ATMEL CORPORATION

RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES

(in thousands, except per share data)

(Unaudited)

Three Months Ended 

Twelve Months Ended

December 31,

September 30,

December 31,

December 31,

December 31,

2012

2012

2011

2012

2011

GAAP gross margin

$       131,539

$        155,526

$       184,657

$       601,319

$       908,233

Loss related to foundry arrangement 

10,628

-

-

10,628

-

Stock-based compensation expense

1,329

2,154

2,057

8,052

7,840

Non-GAAP gross margin

$       143,496

$        157,680

$       186,714

$       619,999

$       916,073

GAAP research and development expense

$         58,872

$          59,966

$         63,669

$       251,519

$       255,653

Stock-based compensation expense

(5,257)

(4,925)

(6,591)

(22,825)

(22,916)

Non-GAAP research and development expense

$         53,615

$          55,041

$         57,078

$       228,694

$       232,737

GAAP selling, general and administrative expense

$         66,376

$          68,036

$         70,817

$       275,257

$       280,410

Stock-based compensation expense

(9,818)

(11,150)

(9,873)

(41,565)

(37,369)

Non-GAAP selling, general and administrative expense

$         56,558

$          56,886

$         60,944

$       233,692

$       243,041

GAAP (loss) income from operations

$        (13,186)

$          27,398

$         48,978

$         47,363

$       382,008

Stock-based compensation expense

16,404

18,229

18,521

72,442

68,125

Acquisition-related charges 

1,946

1,530

2,339

7,388

5,408

Restructuring charges (credit)

11,036

(1,404)

(1,146)

23,986

20,064

Loss related to foundry arrangement 

10,628

-

-

10,628

-

Impairment of receivables from foundry supplier

6,495

-

-

6,495

-

Credit from reserved grant income

-

-

-

(10,689)

-

Gain on sale of assets

-

-

-

-

(35,310)

Non-GAAP income from operations

$         33,323

$          45,753

$         68,692

$       157,613

$       440,295

GAAP benefit from (provision for) income taxes

$          2,192

$           (5,915)

$        (14,381)

$        (11,793)

$        (66,200)

Adjustments for cash tax and other tax settlements

4,790

(3,047)

(14,916)

(4,410)

(64,682)

Non-GAAP (provision for) benefit from income taxes

$         (2,598)

$           (2,868)

$             535

$         (7,383)

$         (1,518)

GAAP net (loss) income

$        (12,332)

$          21,636

$         32,861

$         30,445

$       314,990

Stock-based compensation expense

16,404

18,229

18,521

72,442

68,125

Acquisition-related charges 

1,946

1,530

2,339

7,388

5,408

Restructuring charges (credit)

11,036

(1,404)

(1,146)

23,986

20,064

Loss related to foundry arrangement 

10,628

-

-

10,628

-

Impairment of receivables from foundry supplier

6,495

-

-

6,495

-

Credit from reserved grant income

-

-

-

(10,689)

-

Gain on sale of assets

-

-

-

-

(35,310)

Tax adjustments

(4,790)

3,047

14,916

4,410

64,682

Non-GAAP net income 

$         29,387

$          43,038

$         67,491

$       145,105

$       437,959

GAAP net (loss) income per share - diluted

(0.03)

$             0.05

$            0.07

$            0.07

$            0.68

Stock based compensation expense

0.04

0.04

0.04

0.16

0.14

Acquisition-related charges

0.01

-

-

0.02

-

Restructuring charges (credit)

0.02

-

-

0.05

0.04

Loss related to foundry arrangement 

0.02

-

-

0.02

-

Impairment of receivables from foundry supplier

0.01

-

-

0.01

-

Credit from reserved grant income

-

-

-

(0.02)

-

Gain on sale of assets

-

-

-

-

(0.07)

Tax adjustments

-

0.01

0.03

0.01

0.13

Non-GAAP net income per share  - diluted

0.07

$             0.10

$            0.14

$            0.32

$            0.92

GAAP diluted shares

429,312

433,295

456,514

437,582

462,673

Adjusted dilutive stock awards - non-GAAP

14,669

11,034

14,524

9,764

11,046

Non-GAAP diluted shares

443,981

444,329

471,038

447,346

473,719