Eversource 2010 Annual Report Download - page 120

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E. Other Retirement Benefits
NU provides benefits for retirement and other benefits for certain current and past company officers of NU, including CL&P, PSNH and
WMECO. The actuarially-determined liability for these benefits, which is included in Other Long-Term Liabilities on the accompanying
consolidated balance sheets, was $49.9 million ($0.4 million for CL&P, $2.4 million for PSNH and $0.2 million for WMECO) and $47.9
million ($0.4 million for CL&P, $2.4 million for PSNH and $0.2 million for WMECO) as of December 31, 2010 and 2009, respectively.
During 2010, 2009 and 2008, $4.2 million ($2.3 million for CL&P, $0.9 million for PSNH and $0.4 million for WMECO), $3.9 million ($2.2
million for CL&P, $0.9 million for PSNH and $0.4 million for WMECO) and $3.8 million ($2.2 million for CL&P, $0.8 million for PSNH and
$0.4 million for WMECO), respectively, was expensed related to these benefits. These benefits are accounted for on an accrual basis
and expensed over the service lives of the employees in accordance with accounting guidance for deferred compensation contracts.
11. INCOME TAXES
The tax effect of temporary differences is accounted for in accordance with the rate-making treatment of the applicable regulatory
commissions and relevant accounting authoritative literature. Details of income tax expense and the components of the federal and
state income tax provisions are as follows:
For the Years Ended December 31,
2010 2009 2008
(Millions of Dollars) NU NU NU
Current Income Taxes:
Federal $ 9.0 $ 4.5 $ 6.0
State (6.5) 52.7 16.3
Total Current 2.5 57.2 22.3
Deferred Income Taxes, Net:
Federal 201.2 155.1 100.2
State 9.7 (29.2) (13.4)
Total Deferred 210.9 125.9 86.8
Investment Tax Credits, Net (3.0) (3.2) (3.4)
Income Tax Expense $ 210.4 $ 179.9 $ 105.7
For the Years Ended December 31,
2010 2009 2008
(Millions of Dollars) CL&P PSNH WMECO CL&P PSNH WMECO CL&P PSNH WMECO
Current Income Taxes:
Federal $ 20.7 $ 6.1 $ 3.1 $ 28.3 $ (8.9) $ (8.6) $ 13.9 $ 0.8 $ (1.4)
State (1.1) 5.6 2.5 40.1 5.8 0.9 19.0 (3.6) -
Total Current 19.6 11.7 5.6 68.4 (3.1) (7.7) 32.9 (2.8) (1.4)
Deferred Income Taxes, Net:
Federal 108.1 37.6 11.0 80.5 34.4 21.3 68.0 17.4 10.4
State 7.0 1.6 - (27.6) 0.8 1.6 (20.4) 7.6 1.8
Total Deferred 115.1 39.2 11.0 52.9 35.2 22.9 47.6 25.0 12.2
Investment Tax Credits, Net (2.3) (0.1) (0.3) (2.5) (0.1) (0.3) (2.6) (0.2) (0.2)
Income Tax Expense $ 132.4 $ 50.8 $ 16.3 $ 118.8 $ 32.0 $ 14.9 $ 77.9 $ 22.0 $ 10.6
A reconciliation between income tax expense and the expected tax expense at the statutory rate is as follows:
For the Years Ended December 31,
2010 2009 2008
(Millions of Dollars, except percentages) NU NU NU
Income Before Income Tax Expense $ 604.5 $ 515.5 $ 372.0
Statutory Federal Income Tax Expense at 35% 211.6 180.4 130.2
Tax Effect of Differences:
Depreciation (9.5) (2.7) (12.9)
Investment Tax Credit Amortization (3.0) (3.2) (3.4)
Other Federal Tax Credits (3.8) (3.8) (4.6)
State Income Taxes, Net of Federal Impact 12.5 11.5 (9.5)
Medicare Subsidy 15.6 (3.5) (4.2)
Tax Asset Valuation Allowance/Reserve Adjustments (10.5) 3.8 12.5
Other, Net (2.5) (2.6) (2.4)
Income Tax Expense $ 210.4 $ 179.9 $ 105.7
Effective Tax Rate 34.8 % 34.9 % 28.4 %