Company: TVC
Filing Date: 2025-11-13
Form Type: 10-K
Source: 0001376986-25-000056
Chunk: 464

Company: Tennessee Valley Authority
Filing Date: 2025-11-13
Form: 10-K
Item: Item 7
Chunk 464
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 a discount rate determined by reference to the U.S. Treasury Constant Maturities corresponding to the calculated average durations of TVA's future estimated post-employment claims payments.  The use of a 4.16 percent discount rate resulted in the recognition of $3 million in expenses in 2025 and an unpaid benefit obligation of $233 million at September 30, 2025.  The use of a 3.81 percent discount rate resulted in the recognition of approximately $21 million in expenses in 2024 and an unpaid benefit obligation of $258 million at September 30, 2024.  The use of a 4.59 percent discount rate resulted in the recognition of approximately $(3) million in expenses in 2023 and an unpaid benefit obligation of $266 million at September 30, 2023.  The U.S. Department of Labor ("DOL") administers TVA's worker compensation program and invoices TVA annually for claims processed.

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The decrease in the unpaid obligation at September 30, 2025, compared to the prior year was due primarily to the increase in the discount rate from 3.81 percent in 2024 to 4.16 percent in 2025 and a decrease in overall claims experience.  The DOL billed TVA $25 million for 2025 claims due in October 2025.  TVA estimated claims for 2026 are $24 million.

The decrease in the unpaid obligation at September 30, 2024, compared to the prior year was due primarily to the decrease in overall claims experience offset by inflationary impacts on wage and medical costs and a decrease in the discount rate from 4.59 percent in 2023 to 3.81 percent in 2024.  TVA paid $28 million for 2024 claims to the DOL in October 2024.

The impact of inflation on wages, medical costs, and interest rates on the post-employment obligation depends on factors beyond TVA's knowledge or control, including the effects of supply chain disruptions and geographical tensions.

The current portion which represents unpaid losses and administrative fees due are in Accounts payable and accrued liabilities.  The long-term portion is recognized in Post-retirement and post-employment benefit obligations.

Amounts Recognized on TVA's Consolidated Balance SheetsAt September 30(in millions) 20252024Accounts payable and accrued liabilities$25 $28 Post-retirement and post-employment benefit obligations208 230