NU	For the Years Ended December 31,
(Millions of Dollars)	2014		2013		2012 ⁽¹⁾
Current Income Taxes:
Federal	$	4.4	$	8.8	$	(30.9)
State		24.5		(9.4)		17.6
Total Current		28.9		(0.6)		(13.3)
Deferred Income Taxes, Net:
Federal		406.8		386.2		291.3
State		36.5		45.4		0.8
Total Deferred		443.3		431.6		292.1
Investment Tax Credits, Net		(3.9)		(4.1)		(3.9)
Income Tax Expense	$	468.3	$	426.9	$	274.9

⁽¹⁾ NSTAR amounts were included in NU beginning April 10, 2012.

		For the Years Ended December 31,
		2014								2013								2012
				NSTAR								NSTAR								NSTAR
(Millions of Dollars)		CL&P		Electric		PSNH		WMECO		CL&P		Electric		PSNH		WMECO		CL&P		Electric		PSNH		WMECO
Current Income Taxes:
	Federal	$	(0.2)	$	75.0	$	(22.6)	$	1.9	$	20.1	$	95.8	$	(8.2)	$	(53.4)	$	(47.8)	$	93.5	$	(0.9)	$	(24.7)
	State		4.3		20.2		(0.1)		1.8		(6.7)		29.6		3.6		4.2		3.1		27.6		3.4		3.4
Total Current			4.1		95.2		(22.7)		3.7		13.4		125.4		(4.6)		(49.2)		(44.7)		121.1		2.5		(21.3)
Deferred Income Taxes, Net:
	Federal		138.0		88.0		79.6		28.1		114.9		49.8		64.5		84.7		141.5		11.4		46.5		51.2
	State		(7.1)		20.1		15.2		6.0		15.1		(1.0)		11.2		2.3		(0.5)		(7.1)		12.0		2.7
Total Deferred			130.9		108.1		94.8		34.1		130.0		48.8		75.7		87.0		141.0		4.3		58.5		53.9
Investment Tax Credits, Net			(1.5)		(1.3)		-		(0.5)		(1.7)		(1.3)		-		(0.4)		(1.9)		(1.4)		-		(0.5)
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

A reconciliation between income tax expense and the expected tax expense at the statutory rate is as follows:

NU		For the Years Ended December 31,
(Millions of Dollars, except percentages)		2014		2013		2012 ⁽¹⁾
Income Before Income Tax Expense		$	1,295.4	$	1,220.6	$	808.0

Statutory Federal Income Tax Expense at 35%			453.4		427.2		282.8
Tax Effect of Differences:
	Depreciation		(5.6)		(7.4)		(10.8)
	Investment Tax Credit Amortization		(3.9)		(4.1)		(3.9)
	Other Federal Tax Credits		(3.5)		(3.7)		(3.8)
	State Income Taxes, Net of Federal Impact		42.5		27.6		4.4
	Dividends on ESOP		(8.0)		(8.0)		(6.4)
	Tax Asset Valuation Allowance/Reserve Adjustments		(2.9)		(4.3)		7.6
	Other, Net		(3.7)		(0.4)		5.0
Income Tax Expense		$	468.3	$	426.9	$	274.9
Effective Tax Rate			36.2%		35.0%		34.0%

⁽¹⁾ NSTAR amounts were included in NU beginning April 10, 2012.

		For the Years Ended December 31,
		2014								2013								2012
(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		$	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,
(Millions of Dollars)			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

			As of December 31,
			2014								2013
					NSTAR								NSTAR
(Millions of Dollars)			CL&P		Electric		PSNH		WMECO		CL&P		Electric		PSNH		WMECO
Deferred Tax Assets:
	Employee Benefits		$	129.0	$	39.9	$	46.8	$	9.2	$	56.0	$	38.3	$	15.5	$	(1.8)
	Derivative Liabilities			193.0		1.8		-		-		272.4		3.3		-		(2.9)
	Regulatory Deferrals - Liabilities			73.9		181.3		46.5		11.4		61.5		114.7		40.9		1.0
	Allowance for Uncollectible Accounts			32.3		13.8		3.2		3.8		31.2		15.4		3.1		3.3
	Tax Effect - Tax Regulatory Liabilities			3.1		1.8		2.1		2.5		4.7		5.4		2.1		1.6
	Federal Net Operating Loss Carryforwards			-		-		32.1		4.5		51.0		-		56.6		18.6
	Other			53.8		19.9		48.9		4.9		75.3		31.3		40.3		8.3
Total Deferred Tax Assets				485.1		258.5		179.6		36.3		552.1		208.4		158.5		28.1
	Less: Valuation Allowance			4.0		-		-		-		23.1		-		-		-
Net Deferred Tax Assets			$	481.1	$	258.5	$	179.6	$	36.3	$	529.0	$	208.4	$	158.5	$	28.1
Deferred Tax Liabilities:
	Accelerated Depreciation and Other Plant-Related Differences		$	1,378.6	$	1,296.9	$	596.6	$	385.8	$	1,238.1	$	1,179.4	$	526.6	$	361.1
	Property Tax Accruals			58.1		25.0		7.4		12.8		49.3		25.3		7.1		5.9
	Regulatory Amounts:
		Regulatory Deferrals - Assets		502.3		276.0		147.6		60.4		550.4		276.2		109.3		49.3
		Tax Effect - Tax Regulatory Assets		166.9		35.5		15.9		9.3		160.1		36.0		16.3		18.2
		Goodwill Regulatory Asset - 1999 Merger		-		174.4		-		-		-		181.6		-		-
		Derivative Assets		32.6		-		-		-		29.0		0.5		-		-
		Other		19.4		33.5		35.6		2.8		20.6		26.4		28.0		3.6
Total Deferred Tax Liabilities			$	2,157.9	$	1,841.3	$	803.1	$	471.1	$	2,047.5	$	1,725.4	$	687.3	$	438.1

Carryforwards: The following tables provide the amounts and expiration dates of state tax credit and loss carryforwards and federal tax credit and net operating loss carryforwards:

	As of December 31, 2014
					NSTAR
(Millions of Dollars)	NU		CL&P		Electric		PSNH		WMECO		Expiration Range
Federal Net Operating Loss	$	168.8	$	-	$	-	$	91.8	$	12.7	2031 - 2032
Federal Tax Credit		16.3		0.1		0.2		11.1		-	2031 - 2034
Federal Charitable Contribution		19.4		-		-		-		-	2016 - 2018
State Tax Credit		99.7		71.0		-		-		-	2014 - 2019
State Loss Carryforwards		40.6		-		-		-		-	2014 - 2034
State Charitable Contribution		2.1		-		-		-		-	2015 - 2018

	As of December 31, 2013
					NSTAR
(Millions of Dollars)	NU		CL&P		Electric		PSNH		WMECO		Expiration Range
Federal Net Operating Loss	$	451.3	$	145.8	$	-	$	161.8	$	53.3	2031 - 2032
Federal Tax Credit		8.0		-		-		7.6		-	2031 - 2033
Federal Charitable Contribution		33.7		-		-		-		-	2015 - 2017
State Tax Credit		104.7		86.8		-		-		-	2013 - 2018
State Loss Carryforwards		12.1		-		-		-		-	2013 - 2015
State Charitable Contribution		1.0		-		-		-		-	2015

In 2014, the Company recorded a reduction to its state credit carryforwards of $11 million (CL&P $10.1 million), net of tax, as a result of an update to reflect the amounts expired. Further, the Company decreased its valuation allowance reserve for state credits by $19.2 million at CL&P, net of tax, to reflect an update for expired state credits and latest estimate of usage.

For 2014, state credit and state loss carryforwards have been partially reserved by a valuation allowance of $4.4 million (net of federal income tax). For 2013, state credit and state loss carryforwards have been partially reserved by a valuation allowance of $23.7 million (net of federal income tax).

Unrecognized Tax Benefits: A reconciliation of the activity in unrecognized tax benefits, all of which would impact the effective tax rate if recognized, is as follows:

(Millions of Dollars)		NU		CL&P
Balance as of January 1, 2012		$	73.5	$	46.5
	Gross Increases - Current Year		10.3		2.5
	Gross Increases - Prior Year		0.1		-
	Gross Decreases - Prior Year		(0.8)		-
Balance as of December 31, 2012			83.1		49.0
	Gross Increases - Current Year		8.2		2.1
	Gross Decreases - Prior Year		(1.1)		(0.3)
	Settlements		(49.8)		(39.4)
	Lapse of Statute of Limitations		(2.2)		-
Balance as of December 31, 2013			38.2		11.4
	Gross Increases - Current Year		9.3		2.7
	Gross Increases - Prior Year		0.3		0.2
	Lapse of Statute of Limitations		(1.6)		-
Balance as of December 31, 2014		$	46.2	$	14.3

Interest and Penalties: Interest on uncertain tax positions is recorded and generally classified as a component of Other Interest Expense on the statements of income. However, when resolution of uncertainties results in the Company receiving interest income, any related interest benefit is recorded in Other Income, Net on the statements of income. No penalties have been recorded. The amount of interest expense/(income) on uncertain tax positions recognized and the related accrued interest payable/(receivable) are as follows:

Tax Positions: During 2014, NU did not resolve any of its uncertain tax positions.

During 2013, NU received a Final Determination from the Connecticut Department of Revenue Services (DRS) that concluded its audit of NU's Connecticut income tax returns for the years 2005 through 2008. The DRS Determination resulted in total NU and CL&P after-tax benefits of $13.6 million and $6.9 million, respectively, that included a reduction in NU and CL&P pre-tax interest expense of $8.7 million and $4 million, or $5.2 million and $2.4 million after-tax, respectively. Further, the income tax expense impact resulted in a tax benefit to NU and CL&P of $8.4 million and $4.5 million after-tax, respectively.

Open Tax Years: The following table summarizes NU, CL&P, NSTAR Electric, PSNH and WMECO's tax years that remain subject to examination by major tax jurisdictions as of December 31, 2014:

NU estimates that during the next twelve months, differences of a non-timing nature could be resolved, resulting in a zero to $2 million decrease in unrecognized tax benefits by NU. These estimated changes are not expected to have a material impact on the earnings of NU. Other companies' impacts are not expected to be material.

2014 Federal Legislation: On December 19, 2014, the "Tax Increase Prevention Act of 2014" became law, which extended the accelerated deduction of depreciation to businesses through 2014. This extended stimulus provides NU with cash flow benefits of approximately $200 million (approximately $70 million at CL&P, $50 million at NSTAR Electric, $35 million at PSNH, and $15 million at WMECO) in 2015.

2013 Federal Legislation: On January 2, 2013, the "American Taxpayer Relief Act of 2012" became law, which extended the accelerated deduction of depreciation to businesses through 2013. This extended stimulus provided NU with cash flow benefits of approximately $300 million (approximately $95 million at CL&P, $85 million at NSTAR Electric, $35 million at PSNH, and $50 million at WMECO).

On September 13, 2013, the Internal Revenue Service issued final Tangible Property regulations that are meant to simplify, clarify and make more administrable previously issued guidance. NU is in compliance with the new regulations, but continues to evaluate several new potential elections.

2013 Massachusetts: On July 24, 2013, Massachusetts enacted a law that changed the income tax rate applicable to utility companies effective January 1, 2014, from 6.5 percent to 8 percent. The tax law change required NU to remeasure its accumulated deferred income taxes and resulted in NU increasing its deferred tax liability with an offsetting regulatory asset of approximately $61 million at its utility companies ($46.3 million at NSTAR Electric and $9.8 million at WMECO).