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):
June 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 June 24, 2008

EX-99.2 Supplemental Financial Information Fiscal Quarter and Year Ended May 30, 2008

EX-99.3 H3C - Summary Financial Information Provided to Bank Lenders

ITEM 2.02 Results of Operations and Financial Condition

Financial Results.

     On June 24, 2008, 3Com Corporation (the “Company”) (i) issued a press release regarding its financial results for its fiscal quarter and year ended May 30, 2008 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 (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.

     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 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, a patent litigation success fee, a VAT recovery dispute, IPO write-off fees, a goodwill impairment charge, the change in control portion of our H3C EARP program, and expenses related to the Company’s terminated acquisition by affiliates of Bain Capital.

     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 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-process R&D Expenses

     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.

     Stock-based Compensation

     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.

     Inventory-Related Adjustment from H3C Acquisition

     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.

     Patent Litigation Success Fee

     The Company won a recent jury verdict as a plaintiff in a patent litigation case, and is 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.

     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. We are currently seeking recovery of these amounts as we believe we are entitled to collect them from the European tax authorities, but under applicable accounting regulations have determined we need to take a charge for the amount at this time.

     IPO Fees Write-Off

     The Company excludes external expenses (primarily accounting, auditing and legal) related to the proposed IPO of its TippingPoint division which has been postponed. 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

     Our recent 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.

     Change in Control Portion of H3C EARP Program Payment

     The Company has excluded a portion of the EARP payment. When 3Com and Huawei set up their H3C joint venture in China, they contemplated that one of the shareholders could buy out the other on the third anniversary of the joint venture’s formation. In order to incent the employees of H3C to create value in the joint venture, the shareholders implemented the EARP, which had two components. One component was based on EBIT generation. The other was triggered solely upon a change in control whereby one shareholder bought out the other. The payout for this second component was based on a percentage of the increase in value of the joint venture, and would pay out over time after the buy-out. When 3Com purchased the remaining 49% of H3C from Huawei on March 29, 2007, the change in control EARP payment was triggered. The initial payment that is not subject to continued employment is a one-time payment that was triggered by the acquisition and is clearly a one-time item. As management views this as part of the cost of the acquisition, it believes it is not representative of the on-going core operations of the company. Accordingly, management does not measure H3C’s performance during this period with this charge 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. 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.

     The Company also uses a non-GAAP net income/loss 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: gains/losses on sales of assets and investments, gain from insurance settlement, tax reserve release and change in tax status in PRC.

     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.

     Gain on Insurance Settlement

     The insurance settlement related to monies paid under a policy insuring our Hemel, UK property which was destroyed by an oil depot explosion are outside the ordinary course of business and are not operational. This was a one-time unusual event. We do not own any other real property.

     Tax Reserve Release

     We recently 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.

     Change related to Change in Tax Status in PRC

     The Company excludes a certain deferred tax liability provision 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.

     Adjustment for Huawei’s Portion of Amortization

     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. 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.

     Finally, the Company uses non-GAAP research and development, sales and marketing and general and administrative expenses measures, which are adjusted to exclude some of the items described above 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 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. As described in Exhibit 99.3, the financial data set forth in Exhibit 99.3 differs from the H3C segment data published by the Company in its financial press releases.

     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 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.

ITEM 9.01 Financial Statements and Exhibits

(d) Exhibits

Exhibit Number	Description
99.1	Text of Press Release, dated June 24, 2008, titled “3Com Reports Fourth Quarter and Full-Year Results for Fiscal 2008.”

Exhibit Number	Description
99.2	Supplemental Financial Information — Fiscal Quarter and Year Ended May 30, 2008
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: June 24, 2008	By:	/s/ Jay Zager Jay Zager
		Executive Vice President, Chief Financial Officer

EXHIBIT INDEX

Exhibit Number	Description
99.1	Text of Press Release, dated June 24, 2008, titled “3Com Reports Fourth Quarter and Annual Fiscal Year 2008 Results.”
99.2	Supplemental Financial Information — Fiscal Quarter and Year Ended May 30, 2008
99.3	H3C - Summary Financial Information Provided to Bank Lenders

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 FOURTH QUARTER AND FULL-YEAR RESULTS FOR FISCAL 2008

MARLBOROUGH, MASS. — June 24, 2008 — 3Com Corporation (NASDAQ: COMS) today reported financial results for its fiscal 2008 fourth quarter, which ended May 30, 2008. Revenue in the quarter was $321.3 million compared to revenue of $310.9 million in the corresponding period in fiscal 2007, a 3 percent increase. For the full year, revenue was $1.29 billion compared to full-year fiscal 2007 revenue of $1.27 billion, an increase of 2 percent.

     “In FY08 we made progress in several key areas, including growing revenue year-over-year in almost every region, increasing our gross margins and generating cash from operations,” said 3Com CEO Bob Mao. “To build on these improvements, we must increasingly operate as one global enterprise. Integration of our worldwide operations will support our goals of profitable revenue growth and increasing market share, as well as result in cost savings.”

     Net loss in the quarter was $166.7 million, or $0.41 per share, compared with a net loss of $66.2 million, or $0.17 per share, in the fourth quarter of fiscal year 2007. In the fourth quarter of fiscal 2008, 3Com recorded a non-cash goodwill impairment charge of $158.0 million, or $0.39 per share arising from the company’s 2005 acquisition of TippingPoint. 3Com’s recent stock price decline triggered an impairment evaluation required by applicable accounting regulations. The net loss in the quarter increased primarily due to the impairment charge, offset by the absence of certain one-time charges in the prior-year period. On a non-GAAP basis, net income was $35.6 million, or $0.09 per diluted share, compared with net income of $4.6 million, or $0.01 per diluted share, for the fourth quarter of fiscal year 2007.

     For fiscal year 2008 3Com incurred a net loss of $228.8 million, compared with a net loss in fiscal year 2007 of $88.6 million. The increase in the net loss is primarily explained by the inclusion of the impairment charge offset by the absence of certain one-time charges in the prior-year period. On a non-GAAP basis 3Com generated net income for the full year of $94.9 million, or $0.23 per diluted share, compared to net income of $18.5 million, or $.05 per diluted share, in fiscal 2007.

     In the fourth quarter, 3Com generated $63.3 million in cash from operations. 3Com’s cash and cash equivalents balance at May 30, 2008 was $503.6 million.

     Management will host a conference call and Webcast at 5 p.m. EDT, Tuesday, June 24, 2008, to discuss the company’s financial results. To participate on the call, U.S. and international parties may dial 719-325-4788. 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 24-hour replay will be available starting at 8:00 p.m. EDT on June 25, 2008 by dialing (719) 457-0820 or (888) 203-1112, Confirmation Code: 1308284. A replay also will 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.

     For additional financial information, please refer to the Investor Relations section of our Web site.

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, potential cost savings and integration. 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 28, 2008.

2

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 those 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 (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.

3

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

	Three Months Ended						Twelve Months Ended
	May 30,			June 1,			May 30,			June 1,
	2008			2007			2008			2007
Sales	$	321,254		$	310,920		$	1,294,879		$	1,267,481
Cost of sales		147,529			172,483			640,424			689,027
Gross profit		173,725			138,437			654,455			578,454
Operating expenses:
Sales and marketing		78,402			89,048			316,019			319,696
Research and development		51,614			71,268			206,653			215,632
General and administrative		50,310			28,791			129,116			93,875
Amortization of intangibles		25,626			7,897			103,670			42,525
Goodwill impairment		157,977			—			157,977			—
In-process research and development		—			34,053			—			35,753
Restructuring charges		193			718			4,501			3,494
Total operating expenses		364,122			231,775			917,936			710,975
Operating loss		(190,397	)		(93,338	)		(263,481	)		(132,521	)
Gain on investments, net		109			344			460			1,143
Interest (expense) income, net		(2,675	)		7,598			(13,087	)		40,863
Other income, net		11,370			11,780			44,364			38,291
Loss from operations before income taxes and minority interest of consolidated joint venture		(181,593	)		(73,616	)		(231,744	)		(52,224	)
Income tax benefit (provision)		14,870			(5,126	)		2,903			(10,173	)
Minority interest of Huawei in the income of consolidated joint venture (1)		—			12,516			—			(26,192	)
Net loss	$	(166,723	)	$	(66,226	)		(228,841	)		(88,589	)
Basic and diluted loss per share	$	(0.41	)	$	(0.17	)	$	(0.57	)	$	(0.22	)
Shares used in computing basic and diluted per share amounts		401,922			395,988			399,524			393,894

⁽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

	May 30,		June 1,
	2008		2007
ASSETS
Current assets:
Cash and equivalents	$	503,644	$	559,217
Notes receivable		65,116		77,368
Accounts receivable, net		116,281		102,952
Inventories, net		90,831		107,988
Other current assets		34,033		50,157
Total current assets		809,905		897,682
Property & equipment, net		54,314		76,460
Goodwill		609,297		766,444
Intangibles, net		278,385		371,289
Deposits and other assets		23,229		39,217
Total assets	$	1,775,130	$	2,151,092
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	90,280	$	110,430
Current portion of long-term debt		48,000		94,000
Accrued liabilities and other		384,429		435,638
Total current liabilities		522,709		640,068
Deferred taxes and long-term obligations		4,119		23,725
Long-term debt		253,000		336,000
Stockholders’ equity		995,302		1,151,299
Total liabilities and stockholders’ equity	$	1,775,130	$	2,151,092

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 30,			June 1,			May 30,			June 1,
	2008			2007			2008			2007
GAAP operating loss	$	(190,397	)	$	(93,338	)	$	(263,481	)	$	(132,521	)
Restructuring		193			718			4,501			3,494
Amortization of intangible assets		25,626			7,897			103,670			42,525
In-process research and development [a]		—			34,053			—			35,753
Impacts to cost of sales from purchase accounting adjustments to inventory [b]		—			63			11,176			63
Patent litigation success fee [c]		9,000			—			9,000			—
VAT recovery dispute [d]		6,069			—			6,069			—
IPO fees write-off [e]		4,864			—			4,864			—
Goodwill impairment [f]		157,977			—			157,977			—
EARP change in control expense [g]		—			57,308			—			57,308
Stock-based compensation expense [h]		9,793			4,962			25,206			20,095
Acquiree expensed acquisition costs [i]		43			—			10,631			—
Non-GAAP operating income	$	23,168		$	11,663		$	69,613		$	26,717
GAAP net loss	$	(166,723	)	$	(66,226	)	$	(228,841	)	$	(88,589	)
Restructuring		193			718			4,501			3,494
Amortization of intangible assets		25,626			7,897			103,670			42,525
In-process research and development [a]		—			34,053			—			35,753
Impacts to cost of sales from purchase accounting adjustments to inventory [b]		—			63			11,176			63
Huawei’s 49% minority interest in H3C’s amortization as shown above		—			(30,256	)		—			(41,913	)
Patent litigation success fee [c]		9,000			—			9,000			—
VAT recovery dispute [d]		6,069			—			6,069			—
IPO fees write-off [e]		4,864			—			4,864			—
Goodwill impairment [f]		157,977			—			157,977			—
EARP change in control expense [g]		—			57,308			—			57,308
Stock-based compensation expense [h]		9,793			4,962			25,206			20,095
Acquiree expensed acquisition costs [i]		43			—			10,631			—
Gain on sales of assets [j]		—			—			(6,155	)		(1,300	)
Gain on sale of investment portfolio [k]		—			—			—			(2,000	)
(Gain) loss on insurance settlement [l]		—			(3,908	)		2,066			(6,908	)
Tax reserve release [m]		(11,284	)		—			(11,284	)		—
Charge related to change in tax rates [n]		—			—			6,056			—
Non-GAAP net income	$	35,558		$	4,611		$	94,936		$	18,528
GAAP net loss per share	$	(0.41	)	$	(0.16	)	$	(0.57	)	$	(0.22	)
Restructuring		0.00			0.00			0.01			0.01
Amortization of intangible assets		0.06			0.02			0.26			0.11
In-process research and development [a]		—			0.09			—			0.09
Impacts to cost of sales from purchase accounting adjustments to inventory [b]		—			0.00			0.03			0.00
Huawei’s 49% minority interest in H3C’s amortization as shown above		—			(0.08	)		—			(0.10	)
Patent litigation success fee [c]		0.02			—			0.02			—
VAT recovery dispute [d]		0.02			—			0.02			—
IPO fees write-off [e]		0.01			—			0.01			—
Goodwill impairment [f]		0.39			—			0.39			—
EARP change in control expense [g]		—			0.14			—			0.14
Stock-based compensation expense [h]		0.03			0.01			0.06			0.05
Acquiree expensed acquisition costs [i]		0.00			—			0.03			—
Gain on sales of assets [j]		—			—			(0.02	)		(0.00	)
Gain on sale of investment portfolio [k]		—			—			—			(0.01	)
(Gain) loss on insurance settlement [l]		—			(0.01	)		0.01			(0.02	)
Tax reserve release [m]		(0.03	)		—			(0.03	)		—
Charge related to change in tax rates [n]		—			—			0.01			—
Non-GAAP net income per share, diluted	$	0.09		$	0.01			0.23			0.05
Shares used in computing diluted per share amounts		406,139			401,334			404,193			399,680
GAAP net loss margin		-51.9	%		-21.3	%		-17.7	%		-7.0	%
Restructuring		0.1	%		0.2	%		0.3	%		0.3	%
Amortization of intangible assets		8.0	%		2.5	%		8.0	%		3.4	%
In-process research and development [a]		0.0	%		11.0	%		0.0	%		2.8	%
Impacts to cost of sales from purchase accounting adjustments to inventory [b]		0.0	%		0.0	%		0.9	%		0.0	%
Huawei’s 49% minority interest in H3C’s amortization as shown above		0.0	%		-9.7	%		0.0	%		-3.3	%
Patent litigation success fee [c]		2.8	%		0.0	%		0.7	%		0.0	%
VAT recovery dispute [d]		1.9	%		0.0	%		0.5	%		0.0	%
IPO fees write-off [e]		1.5	%		0.0	%		0.4	%		0.0	%
Goodwill impairment [f]		49.2	%		0.0	%		12.2	%		0.0	%
EARP change in control expense [g]		0.0	%		18.4	%		0.0	%		4.5	%

	Three Months Ended						Twelve Months Ended
	May 30,			June 1,			May 30,			June 1,
	2008			2007			2008			2007
Stock-based compensation expense [h]		3.0	%		1.6	%		1.9	%		1.6	%
Acquiree expensed acquisition costs [i]		0.0	%		0.0	%		0.8	%		0.0	%
Gain on sales of assets [j]		0.0	%		0.0	%		-0.5	%		-0.1	%
Gain on sale of investment portfolio [k]		0.0	%		0.0	%		0.0	%		-0.2	%
(Gain) loss on insurance settlement [l]		0.0	%		-1.2	%		0.2	%		-0.5	%
Tax reserve release [m]		-3.5	%		0.0	%		-0.9	%		0.0	%
Charge related to change in tax rates [n]		0.0	%		0.0	%		0.5	%		0.0	%
Non-GAAP net income margin		11.1	%		1.5	%		7.3	%		1.5	%

[a]	In-process research and development from our acquisition of Roving Planet.
[b]	Results from our 49% H3C acquisition transaction.
[c]	Success fee for patent litigation.
[d]	Disputed VAT recovery receivable no longer deemed collectible.
[e]	Write-off capitalized costs of proposed IPO.
[f]	Goodwill impairment related to loss in value of a reporting unit.
[g]	These charges represent the initial portion of the Equity Appreciation Rights Plan for H3C employees triggered by 3Com’s acquisition of the remaining 49% ownership of H3C. They are included in the following cost and expense categories by period:

	Three and Twelve Months Ended
	May 30,		June 1,
	2008		2007
Cost of sales		—		5,716
Sales and marketing		—		17,727
Research and development		—		27,230
General and administrative		—		6,635

[h] Stock-based compensation expense is included in the following cost and expense categories by period:

	Three Months Ended				Twelve Months Ended
	May 30,		March 2,		May 30,		June 1,
	2008		2007		2008		2007
Cost of sales		731		457		2,134		1,576
Sales and marketing		1,830		1,398		5,976		5,756
Research and development		1,199		848		3,993		4,621
General and administrative		6,033		2,259		13,103		8,142

[i]	These expenses relate to the proposed acquisition of the Company in September 2007, the deal was terminated by the acquisitioner in April 2008.
[j]	The gain relates to patent sales in fiscal 2008 and a patent sale in fiscal 2007.
[k]	This gain relates to the sale of our venture investment portfolio.
[l]	This loss relates to the recording of final costs associated with our Hemel facility in fiscal 2008. Fiscal 2007 relates to insurance settlements received for the Hemel facility.
[m]	This gain relates to the release of tax reserves due to settlements with foreign tax authorities.
[n]	This expense relates to a $6.1 million non-cash deferred tax liability provision in the PRC to reflect an increase in statutory tax rates.

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 30,			February 29,			June 1,			May 30,			June 1,
	2008			2008			2007			2008			2007
Sales	$	321,254		$	336,390		$	310,920		$	1,294,879		$	1,267,481
Cost of sales		147,529			156,716			172,483			640,424			689,027
Gross profit		173,725			179,674			138,437			654,455			578,454
Operating expenses:
Sales and marketing		78,402			82,428			89,048			316,019			319,696
Research and development		51,614			50,530			71,268			206,653			215,632
General and administrative		50,310			26,268			28,791			129,116			93,875
Amortization of intangibles		25,626			25,778			7,897			103,670			42,525
Goodwill impairment		157,977			—			—			157,977			—
In-process research and development		—			—			34,053			—			35,753
Restructuring charges		193			736			718			4,501			3,494
Total operating expenses		364,122			185,740			231,775			917,936			710,975
Operating loss		(190,397	)		(6,066	)		(93,338	)		(263,481	)		(132,521	)
Gain on investments, net		109			23			344			460			1,143
Interest (expense) income, net		(2,675	)		(2,879	)		7,598			(13,087	)		40,863
Other income, net		11,370			10,568			11,780			44,364			38,291
(Loss) income from operations before income taxes and minority interest of consolidated joint venture		(181,593	)		1,646			(73,616	)		(231,744	)		(52,224	)
Income tax benefit (provision)		14,870			(9,486	)		(5,126	)		2,903			(10,173	)
Minority interest of Huawei in the income of consolidated joint venture (1)		—			—			12,516			—			(26,192	)
Net loss	$	(166,723	)	$	(7,840	)	$	(66,226	)	$	(228,841	)	$	(88,589	)
Basic and diluted loss per share	$	(0.41	)	$	(0.02	)	$	(0.17	)	$	(0.57	)	$	(0.22	)
Shares used in computing basic and diluted per share amounts		401,922			400,142			395,988			399,524			393,894

⁽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

	May 30,		June 1,
	2008		2007
ASSETS
Current assets:
Cash and equivalents	$	503,644	$	559,217
Notes receivable		65,116		77,368
Accounts receivable, net		116,281		102,952
Inventories, net		90,831		107,988
Other current assets		34,033		50,157
Total current assets		809,905		897,682
Property & equipment, net		54,314		76,460
Goodwill		609,297		766,444
Intangibles, net		278,385		371,289
Deposits and other assets		23,229		39,217
Total assets	$	1,775,130	$	2,151,092
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	90,280	$	110,430
Current portion of long-term debt		48,000		94,000
Accrued liabilities and other		384,429		435,638
Total current liabilities		522,709		640,068
Deferred taxes and long-term obligations		4,119		23,725
Long-term debt		253,000		336,000
Stockholders’ equity		995,302		1,151,299
Total liabilities and stockholders’ equity	$	1,775,130	$	2,151,092

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

Sales by Geography (a)

	Three Months Ended						Twelve Months Ended
	May 30,		February 29,		June 1,		May 30,		June 1,
	2008		2008		2007		2008		2007
China	$	149,773	$	169,864	$	141,968	$	609,498	$	587,044
Europe, Middle East and Africa		74,100		75,368		66,623		292,339		272,826
North America		46,727		42,871		61,571		202,205		233,691
Asia Pacific Rim (ex-China)		30,514		27,059		23,924		106,820		103,501
Latin and South America		20,140		21,228		16,834		84,017		70,419
Total Sales	$	321,254	$	336,390	$	310,920	$	1,294,879	$	1,267,481

(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						Twelve Months Ended
	May 30,		February 29,		June 1,		May 30,		June 1,
	2008		2008		2007		2008		2007
Networking	$	261,185	$	279,771	$	252,009	$	1,058,465	$	1,028,090
Security		36,441		30,459		32,362		133,445		120,053
Voice		12,625		15,093		16,835		60,696		68,033
Services		10,291		10,309		9,147		39,583		35,871
Connectivity Products		712		758		567		2,690		15,434
Total Sales	$	321,254	$	336,390	$	310,920	$	1,294,879	$	1,267,481

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 30,			February 29,			June 1,			May 30,			June 1,
	2008			2008			2007			2008			2007
GAAP operating loss	$	(190,397	)	$	(6,066	)	$	(93,338	)	$	(263,481	)	$	(132,521	)
Restructuring		193			736			718			4,501			3,494
Amortization of intangible assets		25,626			25,778			7,897			103,670			42,525
In-process research and development [a]		—			—			34,053			—			35,753.00
Impacts to cost of sales from purchase accounting adjustments to inventory [b]		—			57			63			11,176			63.00
Patent litigation success fee [c]		9,000			—			—			9,000			—
VAT recovery dispute [d]		6,069			—			—			6,069			—
IPO fees write-off [e]		4,864			—			—			4,864			—
Goodwill impairment [f]		157,977			—			—			157,977			—
EARP change in control expense [g]		—			—			57,308			—			57,308.00
Stock-based compensation expense [h]		9,793			5,544			4,962			25,206			20,095
Acquiree expensed acquisition costs [i]		43			2,988			—			10,631			—
Non-GAAP operating income	$	23,168		$	29,037		$	11,663		$	69,613		$	26,717
GAAP net loss	$	(166,723	)	$	(7,840	)	$	(66,226	)	$	(228,841	)	$	(88,589	)
Restructuring		193			736			718			4,501			3,494
Amortization of intangible assets		25,626			25,778			7,897			103,670			42,525
In-process research and development [a]		—			—			34,053			—			35,753
Impacts to cost of sales from purchase accounting adjustments to inventory [b]		—			57			63			11,176			63
Huawei’s 49% minority interest in H3C’s amortization as shown above		—			—			(30,256	)		—			(41,913	)
Patent litigation success fee [c]		9,000			—			—			9,000			—
VAT recovery dispute [d]		6,069			—			—			6,069			—
IPO fees write-off [e]		4,864			—			—			4,864			—
Goodwill impairment [f]		157,977			—			—			157,977			—
EARP change in control expense [g]		—			—			57,308			—			57,308
Stock-based compensation expense [h]		9,793			5,544			4,962			25,206			20,095
Acquiree expensed acquisition costs [i]		43			2,988			—			10,631			—
Gain on sales of assets [j]		—			(1,225	)		—			(6,155	)		(1,300	)
Gain on sale of investment portfolio [k]		—			—			—			—			(2,000	)
(Gain) loss on insurance settlement [l]		—			2,066			(3,908	)		2,066			(6,908	)
Tax reserve release [m]		(11,284	)		—			—			(11,284	)		—
Charge related to change in tax rates [n]		—			6,056			—			6,056			—
Non-GAAP net income	$	35,558		$	34,160		$	4,611		$	94,936		$	18,528
GAAP net loss per share	$	(0.41	)	$	(0.02	)	$	(0.16	)	$	(0.57	)	$	(0.22	)
Restructuring		0.00			0.00			0.00			0.01			0.01
Amortization of intangible assets		0.06			0.06			0.02			0.26			0.11
In-process research and development [a]		—			—			0.09			—			0.09
Impacts to cost of sales from purchase accounting		—			—			—			—			—
adjustments to inventory [b]		—			0.00			0.00			0.03			0.00
Huawei’s 49% minority interest in H3C’s amortization		—			—			—			—			—
as shown above		—			—			(0.08	)		—			(0.10	)
Patent litigation success fee [c]		0.02			—			—			0.02			—
VAT recovery dispute [d]		0.02			—			—			0.02			—
IPO fees write-off [e]		0.01			—			—			0.01			—
Goodwill impairment [f]		0.39			—			—			0.39			—
EARP change in control expense [g]		—			—			0.14			—			0.14
Stock-based compensation expense [h]		0.03			0.01			0.01			0.06			0.05
Acquiree expensed acquisition costs [i]		0.00			0.01			—			0.03			—
Gain on sales of assets [j]		—			(0.00	)		—			(0.02	)		(0.00	)
Gain on sale of investment portfolio [k]		—			—			—			—			(0.01	)
(Gain) loss on insurance settlement [l]		—			0.01			(0.01	)		0.01			(0.02	)
Tax reserve release [m]		(0.03	)		—			—			(0.03	)		—
Charge related to change in tax rates [n]		—			0.01			—			0.01			—
Non-GAAP net income per share, diluted	$	0.09		$	0.08		$	0.01		$	0.23		$	0.05
Shares used in computing diluted per share amounts		406,139			404,502			401,334			404,193			399,680
GAAP operating loss margin		-59.3	%		-1.8	%		-30.0	%		-20.3	%		-10.5	%
Restructuring		0.1	%		0.2	%		0.2	%		0.3	%		0.3	%
Amortization of intangible assets		8.0	%		7.7	%		2.5	%		8.0	%		3.4	%
In-process research and development [a]		0.0	%		0.0	%		11.0	%		0.0	%		2.8	%
Impacts to cost of sales from purchase accounting		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%
adjustments to inventory [b]		0.0	%		0.0	%		0.0	%		0.9	%		0.0	%
Patent litigation success fee [c]		2.8	%		0.0	%		0.0	%		0.7	%		0.0	%
VAT recovery dispute [d]		1.9	%		0.0	%		0.0	%		0.5	%		0.0	%
IPO fees write-off [e]		1.5	%		0.0	%		0.0	%		0.4	%		0.0	%
Goodwill impairment [f]		49.2	%		0.0	%		0.0	%		12.2	%		0.0	%
EARP change in control expense [g]		0.0	%		0.0	%		18.4	%		0.0	%		4.5	%
Stock-based compensation expense [h]		3.0	%		1.6	%		1.7	%		2.0	%		1.6	%
Acquiree expensed acquisition costs [i]		0.0	%		0.9	%		0.0	%		0.8	%		0.0	%
Non-GAAP operating income margin		7.2	%		8.6	%		3.8	%		5.4	%		2.1	%

	Three Months Ended									Twelve Months Ended
	May 30,			February 29,			June 1,			May 30,			June 1,
	2008			2008			2007			2008			2007
GAAP net loss margin		-51.9	%		-2.3	%		-21.3	%		-17.7	%		-7.0	%
Restructuring		0.1	%		0.2	%		0.2	%		0.3	%		0.3	%
Amortization of intangible assets		8.0	%		7.7	%		2.5	%		8.0	%		3.4	%
In-process research and development [a]		0.0	%		0.0	%		11.0	%		0.0	%		2.8	%
Impacts to cost of sales from purchase accounting											0.0	%
adjustments to inventory [b]		0.0	%		0.0	%		0.0	%		0.9	%		0.0	%
Huawei’s 49% minority interest in H3C’s amortization											0.0	%
as shown above		0.0	%		0.0	%		-9.7	%		0.0	%		-3.3	%
Patent litigation success fee [c]		2.8	%		0.0	%		0.0	%		0.7	%		0.0	%
VAT recovery dispute [d]		1.9	%		0.0	%		0.0	%		0.5	%		0.0	%
IPO fees write-off [e]		1.5	%		0.0	%		0.0	%		0.4	%		0.0	%
Goodwill impairment [f]		49.2	%		0.0	%		0.0	%		12.2	%		0.0	%
EARP change in control expense [g]		0.0	%		0.0	%		18.4	%		0.0	%		4.5	%
Stock-based compensation expense [h]		3.0	%		1.6	%		1.6	%		1.9	%		1.6	%
Acquiree expensed acquisition costs [i]		0.0	%		0.9	%		0.0	%		0.8	%		0.0	%
Gain on sales of assets [j]		0.0	%		-0.4	%		0.0	%		-0.5	%		-0.1	%
Gain on sale of investment portfolio [k]		0.0	%		0.0	%		0.0	%		0.0	%		-0.2	%
(Gain) loss on insurance settlement [l]		0.0	%		0.6	%		-1.2	%		0.2	%		-0.5	%
Tax reserve release [m]		-3.5	%		0.0	%		0.0	%		-0.9	%		0.0	%
Charge related to change in tax rates [n]		0.0	%		1.8	%		0.0	%		0.5	%		0.0	%
Non-GAAP net income margin		11.1	%		10.2	%		1.5	%		7.3	%		1.5	%
GAAP sales and marketing expenses	$	78,402		$	82,428		$	89,048		$	316,019		$	319,696
EARP change in control expense [g]		—			—			(17,727	)		—			(17,727	)
Stock-based compensation expense [h]		(1,830	)		(1,753	)		(1,398	)		(5,976	)		(5,756	)
Non-GAAP sales and marketing expenses	$	76,572		$	80,675		$	69,923		$	310,043		$	296,213
GAAP research and development expenses	$	51,614		$	50,530		$	71,268		$	206,653		$	215,632
EARP change in control expense [g]		—			—			(27,230	)		—			(27,230	)
Stock-based compensation expense [h]		(1,199	)		(1,100	)		(848	)		(3,993	)		(4,621	)
Non-GAAP research and development expenses	$	50,415		$	49,430		$	43,190		$	202,660		$	183,781
GAAP general and administrative expenses	$	50,310		$	26,268		$	28,791		$	129,116		$	93,875
Patent litigation success fee [c]		(9,000	)		—						(9,000	)		—
VAT recovery dispute [d]		(6,069	)		—						(6,069	)		—
IPO fees write-off [e]		(4,864	)		—						(4,864	)		—
EARP change in control expense [g]		—			—			(6,635	)		—			(6,635	)
Stock-based compensation expense [h]		(6,033	)		(2,195	)		(2,259	)		(13,103	)		(8,142	)
Acquiree expensed acquisition costs [i]		(43	)		(2,988	)		—			(10,631	)		—
Non-GAAP general and administrative expense	$	24,301		$	21,085		$	19,897		$	85,449		$	79,098

[a]	In-process research and development from our acquisition of Roving Planet.
[b]	Results from our 49% H3C acquisition transaction.
[c]	Success fee for patent litigation.
[d]	Disputed VAT recovery receivable no longer deemed collectible.
[e]	Write-off capitalized costs of proposed IPO.
[f]	Goodwill impairment related to loss in value of a reporting unit.
[g]	These charges represent the initial portion of the Equity Appreciation Rights Plan for H3C employees triggered by 3Com’s acquisition of the remaining 49% ownership of H3C. They are included in the following cost and expense categories by period:

	Three and Twelve Months Ended
	May 30,		February 29,		June 1,
	2008		2008		2007
Cost of sales		—		—		5,716
Sales and marketing		—		—		17,727
Research and development		—		—		27,230
General and administrative		—		—		6,635

[h] Stock-based compensation expense is included in the following cost and expense categories by period:

	Three Months Ended						Twelve Months Ended
	May 30,		February 29,		June 1,		May 30,		June 1,
	2008		2008		2007		2008		2007
Cost of sales		731		496		457		2,134		1,576
Sales and marketing		1,830		1,753		1,398		5,976		5,756
Research and development		1,199		1,100		848		3,993		4,621
General and administrative		6,033		2,195		2,259		13,103		8,142

[i]	These expenses relate to the proposed acquisition of the Company in September 2007, the deal was terminated by the acquisitioner in April 2008.
[j]	The gain relates to patent sales in fiscal 2008 and a patent sale in fiscal 2007.
[k]	This gain relates to the sale of our venture investment portfolio.
[l]	This loss relates to the recording of final costs associated with our Hemel facility in fiscal 2008. Fiscal 2007 relates to insurance settlements received for the Hemel facility.
[m]	This gain relates to the release of tax reserves due to settlements with foreign tax authorities.
[n]	This expense relates to a $6.1 million non-cash deferred tax liability provision in the PRC to reflect an increase in statutory tax rates.

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

	Three Months Ended May 30, 2008																Twelve Months Ended May 30, 2008
			Data Voice								Eliminations /								Data Voice									Eliminations /
	H3C		Business Unit			Tipping Point		Corporate			Other			Total			H3C		Business Unit			Tipping Point			Corporate			Other			Total
Sales	$	190,004	$	136,954		$	29,209	$	—		$	(34,913	) [a]	$	321,254		$	772,313	$	551,012		$	104,101		$	—		$	(132,547	) [a]	$	1,294,879
Gross profit		109,644		45,355			19,457		—			(731	) [c]		173,725			425,394		172,384			70,197			(210	) [b]		(13,310	) [c]		654,455
Operating expenses		69,233		50,941			19,188		11,926	[b]		212,834	[d]		364,122			283,383		198,198			70,693			45,878	[b]		319,784	[d]		917,936
Operating income (loss)		40,411		(5,586	)		269		(11,926	)		(213,565	)		(190,397	)		142,011		(25,814	)		(496	)		(46,088	)		(333,094	)		(263,481	)

	Three Months Ended June 1, 2007																	Twelve Months Ended June 1, 2007
			Data Voice									Eliminations /								Data Voice									Eliminations /
	H3C		Business Unit			Tipping Point			Corporate			Other			Total			H3C		Business Unit			Tipping Point			Corporate			Other			Total
Sales	$	175,728	$	138,422		$	24,663		$	—		$	(27,893	) [a]	$	310,920		$	731,131	$	552,640		$	90,178		$	—		$	(106,468	) [a]	$	1,267,481
Gross profit		84,548		44,120			16,248			(243	) [b]		(6,236	) [c]		138,437			344,987		181,713			60,307			(1,196	) [b]		(7,357	) [c]		578,454
Operating expenses		55,180		48,990			18,732			10,103	[b]		98,765	[d]		231,770			240,085		204,003			70,750			44,254	[b]		151,883	[d]		710,975
Operating income (loss)		29,368		(4,870	)		(2,484	)		(10,346	)		(105,001	)		(93,333	)		104,902		(22,290	)		(10,443	)		(45,450	)		(159,240	)		(132,521	)

[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 and purchase accounting inventory related adjustments, Equity Appreciation Rights Plan (EARP) and purchase accounting inventory related adjustments as applicable.
[d]	- includes: stock-based compensation, amortization, and restructuring in all periods and goodwill impairment, IPR&D, Equity Appreciation Rights Plan (EARP), and deal costs where applicable.

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

	Twelve Month’s Ended
	May 30,			June 1,
	2008			2007
Cash flows from operating activities:
Net loss	$	(228,841	)		(88,589	)
Adjustments to reconcile loss from continuing operations to net cash provided by (used in) operating activities:
Depreciation and amortization		136,030			74,990
Loss (gain) on property and equipment disposals		2,224			(14,714	)
Goodwill impairment		157,977			—
In-process research and development		—			35,753
Minority interest		—			26,192
Stock-based compensation expense		25,207			20,095
Gain on investments, net		(185	)		(1,417	)
Deferred income taxes		(8,206	)		(10,487	)
Change in assets and liabilities:
Accounts receivable		7,895			(24,677	)
Inventories		32,621			50,589
Other assets		18,429			32,368
Accounts payable		(22,926	)		(34,760	)
Other liabilities		(65,348	)		100,195
Net cash provided by operating activities		54,877			165,538
Cash flows from investing activities:
Purchase of investments		—			(225,005	)
Proceeds from maturities and sales of investments		442			609,342
Purchase of property and equipment		(17,893	)		(28,331	)
Businesses acquired in purchase transactions, net of cash acquired		—			(898,529	)
Proceeds from sale of property and equipment		1,096			36,580
Net cash used in investing activities		(16,355	)		(505,943	)
Cash flows from financing activities:
Issuances of common stock		8,305			23,588
Repurchases of common stock		(3,180	)		(13,463	)
(Payments of) proceeds from long term debt		(129,000	)		415,811
Dividend paid to minority interest shareholder		—			(40,785	)
Other, net		—			2,787
Net cash (used in) provided by financing activities		(123,875	)		387,938
Effects of exchange rate changes on cash and equivalents		29,780			10,587
Net change in cash and equivalents during period		(55,573	)		58,120
Cash and equivalents, beginning of period		559,217			501,097
Cash and equivalents, end of period	$	503,644		$	559,217

EX-99.3

EXHIBIT 99.3

H3C Summary Financial Information Provided to Bank Lenders
H3C Holdings Limited
For the Fiscal Q1-2008 Ended March 31, 2008
(Unaudited; amounts in thousands except percentages)

Items
Sales	$	187,101
Gross Profit	$	108,658
Gross profit as a percent of sales		58.1	%
Consolidated Adjusted EBITDA	$	60,209
Consolidated Adjusted EBITDA as a percent of sales		32.2	%
Taxes	$	(4,398	)
Deferred income tax	$	(6,416	)
Consolidated Net Income	$	30,444
Net Income based on GAAP	$	30,444
Cash, Cash Equivalents and short term investments	$	404,049
Net property plant and equipment	$	20,761
Consolidated Working Capital	$	(50,136	)
Capital expenditure	$	1,843
Capital Expenditure as a percent of sales		1.0	%
Increase in Consolidated Working Capital	$	(44,981	)
The result of Consolidated Adjusted EBITDA less Consolidated Working Capital	$	110,345

Remarks:

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

The H3C financial information contained in this document is derived from its consolidated H3C entity financials prepared under US Generally Accepted Accounting Principles and differs from the H3C segment financial information reported by 3Com Corporation in its public filings prepared under US Generally Accepted Accounting Principles in that the externally reported segment information includes adjustments for consolidation of the H3C entity and the parent entities and adjustments for any products still in 3Com inventory.