Company: TVC
Filing Date: 2025-11-13
Form Type: 10-K
Source: 0001376986-25-000056
Chunk: 286

Company: Tennessee Valley Authority
Filing Date: 2025-11-13
Form: 10-K
Item: Item 1
Chunk 286
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 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 initial purchase of properties and at three-year intervals thereafter.  All appraisals are conducted by third-party timberland appraisal firms.  Appraisals are based on either a sales comparison analysis or a discounted cash flow analysis. 

    Securities Lending Collateral.  Collateral held under securities lending arrangements is invested in highly liquid short-term securities, primarily repurchase agreements.  The securities are often priced at cost, which approximates fair value due to the short-term nature of the instruments.  These securities are classified as Level 2.

     Derivatives.  The pension plan invests in a variety of derivative instruments.  The valuation methodologies for these instruments are as follows:

     Futures.  The pension plan enters into futures.  The futures contracts are listed on either a national or foreign securities exchange and are generally valued each business day at the official closing price (typically the last reported sales price) on the exchange on which the security is primarily traded.  The pricing is performed by third-party vendors.  Since futures are priced by an exchange in an active market, they are