Eversource 2014 Annual Report Download - page 100

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For the Years Ended December 31,
2014 2013 2012
 NSTAR NSTAR NSTAR
 CL&P Electric PSNH WMECO CL&P Electric PSNH WMECO CL&P Electric PSNH WMECO
Income Before Income
Tax Expense $421.2 $505.1 $186.1 $95.1 $421.1 $441.4 $182.5 $97.8 $304.2 $314.2 $157.9 $86.6
Statutory Federal Income
Tax Expense at 35% 147.4 176.8 65.1 33.3 147.4 154.5 63.9 34.2 106.5 110.0 55.3 30.3
Tax Effect of Differences:
Depreciation (3.6) (1.3) 0.3 (0.2) (7.0) 0.1 0.6 - (9.0) - (0.3) 0.2
Investment Tax Credit
Amortization (1.5) (1.3) - (0.5) (1.7) (1.3) -
(0.4) (1.9) (1.4) - (0.5)
Other Federal Tax Credits - - (3.5) - - -
(3.7)
- - - (3.8) -
State Income Taxes,
Net of Federal Impact 4.4 26.2 9.8 5.0 5.0 18.6 9.6 4.2 0.1 13.4 10.0 4.0
Tax Asset Valuation Allowance/
Reserve Adjustments (6.3) - - - 0.4 - -
- 1.6 - - -
Other, Net (6.9) 1.6 0.4 (0.3) (2.4) 1.0 0.7 (0.6) (2.9) 2.0 (0.2) (1.9)
Income Tax Expense $133.5 $202.0 $72.1 $37.3 $141.7 $172.9 $71.1 $37.4 $94.4 $124.0 $61.0 $32.1
Effective Tax Rate 31.7% 40.0% 38.7% 39.2% 33.6% 39.2%
39.0%
38.2% 31.0% 39.5% 38.6% 37.1%
NU, CL&P, NSTAR Electric, PSNH and WMECO file a consolidated federal income tax return and unitary, combined and separate state income tax
returns. 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.
Deferred tax assets and liabilities are recognized for the future tax effects of temporary differences between the carrying amounts and the tax basis of
assets and liabilities. 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. The tax effects of temporary differences that give rise to the net
accumulated deferred income tax obligations are as follows:
NU As of December 31,
 2014 2013
Deferred Tax Assets:
Employee Benefits $632.2 $435.2
Derivative Liabilities 199.6 272.9
Regulatory Deferrals -Liabilities 366.7 272.7
Allowance for Uncollectible Accounts 60.5 65.0
Tax Effect -Tax Regulatory Liabilities 10.0 16.2
Federal Net Operating Loss Carryforwards 59.1 158.0
Purchase Accounting Adjustment 126.2 132.8
Other 198.7 230.6
Total Deferred Tax Assets 1,653.0 1,583.4
Less: Valuation Allowance 5.1 24.3
Net Deferred Tax Assets
$1,647.9 $1,559.1
Deferred Tax Liabilities:
Accelerated Depreciation and Other Plant-Related Differences $4,215.9 $3,806.5
Property Tax Accruals 109.6 95.1
Regulatory Amounts:
Regulatory Deferrals -Assets 1,277.9 1,146.7
Tax Effect -Tax Regulatory Assets 240.2 248.2
Goodwill Regulatory Asset -1999 Merger 203.2 211.5
Derivative Assets 32.6 30.1
Other 196.3 157.1
Total Deferred Tax Liabilities $6,275.7 $5,695.2