Eversource 2015 Annual Report Download - page 100

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For the Years Ended December 31,
2015 2014 2013
(Millions of Dollars,
NSTAR NSTAR NSTAR
except percentages) CL&P Electric PSNH WMECO CL&P Electric PSNH WMECO CL&P Electric PSNH WMECO
Income Before Income
Tax Expense $
476.8 $ 572.6 $ 187.5 $ 93.5 $ 421.2 $ 505.1 $ 186.1 $ 95.1 $ 421.1 $ 441.4 $ 182.5 $ 97.8
Statutory Federal Income
Tax Expense at 35% 166.9 200.4 65.6 32.7 147.4 176.8 65.1
33.3 147.4 154.5 63.9 34.2
Tax Effect of Differences:
Depreciation (1.7) (1.4) 0.5 (0.3) (3.6) (1.3) 0.3 (0.2) (7.0) 0.1 0.6 -
Investment Tax Credit
Amortization (1.3) (1.3) - (0.5) (1.5) (1.3) -
(0.5) (1.7) (1.3) - (0.4)
Other Federal Tax Credits - - (3.8) - - -
(3.5)
- - - (3.7) -
State Income Taxes,
Net of Federal Impact 9.2 29.6 9.9 4.9 4.4 26.2 9.8
5.0 5.0 18.6 9.6 4.2
Tax Asset Valuation
Allowance/Reserve
Adjustments 1.2 - - - (6.3) - - - 0.4 - - -
Other, Net 3.1 0.7 0.9 0.2 (6.9) 1.6 0.4 (0.3) (2.4) 1.0 0.7 (0.6)
Income Tax Expense $ 177.4 $ 228.0 $ 73.1 $ 37.0 $ 133.5 $ 202.0 $ 72.1 $ 37.3 $ 141.7 $ 172.9 $ 71.1 $ 37.4
Effective Tax Rate 37.2% 39.8% 39.0% 39.6% 31.7% 40.0%
38.7%
39.2% 33.6% 39.2% 39.0% 38.2%
Eversource, 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:
Eversource As of December 31,
(Millions of Dollars) 2015 2014
Deferred Tax Assets:
Employee Benefits $ 637.5 $ 632.2
Derivative Liabilities 172.7 199.6
Regulatory Deferrals - Liabilities 243.5 366.7
Allowance for Uncollectible Accounts 60.5 60.5
Tax Effect - Tax Regulatory Liabilities 9.7 10.0
Federal Net Operating Loss Carryforwards 5.4 59.1
Purchase Accounting Adjustment 119.3 126.2
Other 197.1 198.7
Total Deferred Tax Assets 1,445.7 1,653.0
Less: Valuation Allowance 3.7 5.1
Net Deferred Tax Assets
$ 1,442.0 $ 1,647.9
Deferred Tax Liabilities:
Accelerated Depreciation and Other Plant-Related Differences $ 4,602.6 $ 4,215.9
Property Tax Accruals 76.7 109.6
Regulatory Amounts:
Regulatory Deferrals - Assets 1,289.1 1,277.9
Tax Effect - Tax Regulatory Assets 249.3 240.2
Goodwill Regulatory Asset - 1999 Merger 194.9 203.2
Derivative Assets 17.7 32.6
Other 159.4 196.3
Total Deferred Tax Liabilities $ 6,589.7 $ 6,275.7