Background and Basis of Presentation

12 Months Ended

Dec. 31, 2013

Background and Basis of Presentation [Abstract]

Background and Basis of Presentation

Background and Basis of Presentation

Background

Imation Corp., a Delaware corporation, was formed in 1996 as a result of the spin-off of substantially all of the businesses which comprised the data storage and imaging systems groups of 3M Company. As used herein, the terms “Imation,” “the Company,” ‘‘we,” “us,” or “our” mean Imation Corp. and its subsidiaries and consolidated entities unless the context indicates otherwise. Imation is a global data storage and data security company. Our products and solutions help organizations and individuals store, manage and protect their digital content. Imation's storage and security portfolio includes Nexsan^TM high-density, archive and solid-state optimized unified hybrid storage solutions; IronKey^TMmobile security solutions that address the needs of professionals for secure data transport and mobile workspaces; and consumer storage solutions, audio products and accessories sold under the Imation^TM, Memorex^TM and TDK Life on Record^TM brands. Imation reaches customers in more than 100 countries through a powerful global distribution network.

Basis of Presentation

The financial statements are presented on a consolidated basis and include the accounts of the Company and our wholly-owned subsidiaries. See Note 2 - Summary of Significant Accounting Policies for further information regarding consolidation. Our Consolidated Financial Statements are prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). All significant inter-company transactions have been eliminated.

The results of operations for our XtremeMac™ and Memorex™ consumer electronics businesses are presented in our Consolidated Statements of Operations as discontinued operations for all periods presented. See further discussion of these divestitures in the discussion of our Strategic Transformation below.

During the fourth quarter of 2012, we announced the acceleration of our strategic transformation, including the realignment of our global business into two new business units, a cost reduction program and our increased focus on data storage and data security including exploring strategic options for our consumer electronics brands and businesses. As our traditional media businesses were declining, we determined that we needed to accelerate our business transformation. During the first quarter of 2013 we announced our plans to divest our XtremeMac and Memorex consumer electronics businesses. The divestiture of our Memorex consumer electronics business occurred on October 15, 2013 and the divestiture of our XtremeMac business occurred on January 31, 2014. See Note 4 - Acquisitions and Divestitures for further information on these divestitures. The consumer storage business under the Memorex and TDK Life on Record brands and the consumer electronics business under the TDK Life on Record brand are being retained.

The realignment of our global business into two new business units better aligns the Company with our key consumer and commercial channels. The two business units consist of Consumer Storage and Accessories (CSA), which focuses mainly on retail channels; and Tiered Storage and Security Solutions (TSS), which focuses on small and medium business, enterprise and government customers. In the first quarter of 2013, we revised our segment reporting to reflect these changes into these two new reporting segments. See Note 14 - Business Segment Information and Geographical Data for more information on our business segments.

In October 2012, the Board of Directors approved our Global Process Improvement Restructuring Program (GPI Program) in order to realign our business structure and reduce operating expenses in excess of 25 percent over time. This restructuring program addressed product line rationalization and infrastructure and included a planned reduction in our global workforce. The majority of these actions were implemented during 2013. See Note 7 - Restructuring and Other Expense for more information on this restructuring program.