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Tennessee Valley Authority: Information on Lease-Leaseback and Other Financing Arrangements

GAO-03-784 Published: Jun 30, 2003. Publicly Released: Jul 30, 2003.
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Highlights

Concern about the implications of the Tennessee Valley Authority's (TVA) debt on its future competitiveness prompted Representative Richard Baker to ask GAO to determine TVA's planned and actual use of nontraditional financing arrangements (which, to date, has consisted primarily of lease-leaseback arrangements), who is at risk under TVA's lease-leaseback arrangements, and whether TVA's accounting for the lease-leaseback arrangements complies with applicable standards and requirements.

Recommendations

Matter for Congressional Consideration

Matter Status Comments
Congress may want to consider amending the TVA Act to clarify whether the debt cap should include alternative sources of financing (such as lease-leaseback arrangements) that have the same impact on TVA's financial condition and competitive position as traditional debt financing.
Closed – Not Implemented
Congress has not amended the TVA Act to clarify whether alternative sources of financing should be counted toward TVA's debt cap.

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Topics

Agency debtDeficit financingFinancial managementLeasesStrategic planningAccounting standardsFair market valueFinancial reportingPrivate equityFinancial statements