Eversource 2009 Annual Report Download - page 124

FS-39
For the Years Ended December 31,
2009 2008 2007
CL&P PSNH WMECO CL&P PSNH WMECO CL&P PSNH WMECO
(Millions of Dollars, except percentages)
Income from continuing operations
before income tax expense $ 335.2 $ 97.6 $ 41.1 $ 269.0 $ 80.1 $ 28.9 $ 185.9 $ 77.2 $ 38.2
Expected federal income tax expense 117.3 34.1 14.4 94.2 28.0 10.1 65.1 27.0 13.4
Tax effect of differences:
Depreciation (1.7) (1.2) 0.3 (11.1) (1.8) 0.1 (6.6) - 0.5
Investment tax credit amortization (2.5) (0.1) (0.3) (2.6) (0.2) (0.2) (2.6) (0.3) (0.3)
Other federal tax credits (0.1) (3.7) - (1.2) (3.4) - (1.1) (3.1) -
State income taxes, net of
federal impact 8.9 4.3 1.6 (18.5) 2.6 1.2 (11.9) 1.9 0.9
Medicare subsidy (1.3) (0.6) (0.3) (1.5) (0.8) (0.4) (1.8) (0.9) (0.4)
Tax asset valuation allowance/
reserve adjustments (0.8) - - 19.8 - - 10.9 - -
Other, net (1.0) (0.8) (0.8) (1.2) (2.4) (0.2) 0.4 (1.8) 0.5
Income tax expense $ 118.8 $ 32.0 $ 14.9 $ 77.9 $ 22.0 $ 10.6 $ 52.4 $ 22.8 $ 14.6
Effective tax rate 35.4 % 32.8 % 36.3 % 28.9 % 27.5 %36.7 % 28.2 % 29.5 % 38.2 %
NU, CL&P, PSNH, and WMECO file a consolidated federal income tax return and file separate state income tax returns, with some filing
in more than one state. These entities are also parties to a tax allocation agreement under which taxable subsidiaries do not pay any
more taxes than they would have otherwise paid had they filed a separate company tax return, and subsidiaries generating tax losses, if
any, are paid for their losses when utilized.
The tax effects of temporary differences that give rise to the current and long-term net accumulated deferred tax obligations are as
follows:
As of December 31,
2009 2008
(Millions of Dollars) NU NU
Deferred tax liabilities - current:
Derivative asset and change in fair value of energy contracts $ 8.5 $ 12.5
Property tax accruals and other 49.3 47.5
Total deferred tax liabilities - current 57.8 60.0
Deferred tax assets - current:
Derivative liability and change in fair value of energy contracts 17.5 42.4
Allowance for uncollectible accounts and other 50.1 35.3
Total deferred tax assets - current 67.6 77.7
Net deferred tax (assets)/liabilities – current (9.8) (17.7)
Deferred tax liabilities - long-term:
Accelerated depreciation and other plant-related differences 1,351.0 1,155.4
Regulatory amounts:
Securitized contract termination costs 101.6 135.3
Other regulatory deferrals 848.6 875.8
Income tax gross-up 179.8 192.6
Derivative assets 71.6 88.1
Other 28.2 14.5
Total deferred tax liabilities - long-term 2,580.8 2,461.7
Deferred tax assets - long-term:
Regulatory deferrals 133.0 168.2
Employee benefits 493.1 481.3
Income tax gross-up 25.8 29.0
Derivative liability 374.9 364.8
Other 193.7 211.3
Total deferred tax assets - long-term 1,220.5 1,254.6
Less: valuation allowance 19.8 16.4
Net deferred tax assets - long-term 1,200.7 1,238.2
Net deferred tax liabilities - long-term 1,380.1 1,223.5
Net deferred tax liabilities $ 1,370.3 $ 1,205.8