Company: TVC
Filing Date: 2025-07-29
Form Type: 10-Q
Source: 0001376986-25-000044
Chunk: 261

Company: Tennessee Valley Authority
Filing Date: 2025-07-29
Form: 10-Q
Item: Part II, Item 2
Chunk 261
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ivatives That Do Not Receive Hedge Accounting Treatment:BalanceBalance Sheet PresentationBalanceBalance Sheet PresentationInterest rate swaps    $1.0 billion notional$(508)Accounts payable andaccrued liabilities $(30); Accrued interest $(8); Other long-term liabilities$(470)$(622)Accounts payable andaccrued liabilities $(10); Accrued interest $(26); Other long-term liabilities $(586)$476 million notional(165)Accounts payable andaccrued liabilities $(12); Accrued interest $(1);Other long-term liabilities$(152)(218)Accounts payable andaccrued liabilities $(3); Accrued interest $(9);Other long-term liabilities$(206)Commodity contract derivatives1 Other current assets $6; Accounts payable and accrued liabilities $(3); Other long-term liabilities $(2)2 Other current assets $5; Other long-term assets $2; Accounts payable and accrued liabilities $(3); Other long-term liabilities $(2)Commodity derivatives under the FHP(1)Other long-term assets $17; Other current assets $7; Accounts payable and accrued liabilities $(19); Other long-term liabilities $(6)(161)Accounts payable and accrued liabilities $(99); Other long-term liabilities $(62)

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Table of Contents                               Draft 4.0                    07/24/2025 5:00 PM

Cash Flow Hedging Strategy for Currency SwapsTo protect against exchange rate risk related to British pound sterling denominated Bond transactions, TVA entered into foreign currency hedges at the time the Bond transactions occurred.  TVA had two currency swaps outstanding at June 30, 2025, with total currency exposure of £400 million and expiration dates in 2032 and 2043.When the dollar strengthens against the British pound sterling, the exchange gain on the Bond liability and related accrued interest is offset by an equal amount of loss on the swap contract that is reclassified out of AOCI.  Conversely, the exchange loss on the Bond liability and related accrued interest is offset by an equal amount of gain on the swap contract that is reclassified out of AOCI.  All such exchange gains or losses on the Bond liability and related accrued interest are included in Long-term debt, net and Accrued interest, respectively.  The offsetting exchange losses or gains on the swap contracts are recognized in AOCI.  If any gain (loss) were to be incurred as a result of the early termination of the foreign