INVESTMENTS

Investments at September 30, 2012 and December 31, 2011 primarily include corporate equity securities, U.S. and foreign corporate debt securities and auction-rate securities.

All marketable securities are deemed by management to be available-for-sale and are reported at fair value, with the exception of certain auction-rate securities as described below. Net unrealized gains and losses that are deemed to be temporary are reported within stockholders’ equity on the Company’s condensed consolidated balance sheets as a component of accumulated other comprehensive income. Unrealized losses that are deemed to be other than temporary are recorded in the condensed consolidated statement of operations in the period such determination is made. Gross realized gains or losses are recorded based on the specific identification method. For each of the three and nine months ended September 30, 2012 and 2011, the Company's gross realized gains and losses on short-term investments were insignificant. The Company’s investments are further detailed in the table below:



	September 30, 2012					December 31, 2011
	Adjusted Cost			Fair Value		Adjusted Cost			Fair Value
	(in thousands)
Corporate equity securities	$	3,936		$	2,136	$	—		$	—
Auction-rate securities	983			1,066		2,220			2,251
Corporate debt securities and other obligations	—			—		3,099			3,079
	$	4,919		$	3,202	$	5,319		$	5,330
Unrealized gains	83					31
Unrealized losses	(1,800		)			(20		)
Net unrealized (losses) gains, excluding taxes of $1,005 and $0, respectively	(1,717		)			11
Fair value	$	3,202				$	5,330
Amount included in short-term investments				$	2,136				$	3,079
Amount included in other assets				1,066					2,251
				$	3,202				$	5,330

In September 2010, in connection with the sale of the Company’s smart card business in France to INSIDE Secure (“INSIDE”), the Company received an equity interest in INSIDE, which was privately-held at the time of the investment. In February 2012, INSIDE successfully completed an initial public offering on the NYSE Euronext stock exchange in Paris. As a result of that public offering, the Company reclassified its investment in INSIDE to short-term investments from other assets and now accounts for this investment as available for sale. Accordingly, based on the recent trading prices for shares in INSIDE, the Company recorded an unrealized loss of $1.8 million in accumulated other comprehensive income at September 30, 2012. The Company's intent is to hold this investment until the value recovers.

For the nine months ended September 30, 2012, the Company redeemed a portion of its auction-rate securities in the open market, resulting in an insignificant gain. The Company concluded that its remaining $1.0 million (adjusted cost) of auction-rate securities are unlikely to be liquidated within the next twelve months and classified these securities as long-term investments, which are included in other assets on the condensed consolidated balance sheets.

Contractual maturities (at adjusted cost) of available-for-sale debt securities as of September 30, 2012, were as follows:



	(in thousands)
Due within one year	$	—
Due in 1-5 years	—
Due in 5-10 years	—
Due after 10 years	983
Total	$	983

Atmel has classified all investments with original maturity dates of 90 days or more as short-term as it has the ability and intent to liquidate them within the year, with the exception of the Company’s remaining auction-rate securities, which have been classified as long-term investments and included in other assets on the condensed consolidated balance sheets.