Note 6: Available-for-Sale Investments

Available-for-sale investments as of September 29, 2012 and December 31, 2011 were as follows:

In the preceding table, government bonds include bonds issued or deemed to be guaranteed by government entities. Government bonds include instruments such as U.S. Treasury securities, non-U.S. government obligations, and U.S. agency securities as of September 29, 2012 and December 31, 2011.

During the third quarter of 2012, we entered into a series of agreements with ASML Holding N.V. intended to accelerate the development of 450-millimeter (mm) wafer technology and extreme ultra-violet (EUV) lithography. The agreements include Intel's purchase of ASML equity securities totaling $3.2 billion completed in the third quarter of 2012. This equity interest has been accounted for as an available-for-sale investment and is included in marketable equity securities in the preceding table. Intel's ownership interest in ASML was 13% of ASML's issued shares as of September 29, 2012 and is subject to lock-up and voting restrictions. Subject to certain regulatory approvals, ASML has agreed to execute a synthetic share buy-back during the fourth quarter that would result in Intel's ownership increasing to 15%. Intel also agreed to provide research and development (R&D) funding totaling €829 million (approximately $1.0 billion as of the date of the agreement) over five years and committed to advance purchase orders for a specified number of tools from ASML. The agreements set forth terms to determine pricing as well as milestones related to 450-mm and EUV development and production tool deliveries. In exchange for making this early commitment, Intel will receive credits to be applied to future tool purchases from ASML.

The amortized cost and fair value of available-for-sale debt investments as of September 29, 2012, by contractual maturity, were as follows:

Instruments not due at a single maturity date in the preceding table include asset-backed securities and money market fund deposits.

We sold available-for-sale investments for proceeds of $1.5 billion in the third quarter of 2012 and $2.1 billion in the first nine months of 2012 ($298 million in the third quarter of 2011 and $9.1 billion in the first nine months of 2011). Substantially all of the proceeds in the first nine months of 2011 were from sales of debt investments and were primarily used to fund our acquisition of McAfee, Inc. The gross realized gains on sales of available-for-sale investments were $66 million in the third quarter of 2012 and $110 million in the first nine months of 2012 ($186 million in the third quarter of 2011 and $251 million in the first nine months of 2011) and were primarily related to our sales of marketable equity securities. We determine the cost of an investment sold on an average cost basis at the individual security level. Impairment charges recognized on available-for-sale investments were $36 million in the first nine months of 2012 ($71 million in the first nine months of 2011).

The before-tax net unrealized holding gains (losses) on available-for-sale investments that have been included in other comprehensive income (loss) and the before-tax net gains (losses) reclassified from accumulated other comprehensive income (loss) into earnings were as follows: