Eversource 2009 Annual Report Download - page 126

FS-41
NU
(Millions of Dollars)
Balance as of January 1, 2007 $ 86.1
Gross increases - current year 25.0
Gross increases - prior year 10.6
Lapse of statute of limitations (0.6)
Balance as of December 31, 2007 121.1
Gross increases - current year 28.6
Gross increases - prior year 7.4
Lapse of statute of limitations (0.8)
Balance as of December 31, 2008 156.3
Gross increases - current year 12.3
Settlement (44.2)
Lapse of statute of limitations (0.1)
Balance as of December 31, 2009 $ 124.3
CL&P PSNH WMECO
(Millions of Dollars)
Balance as of January 1, 2007 $ 62.6 $ 0.8 $ -
Gross increases - current year 23.5 - -
Gross (decreases)/increases - prior year (10.2) 9.8 2.9
Lapse of statute of limitations - - -
Balance as of December 31, 2007 75.9 10.6 2.9
Gross increases - current year 24.9 - -
Gross increases - prior year 5.6 1.8 0.9
Lapse of statute of limitations - - -
Balance as of December 31, 2008 106.4 12.4 3.8
Gross increases - current year 8.6 - -
Settlement (26.0) (12.4) (3.8)
Lapse of statute of limitations - - -
Balance as of December 31, 2009 $ 89.0 $ - $ -
Interest and Penalties: Interest on uncertain tax positions is recorded and generally classified as a component of other interest
expense. However, when resolution of uncertainties results in the Company receiving interest income, any related interest benefit is
recorded in Other income, net on the accompanying consolidated statements of income. No penalties have been recorded. If penalties
are recorded in the future, then the estimated penalties would be classified as a component of Other income, net on the accompanying
consolidated statements of income. The components of interest on uncertain tax positions by company in 2009, 2008 and 2007 are as
follows:
Other Interest For the Years Ended December 31, Accrued Interest As of December 31,
Expense/(Income) 2009 2008 2007 Expense/(Income) 2009 2008
(Millions of Dollars) (Millions of Dollars)
CL&P $ (4.2) $ 4.8 $ 2.3 CL&P $13.8 $ 18.0
PSNH (1.3) - (1.1)* PSNH 0.5 1.8
WMECO (0.4) 0.2 (1.4)* WMECO - 0.4
NU parent and other 1.9 3.2 2.6 NU parent and other 20.4 18.5
Total $ (4.0) $ 8.2 $ 2.4 Total $34.7 $ 38.7
*The PSNH and WMECO amounts were reflected in Other income, net on the accompanying consolidated statements of income.
Tax Positions: In 2009, several tax authorities completed examinations and other reviews of various tax years, resulting in the closure
of federal and state tax audits, which decreased tax expense by approximately $3 million at NU and CL&P. NU is currently working to
resolve the treatments of certain timing and other costs in the remaining open periods.
In September 2008, NU and the IRS reached a settlement agreement related to the timing for deducting certain costs. This agreement
closed the federal tax years 2002 through 2004 and resulted in a refund of $123 million less a $35 million payment for 2005. While this
settlement resulted in $10.1 million of pre-tax interest income ($6.4 million for CL&P, $1.9 million for PSNH and $1.1 million for
WMECO), recorded in Other income, net on the accompanying consolidated statement of income, it did not have a significant impact on
income tax expense.