8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):
July 9, 2009

3COM CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	0-12867	94-2605794
(State or other jurisdiction of	(Commission	(IRS Employer
incorporation)	File Number)	Identification No.)

350 Campus Drive
Marlborough, Massachusetts
01752
(Address of Principal Executive Offices)
(Zip Code)

Registrant’s telephone number, including area code: (508) 323-1000

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02 Results of Operations and Financial Condition

Financial Results.

          On July 9, 2009, 3Com Corporation, or the Company, (i) issued a press release regarding its financial results for its fiscal quarter and year ended May 29, 2009 and (ii) posted supplementary financial information concerning the Company to the investor relations portion of its web site, www.3Com.com. The full text of the press release is attached hereto as Exhibit 99.1. The supplementary financial material is attached hereto as Exhibit 99.2.

          The information in Item 2.02 of this Form 8-K and the exhibits attached hereto as Exhibit 99.1 and Exhibit 99.2 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Non-GAAP Financial Measures.

          In evaluating the Company’s performance, management uses certain non-GAAP financial measures to supplement consolidated financial statements prepared under generally accepted accounting principles in the United States, or GAAP.

          More specifically, the Company uses one or more of the following non-GAAP financial measures: non-GAAP gross profit/loss (and margin), non-GAAP operating profit/loss (and margin), non-GAAP net income/loss (and margin), non-GAAP net income/loss per share, non-GAAP research and development, sales and marketing and general and administrative expenses and non-GAAP operating profit/loss before taxes.

          It should be noted that the non-GAAP operating profit measure used as a metric in several components of our executive compensation is defined to exclude the following charges and benefits: restructuring, amortization, stock-based compensation expense and special items that the Compensation Committee believes are unusual and outside of the Company’s on-going operations. Such measure may be different than our publicly reported non-GAAP operating profit measure discussed in this Form 8-K because the Compensation Committee independently considers the appropriateness of excluding various items for the purposes of measuring executive compensation.

          Discussion. The Company uses these measures in its public statements. Management believes these non-GAAP measures help indicate the Company’s baseline performance before gains, losses or charges that are considered by management to be outside on-going operating results. Accordingly, management uses these non-GAAP measures to gain a better understanding of the Company’s comparative operating performance from period-to-period and as a basis for planning and forecasting future periods. Management believes these non-GAAP measures, when read in conjunction with the Company’s GAAP financials, provide useful information to investors by offering:

• the ability to make more meaningful period-to-period comparisons of the Company’s on-going operating results;

• the ability to better identify trends in the Company’s underlying business and perform related trend analysis;

• a higher degree of transparency for certain expenses (particularly when a specific charge impacts multiple line items);

• a better understanding of how management plans and measures the Company’s underlying business; and

• an easier way to compare the Company’s most recent results of operations against investor and analyst financial models.

          In order to provide meaningful comparisons, the Company believes that it needs to adjust for gains as well as charges that are outside the core operations. Accordingly, certain gains are excluded, as discussed below.

          The non-GAAP measures used by the Company are defined to exclude one or more of the following items:

          Restructuring

          Management believes the costs related to restructuring activities are not indicative of the Company’s normal operating costs. The restructuring charge consists primarily of severance expense and facility closure costs.

          Amortization of Intangibles

          Management believes that the expense associated with the amortization of acquisition-related intangible assets is appropriate to be excluded because a significant portion of the purchase price for acquisitions may be allocated to intangible assets that have short lives and exclusion of the amortization expense allows comparisons of operating results that are consistent over time for both the Company’s newly acquired and long-held businesses. Also, amortization is a non-cash charge for the periods presented.

          Stock-based Compensation

          Stock-based compensation expenses are non-cash charges that relate to restricted stock amortization and stock-based compensation costs associated with acquisitions, as well as additional stock-based compensation expense that represents the fair value of stock-based compensation required pursuant to FAS 123 (R). The expense related to acquisitions is not part of the Company’s normal operating costs and is non-cash. The FAS 123 (R)-related expense is excluded because management believes as a non-cash charge it does not provide a meaningful indicator of the core operating business results. Management manages the business primarily without regard to these non-cash expenses. In addition, because the calculation of these expenses is dependent on factors such as forfeiture rate, volatility of the Company’s stock and a risk-free interest rate, all of which are subject to fluctuation, these charges are expected to be variable over time, and therefore may not provide a meaningful comparison of core operating results among periods. It is useful to note that these factors are generally outside the Company’s control.

          Inventory-Related Adjustment from H3C Acquisition

          The Company has excluded the purchase accounting inventory-related adjustment from the 49% acquisition of H3C. These adjustments represent non-cash, one-time items relating to a specific acquisition as opposed to core operations.

          Fees to Facilitate More Autonomous Operation of Subsidiary

          The Company also excluded fees related to costs incurred for a now-ceased initiative to facilitate a more autonomous operation for a Company subsidiary. These fees are one-time items.

          Benefit from Realtek Patent Resolution and Gain on Sale of Related Patents

          We recorded a benefit in the form of an offset to operating expenses for the payments we received in connection with a patent dispute resolution with Realtek. We subsequently sold most of the underlying patents and recorded a gain in connection with such sale. These are non-recurring items, and not part of our ordinary course business operations. Accordingly, it was determined by management to adjust our results to exclude these items. Management does not measure our performance with these items included.

          Terminated Bain Acquisition Expenses

          The Company excludes external expenses (including bankers’, accounting and legal fees) related to its terminated acquisition by affiliates of Bain Capital. The Company does not exclude expenses for its ongoing litigation against Bain Capital. These expenses are one-time charges that are not indicative of core operations as they relate to a one-time specific transaction to take the Company private that did not occur.

          Impairment of Property and Equipment

          We conducted an impairment review of the carrying value of our Hemel UK property, and took a charge for impairment. This charge is a non-cash charge. We believe that it is unlikely that such an impairment will be a

recurring event. Ultimately, this is not a measurement of our ongoing operations, and management does not consider this charge when measuring our business.

          Legal Contingency Accrual

          We accrued for certain contingencies for current litigation, primarily patent litigation involving claims made by entities that own patents but to our knowledge do not conduct commercial operations. From time-to-time we do engage in litigation over our patent portfolio. Ultimately, management believes these contingencies are not useful in measuring our ongoing operations, and accordingly management does not consider this charge when measuring our business.

          VAT Recovery Dispute

          Value-added tax is not typically charged to a company’s income statement because it is collected by the company on behalf of a governmental agency and remitted to that agency, or paid by the company to a third party and later recovered by the company from the government. In this case, management has deemed it appropriate to exclude a one-time, non-cash charge relating to European VAT tax matters under dispute. At the time they were recorded, we were seeking recovery of these amounts as we believed we were entitled to collect them from the European tax authorities. Under applicable accounting regulations, however, we had determined to take a charge for the amount in dispute.

          IPO Fees Write-Off

          The Company excludes external expenses (primarily accounting, auditing and legal) related to the now-terminated IPO of its TippingPoint division. These expenses are one-time charges that are not indicative of core operations as they relate to a one-time specific transaction to take TippingPoint public that would normally be netted against IPO sales proceeds as opposed to being included in operating expenses.

          Goodwill Impairment Charge

          A stock price decline triggered an accounting impairment review of our goodwill booked for our H3C and TippingPoint acquisitions, resulting in an impairment charge on the goodwill we booked in connection with our 2005 acquisition of TippingPoint. This charge is a one-time, non-cash charge. We believe that it is unlikely that such an impairment will be a recurring event. Ultimately, this is not a measurement of our ongoing operations, and management does not consider this charge when measuring our business.

          Patent Litigation Success Fee

          The Company won a jury verdict as a plaintiff in a patent litigation case, and was obligated to pay its external counsel certain contingent fees based on the size of the award. This is a one-time, non-recurring cost tied to the success of the case, and not based on hourly rates charged by the law firm. Because it is not part of our core operations or expenses, management has determined it is appropriate to exclude it from our operational results. Management does not measure the performance of the business with this figure included.

          Recovery of Uninsured Losses for Hemel Land; Loss on Insurance Settlement

          We recovered monies for certain uninsured losses in connection with our Hemel, UK property which was destroyed by an oil depot explosion. As management views this item to be outside the ordinary course of business and not operational, it determined to exclude this item. This was a one-time unusual event. We do not own any other real property. We also booked a loss on the insurance settlement for this land.

          Gains/Losses on Asset Sales and Investments

          Gains/losses on asset sales and investments are outside of the ordinary course of business and not representative of core operations.

          Change related to Change in Tax Rates in PRC

          The Company excludes a certain tax liability provision because (1) it represents a cumulative effect (year-to-date) of a higher tax rate in China based on the current tax law and without giving effect to any concessions or new tax status to which we may be entitled and (2) it is possible that once Chinese tax authorities clarify their position on our tax rate, and similarly situated companies, the provision will be reversed.

          Tax Reserve Release

          We resolved two tax matters in our favor resulting in a reserve release that provides a benefit to the income statement relating to a booked reserve. Accordingly, we believe an adjustment is appropriate, as this positive impact to our results is not indicative of our ongoing operations.

*********************************************

          Per Share Metrics. The Company believes that it is important to provide per share metrics, in addition to absolute dollar measures, when describing its business, including when presenting non-GAAP measures. To the extent 3Com is in an “income position” on a non-GAAP basis, we use our “diluted” shares (as opposed to our “basic” shares) in order to calculate the non-GAAP per share measures.

          Forward-Looking Measures. For the Company’s forward-looking non-GAAP measures, the Company is unable to provide a quantitative reconciliation because the information is not available without unreasonable effort.

          General. These non-GAAP measures have limitations, however, because they do not include all items of income and expense that impact the Company’s operations. Management compensates for these limitations by also considering the Company’s GAAP results. The non-GAAP financial measures the Company uses are not prepared in accordance with, and should not be considered an alternative to, measurements required by GAAP, such as operating loss, net loss and loss per share, and should not be considered measures of the Company’s liquidity. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP measures. In addition, these non-GAAP financial measures may not be comparable to similar measures reported by other companies.

ITEM 7.01 Regulation FD Disclosure

          As required by its senior secured credit facility the Company made available to its senior secured bank lenders certain summary financial information concerning H3C. This financial data is attached hereto as Exhibit 99.3 and is hereby incorporated by reference into this Item 7.01.

          The information in Item 7.01 of this Form 8-K and the exhibit attached hereto as Exhibit 99.3 shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

ITEM 9.01 Financial Statements and Exhibits

                    (d) Exhibits

Exhibit Number	Description
99.1	Text of Press Release, dated July 9, 2009, titled “3Com Reports Fourth-Quarter and Full-Year Results for Fiscal 2009.”
99.2	Supplemental Financial Information
99.3	H3C — Summary Financial Information Provided to Bank Lenders

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 hereunto duly authorized.

	3COM CORPORATION
Date: July 9, 2009	By:	/s/ Jay Zager
		Jay Zager
		Executive Vice President, Chief Financial Officer

EXHIBIT INDEX

Exhibit Number	Description
99.1	Text of Press Release, dated July 9, 2009, titled “3Com Reports Fourth-Quarter and Full-Year Results for Fiscal 2009.”
99.2	Supplemental Financial Information
99.3	H3C — Summary Financial Information Provided to Bank Lenders

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

For more information contact:

Investor Relations	Media Relations
Gene Skayne	Kevin Flanagan
508.323.1080	508.323.1101
gene_skayne@3com.com	kevin_flanagan@3com.com

3Com Reports Fourth-Quarter and Full-Year Results for Fiscal 2009

MARLBOROUGH, MASS.—July 9, 2009—3Com Corporation (Nasdaq: COMS) today reported financial results for its fiscal 2009 fourth quarter and full fiscal year 2009, which ended May 29, 2009. Revenue in the quarter was $295.1 million, compared to revenue of $321.3 million in the corresponding period in fiscal 2008, an 8.2 percent decrease.

     Net income in the quarter was $20.2 million, or $0.05 per diluted share, compared with a net loss of $166.7 million, or $(0.41) per share, in the fourth quarter of fiscal year 2008. Fiscal year 2008 fourth-quarter results included a $158.0 million goodwill impairment charge. On a non-GAAP basis, net income for the fourth quarter of fiscal year 2009 was $37.2 million, or $0.10 per diluted share, compared with net income of $35.6 million, or $0.09 per diluted share, for the fourth quarter of fiscal year 2008.

     Revenue for the full fiscal year 2009 was $1,317.0 million, compared with $1,294.9 million in the prior year, a 1.7 percent increase. Fiscal year 2009 net income, on a GAAP basis, was $114.7 million, or $0.29 per diluted share, compared with a net loss of $228.8 million, or $(0.57) per share, for the prior fiscal year. On a non-GAAP basis, net income for fiscal year 2009 was $176.7 million, or $0.45 per diluted share, compared with net income of $94.9 million, or $0.23 per diluted share, for fiscal year 2008.

     3Com generated $84.1 million in cash from operations in the fourth quarter and $280.5 million for the year. 3Com’s cash and short-term investment balance at May 29, 2009 was $644.2 million.

     “I am very pleased with 3Com’s performance in the fourth quarter as well as the full fiscal year 2009,” said Bob Mao, 3Com’s chief executive officer. “We had a very good year, delivering on all three of our key goals: revenue growth, operating margin improvement and positive cash generation from operations. We have a clear, articulated strategy that we are successfully implementing.”

- more -

3Com Reports Fourth-Quarter and Full-Year Results for Fiscal 2009, p. 2

     Management will host a conference call and Webcast at 8:30 a.m. EDT, Thursday, July 9, 2009, to discuss the company’s financial results and business outlook. To participate on the call, U.S. and international parties may dial (913) 312-1476. Alternatively, interested parties may listen to the live broadcast of the call over the Internet at 3Com’s Investor Relations Web site (www.3com.com/investor) in the Earnings Webcast section.

     For those unable to participate on the live call, a replay will be available starting at 12:30 p.m. EDT on July 9, 2009, by dialing (719) 457-0820 or (888) 203-1112, Confirmation Code: 4556311. A replay will also be available over the Internet at 3Com’s Investor Relations Web site (www.3com.com/investor) in the Earnings Webcast section. The replay will be available for approximately three weeks after posting.

     Additional financial information is available on the Investor Relations section of our Web site.

Safe Harbor

This news release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including forward-looking statements regarding our business objectives and goals. These statements are neither promises nor guarantees, but involve risks and uncertainties that could cause actual results to differ materially from those set forth in the forward-looking statements, including, without limitation, risks relating to: our ability to grow profitably, expand outside of China, maintain and expand in China, improve expense controls while making investments to grow and other risks detailed in the Company’s filings with the SEC, including those discussed in the Company’s quarterly report filed with the SEC on Form 10-Q for the quarter ended February 27, 2009.

3Com Corporation does not intend, and disclaims any obligation, to update any forward-looking information contained in this release or with respect to the announcements described herein.

The non-GAAP measures used by the Company exclude restructuring, amortization, stock-based compensation expense and, if applicable in the relevant period, unusual items, such as those items detailed in the tables attached to this press release. The required reconciliations and other disclosures for all non-GAAP measures used by the Company are set forth later in this press release, in the Current Report on Form 8-K furnished to the SEC on the date hereof and/or in the investor relations section of our Web site, www.3com.com.

References to the financial information included in this news release reflect rounded numbers and should be considered approximate values.

About 3Com Corporation

3Com Corporation is a $1.3 billion global enterprise networking solutions provider that sets a new price/performance standard for customers. 3Com has three global brands—H3C, 3Com, and TippingPoint—that offer high-performance networking and security solutions to enterprises large and small. The H3C enterprise networking portfolio—a market leader in China—includes products that span from the data center to the edge of the network, while TippingPoint network-based intrusion prevention systems and network access control solutions deliver in-depth, no-compromise application, infrastructure and performance protection.

- End -

Copyright© 2009 3Com Corporation. 3Com, the 3Com logo, H3C and TippingPoint are registered trademarks of 3Com Corporation or its wholly owned subsidiaries in various countries around the world. All other company and product names may be trademarks of their respective holders.

3Com Reports Fourth-Quarter and Full-Year Results for Fiscal 2009, p. 3

3Com Corporation
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
TABLE A

	Three Months Ended						Twelve Months Ended
	May 29,			May 30,			May 29,			May 30,
	2009			2008			2009			2008
Sales	$	295,059		$	321,254		$	1,316,978		$	1,294,879
Cost of sales		118,843			147,529			565,514			640,424
Gross profit		176,216			173,725			751,464			654,455
Operating expenses (income):
Sales and marketing		79,258			78,402			338,401			316,019
Research and development		42,649			51,614			179,979			206,653
General and administrative		25,101			50,310			113,900			129,116
Amortization of intangibles		21,683			25,626			95,013			103,670
Patent dispute resolution and patent sale		(15,200	)		—			(85,200	)		—
Goodwill impairment		—			157,977			—			157,977
Restructuring charges		1,318			193			8,679			4,501
Operating expenses, net		154,809			364,122			650,772			917,936
Operating income (loss)		21,407			(190,397	)		100,692			(263,481	)
Interest expense, net		(432	)		(2,675	)		(5,563	)		(13,087	)
Other income, net		6,902			11,479			52,200			44,824
Income (loss) from operations before income taxes		27,877			(181,593	)		147,329			(231,744	)
Income tax (provision) benefit		(7,726	)		14,870			(32,604	)		2,903
Net income (loss)	$	20,151		$	(166,723	)	$	114,725		$	(228,841	)
Basic and diluted income (loss) per share	$	0.05		$	(0.41	)	$	0.29		$	(0.57	)
Shares used in computing basic per share amounts		386,763			401,922			392,092			399,524
Shares used in computing diluted per share amounts		391,135			401,922			394,207			399,524

3Com Reports Fourth-Quarter and Full-Year Results for Fiscal 2009, p. 4

3Com Corporation
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
TABLE B

	May 29,		May 30,
	2009		2008
ASSETS
Current assets:
Cash and equivalents	$	545,818	$	503,644
Short term investments		98,357		—
Notes receivable		40,590		65,116
Accounts receivable, net		112,771		116,281
Inventories, net		90,395		90,831
Other current assets		56,982		34,033
Total current assets		944,913		809,905
Property & equipment, net		40,012		54,314
Goodwill		609,297		609,297
Intangibles, net		198,624		278,385
Deposits and other assets		22,511		23,229
Total assets	$	1,815,357	$	1,775,130
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	68,350	$	90,280
Current portion of long-term debt		48,000		48,000
Accrued liabilities and other		394,103		366,181
Total current liabilities		510,453		504,461
Deferred taxes and long-term obligations		40,729		22,367
Long-term debt		152,000		253,000
Stockholders’ equity		1,112,175		995,302
Total liabilities and stockholders’ equity	$	1,815,357	$	1,775,130

3Com Reports Fourth-Quarter and Full-Year Results for Fiscal 2009, p. 5

3Com Corporation
Reconciliation of Non-GAAP Measures
(in thousands, except margin and per-share data)
(unaudited)
TABLE C

	Three Months Ended						Twelve Months Ended
	May 29,			May 30,			May 29,			May 30,
	2009			2008			2009			2008
GAAP net income (loss)	$	20,151		$	(166,723	)	$	114,725		$	(228,841	)
Restructuring		1,318			193			8,679			4,501
Amortization of intangibles		21,683			25,626			95,013			103,670
Impacts to cost of sales from purchase accounting adjustments to inventory [a]		—			—			—			11,176
Patent dispute resolution and patent sale [b]		(15,200	)		—			(85,200	)		—
VAT recovery dispute [c]		—			6,069			—			6,069
IPO fees write-off [d]		—			4,864			—			4,864
Goodwill impairment [e]		—			157,977			—			157,977
TippingPoint special admin costs [f]		—			—			800			—
Stock-based compensation expense [g]		11,893			9,793			29,636			25,206
Acquiree expensed acquisition costs [h]		—			43			—			10,631
Legal contingency accruals [i]		—			—			2,400			—
Patent litigation success fee (j)		—			9,000			—			9,000
Impairment of property and equipment [k]		—			—			1,150			—
Hemel land settlement [l]		(2,600	)		—			(2,600	)		—
Gain on sales of assets [m]		—			—			—			(6,155	)
Loss on insurance settlement [n]		—			—			—			2,066
Tax reserve release [o]		—			(11,284	)		—			(11,284	)
Charge related to change in tax rates [p]		—			—			12,083			6,056
Non-GAAP net income	$	37,245		$	35,558		$	176,686		$	94,936
GAAP net income (loss) per share	$	0.05		$	(0.41	)	$	0.29		$	(0.57	)
Restructuring		0.00			0.00			0.02			0.01
Amortization of intangibles		0.06			0.06			0.25			0.26
Impacts to cost of sales from purchase accounting adjustments to inventory [a]		—			—			—			0.03
Patent dispute resolution and patent sale [b]		(0.04	)		—			(0.22	)		—
VAT recovery dispute [c]		—			0.02			—			0.02
IPO fees write-off [d]		—			0.01			—			0.01
Goodwill impairment [e]		—			0.39			—			0.39
TippingPoint special admin costs [f]		—			—			0.00			—
Stock-based compensation expense [g]		0.04			0.03			0.08			0.06
Acquiree expensed acquisition costs [h]		—			0.00			—			0.03
Legal contingency accruals [i]		—			—			0.01			—
Patent litigation success fee (j)		—			0.02			—			0.02
Impairment of property and equipment [k]		—			—			0.00			—
Hemel land settlement [l]		(0.01	)		—			(0.01	)		—
Gain on sales of assets [m]		—			—			—			(0.02	)
Loss on insurance settlement [n]		—			—			—			0.01
Tax reserve release [o]		—			(0.03	)		—			(0.03	)
Charge related to change in tax rates [p]		—			—			0.03			0.01
Non-GAAP net income per share, diluted	$	0.10		$	0.09		$	0.45		$	0.23
Shares used in computing diluted per share amounts		391,135			406,139			394,207			404,193

[a]	Results from our 49% H3C acquisition transaction.
[b]	Resolution of Realtek patent dispute and net proceeds of patent sale.
[c]	Disputed VAT recovery receivable no longer deemed collectible.
[d]	Write-off capitalized costs of proposed IPO.
[e]	Goodwill impairment related to loss in value of a reporting unit.
[f]	Costs incurred in the second quarter to facilitate operation of TippingPoint as a more autonomous business.
[g]	Stock-based compensation expense is included in the following cost and expense categories by period:

	Three Months Ended				Twelve Months Ended
	May 29,		May 30,		May 29,		May 30,
	2009		2008		2009		2008
Cost of sales		1,112		731		3,028		2,134
Sales and marketing		3,645		1,830		8,615		5,976
Research and development		1,394		1,199		3,939		3,993
General and administrative		5,742		6,033		14,498		13,103

Note: $444 thousand of stock-based compensation in the twelve months have been recorded to restructuring expense

[h]	These expenses relate to the proposed acquisition of the Company in September 2007, which was terminated in April 2008.
[i]	Accruals for contingencies relating to ongoing patent litigation.
[j]	The charge relates to the success fee related to the Realtek settlement.
[k]	Impairment charge related to the Company’s land in Hemel. UK.
[l]	Proceeds from Hemel land settlement from reimbursement of operating costs
[m]	The gain relates to a patent sale in fiscal 2008.
[n]	This loss relates to the recording of costs associated with our closed Hemel facility in fiscal 2008.
[o]	This gain relates to the release of tax reserves due to settlements with foreign tax authorities.
[p]	These expenses result from a change in the statutory rate used to compute the income tax provision in the PRC.

EX-99.2

EXHIBIT 99.2

3Com Corporation
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
TABLE A

	Three Months Ended									Twelve Months Ended
	May 29,			February 27,			May 30,			May 29,			May 30,
	2009			2009			2008			2009			2008
Sales	$	295,059		$	324,707		$	321,254		$	1,316,978		$	1,294,879
Cost of sales		118,843			138,878			147,529			565,514			640,424
Gross profit		176,216			185,829			173,725			751,464			654,455
Operating expenses (income):
Sales and marketing		79,258			84,241			78,402			338,401			316,019
Research and development		42,649			43,729			51,614			179,979			206,653
General and administrative		25,101			30,393			50,310			113,900			129,116
Amortization of intangibles		21,683			23,106			25,626			95,013			103,670
Patent dispute resolution and patent sale		(15,200	)		—			—			(85,200	)		—
Goodwill impairment		—			—			157,977			—			157,977
Restructuring charges		1,318			2,860			193			8,679			4,501
Operating expenses, net		154,809			184,329			364,122			650,772			917,936
Operating income (loss)		21,407			1,500			(190,397	)		100,692			(263,481	)
Interest expense, net		(432	)		(3,333	)		(2,675	)		(5,563	)		(13,087	)
Other income, net		6,902			16,528			11,479			52,200			44,824
Income (loss) before income taxes		27,877			14,695			(181,593	)		147,329			(231,744	)
Income tax (provision) benefit		(7,726	)		(12,828	)		14,870			(32,604	)		2,903
Net income (loss)	$	20,151		$	1,867		$	(166,723	)	$	114,725		$	(228,841	)
Basic and diluted income (loss) per share	$	0.05		$	0.00		$	(0.41	)	$	0.29		$	(0.57	)
Shares used in computing basic per share amounts		386,763			384,679			401,922			392,092			399,524
Shares used in computing diluted per share amounts		391,135			386,377			401,922			394,207			399,524

3Com Corporation
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
TABLE B

	May 29,		May 30,
	2009		2008
ASSETS
Current assets:
Cash and equivalents	$	545,818	$	503,644
Short term investments		98,357		—
Notes receivable		40,590		65,116
Accounts receivable, net		112,771		116,281
Inventories, net		90,395		90,831
Other current assets		56,982		34,033
Total current assets		944,913		809,905
Property & equipment, net		40,012		54,314
Goodwill		609,297		609,297
Intangibles, net		198,624		278,385
Deposits and other assets		22,511		23,229
Total assets	$	1,815,357	$	1,775,130
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	68,350	$	90,280
Current portion of long-term debt		48,000		48,000
Accrued liabilities and other		394,103		366,181
Total current liabilities		510,453		504,461
Deferred taxes and long-term obligations		40,729		22,367
Long-term debt		152,000		253,000
Stockholders’ equity		1,112,175		995,302
Total liabilities and stockholders’ equity	$	1,815,357	$	1,775,130

Additional Financial Data
(in thousands)
(unaudited)
TABLE C

Sales by Geography (a)

	Three Months Ended						Twelve Months Ended
	May 29,		February 27,		May 30,		May 29,		May 30,
	2009		2009		2008		2009		2008
China	$	157,971	$	183,758	$	149,773	$	702,107	$	609,498
Europe, Middle East and Africa		50,556		52,982		74,100		231,904		292,339
North America		47,892		43,300		46,727		192,353		202,205
Asia Pacific Rim (ex-China)		20,832		23,850		30,514		101,979		106,820
Latin and South America		17,808		20,817		20,140		88,635		84,017
Total Sales	$	295,059	$	324,707	$	321,254	$	1,316,978	$	1,294,879

(a) All non-OEM sales are reported in geographic categories based on the location of the end customer. Sales to OEM customers are included in the geographic categories are based upon the hub locations of OEM partners.

Sales by Product Category

	Three Months Ended						Twelve Months Ended
	May 29,		February 27,		May 30,		May 29,		May 30,
	2009		2009		2008		2009		2008
Networking	$	231,397	$	259,045	$	261,897	$	1,061,802	$	1,061,155
Security (b)		41,259		43,553		36,441		163,941		133,445
Services		11,305		11,892		10,291		45,888		39,583
Voice		11,098		10,217		12,625		45,347		60,696
Total Sales	$	295,059	$	324,707	$	321,254	$	1,316,978	$	1,294,879

(b) Security products include sales of TippingPoint offerings along with Networking business security offerings.

3Com Corporation
Reconciliation of Non-GAAP Measures
(in thousands, except margin and per-share data)
(unaudited)
TABLE D

	Three Months Ended									Twelve Months Ended
	May 29,			February 27,			May 30,			May 29,			May 30,
	2009			2009			2008			2009			2008
GAAP gross profit		176,216			185,829			173,725			751,464			654,455
Impacts to cost of sales from purchase accounting adjustments to inventory [a]		—			—			—			—			11,176
Stock-based compensation expense [g]		1,112			596			731			3,028			2,134
Non-GAAP gross profit		177,328			186,425			174,456			754,492			667,765
GAAP gross margin		59.7	%		57.2	%		54.1	%		57.1	%		50.5	%
Impacts to cost of sales from purchase accounting adjustments to inventory [a]		—			—			—			—			0.9	%
Stock-based compensation expense [g]		0.4	%		0.2	%		0.2	%		0.2	%		0.2	%
Non-GAAP gross margin		60.1	%		57.4	%		54.3	%		57.3	%		51.6	%
GAAP operating income (loss)	$	21,407		$	1,500		$	(190,397	)	$	100,692		$	(263,481	)
Restructuring		1,318			2,860			193			8,679			4,501
Amortization of intangible assets		21,683			23,106			25,626			95,013			103,670
Impacts to cost of sales from purchase accounting adjustments to inventory [a]		—			—			—			—			11,176
Patent dispute resolution and patent sale [b]		(15,200	)		—			—			(85,200	)		—
VAT recovery dispute [c]		—			—			6,069			—			6,069
IPO fees write-off [d]		—			—			4,864			—			4,864
Goodwill impairment [e]		—			—			157,977			—			157,977
TippingPoint special admin costs [f]		—			—			—			800			—
Stock-based compensation expense [g]		11,893			5,663			9,793			29,636			25,206
Acquiree expensed acquisition costs [h]		—			—			43			—			10,631
Legal contingency accruals [i]		—			2,400			—			2,400			—
Patent litigation success fee (j)		—			—			9,000			—			9,000
Impairment of property and equipment [k]		—			1,150			—			1,150			—
Hemel land settlement [l]		(2,600	)		—			—			(2,600	)		—
Non-GAAP operating income	$	38,501		$	36,679		$	23,168		$	150,570		$	69,613
GAAP income (loss) before income taxes	$	27,877		$	14,695		$	(181,593	)	$	147,329		$	(231,744	)
Restructuring		1,318			2,860			193			8,679			4,501
Amortization of intangibles		21,683			23,106			25,626			95,013			103,670
Impacts to cost of sales from purchase accounting adjustments to inventory [a]		—			—			—			—			11,176
Patent dispute resolution and patent sale [b]		(15,200	)		—			—			(85,200	)		—
VAT recovery dispute [c]		—			—			6,069			—			6,069
IPO fees write-off [d]		—			—			4,864			—			4,864
Goodwill impairment [e]		—			—			157,977			—			157,977
TippingPoint special admin costs [f]		—			—			—			800			—
Stock-based compensation expense [g]		11,893			5,663			9,793			29,636			25,206
Acquiree expensed acquisition costs [h]		—			—			43			—			10,631
Legal contingency accruals [i]		—			2,400			—			2,400			—
Patent litigation success fee (j)		—			—			9,000			—			9,000
Impairment of property and equipment [k]		—			1,150			—			1,150			—
Hemel land settlement [l]		(2,600	)		—			—			(2,600	)		—
Gain on sales of assets [m]		—			—			—			—			(6,155	)
Loss on insurance settlement [n]		—			—			—			—			2,066
Non-GAAP income before income taxes	$	44,971		$	49,874		$	31,972		$	197,207		$	97,261
GAAP net income (loss)	$	20,151		$	1,867		$	(166,723	)	$	114,725		$	(228,841	)
Restructuring		1,318			2,860			193			8,679			4,501
Amortization of intangibles		21,683			23,106			25,626			95,013			103,670
Impacts to cost of sales from purchase accounting adjustments to inventory [a]		—			—			—			—			11,176
Patent dispute resolution and patent sale [b]		(15,200	)		—			—			(85,200	)		—
VAT recovery dispute [c]		—			—			6,069			—			6,069
IPO fees write-off [d]		—			—			4,864			—			4,864
Goodwill impairment [e]		—			—			157,977			—			157,977
TippingPoint special admin costs [f]		—			—			—			800			—
Stock-based compensation expense [g]		11,893			5,663			9,793			29,636			25,206
Acquiree expensed acquisition costs [h]		—			—			43			—			10,631
Legal contingency accruals [i]		—			2,400			—			2,400			—
Patent litigation success fee (j)		—			—			9,000			—			9,000
Impairment of property and equipment [k]		—			1,150			—			1,150			—
Hemel land settlement [l]		(2,600	)		—			—			(2,600	)		—
Gain on sales of assets [m]		—			—			—			—			(6,155	)
Loss on insurance settlement [n]		—			—			—			—			2,066
Tax reserve release [o]		—			—			(11,284	)		—			(11,284	)
Charge related to change in tax rates [p]		—			12,083			—			12,083			6,056
Non-GAAP net income	$	37,245		$	49,129		$	35,558		$	176,686		$	94,936
GAAP net income (loss) per share	$	0.05		$	0.00		$	(0.41	)	$	0.29		$	(0.57	)
Restructuring		0.00			0.01			0.00			0.02			0.01
Amortization of intangibles		0.06			0.06			0.06			0.25			0.26
Impacts to cost of sales from purchase accounting adjustments to inventory [a]		—			—			—			—			0.03
Patent dispute resolution and patent sale [b]		(0.04	)		—			—			(0.22	)		—
VAT recovery dispute [c]		—			—			0.02			—			0.02
IPO fees write-off [d]		—			—			0.01			—			0.01
Goodwill impairment [e]		—			—			0.39			—			0.39
TippingPoint special admin costs [f]		—			—			—			0.00			—
Stock-based compensation expense [g]		0.04			0.01			0.03			0.08			0.06
Acquiree expensed acquisition costs [h]		—			—			0.00			—			0.03
Legal contingency accruals [i]		—			0.01			—			0.01			—
Patent litigation success fee (j)		—			—			0.02			—			0.02
Impairment of property and equipment [k]		—			0.00			—			0.00			—
Hemel land settlement [l]		(0.01	)		—			—			(0.01	)		—
Gain on sales of assets [m]		—			—			—			—			(0.02	)
Loss on insurance settlement [n]		—			—			—			—			0.01
Tax reserve release [o]		—			—			(0.03	)		—			(0.03	)
Charge related to change in tax rates [p]		—			0.04			—			0.03			0.01
Non-GAAP net income per share, diluted	$	0.10		$	0.13		$	0.09		$	0.45		$	0.23
Shares used in computing diluted per share amounts		391,135			386,377			406,139			394,207			404,193
GAAP sales and marketing expenses	$	79,258		$	84,241		$	78,402		$	338,401		$	316,019
Stock-based compensation expense [d]		(3,645	)		(1,371	)		(1,830	)		(8,387	)		(5,976	)
Non-GAAP sales and marketing expenses	$	75,613		$	82,870		$	76,572		$	330,014		$	310,043
GAAP research and development expenses	$	42,649		$	43,729		$	51,614		$	179,979		$	206,653
Stock-based compensation expense [d]		(1,394	)		(552	)		(1,199	)		(3,723	)		(3,993	)
Non-GAAP research and development expenses	$	41,255		$	43,177		$	50,415		$	176,256		$	202,660
GAAP general and administrative expenses	$	25,101		$	30,393		$	50,310		$	113,900		$	129,116
VAT recovery dispute [c]		—			—			(6,069	)		—			(6,069	)
IPO fees write-off [d]		—			—			(4,864	)		—			(4,864	)
TippingPoint special admin costs [f]		—			—			—			(800	)		—
Stock-based compensation expense [g]		(5,742	)		(3,144	)		(6,033	)		(14,498	)		(13,103	)
Acquiree expensed acquisition costs [h]		—			—			(43	)		—			(10,631	)
Legal contingency accruals [i]		—			(2,400	)		—			(2,400	)		—
Patent litigation success fee (j)		—			—			(9,000	)		—			(9,000	)
Impairment of property and equipment [k]		—			(1,150	)		—			(1,150	)		—
Hemel land settlement [l]		2,600			—			—			2,600			—
Non-GAAP general and administrative expense	$	21,959		$	23,699		$	24,301		$	97,652		$	85,449

[a]	Results from our 49% H3C acquisition transaction.
[b]	Resolution of Realtek patent dispute and net proceeds of patent sale.
[c]	Disputed VAT recovery receivable no longer deemed collectible.
[d]	Write-off capitalized costs of proposed IPO.
[e]	Goodwill impairment related to the TippingPoint reporting unit.
[f]	Costs incurred in the second quarter to facilitate operation of TippingPoint as a more autonomous business.
[g]	Stock-based compensation expense is included in the following cost and expense categories by period:

	Three Months Ended						Twelve Months Ended
	May 29,		February 27,		May 30,		May 29,		May 30,
	2009		2009		2008		2009		2008
Cost of sales		1,112		596		731		3,028		2,134
Sales and marketing		3,645		1,599		1,830		8,615		5,976
Research and development		1,394		768		1,199		3,939		3,993
General and administrative		5,742		3,144		6,033		14,498		13,103

Note:	$444 thousand of stock-based compensation in the twelve months ended May 29, 2009 have been recorded as restructuring expenses.
[h]	These expenses relate to the proposed acquisition of the Company in September 2007, which was terminated in April 2008.
[i]	Accruals for contingencies relating to patent litigation.
[j]	The charge relates to the success fee related to the Realtek settlement.
[k]	Impairment charge related to the Company’s land in Hemel, UK.
[l]	Proceeds from Hemel land settlement for recovery of uninsured losses.
[m]	The gain relates to a patent sale in fiscal 2008.
[n]	This loss relates to the recording of costs associated with our closed Hemel facility in fiscal 2008.
[o]	This gain relates to the release of tax reserves due to settlements with foreign tax authorities.
[p]	These expenses result from a change in the statutory rate used to compute the income tax provision in the PRC.

3Com Corporation
Segment Reporting
(in thousands)
(unaudited)
TABLE E

	Three Months Ended May 29, 2009															Three Months Ended February 27, 2009															Twelve Months May 29, 2009
								TippingPoint															TippingPoint															TippingPoint
								Security Business															Security Business															Security Business
	Networking Business [a]							[b]								Networking Business [a]							[b]								Networking Business [a]							[b]
	China-Based				Central					Eliminations/						China-Based				Central					Eliminations/										Central					Eliminations/
	Business		Rest of World		Functions			TippingPoint		Other				Total		Business		Rest of World		Functions			TippingPoint		Other				Total		China		Rest of World		Functions			TippingPoint		Other				Total
Sales	$	162,342	$	102,217	$	—		$	32,365	$	(1,865	)	[c]	$	295,059	$	190,385	$	102,836	$	—		$	33,284	$	(1,798	)	[c]	$	324,707	$	727,939	$	471,055	$	—		$	124,864	$	(6,880	)	[c]	$	1,316,978
Gross profit		111,300		58,227		(14,878	)		22,679		(1,112	)	[d]		176,216		128,160		61,365		(25,326	)		22,226		(596	)	[d]		185,829		486,888		273,706		(91,585	)		85,483		(3,028	)	[d]		751,464
Direct sales and marketing expenses		30,000		22,429		—			9,759		3,645		[d]		65,833		36,581		23,360		—			10,282		1,371		[d]		71,594		136,194		99,683		—			40,632		8,387		[d]		284,896
Segment contribution profit (loss)		81,300		35,798		(14,878	)		12,920		(4,757	)			110,383		91,579		38,005		(25,326	)		11,944		(1,967	)			114,235		350,694		174,023		(91,585	)		44,851		(11,415	)			466,568
Other operating expenses		—		—		65,414			11,225		12,337		[e]		88,976		—		—		68,394			11,129		33,212		[e]		112,735		—		—		285,007			42,406		38,463		[e]		365,876
Segment profit		—		—		—			1,695		—						—		—		—			815		—						—		—		—			2,445		—
Operating income														$	21,407														$	1,500														$	100,692

	Three Months Ended May 30, 2008																Three Months Ended February 29, 2008																	Twelve Months Ended May 30, 2008
								TippingPoint																TippingPoint																	TippingPoint
								Security Business																Security Business																	Security Business
	Networking Business [a]							[b]									Networking Business [a]							[b]										Networking Business [a]							[b]
	China-Based				Central					Eliminations/							China-Based				Central						Eliminations/											Central						Eliminations/
	Business		Rest of World		Functions			TippingPoint		Other				Total			Business		Rest of World		Functions			TippingPoint			Other				Total			China		Rest of World		Functions			TippingPoint			Other				Total
Sales	$	157,598	$	135,833	$	—		$	29,209	$	(1,386	)	[c]	$	321,254		$	179,668	$	134,531	$	—		$	23,639		$	(1,448	)	[c]	$	336,390		$	647,718	$	546,868	$	—		$	104,101		$	(3,808	)	[c]	$	1,294,879
Gross profit		102,598		78,279		(25,878	)		19,457		(731	)	[d]		173,725			114,543		77,523		(28,474	)		16,578			(496	)	[d]		179,674			407,325		306,556		(116,370	)		70,197			(13,253	)	[d]		654,455
Direct sales and marketing expenses		26,500		27,339		—			10,728		1,199		[d]		65,766			33,000		25,152		—			8,827			1,753		[d]		68,732			115,995		99,122		—			38,404			5,345		[d]		258,866
Segment contribution profit (loss)		76,098		50,940		(25,878	)		8,729		(1,930	)			107,959			81,543		52,371		(28,474	)		7,751			(2,249	)			110,942			291,330		207,434		(116,370	)		31,793			(18,598	)			395,589
Other operating expenses		—		—		78,261			8,460		211,635		[e]		298,356			—		—		75,701			8,510			32,797		[e]		117,008			—		—		312,341			32,290			314,439		[e]		659,070
Segment profit		—		—		—			269		—							—		—		—			(759	)		—							—		—		—			(497	)		—
Operating loss														$	(190,397	)															$	(6,066	)															$	(263,481	)

[a]	Our networking Business consists of two regionally based reporting segments: China-Based Business and Rest of World. We measure profitability in these segments at a segment contribution profit level. Segment contribution profit is defined as gross profit less segment direct sales and marketing expenses. Gross profit for these regions is defined as sales less standard costs of sales, such as product costs, and “gross profit” as defined for these segments may be referred to as “standard margin” in our public statements. Also as part of our Networking business we report the central function costs for this business. Central function costs include other cost of sales and centralized operating expenses such as supply chain, research and development, indirect sales and marketing support and general and administrative costs.
[b]	Our TippingPoint Security business segment’s profitability is measured on segment profit. This measure includes all costs except those items described in “Eliminations and Other”.
[c]	Eliminations for inter-company sales during the respective periods between our networking business segments, on one hand, and our TippingPoint segment on the other hand.
[d]	Includes stock-based compensation in all periods and purchase accounting inventory related adjustments as applicable.
[e]	Includes: stock-based compensation, amortization, and restructuring in all periods and patent dispute resolution proceeds, patent sale proceeds, legal contingency accruals, impairment of property and equipment, proceeds of Hemel land settlement, goodwill impairment, patent litigation success fee, IPO fees write-off, VAT recovery dispute write-off and Bain transaction costs where applicable.

3Com Corporation
Consolidated Statement of Cash Flows
(In thousands)
(unaudited)
Table F

	Twelve Months Ended
	May 29,			May 30,
	2009			2008
Cash flows from operating activities:
Net income (loss)	$	114,725		$	(228,841	)
Adjustments to reconcile income (loss) from continuing operations to net cash provided by operating activities:
Depreciation and amortization		124,794			136,030
Loss on property and equipment disposals		1,257			2,224
Goodwill impairment		—			157,977
Impairment of property and equipment		1,150			—
Gain on patent sale		(15,200	)		—
Stock-based compensation expense		30,080			25,207
Gain on investments, net		—			(185	)
Deferred income taxes		(10,078	)		(8,206	)
Change in assets and liabilities:
Accounts and notes receivable		35,747			7,895
Inventories		(3,342	)		32,621
Other assets		(9,945	)		18,429
Accounts payable		(32,075	)		(22,926	)
Other liabilities		43,356			(65,348	)
Net cash provided by operating activities		280,469			54,877
Cash flows from investing activities:
Proceeds from maturities and sales of investments		—			442
Purchase of investments		(98,235	)		—
Purchase of property and equipment		(16,587	)		(17,893	)
Proceeds from patent sale		15,200			—
Proceeds from sale of property and equipment		228			1,096
Net cash used in investing activities		(99,394	)		(16,355	)
Cash flows from financing activities:
Issuances of common stock		6,568			8,305
Repurchases of common stock		(53,348	)		(3,180	)
Repayment of long term debt		(101,000	)		(129,000	)
Net cash used in financing activities		(147,780	)		(123,875	)
Effects of exchange rate changes on cash and equivalents		8,879			29,780
Net change in cash and equivalents during period		42,174			(55,573	)
Cash and equivalents, beginning of period		503,644			559,217
Cash and equivalents, end of period	$	545,818		$	503,644

EX-99.3

EXHIBIT 99.3

H3C Summary Financial Information Provided to Bank Lenders
H3C Holdings Limited
For the Fiscal Quarters Ended March 31, 2009 and 2008
(Unaudited; amounts in thousands except percentages)

Unit: US$K for Amounts

Items		FY 2009			FY 2008
(1)	Sales	$	208,426		$	187,101
(2)	Gross profit	$	125,660		$	108,658
(3)	Gross profit as a percent of sales		60.3	%		58.1	%
(4)	Consolidated Adjusted EBITDA (a)	$	75,490		$	60,209
(5)	Consolidated Adjusted EBITDA as a percent of sales		36.2	%		32.2	%
(6)	Taxes	$	8,296		$	(4,398	)
(7)	Deferred income tax	$	179		$	(6,416	)
(8)	Consolidated Net Income (a)	$	45,274		$	30,444
(9)	Net Income based on GAAP	$	45,274		$	30,444
(10)	Cash, Cash equivalents and short term investments	$	568,315		$	404,049
(11)	Net property plant and equipment	$	12,640		$	20,761
(12)	Consolidated Working Capital (a)	$	20,201		$	(50,136	)
(13)	Consolidated Capital Expenditures (a)	$	1,210		$	1,843
(14)	Consolidated Capital Expenditures as a percent of sales		0.6	%		1.0	%
(15)	Increase in Consolidated Working Capital	$	56,109		$	(44,981	)
(16)	The result of Consolidated Adjusted EBITDA less Consolidated Working Capital	$	55,289		$	110,345

(a) These are Non-GAAP financial measures. Where the measure differs from its most comparable GAAP measure, a reconciliation to the most comparable GAAP measure has been provided on next page.

Reconciliation of Consolidated Adjusted EBITDA to Net Income based on GAAP:

	FY 2009		FY 2008
Net Income based on GAAP	$	45,274	$	30,444
Add:
Minority Interest	$	0	$	0
Purchase accounting adjustment	$	0	$	0
Consolidated Net Interest Expense	$	3,234	$	6,479
Provisions for taxes based on income	$	8,296	$	(4,398	)
Total depreciation expense	$	2,818	$	4,264
Total amortization expense	$	15,813	$	23,413
EARP expense due to the change of control	$	0	$	0
Other non-cash items reducing Consolidated Net Income	$	55	$	7
Less:
Other non-cash items increasing Consolidated Net Income	$	0		0
Consolidated Adjusted EBITDA	$	75,490	$	60,209

Reconciliation of Consolidated Working Capital to Working Capital based on GAAP:

	FY 2009			FY 2008
Working Capital based on GAAP	$	401,569		$	240,797
Less:
Cash & Cash equivalents	$	429,368		$	338,933
Current portion of Long Term Debt	$	(48,000	)	$	(48,000	)
Consolidated Working Capital	$	20,201		$	(50,136	)

Defined terms have the definitions ascribed to such terms in the Company’s senior secured credit agreement.