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NEWS RELEASE EMBARGOED UNTIL RELEASE AT 8:30 A.M. EDT, WEDNESDAY, March 26, 2014 Christopher A. Gohrband: (202) 606-9564 BEA 14-12 Elena L. Nguyen: (202) 606-9555 U.S. Net International Investment Position: End of the Fourth Quarter and Year 2013 Fourth Quarter The U.S. net international investment position at the end of the fourth quarter of 2013 was -$4,577.5 billion (preliminary) as the value of foreign investments in the United States exceeded the value of U.S. investments abroad (chart 1, table 1). At the end of the third quarter, the net position was -$4,171.8 billion (revised). The $405.7 billion decrease in the net position reflected a $777.8 billion increase in the value of foreign-owned assets in the United States that exceeded a $372.1 billion increase in the value of U.S.-owned assets abroad. Chart 2. Foreign-Owned Assets in the United States and U.S.-Owned Assets Abroad, 2006:IV-2013:IV (Quarterly, not seasonally adjusted) Billions of dollars 30,000 Chart 1. U.S. Net International Investment Position, 2006:IV-2013:IV Billions of dollars 0 -500 Foreign-owned assets in the United States 25,000 -1,000 -1,500 Quarterly series (not seasonally adjusted) 20,000 -2,000 U.S.-owned assets abroad 2006:IV -2,500 15,000 2006:IV -3,000 Annual series 10,000 -3,500 -4,000 5,000 -4,500 -5,000 0 2007 2008 2009 2010 2011 2012 2013 2007 2008 2009 2010 2011 2012 2013 Comprehensive Restructuring of the U.S. International Economic Accounts On June 30, 2014, BEA will release “U.S. Net International Investment Position: End of the First Quarter 2014, Year 2013, and Annual Revisions.” The statistics will be revised to reflect newly available and more complete source data, changes in estimation methods, and changes in definitions and classifications. BEA will also introduce a new presentation of the IIP statistics as part of a comprehensive restructuring of BEA’s international economic accounts. This change in presentation, combined with changes in definitions and classifications, will bring the statistics into closer alignment with international guidelines. Additional information on BEA’s comprehensive restructuring of the international accounts is published in the March 2014 issue of the Survey of Current Business. Table templates for the restructured presentation are available on the BEA Web site at http://www.bea.gov/international/modern.htm. __________________ NOTE: This news release is available on BEA’s Web site <www.bea.gov> along with Quarterly Highlights and Annual Highlights related to this release, the latest detailed statistics for the U.S. international investment position, and a description of the estimation methods used to compile them. The fourth-quarter statistics for 2013 in this release are preliminary and will be revised on June 30, 2014. -more- -2The U.S. net international investment position decreased 9.7 percent in the fourth quarter, compared with a 6.4-percent increase in the third quarter and an average quarterly decrease of 6.3 percent from the first quarter of 2011 through the third quarter of 2013. The net position was equal to 2.4 percent of the value of all U.S. financial assets at the end of the fourth quarter, up from 2.2 percent at the end of the third quarter. 1 U.S.-owned assets abroad were $21,963.8 billion at the end of the fourth quarter compared with $21,591.7 billion at the end of the third quarter (chart 2). The $372.1 billion increase reflected a $318.4 billion increase in the value of U.S.-owned assets abroad excluding financial derivatives and a $53.7 billion increase in the value of financial derivatives. U.S.-owned assets abroad excluding financial derivatives were $19,148.7 billion at the end of the fourth quarter compared with $18,830.2 billion at the end of the third quarter. The $318.4 billion increase reflected a $196.4 billion increase resulting from valuation changes and a $122.1 billion increase resulting from financial outflows. 2 Valuation changes were mainly attributable to an increase in foreign stock prices that raised the value of U.S. holdings of foreign stocks. Foreign-owned assets in the United States were $26,541.3 billion at the end of the fourth quarter compared with $25,763.5 billion at the end of the third quarter (chart 2). The $777.8 billion increase reflected a $749.3 billion increase in the value of foreign-owned assets in the United States excluding financial derivatives and a $28.5 billion increase in the value of financial derivatives. Foreign-owned assets in the United States excluding financial derivatives were $23,799.4 billion at the end of the fourth quarter compared with $23,050.0 billion at the end of the third quarter. The $749.3 billion increase reflected a $430.6 billion increase resulting from valuation changes and a $318.8 billion increase resulting from financial inflows. Valuation changes were mostly attributable to increases in U.S. stock prices that raised the value of foreign holdings of U.S. stocks. The rise in the value of U.S. stocks was partly offset by declines in the value of U.S. debt securities due to falling bond prices. Revisions The U.S. net international investment position at the end of the third quarter of 2013 was revised to -$4,171.8 billion from a previously-published value of -$4,165.6 billion. The $6.2 billion downward revision to the net position reflected a $6.9 billion upward revision to foreignowned assets in the United States that exceeded a $0.7 billion upward revision to U.S.-owned assets abroad. 1 Board of Governors of the Federal Reserve System (FRS), “Table L.5 Total Liabilities and Its Relation to Total Financial Assets,” in Financial Accounts of the United States, Fourth Quarter 2013, Z.1. Statistical Release (Washington, DC: FRS, March 6, 2014): 11. According to the March 6, 2014 Z.1 release, the value of all U.S. financial assets was $193,911.9 billion at the end of the fourth quarter. U.S. assets abroad from the international investment position were $21,963.8 billion at the end of the fourth quarter, 11.3% of all U.S. assets, down from 11.4% in the third quarter and down from the 13.5% series peak in the third quarter of 2011. 2 For statistics on financial flows, see the financial account transactions in table 1 of the U.S. International Transactions Accounts. Financial flows discussed in this release are not seasonally adjusted. Detailed valuation changes such as price, exchange-rate, and other changes are available only for annual statistics in the June release. -more- -3U.S.-owned assets abroad at the end of the third quarter were revised to $21,591.7 billion from $21,590.9 billion, and foreign-owned assets in the United States were revised to $25,763.5 billion from $25,756.5 billion. These revisions reflect revised source data from the Treasury International Capital (TIC) reporting system and from BEA’s quarterly surveys of direct investment. Year 2013 The U.S. net international investment position was -$4,577.5 billion (preliminary) at the end of 2013 compared with -$3,863.9 billion at the end of 2012. The $713.6 billion decrease in the net position reflected a $1,039.8 billion increase in the value of foreign-owned assets in the United States that exceeded a $326.1 billion increase in the value of U.S.-owned assets abroad. The U.S. net international investment position decreased 18.5 percent from the end 2012 to the end of 2013, compared with a 3.6-percent decrease from yearend 2011 to yearend 2012. U.S.-owned assets abroad were $21,963.8 billion at the end of 2013 compared with $21,637.6 billion at the end of 2012. The $326.1 billion increase reflected a $1,130.8 billion increase in the value of U.S.-owned assets abroad excluding financial derivatives that was partly offset by an $804.7 billion decrease in the value of financial derivatives. U.S.-owned assets abroad excluding financial derivatives were $19,148.7 billion at the end of 2013 compared with $18,017.9 billion at the end of 2012. The $1,130.8 billion increase reflected a $577.8 billion increase resulting from valuation changes and a $553.0 billion increase resulting from financial outflows. Valuation changes were mainly attributable to the increase in foreign stock prices that raised the value of U.S. holdings of foreign stocks. Foreign-owned assets in the United States were $26,541.3 billion at the end of 2013 compared with $25,501.5 billion at the end of 2012. The $1,039.8 billion increase reflected a $1,859.8 billion increase in the value of foreign-owned assets in the United States excluding financial derivatives that was partly offset by an $820.1 billion decrease in the value of financial derivatives. Foreign-owned assets in the United States excluding financial derivatives were $23,799.4 billion at the end of 2013 compared with $21,939.5 billion at the end of 2012. The $1,859.8 billion increase reflected a $953.8 billion increase resulting from valuation changes and a $906.1 billion increase resulting from financial inflows. Valuation changes were mostly attributable to increases in U.S. stock prices that raised the value of foreign holdings of U.S. stocks. The rise in the value of U.S. stocks was partly offset by declines in the value of U.S. debt securities due to falling bond prices. * * * Valuing the Components of the U.S. International Investment Position Investment positions for long-term portfolio securities are based on market values from monthly, annual, and benchmark surveys conducted by the Treasury International Capital (TIC) reporting system of the U.S. Department of the Treasury. Investment positions for financial derivatives are based on fair market values from quarterly surveys conducted by the TIC reporting system. Investment positions for claims and liabilities reported by banks, securities brokers, and -more- -4other nonbanks are based on contractual (face) values of instruments as reported by financial institutions for both their own accounts and the accounts of their customers on the monthly and quarterly surveys conducted by the TIC reporting system with supplementary data for U.S. nonbanks from foreign central banks. Investment positions for direct investment are valued at current-period prices based on a revaluation of book values. Book values are reported by U.S. multinational companies on surveys conducted by BEA. Direct investment at current cost is BEA’s featured measure of direct investment at current-period prices. 3 The current-cost method values the U.S. and foreign parent shares of their affiliates’ investment in (1) plant and equipment using the current cost of capital equipment, (2) land using general price indexes, and (3) inventories using estimates of their replacement cost. 4 * * * Release dates in 2014: End of the Fourth Quarter and Year 2013......................................March 26, 2014 (Wednesday) End of the First Quarter of 2014, Year 2013, and Annual Revisions….June 30, 2014 (Monday) End of the Second Quarter of 2014.............................................September 25, 2014 (Thursday) End of the Third Quarter of 2014..................................................December 30, 2014 (Tuesday) * * * BEA’s national, international, regional, and industry statistics; the Survey of Current Business; and BEA news releases are available without charge at www.bea.gov. At the site, you can also subscribe to receive free e-mail summaries of BEA releases and announcements. 3 BEA publishes direct investment at market value as an alternative current-period price measure with owners’ equity revalued using indexes of stock market prices. Beginning with the June 30, 2014 release, direct investment at market value will be the featured measure in the U.S net international investment position statistics. BEA also publishes direct investment at historical cost with owners’ equity at the book value reported on BEA’s surveys. Country and industry detail for direct investment are available only on a historical-cost basis (see http://www.bea.gov/iTable/index_MNC.cfm). 4 For additional information on the current-cost and market-value methods, see J. Steven Landefeld and Ann M. Lawson, “Valuation of the U.S. Net International Investment Position,” Survey of Current Business 71 (May 1991): 40–49. -more- -5Table 1. International Investment Position of the United States at the End of the Quarter [Millions of dollars, not seasonally adjusted] Line Change: 2013:III to 2013:IV 2013 2012 Type of investment 1 IV I II III r IV p Change: 2012:IV to 2013:IV 1 Net international investment position of the United States (lines 2+3)....................................... 2 Financial derivatives, net (line 5 less line 25)................................................................................. 3 Net international investment position, excluding financial derivatives (line 6 less line 26)........... -3,863,892 57,776 -3,921,668 -4,236,559 40,025 -4,276,584 -4,455,040 59,352 -4,514,392 -4,171,798 47,963 -4,219,761 -4,577,504 73,178 -4,650,682 -405,706 25,215 -430,921 -713,612 15,402 -729,014 4 U.S.-owned assets abroad (lines 5+6)........................................................................................... 5 Financial derivatives (gross positive fair value)........................................................................... 6 U.S.-owned assets abroad, excluding financial derivatives (lines 7+12+17)................................ 21,637,618 3,619,761 18,017,857 21,590,055 3,248,377 18,341,678 20,969,405 2,825,067 18,144,338 21,591,657 2,761,416 18,830,241 21,963,763 2,815,095 19,148,668 372,106 53,679 318,427 326,145 -804,666 1,130,811 7 U.S. official reserve assets............................................................................................................ 572,368 553,058 446,207 483,426 448,333 -35,093 -124,035 8 9 10 11 Gold ....................................................................................................................................... Special drawing rights................................................................................................................ Reserve position in the International Monetary Fund................................................................ Foreign currencies...................................................................................................................... 433,434 55,050 34,161 49,723 417,941 53,704 34,039 47,374 311,707 53,881 33,860 46,759 346,878 54,966 33,462 48,120 314,975 55,184 30,750 47,424 -31,903 218 -2,712 -696 -118,459 134 -3,411 -2,299 12 U.S. government assets, other than official reserve assets........................................................... 93,570 94,016 90,901 91,043 91,596 553 -1,974 84,029 83,756 85,433 85,160 88,636 88,363 89,912 89,639 90,951 90,678 1,039 1,039 6,922 6,922 13 14 2 3 U.S. credits and other long-term assets ..................................................................................... Repayable in dollars................................................................................................................ 4 273 273 273 273 273 0 0 16 U.S. foreign currency holdings and U.S. short-term assets ...................................................... 9,541 8,583 2,265 1,131 645 -486 -8,896 17 18 19 20 21 22 23 U.S. private assets......................................................................................................................... Direct investment at current cost............................................................................................... Foreign securities....................................................................................................................... Bonds....................................................................................................................................... Corporate stocks...................................................................................................................... U.S. claims on unaffiliated foreigners reported by U.S. nonbanking concerns.......................... U.S. claims reported by U.S. banks and securities brokers, not included elsewhere.................. 17,351,919 5,077,750 7,531,223 2,140,685 5,390,538 844,752 3,898,194 17,694,604 5,123,775 7,823,264 2,174,582 5,648,682 906,061 3,841,504 17,607,230 5,194,622 7,719,064 2,086,978 5,632,086 974,663 3,718,881 18,255,772 5,309,596 8,286,838 2,129,377 6,157,461 987,104 3,672,234 18,608,739 5,366,043 8,715,531 2,204,052 6,511,479 935,682 3,591,483 352,967 56,447 428,693 74,675 354,018 -51,422 -80,751 1,256,820 288,293 1,184,308 63,367 1,120,941 90,930 -306,711 24 Foreign-owned assets in the United States (lines 25+26)........................................................... 25 Financial derivatives (gross negative fair value).......................................................................... 26 Foreign-owned assets in the United States, excluding financial derivatives (lines 27+34).......... 25,501,510 3,561,985 21,939,525 25,826,614 3,208,352 22,618,262 25,424,445 2,765,715 22,658,730 25,763,455 2,713,453 23,050,002 26,541,267 2,741,917 23,799,350 777,812 28,464 749,348 1,039,757 -820,068 1,859,825 5,692,448 4,526,896 4,032,204 494,692 5,814,441 4,561,428 4,090,723 470,705 5,744,199 4,460,203 4,009,152 451,051 5,844,774 4,486,853 4,017,000 469,853 5,948,424 4,506,863 4,056,266 450,597 103,650 20,010 39,266 -19,256 255,976 -20,033 24,062 -44,095 15 Other ....................................................................................................................................... 5 27 28 29 30 Foreign official assets in the United States................................................................................... U.S. government securities......................................................................................................... U.S. Treasury securities........................................................................................................... Other........................................................................................................................................ 31 32 33 Other U.S. government liabilities .............................................................................................. U.S. liabilities reported by U.S. banks and securities brokers, not included elsewhere............. Other foreign official assets....................................................................................................... 128,279 204,401 832,872 128,554 224,462 899,997 132,268 215,107 936,621 137,100 245,160 975,661 139,693 266,372 1,035,496 2,593 21,212 59,835 11,414 61,971 202,624 34 35 36 37 38 39 40 41 42 Other foreign assets...................................................................................................................... Direct investment at current cost............................................................................................... U.S. Treasury securities.............................................................................................................. U.S. securities other than U.S. Treasury securities..................................................................... Corporate and other bonds...................................................................................................... Corporate stocks...................................................................................................................... U.S. currency.............................................................................................................................. U.S. liabilities to unaffiliated foreigners reported by U.S. nonbanking concerns....................... U.S. liabilities reported by U.S. banks and securities brokers, not included elsewhere............. 16,247,077 3,057,326 1,541,569 6,904,050 3,061,963 3,842,087 454,227 656,522 3,633,383 16,803,821 3,074,647 1,631,056 7,296,277 3,056,573 4,239,704 459,184 632,919 3,709,738 16,914,531 3,101,291 1,585,232 7,258,691 2,940,348 4,318,343 468,670 626,418 3,874,229 17,205,228 3,130,534 1,637,655 7,616,011 3,035,289 4,580,722 481,334 576,222 3,763,472 17,850,926 3,178,693 1,747,512 8,034,920 3,059,590 4,975,330 491,949 598,286 3,799,566 645,698 48,159 109,857 418,909 24,301 394,608 10,615 22,064 36,094 1,603,849 121,367 205,943 1,130,870 -2,373 1,133,243 37,722 -58,236 166,183 5,249,539 3,923,969 4,453,307 2,650,832 5,500,811 4,251,181 4,499,331 2,668,153 5,435,081 4,333,762 4,570,179 2,694,796 5,973,419 4,515,937 4,685,154 2,724,040 6,349,512 4,935,167 4,741,601 2,772,199 376,093 419,230 56,447 48,159 1,099,973 1,011,198 288,294 121,367 6 Memoranda: 43 Direct investment abroad at market value.......................................................................................... 44 Direct investment in the United States at market value...................................................................... 45 Direct investment abroad at historical cost......................................................................................... 46 Direct investment in the United States at historical cost..................................................................... p Preliminary r Revised 1. The statistics for each quarter are the values as of the last day of the quarter; the first quarter ends on March 31; the second quarter ends on June 30; the third quarter ends on September 30; and the fourth quarter ends on December 31 of the year. 2. U.S. official gold stock is valued at market price. 3. Also includes paid-in capital subscriptions to international financial institutions and outstanding amounts of miscellaneous claims that have been settled through international agreements to be payable to the U.S. government over periods in excess of 1 year. Excludes World War I debts that are not being serviced. 4. Includes indebtedness that the borrower may contractually, or at its option, repay with its currency, with a third country's currency, or by delivery of materials or transfer of services. 5. Includes foreign-currency-denominated assets obtained through temporary reciprocal currency arrangements between the Federal Reserve System and foreign central banks. These assets are included in the investment position at the dollar value established at the time they were received, reflecting the valuation of these assets in the Federal Reserve System’s balance sheet. Changes in exchange rates do not affect this valuation. 6. Includes U.S. government liabilities associated with military sales contracts and U.S. government reserve-related liabilities from allocations of special drawing rights (SDRs). Source: Bureau of Economic Analysis