Company: TVC
Filing Date: 2025-07-29
Form Type: 10-Q
Source: 0001376986-25-000044
Chunk: 252

Company: Tennessee Valley Authority
Filing Date: 2025-07-29
Form: 10-Q
Item: Part II, Item 2
Chunk 252
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 notes") and the issuance of $80 million of membership interests subject to mandatory redemption.  The membership interests were purchased by Johnsonville Holdco LLC ("JHLLC").  JHLLC is a special single-purpose entity, also formed in September 2024, established to acquire and hold the membership interests in JACTG.  A non-controlling interest in JHLLC is held by a third-party through nominal membership interests, to which none of the income, expenses, and cash flows are allocated.   The membership interests held by JHLLC in JACTG were purchased with proceeds from the issuance of $80 million of secured notes (the "JHLLC notes") and are subject to mandatory redemption pursuant to a schedule of amortizing, semi-annual payments due each April 1 and October 1, with a final payment due in October 2054.  The payment dates for the mandatorily redeemable membership interests are the same as those of the JHLLC notes.  The sale of the JACTG notes, the membership interests in JACTG, and the JHLLC notes closed in October 2024.  The JACTG notes are secured by TVA's lease payments, and the JHLLC notes are secured by JHLLC's investment in, and amounts receivable from, JACTG.  TVA's lease payments to JACTG are equal to and payable on the same dates as JACTG's and JHLLC's semi-annual debt service payments.  In addition to the lease payments, TVA pays administrative and miscellaneous expenses incurred by JACTG and JHLLC.  Certain agreements related to this transaction contain default and acceleration provisions.               Due to its participation in the design, business activity, and credit and financial support of JACTG and JHLLC, TVA has determined that it has a variable interest in both of these entities.  Based on its analysis, TVA has concluded that it is the primary beneficiary of JACTG and JHLLC and, as such, is required to account for the VIEs on a consolidated basis.  JHLLC's membership interests in JACTG are eliminated in consolidation.Impact on Consolidated Financial StatementsThe financial statement items attributable to carrying amounts and classifications of JSCCG, Holdco, SCCG, JACTG, and JHLLC at June 30, 2025, and September 30,