Company: TVC
Filing Date: 2025-11-13
Form Type: 10-K
Source: 0001376986-25-000056
Chunk: 461

Company: Tennessee Valley Authority
Filing Date: 2025-11-13
Form: 10-K
Item: Item 7
Chunk 461
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 diversified by property type and geographic location. 

    The pension plan is invested in two commingled funds that develop, renovate, and re-lease real estate properties to create value.  Investments are predominantly in top tier real estate markets that offer deep liquidity.  Property types include residential, office, industrial, hotel, retail, and land.  Properties are diversified by geographic region within the U.S. domestic market.  The plan is invested in a commingled fund that invests primarily in core, well-leased, operating real estate properties with a focus on income generation.  Investments are diversified by property type with a focus on office, industrial, apartment, and retail.  Properties are diversified within the U.S. with an overweight to major market and coastal regions.

    Fair value estimates of the underlying investments in these limited partnerships and commingled fund investments are primarily based upon property appraisal reports prepared by independent real estate appraisers within a reasonable amount of time following acquisition of the real estate and no less frequently than annually thereafter.  The appraisals are based on one or a combination of three methodologies: cost of reproduction analysis, discounted cash flow analysis, and sales comparison analysis.  Pricing for certain investments in mortgage-backed and asset-backed securities is typically based on models that incorporate observable inputs. 

The pension plan is invested in energy infrastructure partnerships that acquire essential, long-lived real assets in three main groupings.  Upstream assets include oil and gas exploration, drilling, and acquisition.  Midstream assets include storage, pipelines, gathering, processing, and transportation of energy commodities.  Downstream assets include generation, distribution, and transmission facilities.  Additionally, the pension plan is invested in infrastructure partnerships that target mid-sized operating infrastructure companies and/or assets with limited development and construction risk primarily in the energy, transportation and logistics, environmental, telecommunications, and social industries.  The partnerships use one or more valuation techniques (e.g., the market approach, the income approach, or the cost approach) for which sufficient and reliable data is available.  The use of the market approach generally consists of using comparable market transactions, while the use of the income approach generally consists of the net present value of estimated future cash flows, adjusted as appropriate for liquidity, credit, market, and/or other risk factors.

     The pension plan is invested in a private real asset investment trust formed to make direct or indirect investments in commercial timberland properties.  Pricing for these types of investments is based on comprehensive appraisals that are conducted shortly after