Company: TVC
Filing Date: 2025-11-13
Form Type: 10-K
Source: 0001376986-25-000056
Chunk: 133

Company: Tennessee Valley Authority
Filing Date: 2025-11-13
Form: 10-K
Item: Item 8
Chunk 133
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 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 $14 million of gains from 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)For the years ended September 30(in millions) Derivative TypeObjective of DerivativeAccounting for Derivative Instrument20252024Interest 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$45 $(31)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)(93)(295)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 liabilities and assets.  As such, there were no related gains (losses) recognized in income for these unrealized gains (losses) for the years ended September 30, 2025 and 2024. (2)  Of the amount recognized in 2025, $77 million and $16 million were reported in Fuel expense and Purchased power expense, respectively.  Of the amount recognized in 2024, $245 million and $50 million were reported in Fuel expense and Purchased power expense, respectively.

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Fair Values of TVA DerivativesAt September 30(in millions) 20252024Derivatives That Receive Hedge Accounting Treatment: BalanceBalance Sheet PresentationBalanceBalance Sheet PresentationCurrency swaps    £250 million Sterling$(47)Accounts payable and accrued liabilities $(4); Other long-term liabilities $(43)$(49)Accounts payable and accrued liabilities $(4); Other long-term liabilities $(45)£150 million Sterling(68)Accounts payable and accrued liabilities $(3); Other long-term liabilities