Features - Storage Innovations:

IMATION OUTLINES DATA STORAGE FOCUSED STRATEGY

"With the explosion of digital information critical to a business and important to the lives of consumers, demand for storage capacity is estimated to be doubling every 18 to 24 months," Monahan said. "Data -- how it's accessed, protected, stored and shared -- has taken center stage in business and consumer applications. Imation is extremely well positioned to create value -- for shareholders, customers and in the marketplace -- by who we are and what we do focused on the data storage removable media industry."

"Imation's data storage roots extend back 50 years to the introduction of the first magnetic data storage tape," Monahan said. "Working with leading drive manufacturers, we continue to meet customer needs for high capacity, reliable, efficient removable media to store, back up, move and manage digital information.

"Imation's future is built on a foundation of five elements: our leading market position, solid operational and cost discipline, technology leadership, a strong financial position, and broad customer experience. Imation's vision is to be the trusted expert and recognized global leader in removable data storage across all market sectors. That's our focus. That's our future," Monahan concluded.

Focus on the Core Imation Corp. , was spun out from 3M Company in 1996 as a diverse collection of largely unrelated businesses. Under Monahan's leadership, the company has rationalized its portfolio, divesting nonstrategic business units so it is now focused on removable data storage media and adjacent businesses that generated $875.9 million in revenue and $56.4 million in operating income in 2001. The Company, experiencing continued strong demand across all data storage market sectors globally, increased its outlook for the second quarter and full year after the market closed yesterday. Imation is now anticipating data storage revenue growth in the range of 10 percent and operating income in the range of $80 million.

Idustry Context:

Removable Data Storage Media Data storage has become central to the information technology infrastructure. Demand for storage capacity is doubling every 18 to 24 months, according to industry analysts and market researchers. Virtually every business transaction...every customer contact...every Internet hit generates digital information. And the information important to individuals is increasingly in digital form as well -- not just business records and correspondence -- but the music, images and pictures that give depth and texture to individuals' lives -- all are being captured and stored digitally.

The questions end-users ask about storing their data are as varied as the requirements of their applications. "How fast can I access my data? How much can I store in a single device? What is the cost per megabyte and the total cost of managing my data? How secure is my data? How portable is my data?" Different user needs result in a wide variety of storage formats and architectures.

For a broad set of applications, the answer is removable media -- ranging from floppy disks, CDs and DVDs storing from a few megabytes to a few gigabytes of data, through network tape libraries storing from a dozen to a hundred gigabytes on each cartridge, to enterprise data center storage applications that rely on high-speed, high-capacity tape cartridges storing hundreds of gigabytes on each cartridge to manage and safeguard terabytes of critical business data.

Imation, unique among data storage media companies, participates in every market sector.

Leading Market Position

Imation's market share growth is built on a leading market position, a comprehensive portfolio of offerings, and broad geographic and distribution channel coverage. Imation's overall share of the $6+ billion removable media market approached 15 percent in 2001 -- a larger share than any single competitor -- and is growing. The Company's product portfolio spans all market sectors from consumer electronics to professional desktops to networks to the data center. Imation operates in approximately 60 countries and 47 percent of revenues come from sales outside the United States. The Company's media products are sold through specialty distributors, value-added resellers, mass retailers, and original equipment manufacturers -- representing the broadest distribution channel coverage to deliver media to end users.

Operational Excellence and Cost Discipline

The sophisticated nature of data storage media today requires exacting manufacturing process expertise. Imation has the people and capabilities to meet these requirements and continues to build on this expertise. In the highly competitive technology industry, pricing pressure is a constant. Imation has successfully maintained its competitive cost position and gross margins year after year through a disciplined quality improvement/cost reduction (QICR) process. All of the company's data storage manufacturing facilities meet the highest ISO 9002 quality standards and the Company's Wahpeton, North Dakota plant was recognized by the editors of Industry Week as among the fourteen best manufacturing plants throughout the United States and Europe.

Technology Leadership

Imation, with its roots in 3M Company, has been a technology leader since this business introduced the first data storage tape for computers 50 years ago. Imation's technology expertise spans several critical areas - from competitive high-quality tape coating to leading advanced capability in servo-writing, media packaging, cartridge design and fabrication, optical thin film coating and material science.

With 400 technology scientists and more than 270 patents in the United States alone, Imation also is focused on meeting the data storage needs for the future. Over the past five years Imation has invested more than $400 million in research and development and capital spending on its core data storage business. Due to strong demand for the company's products, it has expanded its capital spending outlook this year to $50 million to meet increased capacity needs for its products. Holographic, rewriteable optical and patterned media are technologies the Company is exploring.

Financial Strength and Discipline

Imation's future is being built on a solid financial foundation, with nearly $400 million in cash and no debt. Working capital turns have improved significantly over the past two years. Discretionary spending on R&D and SG&A combined has declined over the past four years from nearly 40 percent to 20.3 percent, while operating margins reached 8.6 percent in the most recent quarter. As mentioned previously, the Company increased its forecast for revenue and earnings growth for both the current quarter and full year and reiterated its long term financial goals of ten percent sustainable revenue growth at ten percent operating margins.

Customer Experience

Imation's 50-year legacy of leadership, its trusted global brand and dedicated focus on data storage has built strong and enduring relationships with customers. With the broadest portfolio and longest history in data storage removable media, customer experience at Imation is deeper than any of its competitors. Imation's customers include some of the world's largest government and commercial data centers. Working with leading original equipment manufacturers (OEMs) such as Dell, HP, IBM, Quantum, Seagate, StorageTek and Tandberg, Imation develops the media needed to meet customer requirements today and into the future. With the introduction of a storage area networking (SAN) laboratory at the company's headquarters in Minnesota, Imation is able to offer independent and objective evaluations of different storage configurations to meet different end-user requirements. This consulting practice also gives the Company valuable insight into the concerns and future needs of some of the largest data centers.

The Bottom Line

"Imation is truly the right company with the right assets in the right industry at the right time," concluded Monahan. "We have the global market position, the operational discipline, the technological leadership, the financial strength and the customer confidence to be the leading removable data storage media company globally. That's our goal and our total focus."

Investor meeting information are available on-line. Presentations from the company's half-day session in New York are available on the company's Website at www.imation.com, and in a Webcast distributed over CCBN's investor distribution network to both institutional and individual investors. Individual investors can listen to the call through CCBN's individual investor center at www.companyboardroom.com, or by visiting any of the investor sites in CCBN's individual investor network.

Institutional investors can access the call via CCBN's password-protected event management site, streetevents www.streetevents.com.

About Imation Corp

Imation Corp is a global company widely recognized as a leader in removable data storage. Imation removable data storage offerings are a key ingredient in much of the world's technology infrastructure--from corporate data centers, to networks, to small businesses and home users. The product line is one of the broadest in the industry, with magnetic and optical products for the enterprise data center, the network environment, and the consumer. For business users, Imation magnetic tape cartridges deliver reliable storage in data processing, backup and archive applications. Imation's storage consulting services help customers to improve performance, maximize efficiency, and minimize cost for a multitude of storage environments. Consumers use Imation's broad range of digital media, drives and accessories to store photos, data, music and more. On its own and through industry alliances, Imation continues to pioneer today's proven tape, optical and diskette technologies. As of March 31, 2002, Imation employed approximately 3,300 people worldwide. The Company has sales in over 60 countries with international revenues contributing approximately 46% of total sales. Additional information about Imation is available on the Company's Website, or by calling Imation at 888-466-3456.