87 NOTES TO THE FINANCIAL STATEMENTS

Note 7. Debt and Equity Securities

Debt and Equity Securities as of September 30, 2018

Book

(In billions of dollars) Cost Adjustment Value

Held-To Maturity

Debt securities:

Non-U.S. government....................... - - -

Mortgage/asset backed .................... 0.2 - 0.2

Equity Securities:

All other equity securities .................. 3.5 - 3.5

Total Held-To-Maturity (Net Investment) 3.7 - 3.7

Available-for-Sale:

Debt Securities: 3.5 0.2 3.7

Total Available-for-Sale (Fair Value) 3.5 0.2 3.7

Trading Securities:

Debt Securities:

Non-U.S. government....................... 12.9 (0.2) 12.7

Commercial .................................... 0.2 - 0.2

Mortgage/asset backed..................... 3.8 (0.1) 3.7

Corporate and other bonds ............... 15.9 (0.2) 15.7

All other debt securities..................... 2.5 (1.0) 1.5

Equity Securities:

Unit Trust......................................... 16.3 9.5 25.8

Common Stocks............................... 2.0 0.3 2.3

All other equity securities .................. 14.3 0.9 15.2

Total Trading Securities (Fair Value) 67.9 9.2 77.1

Total

Total debt and equity securities categorized

as held-to-maturity, available-for-sale or trading........................................................................... 84.5

Total NRRIT debt and equity securities (Fair Value) ..................................................................... 25.8

Total debt and equity securities................................................................................................... 110.3
NOTES TO THE FINANCIAL STATEMENTS 88

Debt and Equity Securities as of September 30, 2017 

Book

(In billions of dollars) Cost Adjustment Value

Held-To Maturity

Debt securities:

Non-U.S. government....................... - - -

Mortgage/asset backed .................... 0.2 - 0.2

Equity Securities:

All other equity securities .................. 3.6 - 3.6

Total Held-To-Maturity (Net Investment) 3.8 - 3.8

Available-for-Sale:

Debt Securities: 5.4 0.2 5.6

Total Available-for-Sale (Fair Value) 5.4 0.2 5.6

Trading Securities:

Debt Securities:

Non-U.S. government....................... 12.2 0.6 12.8

Commercial .................................... 0.2 - 0.2

Mortgage/asset backed .................... 3.9 - 3.9

Corporate and other bonds ............... 16.4 0.6 17.0

All other debt securities..................... 4.0 (0.1) 3.9

Equity Securities:

Unit Trust......................................... 18.0 8.2 26.2

Common Stocks............................... 2.1 0.1 2.2

All other equity securities .................. 15.2 (0.1) 15.1

Total Trading Securities (Fair Value) 72.0 9.3 81.3

Total

Total debt and equity securities categorized

as held-to-maturity, available-for-sale or trading.......................................................................... 90.7

*Total RRB debt and equity securities (Fair Value)...................................................................... 25.5

Total debt and equity securities.................................................................................................. 116.2

*Includes amounts from NRRIT in 2017. In 2018, NRRIT amounts are reported separately.

These debt and equity securities do not include nonmarketable Treasury securities that have been eliminated in

consolidation. Held-to-maturity debt and equity securities are reported as total net investment, net of unamortized discounts

and premiums. Available-for-sale debt and equity securities are reported at fair value, net of unrealized gain or loss. Trading

debt and equity securities are reported at fair value, net of unrealized gain or loss.

NRRIT on behalf of the RRB, manages and invests railroad retirement assets that are to be used to pay retirement

benefits to the nation’s railroad workers under the Railroad Retirement Program. As an investment company, NRRIT is

subject to different accounting standards that do not require the classifications presented above. Please refer to NRRIT’s

financial statements for more detailed information concerning this specific investment.

Certain significant consolidation entities apply financial accounting and reporting standards issued by the Financial

Accounting Standards Board (FASB) (FASB standards), and such entities, as permitted by SFFAS No.47, are consolidated

into the U.S. government’s consolidated financial statements without conversion to financial and reporting standards issued

by the FASAB (FASAB standards). PBGC, NRRIT, and TVA debt and equity securities are recorded at fair value and have

been categorized based upon a fair value hierarchy, in accordance with FASB ASC Section 820, Fair Value Measures and

Disclosures, in their respective financial statements.
89 NOTES TO THE FINANCIAL STATEMENTS

Debt and Equity Securities as of September 30, 2018, and 2017

(In billions of dollars) 2018 2017

Pension Benefit Guaranty Corporation....................................... 62.0 66.7

National Railroad Retirement Investment Trust........................... 25.8 -

Tennessee Valley Authority....................................................... 11.5 11.4

*Railroad Retirement Board ..................................................... - 25.5

All other................................................................................... 11.0 12.6

Total securities and investments ............................................. 110.3 116.2

*Includes amounts from NRRIT in 2017. In 2018, NRRIT amounts are reported separately.

PBGC and TVA invest primarily in fixed maturity and equity securities, classified as trading. PBGC reported an

unrealized loss related to trading securities as of September 30, 2018 of $1.2 billion, and an unrealized gain related to trading

securities as of September 30, 2017 of $3.3 billion. TVA reported gains related to trading securities held as of September 30,

2018 and 2017 of $1.6 billion and $1.2 billion, respectively. The TVA balance includes $8.4 billion and $8.5 billion as of

September 30, 2018, and 2017, respectively, for the Tennessee Valley Authority Retirement System (TVARS). TVARS

includes unrealized gains of $0.8 billion as of both September 30, 2018 and 2017. PBGC, NRRIT, and TVA base market

values on the last sale of a listed security, on the mean of the “bid-and-ask” for nonlisted securities, or on a valuation model

in the case of fixed income securities that are not actively traded. These valuations are determined as of the end of each fiscal

year. Purchases and sales of securities are recorded on the trade date. Please refer to the individual financial statements of

PBGC, NRRIT, and TVA for more detailed information related to debt and equity securities. These entities comprise 90.0

percent of the total reported debt and equity securities of $110.3 billion as of September 30, 2018.