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):
December 20, 2006

3COM CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	0-12867	94-2605794
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer 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))

TABLE OF CONTENTS

EX-99.1 TEXT OF PRESS RELEASE, DATED DECEMBER 20, 2006

ITEM 2.02 Results of Operations and Financial Condition

Financial Results.

          On December 20, 2006, 3Com Corporation (the “Company”) issued a press release regarding its financial results for its fiscal quarter ended December 1, 2006. The full text of the press release is attached hereto as Exhibit 99.1.

          The information in Item 2.02 of this Form 8-K and the exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (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.

          The attached press release and the related conference call contain 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 (“GAAP”).

          Non-GAAP Operating Income or Loss Measure. The Company uses a non-GAAP operating income or loss measure in its public statements. Management believes this non-GAAP measure helps 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 this non-GAAP measure 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 this non-GAAP measure, when read in conjunction with the Company’s GAAP financials, provides 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.

          The non-GAAP operating loss or income measure used by the Company is defined to exclude the following charges and benefits: restructuring, amortization, in-process research and development, stock-based compensation expense and special items that management believes are unusual and outside of the Company’s on-going operations. There are no special items for the periods presented in the press release attached hereto. 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. Management also 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. In addition, the Company has non-recurring in-process research and development expenses which are non-cash and related to acquisitions as opposed to the Company’s core operations. Finally, 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.

          Non-GAAP Pro Forma Consolidated Measures. The Company is required by GAAP to disclose, in its SEC filings, pro forma consolidated revenue, net loss and net loss per share measures as if its China joint venture, known as H3C, had been consolidated from the beginning of the relevant period. The Company may use these measures, together with pro forma consolidated measures for periods not required by GAAP to be included in such filings, in its public statements. The additional measures for periods not required by GAAP to be included in such filings are considered non-GAAP financial measures when presented on a pro forma basis. The Company believes these non-GAAP financial measures are meaningful to investors because the Company has determined it is appropriate to consolidate H3C’s results. Further, it is useful for comparative purposes to show additional periods on a pro forma basis. Management believes investors will have a better understanding of the Company’s consolidated results (which include H3C) in future periods if they are provided with pro forma consolidated results for the prior periods. These measures therefore provide additional relevant information to investors about the Company’s consolidated operations. The non-GAAP measures, however, should not be considered indicative of the Company’s future consolidated performance.

          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 9.01 Financial Statements and Exhibits

(d) Exhibits

Exhibit Number	Description
99.1	Text of Press Release, dated December 20, 2006, titled “3Com Reports Second Quarter Fiscal Year 2007 Results.”

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: December 20, 2006	By:	/s/ Donald M. Halsted, III
		Donald M. Halsted, III
		Executive Vice President and Chief Financial Officer

EXHIBIT INDEX

Exhibit Number	Description
99.1	Text of Press Release, dated December 20, 2006, titled “3Com Reports Second Quarter Fiscal Year 2007 Results.”

EX-99.1

FOR IMMEDIATE RELEASE

For more information contact:

Investor Relations
John Vincenzo
508.323.1260
john_vincenzo@3com.com Media Relations
Joseph Vukson
508.323.1228
joseph_vukson@3com.com

3COM REPORTS SECOND QUARTER FISCAL YEAR 2007 RESULTS

Gives High-Level Overview of Financing Plans to Acquire 100 Percent of Joint Venture

Second Quarter Highlights

• GAAP revenue for the second quarter was $333 million, an 81 percent increase over the prior-year quarter; and an 18 percent increase over the prior year quarter’s non-GAAP revenue, assuming the consolidation of Huawei-3Com (H3C) from the beginning of the period;

• GAAP loss per share was $0.01 in the second quarter, as compared to a $0.03 loss per share in the prior-year quarter that included a benefit from a foreign tax settlement of $0.06 per share;

• Reduced SCN operating expenses dropped by $27 million year-over-year; and

• Agreed to buy Huawei Technologies’ 49 percent stake in H3C for $882 million.

MARLBOROUGH, MASS. — December 20, 2006 — 3Com Corporation (NASDAQ: COMS) today reported consolidated financial results for its second quarter of fiscal year 2007, which ended December 1, 2006, including the results for its two operating segments, Secure, Converged Networking (SCN) and H3C.

Revenue

     U.S. Generally Accepted Accounting Principles (GAAP) revenue for the second quarter of fiscal 2007 was $333 million, an 81 percent increase compared to same period in fiscal 2006. This growth is primarily the result of the inclusion of H3C revenue in the

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current period. Compared to non-GAAP revenue for the prior-year period, which includes the results of H3C as if it had been consolidated from the beginning of the prior-year period, 3Com’s revenue grew 18 percent. In both cases, the overall growth was offset partially by year-over-year declines in SCN revenue.

Gross Profit, Operating Expense and Operating Loss — GAAP Basis

     3Com’s gross profit for the second quarter of fiscal 2007 was $150 million, or 45 percent of revenue, which is a five percentage point improvement compared to the prior-year quarter, driven primarily by the inclusion of H3C results in the current period results. Second quarter fiscal 2007 operating expenses were $160 million, which includes a $27 million reduction in expenses for the SCN segment compared to the year-ago period. This resulted in an operating loss of $9 million. This compares to a $42 million operating loss in the second quarter of fiscal 2006. The $33 million improvement comprises $12 million due to reduced operating loss in the SCN segment and $21 million of operating income from H3C’s results.

Non-GAAP Operating Income¹

     The second quarter fiscal 2007 non-GAAP operating income was $10 million, a $40 million improvement compared to the prior-year quarter’s non-GAAP operating loss of $30 million. GAAP operating loss improved less than non-GAAP operating loss due to the inclusion of increased amortization expenses for the January 2006 3Com acquisition of two percent of the shares in H3C from Huawei, and the inclusion of stock-based compensation expense under FAS 123R, which are included in GAAP results for the current period.

Net Loss and EPS — GAAP basis

     The second quarter fiscal 2007 net loss was $4 million, or $0.01 per share, including restructuring, amortization and stock-based compensation expense of $20 million, or $0.05 per share. In the same period of the prior year, the net loss was $11

¹ The non-GAAP operating income and loss measures used by the company exclude restructuring, amortization, in-process research and development, stock-based compensation expense and, if applicable in the relevant period, unusual items. The required reconciliations and other disclosures are set forth later in this press release in Table D and in the Current Report on Form 8-K furnished to the SEC on the date hereof.

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million, or $0.03 per share, including restructuring, amortization and stock-based compensation expense of $12 million, or $0.03 per share². The prior-year quarter also included a benefit of $24 million or $0.06 per share, resulting from a foreign tax settlement.

     “In our second fiscal quarter, we continued to show excellent progress in both the H3C and SCN operating segments of our business, delivering on one of our key milestones — non-GAAP operating profitability,” said Edgar Masri, 3Com’s President and Chief Executive Officer. “Companies that will be successful on a global scale must find new and innovative ways to tap into fast growing economies such as the one in China and other emerging markets. Through H3C and our improving SCN segment, we believe we have the building blocks necessary to create a global technology leader. We must now focus on successfully integrating the best-in-class approaches from both H3C and 3Com to build on this positive momentum and create a sustainable, growing and profitable business.”

Cash and Short-Term Securities

     3Com ended the quarter with $869 million in cash, cash equivalents and short-term investments, including the consolidated cash, cash equivalents and short-term investments of H3C, which totaled $132 million. The net decrease of $47 million from the balance at the end of the previous quarter is due in large part to a capital distribution from H3C to its shareholders, which resulted in a decline in 3Com’s consolidated cash balance of $41 million for Huawei’s share of the distribution.

Financing the H3C Acquisition

     On November 28, 2006, 3Com announced that it agreed to buy Huawei Technologies’ 49 percent stake in H3C for $882 million, which represents an implied equity value of $1.8 billion. The acquisition is subject to customary approval in the People’s Republic of China. To fund the purchase price, 3Com has secured committed financing from its international banking partner, subject to customary funding conditions,

² Our results for the year ago period include stock-based compensation expense primarily related to restricted stock amortization and stock-based compensation costs associated with acquisitions. Our results for the current period also include the effects of our adoption of FAS 123 (R).

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for up to $500 million in Hong Kong-based senior secured bank debt. The remainder of the payment will come from the cash and short-term investments on 3Com’s balance sheet.

Conference Call

     Management will host a conference call and webcast at 5 p.m. EST today to discuss quarterly highlights, historical financial results and expectations of future performance. To participate on the call, U.S. and international parties may dial (913) 981-4902. 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.

Safe Harbor

This press 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 goal to create a global technology leader and build a growing and profitable business, approvals required for our announced acquisition to acquire Huawei’s 49% ownership interest in H3C, our bank commitment to finance such acquisition and our intent to use bank funds and existing cash to fund such acquisition. 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 return to profitability in light of significant historical net losses; our ability to respond effectively to increased competition; our ability to compensate for lower sales or cash outlays with cost reductions sufficient to generate positive net income or cash flow; the consequences of expense reduction; our dependence on our joint venture in China (H3C); economic, political and social events in China; H3C’s dependence on Huawei; our ability to hire and retain qualified personnel, including at H3C; our ability to successfully transition to 100% ownership of H3C and leverage the benefits such ownership can provide; our ability to evolve our financial and managerial control and systems, including those at H3C; competition with Huawei; our ability to consummate our announced transaction with Huawei to purchase additional interest in H3C and finance it on favorable terms; our ability to identify and respond to market trends; our ability to use strategic alliances; the success of our outsourcing strategy; the market acceptance of our products and the inclusion of our technology in industry standards; our focus on enterprise networking and fluctuating results based on conditions in that market; our reliance on a small number of resellers; distributors reducing inventories of our products; our ability to successfully develop relationships with system integrators, service providers and enterprise VARs; the success of acquisitions; our ability to manage our supply chain; the ability of our manufacturing outsourcing strategy to meet cost, quality and performance standards; China’s reforms and changing economic environment; uncertainty with respect to China’s legal system; possible reduction in Chinese tax benefits; restrictions on H3C paying dividends; our ability to maintain effective internal controls that include H3C; currency rate fluctuations; Huawei’s minority rights in our H3C venture; intellectual property rights, enforcement and defense; stock price volatility; anti-takeover provisions; and other risks detailed in the Company’s filings with the SEC,

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including those discussed in the Company’s quarterly report filed with the SEC on Form 10-Q for the quarter ended September 1, 2006.

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.

References to the financial information included in this press release and the related conference call reflect rounded numbers and should be considered approximate values.

About 3Com Corporation
3Com Corporation (NASDAQ: COMS) is a leading provider of secure, converged voice and data networking solutions for enterprises of all sizes. 3Com offers a broad line of innovative products backed by world class sales, service and support, which excel at delivering business value for its customers. Through its TippingPoint division, 3Com is the leading provider of network-based intrusion prevention systems that deliver in-depth application protection, infrastructure protection, and performance protection. 3Com also is the majority owner of Huawei-3Com Co., Ltd. (H3C), a China-based joint venture formed by 3Com and Huawei in November 2003. H3C brings innovative and cost-effective product development and manufacturing and a strong footprint in one of the world’s most dynamic markets. For further information, please visit www.3com.com, or the press site www.3com.com/pressbox.

# # #

Copyright ^© 2006 3Com Corporation. 3Com and the 3Com logo are registered trademarks and TippingPoint is a trademark of 3Com Corporation. All other company and product names may be trademarks of their respective holders.

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3Com Corporation

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)

TABLE A

	Three Months Ended
	December 1,			September 1,			December 2,
	2006			2006			2005
Sales	$	332,976		$	300,144		$	184,332
Cost of sales		182,825			163,715			110,017
Gross profit		150,151			136,429			74,315
Operating expenses:
Sales and marketing		76,188			77,122			67,694
Research and development		48,151			47,793			23,225
General and administrative		22,341			20,276			18,292
Amortization of intangibles		12,221			12,181			3,862
Restructuring charges		630			(75	)		3,468
Total operating expenses		159,531			157,297			116,541
Operating loss		(9,380	)		(20,868	)		(42,226	)
Gain (loss) on investments, net		(911	)		2,292			3,511
Interest Income, net		11,447			10,090			6,630
Other Income, net		12,616			4,718			487
Loss from operations before income taxes and equity interest of unconsolidated joint venture and minority interest of consolidated joint venture		13,772			(3,768	)		(31,598	)
Income tax provision		(2,315	)		(1,358	)		21,893
Equity interest of 3Com in the income (loss) of unconsolidated joint venture (1)		—			—			(995	)
Minority Interest of Huawei in the income of consolidated joint venture (2)		(14,973	)		(8,942	)		—
Net loss	$	(3,516	)	$	(14,068	)	$	(10,700	)
Basic and diluted loss per share:	$	(0.01	)	$	(0.04	)	$	(0.03	)
Shares used in computing basic and diluted per share amounts		393,352			391,885			385,442

(1)	Represents 3Com’s interest in the Huawei-3Com joint venture for the period on and prior to February 1, 2006
(2)	Represents Huawei’s interest in the Huawei-3Com joint venture for the period subsequent to February 1, 2006

3Com Corporation

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

TABLE B

	December 1,		June 2,
	2006		2006
ASSETS
Current assets:
Cash and cash equivalent	$	529,180	$	501,097
Short-term investments		339,358		363,250
Notes receivable		62,359		63,224
Accounts receivable, net		155,181		115,120
Inventories, net		142,671		148,819
Other current assets		57,715		57,835
Total current assets		1,286,464		1,249,345
Property & equipment, net		78,868		89,109
Goodwill		354,259		354,259
Intangibles, net		87,344		111,845
Other assets		24,877		56,803
Total assets	$	1,831,812	$	1,861,361
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	122,166	$	153,245
Accrued liabilities and other		341,287		318,036
Total current liabilities		463,453		471,281
Deferred revenue and long-term obligations		2,685		13,788
Minority Interest of Huawei (a)		157,061		173,930
Stockholders’ equity		1,208,613		1,202,362
Total liabilities and stockholders’ equity	$	1,831,812	$	1,861,361

(a) Represents Huawei’s 49 percent ownership in the Huawei-3Com joint venture.

Additional Financial Data

(in thousands)

(unaudited)

TABLE C

Sales by Geography (a)

	Three Months Ended
	December 1,		September 1,		December 2,
	2006		2006		2005
North America	$	55,159	$	58,423	$	61,521
Latin and South America		20,296		15,319		19,487
Europe, Middle East and Africa		70,933		69,534		81,196
Asia Pacific Rim		28,312		24,359		22,128
China		158,276		132,509		—
Total Sales	$	332,976	$	300,144	$	184,332

(a) SCN segment sales are included in geographic categories based on the location of the end customer. H3C segment sales included in the geographic categories are based upon the hub locations of OEM partners in the case of OEM sales and the location of end-customers in the case of direct customer sales.

Sales by Product Category

	Three Months Ended
	December 1,		September 1,		December 2,
	2006		2006		2005
Networking	$	272,852	$	244,033	$	131,682
Security		31,582		25,462		20,922
Voice		16,549		15,949		14,202
Services		8,568		8,351		8,754
Connectivity Products		3,425		6,349		8,772
Total Sales	$	332,976	$	300,144	$	184,332

3Com Corporation

Reconciliation of Non-GAAP Operating Loss

(in thousands)

(unaudited)

TABLE D

	Three Months Ended
	December 1,			September 1,			December 2,
	2006			2006			2005
GAAP operating loss	$	(9,380	)	$	(20,868	)	$	(42,226	)
Restructuring		630			(75	)		3,468
Amortization of intangible assets		12,221			12,181			3,862
Stock-based compensation expense [a]		6,950			3,287			5,097
Non-GAAP operating income (loss)	$	10,421		$	(5,475	)	$	(29,799	)

[a] Stock-based compensation expense is included in the following cost and expense categories by period (dollars in millions):

	Three Months Ended
	December 1,		September 1,		December 2,
	2006		2006		2005
Cost of sales	$	0.4	$	0.3	$	0.1
Sales and marketing		1.6		1.2		1.2
Research and development		1.5		1.2		2.1
General and administrative		3.5		0.6		1.7

3Com Corporation

Segment Reporting

(in thousands)
(unaudited)
TABLE E

	Operating Segments
	SCN						H3C				Eliminations and Other Items
	Three Months Ended			Three Months Ended			Three Months Ended		Three Months Ended		Three Months Ended			Three Months Ended
	December 1, 2006			September 1, 2006			September 30, 2006		June 30 , 2006		December 1 , 2006			September 1, 2006
Sales	$	166,525		$	155,823		$	190,291	$	169,968	$	(23,840	) (1)	$	(25,647	) (1)
Gross profit		59,436			56,345			90,715		80,084
Total sales and marketing, research and development, and general and administrative expenses		85,629			85,403			61,051		59,788
Other operating expenses (2)		4,221			3,516			8,630		8,590
Operating income (loss)		(30,414	)		(32,574	)		21,034		11,706
Net income (loss)		(19,103	)		(23,375	)		30,561		18,249		(14,973	) (3)		(8,942	) (3)

(1)	Represents eliminations for inter-company revenue during the respective periods.
(2)	Represents restructuring and amortization in all periods presented.
(3)	Represents equity interest of Huawei in H3C for July, August and September of 2006 for the period ended December 1, 2006 and April, May and June of 2006 for the period ended September 1, 2006.

3Com Corporation

Non-GAAP Pro Forma Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)

TABLE F

	Three Months Ended
	Sept 2, 2005 (a)			Dec 2, 2005 (a)			March 3, 2006			June 2, 2006
Sales	$	259,615		$	282,470		$	304,938		$	299,758
Net loss		(42,649	)		(11,348	)		(33,010	)		(15,237	)
EPS	$	(0.11	)	$	(0.03	)	$	(0.09	)	$	(0.04	)
Shares used in computing EPS		383,760			385,442			387,754			390,245

(a) These columns contain non-GAAP financial measures.
The most directly comparable GAAP measure and required reconciliations are set forth below.

Reconciliation of Non-GAAP Pro Forma Measures
(in thousands, except per share data)
(unaudited)

	Three Months Ended
	GAAP			Adjustments							Pro Forma
	3Com			H3C							Consolidated
	Sept 2, 2005			June 30, 2005			Eliminations				Sept 2, 2005
Sales	$	177,636		$	95,772		$	(13,793	)		$	259,615
Net loss	$	(42,041	)	$	(1,224)	[b]	$	616		[b]	$	(42,649	)
EPS											$	(0.11	)
Shares used in computing EPS												383,760

	Three Months Ended
	GAAP			Adjustments							Pro Forma
	3Com			H3C							Consolidated
	December 2, 2005			September 30, 2005			Eliminations				December 2, 2005
Sales	$	184,332		$	111,177		$	(13,039	)		$	282,470
Net loss	$	(10,700	)	$	(3,221)	[b]	$	2,573		[c]	$	(11,348	)
EPS											$	(0.03	)
Shares used in computing EPS												385,442

	Three Months Ended
	GAAP			Adjustments							Pro Forma
	3Com			H3C							Consolidated
	March 3, 2006			December 31, 2005			Eliminations				March 3, 2006
Sales	$	177,563		$	144,973		$	(17,598	)		$	304,938
Net income (loss)	$	(32,760	)	$	16,719	[b]	$	(16,969)		[b]	$	(33,010	)
EPS											$	(0.09	)
Shares used in computing EPS												387,754

	Three Months Ended
	GAAP			Adjustments							Pro Forma
	3Com			H3C							Consolidated
	June 2, 2006			March 31, 2006			Eliminations				June 2, 2006
Sales	$	165,808		$	155,980		$	(22,030	)		$	299,758
Net income (loss)	$	(28,919	)	$	27,820	[b]	$	(14,138)		[c]	$	(15,237	)
EPS											$	(0.04	)
Shares used in computing EPS												390,245

[b]	For the purpose of calculating the pro forma consolidated net loss, the net loss for stand-alone H3C includes amortization expense resulting from the estimated allocation of the Company’s purchase price for its incremental 2 percent of the equity of H3C in January 2006. Such estimated allocation was not available until the current reporting period.
[c]	Represents the adjustment necessary for the pro forma consolidated net loss to include 3Com’s 51 percent ownership position in H3C.