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Definitions

A U.S. affiliate is a U.S. business enterprise in which there is foreign direct investment—that is, in which a foreign parent owns 10 percent or more of the U.S. business enterprise.

A majority-owned U.S. affiliate is a U.S. affiliate in which the combined ownership of all foreign parents, either directly or indirectly, exceeds 50 percent.

A foreign parent is the first person (in the broad legal sense to include any individual, partnership, corporation, or other form of organization), resident outside the United States, that has a direct investment interest in the affiliate.

The ultimate owner, also referred to as ultimate beneficial owner (UBO), is that person, proceeding up a chain of majority ownership (where the entity above owns more than 50 percent of the entity below), beginning with and including the foreign parent, that is not owned more than 50 percent by another person. Unlike the foreign parent, the UBO of an affiliate may be located in the United States.

Employment covers the total number of full-time and part-time employees on the payroll at the end of the U.S. affiliate’s fiscal year.

Value added is the value of the final goods and services produced by a firm's labor and property. Value added represents the firm's contribution to gross domestic product. The estimates of value added in this release were prepared by summing cost and profit data collected in BEA's surveys of foreign direct investment in the United States and are conceptually consistent with BEA's estimates of U.S. value added by industry.

Expenditures for property, plant, and equipment cover total expenditures for land and depreciable structures and equipment; they are gross of any sales, retirements, or transfers of previously owned tangible assets.

Research and development (R&D) performed includes expenditures for R&D performed by the U.S. affiliate, whether the R&D was for their own use or for use by others, irrespective of the source of funding.

Statistical conventions

The statistics on the activities of U.S. affiliates of foreign MNEs are based primarily on data reported in the Annual and Benchmark Surveys of Foreign Direct Investment in the United States conducted by BEA. The statistics provide information on the operations and finances of U.S affiliates and cover the entire operations of the affiliate, irrespective of the percentage of foreign ownership.

Majority-owned U.S. affiliate shares of domestic activity are provided in this news release for employment. These shares are computed by dividing majority-owned U.S. affiliate activity levels by measures of domestic activity from other data sets that are approximately comparable. The majority-owned U.S. affiliate measures include activities in Puerto Rico and other U.S. territories; these activities are excluded in the corresponding domestic measures. Majority-owned U.S. affiliate data on employment in Puerto Rico and other U.S. territories are excluded to improve comparability. The domestic totals used to compute shares are detailed below:

Related statistics

Statistics on the activities of U.S. affiliates of foreign MNEs are one part of a broader set of U.S. International Economic Accounts that, taken together, provide a comprehensive, integrated, and detailed picture of U.S. international economic activities.

Statistics on direct investment and multinational enterprises include annual statistics on the activities of U.S. MNEs, detailed annual and quarterly statistics on direct investment, and annual statistics on new foreign direct investment in the United States.

Statistics on international services, released annually, include detailed annual information on trade in services and on services supplied through the channel of direct investment by affiliates of MNEs.

The International Investment Position (IIP) Accounts are released quarterly. The IIP is a statistical balance sheet that presents the dollar value of U.S. financial assets and liabilities with respect to foreign residents at a specific point in time.

The International Transactions Accounts (ITAs) are released quarterly. The ITAs are a statistical summary of economic activity between U.S. residents and the residents of other countries.

U.S. international trade in goods and services, released by BEA and the U.S. Census Bureau, provides monthly statistics on trade in goods and services.