Emulex (ELX) CORRESP Correspondence with SEC

(EMULEX LETTERHEAD)

April 26, 2006

VIA EDGAR AND FAX

Stephen Krikorian
Accounting Branch Chief
Division of Corporation Finance
Securities and Exchange Commission
Mail Stop 4561
100 F Street, N.E.
Washington D. C. 20549

Re:  Emulex Corporation (File No. 001-31353)
Form 10-K for the fiscal year ended July 3, 2005
Form 10-Q for the fiscal quarters ended October 2, 2005 and January 1, 2006

Dear Mr. Krikorian:

     On behalf of Emulex Corporation (the “Company” or “Emulex”), I am providing a supplemental response to your letter dated April 10, 2006 relating to the above-referenced annual and quarterly reports.

     As mentioned in a voice mail to Christopher White, Staff Accountant, by our outside counsel, the enclosed response restates our response to comment 3 contained in our April 25, 2006 letter in order to correct certain errors relating to the reclassification of amortization expense. In particular, in preparing the sample financial statements for our April 25, 2006 response, we inadvertently reclassified the amortization associated with patents acquired in a business combination from operating expenses to cost of goods sold, in addition to the core and developed technology intangible assets acquired. Our intention was to reclassify only the amortization of our core and developed technology assets acquired in business combinations in accordance with your recommendation. We apologize for the inconvenience this may have caused and enclose our revised response to comment 3 from your April 10, 2006 letter.

Form 10-K for Fiscal Year Ended July 3, 2005

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Fiscal 2005 versus Fiscal 2004

Consolidated Statement of Operations, page 54

3. Comment:

Your response to prior comment number 4 confirms that your products include intangible assets related to core technology which are being amortized in the income statement. Therefore, as your products sales include such technology, it appears that the appropriate line-item within continuing operations for this amortization should be cost of sales. In this regard, we note your reference to paragraph 42 of SFAS 142, and that this literature requires classification of amortization expense “asdeemed appropriate for each entity.” This guidance does not support classifying the amortization expense simply based on an entity’s “policy election” without considering the nature of the charge. As your acquired technology is part of your cost of sales, it appears that based on the nature of this charge it should be classified in the cost of sales section. We further note your response references the guide of SAB Topic 11.B. Since you are presenting a gross profit line item in your statements of operations, in MD&A and in Note 16 — Quarterly Financial Data, the amortization charge must be included in cost of sales to properly present your gross profit. Revise or provide an analysis using SAB 99 that supports your conclusion not to amend prior Exchange Act Filings to properly present your gross profit.

Response:

In response to the Staff’s comments, the Company proposes to reclassify this amortization expense to cost of sales in future filings and to enhance our footnote disclosure. In order for the Staff to better understand the effect the reclassification will have on future filings, for your convenience, we have attached statements of operations which present the reclassified amounts compared to the previous presentation for the periods impacted by the reclassification. Those periods are the years ended June 27, 2004 and July 3, 2005, the three months ended January 1, 2006 and October 2, 2005, and the six months ended January 1, 2006. In future filings we will also reclassify statement of operations and related Disclosures in Management’s Discussion and Analysis to conform to the current presentation as necessary.

Additionally, the Company will amend its intangible assets footnote (currently footnote 7) in future filings to clarify where amortization expense of intangibles is classified in the statement of operations. The proposed changes to the footnote are presented in brackets and italics to assist in more clearly identifying them for purposes of this response.

“Goodwill related to the purchase of Vixel in 2004 and the purchase of Giganet in 2001. Core technology and patents relate to the purchase of Vixel and Giganet and to the purchase of the technology assets of Trebia Corporation for $2.1 million in October 2003. All other intangible assets subject to amortization relate to the purchase of Vixel. [The amortization expense associated with core technology and developed technology is included within the cost of sales line item in the Statement of Operations. The amortization expense associated with patents, customer relationships, tradename and covenants not-to-compete is included in the amortization of other intangibles line item which is within operating expenses.]”

“Aggregated amortization expense for these intangibles for the years 2006, 2005 and 2004, was $XX.X million, $26.2 million and $19.1 million, respectively, [of which $X.X million, $14.8 million and $11.5 million of amortization expense related to core technology and developed technology, respectively has been included in cost of sales within the Statement of Operations.]”

     Please do not hesitate to call me if you have any further comments or questions regarding this response.

Very truly yours,      Emulex Corporation
By:	/s/ Michael J. Rockenbach
	Michael J. Rockenbach, Chief Financial Officer

cc:  Christopher White, Staff Accountant
Paul F. Folino
Randall Wick
Natalie Smith
Mark Clemens
Robert M. Steinberg

Emulex
Proposed Income Statement Changes
Reclassification of Purchased Intangible Assets Amortization Expense to Cost of Sales
Form 10-K, Fiscal Years 2005 and 2004 —REVISED

	As Presented						As Revised
Description	2005			2004			2005			2004
Net Revenues	$	375,653		$	364,422		$	375,653		$	364,422
Cost of Sales		139,682			131,803			154,530			143,311
Gross Profit		235,971			232,619			221,123			221,111
Operating Expenses:
Engineering and development		79,971			73,211			79,971			73,211
Selling and Marketing		32,441			28,035			32,441			28,035
General and administrative		11,636			18,815			11,636			18,815
Amortization of intangibles		26,162			19,093			11,314			7,585
Impairment of goodwill		1,096			583,499			1,096			583,499
In-process research and development		—			11,400			—			11,400
Total operating expenses		151,306			734,053			136,458			722,545
Operating income (loss)		84,665			(501,434	)		84,665			(501,434	)
Nonoperating income:
Interest income		13,106			9,149			13,106			9,149
Interest expense		(4,202	)		(4,754	)		(4,202	)		(4,754	)
Gain on repurchase of convertible subordinated notes		20,514			2,670			20,514			2,670
Other income (expense), net		(2,273	)		109			(2,273	)		109
Total nonoperating income		27,145			7,174			27,145			7,174
Income (loss) before income taxes		111,810			(494,260	)		111,810			(494,260	)
Income tax provision		40,221			38,062			40,221			38,062
Net income (loss)	$	71,589		$	(532,322	)	$	71,589		$	(532,322	)
Net income (loss) per share:
Basic	$	0.86		$	(6.47	)	$	0.86		$	(6.47	)
Diluted	$	0.80		$	(6.47	)	$	0.80		$	(6.47	)
Number of shares used in per share computations:
Basic		82,819			82,293			82,819			82,293
Diluted		92,970			82,293			92,970			82,293

Emulex
Proposed Income Statement Changes
Reclassification of Purchased Intangible Assets Amortization Expense to Cost of Sales
Form 10-Q, Six months ended January 1, 2006 —REVISED

	As Presented			As Revised
Description	January 1, 2006			January 1, 2006
Net Revenues	$	214,647		$	214,647
Cost of Sales		79,861			87,161
Gross Profit		134,786			127,486
Operating Expenses:
Engineering and development		44,190			44,190
Selling and Marketing		17,211			17,211
General and administrative		11,848			11,848
Amortization of intangibles		12,757			5,457
Impairment of goodwill		—			—
Total operating expenses		86,006			78,706
Operating income		48,780			48,780
Nonoperating income:
Interest income		8,538			8,538
Interest expense		(1,246	)		(1,246	)
Gain on repurchase of convertible subordinated notes		—			—
Other income (expense), net		(20	)		(20	)
Total nonoperating income		7,272			7,272
Income before income taxes		56,052			56,052
Income tax provision		22,407			22,407
Net income	$	33,645		$	33,645
Net income per share:
Basic	$	0.40		$	0.40
Diluted	$	0.38		$	0.38
Number of shares used in per share computations:
Basic		83,609			83,609
Diluted		91,115			91,115

Emulex
Proposed Income Statement Changes
Reclassification of Purchased Intangible Assets Amortization Expense to Cost of Sales
Form 10-Q, Three months ended January 1, 2006 —REVISED

	As Presented			As Revised
Description	January 1, 2006			January 1, 2006
Net Revenues	$	110,268		$	110,268
Cost of Sales		41,712			45,359
Gross Profit		68,556			64,909
Operating Expenses:
Engineering and development		22,335			22,335
Selling and Marketing		9,254			9,254
General and administrative		5,904			5,904
Amortization of intangibles		6,373			2,726
Impairment of goodwill		—			—
Total operating expenses		43,866			40,219
Operating income		24,690			24,690
Nonoperating income:
Interest income		4,792			4,792
Interest expense		(622	)		(622	)
Gain on repurchase of convertible subordinated notes		—			—
Other income (expense), net		(18	)		(18	)
Total nonoperating income		4,152			4,152
Income before income taxes		28,842			28,842
Income tax provision		11,633			11,633
Net income	$	17,209		$	17,209
Net income per share:
Basic	$	0.21		$	0.21
Diluted	$	0.19		$	0.19
Number of shares used in per share computations:
Basic		83,821			83,821
Diluted		91,266			91,266

Emulex
Proposed Income Statement Changes
Reclassification of Purchased Intangible Assets Amortization Expense to Cost of Sales
Form 10-Q, Three months ended October 2, 2005 —REVISED

	As Presented			As Revised
Description	October 2, 2005			October 2, 2005
Net Revenues	$	104,379		$	104,379
Cost of Sales		38,149			41,802
Gross Profit		66,230			62,577
Operating Expenses:
Engineering and development		21,855			21,855
Selling and Marketing		7,957			7,957
General and administrative		5,944			5,944
Amortization of intangibles		6,384			2,731
Impairment of goodwill		—			—
Total operating expenses		42,140			38,487
Operating income		24,090			24,090
Nonoperating income:
Interest income		3,746			3,746
Interest expense		(624	)		(624	)
Gain on repurchase of convertible subordinated notes		—			—
Other income (expense), net		(2	)		(2	)
Total nonoperating income		3,120			3,120
Income before income taxes		27,210			27,210
Income tax provision		10,774			10,774
Net income	$	16,436		$	16,436
Net income per share:
Basic	$	0.20		$	0.20
Diluted	$	0.19		$	0.19
Number of shares used in per share computations:
Basic		83,398			83,398
Diluted		90,825			90,825