1014111--2/22/2007--IMATION

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Because of the rapid technology changes in our industry, we may not be able to compete if we cannot quickly develop and introduce differentiating and innovative products. Since price competition is a common factor in the data storage removable media markets, we risk reducing profitability if we cannot reduce costs and manage inventory in line with price declines. If we cannot obtain finished products or raw materials at projected costs, we may not be able to maintain expected levels of profitability. If we do not achieve the expected benefit from Memorex and other future acquisitions, our financial results may be negatively impacted. We must make strategic decisions from time to time as to the products and technologies in which we invest and if we choose the wrong product or technology, our financial results could be adversely impacted. We may be dependent on third parties for new product introductions or technologies in order to introduce our own new products. Our financial success depends upon our ability to manufacture, source and deliver products to our customers at acceptable quality, volume and cost levels.

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1014111--2/22/2007--IMATION_CORP