ATMEL CORPORATION

RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES

(in thousands, except per share data)

(Unaudited)

Three Months Ended

Nine Months Ended

September 30, 

June 30, 

September 30, 

September 30, 

September 30, 

2014

2014

2013

2014

2013

GAAP gross margin

$            176,843

$  161,238

$            143,467

$            478,071

$            422,697

(Gain) loss from manufacturing facility damage and shutdown

(3,571)

-

-

3,485

-

(Gain) loss related to foundry arrangements

(454)

(2,071)

8,938

(2,583)

7,424

Fair value adjustments to inventory from businesses acquired

1,548

-

-

1,548

-

Share-based compensation expense

1,605

1,971

1,136

4,892

4,589

Non-GAAP gross margin

$            175,971

$  161,138

$            153,541

$            485,413

$            434,710

GAAP research and development expense

$              69,917

$    70,082

$              66,790

$            209,751

$            202,460

Share-based compensation expense

(4,632)

(4,383)

(3,100)

(13,744)

(10,724)

French building underutilization and other

(608)

(651)

-

(2,220)

-

Non-GAAP research and development expense

$              64,677

$    65,048

$              63,690

$            193,787

$            191,736

GAAP selling, general and administrative expense

$              65,324

$    64,783

$              55,793

$            194,186

$            178,282

Share-based compensation expense

(8,680)

(8,924)

(3,858)

(27,176)

(15,023)

French building underutilization and other

(214)

(515)

-

(1,064)

-

Non-GAAP selling, general and administrative expense

$              56,430

$    55,344

$              51,935

$            165,946

$            163,259

GAAP income (loss) from operations

$              33,600

$    26,459

$              11,050

$              64,814

$            (31,937)

Share-based compensation expense

14,917

15,278

8,094

45,812

30,336

(Gain) loss from manufacturing facility damage and shutdown

(3,571)

-

-

3,485

-

Acquisition-related charges

7,162

1,497

1,685

10,287

5,699

French building underutilization and other

822

1,166

-

3,284

-

Restructuring charges (credits) 

840

(1,583)

8,149

(967)

51,545

(Gain) loss related to foundry arrangements

(454)

(2,071)

8,938

(2,583)

7,424

Fair value adjustments to inventory from businesses acquired

1,548

-

-

1,548

-

Recovery of receivables from foundry suppliers

-

-

-

(522)

Gain on sale of assets

-

-

-

(4,430)

Settlement charges

-

-

-

21,600

Non-GAAP income from operations

$              54,864

$    40,746

$              37,916

$            125,680

$              79,715

GAAP (provision for) benefit from income taxes

$            (11,619)

$    (6,021)

$              (7,038)

$            (20,306)

$                 1,644

Adjustments for cash tax and other tax settlements

(9,522)

(4,788)

(5,449)

(15,961)

5,829

Non-GAAP provision for income taxes

$              (2,097)

$    (1,233)

$              (1,589)

$              (4,345)

$              (4,185)

GAAP net income (loss) 

$              17,250

$    19,236

$                 5,426

$              38,652

$            (29,265)

Share-based compensation expense

14,917

15,278

8,094

45,812

30,336

(Gain) loss from manufacturing facility damage and shutdown

(3,571)

-

-

3,485

-

Acquisition-related charges

7,162

1,497

1,685

10,287

5,699

French building underutilization and other

822

1,166

-

3,284

-

Restructuring charges (credits) 

840

(1,583)

8,149

(967)

51,545

(Gain) loss related to foundry arrangements

(454)

(2,071)

8,938

(2,583)

7,424

Fair value adjustments to inventory from businesses acquired

1,548

-

-

1,548

-

Recovery of receivables from foundry suppliers

-

-

-

-

(522)

Gain on sale of assets

-

-

-

-

(4,430)

Settlement charges

-

-

-

-

21,600

Write-down of investments in privately-held companies

1,805

-

-

1,805

-

Tax adjustments

9,522

4,788

5,449

15,961

(5,829)

Non-GAAP net income

$              49,841

$    38,311

$              37,741

$            117,284

$              76,558

GAAP net income (loss) per share - diluted

$                   0.04

$         0.05

$                   0.01

$                   0.09

$                 (0.07)

Share-based compensation expense

0.04

0.03

0.02

0.11

0.07

(Gain) loss from manufacturing facility damage and shutdown

(0.01)

-

-

0.01

-

Acquisition-related charges

0.02

-

0.01

0.02

0.01

French building underutilization and other

-

-

-

0.01

-

Restructuring charges (credits) 

-

-

0.02

-

0.12

(Gain) loss related to foundry arrangements

-

-

0.02

(0.01)

0.02

Fair value adjustments to inventory from businesses acquired

-

-

-

-

Recovery of receivables from foundry suppliers

-

-

-

-

-

Gain on sale of assets

-

-

-

-

(0.01)

Settlement charges

-

-

-

-

0.05

Write-down of investments in privately-held companies

0.01

-

-

Tax adjustments

0.02

0.01

0.01

0.04

(0.02)

Non-GAAP net income per share  - diluted

$                   0.12

$         0.09

$                   0.09

$                   0.27

$                   0.17

GAAP diluted shares

420,964

422,834

429,639

423,700

427,944

Adjusted dilutive stock awards - non-GAAP

7,297

7,212

9,207

6,676

11,707

Non-GAAP diluted shares

428,261

430,046

438,846

430,376

439,651