Company: TVC
Filing Date: 2025-02-05
Form Type: 10-Q
Source: 0001376986-25-000011
Chunk: 211

Company: Tennessee Valley Authority
Filing Date: 2025-02-05
Form: 10-Q
Item: Part II, Item 2
Chunk 211
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 efficiency savings.

Interest Expense.  Interest expense and interest rates for the three months ended December 31, 2024, and the three months ended December 31, 2023, were as follows:

Interest Expense and Rates(in millions) Three Months Ended December 31 20242023Percent ChangeInterest expense(1)$280 $262 6.9 %Average blended debt balance(2)$21,509 $20,610 4.4 %Average blended interest rate(3)4.99 %4.89 %2.0 %

Notes

(1)  Includes amortization of debt discounts, issuance, and reacquisition costs, net.

(2)  Includes average balances of long-term power bonds, debt of variable interest entities ("VIEs"), and discount notes.

(3)  Includes interest on long-term power bonds, debt of VIE, and discount notes.

Total interest expense increased $18 million for the three months ended December 31, 2024, as compared to the same period of the prior year.  This increase was primarily driven by a $10 million increase in alternative financing interest due to the 

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new Johnsonville lease financing arrangement and a $6 million increase primarily from higher average rates on long-term debt.  The increase was also driven by a $2 million increase from higher average balances of short-term debt and a $1 million increase in interest related to finance leases, partially offset by a $1 million decrease from lower average rates on short‐term debt.

Liquidity and Capital Resources 

Sources of Liquidity

TVA depends on various sources of liquidity to meet cash needs and contingencies.  TVA's primary sources of liquidity are cash from operations and proceeds from the issuance of short-term debt in the form of discount notes, along with periodic issuances of long-term debt.  TVA's balance of short-term debt typically changes frequently as TVA issues discount notes to meet short-term cash needs and pay scheduled maturities of discount notes and long-term debt.  TVA’s next significant power bond maturity is $1.0 billion in May 2025.  The periodic amounts of short-term debt issued are determined by near-term expectations for cash receipts, cash expenditures, and funding needs, while seeking to maintain a target range of cash and cash equivalents on hand.  TVA may hold higher cash balances from time to time in response to potential market volatility or other business conditions.  In addition, cash