Company: TVC
Filing Date: 2025-07-29
Form Type: 10-Q
Source: 0001376986-25-000044
Chunk: 342

Company: Tennessee Valley Authority
Filing Date: 2025-07-29
Form: 10-Q
Item: Part II, Item 3
Chunk 342
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 the periods presented.  Based on forecasted foreign currency exchange rates, TVA expects to reclassify approximately $1 million of loss 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 gains on the debt.

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

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 June 30Nine Months Ended June 30Derivative 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$(11)$(8)$(33)$(23)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)(13)(72)(64)(227)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 unrealized gains (losses) for the three and nine months ended June 30, 2025 and for the three and nine months ended June 30, 2024.(2)  Of the amount recognized for the three months ended June 30, 2025, $3 million and $10 million were reported in Fuel expense and Purchased power expense, respectively, and of the amount recognized for the three months ended June 30, 2024, $59 million and $13 million were reported in Fuel expense and Purchased power expense, respectively.  Of the amount recognized for the nine months ended June 30, 2025, $12 million and $52 million were reported in Fuel expense and Purchased power expense, respectively,