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Best money market account rates today, July 29, 2025 (Earn up to 4.41% APY)

Best money market account rates today, July 29, 2025 (Earn up to 4.41% APY)

Yahoo3 days ago
Find out which banks are offering the top rates. Money market accounts (MMAs) can be a great place to store your cash if you're looking for a relatively high interest rate along with liquidity and flexibility.
Unlike traditional savings accounts, MMAs typically offer better returns, and they may also provide check-writing privileges and debit card access. This makes these accounts ideal for holding long-term savings that you want to grow over time, but can still access when needed for certain purchases or bills.
Where are the best money market interest rates today?
The national average interest rate for money market accounts is just 0.62%, according to the FDIC. However, the best money market account rates often pay above 4% APY — similar to the rates offered on high-yield savings accounts.
Here is a look at today's highest money market account rates:
Interested in earning the best possible interest rate on your savings balance? Here is a look at some of the best savings and money market account rates available today from our verified partners.
Historical money market account rates
Money market account rates have fluctuated significantly in recent years, largely due to changes in the Federal Reserve's target interest rate, known as the federal funds rate.
In the wake of the 2008 financial crisis, for example, interest rates were kept extremely low to stimulate the economy. The Fed slashed the federal funds rate to near zero, which led to very low MMA rates. During this time, money market account rates were typically around 0.10% to 0.50%, with many accounts offering rates on the lower end of that range.
Eventually, the Fed began raising interest rates gradually as the economy improved. This led to higher yields on savings products, including MMAs. However, in 2020, the COVID-19 pandemic led to a brief but sharp recession, and the Fed once again cut its benchmark rate to near zero to combat the economic fallout. This resulted in a sharp decline in MMA rates.
But starting in 2022, the Fed embarked on a series of aggressive interest rate hikes to combat inflation. This led to historically high deposit rates across the board. By late 2023, money market account rates had risen substantially, with many accounts offering 4.00% or higher.
Throughout 2024, MMA interest rates remained elevated, and it was possible to find accounts that paid well above 5% APY.
Today, rates remain high by historical standards, though they've begun a downward trajectory following the Fed's most recent rate cuts later in late 2024. Today, online banks and credit unions tend to offer the highest rates.
What to consider when choosing a money market account
When comparing money market accounts, it's important to look beyond just the interest rate. Other factors, such as minimum balance requirements, fees, and withdrawal limits, can impact the total value you get from the account.
For example, it's common for money market accounts to require a large minimum balance in order to earn the highest advertised rate — as much as $5,000 or more in some cases. Other accounts may charge monthly maintenance fees that can eat into your interest earnings.
However, there are several MMAs available that offer competitive rates without any balance requirements, fees, or other restrictions. That's why it's important to shop around and compare accounts before making a decision.
Additionally, ensure that the account you choose is insured by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA), which guarantees deposits up to $250,000 per institution, per depositor. Most money market accounts are federally insured, but it's important to double-check in the rare case the financial institution fails.
Read more: Are money market accounts safe?
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Money market account rates: Frequently asked questions
What are money market rates right now?
Today, money market account rates are still quite high by historical standards. The best accounts provide over 4% APY, with the highest rate available today at 4.51% APY.
How much will $10,000 make in a money market account?
The amount $10,000 will earn in a money market account depends on the annual percentage yield (APY) offered by the account, as well as how long you keep your money in the account. Let's say you choose to deposit $10,000 in a money market account that earns 4% APY with monthly compounding interest. After one year, you would earn $407.44 in interest, for a total balance of $10,407.44.
What is the downside of a money market account?
Money market accounts are generally safe and flexible savings options, but like any other financial product, they come with some downsides, too.
For instance, some MMAs require a high minimum balance to open the account or to earn the advertised APY. Failing to maintain that minimum balance can result in penalties or reduced interest rates. Additionally, money market rates are variable, which means they can change at any time at the bank's discretions. If interest rates drop, so will your account APY, which can make future earnings unpredictable compared to fixed-rate products like CDs.
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AES Reports Second Quarter 2025 Results; On Track to Deliver on 2025 Guidance and Long-Term Targets
AES Reports Second Quarter 2025 Results; On Track to Deliver on 2025 Guidance and Long-Term Targets

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AES Reports Second Quarter 2025 Results; On Track to Deliver on 2025 Guidance and Long-Term Targets

Second Quarter 2025 Renewables SBU Adjusted EBITDA Grew 56% Versus Second Quarter 2024 Strategic Accomplishments On track to add 3.2 GW of new projects in operation in 2025 1.9 GW already completed Remaining 1.3 GW 78% complete Since the first quarter call in May, signed or awarded new long-term PPAs for 1.6 GW of solar and wind, all with data center companies PPA backlog of 12 GW, including 5.2 GW under construction AES Indiana filed a petition for regulatory rate review with the Indiana Utility Regulatory Commission (IURC) Q2 2025 Financial Highlights GAAP Financial Metrics Net Loss of $150 million, compared to Net Income of $153 million in Q2 2024 Net Loss Attributable to The AES Corporation of $95 million, compared to Net Income Attributable to The AES Corporation of $276 million in Q2 2024 Diluted EPS of ($0.15), compared to $0.39 in Q2 2024 Non-GAAP Adjusted Financial Metrics Adjusted EBITDA1 of $681 million, compared to $658 million in Q2 2024 Adjusted EBITDA with Tax Attributes1,2 of $1,057 million, compared to $849 million in Q2 2024 Adjusted EPS3 of $0.51, compared to $0.38 in Q2 2024 Financial Position and Outlook Reaffirming 2025 guidance for Adjusted EBITDA1 of $2,650 to $2,850 million Reaffirming annualized growth target of 5% to 7% through 2027, off a base of 2023 guidance Reaffirming expectation for 2025 Adjusted EBITDA with Tax Attributes1,2 of $3,950 to $4,350 million Reaffirming 2025 guidance for Adjusted EPS3 of $2.10 to $2.26 Reaffirming annualized growth target of 7% to 9% through 2025, off a base of 2020 and 7% to 9% through 2027, off a base of 2023 guidance ARLINGTON, Va., July 31, 2025 /PRNewswire/ -- The AES Corporation (NYSE: AES) today reported financial results for the quarter ended June 30, 2025. "AES is in a uniquely strong position due to our diversified operating portfolio, well-protected 12 GW backlog of signed long-term PPAs, and established domestic supply chain," said Andrés Gluski, AES President and Chief Executive Officer. "With 1.6 GW of signed PPAs with data centers since our first quarter results in May, we are a leader in the fastest growing segment in the market." "We made excellent progress during the second quarter of 2025, as demonstrated by the robust growth in Adjusted EBITDA at our Renewables SBU, which was 56% higher than in the same period last year," said Stephen Coughlin, AES Executive Vice President and Chief Financial Officer. "Our strong track record with our customers, resilient supply chain strategy, and advanced construction execution enable us to confidently reaffirm both our 2025 guidance and long-term growth rate targets through 2027." Q2 2025 Financial Results Second quarter 2025 Net Loss was $150 million, a decrease of $303 million compared to Net Income of $153 million in second quarter 2024, primarily due to higher day-one losses on sales type leases at AES Clean Energy Development4. In addition, Net Income was negatively impacted by higher income tax expense, lower margins from the Energy Infrastructure Strategic Business Unit (SBU) from prior year unrealized derivative gains and higher prior year revenues from the monetization of the Warrior Run coal plant PPA. This decrease was partially offset by the impact of reclassifying Mong Duong from held-for-sale to held and used, and higher contributions from renewables projects placed in service in the current year. Second quarter 2025 Adjusted EBITDA5 (a non-GAAP financial measure) was $681 million, an increase of $23 million compared to second quarter 2024, driven by higher contributions from the Renewables SBU primarily due to higher revenues from renewables projects placed in service and prior year outages in Colombia. This was partially offset by the sale of AES Brasil, higher prior year revenues from the monetization of the Warrior Run coal plant PPA, and the impact of the sell-down of AES Ohio in the Utilities SBU. Second quarter 2025 Adjusted EBITDA with Tax Attributes5,6 (a non-GAAP financial measure) was $1,057 million, an increase of $208 million compared to second quarter 2024, due to higher realized tax attributes driven by more projects placed in service and higher income from tax credit transfers, as well as the drivers above. Second quarter 2025 Diluted Earnings Per Share from Continuing Operations (Diluted EPS) was ($0.15), a decrease of $0.54 compared to second quarter 2024, mainly driven by higher income tax expense, day-one losses on the commencement of sales-type leases at AES Clean Energy Development, and lower earnings at the Energy Infrastructure SBU primarily due to higher prior year revenues from the monetization of the Warrior Run coal plant PPA. This was partially offset by the derecognition of a valuation allowance on the loan receivable upon reclassifying Mong Duong from held-for-sale to held and used. Second quarter 2025 Adjusted Earnings Per Share7 (Adjusted EPS, a non-GAAP financial measure) was $0.51, an increase of $0.13 compared to second quarter 2024, mainly driven by a lower adjusted tax rate and higher contributions due to new renewables projects placed in service, partially offset by lower contributions from the Utilities SBU due to planned outages. Strategic Accomplishments The Company's backlog, which consists of projects with signed contracts, but which are not yet operational, is 12 GW, including 5.2 GW under construction. Since the Company's first quarter 2025 earnings call in May 2025, the Company: Completed the construction of 1.2 GW of energy storage and solar, including the 1 GW Bellefield 1 solar-plus-storage facility, for a total of 1.9 GW year-to-date, and is on track to add a total of 3.2 GW to its operating portfolio by year-end 2025; and Signed or was awarded new long-term PPAs for 1.6 GW of renewables, all with data center companies, and a total of 2 GW year-to-date. In June, AES Indiana filed a petition for regulatory rate review with the Indiana Utility Regulatory Commission (IURC). This is AES Indiana's first rate case using a forward-looking test year, which will enable a more efficient investment program to best serve customers with cost-effective and reliable electricity service. Guidance and Expectations8,10 The Company is reaffirming its 2025 guidance for Adjusted EBITDA8 of $2,650 to $2,850 million. Growth in 2025 is expected to be driven by contributions from new renewables projects, rate base growth at the Company's US utilities, and normalized results in Colombia and Mexico, partially offset by revenues from the monetization of the Warrior Run coal plant PPA in 2024 and asset sales. The Company is reaffirming its expectation for annualized growth in Adjusted EBITDA8 of 5% to 7% through 2027, from a base of its 2023 guidance of $2,600 to $2,900 million. The Company is reaffirming its expectation that 2025 Adjusted EBITDA with Tax Attributes8,9 of $3,950 to $4,350 million. The Company is reaffirming its 2025 Adjusted EPS10 guidance of $2.10 to $2.26. Growth in 2025 is expected to be primarily driven by contributions from new renewables projects, rate base growth at the Company's US utilities, and normalized results in Colombia and Mexico, partially offset by revenues from the monetization of the Warrior Run coal plant PPA in 2024, asset sales, higher Parent interest, and a higher adjusted tax rate. The Company is reaffirming its annualized growth target for Adjusted EPS10 of 7% to 9% through 2025, from a base year of 2020. The Company is also reaffirming its annualized growth target for Adjusted EPS8 of 7% to 9% through 2027, from a base of its 2023 guidance of $1.65 to $1.75. The Company's 2025 guidance is based on foreign currency and commodity forward curves as of June 30, 2025. The Company expects to maintain its current quarterly dividend payment of $0.17595 going forward. Non-GAAP Financial Measures See Non-GAAP Measures for definitions of Adjusted EBITDA, Adjusted EBITDA with Tax Attributes, Tax Attributes, Adjusted Earnings Per Share, and Adjusted Pre-Tax Contribution, as well as reconciliations to the most comparable GAAP financial measures. Attachments Condensed Consolidated Statements of Operations, Segment Information, Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Cash Flows, Non-GAAP Financial Measures and Parent Financial Information. Conference Call Information AES will host a conference call on Friday, August 1, 2025 at 10:00 a.m. Eastern Time (ET). Interested parties may listen to the teleconference by dialing 1-833-470-1428 at least ten minutes before the start of the call. International callers should dial +1-404-975-4839. The Participant Access Code for this call is 439668. Internet access to the conference call and presentation materials will be available on the AES website at by selecting "Investors" and then "Presentations and Webcasts." A webcast replay will be accessible at beginning shortly after the completion of the call.1 Adjusted EBITDA is a non-GAAP financial measure. See attached "Non-GAAP Measures" for definition of Adjusted EBITDA and a description of the adjustments to reconcile Adjusted EBITDA to Net Income (Loss) for the quarter ended June 30, 2025. The Company is not able to provide a corresponding GAAP equivalent or reconciliation for its Adjusted EBITDA guidance without unreasonable effort. 2 Pre-tax effect of Production Tax Credits, Investment Tax Credits, and depreciation tax deductions allocated to tax equity investors, as well as the tax benefit recorded from tax credits retained or transferred to third parties. 3 Adjusted EPS is a non-GAAP financial measure. See attached "Non-GAAP Measures" for definition of Adjusted EPS and a description of the adjustments to reconcile Adjusted EPS to Diluted EPS for the quarter ended June 30, 2025. The Company is not able to provide a corresponding GAAP equivalent or reconciliation for its Adjusted EPS guidance without unreasonable effort. 4 Losses recognized on the commencement of sales-type leases primarily relate to the exclusion of the value of Investment Tax Credits from the fair value of the renewable asset. 5 Adjusted EBITDA is a non-GAAP financial measure. See attached "Non-GAAP Measures" for definition of Adjusted EBITDA and a description of the adjustments to reconcile Adjusted EBITDA to Net Income for the quarter ended June 30, 2025. The Company is not able to provide a corresponding GAAP equivalent or reconciliation for its Adjusted EBITDA guidance without unreasonable effort. 6 Pre-tax effect of Production Tax Credits, Investment Tax Credits, and depreciation tax deductions allocated to tax equity investors, as well as the tax benefit recorded from tax credits retained or transferred to third parties. 7 Adjusted EPS is a non-GAAP financial measure. See attached "Non-GAAP Measures" for definition of Adjusted EPS and a description of the adjustments to reconcile Adjusted EPS to Diluted EPS for the quarter ended June 30, 2025. The Company is not able to provide a corresponding GAAP equivalent or reconciliation for its Adjusted EPS guidance without unreasonable effort. 8 Adjusted EBITDA is a non-GAAP financial measure. See attached "Non-GAAP Measures" for definition of Adjusted EBITDA and a description of the adjustments to reconcile Adjusted EBITDA to Net Income for the quarter ended June 30, 2025. The Company is not able to provide a corresponding GAAP equivalent or reconciliation for its Adjusted EBITDA guidance without unreasonable effort. 9 Pre-tax effect of Production Tax Credits, Investment Tax Credits, and depreciation tax deductions allocated to tax equity investors, as well as the tax benefit recorded from tax credits retained or transferred to third parties. 10 Adjusted EPS is a non-GAAP financial measure. See attached "Non-GAAP Measures" for definition of Adjusted EPS and a description of the adjustments to reconcile Adjusted EPS to Diluted EPS for the quarter ended June 30, 2025. The Company is not able to provide a corresponding GAAP equivalent or reconciliation for its Adjusted EPS guidance without unreasonable effort. About AES The AES Corporation (NYSE: AES) is a Fortune 500 global energy company accelerating the future of energy. Together with our many stakeholders, we're improving lives by delivering the greener, smarter energy solutions the world needs. Our diverse workforce is committed to continuous innovation and operational excellence, while partnering with our customers on their strategic energy transitions and continuing to meet their energy needs today. For more information, visit Safe Harbor Disclosure This news release contains forward-looking statements within the meaning of the Securities Act of 1933 and of the Securities Exchange Act of 1934. Such forward-looking statements include, but are not limited to, those related to future earnings, growth and financial and operating performance. Forward-looking statements are not intended to be a guarantee of future results, but instead constitute AES' current expectations based on reasonable assumptions. Forecasted financial information is based on certain material assumptions. These assumptions include, but are not limited to, our expectations regarding accurate projections of future interest rates, commodity price and foreign currency pricing, continued normal levels of operating performance and electricity volume at our distribution companies and operational performance at our generation businesses consistent with historical levels, as well as the execution of PPAs, conversion of our backlog and growth investments at normalized investment levels, and rates of return consistent with prior experience. Actual results could differ materially from those projected in our forward-looking statements due to risks, uncertainties and other factors. Important factors that could affect actual results are discussed in AES' filings with the Securities and Exchange Commission (the "SEC"), including, but not limited to, the risks discussed under Item 1A: "Risk Factors" and Item 7: "Management's Discussion & Analysis" in AES' 2024 Annual Report on Form 10-K and in subsequent reports filed with the SEC. Readers are encouraged to read AES' filings to learn more about the risk factors associated with AES' business. AES undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except where required by law. Any Stockholder who desires a copy of the Company's 2024 Annual Report on Form 10-K filed March 11, 2025 with the SEC may obtain a copy (excluding the exhibits thereto) without charge by addressing a request to the Office of the Corporate Secretary, The AES Corporation, 4300 Wilson Boulevard, Arlington, Virginia 22203. Exhibits also may be requested, but a charge equal to the reproduction cost thereof will be made. A copy of the Annual Report on Form 10-K may be obtained by visiting the Company's website at Website Disclosure AES uses its website, including its quarterly updates, as channels of distribution of Company information. The information AES posts through these channels may be deemed material. Accordingly, investors should monitor our website, in addition to following AES' press releases, quarterly SEC filings and public conference calls and webcasts. In addition, you may automatically receive e-mail alerts and other information about AES when you enroll your e-mail address by visiting the "Subscribe to Alerts" page of AES' Investors website. The contents of AES' website, including its quarterly updates, are not, however, incorporated by reference into this release. THE AES CORPORATION Condensed Consolidated Statements of Operations (Unaudited) Three Months Ended June 30,Six Months Ended June 30,2025202420252024(in millions, except share and per share amounts) Revenue:Non-Regulated $ 1,922$ 2,070$ 3,863$ 4,302 Regulated 9338721,9181,725 Total revenue 2,8552,9425,7816,027 Cost of Sales:Non-Regulated (1,607)(1,671)(3,268)(3,404) Regulated (795)(718)(1,619)(1,451) Total cost of sales (2,402)(2,389)(4,887)(4,855) Operating margin 4535538941,172 General and administrative expenses (49)(66)(126)(141) Interest expense (352)(389)(694)(746) Interest income 7088139193 Loss on extinguishment of debt (5)(9)(13)(10) Other expense (295)(84)(347)(122) Other income 31213856 Gain on disposal and sale of business interests 7016944 Asset impairment reversals (expense) 154(38)105(84) Foreign currency transaction gains (losses) (28)38(38)30 Other non-operating expense (10)—(10)— INCOME FROM CONTINUING OPERATIONS BEFORE TAXES AND EQUITY IN EARNINGS OF AFFILIATES 3911517392 Income tax benefit (expense) (167)35(184)51 Net equity in earnings (losses) of affiliates (22)3(56)(12) NET INCOME (LOSS) (150)153(223)431 Less: Net loss attributable to noncontrolling interests and redeemable stock of subsidiaries 55123174277 NET INCOME (LOSS) ATTRIBUTABLE TO THE AES CORPORATION $ (95)$ 276$ (49)$ 708 Decrease (increase) in redemption value of redeemable stock of subsidiaries (10)6(10)— NET INCOME (LOSS) AVAILABLE TO THE AES CORPORATION COMMON STOCKHOLDERS $ (105)$ 282$ (59)$ 708 BASIC EARNINGS PER SHARE:NET INCOME (LOSS) AVAILABLE TO THE AES CORPORATION COMMON STOCKHOLDERS $ (0.15)$ 0.40$ (0.08)$ 1.01 DILUTED EARNINGS PER SHARE:NET INCOME (LOSS) AVAILABLE TO THE AES CORPORATION COMMON STOCKHOLDERS $ (0.15)$ 0.39$ (0.08)$ 0.99 DILUTED SHARES OUTSTANDING 712713712713 THE AES CORPORATION Strategic Business Unit (SBU) Information (Unaudited)Three Months Ended June 30,Six Months Ended June 30, (in millions) 2025202420252024 REVENUE Renewables SBU $ 644$ 619$ 1,310$ 1,262 Utilities SBU 9548961,9631,769 Energy Infrastructure SBU 1,3061,4622,6263,071 New Energy Technologies SBU ———— Corporate and Other 43407973 Eliminations (92)(75)(197)(148) Total Revenue $ 2,855$ 2,942$ 5,781$ 6,027 THE AES CORPORATION Condensed Consolidated Balance Sheets (Unaudited) June 30, 2025December 31,2024(in millions, except share and per share data) ASSETSCURRENT ASSETS Cash and cash equivalents $ 1,350$ 1,524 Restricted cash 763437 Accounts receivable, net of allowance of $54 and $52, respectively 1,8651,646 Inventory 647593 Prepaid expenses 132157 Other current assets, net of allowance of $2 and $0, respectively 1,5321,612 Current held-for-sale assets 31862 Total current assets 6,3206,831 NONCURRENT ASSETSProperty, plant and equipment, net of accumulated depreciation of $9,311 and $8,701, respectively 34,72733,166 Investments in and advances to affiliates 1,0911,124 Debt service reserves and other deposits 8878 Goodwill 345345 Other intangible assets, net of accumulated amortization of $472 and $426, respectively 2,0501,947 Deferred income taxes 402365 Loan receivable, net of allowance of $20 and $0, respectively 800— Other noncurrent assets, net of allowance of $22 and $20, respectively 2,7192,917 Noncurrent held-for-sale assets —633 Total noncurrent assets 42,22240,575 TOTAL ASSETS $ 48,542$ 47,406 LIABILITIES, REDEEMABLE STOCK OF SUBSIDIARIES, AND EQUITYCURRENT LIABILITIES Accounts payable $ 1,663$ 1,654 Accrued interest 277256 Accrued non-income taxes 292249 Supplier financing arrangements 621917 Accrued and other liabilities 1,1091,246 Recourse debt 990899 Non-recourse debt 2,7272,688 Current held-for-sale liabilities —662 Total current liabilities 7,6798,571 NONCURRENT LIABILITIESRecourse debt 4,8024,805 Non-recourse debt 21,75220,626 Deferred income taxes 1,6351,490 Other noncurrent liabilities 2,8122,881 Noncurrent held-for-sale liabilities —391 Total noncurrent liabilities 31,00130,193 Commitments and ContingenciesRedeemable stock of subsidiaries 2,179938 EQUITYTHE AES CORPORATION STOCKHOLDERS' EQUITYCommon stock ($0.01 par value, 1,200,000,000 shares authorized; 859,711,007 issued and 711,922,815 outstanding at June 30, 2025 and 859,709,987 issued and 711,074,269 outstanding at December 31, 2024) 99 Additional paid-in capital 6,0705,913 Retained earnings (accumulated deficit) (79)293 Accumulated other comprehensive loss (836)(766) Treasury stock, at cost (147,788,192 and 148,635,718 shares at June 30, 2025 and December 31, 2024, respectively) (1,795)(1,805) Total AES Corporation stockholders' equity 3,3693,644 NONCONTROLLING INTERESTS 4,3144,060 Total equity 7,6837,704 TOTAL LIABILITIES, REDEEMABLE STOCK OF SUBSIDIARIES, AND EQUITY $ 48,542$ 47,406 THE AES CORPORATION Condensed Consolidated Statements of Cash Flows (Unaudited) Three Months Ended June 30,Six Months Ended June 30,2025202420252024(in millions)(in millions) OPERATING ACTIVITIES:Net income (loss) $ (150)$ 153$ (223)$ 431 Adjustments to net income (loss): Depreciation, amortization, and accretion of AROs 354315691633 Emissions allowance expense 762417871 Loss (gain) on realized/unrealized derivatives 86(64)71(137) Loss on commencement of sales-type leases 1997220867 Gain on disposal and sale of business interests (70)(1)(69)(44) Impairment expense (reversals) (144)38(95)84 Loss on realized/unrealized foreign currency 24782478 Deferred income tax expense (benefit), net of tax credit transfers allocated to AES 13936149258 Tax credit transfers allocated to noncontrolling interests 2122621226 Other 100(313)220(210) Changes in operating assets and liabilities: (Increase) decrease in accounts receivable 125(7)26(239) (Increase) decrease in inventory (1)(41)(29)31 (Increase) decrease in prepaid expenses and other current assets 2994198133 (Increase) decrease in other assets 571387547 Increase (decrease) in accounts payable and other current liabilities (119)(75)(116)(160) Increase (decrease) in income tax payables, net and other tax payables 1(137)(82)(464) Increase (decrease) in other liabilities 58568374 Net cash provided by operating activities 9763921,521679 INVESTING ACTIVITIES:Capital expenditures (1,332)(1,685)(2,586)(3,833) Acquisitions of business interests, net of cash and restricted cash acquired (108)(16)(112)(73) Proceeds from the sale of business interests, net of cash and restricted cash sold ——511 Sale of short-term investments 1939352534 Purchase of short-term investments (18)(460)(36)(604) Contributions and loans to equity affiliates —(29)(1)(50) Purchase of emissions allowances (195)(35)(234)(91) Other investing 34(6)30(118) Net cash used in investing activities (1,600)(1,838)(2,882)(4,224) FINANCING ACTIVITIES:Borrowings under the revolving credit facilities 9412,2622,1284,003 Repayments under the revolving credit facilities (1,947)(1,545)(2,398)(2,582) Commercial paper borrowings (repayments), net (188)(29)67690 Issuance of recourse debt —950800950 Repayments of recourse debt ——(774)— Issuance of non-recourse debt 1,0391,6672,3323,798 Repayments of non-recourse debt (731)(1,811)(1,490)(2,726) Payments for financing fees (28)(44)(49)(75) Purchases under supplier financing arrangements 250222567708 Repayments of obligations under supplier financing arrangements (234)(539)(862)(1,055) Distributions to noncontrolling interests (254)(105)(338)(128) Contributions from noncontrolling interests 2017127497 Sales to noncontrolling interests 8931981,138323 Issuance of preferred shares in subsidiaries 444—452— Dividends paid on AES common stock (125)(122)(250)(238) Payments for financed capital expenditures (14)(12)(21)(19) Other financing (102)(10)(114)13 Net cash provided by financing activities 1451,1531,4623,759 Effect of exchange rate changes on cash, cash equivalents and restricted cash (4)(28)(5)(43) (Increase) decrease in cash, cash equivalents and restricted cash of held-for-sale businesses 118(86)66(13) Total increase in cash, cash equivalents and restricted cash (365)(407)162158 Cash, cash equivalents and restricted cash, beginning 2,5661,9802,0391,990 Cash, cash equivalents and restricted cash, ending $ 2,201$ 1,573$ 2,201$ 2,148 SUPPLEMENTAL DISCLOSURES:Cash payments for interest, net of amounts capitalized $ 331$ 411$ 598$ 765 Cash payments for income taxes, net of refunds 74141134209 SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:Noncash contributions from noncontrolling interests $ 212$ 25$ 254$ 25 Receivable for proceeds from the sale of Dominican Republic Renewables 100—100— Noncash recognition of new operating and financing leases 185678180 Noncash distributions to noncontrolling interests 45—45— Initial recognition of contingent consideration for acquisitions 1151114 Conversion of Corporate Units to shares of common stock ———838 Liabilities derecognized upon completion of remaining performance obligation for sale of Warrior Run receivables —273—273 THE AES CORPORATIONNON-GAAP FINANCIAL MEASURES(Unaudited)RECONCILIATION OF ADJUSTED EBITDA, ADJUSTED PTC AND ADJUSTED EPS We define EBITDA as earnings before interest income and expense, taxes, depreciation, amortization, and accretion of AROs. We define Adjusted EBITDA as EBITDA adjusted for the impact of NCI and interest, taxes, depreciation, amortization, and accretion of AROs of our equity affiliates, adding back interest income recognized under service concession arrangements, and excluding gains or losses of both consolidated entities and entities accounted for under the equity method due to (a) unrealized gains or losses pertaining to derivative transactions, equity securities, and financial assets and liabilities measured using the fair value option; (b) unrealized foreign currency gains or losses; (c) gains, losses, benefits and costs associated with dispositions and acquisitions of business interests, including early plant closures, and gains and losses recognized at commencement of sales-type leases; (d) losses due to impairments; (e) gains, losses, and costs due to the early retirement of debt or troubled debt restructuring, and (f) costs directly associated with a major restructuring program, including, but not limited to, workforce reduction efforts. We define Adjusted EBITDA with Tax Attributes as Adjusted EBITDA, adding back the pre-tax effect of Production Tax Credits ("PTCs"), Investment Tax Credits ("ITCs"), and depreciation tax deductions allocated to tax equity investors, as well as the tax benefit recorded from tax credits retained or transferred to third parties. The GAAP measure most comparable to EBITDA, Adjusted EBITDA, and Adjusted EBITDA with Tax Attributes is net income. We believe that EBITDA, Adjusted EBITDA, and Adjusted EBITDA with Tax Attributes better reflect the underlying business performance of the Company. Adjusted EBITDA is the most relevant measure considered in the Company's internal evaluation of the financial performance of its segments. Factors in this determination include the variability due to unrealized gains or losses pertaining to derivative transactions, equity securities, or financial assets and liabilities remeasurement, unrealized foreign currency gains or losses, losses due to impairments, strategic decisions to dispose of or acquire business interests, retire debt, or implement restructuring initiatives, and the variability of allocations of earnings to tax equity investors, which affect results in a given period or periods. In addition, each of these metrics represent the business performance of the Company before the application of statutory income tax rates and tax adjustments, including the effects of tax planning, corresponding to the various jurisdictions in which the Company operates. EBITDA, Adjusted EBITDA, and Adjusted EBITDA with Tax Attributes should not be construed as alternatives to net income, which is determined in accordance with Months Ended June 30,Six Months Ended June 30, Reconciliation of Adjusted EBITDA and Adjusted EBITDA with Tax Attributes (in millions) 2025202420252024 Net income (loss) $ (150)$ 153$ (223)$ 431 Income tax expense (benefit) 167(35)184(51) Interest expense 352389694746 Interest income (70)(88)(139)(193) Depreciation, amortization, and accretion of AROs 354315691633 EBITDA $ 653$ 734$ 1,207$ 1,566 Less: Adjustment for noncontrolling interests and redeemable stock of subsidiaries (1) (253)(182)(387)(346) Less: Income tax expense (benefit), interest expense (income) and depreciation, amortization, and accretion of AROs from equity affiliates 45288162 Interest income recognized under service concession arrangements 14162933 Unrealized derivatives, equity securities, and financial assets and liabilities losses (gains) 133(53)132(138) Unrealized foreign currency losses (gains) 412(3)3 Disposition/acquisition losses 1266216719 Impairment losses (reversals) (87)23(54)49 Loss on extinguishment of debt and troubled debt restructuring 4181250 Restructuring costs 42—88— Adjusted EBITDA (1) $ 681$ 658$ 1,272$ 1,298 Tax attributes 376191562419 Adjusted EBITDA with Tax Attributes (2) $ 1,057$ 849$ 1,834$ 1,717 (1) The allocation of earnings and losses to tax equity investors from both consolidated entities and equity affiliates is removed from Adjusted EBITDA. NCI also excludes amounts allocated to preferred shareholders during the construction phase before a project becomes operational, as this is akin to a financing arrangement. (2) Adjusted EBITDA with Tax Attributes includes the impact of the share of the ITCs, PTCs, and depreciation deductions allocated to tax equity investors under the HLBV accounting method and recognized as Net loss (income) attributable to noncontrolling interests and redeemable stock of subsidiaries on the Condensed Consolidated Statements of Operations. It also includes the tax benefit recorded from tax credits retained or transferred to third parties. The tax attributes are related to the Renewables and Utilities SBUs. We define Adjusted PTC as pre-tax income from continuing operations attributable to The AES Corporation excluding gains or losses of the consolidated entity due to (a) unrealized gains or losses pertaining to derivative transactions, equity securities, and financial assets and liabilities measured using the fair value option; (b) unrealized foreign currency gains or losses; (c) gains, losses, benefits, and costs associated with dispositions and acquisitions of business interests, including early plant closures, and gains and losses recognized at commencement of sales-type leases; (d) losses due to impairments; (e) gains, losses, and costs due to the early retirement of debt or troubled debt restructuring; and (f) costs directly associated with a major restructuring program, including, but not limited to, workforce reduction efforts. Adjusted PTC also includes net equity in earnings of affiliates on an after-tax basis adjusted for the same gains or losses excluded from consolidated entities. We define Adjusted EPS as diluted earnings per share from continuing operations excluding gains or losses of both consolidated entities and entities accounted for under the equity method due to (a) unrealized gains or losses pertaining to derivative transactions, equity securities, and financial assets and liabilities measured using the fair value option; (b) unrealized foreign currency gains or losses; (c) gains, losses, benefits and costs associated with dispositions and acquisitions of business interests, including early plant closures, and the tax impact from the repatriation of sales proceeds, and gains and losses recognized at commencement of sales-type leases; (d) losses due to impairments; (e) gains, losses, and costs due to the early retirement of debt or troubled debt restructuring; and (f) costs directly associated with a major restructuring program, including, but not limited to, workforce reduction efforts. The GAAP measure most comparable to Adjusted PTC is income from continuing operations attributable to AES. The GAAP measure most comparable to Adjusted EPS is diluted earnings per share from continuing operations. We believe that Adjusted PTC and Adjusted EPS better reflect the underlying business performance of the Company and are considered in the Company's internal evaluation of financial performance. Factors in this determination include the variability due to unrealized gains or losses pertaining to derivative transactions, equity securities, or financial assets and liabilities remeasurement, unrealized foreign currency gains or losses, losses due to impairments, and strategic decisions to dispose of or acquire business interests, retire debt, or implement restructuring initiatives, which affect results in a given period or periods. In addition, for Adjusted PTC, earnings before tax represents the business performance of the Company before the application of statutory income tax rates and tax adjustments, including the effects of tax planning, corresponding to the various jurisdictions in which the Company operates. Adjusted PTC and Adjusted EPS should not be construed as alternatives to income from continuing operations attributable to AES and diluted earnings per share from continuing operations, which are determined in accordance with GAAP. The Company reported diluted loss per share of $0.15 and $0.08 for the three and six months ended June 30, 2025. The Company reported diluted earnings per share of $0.39 and $0.99 for the three and six months ended June 30, 2024. For purposes of measuring earnings per share under U.S. GAAP, income available to AES common stockholders is reduced by increases in the carrying amount of redeemable stock of subsidiaries to redemption value and increased by decreases in the carrying amount to the extent they represent recoveries of amounts previously reflected in the computation of earnings per share. While the adjustment for the three and six months ended June 30, 2025 decreased earnings per share and the adjustment for the three months ended June 30, 2024 increased earnings per share, neither adjustment impacted Net income on the Condensed Consolidated Statement of Operations. For purposes of computing Adjusted EPS, the Company excluded the adjustment to redemption value from the numerator. The table below reconciles the income available to AES common stockholders used in GAAP diluted earnings per share to the income from continuing operations used in calculating the non-GAAP measure of Adjusted EPS. Reconciliation of Numerator Used for Adjusted EPS Three months ended June 30, 2025Six months ended June 30, 2025 (in millions, except per share data) LossShares$ per ShareLossShares$ per Share GAAP DILUTED LOSS PER SHARELoss available to The AES Corporation common stockholders $ (105)712$ (0.15)$ (59)712$ (0.08) Add back: Adjustment to redemption value of redeemable stock of subsidiaries 10—0.0210—0.01 NON-GAAP DILUTED LOSS PER SHARE BEFORE EFFECT OF DILUTIVE SECURITIES $ (95)712$ (0.13)$ (49)712$ (0.07) Restricted stock units —2——1— NON-GAAP DILUTED LOSS PER SHARE $ (95)714$ (0.13)$ (49)713$ (0.07) Reconciliation of Numerator Used for Adjusted EPS Three months ended June 30, 2024Six months ended June 30, 2024 (in millions, except per share data) IncomeShares$ per ShareIncomeShares$ per Share GAAP DILUTED EARNINGS PER SHAREIncome available to The AES Corporation common stockholders $ 282713$ 0.39$ 708713$ 0.99 Add back: Adjustment to redemption value of redeemable stock of subsidiaries (6)————— NON-GAAP DILUTED EARNINGS PER SHARE $ 276713$ 0.39$ 708713$ 0.99 Three Months Ended June 30, 2025Three Months Ended June 30, 2024Six Months Ended June 30, 2025Six Months Ended June 30, 2024 Net of NCI (1) Per Share (Diluted) Net of NCI (1)Net of NCI (1) Per Share (Diluted) Net of NCI (1)Net of NCI (1) Per Share (Diluted) Net of NCI (1)Net of NCI (1) Per Share (Diluted) Net of NCI (1) (in millions, except per share amounts)Income (loss) from continuing operations, net of tax, attributable to AES and Diluted EPS $ (95) $ (0.13)$ 276 $ 0.39$ (49) $ (0.07)$ 708 $ 0.99Add: Income tax expense (benefit) from continuing operations attributable to AES 148 (67) 144 (86) Pre-tax contribution $ 53 $ 209 $ 95 $ 622 Adjustments Unrealized derivatives, equity securities, and financial assets and liabilities losses (gains) $ 133 $ 0.18 (2) $ (53) $ (0.07) (3) $ 128 $ 0.19 (4) $ (138) $ (0.19) (5) Unrealized foreign currency losses (gains) 4 —12 0.01(3) —3 —Disposition/acquisition losses 125 0.18 (6) 62 0.08 (7) 167 0.23 (8) 19 0.03 (9) Impairment losses (reversals) (87) (0.12) (10) 23 0.03 (11) (54) (0.08) (12) 49 0.08 (13) Loss on extinguishment of debt and troubled debt restructuring 6 0.0120 0.03 (14) 16 0.0254 0.07 (15) Restructuring costs 42 0.06 (16) — —88 0.12 (17) — —Less: Net income tax expense (benefit)0.33 (18)(0.09) (19)0.37 (20)(0.09) (19) Adjusted PTC and Adjusted EPS $ 276 $ 0.51$ 273 $ 0.38$ 437 $ 0.78$ 609 $ 0.89(1) NCI is defined as Noncontrolling Interests. (2) Amount primarily relates to remeasurement of our investment in 5B of $48 million, or $0.07 per share, net unrealized derivative losses at the Energy Infrastructure SBU of $38 million, or $0.05 per share, and unrealized derivative losses on commodities at AES Clean Energy of $33 million, or $0.05 per share. (3) Amount primarily relates to unrealized gains on foreign currency derivatives at Corporate of $34 million, or $0.05 per share, and unrealized gains on cross currency swaps in Brazil of $25 million, or $0.03 per share. (4) Amount primarily relates to remeasurement of our investment in 5B of $48 million, or $0.07 per share, net unrealized derivative losses at the Energy Infrastructure SBU of $46 million, or $0.06 per share, and unrealized derivative losses on commodities at AES Clean Energy of $17 million, or $0.02 per share. (5) Amount primarily relates to net unrealized derivative gains at the Energy Infrastructure SBU of $59 million, or $0.08 per share, unrealized gains on foreign currency derivatives at Corporate of $37 million, or $0.05 per share, and unrealized gains on cross currency swaps in Brazil of $28 million, or $0.04 per share. (6) Amount primarily relates to day-one losses on commencement of sales-type leases at AES Clean Energy Development of $149 million, or $0.21 per share, partially offset by gain on sale of Dominican Republic Renewables of $45 million, or $0.06 per share. (7) Amount primarily relates to day-one losses at commencement of sales-type leases at AES Renewable Holdings of $63 million, or $0.09 per share. (8) Amount primarily relates to day-one losses on commencement of sales-type leases at AES Clean Energy Development of $149 million, or $0.21 per share, and AES Renewable Holdings of $9 million, or $0.01 per share, and losses on remeasurement of contingent consideration at AES Clean Energy of $12 million, or $0.02 per share, partially offset by gain on sale of Dominican Republic Renewables of $45 million, or $0.06 per share. (9) Amount primarily relates to day-one losses at commencement of sales-type leases at AES Renewable Holdings of $63 million, or $0.09 per share, and the loss on partial sale of our ownership interest in Amman East and IPP4 in Jordan of $10 million, or $0.01 per share, partially offset by a gain on dilution of ownership in Uplight due to its acquisition of AutoGrid of $52 million, or $0.07 per share. (10) Amount primarily relates to the derecognition of the valuation allowance on a loan receivable accounted for under ASC 310 and the elimination of estimated costs to sell at Mong Duong of $127 million, or $0.18 per share, after reclassification to held and used, partially offset by impairments at AES Clean Energy of $29 million, or $0.04 per share. (11) Amount primarily relates to impairment at AES Brasil of $12 million, or $0.02 per share. (12) Amount primarily relates to the derecognition of the valuation allowance on a loan receivable accounted for under ASC 310 and the elimination of estimated costs to sell at Mong Duong of $127 million, or $0.18 per share, after reclassification to held and used, partially offset by impairments at AES Clean Energy of $54 million, or $0.08 per share, and at Mong Duong of $9 million, or $0.01 per share. (13) Amount primarily relates to impairment at Mong Duong of $22 million, or $0.03 per share, and impairment at AES Brasil of $12 million, or $0.02 per share. (14) Amount primarily relates to losses incurred at AES Andes due to early retirement of debt of $16 million, or $0.02 per share. (15) Amount primarily relates to losses incurred at AES Andes due to early retirement of debt $29 million, or $0.04 per share, and costs incurred due to troubled debt restructuring at Puerto Rico of $20 million, or $0.03 per share. (16) Amount primarily relates to impairments at AES Clean Energy Development that were the result of the Company-wide restructuring program of $38 million, or $0.05 per share. (17) Amount primarily relates to severance costs associated with the Company-wide restructuring program of $50 million, or $0.07 per share, and impairments at AES Clean Energy Development that were the result of the Company's restructuring program of $38 million, or $0.05 per share. (18) Amount primarily relates to income tax expense associated with the day-one losses on commencement of sales-type leases at AES Clean Energy Development of $95 million, or $0.13 per share, impairments at AES Clean Energy Development of $50 million, or $0.07 per share, remeasurement and downward adjustment of our investment in 5B of $28 million, or $0.04 per share, the selldown of AES Ohio of $13 million, or $0.02 per share, and net unrealized derivative losses at Integrated Energy of $18 million, or $0.03 per share. (19) Amount primarily relates to income tax benefits associated with the tax over book investment basis differences related to the AES Brasil held-for-sale classification of $59 million, or $0.08 per share, for the three and six months ended June 30, 2024. (20) Amount primarily relates to income tax expense associated with the day-one losses on commencement of sales-type leases at AES Clean Energy Development of $95 million, or $0.13 per share, impairments at AES Clean Energy Development of $57 million, or $0.08 per share, severance costs related to the Company-wide restructuring program of $23 million, or $0.03 per share, remeasurement and downward adjustment of our investment in 5B of $28 million, or $0.04 per share, net unrealized derivative losses at Integrated Energy of $19 million, or $0.03 per share, and the selldown of AES Ohio of $13 million, or $0.02 per share. The AES Corporation Parent Financial Information Parent only data: last four quarters (in millions) 4 Quarters Ended Total subsidiary distributions & returns of capital to Parent June 30, 2025 March 31, 2025 December 31, 2024 September 30, 2024 Actual Actual Actual Actual Subsidiary distributions(1) to Parent & QHCs $ 1,706 $ 1,447 $ 1,603 $ 1,424 Returns of capital distributions to Parent & QHCs 75 32 30 80 Total subsidiary distributions & returns of capital to Parent $ 1,781 $ 1,479 $ 1,633 $ 1,504 Parent only data: quarterly (in millions) Quarter Ended Total subsidiary distributions & returns of capital to Parent June 30, 2025 March 31, 2025 December 31, 2024 September 30, 2024 Actual Actual Actual Actual Subsidiary distributions1 to Parent & QHCs $ 557 $ 230 $ 715 $ 204 Returns of capital distributions to Parent & QHCs 44 3 28 — Total subsidiary distributions & returns of capital to Parent $ 601 $ 233 $ 743 $ 204 (in millions) Balance atJune 30, 2025 March 31, 2025 December 31, 2024 September 30, 2024 Parent Company Liquidity(2) Actual Actual Actual Actual Cash at Parent & Cash at QHCs(3) $ 9 $ 151 $ 265 $ 6 Availability under credit facilities 2,185 1,526 1,782 335 Ending liquidity $ 2,194 $ 1,677 $ 2,047 $ 341(1) Subsidiary distributions received by Qualified Holding Companies ("QHCs") excluded from Schedule 1. Subsidiary Distributions should not be construed as an alternative to Consolidated Net Cash Provided by Operating Activities, which is determined in accordance with US GAAP. Subsidiary Distributions are important to the Parent Company because the Parent Company is a holding company that does not derive any significant direct revenues from its own activities but instead relies on its subsidiaries' business activities and the resultant distributions to fund the debt service, investment and other cash needs of the holding company. The reconciliation of the difference between the Subsidiary Distributions and Consolidated Net Cash Provided by Operating Activities consists of cash generated from operating activities that is retained at the subsidiaries for a variety of reasons which are both discretionary and non-discretionary in nature. These factors include, but are not limited to, retention of cash to fund capital expenditures at the subsidiary, cash retention associated with non-recourse debt covenant restrictions and related debt service requirements at the subsidiaries, retention of cash related to sufficiency of local GAAP statutory retained earnings at the subsidiaries, retention of cash for working capital needs at the subsidiaries, and other similar timing differences between when the cash is generated at the subsidiaries and when it reaches the Parent Company and related holding companies. (2) Parent Company Liquidity is defined as cash available to the Parent Company, including cash at qualified holding companies (QHCs), plus available borrowings under our existing credit facility. AES believes that unconsolidated Parent Company liquidity is important to the liquidity position of AES as a Parent Company because of the non-recourse nature of most of AES' indebtedness. (3) The cash held at QHCs represents cash sent to subsidiaries of the company domiciled outside of the US. Such subsidiaries have no contractual restrictions on their ability to send cash to AES, the Parent Company. Cash at those subsidiaries was used for investment and related activities outside of the US. These investments included equity investments and loans to other foreign subsidiaries as well as development and general costs and expenses incurred outside the US. Since the cash held by these QHCs is available to the Parent, AES uses the combined measure of subsidiary distributions to Parent and QHCs as a useful measure of cash available to the Parent to meet its international liquidity needs. Investor Contact: Susan Harcourt 703-682-1204, Media Contact: Amy Ackerman 703-682-6399, View original content to download multimedia: SOURCE The AES Corporation Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

Amazon profits surge 35% but forecast sinks share price
Amazon profits surge 35% but forecast sinks share price

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Amazon profits surge 35% but forecast sinks share price

Amazon reported a 35 percent jump in quarterly profits Thursday as the e-commerce giant said major investments in artificial intelligence began paying off. But the Seattle-based company's profit outlook for the current quarter came in lower than hoped for, with investors worried that the cost of AI was weiging on the bottom line. Amazon's share price was trading about six percent lower in after hours trading. This was despite a stellar second quarter that exceeded analyst expecations, much like it did for its AI focused rivals Google, Microsoft and Meta, which posted bumper results for the period. "Our conviction that AI will change every customer experience is starting to play out," said Chief Executive Andy Jassy, pointing to the company's expanded Alexa+ service and new AI shopping agents. Amazon posted net profit of $18.2 billion for the second quarter that ended June 30, compared with $13.5 billion in the same period last year. Net sales climbed 13 percent to $167.7 billion, beating analyst expectations and signaling that the company was surviving the impacts of the high-tariff trade policy under US President Donald Trump. "There continues to be a lot of noise about the impact that tariffs will have on retail prices and consumption. Much of it thus far has been wrong and misreported," Jassy told analysts. - 'Curveballs' - Amazon Web Services (AWS), the company's world leading cloud computing division, led the charge with sales jumping 17.5 percent to $30.9 billion. The unit's operating profit rose to $10.2 billion from $9.3 billion a year earlier. The strong AWS performance reflects surging demand for cloud infrastructure to power AI applications, a trend that has benefited major cloud providers as companies race to adopt generative AI technologies. But investors seemed worried about Amazon's big cash outlays to pursue its AI ambitions, sending its share price more than three percent lower in after-hours trading. The company's free cash flow declined sharply to $18.2 billion, down from $53 billion in the same period last year, as Amazon ramped up capital spending on AI infrastructure and logistics. The company spent $32.2 billion on property and equipment in the quarter, nearly double the $17.6 billion spent a year earlier, reflecting massive investments in data centers and backroom capabilities. Amazon has pledged to spend up to $100 billion this year, largely on AI-related investments for AWS. For the current quarter, Amazon forecast net sales between $174.0 billion and $179.5 billion, representing solid growth of 10-13 percent compared with the third quarter of 2024. But operating profit was forecast in a wide range from $15.5 billion to $20.5 billion in the current third quarter, which was more cautious than some had hoped for. The caution indicates that "there's still potential for curveballs from ongoing trade negotiations and accelerating competition on the AI front," said Emarketer analyst Sky Canaves. arp/dw Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

2025 tax guide for expats: What you need to know about taxes if you live outside the U.S.
2025 tax guide for expats: What you need to know about taxes if you live outside the U.S.

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2025 tax guide for expats: What you need to know about taxes if you live outside the U.S.

Living abroad doesn't mean you can leave your U.S. tax responsibilities behind. If you're an American expat, the IRS still expects you to report your worldwide income — no matter where you live or work. Here's the good news: There are a few different tax breaks that help many expats avoid U.S. taxes altogether. This tax guide for expats will help you understand which forms to file, what income to report and how to take advantage of key exclusions and credits so you can stay compliant and avoid overpaying. What you should report to the IRS if you live abroad U.S. citizens and resident aliens must report their global income — no matter where it's earned. That means wages, dividends, interest, rental income and self-employment earnings all need to be included on your annual tax return, converted into U.S. dollars using the applicable exchange rate. You'll also need to file Form 1040 if your income exceeds the standard filing threshold, which is now $15,750 for single filers and $31,500 for married-filing-jointly filers in 2025. If you're self-employed and earn $400 or more, a return is required regardless of your total income. Learn more: Self-employment tax: What it is, how to calculate it Beyond income, expats with foreign financial accounts worth over $10,000 at any point during the year must file a foreign bank account report (FBAR) separately from their tax return. See this IRS page on FBARs for more information. If you own specified foreign financial assets — like foreign stocks, retirement accounts or insurance policies — with values above set thresholds ($200,000 for single filers and $400,000 for married-filing-jointly filers living abroad), you may also need to file Form 8938 under the Foreign Account Tax Compliance Act (FATCA). See this IRS page on FATCA for more information. Other filings may apply if you have ties to foreign trusts, corporations or investment vehicles. Learn more: Trump's temporary tax breaks: 5 'big beautiful bill' provisions that may not stick around for long Tax breaks for U.S. expats U.S. expats can take advantage of several tax breaks that help reduce or eliminate double taxation. Here are the most important ones to know for the 2025 tax year: Foreign earned income exclusion (FEIE) You can exclude up to $130,000 of foreign earned income from U.S. taxes in 2025. That amount doubles to $260,000 if you're married and both spouses qualify for the FEIE. Those dollar amounts are adjusted for inflation each year. To qualify for this tax benefit, your tax home must be abroad, and you must meet either the bona fide residence test or the physical presence test. The physical presence test is defined by the IRS as being 'physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months.' 'The physical presence test is great because it is objective — if you meet the 330-day requirement, then you get the benefits of FEIE,' says Nicolás Castillo, CPA at Rook International CPAs, which specializes in global tax strategies. One thing many expats don't realize is that if you don't technically qualify for the physical presence test at the time of filing, you may still be able to claim the deduction. You'll need to file for an extension using Form 4868 or Form 2350. You can then apply the extra time towards the FEIE. If the physical presence test doesn't work for you, the other test to qualify for the FEIE is the bona fide residence test. This test 'is excellent for those with a more subjective situation,' Castillo says. 'Perhaps the taxpayer has lived in Italy his/her whole life, but spends time in the U.S. for work or an extended holiday. Then there are a number of claims you must make to prove you are a true resident of the other country.' Retirement savings and the FEIE The foreign earned income exclusion reduces your taxable income, and that can limit your ability to contribute to U.S. retirement accounts such as IRAs. For example, if the FEIE drops your income to zero, the IRS interprets that as you having no earned income. You must have earned income to contribute to an IRA. But keep in mind that, as noted below, if you choose not to claim the FEIE, you may be prevented from claiming it for the next 5 years. See this IRS page on the foreign earned income exclusion for other important details, including which types of income do and don't qualify and how the IRS defines a 'foreign tax home.' Another twist to consider: If you opt not to claim the FEIE, then you may be prevented from claiming it for the next 5 years. See this IRS page for more information. Foreign housing exclusion or deduction If you qualify for the FEIE, then generally you'll qualify for the foreign housing tax break, which lets you exclude or deduct certain foreign housing costs above a base amount. For 2025, the base amount is $20,800, and the maximum expense is $39,000, though this maximum may vary depending on where you live. Generally, the base amount is 16 percent of the FEIE exclusion amount (which is $130,000 in 2025) and the maximum you can claim is 30 percent of the FEIE exclusion. Remember, the FEIE amount adjusts each year for inflation. Generally, the foreign housing exclusion is for people who are employed by a company, while the foreign housing deduction is for self-employed people. See this IRS page for more on the foreign housing exclusion and deduction. Get started: Match with an advisor who can help you achieve your financial goals Foreign tax credit (FTC) If you pay income taxes to a foreign government, you can claim a dollar-for-dollar credit towards any U.S. taxes owed. For example, if you paid the equivalent of $10,000 in taxes to Germany, you'd get a $10,000 credit towards your U.S. taxes. You can use both the foreign earned income exclusion (FEIE) and the foreign tax credit (FTC), but not on the same portion of income. Expats often use both the FEIE (for the first $130,000 of earned income) and the FTC (for any excess income) to reduce or eliminate their U.S. tax burden. 'The foreign earned income exclusion is often easier to report. But the foreign tax credit is often a better mechanism for Americans in high-tax countries,' Castillo says. While the foreign tax credit isn't refundable, generally you can carry forward unused amounts. 'Not only does it prevent double taxation, but any excess tax carries forward to be used in a future year. Sometimes, like in France, the tax treaty enhances the FTC and allows us to use French social taxes, too,' Castillo says. Keep in mind that the interaction between the FEIE, the FTC and the foreign taxes you pay can get complex, especially for high-income earners in high-tax countries, so hiring a tax pro with expertise on expat issues could be a smart move. Learn more: 5 tips to find the best tax preparer for you U.S. tax benefits still apply As a U.S. citizen living abroad, you're still entitled to many of the same tax breaks and credits as U.S. residents, assuming you meet the requirements. Standard deduction: The 2025 standard deduction is $15,750 for single filers and $31,500 for married couples filing jointly. You can also choose to itemize if that provides a greater tax benefit. Child tax credit (CTC): Expats with qualifying children may claim the child tax credit, worth up to $2,200 per child in 2025. Retirement contributions: As a U.S. expat, you can still contribute to an IRA — but only if you have taxable earned income. If you use the foreign tax credit, your income remains taxable, keeping you eligible. But if you exclude all of your income using the foreign earned income exclusion, you won't qualify to contribute, since the IRS considers your compensation $0. Choose your tax break carefully if growing your retirement savings is a goal. Learn more: Trump signs massive megabill into law — here's what it means for your money To take advantage of these benefits, you must file a U.S. tax return and the appropriate forms — such as Form 2555 for the FEIE or Form 1116 for the FTC. What are the tax deadlines for expats? Most expats get an automatic two-month extension to file, which pushes their filing deadline to June 15. There's a catch, however: Any taxes you owe are still due by April 15 — you'll owe interest on any taxes not paid by the April due date. Plus, you must attach an explanation to your tax return, stating that you qualify for the automatic two-month extension. See this IRS page for more details on who qualifies and who doesn't. Filing a tax extension to October 15 is also possible, but you need to request it. Learn more: 2025 federal tax brackets and current income tax rates

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