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Pepco Holdings LLC (): analysis traps
Where its figures could mislead a reader, and what to check before taking them at face value · Data: Q3 2026, to Sep 30, 2026, filed Oct 30, 2026; rules v1.1
Pepco Holdings LLC (): 1 rule of 10 triggered on the filings to Sep 30, 2026: low net debt = no refinancing risk; 5 with insufficient data; 2 not applicable. Each is a question to verify, with the normal explanation that would produce the same figures.
Check these first
Low net debt = no refinancing risk Triggered · severity high · confidence medium
$340M of debt comes due within a year against $25M of cash and investments: $315M short, to be refinanced or raised. Net debt of $6.0B says nothing about when the debt falls due.
Innocent reading: A committed, undrawn credit facility covers the gap (not visible in the balance sheet).
Every rule
A01 FCF growth = the business improved Insufficient data
fewer than two fiscal years with operating cash flow and capital expenditure on file
A07 Stock compensation added back = no economic cost Insufficient data
fewer than two fiscal years of stock compensation and share counts on file
B02 Receivables growing = future cash is certain Not triggered confidence medium
Receivables grew 7% against revenue 3% in Q4 2015; DSO 71 against a median of 64: collections are keeping pace with sales.
The figures and how they are read
| Quarter | Q4 2015 |
| Revenue, year over year | +2.9% |
| Receivables, year over year | +7.3% |
| Quarter before | Q3 2015 |
| Revenue y/y, quarter before | +3.7% |
| Receivables y/y, quarter before | +16.6% |
| Days sales outstanding | 71.4 |
| DSO, median of eight quarters | 64.3 |
| Receivables | $839M |
| Revenue | $1.1B |
receivables and revenue against the same quarter a year earlier; DSO = receivables / quarterly revenue × days, against the median of the eight quarters before
Source: Q4 2015 (receivables and revenue) · Q4 2014 (the same quarter a year earlier)
B08 Adjusted profit = economic profit Insufficient data
no reconciliation table read from the releases yet and fewer than three quarters with both an adjusted and a GAAP EPS
C02 Low net debt = no refinancing risk Triggered severity high · confidence medium
$340M of debt comes due within a year against $25M of cash and investments: $315M short, to be refinanced or raised. Net debt of $6.0B says nothing about when the debt falls due.
The figures and how they are read
| Cash and investments | $25M |
| Debt | $6.0B |
| Net debt | $6.0B |
| Due within a year | $340M |
| Read from | the debt maturity table |
| Free cash flow, twelve months | — |
| Cash plus free cash flow | $25M |
| Coverage of what is due | 0.1 |
| Due in the second year | $131M |
| Balance sheet date | 2015-12-31 |
due within a year from the maturity table (else the current portion of debt), against cash and investments plus free cash flow over the last twelve months (zero if negative); no credit lines assumed
Source: FY2015 (debt maturities, cash and investments)
What would explain it innocently
- A committed, undrawn credit facility covers the gap (not visible in the balance sheet)
- The notes are routinely rolled over in the commercial-paper or bond market at an investment-grade rating
- Cash held abroad or in subsidiaries can be moved to where the debt is
- A sale of a business or asset already agreed brings the cash
What to look for in the filing
- Undrawn committed facilities and their covenants
- The cost and rating of the refinancing
- Restricted cash and the operating minimum
What would show the trap does not apply
- The 10-K lists an undrawn credit facility that covers the debt due, or the maturity is refinanced before it falls due
- Cash plus FCF of the next quarter exceeds the debt due within a year
Look again: next filing.
D03 EPS growth = profit growth Not triggered confidence high
EPS rose 14% and net income rose 15% in Q3 2015; the share count rose 0.8%: EPS growth follows profit growth.
The figures and how they are read
| Quarter | Q3 2015 |
| Quarter before | Q3 2014 |
| EPS, year before | $0.31 |
| EPS | $0.36 |
| Net income, year before | $79M |
| Net income | $91M |
| Diluted shares, year before | 252.0M shares |
| Diluted shares | 254.0M shares |
| EPS growth | +14.4% |
| Net income growth | +15.2% |
| Diluted shares: change | +0.8% |
| eps from profit | $0.05 |
| eps from share count | $0.00 |
EPS and net income against the same quarter a year earlier; the EPS bridge attributes the change to profit first, then to the share count (the order is fixed and disclosed)
Source: Q3 2015 (net income, diluted shares, EPS) · Q3 2014 (the same quarter a year earlier)
E02 Low P/E at a cyclical peak = undervalued Insufficient data
no market value or trailing net income in the valuation research
E07 A precise DCF value = the true value Insufficient data
no DCF in the valuation research for this company
J06 A bank's low P/E and high profit = safe Not applicable
not a bank
J08 A REIT's low net income = the dividend is unsafe Not applicable
not a REIT
What the statuses mean
Triggered: the filings show the pattern; read the normal explanations and the missing evidence before concluding anything. To review: one quarter or a weak signal; a reader's judgement, not a pattern. Not triggered: the pattern is absent on these figures. Insufficient data: the filings read so far do not hold what the rule needs; this is not a clean bill. Not applicable: the rule is not meant for this kind of company (a bank's working capital, a loss-making quarter's EPS growth). Out of date: the latest filing is more than fifteen months old.
Severity is what the pattern could mean for cash, value or solvency; confidence is how reliable the inputs and the reading are. The two are kept apart.
Record a view
A reader's judgement, grounds, what would change it and the next review; kept in the browser (needs JavaScript).
Every rule and the companies it triggers on → Pepco Holdings LLC: cash flow →
Each rule reads the company's own filings by a fixed formula and says what would explain the same figures innocently. A triggered rule is a question to verify, not a finding of manipulation, and not a view on the stock. Missing data is shown as missing, never as clear. Not investment advice.