Segments and Related Information

Operating results from the regulated electric utility and regulated natural gas utility are each separately and regularly reviewed by PSCo’s chief operating decision maker. PSCo evaluates performance based on profit or loss generated from the product or service provided. These segments are managed separately because the revenue streams are dependent upon regulated rate recovery, which is separately determined for each segment.

PSCo has the following reportable segments: regulated electric utility, regulated natural gas utility and all other.


•	Regulated Electric - The regulated electric utility segment generates electricity which is transmitted and distributed in Colorado. This segment includes sales for resale and provides wholesale transmission service to various entities in the United States. Regulated electric utility also includes PSCo’s wholesale commodity and trading operations.


•	Regulated Natural Gas - The regulated natural gas utility segment transports, stores and distributes natural gas in portions of Colorado.


•	All Other - Revenues from operating segments not included above are below the necessary quantitative thresholds are included in the all other category. Those primarily include steam revenue, appliance repair services and nonutility real estate activities.

Asset and capital expenditure information is not provided for PSCo’s reportable segments because as an integrated electric and natural gas utility, PSCo operates significant assets that are not dedicated to a specific business segment, and reporting assets and capital expenditures by business segment would require arbitrary and potentially misleading allocations which may not necessarily reflect the assets that would be required for the operation of the business segments on a stand-alone basis.

To report income from operations for regulated electric and regulated natural gas utility segments, the majority of costs are directly assigned to each segment. However, some costs, such as common depreciation, common O&M expenses and interest expense are allocated based on cost causation allocators. A general allocator is used for certain general and administrative expenses, including office supplies, rent, property insurance and general advertising.

PSCo’s segment information:



(Millions of Dollars)	2018			2017			2016
Regulated Electric
Operating revenues^(a)	$	3,031.2		$	3,003.8		$	3,049.4
Intersegment revenues	0.3			0.3			0.3
Total operating revenue	$	3,031.5		$	3,004.1		$	3,049.7
Depreciation and amortization	415.6			353.6			337.6
Interest charges and financing costs	142.3			138.6			136.3
Income tax expense	103.0			243.6			228.8
Net income	428.6			370.6			384.0
Regulated Natural Gas
Operating revenues^(a)	$	1,014.6		$	995.2		$	957.7
Intersegment revenues	0.6			0.4			0.1
Total operating revenue	$	1,015.2		$	995.6		$	957.8
Depreciation and amortization	140.6			113.2			101.7
Interest charges and financing costs	42.9			40.2			37.9
Income tax expense	13.1			18.4			46.0
Net income	121.4			107.8			75.4
All Other
Operating revenues^(a)	$	40.4		$	43.5		$	40.7
Depreciation and amortization	4.9			4.7			4.3
Interest charges and financing costs	0.5			0.5			0.4
Income tax (benefit)	(2.4		)	(9.8		)	(0.9		)
Net income	1.7			15.7			4.1

Consolidated Total
Operating revenues^(a)	$	4,087.1		$	4,043.2		$	4,048.2
Intersegment revenues	(0.9		)	(0.7		)	(0.4		)
Total operating revenue	$	4,086.2		$	4,042.5		$	4,047.8
Depreciation and amortization	561.1			471.5			443.6
Interest charges and financing costs	185.7			179.3			174.6
Income tax expense	113.7			252.2			273.9
Net income	551.7			494.1			463.5


^(a)	Operating revenues include $4.4 million, $5.9 million and $13.3 million of intercompany revenue for the years ended Dec. 31, 2018, 2017 and 2016, respectively. See Note 14 for further information.