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Fair Value
 3 Months Ended
Mar. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]  
Fair Value
Fair Value

The fair value of current financial assets and liabilities, debt service reserves and other deposits approximate their reported carrying amounts. The estimated fair values of our assets and liabilities have been determined using available market information. By virtue of these amounts being estimates and based on hypothetical transactions to sell assets or transfer liabilities, the use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. For further information on our valuation techniques and policies, see Note 5—Fair Value in Item 8.—Financial Statements and Supplementary Data of our Form 10-K.

The following table presents the fair value, carrying value and cost of our non-derivative instruments at March 31, 2019 and December 31, 2018. Information about the fair value of our derivative instruments can be found in Note 5 – Derivative Instruments and Hedging Activities.
 
 
March 31, 2019
 
December 31, 2018
$ in millions
 
Cost
 
Fair Value
 
Cost
 
Fair Value
Assets
 
 
 
 
 
 
 
 
Money market funds
 
$
0.1

 
$
0.1

 
$
0.4

 
$
0.4

Equity securities
 
2.3

 
3.9

 
2.4

 
3.5

Debt securities
 
4.1

 
4.1

 
4.1

 
4.0

Hedge funds
 
0.1

 
0.1

 
0.1

 
0.1

Tangible assets
 
0.1

 
0.1

 
0.1

 
0.1

Total Assets
 
$
6.7

 
$
8.3

 
$
7.1

 
$
8.1

 
 
 
 
 
 
 
 
 
 
 
Carrying Value
 
Fair Value
 
Carrying Value
 
Fair Value
Liabilities
 
 
 
 
 
 
 
 
Long-term debt
 
$
1,475.7

 
$
1,544.9

 
$
1,475.9

 
$
1,519.6



These financial instruments are not subject to master netting agreements or collateral requirements and as such are presented in the Condensed Consolidated Balance Sheet at their gross fair value, except for Long-term debt, which is presented at amortized carrying value.

We did not have any transfers of the fair values of our financial instruments between Level 1, Level 2 or Level 3 of the fair value hierarchy during the three months ended March 31, 2019 or 2018.

Master Trust Assets
DP&L established a Master Trust to hold assets that could be used for the benefit of employees participating in employee benefit plans and these assets are not used for general operating purposes. On January 1, 2018, AOCI of $1.6 million ($1.0 million net of tax) was reversed to Accumulated Deficit and all future changes to fair value on the Master Trust Assets will be included in income in the period that the changes occur. Changes to fair value were not material for the three months ended March 31, 2019 or 2018. These assets are primarily comprised of open-ended mutual funds, which are valued using the net asset value per unit. These investments are recorded at fair value within Other deferred assets on the condensed consolidated balance sheets and classified as available for sale.

Long-term debt
The fair value of debt is based on current public market prices for disclosure purposes only. Unrealized gains or losses are not recognized in the financial statements as long-term debt is presented at carrying value, net of unamortized premium or discount and unamortized deferred financing costs in the financial statements. The long-term debt amounts include the current portion payable in the next twelve months and have maturities that range from 2019 to 2061.

The fair value of assets and liabilities at March 31, 2019 and December 31, 2018 and the respective category within the fair value hierarchy for DPL is as follows:
$ in millions
 
Fair value at March 31, 2019 (a)
 
Fair value at December 31, 2018 (a)
 
 
Level 1
 
Level 2
 
Level 3
 
Total
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Master Trust assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Money market funds
 
$
0.1

 
$
—

 
$
—

 
$
0.1

 
$
0.4

 
$
—

 
$
—

 
$
0.4

Equity securities
 
—

 
3.9

 
—

 
3.9

 
—

 
3.5

 
—

 
3.5

Debt securities
 
—

 
4.1

 
—

 
4.1

 
—

 
4.0

 
—

 
4.0

Hedge funds
 
—

 
0.1

 
—

 
0.1

 
—

 
0.1

 
—

 
0.1

Tangible assets
 
—

 
0.1

 
—

 
0.1

 
—

 
0.1

 
—

 
0.1

Total Master Trust assets
 
0.1

 
8.2

 
—

 
8.3

 
0.4

 
7.7

 
—

 
8.1

Derivative assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate hedges
 
—

 
1.1

 
—

 
1.1

 
—

 
1.5

 
—

 
1.5

Total Derivative assets
 
—

 
1.1

 
—

 
1.1

 
—

 
1.5

 
—

 
1.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Assets
 
$
0.1

 
$
9.3

 
$
—

 
$
9.4

 
$
0.4

 
$
9.2

 
$
—

 
$
9.6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term debt
 
$
—

 
$
1,527.3

 
$
17.6

 
$
1,544.9

 
$
—

 
$
1,501.9

 
$
17.7

 
$
1,519.6

 
 
 
 
 
 
 
 


 
 
 
 
 
 
 


Total Liabilities
 
$
—

 
$
1,527.3

 
$
17.6

 
$
1,544.9

 
$
—

 
$
1,501.9

 
$
17.7

 
$
1,519.6



(a)
Includes credit valuation adjustment
THE DAYTON POWER AND LIGHT COMPANY [Member]  
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]  
Fair Value
Fair Value

The fair value of current financial assets and liabilities, debt service reserves and other deposits approximate their reported carrying amounts. The estimated fair values of our assets and liabilities have been determined using available market information. By virtue of these amounts being estimates and based on hypothetical transactions to sell assets or transfer liabilities, the use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. For further information on our valuation techniques and policies, see Note 5—Fair Value in Item 8.—Financial Statements and Supplementary Data of our Form 10-K.

The following table presents the fair value, carrying value and cost of our non-derivative instruments at March 31, 2019 and December 31, 2018. Information about the fair value of our derivative instruments can be found in Note 5 – Derivative Instruments and Hedging Activities.
 
 
March 31, 2019
 
December 31, 2018
$ in millions
 
Cost
 
Fair Value
 
Cost
 
Fair Value
Assets
 
 
 
 
 
 
 
 
Money market funds
 
$
0.1

 
$
0.1

 
$
0.4

 
$
0.4

Equity securities
 
2.3

 
3.9

 
2.4

 
3.5

Debt securities
 
4.1

 
4.1

 
4.1

 
4.0

Hedge funds
 
0.1

 
0.1

 
0.1

 
0.1

Tangible assets
 
0.1

 
0.1

 
0.1

 
0.1

Total assets
 
$
6.7

 
$
8.3

 
$
7.1

 
$
8.1

 
 
 
 
 
 
 
 
 
 
 
Carrying Value
 
Fair Value
 
Carrying Value
 
Fair Value
Liabilities
 
 
 
 
 
 
 
 
Long-term debt
 
$
585.5

 
$
592.6

 
$
586.1

 
$
593.8



These financial instruments are not subject to master netting agreements or collateral requirements and as such are presented in the Condensed Balance Sheet at their gross fair value, except for Long-term debt, which is presented at amortized carrying value.

We did not have any transfers of the fair values of our financial instruments between Level 1, Level 2 or Level 3 of the fair value hierarchy during the three months ended March 31, 2019 or 2018.

Master Trust Assets
DP&L established a Master Trust to hold assets that could be used for the benefit of employees participating in employee benefit plans and these assets are not used for general operating purposes. On January 1, 2018, AOCI of $1.7 million ($1.1 million net of tax) was reversed to Accumulated Deficit and all future changes to fair value on the Master Trust Assets will be included in income in the period that the changes occur. Changes to fair value were not material for the three months ended March 31, 2019 or 2018. These assets are primarily comprised of open-ended mutual funds, which are valued using the net asset value per unit. These investments are recorded at fair value within Other deferred assets on the condensed balance sheets and classified as available for sale.

Long-term debt
The fair value of debt is based on current public market prices for disclosure purposes only. Unrealized gains or losses are not recognized in the financial statements as long-term debt is presented at carrying value, net of unamortized premium or discount and unamortized deferred financing costs in the financial statements. The long-term debt amounts include the current portion payable in the next twelve months and have maturities that range from 2020 to 2061.

The fair value of assets and liabilities at March 31, 2019 and December 31, 2018 and the respective category within the fair value hierarchy for DP&L is as follows:
$ in millions
 
Fair value at March 31, 2019 (a)
 
Fair value at December 31, 2018 (a)
 
 
Level 1
 
Level 2
 
Level 3
 
Total
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Master Trust assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Money market funds
 
$
0.1

 
$
—

 
$
—

 
$
0.1

 
$
0.4

 
$
—

 
$
—

 
$
0.4

Equity securities
 
—

 
3.9

 
—

 
3.9

 
—

 
3.5

 
—

 
3.5

Debt securities
 
—

 
4.1

 
—

 
4.1

 
—

 
4.0

 
—

 
4.0

Hedge funds
 
—

 
0.1

 
—

 
0.1

 
—

 
0.1

 
—

 
0.1

Tangible assets
 
—

 
0.1

 
—

 
0.1

 
—

 
0.1

 
—

 
0.1

Total Master Trust assets
 
0.1

 
8.2

 
—

 
8.3

 
0.4

 
7.7

 
—

 
8.1

Derivative assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate hedges
 
—

 
1.1

 
—

 
1.1

 
—

 
1.5

 
—

 
1.5

Total derivative assets
 
—

 
1.1

 
—

 
1.1

 
—

 
1.5

 
—

 
1.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
 
$
0.1

 
$
9.3

 
$
—

 
$
9.4

 
$
0.4

 
$
9.2

 
$
—

 
$
9.6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term debt
 
$
—

 
$
575.0

 
$
17.6

 
592.6

 
$
—

 
$
576.1

 
$
17.7

 
$
593.8

 
 
 
 
 
 
 
 


 
 
 
 
 
 
 


Total liabilities
 
$
—

 
$
575.0

 
$
17.6

 
$
592.6

 
$
—

 
$
576.1

 
$
17.7

 
$
593.8



(a)
Includes credit valuation adjustment