FOR WIRE TRANSMISSION: 8:30 A.M. EDT, TUESDAY, September 24, 2013 Christopher A. Gohrband: (202) 606-9564 BEA 13-45 Elena L. Nguyen: (202) 606-9555 Kevin Barefoot: (202) 606-9994 (For inquiries regarding direct investment) U.S. Net International Investment Position: End of Second Quarter 2013 The U.S. net international investment position at the end of the second quarter of 2013 was -$4,504.1 billion (preliminary) as the value of foreign investments in the United States exceeded the value of U.S. investments abroad (table 1) (www.bea.gov/newsreleases/international/intinv/2013/xls/intinv213.xls). At the end of the first quarter, the U.S. net international investment position was -$4,236.6 billion (revised). The $267.6 billion decrease in the net position reflected a $605.8 billion decrease in the value of U.S.-owned assets abroad that exceeded a $338.2 billion decrease in the value of foreign-owned assets in the United States. The net position decreased 6 percent in the second quarter, compared with a 10-percent decrease in the first quarter and an average quarterly decrease of 8 percent from the first quarter of 2011 through the first quarter of 2013. U.S.-owned assets abroad were $20,984.3 billion at the end of the second quarter compared with $21,590.1 billion at the end of the first quarter. The $605.8 billion decrease reflected a $423.3 billion decrease in the value of financial derivatives and a $182.5 billion decrease in the value of U.S.-owned assets abroad excluding financial derivatives. U.S.-owned assets abroad excluding financial derivatives were $18,159.2 billion at the end of the second quarter compared with $18,341.7 billion at the end of the first quarter. The $182.5 billion decrease reflected a $292.1 billion decrease resulting from valuation changes that was partly offset by a $109.6 billion increase resulting from financial outflows./1/ Valuation changes were mostly attributable to decreases in gold prices that lowered the market value of U.S. government gold and decreases in foreign stock and bond prices that lowered the value of U.S. holdings of foreign securities. Foreign-owned assets in the United States were $25,488.4 billion at the end of the second quarter compared with $25,826.6 billion at the end of the first quarter. The $338.2 billion decrease reflected a $442.6 billion decrease in the value of financial derivatives that was partly offset by a $104.4 billion increase in the value of foreign-owned assets in the United States excluding financial derivatives. Foreign-owned assets in the United States excluding financial derivatives were $22,722.7 billion at the end of the second quarter compared with $22,618.3 billion at the end of the first quarter. The $104.4 billion increase reflected a $179.3 billion increase resulting from financial inflows that was partly offset by a $74.9 billion decrease resulting from valuation changes. Valuation changes were mostly attributable to decreases in U.S. bond prices that were partly offset by increases in U.S. stock prices. Revisions The U.S. net international investment position at the end of the first quarter of 2013 was revised to -$4,236.6 billion from a previously-published value of -$4,277.1 billion. The $40.6 billion upward revision to the net position reflected a $69.1 billion downward revision to foreign-owned assets in the United States that exceeded a $28.5 billion downward revision to U.S.-owned assets abroad. U.S.-owned assets abroad at the end of the first quarter were revised to $21,590.1 billion from $21,618.6 billion, and foreign-owned assets in the United States were revised to $25,826.6 billion from $25,895.7 billion. These revisions reflect revised source data from the Treasury International Capital (TIC) reporting system and from BEA’s quarterly surveys of direct investment. * * * 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 other 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./2/ 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./3/ * * * Release dates in 2013: End of the Fourth Quarter and Year 2012............................March 26, 2013 (Tuesday) End of the First Quarter of 2013, Year 2012, and Annual Revisions...June 25, 2013 (Tuesday) End of the Second Quarter of 2013..............................September 24, 2013 (Tuesday) End of the Third Quarter of 2013.................................December 30, 2013 (Monday) * * * 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. 1 For statistics on financial flows, see the financial account transactions in table 1 (www.bea.gov/iTable/iTableHtml.cfm?reqid=6&step=3&isuri=1&600=1) of the U.S. International Transactions Accounts. Detailed valuation changes such as price, exchange-rate, and other changes are available only for annual statistics. 2 BEA publishes direct investment at market value as an alternative current-period price measure with owners’ equity revalued using indexes of stock market prices. 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 www.bea.gov/iTable/index_MNC.cfm). 3 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,” (www.bea.gov/scb/pdf/internat/bpa/1991/0591bop.pdf) Survey of Current Business 71 (May 1991): 40–49. __________________ NOTE: This news release is available on BEA’s Web site along with Quarterly Highlights (www.bea.gov/newsreleases/international/intinv/2013/pdf/intinv213_fax.pdf) related to this release, the latest detailed statistics (www.bea.gov/international/index.htm#iip) for the U.S. international investment position, and a description of the estimation methods (www.bea.gov/scb/pdf/2010/02 February/0210_guide.pdf) used to compile them. The second-quarter statistics for 2013 in this release are preliminary and will be revised on December 30, 2013. Table 1. International Investment Position of the United States at the End of the Quarter /1/ [Millions of dollars, not seasonally adjusted] Change: Line Type of investment 2012 2013 2013:I to I II III IV I r II p 2013:II 1 Net international investment position of the United States (lines 2+3)................................ -3,886,446 -4,332,158 -4,109,198 -3,863,892 -4,236,559 -4,504,121 -267,562 2 Financial derivatives, net (line 5 less line 25).................................................... 76,286 67,589 52,493 57,776 40,025 59,352 19,327 3 Net international investment position, excluding financial derivatives (line 6 less line 26)........ -3,962,732 -4,399,747 -4,161,691 -3,921,668 -4,276,584 -4,563,473 -286,889 4 U.S.-owned assets abroad (lines 5+6)................................................................ 21,349,048 20,948,183 21,551,595 21,637,618 21,590,055 20,984,263 -605,792 5 Financial derivatives (gross positive fair value)................................................. 3,950,239 4,155,820 3,925,606 3,619,761 3,248,377 2,825,067 -423,310 6 U.S.-owned assets abroad, excluding financial derivatives (lines 7+12+17)......................... 17,398,809 16,792,363 17,625,989 18,017,857 18,341,678 18,159,196 -182,482 7 U.S. official reserve assets...................................................................... 572,578 556,620 606,277 572,368 553,058 446,207 -106,851 8 Gold /2/........................................................................................ 434,742 418,006 464,422 433,434 417,941 311,707 -106,234 9 Special drawing rights.......................................................................... 55,460 54,341 55,232 55,050 53,704 53,881 177 10 Reserve position in the International Monetary Fund............................................. 31,436 33,930 35,248 34,161 34,039 33,860 -179 11 Foreign currencies.............................................................................. 50,940 50,343 51,375 49,723 47,374 46,759 -615 12 U.S. government assets, other than official reserve assets........................................ 127,814 111,164 95,958 93,570 94,016 90,116 -3,900 13 U.S. credits and other long-term assets /3/..................................................... 80,642 82,500 82,691 84,029 85,433 87,846 2,413 14 Repayable in dollars.......................................................................... 80,369 82,227 82,418 83,756 85,160 87,573 2,413 15 Other /4/..................................................................................... 273 273 273 273 273 273 0 16 U.S. foreign currency holdings and U.S. short-term assets /5/................................... 47,172 28,664 13,267 9,541 8,583 2,270 -6,313 17 U.S. private assets............................................................................... 16,698,417 16,124,579 16,923,754 17,351,919 17,694,604 17,622,873 -71,731 18 Direct investment at current cost............................................................... 4,759,096 4,826,428 4,983,377 5,077,750 5,123,775 5,200,421 76,646 19 Foreign securities.............................................................................. 6,999,263 6,662,323 7,159,326 7,531,223 7,823,264 7,710,167 -113,097 20 Bonds......................................................................................... 1,960,498 1,946,486 2,052,037 2,140,685 2,174,582 2,088,771 -85,811 21 Corporate stocks.............................................................................. 5,038,765 4,715,837 5,107,289 5,390,538 5,648,682 5,621,396 -27,286 22 U.S. claims on unaffiliated foreigners reported by U.S. nonbanking concerns..................... 869,251 845,301 845,865 844,752 906,061 999,115 93,054 23 U.S. claims reported by U.S. banks and securities brokers, not included elsewhere............... 4,070,807 3,790,527 3,935,186 3,898,194 3,841,504 3,713,170 -128,334 24 Foreign-owned assets in the United States (lines 25+26)............................................. 25,235,494 25,280,341 25,660,793 25,501,510 25,826,614 25,488,384 -338,230 25 Financial derivatives (gross negative fair value)................................................. 3,873,953 4,088,231 3,873,113 3,561,985 3,208,352 2,765,715 -442,637 26 Foreign-owned assets in the United States, excluding financial derivatives (lines 27+34).......... 21,361,541 21,192,110 21,787,680 21,939,525 22,618,262 22,722,669 104,407 27 Foreign official assets in the United States...................................................... 5,428,122 5,496,057 5,640,245 5,692,448 5,814,441 5,740,705 -73,736 28 U.S. government securities...................................................................... 4,316,906 4,400,470 4,487,789 4,526,896 4,561,428 4,460,227 -101,201 29 U.S. Treasury securities...................................................................... 3,722,551 3,857,872 3,958,112 4,032,204 4,090,723 4,009,164 -81,559 30 Other......................................................................................... 594,355 542,598 529,677 494,692 470,705 451,063 -19,642 31 Other U.S. government liabilities /6/........................................................... 123,406 125,065 127,657 128,279 128,554 131,965 3,411 32 U.S. liabilities reported by U.S. banks and securities brokers, not included elsewhere.......... 191,515 191,921 198,987 204,401 224,462 215,161 -9,301 33 Other foreign official assets................................................................... 796,295 778,601 825,812 832,872 899,997 933,352 33,355 34 Other foreign assets.............................................................................. 15,933,419 15,696,053 16,147,435 16,247,077 16,803,821 16,981,964 178,143 35 Direct investment at current cost............................................................... 2,913,781 2,976,814 3,029,271 3,057,326 3,074,647 3,110,911 36,264 36 U.S. Treasury securities........................................................................ 1,425,087 1,455,648 1,517,253 1,541,569 1,631,056 1,591,438 -39,618 37 U.S. securities other than U.S. Treasury securities............................................. 6,608,954 6,491,227 6,794,000 6,904,050 7,296,277 7,296,994 717 38 Corporate and other bonds..................................................................... 2,927,923 2,887,851 3,008,379 3,061,963 3,056,573 2,969,464 -87,109 39 Corporate stocks.............................................................................. 3,681,031 3,603,376 3,785,621 3,842,087 4,239,704 4,327,530 87,826 40 U.S. currency................................................................................... 415,143 422,259 438,415 454,227 459,184 468,670 9,486 41 U.S. liabilities to unaffiliated foreigners reported by U.S. nonbanking concerns................ 683,453 680,186 678,508 656,522 632,919 651,864 18,945 42 U.S. liabilities reported by U.S. banks and securities brokers, not included elsewhere.......... 3,887,001 3,669,919 3,689,988 3,633,383 3,709,738 3,862,087 152,349 Memoranda: 43 Direct investment abroad at market value.............................................................. 4,975,809 4,679,267 5,058,812 5,249,539 5,500,811 5,429,676 -71,135 44 Direct investment in the United States at market value................................................ 3,855,543 3,764,768 3,961,992 3,923,969 4,251,181 4,342,813 91,632 45 Direct investment abroad at historical cost........................................................... 4,169,123 4,224,965 4,370,424 4,453,307 4,499,331 4,575,978 76,647 46 Direct investment in the United States at historical cost............................................. 2,529,479 2,585,115 2,630,175 2,650,832 2,668,153 2,704,417 36,264 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