constitute the legal, valid and binding obligation of each Borrower and each Guarantor, as applicable, and are enforceable against each Borrower and each Guarantor, as applicable, in accordance with their respective terms, without defense, counterclaim or offset.

(d)All representations and warranties of the Borrowers contained in Article V of the Credit Agreement are true and correct on and as of the Effective Date, except to the extent that any such representation and warranty specifically relates to an earlier date.

(e)Each Borrower is entering into this Amendment and each Guarantor is entering into the Guarantor Consent on the basis of its own investigation and for its own reasons, without reliance upon the Administrative Agent, the Lenders or any other Person.

4

9.Miscellaneous.

(a)This Amendment shall be binding upon and inure to the benefit of the parties hereto and thereto and their respective successors and assigns. No third party beneficiaries are intended in connection with this Amendment.

(b)THIS AMENDMENT IS SUBJECT TO THE PROVISIONS OF SECTIONS 10.16 AND 10.17 OF THE CREDIT AGREEMENT RELATING TO GOVERNING LAW, VENUE AND WAIVER OF RIGHT TO TRIAL BY JURY, THE PROVISIONS OF WHICH ARE BY THIS REFERENCE INCORPORATED HEREIN IN FULL.

(c)This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument. Transmission of signatures of any party by facsimile shall for all purposes be deemed the delivery of original, executed counterparts thereof and the Administrative Agent is hereby authorized to make sufficient photocopies thereof to assemble complete counterparty documents.

(d)This Amendment, together with the other Amendment Documents, the Credit Agreement and the Guaranty, contains the entire and exclusive agreement of the parties hereto with reference to the matters discussed herein and therein. This Amendment supersedes all prior drafts and communications with respect thereto. This Amendment may not be amended except in accordance with the provisions of Section 10.01 of the Credit Agreement.

(e)If any term or provision of this Amendment shall be deemed prohibited by or invalid under any applicable law, such provision shall be invalidated without affecting the remaining provisions of this Amendment, the Credit Agreement or the Guaranty, respectively.

(f)Each Borrower covenants to pay to or reimburse the Administrative Agent, upon demand, for all reasonable out-of-pocket costs and expenses incurred in connection with the development, preparation, negotiation, execution and delivery of this Amendment.

(g)This Amendment shall constitute a “Loan Document” under and as defined in the Credit Agreement.

[SIGNATURE PAGES FOLLOW]

5

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written.

IMATION CORP., as a Borrower

By:_______________________________________

Name:Paul R. Zeller

Title: Senior Vice President and Chief Financial

Officer

IMATION ENTERPRISES CORP., as a Borrower

By:________________________________________

Name:Paul R. Zeller

Title: Senior Vice President and Chief Financial

Officer

IMATION EUROPE B.V., as a Borrower

By:_________________________________________

Name:_______________________________________

Title:________________________________________

[Fourth Amendment and Consent to Credit Agreement – Imation]

BANK OF AMERICA, N.A., as Administrative Agent

By:_______________________________________

Name:Jason Riley

Title: Senior Vice President - Business Capital

BANK OF AMERICA, N.A., as L/C Issuer and as a

Lender

By:_______________________________________

Name:Jason Riley

Title: Senior Vice President - Business Capital

[Fourth Amendment and Consent to Credit Agreement – Imation]

WELLS FARGO BANK, NATIONAL ASSOCIATION, as a Lender

By:_____________________________________

Name:___________________________________

Title:____________________________________

[Fourth Amendment and Consent to Credit Agreement – Imation]

JPMORGAN CHASE BANK, N.A., as a Lender

By:____________________________________

Name:__________________________________

Title:___________________________________

[Fourth Amendment and Consent to Credit Agreement – Imation]

Exhibit A to FOURTH AMENDMENT

Guarantor Consent

Each of the undersigned, in its capacity as a Guarantor, acknowledges that its consent to the foregoing Amendment is not required, but each of the undersigned nevertheless does hereby consent to the foregoing Amendment (together with all prior amendments) and to the documents and agreements referred to therein. Nothing herein shall in any way limit any of the terms or provisions of the Guaranty of the undersigned or the Collateral Documents executed by the undersigned in the Administrative Agent's and the Lenders' favor, or any other Loan Document executed by the undersigned (as the same may be amended from time to time), all of which are hereby ratified and affirmed in all respects.

IMATION FUNDING CORP., as a Guarantor

By:_______________________________________

Name:Paul R. Zeller

Title:Treasurer

IMATION LATIN AMERICA CORP., as a Guarantor

By:_______________________________________

Name:Paul R. Zeller

Title:President

MEMOREX PRODUCTS, INC., as a Guarantor

By:_______________________________________

Name:Paul R. Zeller

Title: Senior Vice President and Chief Financial

Officer

IMN DATA STORAGE LLC, as a Guarantor

By:______________________________________

Name:Paul R. Zeller

Title:Senior Vice President and Chief Financial

Officer

[Fourth Amendment and Consent to Credit Agreement – Imation]

IMATION HOLDING B.V., as the European Holdco

By:___________________________________

Name:_________________________________

Title:__________________________________

NEXSAN CORPORATION, as a Guarantor

By:___________________________________

Name:John P. Breedlove

Title:Vice President and Corporate Secretary

NEXSAN TECHNOLOGIES INCORPORATED, as a Guarantor

By:__________________________________

Name:John P. Breedlove

Title:Vice President and Corporate Secretary

[Fourth Amendment and Consent to Credit Agreement – Imation]

EX-10.2

IMATION CORP.

DIRECTORS COMPENSATION PROGRAM

EFFECTIVE MAY 4, 2005

(As amended effective January 1, 2013)

SECTION 1. PURPOSE

(a)The purpose of the Program is to attract and retain well-qualified persons for service as nonemployee directors of the Company and to promote identity of interest between directors and stockholders of the Company. The Program is designed and intended to comply with Rule 16b-3 under the Securities Exchange Act of 1934, as amended, as such Rule may be amended from time to time, and shall be interpreted in a manner consistent with the requirements thereof, as now or hereafter construed, interpreted and applied by regulations, rulings and cases.

(b)The Program is also intended to comply in form and operation with the requirements of Section 409A of the Code, or an exception thereto.

SECTION 2. DEFINITIONS

The following words and phrases have the meaning indicated below, unless the context clearly indicates otherwise.

(a)“Affiliate” means any entity that, together with the Company, is treated as a single employer under Code section 414(b) or (c). For purposes of determining whether a Termination of Employment has occurred, the term Affiliate will be determined by applying Code section 1563(a)((1), (2) and (3) for purposes of determining a controlled group of corporations under Code section 414(b) and in applying Treas. Reg. Section 1.414(c)-2 for purposes of determining trades or businesses that are under common control for purposes of Code section 414(c), the phrase “at least 50 percent” will be used instead of “at least 80 percent” each place it appears.

(b)“Accounting Date” means the first business day following the annual meeting of stockholders of the Company, or, if no annual meeting is held during a calendar year, it means December 31.

(c)“Basic Fee” means the annual retainer payable to an Eligible Director at the annual rate in effect on the Accounting Date for such Eligible Director's services on the Board (exclusive of any Chairperson Fee, Non-Executive Chairman Fee or Meeting Fees.)

(d)“Board” means the Board of Directors of the Company.

(e)“Chairperson Fee” means the annual retainer payable to an Eligible Director at the annual rate in effect on the Accounting Date for such Eligible Director's services as the chairperson of any committee of the Board.

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(f)“Change in Control” has the meaning given it in Section 8(b) to the extent it is consistent with and satisfies the definition of “Change of Control” under Code section 409A.

(g)“Change in Control Price” of the Common Stock shall equal the higher of (i) if applicable, the price paid for the Common Stock in the transaction constituting a Change in Control and (ii) the Fair Market Value of the Common Stock as of the last trading day preceding the date of the Change in Control.

(h)“Code” means the Internal Revenue Code of 1986, as amended, and any applicable regulations or binding rules promulgated thereunder.

(i)“Committee” means the Compensation Committee of the Board.

(j)“Common Stock” means the common stock, par value $.01 per share, of the Company.

(k)“Company” means Imation Corp.

(l)“Dividend Equivalent Credit” has the meaning given it in Section 7(b).

(m)“Election Form” means the Election Form attached as Exhibit B hereto or such other form as may be deemed acceptable by the Secretary of the Company from time to time.

(n)“Eligible Director” means each member of the Board who is not at the time of reference an employee of the Company or any of its subsidiaries.

(o)“Exchange Act” means the Securities Exchange Act of 1934, as amended.

(p)“Fair Market Value” as of any date means, the fair market value as defined under the Stock Plan.

(q)“Meeting Fees” means the amounts payable to an Eligible Director in arrears on any Quarterly Payment Date for attendance at meetings or participation in teleconferences of the Board or any committee of the Board (exclusive of any Basic Fee, Chairperson Fee or Non-Executive Chairman Fee).

(r)“Non-Executive Chairman Fee” means the annual retainer payable to the Eligible Director who is selected to be the Non-Executive Chairman at the annual rate in effect on the Accounting Date for such Eligible Director's services as the Non-Executive Chairman.

(s)“Program” means the Company's Directors Compensation Program, as amended from time to time.

(t)“Proration Fraction” means a fraction, the numerator of which is the number of days from the date an Eligible Director first becomes an Eligible Director to the date of the next succeeding annual meeting of stockholders and the denominator of which is 365.

(u)“Quarterly Payment Date” means the date established by the Company from time to time for payment, in arrears, of all Meeting Fees earned by Eligible Directors during the preceding calendar quarter, provided such date shall not be later than the fifteenth day of the third month following the end of such calendar quarter.

(v)“Restricted Stock Unit” means a right to receive payment of one share of Common Stock in accordance with the conditions set forth in Section 7 hereof or conditions established by the Committee.

(w)“Rule 16b-3” means Rule 16b-3 under the Exchange Act, as such Rule may be amended from time to time.

(x)“Separation from Service” means the individual has ceased to be a member of the Board and has ceased to provide services as an independent contractor (including as a member of any board of directors) of the Company and all Affiliates, or such other change in status that constitutes a “separation from service” under Code section 409A.

(x)“Stock Plan” means the then current stock incentive plan of the Company used to grant stock based awards to Eligible Directors.

SECTION 3. ADMINISTRATION

(a)The Program shall be administered by the Committee.

(b)In administering the Program, it will be necessary to follow various laws and regulations. It may be necessary from time to time to change or waive requirements of the Program to conform with the law, to meet special circumstances not anticipated or covered in the Program, or to carry on successful operation of the Program, and in connection therewith, the Committee shall have the full power and authority to:

(i)Prescribe, amend, and rescind rules and regulations relating to the Program, establish procedures deemed appropriate for its administration, interpret the provisions of the Program, remedy ambiguities, and make any and all other determinations not herein specifically authorized which may be necessary or advisable for its effective administration;

(ii)Make any amendments to or modifications of the Program which may be required or necessary to make the Program set forth herein comply with the provisions of any laws, federal or state, or any regulations issued thereunder, and to cause the Company at its expense to take any action related to the Program which may be required under such laws or regulations;

(iii)Contest on behalf of the Eligible Directors or the Company, at the sole discretion of the Committee and at the expense of the Company, any ruling or decision on any issue related to the Program, and conduct any such contest and any resulting litigation to a final determination, ruling, or decision; and

(iv)Grant stock-based awards under the Program, as provided in Section 5 hereof.

(c)Unless otherwise expressly provided in the Program, all designations, determinations, interpretations and other decisions under or with respect to the Program or any award shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive and binding upon any Eligible Director or beneficiary, and any employee of the Company.

SECTION 4. FEES/EXPENSES

(a)Each Eligible Director who is first elected to the Board at, or who continues to serve on the Board immediately following an annual meeting of stockholders, is entitled to receive a Basic Fee and a Chairperson Fee for serving as chairperson of a committee of the Board (as applicable).

(b)Any Eligible Director who is designated as the Non-Executive Chairman is entitled to receive a Non-Executive Chairman Fee for services as the Non-Executive Chairman.

(c)Each Eligible Director who joins the Board or becomes a chairperson of a committee of the Board or Non-Executive Chairman after the annual meeting of stockholders is entitled to receive a Basic Fee, Chairperson Fee or Non-Executive Chairman Fee (as applicable) multiplied by the Proration Fraction, as of the date such Eligible Director first becomes an Eligible Director, chairperson of a committee of the Board or Non-Executive Chairman.

(d)Each Eligible Director is entitled to receive a Meeting Fee for attendance at a meeting of the Board or a Committee of the Board or participation in a teleconference in lieu of such meeting. The Meeting Fees are payable in arrears on the Quarterly Payment Date. Any member of the Board who interviews a Board candidate shall be entitled to receive compensation in an amount equal to the Meeting Fee for an in person Board meeting for each such interview.

(e)The current rate of the Basic Fee, Chairperson Fee, Non-Executive Chairman Fee and Meeting Fees are set forth on the attached Exhibit A, and may be amended from time to time by the Board or any committee given responsibility for determining Board of Director compensation.

(f)Each Eligible Director is entitled to reimbursement for reasonable travel costs of attending Board and committee meetings and interviews of Board candidates. Such reimbursement shall be payable in cash after receipt of documentation by the Company from such Eligible Director, provided reimbursement is made no later than the end of the calendar year following the calendar year in which the expense was incurred.

SECTION 5. ANNUAL GRANT OF STOCK BASED AWARD

(a)Each Eligible Director who is first elected to the Board at, continues to serve on the Board or is serving as the Non-Executive Chairman of the Board immediately following an annual meeting of stockholders shall be granted a stock based award (i.e., options, restricted stock, etc.) as of the date of such meeting in type, proportion and amount to be determined by the Committee and under, and in accordance with, the terms of the Stock Plan.

(b)Each Eligible Director who joins the Board after an annual meeting of stockholders, shall be granted a stock based award pursuant to this Section 5 as of the date such Eligible Director first becomes an Eligible Director based on the dollar value of the grant made at the time of the immediately preceding annual meeting of stockholders (“Grant”), multiplied by the Proration Fraction and allocated in the same manner as the Grant. An Eligible Director who is appointed the Non-Executive Chairman of the Board after an annual meeting of stockholders, shall be granted a stock based award pursuant to this Section 5 as of the date such Eligible Director first becomes the Non-Executive Chairman of the Board based on dollar value of the grant made at the time of the immediately preceding annual meeting of stockholders (Non-Executive Grant”), multiplied by the Proration Fraction and allocated in the same manner as the Non-Executive Grant.

(c)Terms and conditions of stock based awards (such as grant price, vesting schedule, etc.) shall be as determined by the Committee and under, and in accordance with, the terms of the Stock Plan.

(d)The amount and composition of the current annual stock based award are set forth on the attached Exhibit A, which may be amended from time to time by the Board or any committee given responsibility for determining Board of Director compensation.

SECTION 6. MATCHING GIFT PROGRAM

Each Eligible Director is entitled to a matching gift from the Company of up to $7,500 per calendar year to qualifying charitable institutions, prorated for any calendar year that Eligible Director joins the Board. Each Eligible Director must submit evidence of such gift to the Company and the Company will send the matching contribution directly to the qualifying charitable institution on behalf of the Eligible Director.

SECTION 7. ELECTIONS TO RECEIVE COMMON STOCK OR RESTRICTED STOCK UNITS

(a)Elections.

(i)Common Stock. Each Eligible Director who is not covered by clause (iii) below, may elect to receive, in lieu of a cash payment for his or her Basic Fee, Chairperson Fee, Non-Executive Chairman Fee and/or Meeting Fees (or a portion thereof, as elected by the Eligible Director), a number of shares of Common Stock (excluding fractional shares, which shall be paid in cash (or carried over to the next payment if an Eligible Director elects to be paid all in Common Stock)), which is calculated by dividing his or her Basic Fee, Chairperson Fee, Non-Executive Chairman Fee and/or Meeting Fees (or a portion thereof), by the Fair Market Value of one share of Common Stock on the Accounting Date or Quarterly Payment Date, as applicable. To be effective, any such election shall be made by submitting a completed and executed Election Form to the Secretary of the Company prior to the relevant Accounting Date or Quarterly Payment Date, as applicable.

(ii)Restricted Stock Units. Each Eligible Director who is not covered by clause (iii) below, may elect to receive, in lieu of cash payment for his or her Basic Fee, Chairperson Fee, Non-Executive Chairman Fee and/or Meeting Fees, Restricted Stock Units (including fractional Restricted Stock Units) calculated by dividing his or her Basic Fee, Chairperson Fee, Non-Executive Chairman Fee and/or Meeting Fees (or a portion thereof, as elected by the Eligible Director) for services to be performed in the following the calendar year by the Fair Market Value of one share of Common Stock on the Accounting Date or Quarterly Payment Date, as applicable. To be effective, any such election relating to the Basic Fee, Chairperson Fee, Non-Executive Chairman Fee or Meeting Fees shall be made by submitting a completed and executed Election Form to the Secretary of the Company prior to the calendar year in which the Eligible Director wishes the election to be in effect and such election shall be irrevocable for such calendar year.

(iii)New Directors. Each Eligible Director who during the preceding twenty-four (24) months has not participated in any deferred compensation arrangement of the Company or any Affiliate that would be treated as a single plan with this Plan under Treas. Reg. Sec. 1.409A-1(c)(2)(i) and who joins the Board between annual meetings of stockholders may elect prior to first becoming an Eligible Director to receive, in lieu of cash payment for his or her Basic Fee, Chairperson Fee and/or Non-Executive Chairman Fee, a number of shares of Common Stock (excluding fractional shares, which shall be paid in cash (or carried over to the next payment if an Eligible Director elects to be paid all in Common Stock)) and/or Restricted Stock Units (including fractional Restricted Stock Units) up to the number which is calculated by (A) multiplying the sum of his or her Basic Fee, Chairperson Fee, Non-Executive Chairman Fee (or a portion thereof, as elected by the Eligible Director) payable with respect to the time prior to the next annual meeting of stockholders which the Eligible Director is first elected to the Board by the Proration Fraction and (B) dividing the product resulting from clause (A) by the Fair Market Value of one share of Common Stock on the date that the Eligible Director becomes an Eligible Director. Each Eligible

Director may also elect to receive, in lieu of cash payment for his or her Meeting Fees (or a portion thereof, as elected by the Eligible Director), Common Stock (excluding fractional shares, which shall be paid in cash (or carried over to the next payment if an Eligible Director elects to be paid all in Common Stock)) Restricted Stock Units (including fractional Restricted Stock Units) calculated by dividing his or her Meeting Fees (or portion thereof) by the Fair Market Value of one share of Common Stock on the Quarterly Payment Date. To be effective, any such election shall be made by submitting a completed and executed Election Form to the Secretary of the Company prior to the date that the Eligible Director becomes a Director, and such Election Form shall be irrevocable on the date he or she first becomes an Eligible Director for that calendar year with respect to any election (or lack of election) to receive Restricted Stock Units.

(b)Restricted Stock Units.

(i)Account. Upon the grant of Restricted Stock Units to an Eligible Director, such units shall be credited to an account established for such Eligible Director. A Restricted Stock Unit shall be treated as granted on the corresponding Accounting Date or last day of the calendar quarter relating to the fees for which the Restricted Stock Units are determined. Each Eligible Director shall receive an annual statement showing the number of Restricted Stock Units that have been credited to the Eligible Director's account under the Program.

(ii) Dividend Equivalent Credits. An Eligible Director's account shall be credited with Dividend Equivalent Credits equivalent to the amount of dividends paid by the Company to holders of outstanding shares of Common Stock based on the number of Restricted Stock Units credited to the Eligible Director's account on the dividend record date for shares of Common Stock. Such Dividend Equivalent Credit shall be converted into an equivalent number of Restricted Stock Units (including fractional Restricted Stock Units) based on the fair market value of one share of Common Stock on the related dividend payment date and such Restricted Stock Units shall be subject to the same distribution timing as the underlying Restricted Stock Units to which the Dividend Equivalent Credits related. If a dividend is paid in cash, each Eligible Director shall be credited, as of each applicable dividend payment date, in accordance with the following formula:

(A X B) / C

in which “A” equals the number of Restricted Stock Units held by the Eligible Director on the dividend record date, “B” equals the cash dividend per share and “C” equals the Fair Market Value per share of Common Stock on the dividend payment date. If a dividend is paid in property other than cash, Dividend Equivalent Credits shall be credited, as of the applicable dividend payment date, in accordance with the formula set forth above, except that “B” shall equal the fair market value per share of the property that the Eligible Director would have received in respect of the number of shares of Common Stock equal to the number of Restricted Stock Units held by the Eligible Director as of the dividend record date, had such shares been owned by the Eligible Director as of the record date for such dividend.

(iii)Time of Payment. All payments in respect of an Eligible Director's Restricted Stock Units shall be made as soon as practicable but not more than ninety (90) days following the earlier of (A) the Eligible Director's death (B) the occurrence of a Change in Control, and (C) the specific date (including upon the Eligible Director's Separation from Service) the Eligible Director has elected to receive payment pursuant to the applicable Election Form pursuant to which such Eligible Director elected to receive such Restricted Stock Units in lieu of cash. If distribution is to be made upon a Separation from Service and the individual is a “specified employee,” as defined

under Code section 409A, on the date of such Separation from Service, then no distribution will be made before the date that is six (6) months after the date of the individual's Separation from Services, or if earlier, upon his or her death.

(iv)Form of Payment. Payment in respect of Restricted Stock Units shall be made in one lump sum payment in the form of shares of Common Stock. For purposes of the preceding sentence, any payment made upon the occurrence of a Change in Control in full or partial payment of Restricted Stock Units shall be made in cash in an amount equal the Change in Control Price multiplied by the number of Restricted Stock Units (including fractional units).

(c)Stock Plan.

All shares of Common Stock and all Restricted Stock Units awarded pursuant to this Section 7 shall be awarded under, and in accordance with, the terms of the Stock Plan. Restricted Stock Units awarded hereunder shall be considered Other Stock-Based Awards under the Plan.

SECTION 8. CHANGE IN CONTROL

(a)For purposes of this Section 8, “Act” shall mean the Securities Exchange Act of 1934.

(b)For purposes of the Program, a “Change in Control” of the Company shall be deemed to have occurred if any one of the following events shall occur:

(i)the consummation of a transaction or series of related transactions during a 12-month period in which a person, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Act) that owns (after application of the attribution rules of Section 318 of the Code) less than 35% of the combined voting power of the Company's outstanding voting stock prior to such transaction or the first of such series of related transactions), other than the Company or a subsidiary of the Company, or any employee benefit plan of the Company or a subsidiary of the Company, acquires ownership (after application of the attribution rules of Section 318 of the Code) of 35% or more of the combined voting power of the Company's then outstanding voting stock (other than in connection with a Business Combination in which clauses (1) and (2) of Section 8(b) (iii) apply); or

(ii)a majority of the members of the Company's Board of Directors is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Company's Board of Directors prior to the date of the election or appointment; or

(iii)the consummation of a reorganization, merger, statutory share exchange, consolidation or similar transaction involving the Company, a sale or other disposition in a transaction or series of related transactions within a 12-month period of all or substantially all of the Company's assets or the issuance by the Company of its stock in connection with the acquisition of assets or stock of another entity (each, a “Business Combination”) in each case unless, following such Business Combination, (1) all or substantially all of the individuals and entities that were the owners of the Company's outstanding voting stock immediately prior to such Business Combination own (after application of the attribution rules of Section 318 of the Code) immediately after the transaction or transactions more than 50% of the combined voting power of the then outstanding voting stock (or comparable equity interests) of the entity resulting from such Business Combination (including an entity that, as a result of such transaction, owns the Company

or all or substantially all of the Company's assets either directly or through one of more subsidiaries), and (2) no person, entity or group (other than a direct or indirect parent entity of the Company that, after giving effect to the Business Combination, beneficially owns 100% of the outstanding voting securities (or comparable equity interests) of the entity resulting from the Business Combination) has acquired, during a 12-month period, ownership (after application of the attribution rules of Section 318 of the Code) of 35% or more of the combined voting power of the then outstanding voting stock (or comparable equity interests) of the entity resulting from such Business Combination.

Notwithstanding anything herein stated, no Change in Control shall be deemed to occur unless such event constitutes a change in ownership or effective control, or a change in the ownership of a substantial portion of the assets, of a business under Code section 409A.

SECTION 9. AMENDMENT; TERMINATION

The Board may at any time and from time to time alter, amend, suspend, or terminate the Program in whole or in part; provided, however, that no amendment which requires stockholder approval in order for the exemptions available under Rule 16b-3 to be applicable to the Program and the Eligible Directors shall be effective unless the same shall be approved by the stockholders of the Company entitled to vote thereon.

SECTION 10. RIGHTS OF ELIGIBLE DIRECTORS

Nothing contained in the Program or with respect to any grant shall interfere with or limit in any way the right of the stockholders of the Company to remove any Eligible Director from the Board pursuant to the bylaws of the Company, nor confer upon any Eligible Director any right to continue in the service of the Company as a director.

SECTION 11. GENERAL RESTRICTIONS

(a)Investment Representations. The Company may require any Eligible Director to whom Common Stock is issued, as a condition of receiving such Common Stock, to give written assurances in substance and form satisfactory to the Company and its counsel to the effect that such person is acquiring the Common Stock for his or her own account for investment and not with any present intention of selling or otherwise distributing the same, and to such other effects as the Company deems necessary or appropriate in order to comply with federal and applicable state securities laws.

(b)Compliance with Securities Laws. Each issuance shall be subject to the requirement that, if at any time counsel to the Company shall determine that the listing, registration or qualification of the shares upon any securities exchange or under any state or federal law, or the consent or approval of any governmental or regulatory body, is necessary as a condition of, or in connection with, the issuance of shares thereunder, such issuance may not be accepted or exercised in whole or in part unless such listing, registration, qualification, consent or approval shall have been effected or obtained on conditions acceptable to the Committee. Nothing herein shall be deemed to require the Company to apply for or to obtain such listing, registration or qualification.

(c)Nontransferability. Except as otherwise provided by the Committee, Restricted Stock Units under this Program shall not be transferable by an Eligible Director other than by the laws of descent and distribution.

(d)No Acceleration of Distribution of Restricted Stock Units. The distribution of Restricted Stock Units may not be accelerated, including upon termination of the Program, if such acceleration would cause the distribution to become subject to tax under Code Section 409A.

SECTION 12. WITHHOLDING

The Company may defer making payments or delivering shares of Common Stock under the Program for up to 30 days to ensure that satisfactory arrangements have been made for the payment of any federal, state or local income or employment taxes that the Company reasonably determines in its sole discretion are required to be withheld with respect to such payment or delivery.

SECTION 13. GOVERNING LAW

The Program and all rights hereunder shall be construed in accordance with and governed by the internal law, and not the law of conflicts, of the State of Delaware.

SECTION 14. UNFUNDED PROGRAM

The Program shall be unfunded and shall not create (or be construed to create) a trust or a separate fund or funds. The Program shall not establish any fiduciary relationship between the Company and any Eligible Director or other person. To the extent any person holds any rights by virtue of a grant under the Program, such right shall be no greater than the right of an unsecured general creditor of the Company.

SECTION 15. HEADINGS

The headings of sections and subsections herein are included solely for convenience of reference and shall not affect the meaning of any of the provisions of the Program.

EXHIBIT A

FEES

(as of January 1, 2013)

Basic Fee	$50,000
Non-Executive Chairman	$ 87,500, in addition to the Basic Fee for service as a member of the Board of Directors.
Committee Chair	Audit & Finance: $10,000 Compensation: $10,000 Nominating & Governance: $7,500
Board Meetings/Teleconferences	$ 1,500/$1,000
Audit & Finance Meetings/Teleconferences	$ 1,500/$1,000
Compensation Committee Meetings/Teleconferences	$ 1,500/$1,000
Nomination & Governance Meetings/Teleconferences	$ 1,500/$1,000
Annual Stock Based Grants	All Eligible Directors: Dollar value $175,000 in restricted stock Non-Executive Chairman: $87,500 in restricted stock, in addition to the Annual Stock Based Grant for service as a member of the Board of Directors

EXHIBIT B

IMATION CORP.

DIRECTORS COMPENSATION PROGRAM

ELECTION FORM

THIS ELECTION is made by _________ (the “Eligible Director”), effective as of the ___ day of ___, 200_.

WHEREAS, Imation Corp., a Delaware corporation (the “Company”) has a director compensation program (the “Program”);

WHEREAS, the Eligible Director has the option under the Program to receive Common Stock and/or Restricted Stock Units in lieu of payment of certain cash compensation for service as a director of the Company;

NOW, THEREFORE, in accordance with the terms and conditions of the Program, the Eligible Director hereby agrees as follows:

The Program

This Election is entered into pursuant to the Program, which is incorporated herein by reference and made a part hereof. The Eligible Director hereby acknowledges receipt of a copy of the Program. All capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Program.

Basic Fee, Chairperson Fee and Non-Executive Chairman Fee (“Annual Grant”)

The Basic Fee, Chairperson Fee and Lee Director Fee is payable (and prorated) on the date first elected to the Board of Directors (if other than at an annual meeting of stockholders). Thereafter, the Basic Fee, Chairperson Fee and Non-Executive Chairman Fee is payable on each Accounting Date following the Annual Meeting of Stockholders.

** Special Tax Rules Relating to Election to Receive Restricted Stock Units

Due to Internal Revenue Code Section 409A relating to the taxation of deferred compensation, an election to receive Restricted Stock Units under the Program can only be made for services performed and payments to be received following the calendar year in which the election is made (e.g., an election made in 2013 is not effective until January 1, 2014). Also, the election must remain in effect for the ENTIRE calendar year. Any change in or termination of the election can only be made the year before it is to go in effect (e.g., a change for 2014 must be made before the end of 2013.)

Subject to the terms and conditions of the Program, the Eligible Director hereby elects to receive the Basic Fee, the Chairperson and Non-Executive Chairman Fee, if applicable, in the following manner:

BASIC FEE

___ % Election to receive Common Stock in lieu of Cash

___ % Election to receive Restricted Stock Units in lieu of Cash**

___ % Election to receive Cash

Total:100 %

CHAIRPERSON FEE: (if applicable)

___ % Election to receive Common Stock in lieu of Cash

___ % Election to receive Restricted Stock Units in lieu of Cash**

___ % Election to receive Cash

Total:100 %

MEETING FEES:

Subject to the terms and conditions of the Program, the Eligible Director elects to receive Meeting Fees compensation in the following manner, with such fees payable on each Quarterly Payment Date:

___ % Election to receive Common Stock in lieu of Cash

___ % Election to receive Restricted Stock Units in lieu of Cash**

___ % Election to receive Cash

Total:100 %

NON-EXECUTIVE CHAIRMAN FEE: (if applicable)

___ % Election to receive Common Stock in lieu of Cash

___ % Election to receive Restricted Stock Units in lieu of Cash**

___ % Election to receive Cash

Total:100 %

DISTRIBUTION ELECTION FOR RESTRICTED STOCK UNITS: (Must be completed if Eligible Director has made an Election to Receive Restricted Stock Units.)

The Eligible Director hereby elects to receive payment of his or her Restricted Stock Units on the earlier to occur of a Change in Control, his or her death or the following date:

______-year anniversary of the grant date (please specify)

___The date the Eligible Director incurs a “separation from service” with Company (within the meaning of Section 409A of the Internal Revenue Code).

___Other (please specify date only): ___________________________

Term of Election

This Election will remain in effect until terminated or changed by the Eligible Director pursuant to written notice to the Secretary of the Company or filing of a new Election Form. Note: A change or termination of an Election to receive Restricted Stock Units will not become effective until January 1 of the calendar year following the calendar year the change or termination is filed with the Secretary of the Company.

IN WITNESS WHEREOF, the Eligible Director has entered into this Election on the day and year first above written, and the Company has accepted this Election as of such day and year.

ELIGIBLE DIRECTOR

Signature

Accepted and Agreed to by IMATION CORP.

By:

Title:

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.

May 9, 2013
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.

May 9, 2013
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 March 31, 2013, 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.

May 9, 2013

/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 March 31, 2013, 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.

May 9, 2013

/s/ PAUL R. ZELLER  

Paul R. Zeller, 

Senior Vice President and Chief Financial Officer 

XML

Restructuring and Other Expense (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Restructuring and Related Activities [Abstract]
Severance and related	$ 0.6	$ 0.4
Lease termination costs	0.1	0
Gain on sale of fixed assets held for sale	0	(0.7)
Other	0.8	0.9
Total restructuring	1.5	0.6
Contingent consideration adjustment	(0.1)	0
Acquisition and integration related costs	0.4	0.4
Other	0.3	0.3
Total	2.1	1.3
Severance related to discontinued operations	$ 1.1

XML

Segment Information - Segment Information (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Segment Reporting Information [Line Items]
Net revenue	$ 224.4	$ 263.3
Operating Income (Loss)	(14.7)	(5.6)
Interest income	0	(0.1)
Interest expense	0.7	0.9
Other, net	(0.2)	1.5
Loss from continuing operations before income taxes	(15.2)	(7.9)
All segments
Segment Reporting Information [Line Items]
Operating Income (Loss)	2.9	10.1
Corporate and Unallocated Amount
Segment Reporting Information [Line Items]
Operating Income (Loss)	(17.6)	(15.7)
Consumer Storage and Accessories
Segment Reporting Information [Line Items]
Net revenue	121.8	162.1
Consumer Storage and Accessories | All segments
Segment Reporting Information [Line Items]
Operating Income (Loss)	5.9	16.6
Consumer Storage and Accessories | Consumer Storage Media
Segment Reporting Information [Line Items]
Net revenue	114.2	152.7
Consumer Storage and Accessories | Audio and Accessories
Segment Reporting Information [Line Items]
Net revenue	7.6	9.4
Tiered Storage and Security and Accessories
Segment Reporting Information [Line Items]
Net revenue	102.6	101.2
Tiered Storage and Security and Accessories | All segments
Segment Reporting Information [Line Items]
Operating Income (Loss)	(3.0)	(6.5)
Tiered Storage and Security and Accessories | Commercial Storage Media
Segment Reporting Information [Line Items]
Net revenue	66.9	86.2
Tiered Storage and Security and Accessories | Storage and Security Solutions
Segment Reporting Information [Line Items]
Net revenue	$ 35.7	$ 15.0

XML

Debt (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2013
Line of Credit Facility [Line Items]
Line of Credit Facility, Amount Outstanding	$ 20.0
Current borrowing capacity	78.4
Debt Instrument, Interest Rate at Period End	2.20%
Domestic Line of Credit | United States
Line of Credit Facility [Line Items]
Current borrowing capacity	66.0
Foreign Line of Credit | Europe
Line of Credit Facility [Line Items]
Current borrowing capacity	$ 12.4

XML

Litigation, Commitments and Contingencies (Details) (USD $) In Millions, unless otherwise specified	135 Months Ended
	Mar. 31, 2013	Dec. 31, 2012
Loss Contingencies [Line Items]
Tax levy liabilities	$ 29.1	$ 27.7
ECJ Copyright Levy
Loss Contingencies [Line Items]
Copyright Levy Payment	100
Tax levy liabilities	$ 29.1	$ 27.7

XML

Retirement Plans (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Pension Plans, Defined Benefit [Member]
Defined Benefit Plan Disclosure [Line Items]
Employer contributions in current fiscal year	$ 0.4
United States
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract]
Service cost	0	0
Interest cost	0.7	0.8
Expected return on plan assets	(1.3)	(1.5)
Amortization of net actuarial loss	0.4	0.3
Total pension cost (credit)	(0.2)	(0.4)
International
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract]
Service cost	0.1	0.1
Interest cost	0	0
Expected return on plan assets	0	0
Amortization of net actuarial loss	0.1	0.1
Total pension cost (credit)	0.2	0.2
Minimum | Pension Plans, Defined Benefit [Member]
Defined Benefit Plan Disclosure [Line Items]
Estimated future employer contributions in current fiscal year	1.0
Maximum | Pension Plans, Defined Benefit [Member]
Defined Benefit Plan Disclosure [Line Items]
Estimated future employer contributions in current fiscal year	$ 3.0

XML

Acquisitions and Divestitures Acquisitions (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended				3 Months Ended		3 Months Ended		3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2012	Dec. 31, 2012 Nexsan Corporation	Mar. 31, 2013 MXI Security	Jun. 04, 2011 MXI Security	Mar. 31, 2013 BeCompliant Corporation (Encryptx)	Feb. 28, 2011 BeCompliant Corporation (Encryptx)	Mar. 31, 2013 Cash Flows from Financing Activities BeCompliant Corporation (Encryptx)	Mar. 31, 2013 Cash Flows from Operating Activities BeCompliant Corporation (Encryptx)
Business Acquisition, Contingent Consideration [Line Items]
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net				$ 120.1
Goodwill	70.6		73.5	65.5
Goodwill, Purchase Accounting Adjustments	1.6	0
Contingent consideration fair value					0.5	0.6		0.6
Contingent consideration adjustment	(0.1)	0			0.1
Contingent consideration payments	$ 0.5	$ 0.7					$ 0.8		$ 0.5	$ 0.3

XML

Restructuring and Other Expense (Tables)

3 Months Ended

Mar. 31, 2013

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
	March 31,
(In millions)	2013			2012
Restructuring
Severance and related	$	0.6		$	0.4
Lease termination costs	0.1			—
Gain on sale of fixed assets held for sale	—			(0.7		)
Other	0.8			0.9
Total restructuring	$	1.5		$	0.6
Other
Contingent consideration fair value adjustment	(0.1		)	—
Acquisition and integration related costs	0.4			0.4
Other	0.3			0.3
Total	$	2.1		$	1.3

Global Processing Improvement Restructuring Program 2012 [Member]

Restructuring Cost and Reserve [Line Items]

Schedule of Restructuring Reserve by Type of Cost

Changes in the 2012 GPI Program accruals were as follows:

(In millions)	Severance and Related			Lease Termination Costs			Other			Total
Accrued balance at December 31, 2012	$	15.4		$	0.5		$	1.0		$	16.9
Charges	1.7			0.1			0.8			2.6
Usage and payments	(5.0		)	(0.1		)	(0.2		)	(5.3		)
Currency impacts	(0.2		)	—			(0.1		)	(0.3		)
Accrued balance at March 31, 2013	$	11.9		$	0.5		$	1.5		$	13.9

XML

Fair Value Measurements - Other Hedges (Details) (USD $) In Millions, unless otherwise specified			3 Months Ended																		3 Months Ended
	Mar. 31, 2013	Dec. 31, 2012	Mar. 31, 2013 Foreign currency forward contracts	Mar. 31, 2012 Foreign currency forward contracts	Mar. 31, 2013 Other Current Assets	Dec. 31, 2012 Other Current Assets	Mar. 31, 2013 Other Current Liabilities	Dec. 31, 2012 Other Current Liabilities	Mar. 31, 2013 Hedges designated as hedging instruments Cash flow hedges	Dec. 31, 2012 Hedges designated as hedging instruments Cash flow hedges	Mar. 31, 2013 Hedges designated as hedging instruments Cash flow hedges Other Current Assets	Dec. 31, 2012 Hedges designated as hedging instruments Cash flow hedges Other Current Assets	Mar. 31, 2013 Hedges designated as hedging instruments Cash flow hedges Other Current Liabilities	Dec. 31, 2012 Hedges designated as hedging instruments Cash flow hedges Other Current Liabilities	Mar. 31, 2013 Other hedges not receiving hedge accounting	Dec. 31, 2012 Other hedges not receiving hedge accounting	Mar. 31, 2013 Other hedges not receiving hedge accounting Other Current Assets	Dec. 31, 2012 Other hedges not receiving hedge accounting Other Current Assets	Mar. 31, 2013 Other hedges not receiving hedge accounting Other Current Liabilities	Dec. 31, 2012 Other hedges not receiving hedge accounting Other Current Liabilities	Mar. 31, 2013 Other Expense	Mar. 31, 2012 Other Expense
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Foreign Currency Transaction Gain (Loss), before Tax																					$ 0.5	$ (1.0)
Gain on foreign currency contracts			0.3	0.4
Notional Amount	227.0	295.1							179.7	248.6					47.3	46.5
Derivative assets fair value					7.7	5.5					7.7	5.5					0	0
Derivative liabilities fair value							$ (0.6)	$ (1.3)					$ (0.6)	$ (1.3)					$ 0	$ 0

XML

Stock-Based Compensation (Details) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended			0 Months Ended
	Mar. 31, 2013 plan	Mar. 31, 2012	Mar. 31, 2013 Stock Incentive Plan 2011	May 08, 2013 Subsequent Event Stock Incentive Plan 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock compensation expense	$ 1.8	$ 1.9
Number of share-based compensation plans	5
Number of shares available for grant			1,293,247
Additional shares authorized for grant				1,543,000
Total number of shares authorized				6,043,000
Grants in period, weighted average grant date fair value (dollars per share)	$ 1.61

XML

Intangible Assets and Goodwill - Intangible Assets Narrative (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets held for sale	$ 1.7
Contingent consideration payments	0.5	0.7
Amortization expense	$ 3.6	$ 7.2

XML

Shareholders' Equity - Treasury Stock (Details) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended	11 Months Ended
	Mar. 31, 2013	Mar. 31, 2013	May 02, 2012
Equity [Abstract]
Number of shares authorized to be repurchased			5,000,000
Stock Repurchased During Period, Shares		1,200,000
Payments for Repurchase of Common Stock		$ 6.5
Remaining number of shares authorized to be repurchased	3,800,000	3,800,000
Average price per share of treasury stock acquired and held	$ 24.15
Movement in Treasury Stock [Roll Forward]
Balance as of December 31, 2012 (shares)	1,563,321
Purchases (shares)	0
Exercise of stock options (shares)	0
Restricted stock grants and other (shares)	51,718
401(k) matching contribution (shares)	(200,080)
Balance as of March 31, 2013 (shares)	1,414,959	1,414,959

XML

Income Taxes (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2012
Income Tax Disclosure [Abstract]
Income tax provision	$ 0.4	$ 1.3
Effective income tax rate	(2.60%)	(16.50%)
Federal statutory income tax rate	35.00%
Unrecognized Tax Benefits	$ 4.6		$ 4.7

XML

Acquisitions and Divestitures Acquisitions and Divestitures (Notes)

3 Months Ended

Mar. 31, 2013

Business Combinations [Abstract]

Acquisitions and Divestitures

Acquisitions and Divestitures

Acquisitions

On December 31, 2012, we acquired Nexsan Corporation (Nexsan), a provider of disk-based storage systems with a portfolio of disk-based and hybrid disk-and-solid-state storage systems, for a purchase price of $120.1 million. The acquisition resulted in $65.5 million of goodwill. During the three months ended March 31, 2013, the purchase price was adjusted to reflect working capital variances in accordance with the merger agreement. This adjustment resulted in a decrease to goodwill of $1.6 million and a cash receipt for this amount. As of March 31, 2013, our purchase price allocation is preliminary pending final evaluation of income tax balances. See Note 6 - Intangible Assets and Goodwill for more information regarding goodwill. We have not shown proforma results for the comparative period for the acquisition of Nexsan as it is not material to our Condensed Consolidated Results of Operations.

On June 4, 2011, we acquired the assets of MXI Security (MXI). The purchase price included a contingent consideration arrangement with an estimated fair value of $0.6 million at December 31, 2012. See Note 4 - Acquisitions in our 2012 Annual Report on Form 10-K for further information regarding the contingent consideration.

We remeasure the estimated fair value of the remaining contingent consideration each reporting period. At March 31, 2013, our estimated fair value of this contingent consideration obligation was determined to be $0.5 million. The $0.1 million decrease in the fair value of this contingent consideration obligation from December 31, 2012 was recorded as a benefit in the restructuring and other line 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 $0.6 million at December 31, 2012. The final contingent consideration payment of $0.8 million was determined based on certain 2012 milestones and was paid during the first quarter of 2013. In the Condensed Consolidated Statement of Cash Flows, $0.5 million was presented in cash flows from financing activities and the remaining $0.3 million was presented in cash flows from operating activities as it pertains to the excess of actual payments over the initially recognized fair value of the contingent consideration.

Discontinued Operations

On February 13, 2013, we announced our plans to divest our XtremeMac and Memorex consumer electronics businesses. The consumer storage business under the Memorex^TM and TDK Life on Record^TM brands will be retained. These divestitures are part of the acceleration of our strategic transformation that we announced during the fourth quarter of 2012 in conjunction with our plan to increase focus on data storage and security. As a part of exiting these disposal groups, we plan to sell the assets directly associated with these businesses, which primarily include inventory, tooling and intangible assets. We are in varying degrees of negotiations for the sale of these assets and believe such sales are probable to be consummated in the next 12 months. We have classified inventory of $24.8 million, intangible assets of $1.7 million and tooling of $1.6 million as assets held for sale as of March 31, 2013. The operating results for these businesses are presented in our Condensed Consolidated Statements of Operations as discontinued operations for all periods presented and only reflect revenues and expenses that are directly attributable to these businesses that will be eliminated from ongoing operations. Activity from the operations of these businesses will continue to be recorded and classified as discontinued operations until the sale of each business is consummated.

The key components from discontinued operations were as follows:

	Three Months Ended
	March 31,
(In millions)	2013			2012
Net revenue	$	11.2		$	18.4
Loss from operations of discontinued businesses, before income taxes	$	(5.5	)	$	(3.3	)
Income tax benefit	—			(0.3		)
Discontinued operations	$	(5.5	)	$	(3.0	)

XML

Stock-Based Compensation - Stock Options Activity (Details) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Stock Options [Roll Forward]
Outstanding December 31, 2012 (shares)	5,818,472
Granted (shares)	882,602
Exercised (shares)	0
Canceled (shares)	(201,772)
Forfeited (shares)	(121,738)
Outstanding March 31, 2013 (shares)	6,377,564
Exercisable as of March 31, 2013 (shares)	3,385,768
Weighted Average Exercise Price [Roll Forward]
Oustanding December 31, 2012 (dollars per share)	$ 16.57
Granted (dollars per share)	$ 3.86
Exercised (dollars per share)	$ 0.00
Canceled (dollars per share)	$ 24.53
Forfeited (dollars per share)	$ 7.39
Outstanding March 31, 2013 (dollars per share)	$ 14.73
Exercisable as of March 31, 2013 (dollars per share)	$ 21.90
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options expiration term	10 years
Total compensation cost not yet recognized, period for recognition	1 year 11 months
Total unrecognized compensation expense related to non-vested stock	$ 5.5

XML

Shareholders' Equity (Tables)

3 Months Ended

Mar. 31, 2013

Equity [Abstract]

Reclassification Out Of Accumulated Other ComprehensiveIncome

Details of amounts reclassified from Accumulated other comprehensive loss and the line item in the Condensed Consolidated Statement of Operations are as follows:

(In millions)	Amounts Reclassified from Accumulated Other Comprehensive Loss			Affected Line Item in the Statement Where Net Loss is Presented
(Gains) Losses on cash flow hedges	$	(2.1	)	Cost of goods sold
	0.8			Income tax provision
	(1.3		)	Net of tax
Amortization of net actuarial loss	0.4			Selling, general and administrative
	—			Income tax provision
	0.4			Net of tax
Total reclassifications for the period	$	(0.9	)

Schedule of Treasury Stock by Class

Following is a summary of treasury share activity:

	Treasury Shares
Balance as of December 31, 2012	1,563,321
Purchases	—
Exercise of stock options	—
Restricted stock grants and other	51,718
401(k) matching contribution	(200,080	)
Balance as of March 31, 2013	1,414,959

Schedule of Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss and related activity consisted of the following:

(In millions)	Gains (Losses) on Derivative Financial Instruments			Defined Benefit Plans			Foreign Currency Translation			Total
Balance as of December 31, 2012	$	2.7		$	(27.8	)	$	(49.1	)	$	(74.2	)
Other comprehensive (loss) income before reclassifications, net of tax1	2.8			—			(4.2		)	(1.4		)
Amounts reclassified from accumulated other comprehensive loss, net of tax	(1.3		)	0.4			—			(0.9		)
Net current-period other comprehensive income (loss)	1.5			0.4			(4.2		)	(2.3		)
Balance as of March 31, 2013	$	4.2		$	(27.4	)	$	(53.3	)	$	(76.5	)

¹Income tax expense of $2.0 million was recorded for gains on derivative financial instruments for the three months ended

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2013

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.

	March 31, 2013							December 31, 2012
(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	$	—	$	7.7		$	—	$	—	$	5.5		$	—
Foreign currency forward contracts	—		—			—		—		—			—
Derivative liabilities
Foreign currency option contracts	—		(0.5		)	—		—		(1.2		)	—
Foreign currency forward contracts	—		(0.1		)	—		—		(0.1		)	—
Total	$	—	$	7.1		$	—	$	—	$	4.2		$	—

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:

	March 31, 2013							December 31, 2012
			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	$	179.7	$	7.7	$	(0.6	)	$	248.6	$	5.5	$	(1.3	)
Other hedges not receiving hedge accounting	47.3		—		—			46.5		—		—
Total	$	227.0	$	7.7	$	(0.6	)	$	295.1	$	5.5	$	(1.3	)

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Stock-Based Compensation - Fair Value Assumptions (Details) (Stock Options)	3 Months Ended
	Mar. 31, 2013
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Volatility	42.90%
Risk free interest rate	1.10%
Expected life (months)	71 months
Dividend yield	0.00%

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Segment Information (Tables)

3 Months Ended

Mar. 31, 2013

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
	March 31,
(In millions)	2013		2012
Net Revenue
Consumer Storage and Accessories
Consumer storage media	$	114.2	$	152.7
Audio and accessories	7.6		9.4
Total Consumer Storage and Accessories	121.8		162.1
Tiered Storage and Security Solutions
Commercial storage media	66.9		86.2
Storage and security solutions	35.7		15.0
Total Tiered Storage and Security Solutions	102.6		101.2
Total Net Revenue	$	224.4	$	263.3

	Three Months Ended
	March 31,
(In millions)	2013			2012
Operating Income (Loss)
Consumer Storage and Accessories	$	5.9		$	16.6
Tiered Storage and Security Solutions	(3.0		)	(6.5		)
Total segment operating income	2.9			10.1
Corporate and unallocated	(17.6		)	(15.7		)
Total operating loss	(14.7		)	(5.6		)
Interest income	—			(0.1		)
Interest expense	0.7			0.9
Other, net	(0.2		)	1.5
Loss from continuing operations before income taxes	$	(15.2	)	$	(7.9	)

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Basis of Presentation Basis of Presentation (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Basis of Presentation [Abstract]
Contingent consideration payments	$ 0.5	$ 0.7

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(Loss) Earnings per Common Share

3 Months Ended

Mar. 31, 2013

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 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
	March 31,
(In millions, except for per share amounts)	2013			2012
Numerator:
Loss from continuing operations	$	(15.6	)	$	(9.2	)
Loss from discontinued operations	(5.5		)	(3.0		)
Net loss	$	(21.1	)	$	(12.2	)
Denominator:
Weighted average number of common shares outstanding during the period	40.4			37.5
Dilutive effect of stock-based compensation plans	—			—
Weighted average number of diluted shares outstanding during the period	40.4			37.5
(Loss) earnings per common share — basic
Continuing operations	$	(0.39	)	$	(0.25	)
Discontinued operations	(0.14		)	(0.08		)
Net loss	(0.52		)	(0.33		)
(Loss) earnings per common share — diluted
Continuing operations	$	(0.39	)	$	(0.25	)
Discontinued operations	(0.14		)	(0.08		)
Net loss	(0.52		)	(0.33		)
Anti-dilutive shares excluded from calculation	6.5			5.9

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(Loss) Earnings per Common Share (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Earnings Per Share [Abstract]
Loss from continuing operations	$ (15.6)	$ (9.2)
Loss from operations of discontinued business, net of income taxes	(5.5)	(3.0)
Net loss	$ (21.1)	$ (12.2)
Weighted average number of common shares outstanding during period	40.4	37.5
Dilutive effect of stock-based compensation plans (in shares)	0	0
Weighted average number of diluted shares outstanding during the period	40.4	37.5
(Loss) earnings per common share - basic (dollars per share)	$ (0.52)	$ (0.33)
(Loss) earnings per common share — basic
Continuing operations	$ (0.39)	$ (0.25)
Discontinued operations	$ (0.14)	$ (0.08)
(Loss) earnings per common share — diluted
Continuing operations	$ (0.39)	$ (0.25)
Discontinued operations	$ (0.14)	$ (0.08)
Net loss - diluted (dollars per share)	$ (0.52)	$ (0.33)
Anti-dilutive shares excluded from calculation (in shares)	6.5	5.9

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Restructuring and Other Expense - Restructuring Plans (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		0 Months Ended	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Oct. 22, 2012 Global Processing Improvement Restructuring Program 2012 [Member]	Mar. 31, 2013 Global Processing Improvement Restructuring Program 2012 [Member]	Mar. 31, 2013 Severance and Related Global Processing Improvement Restructuring Program 2012 [Member]	Mar. 31, 2013 Lease Termination Costs Global Processing Improvement Restructuring Program 2012 [Member]	Mar. 31, 2013 Other Global Processing Improvement Restructuring Program 2012 [Member]
Restructuring Cost and Reserve [Line Items]
Expected reduction in operating expenses, percent			25.00%
Reduction in global workforce			20.00%
Restructuring Reserve [Roll Forward]
Accrued balance, beginning of period				$ 16.9	$ 15.4	$ 0.5	$ 1.0
Restructuring Charges	1.5	0.6		2.6	1.7	0.1	0.8
Usage and payments				(5.3)	(5.0)	(0.1)	(0.2)
Currency impacts				(0.3)	(0.2)	0	(0.1)
Accrued balance, end of period				$ 13.9	$ 11.9	$ 0.5	$ 1.5

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Shareholders' Equity Shareholders' Equity - Accumulated Other Comprehensive Loss (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013		Mar. 31, 2012
Schedule of Accumulated Other Comprehensive Income (Loss) [Line Items]
Income tax expense for gains on derivative financial instruments	$ 2.0
Income tax provision	0.4		1.3
Selling, general and administrative	0.3		0.3
Accumulated Other Comprhensive Income (Loss) [Roll Forward]
Accumulated other comprehensive income (loss), net of tax, beginning of year	(74.2)
Other comprehensive (loss) income before reclassifications, net of tax	(1.4)	[1]
Amounts reclassified from accumulated other comprehensive loss, net of tax	(0.9)
Net current-period other comprehensive income (loss)	(2.3)
Accumulated other comprehensive income (loss), net of tax, end of year	(76.5)
Defined Benefit Plans
Accumulated Other Comprhensive Income (Loss) [Roll Forward]
Accumulated other comprehensive income (loss), net of tax, beginning of year	(27.8)
Other comprehensive (loss) income before reclassifications, net of tax	0	[1]
Amounts reclassified from accumulated other comprehensive loss, net of tax	0.4
Net current-period other comprehensive income (loss)	0.4
Accumulated other comprehensive income (loss), net of tax, end of year	(27.4)
Foreign Currency Translation
Accumulated Other Comprhensive Income (Loss) [Roll Forward]
Accumulated other comprehensive income (loss), net of tax, beginning of year	(49.1)
Other comprehensive (loss) income before reclassifications, net of tax	(4.2)	[1]
Amounts reclassified from accumulated other comprehensive loss, net of tax	0
Net current-period other comprehensive income (loss)	(4.2)
Accumulated other comprehensive income (loss), net of tax, end of year	(53.3)
(Gains) Losses on cash flow hedges
Accumulated Other Comprhensive Income (Loss) [Roll Forward]
Accumulated other comprehensive income (loss), net of tax, beginning of year	2.7
Other comprehensive (loss) income before reclassifications, net of tax	2.8	[1]
Amounts reclassified from accumulated other comprehensive loss, net of tax	(1.3)
Net current-period other comprehensive income (loss)	1.5
Accumulated other comprehensive income (loss), net of tax, end of year	4.2
Reclassification out of Accumulated Other Comprehensive Income
Schedule of Accumulated Other Comprehensive Income (Loss) [Line Items]
Reclassification for the period, net of tax	(0.9)
Reclassification out of Accumulated Other Comprehensive Income | Defined Benefit Plans
Schedule of Accumulated Other Comprehensive Income (Loss) [Line Items]
Income tax provision	0
Reclassification for the period, net of tax	0.4
Selling, general and administrative	0.4
Reclassification out of Accumulated Other Comprehensive Income | (Gains) Losses on cash flow hedges
Schedule of Accumulated Other Comprehensive Income (Loss) [Line Items]
Cost of sales	(2.1)
Income tax provision	0.8
Reclassification for the period, net of tax	$ (1.3)

[1] Income tax expense of $2.0 million was recorded for gains on derivative financial instruments for the three months ended March 31, 2013.

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Condensed Consolidated Statements of Operations (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Condensed Consolidated Statements of Operations [Abstract]
Net revenue	$ 224.4	$ 263.3
Cost of goods sold	182.3	209.7
Gross profit	42.1	53.6
Operating expenses:
Selling, general and administrative	49.3	52.3
Research and development	5.4	5.6
Restructuring and other	2.1	1.3
Total	56.8	59.2
Operating loss	(14.7)	(5.6)
Other expense (income):
Interest income	0	(0.1)
Interest expense	0.7	0.9
Other, net	(0.2)	1.5
Total	0.5	2.3
Loss from continuing operations before income taxes	(15.2)	(7.9)
Income tax provision	0.4	1.3
Loss from continuing operations	(15.6)	(9.2)
Discontinued operations:
Loss from operations of discontinued business, net of income taxes	(5.5)	(3.0)
Net loss	$ (21.1)	$ (12.2)
Loss per common share — basic:
Continuing operations	$ (0.39)	$ (0.25)
Discontinued operations	$ (0.14)	$ (0.08)
(Loss) earnings per common share - basic (dollars per share)	$ (0.52)	$ (0.33)
Loss per common share — diluted:
Continuing operations	$ (0.39)	$ (0.25)
Discontinued operations	$ (0.14)	$ (0.08)
(Loss) earnings per common share - diluted (dollars per share)	$ (0.52)	$ (0.33)
Weighted average shares outstanding - basic	40.4	37.5
Weighted average shares outstanding - diluted	40.4	37.5

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Stock-Based Compensation - Restricted Stock (Details) (Restricted Stock, USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total compensation cost not yet recognized, period for recognition	1 year 7 months
Total unrecognized compensation expense related to non-vested stock	$ 3.5
Restricted Stock [Roll Forward]
Nonvested as of December 31, 2012 (shares)	1,025,804
Granted (shares)	4,967
Vested (shares)	(6,150)
Forfeited (shares)	(56,452)
Nonvested as of March 31, 2013 (shares)	968,169
Weighted Average Grant Date Fair Value Per Share [Roll Forward]
Nonvested as of December 31, 2012 (dollars per share)	$ 7.12
Granted (dollars per share)	$ 3.48
Vested (dollars per share)	$ 8.16
Forfeited (dollars per share)	$ 7.36
Nonvested as of March 31, 2013 (dollars per share)	$ 7.09

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Basis of Presentation

3 Months Ended

Mar. 31, 2013

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, 2012 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, 2012.

On February 13, 2013, we announced our plans to divest our XtremeMac and Memorex consumer electronics businesses. The results of operations for these businesses are presented in our Condensed Consolidated Statements of Operations as discontinued operations for all periods presented. The consumer storage business under the Memorex^TM and TDK Life on Record^TM brands will be retained. See Note 4 - Acquisitions and Divestitures for further information.

We have revised the Statement of Cash Flows for the three months ended March 31, 2012 from amounts previously filed to reclassify $0.7 million of payments made for contingent consideration as a financing activity from its previous presentation as an investing activity. We believe this revision is immaterial to the previously issued Statement of Cash Flows for the three months ended March 31, 2012.

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Supplemental Balance Sheet Information (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2013		Dec. 31, 2012
Accounts Receivable
Accounts receivable	$ 193.5		$ 238.8
Less reserves and allowances	(17.3)	[1]	(18.0)	[1]
Accounts receivable, net	176.2		220.8
Inventories
Finished goods	118.4		146.9
Work in process	6.9		6.4
Raw materials and supplies	8.3		12.7
Total inventories	133.6		166.0
Other Current Assets
Nontrade Receivables	15.4		15.1
Deferred income taxes	6.1		4.7
Prepaid expenses	4.5		5.4
Hedging asset	7.7		5.5
Assets held for sale	30.5		2.5
Restricted cash	2.4		7.5
Other	25.6		20.9
Total other current assets	92.2		61.6
Property, Plant and Equipment
Property, plant and equipment	221.8		222.6
Less accumulated depreciation	(166.0)		(163.7)
Property, plant and equipment, net	55.8		58.9
Other Assets
Deferred income taxes	11.3		9.3
Pension assets	5.9		6.6
Credit facility fees	2.3		2.3
Other	3.2		3.9
Total other assets	22.7		22.1
Other Current Liabilities
Rebates	33.1		44.8
Accrued copyright levies	29.1		27.7
Accrued payroll	10.0		11.4
Accrued royalties	6.4		7.5
Deferred revenue	7.2		6.9
Employee separation costs	11.9		16.7
Hedging liability	0.6		1.3
Other	40.1		42.1
Total other current liabilities	138.4		158.4
Other Liabilities
Pension liabilities	27.1		28.1
Deferred revenue	2.5		2.5
Deferred income taxes	3.5		2.1
Other	17.5		19.3
Total other liabilities	$ 50.6		$ 52.0

[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.

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Acquisitions and Divestitures (Tables)

3 Months Ended

Mar. 31, 2013

Business Combinations [Abstract]

Schedule of key components from discontinued operations

The key components from discontinued operations were as follows:

	Three Months Ended
	March 31,
(In millions)	2013			2012
Net revenue	$	11.2		$	18.4
Loss from operations of discontinued businesses, before income taxes	$	(5.5	)	$	(3.3	)
Income tax benefit	—			(0.3		)
Discontinued operations	$	(5.5	)	$	(3.0	)

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Intangible Assets and Goodwill - Intangible Assets (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Acquired Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	$ 138.4	$ 144.1
Accumulated amortization	(62.6)	(62.2)
Intangible assets, net	75.8	81.9
Trade Names
Acquired Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	34.2	37.7
Accumulated amortization	(5.5)	(6.0)
Intangible assets, net	28.7	31.7
Software
Acquired Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	57.6	58.4
Accumulated amortization	(52.0)	(52.0)
Intangible assets, net	5.6	6.4
Customer Relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	20.3	21.2
Accumulated amortization	(1.0)	(1.0)
Intangible assets, net	19.3	20.2
Other
Acquired Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	26.3	26.8
Accumulated amortization	(4.1)	(3.2)
Intangible assets, net	$ 22.2	$ 23.6

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Intangible Assets and Goodwill (Tables)

3 Months Ended

Mar. 31, 2013

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
March 31, 2013
Gross carrying amount	$	34.2		$	57.6		$	20.3		$	26.3		$	138.4
Accumulated amortization	(5.5		)	(52.0		)	(1.0		)	(4.1		)	(62.6		)
Intangible assets, net	$	28.7		$	5.6		$	19.3		$	22.2		$	75.8
December 31, 2012
Gross carrying amount	$	37.7		$	58.4		$	21.2		$	26.8		$	144.1
Accumulated amortization	(6.0		)	(52.0		)	(1.0		)	(3.2		)	(62.2		)
Intangible assets, net	$	31.7		$	6.4		$	20.2		$	23.6		$	81.9

Schedule of Intangible Asset Amortization Expense

Amortization expense for intangible assets consisted of the following:

	Three Months Ended
	March 31,
(In millions)	2013		2012
Amortization expense	$	3.6	$	7.2

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Recently Issued or Adopted Accounting Pronouncements

3 Months Ended

Mar. 31, 2013

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Recently Issued or Adopted Accounting Pronouncements

Recently Issued or Adopted Accounting Pronouncements

Management has assessed the potential impact of accounting standards that have been issued but are not yet effective and has determined that no such standards are expected to have a material impact 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
	Mar. 31, 2013	Mar. 31, 2012
Net loss	$ (21.1)	$ (12.2)
Net unrealized (losses) gains on derivative financial instruments:
Net holding gains arising during the period	2.8	0.5
Reclassification adjustment for net realized (gains) losses included in net loss	(1.3)	0.4
Total net unrealized gains on derivative financial instruments	1.5	0.9
Reclassification of adjustments for defined benefit plans recorded in net loss	0.4	0.2
Unrealized foreign currency translation gains (losses)	(4.2)	0.6
Total other comprehensive income (loss), net of tax	(2.3)	1.7
Comprehensive loss	$ (23.4)	$ (10.5)

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Fair Value Measurements

3 Months Ended

Mar. 31, 2013

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.

	March 31, 2013							December 31, 2012
(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	$	—	$	7.7		$	—	$	—	$	5.5		$	—
Foreign currency forward contracts	—		—			—		—		—			—
Derivative liabilities
Foreign currency option contracts	—		(0.5		)	—		—		(1.2		)	—
Foreign currency forward contracts	—		(0.1		)	—		—		(0.1		)	—
Total	$	—	$	7.1		$	—	$	—	$	4.2		$	—

Other Derivative Instruments

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 on our Condensed Consolidated Balance Sheets and because we do not receive hedge accounting for these derivatives, changes in their value are recognized every reporting period in the Condensed Consolidated Statements of Operations.

For the three months ended March 31, 2013 and 2012, we recorded foreign currency gains of $0.5 million and losses of $1.0 million, respectively, in other expense (income) in the Condensed Consolidated Statements of Operations. These gains and losses reflect changes in foreign exchange rates on foreign denominated assets and liabilities and are net of gains of $0.3 million and $0.4 million from the related foreign currency forward contracts for the three months ended March 31, 2013 and 2012, 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:

	March 31, 2013							December 31, 2012
			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	$	179.7	$	7.7	$	(0.6	)	$	248.6	$	5.5	$	(1.3	)
Other hedges not receiving hedge accounting	47.3		—		—			46.5		—		—
Total	$	227.0	$	7.7	$	(0.6	)	$	295.1	$	5.5	$	(1.3	)

On March 31, 2013, we entered into certain hedges not receiving hedge accounting treatment and the estimated fair value of these hedges was inconsequential as of March 31, 2013.

Contingent Consideration

Contingent consideration recorded for earn-out payments related to our acquisitions is immaterial as of March 31, 2013 and December 31, 2012, and is recorded at fair value and remeasured on a recurring basis. We use the income approach in calculating the fair value of our contingent consideration. Changes in the fair value of our contingent consideration obligations are recognized as a fair value adjustment within restructuring and other in our Condensed Consolidated Statements of Operations. These fair value measurements are calculated using the income approach with cash flow projections based on significant inputs not observable in the market and therefore represent Level 3 measurements. See Note 4 - Acquisitions and Divestitures for further discussion of the fair value calculation of our contingent consideration as of March 31, 2013. The following table sets forth a summary of changes in fair value of our contingent consideration Level 3 liabilities:

(In millions)	MXI Security			Encryptx			Total
Balance as of December 31, 2012	$	0.6		$	0.6		$	1.2
Fair value adjustment	(0.1		)	0.2			0.1
Payments	—			(0.8		)	(0.8		)
Balance as of March 31, 2012	$	0.5		$	—		$	0.5

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Document and Entity Information Document	3 Months Ended
	Mar. 31, 2013	May 03, 2013
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	Mar. 31, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding		41,512,668

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Shareholders' Equity

3 Months Ended

Mar. 31, 2013

Equity [Abstract]

Shareholders' Equity

Shareholders' Equity

Treasury Stock

On May 2, 2012, our Board of Directors authorized a share repurchase program that allowed for the repurchase of 5.0 million shares of common stock. Since the authorization of this program we have repurchased 1.2 million shares of common stock for $6.5 million, and as of March 31, 2013 we had remaining authorization to repurchase up to 3.8 million additional shares. The treasury stock held as of March 31, 2013 was acquired at an average price of $24.15 per share.

Following is a summary of treasury share activity:

	Treasury Shares
Balance as of December 31, 2012	1,563,321
Purchases	—
Exercise of stock options	—
Restricted stock grants and other	51,718
401(k) matching contribution	(200,080	)
Balance as of March 31, 2013	1,414,959

Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss and related activity consisted of the following:

(In millions)	Gains (Losses) on Derivative Financial Instruments			Defined Benefit Plans			Foreign Currency Translation			Total
Balance as of December 31, 2012	$	2.7		$	(27.8	)	$	(49.1	)	$	(74.2	)
Other comprehensive (loss) income before reclassifications, net of tax1	2.8			—			(4.2		)	(1.4		)
Amounts reclassified from accumulated other comprehensive loss, net of tax	(1.3		)	0.4			—			(0.9		)
Net current-period other comprehensive income (loss)	1.5			0.4			(4.2		)	(2.3		)
Balance as of March 31, 2013	$	4.2		$	(27.4	)	$	(53.3	)	$	(76.5	)

¹Income tax expense of $2.0 million was recorded for gains on derivative financial instruments for the three months ended March 31, 2013.

Details of amounts reclassified from Accumulated other comprehensive loss and the line item in the Condensed Consolidated Statement of Operations are as follows:

(In millions)	Amounts Reclassified from Accumulated Other Comprehensive Loss			Affected Line Item in the Statement Where Net Loss is Presented
(Gains) Losses on cash flow hedges	$	(2.1	)	Cost of goods sold
	0.8			Income tax provision
	(1.3		)	Net of tax
Amortization of net actuarial loss	0.4			Selling, general and administrative
	—			Income tax provision
	0.4			Net of tax
Total reclassifications for the period	$	(0.9	)

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Condensed Consolidated Balance Sheets (USD $) In Millions, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Current assets
Cash and cash equivalents	$ 98.2	$ 108.7
Accounts receivable, net	176.2	220.8
Inventories	133.6	166.0
Other current assets	92.2	61.6
Total current assets	500.2	557.1
Property, plant and equipment, net	55.8	58.9
Intangible assets, net	75.8	81.9
Goodwill	70.6	73.5
Other assets	22.7	22.1
Total assets	725.1	793.5
Current liabilities
Accounts payable	136.5	162.7
Short-term Debt	20.0	20.0
Other current liabilities	138.4	158.4
Total current liabilities	294.9	341.1
Other liabilities	50.6	52.0
Total liabilities	345.5	393.1
Commitments and contingencies (Note 15)
Shareholders’ equity	379.6	400.4
Total liabilities and shareholders’ equity	$ 725.1	$ 793.5

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Restructuring and Other Expense

3 Months Ended

Mar. 31, 2013

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
	March 31,
(In millions)	2013			2012
Restructuring
Severance and related	$	0.6		$	0.4
Lease termination costs	0.1			—
Gain on sale of fixed assets held for sale	—			(0.7		)
Other	0.8			0.9
Total restructuring	$	1.5		$	0.6
Other
Contingent consideration fair value adjustment	(0.1		)	—
Acquisition and integration related costs	0.4			0.4
Other	0.3			0.3
Total	$	2.1		$	1.3

Severance expense of $1.1 million related to our planned divestiture of the XtremeMac and Memorex consumer electronics businesses was recorded in discontinued operations during the quarter ended March 31, 2013. See Note 4 - Acquisitions and Divestituresfor additional information related to our discontinued operations. This expense is excluded from the table above.

2012 Global Process Improvement Restructuring Program

On October 22, 2012, the Board of Directors approved the Global Process Improvement Restructuring Program (GPI Program) related to the realignment of our business structure and the reduction of our operating expenses in excess of 25 percent over time. This program addresses product line rationalization and infrastructure, and is anticipated to include a reduction of approximately 20 percent of our global workforce. Restructuring charges under this plan will continue to be incurred throughout the remainder of 2013.

Changes in the 2012 GPI Program accruals were as follows:

(In millions)	Severance and Related			Lease Termination Costs			Other			Total
Accrued balance at December 31, 2012	$	15.4		$	0.5		$	1.0		$	16.9
Charges	1.7			0.1			0.8			2.6
Usage and payments	(5.0		)	(0.1		)	(0.2		)	(5.3		)
Currency impacts	(0.2		)	—			(0.1		)	(0.3		)
Accrued balance at March 31, 2013	$	11.9		$	0.5		$	1.5		$	13.9

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Intangible Assets and Goodwill

3 Months Ended

Mar. 31, 2013

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
March 31, 2013
Gross carrying amount	$	34.2		$	57.6		$	20.3		$	26.3		$	138.4
Accumulated amortization	(5.5		)	(52.0		)	(1.0		)	(4.1		)	(62.6		)
Intangible assets, net	$	28.7		$	5.6		$	19.3		$	22.2		$	75.8
December 31, 2012
Gross carrying amount	$	37.7		$	58.4		$	21.2		$	26.8		$	144.1
Accumulated amortization	(6.0		)	(52.0		)	(1.0		)	(3.2		)	(62.2		)
Intangible assets, net	$	31.7		$	6.4		$	20.2		$	23.6		$	81.9

As of March 31, 2013, $1.7 million of net intangible assets have been reclassified from intangible assets to assets held for sale as a result of the planned divestiture of our XtremeMac and Memorex consumer electronics businesses. See Note 4 - Acquisitions and Divestitures for further information of these divestitures.

Amortization expense for intangible assets consisted of the following:

	Three Months Ended
	March 31,
(In millions)	2013		2012
Amortization expense	$	3.6	$	7.2

Goodwill

During the three months ended March 31, 2013, we recorded a decrease in goodwill of $1.6 million due to the working capital adjustment to the Nexsan acquisition purchase price. Additionally, goodwill decreased $1.3 million due to foreign currency translation. See Note 4 - Acquisitions and Divestitures for further information regarding the Nexsan acquisition and this adjustment.

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Supplemental Balance Sheet Information (Tables)

3 Months Ended

Mar. 31, 2013

Supplemental Balance Sheet Information [Abstract]

Supplemental Balance Sheet Disclosures

	March 31,			December 31,
(In millions)	2013			2012
Accounts Receivable
Accounts receivable	$	193.5		$	238.8
Less reserves and allowances1	(17.3		)	(18.0		)
Accounts receivable, net	$	176.2		$	220.8
Inventories
Finished goods	$	118.4		$	146.9
Work in process	6.9			6.4
Raw materials and supplies	8.3			12.7
Total inventories	$	133.6		$	166.0
Other Current Assets
Non-trade receivables	$	15.4		$	15.1
Deferred income taxes	6.1			4.7
Prepaid expenses	4.5			5.4
Hedging asset	7.7			5.5
Assets held for sale	30.5			2.5
Restricted cash	2.4			7.5
Other	25.6			20.9
Total other current assets	$	92.2		$	61.6
Property, Plant and Equipment
Property, plant and equipment	$	221.8		$	222.6
Less accumulated depreciation	(166.0		)	(163.7		)
Property, plant and equipment, net	$	55.8		$	58.9

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.

	March 31,		December 31,
(In millions)	2013		2012
Other Assets
Deferred income taxes	$	11.3	$	9.3
Pension assets	5.9		6.6
Credit facility fees	2.3		2.3
Other	3.2		3.9
Total other assets	$	22.7	$	22.1
Other Current Liabilities
Rebates	$	33.1	$	44.8
Accrued copyright levies	29.1		27.7
Accrued payroll	10.0		11.4
Accrued royalties	6.4		7.5
Deferred revenue	7.2		6.9
Employee separation costs	11.9		16.7
Hedging liability	0.6		1.3
Other	40.1		42.1
Total other current liabilities	$	138.4	$	158.4
Other Liabilities
Pension liabilities	$	27.1	$	28.1
Deferred revenue	2.5		2.5
Deferred income taxes	3.5		2.1
Other	17.5		19.3
Total other liabilities	$	50.6	$	52.0

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Segment Information

3 Months Ended

Mar. 31, 2013

Segment Reporting [Abstract]

Segment Information

Segment Information

As of January 1, 2013, we revised our segment reporting to reflect changes in how we manage our business, review operating performance and allocate resources. We now manage our business through two reporting segments, Tiered Storage and Security Solutions (TSS) and Consumer Storage and Accessories (CSA). Our new reporting segments are aligned with our key commercial and consumer channels.

We have two major product categories under our CSA segment: Consumer storage media and Audio and accessories. Consumer storage media products include primarily optical products such as DVDs, CDs and Blu-ray disc recordable media as well as flash media. Audio and accessories include primarily headphones, audio electronics and accessories. We have two major product categories under our TSS segment: Commercial storage media and Storage and security solutions. Commercial storage media products consist mainly of magnetic data storage tape media and RDX media.Storage and security solutions includes storage hardware products, services and software for primary storage as well as backup and archiving; encrypted and biometric universal serial bus (USB) drives and 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.

We evaluate segment performance based on revenue and operating income (loss). 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 depreciation and amortization, litigation settlement expense, goodwill impairment, intangible impairments, intangible asset abandonment, corporate expense, contingent consideration adjustments, inventory write-offs related to our restructuring programs and restructuring and other expenses which are not allocated to the segments.

On February 13, 2013, we announced our plans to divest our XtremeMac and Memorex consumer electronics businesses. The operating results for these businesses are presented in our Condensed Consolidated Statements of Operations as discontinued operations and are not included in segment results for any periods presented. The consumer storage business under the Memorex and TDK Life on Record brands will be retained. See Note 4 - Acquisitions and Divestitures for further information.

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

	Three Months Ended
	March 31,
(In millions)	2013		2012
Net Revenue
Consumer Storage and Accessories
Consumer storage media	$	114.2	$	152.7
Audio and accessories	7.6		9.4
Total Consumer Storage and Accessories	121.8		162.1
Tiered Storage and Security Solutions
Commercial storage media	66.9		86.2
Storage and security solutions	35.7		15.0
Total Tiered Storage and Security Solutions	102.6		101.2
Total Net Revenue	$	224.4	$	263.3

	Three Months Ended
	March 31,
(In millions)	2013			2012
Operating Income (Loss)
Consumer Storage and Accessories	$	5.9		$	16.6
Tiered Storage and Security Solutions	(3.0		)	(6.5		)
Total segment operating income	2.9			10.1
Corporate and unallocated	(17.6		)	(15.7		)
Total operating loss	(14.7		)	(5.6		)
Interest income	—			(0.1		)
Interest expense	0.7			0.9
Other, net	(0.2		)	1.5
Loss from continuing operations before income taxes	$	(15.2	)	$	(7.9	)

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Income Taxes

3 Months Ended

Mar. 31, 2013

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 months ended March 31, 2013 we recorded income tax expense of $0.4 million. The effective income tax rate for the three months ended March 31, 2013 was (2.6) percent, compared with (16.5) percent in the same period last year. The effective rate change was primarily due to a full valuation allowance on U.S. deferred tax assets, lower withholding tax expense and the mix of taxable income (loss) by country. The effective income tax rate for the three months ended March 31, 2013 differs from the U.S. federal statutory rate of 35 percent primarily due to the full valuation allowance on U.S. deferred tax assets and the effects of foreign tax rate differential.

We conduct business globally. As a result, we file income tax returns in multiple jurisdictions and are subject to review by various U.S and foreign taxing authorities. Our U.S. federal income tax returns for 2010 and 2011 are subject to examination by the Internal Revenue Service (IRS). With few exceptions, we are no longer subject to examination by foreign tax jurisdictions or state and city tax jurisdictions for years before 2006. 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. 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 $4.6 million and $4.7 million as of March 31, 2013 and December 31, 2012, 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

3 Months Ended

Mar. 31, 2013

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

Stock-Based Compensation

Stock-Based Compensation

Stock compensation consisted of the following:

	Three Months Ended
	March 31,
(In millions)	2013		2012
Stock compensation expense	$	1.8	$	1.9

We have stock-based compensation awards consisting of stock options and restricted stock outstanding under five plans (collectively, the Stock Plans) which are described in detail in our 2012 Annual Report on Form 10-K. As of March 31, 2013 there were 1,293,247 shares available for grant under our 2011 Stock Incentive Plan (2011 Incentive Plan). On May 8, 2013, at the Company's 2013 Annual Meeting of Shareholders, the Company's shareholders approved various amendments to 2011 Incentive Plan including increasing the number of shares of our common stock that may be issued pursuant to stock-based awards made under the 2011 Incentive Plan by 1,543,000 shares to a total of 6,043,000 shares. 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, 2012	5,818,472		$	16.57
Granted	882,602		3.86
Exercised	—		—
Canceled	(201,772	)	24.53
Forfeited	(121,738	)	7.39
Outstanding March 31, 2013	6,377,564		$	14.73
Exercisable as of March 31, 2013	3,385,768		$	21.90

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 three months ended March 31, 2013 was $1.61 per award. The following table summarizes our weighted average assumptions used in the valuation of options:

	2013
Volatility	42.9	%
Risk-free interest rate	1.1	%
Expected life (months)	71
Dividend yield	—

As of March 31, 2013, there was $5.5 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 1.9 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, 2012	1,025,804		$	7.12
Granted	4,967		3.48
Vested	(6,150	)	8.16
Forfeited	(56,452	)	7.36
Nonvested as of March 31, 2013	968,169		$	7.09

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 March 31, 2013, there was $3.5 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 1.6 years.

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Retirement Plans

3 Months Ended

Mar. 31, 2013

Compensation and Retirement Disclosure [Abstract]

Retirement Plans

Retirement Plans

Pension Plans

During the three months ended March 31, 2013 we contributed $0.4 million to our worldwide pension plans. We presently anticipate contributing approximately $1.0 million to $3.0 million to fund our worldwide pension plans during the remainder of 2013.

Components of net periodic pension cost included the following:

	United States						International
	Three Months Ended March 31,
(In millions)	2013			2012			2013		2012
Service cost	$	—		$	—		$	0.1	$	0.1
Interest cost	0.7			0.8			—		—
Expected return on plan assets	(1.3		)	(1.5		)	—		—
Amortization of net actuarial loss	0.4			0.3			0.1		0.1
Total pension cost (credit)	$	(0.2	)	$	(0.4	)	$	0.2	$	0.2

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Debt

3 Months Ended

Mar. 31, 2013

Debt Disclosure [Abstract]

Debt

Debt

Our Credit Agreement and its terms are described in Note 11 - Debt of our Annual Report on Form 10-K for the year ended December 31, 2012. As of March 31, 2013, our borrowing capacity under this arrangement, after consideration of amounts outstanding, was $78.4 million, consisting of $66.0 million in the United States and $12.4 million in Europe.

As of March 31, 2013, we had $20.0 million of borrowings outstanding under the Credit Agreement, all of which was borrowed in the United States and bears an interest rate of 2.2 percent. We are in compliance with all covenant requirements as of March 31, 2013.

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Acquisitions and Divestitures Discontinued Operations (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Long Lived Assets Held-for-sale [Line Items]
Assets held for sale, intangible	$ 1.7
Discontinued operations	(5.5)	(3.0)
XtremeMac and Memorex
Long Lived Assets Held-for-sale [Line Items]
Assets held for sale, inventory	24.8
Assets held for sale, intangible	1.7
Assets held for sale, tooling	1.6
Disposal group, net revenue	11.2	18.4
Loss from operations of discontinued businesses, before income taxes	(5.5)	(3.3)
Income tax benefit	0	(0.3)
Discontinued operations	$ (5.5)	$ (3.0)

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Fair Value Measurements Assets measured on a recurring basis, unobservable input reconciliation (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Dec. 31, 2012
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value, Measurement with Unobservable Inputs Reconciliations, Recurring Basis, Liability Value	$ 0.5	$ 1.2
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liabilities, Fair Value Adjustment	0.1
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Settlements	(0.8)
Encryptx [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value, Measurement with Unobservable Inputs Reconciliations, Recurring Basis, Liability Value	0	0.6
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liabilities, Fair Value Adjustment	0.2
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Settlements	(0.8)
MXI Security
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value, Measurement with Unobservable Inputs Reconciliations, Recurring Basis, Liability Value	0.5	0.6
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liabilities, Fair Value Adjustment	(0.1)
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Settlements	$ 0

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(Loss) Earnings per Common Share (Tables)

3 Months Ended

Mar. 31, 2013

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
	March 31,
(In millions, except for per share amounts)	2013			2012
Numerator:
Loss from continuing operations	$	(15.6	)	$	(9.2	)
Loss from discontinued operations	(5.5		)	(3.0		)
Net loss	$	(21.1	)	$	(12.2	)
Denominator:
Weighted average number of common shares outstanding during the period	40.4			37.5
Dilutive effect of stock-based compensation plans	—			—
Weighted average number of diluted shares outstanding during the period	40.4			37.5
(Loss) earnings per common share — basic
Continuing operations	$	(0.39	)	$	(0.25	)
Discontinued operations	(0.14		)	(0.08		)
Net loss	(0.52		)	(0.33		)
(Loss) earnings per common share — diluted
Continuing operations	$	(0.39	)	$	(0.25	)
Discontinued operations	(0.14		)	(0.08		)
Net loss	(0.52		)	(0.33		)
Anti-dilutive shares excluded from calculation	6.5			5.9

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Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2013

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
	March 31,
(In millions)	2013		2012
Stock compensation expense	$	1.8	$	1.9

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, 2012	5,818,472		$	16.57
Granted	882,602		3.86
Exercised	—		—
Canceled	(201,772	)	24.53
Forfeited	(121,738	)	7.39
Outstanding March 31, 2013	6,377,564		$	14.73
Exercisable as of March 31, 2013	3,385,768		$	21.90

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

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

	2013
Volatility	42.9	%
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, 2012	1,025,804		$	7.12
Granted	4,967		3.48
Vested	(6,150	)	8.16
Forfeited	(56,452	)	7.36
Nonvested as of March 31, 2013	968,169		$	7.09

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Fair Value Measurements - Cash Flow Hedges (Details) (Fair Value, Measurements, Recurring, Cash flow hedges, USD $) In Millions, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
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	7.1	4.2
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	7.7	5.5
Derivative liabilities	(0.5)	(1.2)
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
Derivative liabilities	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	0
Derivative liabilities	(0.1)	(0.1)
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
Derivative liabilities	$ 0	$ 0

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Restructuring and Other Expense Restructuring and Other Expenses Activity (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Restructuring Cost and Reserve [Line Items]
Restructuring Charges	$ 1.5	$ 0.6

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Condensed Consolidated Statements of Cash Flows (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Cash Flows from Operating Activities:
Net loss	$ (21.1)	$ (12.2)
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation	6.4	9.3
Amortization	3.6	7.2
Stock-based compensation	1.8	1.9
Contingent consideration adjustment	(0.1)	0
Other	1.1	1.7
Changes in operating assets and liabilities:	2.8	(6.7)
Net cash used in operating activities	(9.0)	(6.0)
Cash Flows from Investing Activities:
Capital expenditures	(1.4)	(2.0)
Goodwill, Purchase Accounting Adjustments	1.6	0
Proceeds from sale of assets	0	1.4
Net cash used in investing activities	0.2	(0.6)
Cash Flows from Financing Activities:
Contingent consideration payments	(0.5)	(0.7)
Net cash used in financing activities	(0.5)	(0.7)
Effect of exchange rate changes on cash and cash equivalents	(1.2)	0.4
Net change in cash and cash equivalents	(10.5)	(6.9)
Cash and cash equivalents — beginning of period	108.7	223.1
Cash and cash equivalents - end of period	$ 98.2	$ 216.2

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Supplemental Balance Sheet Information

3 Months Ended

Mar. 31, 2013

Supplemental Balance Sheet Information [Abstract]

Supplemental Balance Sheet Information

Supplemental Balance Sheet Information

	March 31,			December 31,
(In millions)	2013			2012
Accounts Receivable
Accounts receivable	$	193.5		$	238.8
Less reserves and allowances1	(17.3		)	(18.0		)
Accounts receivable, net	$	176.2		$	220.8
Inventories
Finished goods	$	118.4		$	146.9
Work in process	6.9			6.4
Raw materials and supplies	8.3			12.7
Total inventories	$	133.6		$	166.0
Other Current Assets
Non-trade receivables	$	15.4		$	15.1
Deferred income taxes	6.1			4.7
Prepaid expenses	4.5			5.4
Hedging asset	7.7			5.5
Assets held for sale	30.5			2.5
Restricted cash	2.4			7.5
Other	25.6			20.9
Total other current assets	$	92.2		$	61.6
Property, Plant and Equipment
Property, plant and equipment	$	221.8		$	222.6
Less accumulated depreciation	(166.0		)	(163.7		)
Property, plant and equipment, net	$	55.8		$	58.9

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.

	March 31,		December 31,
(In millions)	2013		2012
Other Assets
Deferred income taxes	$	11.3	$	9.3
Pension assets	5.9		6.6
Credit facility fees	2.3		2.3
Other	3.2		3.9
Total other assets	$	22.7	$	22.1
Other Current Liabilities
Rebates	$	33.1	$	44.8
Accrued copyright levies	29.1		27.7
Accrued payroll	10.0		11.4
Accrued royalties	6.4		7.5
Deferred revenue	7.2		6.9
Employee separation costs	11.9		16.7
Hedging liability	0.6		1.3
Other	40.1		42.1
Total other current liabilities	$	138.4	$	158.4
Other Liabilities
Pension liabilities	$	27.1	$	28.1
Deferred revenue	2.5		2.5
Deferred income taxes	3.5		2.1
Other	17.5		19.3
Total other liabilities	$	50.6	$	52.0

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Retirement Plans (Tables)

3 Months Ended

Mar. 31, 2013

Compensation and Retirement Disclosure [Abstract]

Schedule of Net Benefit Costs

Components of net periodic pension cost included the following:

	United States						International
	Three Months Ended March 31,
(In millions)	2013			2012			2013		2012
Service cost	$	—		$	—		$	0.1	$	0.1
Interest cost	0.7			0.8			—		—
Expected return on plan assets	(1.3		)	(1.5		)	—		—
Amortization of net actuarial loss	0.4			0.3			0.1		0.1
Total pension cost (credit)	$	(0.2	)	$	(0.4	)	$	0.2	$	0.2

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Intangible Assets and Goodwill - Goodwill (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2012
Goodwill [Line Items]
Goodwill, Translation Adjustments	$ 1.3
Goodwill, Purchase Accounting Adjustments	1.6	0
Goodwill	$ 70.6		$ 73.5

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Litigation, Commitments and Contingencies

3 Months Ended

Mar. 31, 2013

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 March 31, 2013, we are unable to reasonably estimate the ultimate aggregate amount of any monetary liability or financial impact that we may incur with respect to these matters. It is reasonably possible that the ultimate resolution of these matters could materially affect our operating results.

Copyright Levies

In many European Union (EU) member countries, the sale of recordable optical media is subject to a private copyright levy. The levies are 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, are intended to 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 importers of levy payments made by importers of applicable products, including the Company) when sales of optical media are made to natural persons intending to make private copies.

Since the Directive was implemented in 2002, we have paid in excess of $100 million in levies to various ongoing collecting societies related to commercial channel sales. Based on the ECJ's October 2010 ruling and subsequent litigation and law making activities, we believe that these payments were not consistent with the Directive and should not have been paid to the various collecting societies. Accordingly, in 2010 we began withholding levy payments to the various collecting societies on commercial and consumer channel sales. We released accruals for levy payments related to commercial channel sales in 2011. However, we continue to accrue a liability for levies arising from consumer channel sales. As of March 31, 2013 and December 31, 2012, we are carrying a liability of $29.1 million and $27.7 million, respectively, associated with levies related to consumer channel sales for which we are withholding payment. At March 31, 2013, the recovery of some or all of the approximately $100 million of copyright levies previously paid on professional and commercial sales represents a gain contingency that has not yet met the required criteria for recognition in our financial statements. There is no assurance that we will realize any of this gain contingency.

Since the October 2010 ECJ ruling, we evaluate quarterly on a country-by-country basis whether: (i) levies should be accrued on current period commercial and/or consumer channel sales; and, (ii) accrued, but unpaid, copyright levies on prior period consumer product sales should be reversed. Our evaluation is made on a jurisdiction-by-jurisdiction basis and considers ongoing and cumulative developments related to levy litigation and law making activities within each jurisdiction as well as throughout the EU. 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 months ended March 31, 2013 and March 31, 2012, we did not reverse any amounts into cost of goods sold for prior period obligations.

We are subject to several pending or threatened legal actions by the individual European national levy collecting societies in relation to private copyright levies under the Directive. Those actions generally seek payment of the commercial and consumer optical levies withheld by Imation. Imation has corresponding claims in those actions seeking reimbursement of levies improperly collected by those collecting societies. 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 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.