Company: TVC
Filing Date: 2025-02-05
Form Type: 10-Q
Source: 0001376986-25-000011
Chunk: 309

Company: Tennessee Valley Authority
Filing Date: 2025-02-05
Form: 10-Q
Item: Part II, Item 5
Chunk 309
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 measured at NAV in the fair value hierarchy.Realized and unrealized gains and losses on equity and trading debt securities are recognized in current earnings and are based on average cost.  The gains and losses of the NDT and ART are subsequently reclassified to a regulatory asset or liability account in accordance with TVA's regulatory accounting policy.  See Note 1 — Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements in the Annual Report and Note 8 — Regulatory Assets and Liabilities.  TVA recorded unrealized gains and losses related to its equity and trading debt securities held during each period as follows:Unrealized Investment Gains (Losses)(1)(in millions) Three Months Ended December 31FundFinancial Statement Presentation20242023NDTRegulatory assets(2)$(75)$197 ARTRegulatory assets(3)(20)89 SERPOther income, net(6)7 DCPOther income, net(1)1 Notes(1)  The unrealized gains for the RP were less than $1 million for both the three months ended December 31, 2024 and December 31, 2023, and therefore were not represented in the table above.(2)  Includes $43 million of unrealized losses and $61 million of unrealized gains related to NDT equity securities (excluding commingled funds) for the three months ended December 31, 2024 and December 31, 2023, respectively. (3)  Includes $11 million of unrealized losses and $18 million of unrealized gains related to ART equity securities (excluding commingled funds) for the three months ended December 31, 2024 and December 31, 2023, respectively.

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Currency and Interest Rate Swap DerivativesSee Note 13 — Risk Management Activities and Derivative Transactions — Cash Flow Hedging Strategy for Currency Swaps and Derivatives Not Receiving Hedge Accounting Treatment for a discussion of the nature, purpose, and contingent features of TVA's currency swaps and interest rate swaps.  These swaps are classified as Level 2 valuations and are valued based on income approaches using observable market inputs for similar instruments.Commodity Contract Derivatives and Commodity Derivatives under the FHPCommodity Contract Derivatives.  Most of these derivative contracts are valued based on market approaches, which utilize short-term and mid-term market-quoted prices from an external industry brokerage service.  These contracts are classified as Level 2