The following is the unedited transcript of the news release from the U.S. Bureau of Economic Analysis.

The -$333.0 billion change in the net investment position from yearend 2004 to yearend 2005 was largely due to record private net foreign purchases of U.S. securities, including U.S. Treasury securities, and to depreciation of most major foreign currencies against the U.S. dollar, which lowered the dollar value of U.S.-owned assets abroad.

The impact of these net purchases and exchange-rate changes was largely offset by price appreciation of U.S.-held foreign stocks that surpassed by a large amount price appreciation of foreign-held U.S. stocks.

With direct investment valued at the current stock market value of owners'' equity, the net investment position was -$2,546.2 billion (preliminary) at yearend 2005, compared with -$2,448.7 billion (revised) at yearend 2004. The -$97.4 billion change in the net investment position on this basis resulted from the same factors as above. Price increases on direct investment were larger on this basis than with direct investment valued at current cost.

Foreign acquisitions of assets in the United States were $1,212.3 billion in 2005, down from $1,450.2 billion in 2004. Foreign official acquisitions were $199.5 billion, down from last year''s record $387.8 billion, as a result of sharply reduced net purchases of U.S. Treasury securities. Partly offsetting were stronger private net foreign purchases of U.S. securities, including U.S. Treasury securities.

Net private foreign purchases of U.S. Treasury securities were a record $199.5 billion, up from $102.9 billion. Net private foreign purchases of U.S. securities other than U.S. Treasury securities were a record $474.1 billion, up from $381.5 billion in 2004, of which net purchases of U.S. bonds were $388.4 billion, up from $321.9 billion, and net purchases of U.S. stocks were $85.8 billion, up from $59.5 billion.

U.S. banks'' liabilities increased $179.8 billion, down from last year''s increase of $336.7 billion, and U.S. nonbanks'' liabilities increased $30.1 billion, down from $93.3 billion. Foreign direct investment in the United States increased $109.8 billion, down from an increase of $133.2 billion.

U.S. acquisitions of assets abroad were $426.8 billion in 2005, down from a record $867.8 billion in 2004, as U.S. direct investment abroad and U.S. banks'' and nonbanks'' claims slowed sharply from last year''s pace. U.S. direct investment abroad increased only $9.1 billion, down from an increase of $244.1 billion in 2004.

U.S. banks'' claims increased $213.0 billion, down from an increase of $361.6 billion in 2004, and U.S. nonbanks'' claims increased $44.2 billion, down from an increase of $120.0 billion. In contrast, net U.S.purchases of foreign securities, mostly foreign stocks, increased to $180.1 billion from $146.5 billion.

Price appreciation in most foreign stock markets substantially increased the value of U.S. holdings of foreign corporate stocks and the value of owners'' equity of U.S. direct investment abroad on a market-value basis. Price appreciation in the U.S. stock market also increased the value of foreign holdings of U.S. corporate stocks, but by a much smaller amount.

Depreciation of most major foreign currencies against the U.S. dollar from yearend 2004 to yearend 2005 lowered the dollar value of U.S.-owned assets abroad, especially the value of U.S.-owned foreign corporate stocks and U.S. direct investment abroad at market value.

Valuation Methods for Direct Investment

The current-cost method values the U.S. and foreign parents'' share of their affiliates'' investment in plant and equipment using the current cost of capital equipment, in land using general price indexes, and in inventories using estimates of their replacement cost.The market-value method values the owners'' equity component of the direct investment position using indexes of stock market prices.


U.S.-owned assets abroad increased $822.0 billion to $10,008.7 billion with U.S. direct investment abroad valued at current cost, and they increased $1,003.9 billion to $11,079.2 billion with U.S. direct investment abroad valued at market value.

U.S. holdings of foreign securities increased $520.6 billion to $4,074.0 billion. Holdings of foreign stocks increased as a result of large price appreciation and record net U.S. purchases, which were partly offset by exchange-rate depreciation. Holdings of foreign bonds decreased as a result of price depreciation and exchange-rate depreciation that more than offset net U.S. purchases.

U.S. direct investment abroad valued at current cost increased $54.7 billion to $2,453.9 billion, mostly as a result of price appreciation. Financial transactions increased U.S. direct investment abroad $9.1 billion, down sharply from last year''s increase of $244.1 billion, largely as a result of tax incentives provided by the American Jobs Creation Act that encouraged the payment of dividends by foreign affiliates to their U.S. parent companies.

At market value, U.S. direct investment abroad increased $236.6 billion to $3,524.5 billion, reflecting strong price appreciation of owners'' equity resulting from an increase in foreign stock prices. Partly offsetting was exchange-rate depreciation.

Claims on foreigners reported by U.S. banks increased $202.8 billion to $2,430.7 billion. Claims on unaffiliated foreigners reported by U.S. nonbanking concerns increased $51.0 billion to $784.5 billion.U.S. official reserve assets decreased $1.5 billion to $188.0 billion.

Foreign-owned assets in the United States increased $1,155.0 billion to $12,702.5 billion with foreign direct investment in the United States valued at current cost, and they increased $1,101.3 billion to $13,625.4 billion with foreign direct investment in the United States valued at market value.