FOR WIRE TRANSMISSION: 8:30 A.M. EST, MONDAY, December 30, 2013 Christopher A. Gohrband: (202) 606-9564 BEA 13-66 Elena L. Nguyen: (202) 606-9555 U.S. Net International Investment Position: End of Third Quarter 2013 The U.S. net international investment position at the end of the third quarter of 2013 was -$4,165.6 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/intinv313.xls). At the end of the second quarter, the U.S. net international investment position was -$4,455.0 billion (revised). The $289.5 billion increase in the net position reflected a $621.5 billion increase in the value of U.S.-owned assets abroad that exceeded a $332.1 billion increase in the value of foreign-owned assets in the United States. The U.S. net position increased primarily as rising foreign stock prices, as well as the appreciation of foreign currencies relative to the U.S. dollar, increased the value of U.S.-owned assets abroad more than the increase in the value of foreign-owned assets in the United States. The U.S. net international investment position increased 6.5 percent in the third quarter, compared with a 5.2-percent decrease in the second quarter and an average quarterly decrease of 7.6 percent from the first quarter of 2011 through the second quarter of 2013. The net position was equal to 2.2 percent of the value of all U.S. financial assets at the end of the third quarter, down from 2.4 percent at the end of the second quarter./1/ U.S.-owned assets abroad were $21,590.9 billion at the end of the third quarter compared with $20,969.4 billion at the end of the second quarter. The $621.5 billion increase reflected a $687.4 billion increase in the value of U.S.-owned assets abroad excluding financial derivatives that was partly offset by a $65.9 billion decrease in the value of financial derivatives. U.S.-owned assets abroad excluding financial derivatives were $18,831.7 billion at the end of the third quarter compared with $18,144.3 billion at the end of the second quarter. The $687.4 billion increase reflected a $606.6 billion increase resulting from valuation changes and an $80.8 billion increase resulting from financial outflows./2/ Valuation changes were mainly attributable to the increase in foreign stock prices that raised the value of U.S. holdings of foreign stocks and also to the appreciation of foreign currencies relative to the U.S. dollar. Foreign-owned assets in the United States were $25,756.5 billion at the end of the third quarter compared with $25,424.4 billion at the end of the second quarter. The $332.1 billion increase reflected a $385.8 billion increase in the value of foreign-owned assets in the United States excluding financial derivatives that was partly offset by a $53.8 billion decrease in the value of financial derivatives. Foreign-owned assets in the United States excluding financial derivatives were $23,044.6 billion at the end of the third quarter compared with $22,658.7 billion at the end of the second quarter. The $385.8 billion increase reflected a $230.3 billion increase resulting from valuation changes and a $155.6 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. Treasury and agency debt due to falling prices. The appreciation of foreign currencies relative to the U.S. dollar had very little impact on the value of foreign-owned assets, which are mostly denominated in U.S. dollars. Revisions The U.S. net international investment position at the end of the second quarter of 2013 was revised to -$4,455.0 billion from a previously-published value of -$4,504.1 billion. The $49.1 billion upward revision to the net position reflected a $63.9 billion downward revision to foreign-owned assets in the United States that exceeded a $14.9 billion downward revision to U.S.-owned assets abroad. U.S.-owned assets abroad at the end of the second quarter were revised to $20,969.4 billion from $20,984.3 billion, and foreign-owned assets in the United States were revised to $25,424.4 billion from $25,488.4 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./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. ______________________ NOTE: This news release is available on BEA’s Web site along with Quarterly Highlights (www.bea.gov/newsreleases/international/intinv/2013/pdf/intinv313_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 third-quarter statistics for 2013 in this release are preliminary and will be revised on March 26, 2014. 1. Board of Governors of the Federal Reserve System (FRS), Flow of Funds Accounts of the United States, Flows and Outstandings, Third Quarter 2013, Release Z.1. Statistical Release (Washington, DC: FRS, December 9, 2013) Table L.5, page 11. According to the December 9, 2013 Z.1 release, the value of all U.S. financial assets was $188,503.7 billion at the end of the third quarter. U.S. assets abroad from the international investment position were $21,590.9 billion at the end of the third quarter, 11.5% of all U.S. assets, up from 11.4% in the second quarter and down from the 13.8% series peak in the fourth quarter of 2008. 2. For statistics on financial flows, see the financial account transactions in table 1 (http://www.bea.gov/iTable/iTableHtml.cfm?reqid=6&step=3&isuri=1&600=1&601=2013,2012&602= 1&603=0&604=0&605=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. 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. 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,” (www.bea.gov/scb/pdf/internat/bpa/1991/0591bop.pdf) Survey of Current Business 71 (May 1991): 40–49. 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:II to I II III IV I II r III p 2013:III 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 -4,455,040 -4,165,583 289,457 2 Financial derivatives, net (line 5 less line 25).................................................... 76,286 67,589 52,493 57,776 40,025 59,352 47,248 -12,104 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 -4,514,392 -4,212,831 301,561 4 U.S.-owned assets abroad (lines 5+6)................................................................ 21,349,048 20,948,183 21,551,595 21,637,618 21,590,055 20,969,405 21,590,938 621,533 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 2,759,201 -65,866 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 18,144,338 18,831,737 687,399 7 U.S. official reserve assets...................................................................... 572,578 556,620 606,277 572,368 553,058 446,207 483,426 37,219 8 Gold /2/........................................................................................ 434,742 418,006 464,422 433,434 417,941 311,707 346,878 35,171 9 Special drawing rights.......................................................................... 55,460 54,341 55,232 55,050 53,704 53,881 54,966 1,085 10 Reserve position in the International Monetary Fund............................................. 31,436 33,930 35,248 34,161 34,039 33,860 33,462 -398 11 Foreign currencies.............................................................................. 50,940 50,343 51,375 49,723 47,374 46,759 48,120 1,361 12 U.S. government assets, other than official reserve assets........................................ 127,814 111,164 95,958 93,570 94,016 90,901 90,052 -849 13 U.S. credits and other long-term assets /3/..................................................... 80,642 82,500 82,691 84,029 85,433 88,636 88,933 297 14 Repayable in dollars.......................................................................... 80,369 82,227 82,418 83,756 85,160 88,363 88,660 297 15 Other /4/..................................................................................... 273 273 273 273 273 273 273 0 16 U.S. foreign currency holdings and U.S. short-term assets /5/................................... 47,172 28,664 13,267 9,541 8,583 2,265 1,119 -1,146 17 U.S. private assets............................................................................... 16,698,417 16,124,579 16,923,754 17,351,919 17,694,604 17,607,230 18,258,259 651,029 18 Direct investment at current cost............................................................... 4,759,096 4,826,428 4,983,377 5,077,750 5,123,775 5,194,622 5,318,629 124,007 19 Foreign securities.............................................................................. 6,999,263 6,662,323 7,159,326 7,531,223 7,823,264 7,719,064 8,291,808 572,744 20 Bonds......................................................................................... 1,960,498 1,946,486 2,052,037 2,140,685 2,174,582 2,086,978 2,127,228 40,250 21 Corporate stocks.............................................................................. 5,038,765 4,715,837 5,107,289 5,390,538 5,648,682 5,632,086 6,164,580 532,494 22 U.S. claims on unaffiliated foreigners reported by U.S. nonbanking concerns..................... 869,251 845,301 845,865 844,752 906,061 974,663 980,805 6,142 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 3,718,881 3,667,017 -51,864 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 25,424,445 25,756,521 332,076 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 2,711,953 -53,762 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 22,658,730 23,044,568 385,838 27 Foreign official assets in the United States...................................................... 5,428,122 5,496,057 5,640,245 5,692,448 5,814,441 5,744,199 5,843,282 99,083 28 U.S. government securities...................................................................... 4,316,906 4,400,470 4,487,789 4,526,896 4,561,428 4,460,203 4,485,873 25,670 29 U.S. Treasury securities...................................................................... 3,722,551 3,857,872 3,958,112 4,032,204 4,090,723 4,009,152 4,016,025 6,873 30 Other......................................................................................... 594,355 542,598 529,677 494,692 470,705 451,051 469,848 18,797 31 Other U.S. government liabilities /6/........................................................... 123,406 125,065 127,657 128,279 128,554 132,268 136,437 4,169 32 U.S. liabilities reported by U.S. banks and securities brokers, not included elsewhere.......... 191,515 191,921 198,987 204,401 224,462 215,107 245,159 30,052 33 Other foreign official assets................................................................... 796,295 778,601 825,812 832,872 899,997 936,621 975,813 39,192 34 Other foreign assets.............................................................................. 15,933,419 15,696,053 16,147,435 16,247,077 16,803,821 16,914,531 17,201,286 286,755 35 Direct investment at current cost............................................................... 2,913,781 2,976,814 3,029,271 3,057,326 3,074,647 3,101,291 3,131,595 30,304 36 U.S. Treasury securities........................................................................ 1,425,087 1,455,648 1,517,253 1,541,569 1,631,056 1,585,232 1,638,634 53,402 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 7,258,691 7,614,454 355,763 38 Corporate and other bonds..................................................................... 2,927,923 2,887,851 3,008,379 3,061,963 3,056,573 2,940,348 3,034,976 94,628 39 Corporate stocks.............................................................................. 3,681,031 3,603,376 3,785,621 3,842,087 4,239,704 4,318,343 4,579,478 261,135 40 U.S. currency................................................................................... 415,143 422,259 438,415 454,227 459,184 468,670 481,334 12,664 41 U.S. liabilities to unaffiliated foreigners reported by U.S. nonbanking concerns................ 683,453 680,186 678,508 656,522 632,919 626,418 565,620 -60,798 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 3,874,229 3,769,649 -104,580 Memoranda: 43 Direct investment abroad at market value.............................................................. 4,975,809 4,679,267 5,058,812 5,249,539 5,500,811 5,435,081 5,980,129 545,048 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 4,333,762 4,524,450 190,688 45 Direct investment abroad at historical cost........................................................... 4,169,123 4,224,965 4,370,424 4,453,307 4,499,331 4,570,179 4,694,186 124,007 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 2,694,796 2,725,102 30,306 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