FOR WIRE TRANSMISSION: 8:30 A.M. EDT, TUESDAY, March 26, 2013 Christopher A. Gohrband: (202) 606-9564 BEA 13-11 Elena L. Nguyen: (202) 606-9555 Kevin Barefoot: (202) 606-9994 (For inquiries regarding direct investment) U.S. Net International Investment Position: End of the Fourth Quarter and Year 2012 _________________________________________________________________________________________ Newly-Available Statistics In this release, BEA introduces new U.S. international investment position statistics on a quarterly basis. The new statistics are available for the fourth quarter of 2005 through the fourth quarter of 2012. Previously-published yearend positions are not revised. These new statistics are part of BEA's effort to provide more frequent and timely statistics on cross-border linkages to help users better assess U.S. vulnerability to external financial shocks in the aftermath of the 2008 financial crisis. Going forward, quarterly statistics will be made available every March, June, September, and December via BEA news releases. _________________________________________________________________________________________ Fourth Quarter The U.S. net international investment position at the end of the fourth quarter of 2012 was -$4,416.2 billion (preliminary) as the value of foreign investments in the United States exceeded the value of U.S. investments abroad (table 1). At the end of the third quarter, the U.S. net international investment position was -$4,663.4 billion. The $247.2 billion change in the net position reflected a $207.2 billion decrease in the value of foreign-owned assets in the United States and a $40.0 billion increase in the value of U.S.-owned assets abroad. U.S.-owned assets abroad were $20,760.1 billion at the end of the fourth quarter compared with $20,720.2 billion at the end of the third quarter. The $40.0 billion increase reflected an increase of $318.6 billion in the value of U.S.-owned assets excluding financial derivatives that was mostly offset by a decrease of $278.7 billion in the value of financial derivatives. U.S.-owned assets abroad excluding financial derivatives were $17,140.3 billion at the end of the fourth quarter compared with $16,821.7 billion at the end of the third quarter. The $318.6 billion increase reflected $120.5 billion in financial outflows and $198.1 billion in valuation changes./1/ Foreign-owned assets in the United States were $25,176.3 billion at the end of the fourth quarter compared with $25,383.6 billion at the end of the third quarter. The $207.2 billion decrease reflected a decrease of $284.6 billion in the value of financial derivatives that was partly offset by an increase of $77.3 billion 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 $21,614.4 billion at the end of the fourth quarter compared with $21,537.0 billion at the end of the third quarter. The $77.3 billion increase reflected $176.0 billion in financial inflows and -$98.6 billion in valuation changes. Year 2012 The U.S. net international investment position was -$4,416.2 billion (preliminary) at the end of 2012 compared with -$4,030.3 billion at the end of 2011. The -$386.0 billion change in the net position from the end of 2011 to the end of 2012 reflected a $372.3 billion decrease in the value of U.S.-owned assets abroad and a $13.7 billion increase in the value of foreign-owned assets in the United States. U.S.-owned assets abroad were $20,760.1 billion at the end of 2012 compared with $21,132.4 billion at the end of 2011. The $372.3 billion decrease reflected a decrease of $1,084.9 billion in the value of financial derivatives that was mostly offset by an increase of $712.6 billion in the value of U.S.-owned assets abroad excluding financial derivatives. U.S.-owned assets abroad excluding financial derivatives were $17,140.3 billion at the end of 2012 compared with $16,427.7 billion at the end of 2011. The $712.6 billion increase reflected $730.6 billion in valuation changes as prices of foreign stocks increased in 2012 after falling in 2011. Financial inflows of $17.9 billion were partly offsetting. Foreign-owned assets in the United States were $25,176.3 billion at the end of 2012 compared with $25,162.6 billion at the end of 2011. The $13.7 billion increase reflected an increase of $1,030.2 billion in the value of foreign-owned assets in the United States excluding financial derivatives that was mostly offset by a decrease of $1,016.4 billion in the value of financial derivatives. Foreign-owned assets in the United States excluding financial derivatives were $21,614.4 billion at the end of 2012 compared with $20,584.2 billion at the end of 2011. The $1,030.2 billion increase reflected $384.9 billion in financial inflows and $645.3 billion in valuation changes as prices of U.S. corporate stocks and bonds increased in 2012. Additional statistics for the year 2012, including changes in positions resulting from financial flows and detailed valuation changes, along with historical revisions will be presented in the June 25, 2013 U.S. International Investment Position news release. * * * Valuing the Components of the U.S. International Investment Position Investment positions for long-term portfolio securities are based on market values from annual 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 their own accounts or for the accounts of their customers. Contractual (face) values come from 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 the Bureau of Economic Analysis (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 parents’ 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 and the year 2012..........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 (http://www.bea.gov/_subscribe/index_vocus.htm) of BEA releases and announcements. 1 For statistics on financial flows, see the financial account transactions of the U.S. International Transactions Accounts in Table 1 (http://www.bea.gov/iTable/iTableHtml.cfm?reqid=6&step=3&isuri=1&600=1). Detailed valuation changes by type of change for the year 2012 will be presented in the June 25, 2013 U.S. International Investment Position news release. 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 http://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,” (http://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 (http://www.bea.gov/international/intinv/2013/pdf/intinv412_fax.pdf) and Annual Highlights (http://www.bea.gov/international/intinv/2013/pdf/intinv412annual_fax.pdf) related to this release, the latest detailed statistics (http://www.bea.gov/international/index.htm#iip) for the U.S. international investment position, and a description of the estimation methods (http://www.bea.gov/scb/pdf/2010/02 February/0210_guide.pdf) used to compile them. The fourth-quarter statistics for 2012 in this release are preliminary and will be revised on June 25, 2013. 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 2011 2012 2012:III- 2011:IV- IV I II III IV p 2012:IV 2012:IV 1 Net international investment position of the United States (lines 2+3)................................ -4,030,250 -4,162,992 -4,680,073 -4,663,404 -4,416,243 247,161 -385,993 2 Financial derivatives, net (line 5 less line 25) ................................................... 126,252 77,084 69,043 51,892 57,776 5,884 -68,476 3 Net international investment position, excluding financial derivatives (line 6 less line 26)........ -4,156,502 -4,240,076 -4,749,116 -4,715,296 -4,474,019 241,277 -317,517 4 U.S.-owned assets abroad (lines 5+6))............................................................... 21,132,370 20,785,561 20,318,147 20,720,154 20,760,106 39,952 -372,264 5 Financial derivatives (gross positive fair value)................................................. 4,704,666 3,942,897 4,140,513 3,898,433 3,619,761 -278,672 -1,084,905 6 U.S.-owned assets abroad, excluding financial derivatives (lines 7+12+17)......................... 16,427,704 16,842,664 16,177,634 16,821,721 17,140,345 318,624 712,641 7 U.S. official reserve assets...................................................................... 536,036 572,578 556,620 606,277 570,648 -35,629 34,612 8 Gold /2/........................................................................................ 400,355 434,742 418,006 464,422 431,714 -32,708 31,359 9 Special drawing rights.......................................................................... 54,956 55,460 54,341 55,232 55,050 -182 94 10 Reserve position in the International Monetary Fund............................................. 30,080 31,436 33,930 35,248 34,161 -1,087 4,081 11 Foreign currencies.............................................................................. 50,645 50,940 50,343 51,375 49,723 -1,652 -922 12 U.S. government assets, other than official reserve assets........................................ 178,901 127,824 111,174 95,970 93,790 -2,180 -85,111 13 U.S. credits and other long-term assets /3/..................................................... 78,373 80,652 82,510 82,703 84,248 1,545 5,875 14 Repayable in dollars.......................................................................... 78,100 80,379 82,237 82,430 83,975 1,545 5,875 15 Other /4/..................................................................................... 273 273 273 273 273 0 0 16 U.S. foreign currency holdings and U.S. short-term assets /5/................................... 100,528 47,172 28,664 13,267 9,542 -3,725 -90,986 17 U.S. private assets............................................................................... 15,712,767 16,142,262 15,509,840 16,119,474 16,475,907 356,433 763,140 18 Direct investment at current cost............................................................... 4,681,569 4,801,217 4,825,981 4,897,840 4,944,427 46,587 262,858 19 Foreign securities.............................................................................. 5,922,001 6,424,890 6,054,854 6,432,218 6,763,173 330,955 841,172 20 Bonds......................................................................................... 1,763,754 1,775,337 1,747,955 1,802,335 1,843,629 41,294 79,875 21 Corporate stocks.............................................................................. 4,158,247 4,649,553 4,306,899 4,629,883 4,919,544 289,661 761,297 22 U.S. claims on unaffiliated foreigners reported by U.S. nonbanking concerns..................... 796,827 849,967 839,634 846,395 870,149 23,754 73,322 23 U.S. claims reported by U.S. banks and securities brokers, not included elsewhere............... 4,312,370 4,066,188 3,789,371 3,943,021 3,898,158 -44,863 -414,212 24 Foreign-owned assets in the United States (lines 25+26)............................................. 25,162,620 24,948,553 24,998,220 25,383,558 25,176,349 -207,209 13,729 25 Financial derivatives (gross negative fair value)................................................. 4,578,414 3,865,813 4,071,470 3,846,541 3,561,985 -284,556 -1,016,429 26 Foreign-owned assets in the Unites States, excluding financial derivatives (lines 27+34).......... 20,584,206 21,082,740 20,926,750 21,537,017 21,614,364 77,347 1,030,158 27 Foreign official assets in the United States...................................................... 5,250,792 5,344,094 5,446,794 5,615,555 5,681,262 65,707 430,470 28 U.S. government securities...................................................................... 4,277,348 4,319,166 4,430,658 4,546,139 4,600,858 54,719 323,510 29 U.S. Treasury securities...................................................................... 3,653,065 3,696,626 3,820,663 3,925,250 3,985,849 60,599 332,784 30 Other......................................................................................... 624,283 622,540 609,995 620,889 615,009 -5,880 -9,274 31 Other U.S. government liabilities /6/........................................................... 119,359 122,680 124,227 126,771 127,326 555 7,967 32 U.S. liabilities reported by U.S. banks and securities brokers, not included elsewhere.......... 209,550 190,424 196,424 203,871 214,479 10,608 4,929 33 Other foreign official assets................................................................... 644,535 711,824 695,485 738,774 738,599 -175 94,064 34 Other foreign assets.............................................................................. 15,333,414 15,738,646 15,479,956 15,921,462 15,933,102 11,640 599,688 35 Direct investment at current cost............................................................... 2,908,791 2,932,170 2,992,683 3,037,527 3,070,383 32,856 161,592 36 U.S. Treasury securities........................................................................ 1,418,050 1,434,919 1,476,428 1,523,526 1,540,207 16,681 122,157 37 U.S. securities other than U.S. Treasury securities............................................. 5,968,177 6,378,928 6,224,331 6,541,385 6,580,029 38,644 611,852 38 Corporate and other bonds..................................................................... 2,909,962 2,934,845 2,902,018 2,990,435 3,022,400 31,965 112,438 39 Corporate stocks.............................................................................. 3,058,215 3,444,083 3,322,313 3,550,950 3,557,629 6,679 499,414 40 U.S. currency................................................................................... 397,086 415,143 422,259 438,415 454,227 15,812 57,141 41 U.S. liabilities to unaffiliated foreigners reported by U.S. nonbanking concerns................ 629,728 682,005 678,136 678,101 662,054 -16,047 32,326 42 U.S. liabilities reported by U.S. banks and securities brokers, not included elsewhere.......... 4,011,582 3,895,481 3,686,119 3,702,508 3,626,202 -76,306 -385,380 Memoranda: 43 Direct investment abroad at market value.............................................................. 4,499,962 4,960,890 4,639,071 5,025,637 5,191,116 165,479 691,154 44 Direct investment in the United States at market value................................................ 3,509,359 3,846,691 3,762,669 3,953,586 3,931,976 -21,610 422,617 45 Direct investment abroad at historical cost........................................................... 4,155,551 4,275,199 4,299,963 4,371,822 4,418,409 46,587 262,858 46 Direct investment in the United States at historical cost............................................. 2,547,828 2,571,206 2,631,720 2,676,564 2,709,419 32,855 161,591 p Preliminary 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