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 ______________________________________________________________________________________________ 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 www.bea.gov/international/modern.htm. ______________________________________________________________________________________________ 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 (table 1) (www.bea.gov/newsreleases/international/intinv/2014/xls/intinv413.xls). 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. The 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. 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. 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 foreign-owned assets in the United States that exceeded a $0.7 billion upward revision to U.S.-owned assets abroad. U.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 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 (www.bea.gov/_subscribe/index_vocus.htm) 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/2014/pdf/intinv413_fax.pdf) and Annual Highlights (www.bea.gov/newsreleases/international/intinv/2014/pdf/intinv413annual_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 fourth-quarter statistics for 2013 in this release are preliminary and will be revised on June 30, 2014. 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 (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 in the June release. 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 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: Change: Line Type of investment 2012 2013 2013:III to 2012:IV to IV I II III r IV p 2013:IV 2013:IV 1 Net international investment position of the United States (lines 2+3)................................ -3,863,892 -4,236,559 -4,455,040 -4,171,798 -4,577,504 -405,706 -713,612 2 Financial derivatives, net (line 5 less line 25).................................................... 57,776 40,025 59,352 47,963 73,178 25,215 15,402 3 Net international investment position, excluding financial derivatives (line 6 less line 26)........ -3,921,668 -4,276,584 -4,514,392 -4,219,761 -4,650,682 -430,921 -729,014 4 U.S.-owned assets abroad (lines 5+6)................................................................ 21,637,618 21,590,055 20,969,405 21,591,657 21,963,763 372,106 326,145 5 Financial derivatives (gross positive fair value)................................................. 3,619,761 3,248,377 2,825,067 2,761,416 2,815,095 53,679 -804,666 6 U.S.-owned assets abroad, excluding financial derivatives (lines 7+12+17)......................... 18,017,857 18,341,678 18,144,338 18,830,241 19,148,668 318,427 1,130,811 7 U.S. official reserve assets...................................................................... 572,368 553,058 446,207 483,426 448,333 -35,093 -124,035 8 Gold /2/........................................................................................ 433,434 417,941 311,707 346,878 314,975 -31,903 -118,459 9 Special drawing rights.......................................................................... 55,050 53,704 53,881 54,966 55,184 218 134 10 Reserve position in the International Monetary Fund............................................. 34,161 34,039 33,860 33,462 30,750 -2,712 -3,411 11 Foreign currencies.............................................................................. 49,723 47,374 46,759 48,120 47,424 -696 -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 13 U.S. credits and other long-term assets /3/..................................................... 84,029 85,433 88,636 89,912 90,951 1,039 6,922 14 Repayable in dollars.......................................................................... 83,756 85,160 88,363 89,639 90,678 1,039 6,922 15 Other /4/..................................................................................... 273 273 273 273 273 0 0 16 U.S. foreign currency holdings and U.S. short-term assets /5/................................... 9,541 8,583 2,265 1,131 645 -486 -8,896 17 U.S. private assets............................................................................... 17,351,919 17,694,604 17,607,230 18,255,772 18,608,739 352,967 1,256,820 18 Direct investment at current cost............................................................... 5,077,750 5,123,775 5,194,622 5,309,596 5,366,043 56,447 288,293 19 Foreign securities.............................................................................. 7,531,223 7,823,264 7,719,064 8,286,838 8,715,531 428,693 1,184,308 20 Bonds......................................................................................... 2,140,685 2,174,582 2,086,978 2,129,377 2,204,052 74,675 63,367 21 Corporate stocks.............................................................................. 5,390,538 5,648,682 5,632,086 6,157,461 6,511,479 354,018 1,120,941 22 U.S. claims on unaffiliated foreigners reported by U.S. nonbanking concerns..................... 844,752 906,061 974,663 987,104 935,682 -51,422 90,930 23 U.S. claims reported by U.S. banks and securities brokers, not included elsewhere............... 3,898,194 3,841,504 3,718,881 3,672,234 3,591,483 -80,751 -306,711 24 Foreign-owned assets in the United States (lines 25+26)............................................. 25,501,510 25,826,614 25,424,445 25,763,455 26,541,267 777,812 1,039,757 25 Financial derivatives (gross negative fair value)................................................. 3,561,985 3,208,352 2,765,715 2,713,453 2,741,917 28,464 -820,068 26 Foreign-owned assets in the United States, excluding financial derivatives (lines 27+34).......... 21,939,525 22,618,262 22,658,730 23,050,002 23,799,350 749,348 1,859,825 27 Foreign official assets in the United States...................................................... 5,692,448 5,814,441 5,744,199 5,844,774 5,948,424 103,650 255,976 28 U.S. government securities...................................................................... 4,526,896 4,561,428 4,460,203 4,486,853 4,506,863 20,010 -20,033 29 U.S. Treasury securities...................................................................... 4,032,204 4,090,723 4,009,152 4,017,000 4,056,266 39,266 24,062 30 Other......................................................................................... 494,692 470,705 451,051 469,853 450,597 -19,256 -44,095 31 Other U.S. government liabilities /6/........................................................... 128,279 128,554 132,268 137,100 139,693 2,593 11,414 32 U.S. liabilities reported by U.S. banks and securities brokers, not included elsewhere.......... 204,401 224,462 215,107 245,160 266,372 21,212 61,971 33 Other foreign official assets................................................................... 832,872 899,997 936,621 975,661 1,035,496 59,835 202,624 34 Other foreign assets.............................................................................. 16,247,077 16,803,821 16,914,531 17,205,228 17,850,926 645,698 1,603,849 35 Direct investment at current cost............................................................... 3,057,326 3,074,647 3,101,291 3,130,534 3,178,693 48,159 121,367 36 U.S. Treasury securities........................................................................ 1,541,569 1,631,056 1,585,232 1,637,655 1,747,512 109,857 205,943 37 U.S. securities other than U.S. Treasury securities............................................. 6,904,050 7,296,277 7,258,691 7,616,011 8,034,920 418,909 1,130,870 38 Corporate and other bonds..................................................................... 3,061,963 3,056,573 2,940,348 3,035,289 3,059,590 24,301 -2,373 39 Corporate stocks.............................................................................. 3,842,087 4,239,704 4,318,343 4,580,722 4,975,330 394,608 1,133,243 40 U.S. currency................................................................................... 454,227 459,184 468,670 481,334 491,949 10,615 37,722 41 U.S. liabilities to unaffiliated foreigners reported by U.S. nonbanking concerns................ 656,522 632,919 626,418 576,222 598,286 22,064 -58,236 42 U.S. liabilities reported by U.S. banks and securities brokers, not included elsewhere.......... 3,633,383 3,709,738 3,874,229 3,763,472 3,799,566 36,094 166,183 Memoranda: 43 Direct investment abroad at market value.............................................................. 5,249,539 5,500,811 5,435,081 5,973,419 6,349,512 376,093 1,099,973 44 Direct investment in the United States at market value................................................ 3,923,969 4,251,181 4,333,762 4,515,937 4,935,167 419,230 1,011,198 45 Direct investment abroad at historical cost........................................................... 4,453,307 4,499,331 4,570,179 4,685,154 4,741,601 56,447 288,294 46 Direct investment in the United States at historical cost............................................. 2,650,832 2,668,153 2,694,796 2,724,040 2,772,199 48,159 121,367 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