Company: TVC
Filing Date: 2025-07-29
Form Type: 10-Q
Source: 0001376986-25-000044
Chunk: 507

Company: Tennessee Valley Authority
Filing Date: 2025-07-29
Form: 10-Q
Item: Part II, Item 10
Chunk 507
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A'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, 2024, as reflected on the Consolidated Balance Sheets, are as follows:Summary of Impact of VIEs on Consolidated Balance Sheets(in millions) At June 30, 2025At September 30, 2024Current liabilities Accrued interest$30 $9 Accounts payable and accrued liabilities1 1 Current maturities of long-term debt of variable interest entities48 37 Total current liabilities79 47 Other liabilitiesOther long-term liabilities15 16 Long-term debt, netLong-term debt of variable interest entities, net1,651 897 Total liabilities$1,745 $960 Interest expense of $21 million and $12 million for the three months ended June 30, 2025 and 2024, respectively, and $64 million and $35 million for the nine months ended June 30, 2025 and 2024, respectively, is included in the Consolidated Statements of Operations related to debt of VIEs and membership interests of VIEs subject to mandatory redemption.Creditors of the VIEs do not have any recourse to the general credit of TVA.  TVA does not have any obligations to provide financial