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):
March 24, 2008

3COM CORPORATION

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation) 0-12867
(Commission
File Number) 94-2605794
(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 March 24, 2008

Ex-99.2 Supplemental Financial Information

ITEM 2.02 Results of Operations and Financial Condition

Financial Results.

     On March 24, 2008, 3Com Corporation (the “Company”) (i) issued a press release regarding its financial results for its fiscal quarter ended February 29, 2008 (“Q3 FY08”) and (ii) posted supplementary financial information concerning the Company’s Q3 FY08 fiscal quarter 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 (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 contains 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”).

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

     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.

     The non-GAAP operating loss or income (and margin) 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, such as, for some of the periods presented in the press release, the inventory-related adjustment portion of the purchase accounting effects of the Company’s acquisition of 49% of H3C and expenses related to the Company’s proposed acquisition by affiliates of Bain Capital.

     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.

     Further, 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.

     The Company has excluded the purchase accounting inventory-related adjustment from the 49% acquisition of H3C. Similar to IPR&D and amortization described above with respect to acquisitions, these adjustments represent non-cash, one-time items relating to a specific acquisition as opposed to core operations.

     Finally, the Company excludes expenses related to its proposed acquisition by affiliates of 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.

     The Company also uses a non-GAAP net income/loss (and margin) measure. All of the items described above are relevant to why management believes this measure is meaningful. In addition, the following further items, which are special items for the relevant fiscal periods, were excluded, from this measure: change in tax status in PRC; gain on sales of assets and gain from insurance settlement. The Company excludes the new deferred tax liability provision referenced in its press release because it is expected to be reversed in coming quarters once the appropriate PRC tax authorities approve the Company’s status as a “new and high technology enterprise,” which the Company fully expects them to do. Gains on asset sales are outside of the ordinary course of business and not representative of core operations. Similarly, the insurance settlement related to monies paid under a policy insuring the Hemel property owned by the Company which was destroyed by an oil depot explosion. Accordingly, 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.

     Also, for prior periods when Huawei owned 49% of H3C it is necessary to further adjust the foregoing adjustments that impacted H3C’s financials by a factor of 0.49 in order to provide a meaningful comparison of 3Com’s operations. For this reason, the Company adjusted for Huawei’s portion of the amortization during those prior periods.

     3Com also uses a non-GAAP net income/loss measure on a per share basis. All of the adjustments described above are relevant to this per share measure. 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.

     Finally, the Company uses non-GAAP research and development, sales and marketing and general and administrative expenses measures, which are adjusted to exclude stock-based compensation expense and expenses related to the proposed merger with affiliates of Bain Capital for the reasons discussed above.

     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 9.01 Financial Statements and Exhibits

          (d) Exhibits

Exhibit Number	Description
99.1	Text of Press Release, dated March 24, 2008, titled “3Com Reports Third Quarter Fiscal Year 2008 Results.”
99.2	Supplemental Financial Information – Fiscal Quarter Ended February 29, 2008

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: March 24, 2008	By:	/s/ Jay Zager
		Jay Zager
		Executive Vice President and Chief Financial Officer

EXHIBIT INDEX

Exhibit Number	Description
99.1	Text of Press Release, dated March 24, 2008, titled “3Com Reports Third Quarter Fiscal Year 2008 Results.”
99.2	Supplemental Financial Information – Fiscal Quarter Ended February 29, 2008

EX-99.1

EXHIBIT 99.1

FOR IMMEDIATE RELEASE

For more information contact:

Media & Investor Relations	Media Relations
John Vincenzo	Kevin Flanagan
508.323.1260	508.323.1101
john_vincenzo@3com.com	kevin_flanagan@3com.com

3COM REPORTS THIRD QUARTER FISCAL YEAR 2008 RESULTS

MARLBOROUGH, MASS. — March 24, 2008 — 3Com Corporation (NASDAQ: COMS) today reported financial results for its fiscal 2008 third quarter, which ended February 29, 2008. Revenue in the quarter was $336.4 million compared to revenue of $323.4 million in the corresponding period in fiscal 2007, a 4 percent increase.

Net loss in the quarter was $7.8 million, or $0.02 per share, compared with a net loss of $4.8 million, or $0.01 per share, in the third quarter of fiscal year 2007. The net loss increase resulted primarily from a $6.1 million non-cash deferred tax liability provision, which is expected to be reversed in coming quarters. On a non-GAAP basis, net income was $34.2 million, or $0.08 per diluted share, compared with net income of $11.0 million, or $0.03 per diluted share for the third quarter of fiscal year 2007.

In the third quarter, 3Com generated $44.1 million in cash from operations.

“On an operational basis we had a very strong quarter,” said Edgar Masri, 3Com President and CEO. “In the third quarter, our revenues were at the highest level since we began consolidating H3C revenue; our gross margins reached a record high of 53 percent; we

generated a non-GAAP net income margin of 10 percent; and we were cash-flow positive for the second consecutive quarter. We still have more work to do, but I am very pleased with the continued progress we are making in building a growing and profitable business.”

For additional financial information, please refer to the Investor Relations section of the 3Com 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 our belief about a reversal in a deferred tax liability provision. 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 and receive approval for lower tax rates under PRC law 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 November 30, 2007.

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, in-process research and development, stock-based compensation expense and, if applicable in the relevant period, unusual items, such as a potential change in our tax status in the PRC, the inventory-related adjustment portion of the purchase accounting effects of the Company’s acquisition of 49% of H3C, the gains on sales of assets, the gain on an insurance settlement and expenses related to our pending acquisition by affiliates of Bain Capital. 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 (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. 3Com also includes H3C Technologies Co., Limited (H3C), a China-based provider of network infrastructure products. H3C brings high-performance, cost-effective product development and a strong footprint in one of the world’s most dynamic markets. Through its TippingPoint division, 3Com is a leading provider of network-based intrusion prevention systems that deliver in-depth application protection, infrastructure protection, and performance protection. For further information, please visit www.3com.com, or the press site www.3com.com/pressbox.

# # #

Copyright © 2008 3Com Corporation. 3Com, the 3Com logo and TippingPoint are registered trademarks and H3C is a trademark of 3Com Corporation or its wholly owned subsidiaries. All other company and product names may be trademarks of their respective holders.

2

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

	Three Months Ended
	February 29,			March 2,
	2008			2007
Sales	$	336,390		$	323,441
Cost of sales		156,716			170,004
Gross profit		179,674			153,437
Operating expenses:
Sales and marketing		82,428			77,338
Research and development		50,530			48,419
General and administrative		26,268			22,466
Amortization of intangibles		25,778			10,228
In-process research and development		—			1,700
Restructuring charges		736			2,221
Total operating expenses		185,740			162,372
Operating loss		(6,066	)		(8,935	)
Gain (loss) on investments, net		23			(582	)
Interest (expense) income, net		(2,879	)		11,265
Other income, net		10,568			9,637
Income from operations before income taxes and minority interest of consolidated joint venture		1,646			11,385
Income tax provision		(9,486	)		(1,374	)
Minority interest of Huawei in the income of consolidated joint venture (1)		—			(14,790	)
Net loss	$	(7,840	)	$	(4,779	)
Basic and diluted loss per share	$	(0.02	)	$	(0.01	)
Shares used in computing basic and diluted per share amounts		400,142			394,351

⁽¹⁾ Represents Huawei’s 49% interest in the H3C joint venture for the period of minority interest that ended with 3Com’s acquisition of the remaining 49% interest on March 29, 2007.

3

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

	February 29,		June 1,
	2008		2007
ASSETS
Current assets:
Cash and equivalents	$	466,030	$	559,217
Notes receivable		106,595		77,368
Accounts receivable, net		142,309		102,952
Inventories, net		93,668		107,988
Other current assets		46,601		50,157
Total current assets		855,203		897,682
Property & equipment, net		56,766		76,460
Goodwill		767,274		766,444
Intangibles, net		300,307		371,289
Deposits and other assets		26,757		39,217
Total assets	$	2,006,307	$	2,151,092
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	104,489	$	110,430
Current portion of long-term debt		48,000		94,000
Accrued liabilities and other		414,511		435,638
Total current liabilities		567,000		640,068
Deferred taxes and long-term obligations		16,839		23,725
Long-term debt		288,000		336,000
Stockholders’ equity		1,134,468		1,151,299
Total liabilities and stockholders’ equity	$	2,006,307	$	2,151,092

 4

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

	Three Months Ended
	February 29,			March 2,
	2008			2007
GAAP operating loss	$	(6,066	)	$	(8,935	)
Restructuring		736			2,221
Amortization of intangible assets		25,778			10,228
In-process research and development [a]		—			1,700
Impacts to cost of sales from purchase accounting adjustments to inventory [b]		57			—
Stock-based compensation expense [c]		5,544			4,896
Acquiree expensed acquisition costs [d]		2,988			—
Non-GAAP operating income	$	29,037		$	10,110
GAAP net loss	$	(7,840	)	$	(4,779	)
Restructuring		736			2,221
Amortization of intangible assets		25,778			10,228
In-process research and development [a]		—			1,700
Impacts to cost of sales from purchase accounting adjustments to inventory [b]		57			—
Stock-based compensation expense [c]		5,544			4,896
Huawei’s 49% minority interest in H3C’s amortization as shown above		—			(3,219	)
Acquiree expensed acquisition costs [d]		2,988			—
Gain on sales of assets [e]		(1,225	)		—
Loss on insurance settlement [f]		2,066			—
Charge related to change in tax status [g]		6,056			—
Non-GAAP net income	$	34,160		$	11,047
GAAP net loss per share	$	(0.02	)	$	(0.01	)
Restructuring		0.00			0.01
Amortization of intangible assets		0.06			0.03
In-process research and development [a]		—			0.00
Impacts to cost of sales from purchase accounting adjustments to inventory [b]		0.00			—
Stock-based compensation expense [c]		0.01			0.01
Huawei’s 49% minority interest in H3C’s amortization as shown above		—			(0.01	)
Acquiree expensed acquisition costs [d]		0.01			—
Gain on sales of assets [e]		(0.00	)		—
Gain on insurance settlement [f]		0.01			—
Charge related to change in tax status [g]		0.01			—
Non-GAAP net income per share, diluted	$	0.08		$	0.03
Shares used in computing diluted per share amounts		404,502			400,146
GAAP net loss margin		-2.3	%		-1.5	%
Restructuring		0.2	%		0.7	%
Amortization of intangible assets		7.7	%		3.2	%
In-process research and development [a]		0.0	%		0.5	%
Impacts to cost of sales from purchase accounting adjustments to inventory [b]		0.0	%		0.0	%
Stock-based compensation expense [c]		1.6	%		1.5	%
Huawei’s 49% minority interest in H3C’s amortization as shown above		0.0	%		-1.0	%
Acquiree expensed acquisition costs [d]		0.9	%		0.0	%
Gain on sales of assets [e]		-0.4	%		0.0	%
Loss on insurance settlement [f]		0.6	%		0.0	%
Charge related to change in tax status [g]		1.8	%		0.0	%
Non-GAAP net income margin		10.1	%		3.4	%

[a]	In-process research and development from our acquisition of Roving Planet.
[b]	Results from our 49% H3C acquisition transaction.
[c]	Stock-based compensation expense is included in the following cost and expense categories by period:

	Three Months Ended
	February 29,		March 2,
	2008		2007
Cost of sales		496		418
Sales and marketing		1,753		1,553
Research and development		1,100		1,060
General and administrative		2,195		1,865

[d]	These expenses relate to the announced acquisition of the Company in September 2007
[e]	The gain relates to a patent sale in Q3 fiscal 2008
[f]	This loss relates to the recording of final costs associated with our Hemel facility.
[g]	This expense relates $6.1 million non-cash deferred tax liability provision

5

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
	February 29,			November 30,			March 2,
	2008			2007			2007
Sales	$	336,390		$	317,801		$	323,441
Cost of sales		156,716			165,681			170,004
Gross profit		179,674			152,120			153,437
Operating expenses:
Sales and marketing		82,428			80,785			77,338
Research and development		50,530			52,199			48,419
General and administrative		26,268			31,060			22,466
Amortization of intangibles		25,778			26,260			10,228
In-process research and development		—			—			1,700
Restructuring charges		736			3,147			2,221
Total operating expenses		185,740			193,451			162,372
Operating loss		(6,066	)		(41,331	)		(8,935	)
Gain (loss) on investments, net		23			1			(582	)
Interest (expense) income, net		(2,879	)		(3,966	)		11,265
Other income, net		10,568			10,342			9,637
Income (loss) from operations before income taxes and minority interest of consolidated joint venture		1,646			(34,954	)		11,385
Income tax provision		(9,486	)		(670	)		(1,374	)
Minority interest of Huawei in the income of consolidated joint venture (1)		—			—			(14,790	)
Net loss	$	(7,840	)	$	(35,624	)	$	(4,779	)
Basic and diluted loss per share	$	(0.02	)	$	(0.09	)	$	(0.01	)
Shares used in computing basic and diluted per share amounts		400,142			398,989			394,351

⁽¹⁾ Represents Huawei’s 49% interest in the H3C joint venture for the period of minority interest that ended with 3Com’s acquisition of the remaining 49% interest on March 29, 2007.

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

	February 29,		June 1,
	2008		2007
ASSETS
Current assets:
Cash and equivalents	$	466,030	$	559,217
Notes receivable		106,595		77,368
Accounts receivable, net		142,309		102,952
Inventories, net		93,668		107,988
Other current assets		46,601		50,157
Total current assets		855,203		897,682
Property & equipment, net		56,766		76,460
Goodwill		767,274		766,444
Intangibles, net		300,307		371,289
Deposits and other assets		26,757		39,217
Total assets	$	2,006,307	$	2,151,092
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	104,489	$	110,430
Current portion of long-term debt		48,000		94,000
Accrued liabilities and other		414,511		435,638
Total current liabilities		567,000		640,068
Deferred taxes and long-term obligations		16,839		23,725
Long-term debt		288,000		336,000
Stockholders’ equity		1,134,468		1,151,299
Total liabilities and stockholders’ equity	$	2,006,307	$	2,151,092

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

Sales by Geography (a)

	Three Months Ended
	February 29,		November 30,		March 2,
	2008		2007		2007
China	$	169,864	$	143,107	$	154,291
Europe, Middle East and Africa		75,368		73,209		65,736
North America		42,871		52,589		58,538
Asia Pacific Rim (ex-China)		27,059		25,865		26,906
Latin and South America		21,228		23,031		17,970
Total Sales	$	336,390	$	317,801	$	323,441

(a) DVBU and TippingPoint 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
	February 29,		November 30,		March 2,
	2008		2007		2007
Networking	$	279,771	$	255,533	$	259,196
Security		30,459		35,062		30,647
Voice		15,093		16,657		18,700
Services		10,309		9,953		9,805
Connectivity Products		758		596		5,093
Total Sales	$	336,390	$	317,801	$	323,441

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

	Three Months Ended
	February 29,			March 2,
	2008			2007
GAAP operating loss	$	(6,066	)	$	(8,935	)
Restructuring		736			2,221
Amortization of intangible assets		25,778			10,228
In-process research and development [a]		—			1,700
Impacts to cost of sales from purchase accounting adjustments to inventory [b]		57			—
Stock-based compensation expense [c]		5,544			4,896
Acquiree expensed acquisition costs [d]		2,988			—
Non-GAAP operating income	$	29,037		$	10,110
GAAP net loss	$	(7,840	)	$	(4,779	)
Restructuring		736			2,221
Amortization of intangible assets		25,778			10,228
In-process research and development [a]		—			1,700
Impacts to cost of sales from purchase accounting adjustments to inventory [b]		57			—
Stock-based compensation expense [c]		5,544			4,896
Huawei’s 49% minority interest in H3C’s amortization as shown above		—			(3,219	)
Acquiree expensed acquisition costs [d]		2,988			—
Gain on sales of assets [e]		(1,225	)		—
Loss on insurance settlement [f]		2,066			—
Charge related to change in tax status [g]		6,056			—
Non-GAAP net income	$	34,160		$	11,047
GAAP net loss per share	$	(0.02	)	$	(0.01	)
Restructuring		0.00			0.01
Amortization of intangible assets		0.06			0.03
In-process research and development [a]		—			0.00
Impacts to cost of sales from purchase accounting adjustments to inventory [b]		0.00			—
Stock-based compensation expense [c]		0.01			0.01
Huawei’s 49% minority interest in H3C’s amortization as shown above		—			(0.01	)
Acquiree expensed acquisition costs [d]		0.01			—
Gain on sales of assets [e]		(0.00	)		—
Gain on insurance settlement [f]		0.01			—
Charge related to change in tax status [g]		0.01			—
Non-GAAP net income per share, diluted	$	0.08		$	0.03
Shares used in computing diluted per share amounts		404,502			400,146
GAAP operating loss margin		-1.8	%		-2.8	%
Restructuring		0.2	%		0.7	%
Amortization of intangible assets		7.7	%		3.2	%
In-process research and development [a]		0.0	%		0.5	%
Impacts to cost of sales from purchase accounting adjustments to inventory [b]		0.0	%		0.0	%
Stock-based compensation expense [c]		1.7	%		1.5	%
Acquiree expensed acquisition costs [d]		0.9	%		0.0	%
Non-GAAP operating income margin		8.7	%		3.1	%
GAAP net loss margin		-2.3	%		-1.5	%
Restructuring		0.2	%		0.7	%
Amortization of intangible assets		7.7	%		3.2	%
In-process research and development [a]		0.0	%		0.5	%
Impacts to cost of sales from purchase accounting adjustments to inventory [b]		0.0	%		0.0	%
Stock-based compensation expense [c]		1.6	%		1.5	%
Huawei’s 49% minority interest in H3C’s amortization as shown above		0.0	%		-1.0	%
Acquiree expensed acquisition costs [d]		0.9	%		0.0	%
Gain on sales of assets [e]		-0.4	%		0.0	%
Loss on insurance settlement [f]		0.6	%		0.0	%
Charge related to change in tax status [g]		1.8	%		0.0	%
Non-GAAP net income margin		10.1	%		3.4	%
GAAP sales and marketing expenses	$	82,428		$	77,338
Stock-based compensation expense [c]		(1,753	)		(1,553	)
Acquiree expensed acquisition costs [d]		—			—
Non-GAAP sales and marketing expenses	$	80,675		$	75,785
GAAP research and development expenses	$	50,530		$	48,419
Stock-based compensation expense [c]		(1,100	)		(1,060	)
Acquiree expensed acquisition costs [d]		—			—
Non-GAAP research and development expenses	$	49,430		$	47,359
GAAP general and administrative expenses	$	26,268			22,466
Stock-based compensation expense [c]		(2,195	)		(1,865	)
Acquiree expensed acquisition costs [d]		(2,988	)		—
Non-GAAP general and admistrative expense	$	21,085		$	20,601

[a]	In-process research and development from our acquisition of Roving Planet.
[b]	Results from our 49% H3C acquisition transaction.
[c]	Stock-based compensation expense is included in the following cost and expense categories by period:

	Three Months Ended
	February 29,		March 2,
	2008		2007
Cost of sales		496		418
Sales and marketing		1,753		1,553
Research and development		1,100		1,060
General and administrative		2,195		1,865

[d]	These expenses relate to the announced acquisition of the Company in September 2007
[e]	The gain relates to a patent sale in Q3 fiscal 2008
[f]	This loss relates to the recording of final costs associated with our Hemel facility.
[g]	This expense relates $6.1 million non-cash deferred tax liability provision

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

	Three Months Ended February 29, 2008
			Data Voice			Tipping						Eliminations /
	H3C		Business Unit			Point			Corporate			Other			Total
Sales	$	212,558	$	134,603		$	23,639		$	—		$	(34,410	) [a]	$	336,390
Gross profit		120,230		43,362			16,578			—			(496	) [c]		179,674
Operating expenses		73,413		49,445			17,337			10,995	[b]		34,550	[d]		185,740
Operating income (loss)		46,817		(6,083	)		(759	)		(10,995	)		(35,046	)		(6,066	)

	Three Months Ended March 2, 2007
			Data Voice		Tipping						Eliminations /
	H3C		Business Unit		Point			Corporate			Other			Total
Sales	$	195,144	$	132,882	$	24,503		$	—		$	(29,088	) [a]	$	323,441
Gross profit		89,640		47,672		16,807			(264	) [b]		(418	) [c]		153,437
Operating expenses		64,066		47,509		18,626			13,544	[b]		18,627	[d]		162,372
Operating income (loss)		25,574		163		(1,819	)		(13,808	)		(19,045	)		(8,935	)

[a]	- eliminations for inter-company revenue during the respective periods.
[b]	- represents costs not directly attributable to any operating business segment.
[c]	- includes stock based compensation in all periods plus purchase accounting inventory related adjustments as applicable.
[d]	- includes: stock-based compensation, amortization, and restructuring in all periods and deal costs where applicable.

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

	Nine Month’s Ended
	February 29,			March 2,
	2008			2007
Cash flows from operating activities:
Net loss	$	(62,118	)		(22,363	)
Adjustments to reconcile loss from continuing operations to net cash provided by (used in) operating activities:
Depreciation and amortization		102,731			58,255
Loss (gain) on property and equipment disposals		2,227			(10,898	)
In-process research and development		—			1,700
Minority interest		—			38,705
Equity Interest in unconsolidated H3C		—			—
Stock-based compensation expense		15,413			15,133
Gain on investments, net		(185	)		(1,476	)
Deferred income taxes		(448	)		(8,836	)
Change in assets and liabilities:
Accounts receivable		(59,344	)		(12,392	)
Inventories		22,704			23,754
Other assets		7,733			31,689
Accounts payable		(13,447	)		(28,098	)
Intercompany — H3C		—
Other liabilities		(23,704	)		9,682
Net cash (used in) provided by operating activities		(8,438	)		94,855
Cash flows from investing activities:
Purchase of investments		—			(225,005	)
Proceeds from maturities and sales of investments		442			495,941
Purchase of property and equipment		(13,269	)		(24,152	)
Businesses acquired in purchase transactions, net of cash acquired		—			(7,830	)
Proceeds from sale of property and equipment		944			33,111
Net cash (used in) provided by investing activities		(11,883	)		272,065
Cash flows from financing activities:
Issuances of common stock		6,126			13,088
Repurchases of common stock		(2,321	)		(4,788	)
Payments from Long Term Debt		(94,000	)		(40,785	)
Dividend paid to minority interest shareholder		—			—
Net cash used in financing activities		(90,195	)		(32,485	)
Effects of exchange rate changes on cash and equivalents		17,329			7,229
Net change in cash and equivalents during period		(93,187	)		341,664
Cash and equivalents, beginning of period		559,217			501,097
Cash and equivalents, end of period	$	466,030		$	842,761