Company: TVC
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0001376986-25-000029
Chunk: 116

Company: Tennessee Valley Authority
Filing Date: 2025-05-01
Form: 10-Q
Item: Part II, Item 3
Chunk 116
---
 DerivativeHedging Instrument2025202420252024Currency swapsTo protect against changes in cash flows caused by changes in foreign currency exchange rates (exchange rate risk)Unrealized gains and losses are recorded in AOCI and reclassified to Interest expense to the extent they are offset by gains and losses on the hedged transaction$(4)$(4)$(23)$16 Summary of Derivative Instruments That Receive Hedge Accounting Treatment (part 2)(1)Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) to Interest Expense(in millions)Three Months Ended March 31Six Months Ended March 31Derivatives in Cash Flow Hedging Relationship2025202420252024Currency swaps$14 $(6)$(23)$13 Note(1)  There were no amounts excluded from effectiveness testing for any of the periods presented.  Based on forecasted foreign currency exchange rates, TVA expects to reclassify approximately $3 million of gains from Accumulated other comprehensive income (loss) ("AOCI") to Interest expense within the next 12 months to offset amounts anticipated to be recorded in Interest expense related to the forecasted exchange loss on the debt.Summary of Derivative Instruments That Do Not Receive Hedge Accounting TreatmentAmount of Gain (Loss) Recognized in Income on Derivatives(1)(in millions)Three Months Ended March 31Six Months Ended March 31Derivative TypeObjective of DerivativeAccounting for Derivative Instrument2025202420252024Interest rate swapsTo fix short-term debt variable rate to a fixed rate (interest rate risk)Mark-to-market gains and losses are recorded as regulatory liabilities and assets, respectivelyRealized gains and losses are recognized in Interest expense when incurred during the settlement period and are presented in operating cash flow$(12)$(7)$(22)$(15)Commodity derivativesunder the FHPTo protect against fluctuations in market prices of purchased commodities (price risk)Mark-to-market gains and losses are recorded as regulatory liabilities and assets, respectivelyRealized gains and losses are recognized in Fuel expense or Purchased power expense as the contracts settle to match the delivery period of the underlying commodity(2)(14)(101)(51)(155)Notes(1)  All of TVA's derivative instruments that do not receive hedge accounting treatment have unrealized gains (losses) that would otherwise be recognized in income but instead are deferred as regulatory assets and liabilities.  As such, there were no related gains (losses) recognized in income for these unreal