INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2017

Schedule of Components of Income Tax Expense (Benefit)

The components of income tax expense are as follows:



Eversource (Millions of Dollars)	For the Years Ended December 31,
Eversource (Millions of Dollars)	2017			2016			2015
Current Income Taxes:
Federal	$	58.9		$	38.9		$	6.2
State	31.6			53.0			45.7
Total Current	90.5			91.9			51.9
Deferred Income Taxes, Net:
Federal	433.0			427.9			436.1
State	58.6			38.6			55.6
Total Deferred	491.6			466.5			491.7
Investment Tax Credits, Net	(3.2		)	(3.4		)	(3.6		)
Income Tax Expense	$	578.9		$	555.0		$	540.0



	For the Years Ended December 31,
	2017								2016									2015
(Millions of Dollars)	CL&P			NSTAR Electric			PSNH		CL&P			NSTAR Electric			PSNH			CL&P			NSTAR Electric			PSNH
Current Income Taxes:
Federal	$	50.9		$	107.8		$	18.6	$	27.3		$	86.4		$	(13.7	)	$	26.9		$	32.8		$	(16.7	)
State	17.4			25.6			6.2		13.3			39.5			8.8			15.8			21.4			6.0
Total Current	68.3			133.4			24.8		40.6			125.9			(4.9		)	42.7			54.2			(10.7		)
Deferred Income Taxes, Net:
Federal	123.9			88.1			52.7		157.6			96.6			79.5			135.8			180.9			74.5
State	(4.6		)	22.4			11.2		11.3			5.1			7.8			0.2			31.7			9.3
Total Deferred	119.3			110.5			63.9		168.9			101.7			87.3			136.0			212.6			83.8
Investment Tax Credits, Net	(1.0		)	(1.8		)	—		(1.2		)	(1.8		)	—			(1.3		)	(1.8		)	—
Income Tax Expense	$	186.6		$	242.1		$	88.7	$	208.3		$	225.8		$	82.4		$	177.4		$	265.0		$	73.1

Schedule of Effective Income Tax Rate Reconciliation

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



Eversource (Millions of Dollars, except percentages)	For the Years Ended December 31,
Eversource (Millions of Dollars, except percentages)	2017			2016			2015
Income Before Income Tax Expense	$	1,574.4		$	1,504.8		$	1,425.9

Statutory Federal Income Tax Expense at 35%	551.0			526.7			499.1
Tax Effect of Differences:
Depreciation	(10.8		)	(3.4		)	(4.6		)
Investment Tax Credit Amortization	(3.2		)	(3.4		)	(3.6		)
Other Federal Tax Credits	—			(3.5		)	(3.8		)
State Income Taxes, Net of Federal Impact	47.7			56.2			61.1
Dividends on ESOP	(8.4		)	(8.4		)	(8.1		)
Tax Asset Valuation Allowance/Reserve Adjustments	7.0			3.3			4.7
Excess Stock Benefit ⁽¹⁾	(2.9		)	(19.1		)	—
Other, Net	(1.5		)	6.6			(4.8		)
Income Tax Expense	$	578.9		$	555.0		$	540.0
Effective Tax Rate	36.8		%	36.9		%	37.9		%



	For the Years Ended December 31,
	2017									2016									2015
(Millions of Dollars, except percentages)	CL&P			NSTAR Electric			PSNH			CL&P			NSTAR Electric			PSNH			CL&P			NSTAR Electric			PSNH
Income Before Income Tax Expense	$	563.4		$	616.8		$	224.7		$	542.6		$	576.6		$	214.3		$	476.8		$	666.1		$	187.5

Statutory Federal Income Tax Expense at 35%	197.2			215.9			78.6			189.9			201.8			75.0			166.9			233.1			65.6
Tax Effect of Differences:
Depreciation	(5.2		)	(3.0		)	1.1			1.6			(3.1		)	1.0			(1.7		)	(1.7		)	0.5
Investment Tax Credit Amortization	(1.0		)	(1.8		)	—			(1.2		)	(1.8		)	—			(1.3		)	(1.8		)	—
Other Federal Tax Credits	—			—			—			—			—			(3.5		)	—			—			(3.8		)
State Income Taxes, Net of Federal Impact	4.5			31.2			11.3			14.5			29.0			10.8			9.2			34.5			9.9
Tax Asset Valuation Allowance/Reserve Adjustments	(9.5		)	—			—			1.5			—			—			1.2			—			—
Excess Stock Benefit ⁽¹⁾	(0.7		)	(0.7		)	(0.3		)	(0.9		)	(1.2		)	(0.4		)	—			—			—
Other, Net	1.3			0.5			(2.0		)	2.9			1.1			(0.5		)	3.1			0.9			0.9
Income Tax Expense	$	186.6		$	242.1		$	88.7		$	208.3		$	225.8		$	82.4		$	177.4		$	265.0		$	73.1
Effective Tax Rate	33.1		%	39.2		%	39.5		%	38.4		%	39.2		%	38.4		%	37.2		%	39.8		%	39.0		%

⁽¹⁾

In 2016, the Company adopted new accounting guidance, which prospectively changed the accounting for excess tax benefits associated with the distribution of stock compensation awards, previously recognized in Capital Surplus, Paid In within Common Shareholders' Equity on the balance sheet, to recognition within income tax expense in the income statement. See Note 1D, "Summary of Significant Accounting Policies - Accounting Standards," for further information.

Schedule of Deferred Tax Assets and Liabilities

The tax effects of temporary differences that give rise to the net accumulated deferred income tax obligations are as follows:



Eversource (Millions of Dollars)	As of December 31,
Eversource (Millions of Dollars)	2017		2016
Deferred Tax Assets:
Employee Benefits	$	442.1	$	640.6
Derivative Liabilities	111.8		192.6
Regulatory Deferrals - Liabilities	205.6		290.9
Allowance for Uncollectible Accounts	50.1		76.6
Tax Effect - Tax Regulatory Liabilities	832.6		11.8
Federal Net Operating Loss Carryforwards	47.8		—
Purchase Accounting Adjustment	69.9		112.2
Other	149.5		170.5
Total Deferred Tax Assets	1,909.4		1,495.2
Less: Valuation Allowance	14.6		5.1
Net Deferred Tax Assets	$	1,894.8	$	1,490.1
Deferred Tax Liabilities:
Accelerated Depreciation and Other Plant-Related Differences	$	3,562.0	$	5,001.2
Property Tax Accruals	56.7		81.9
Regulatory Amounts:
Regulatory Deferrals - Assets	924.9		1,321.8
Tax Effect - Tax Regulatory Assets	243.1		252.6
Goodwill Regulatory Asset - 1999 Merger	99.8		186.7
Derivative Assets	17.4		29.5
Other	288.4		223.6
Total Deferred Tax Liabilities	$	5,192.3	$	7,097.3



	As of December 31,
	2017						2016
(Millions of Dollars)	CL&P		NSTAR Electric		PSNH		CL&P		NSTAR Electric		PSNH
Deferred Tax Assets:
Employee Benefits	$	112.3	$	34.0	$	38.0	$	138.8	$	69.5	$	46.5
Derivative Liabilities	110.5		0.3		—		191.5		1.1		—
Regulatory Deferrals - Liabilities	12.0		139.8		17.9		6.3		194.9		36.7
Allowance for Uncollectible Accounts	20.6		17.3		2.9		33.0		25.7		4.1
Tax Effect - Tax Regulatory Liabilities	337.2		281.2		116.8		4.9		3.3		2.6
Other	70.7		4.9		49.6		59.4		6.6		56.4
Total Deferred Tax Assets	663.3		477.5		225.2		433.9		301.1		146.3
Less: Valuation Allowance	6.3		—		—		4.5		—		—
Net Deferred Tax Assets	$	657.0	$	477.5	$	225.2	$	429.4	$	301.1	$	146.3
Deferred Tax Liabilities:
Accelerated Depreciation and Other Plant-Related Differences	$	1,224.9	$	1,229.2	$	502.5	$	1,700.3	$	1,901.9	$	726.3
Property Tax Accruals	20.7		24.2		5.5		29.7		36.8		8.0
Regulatory Amounts:
Regulatory Deferrals - Assets	310.6		267.1		103.6		473.4		381.7		142.1
Tax Effect - Tax Regulatory Assets	173.1		9.8		11.4		170.4		44.8		12.2
Goodwill Regulatory Asset - 1999 Merger	—		85.7		—		—		160.3		—
Derivative Assets	17.4		—		—		27.0		—		—
Other	13.7		137.3		45.7		16.3		102.7		43.1
Total Deferred Tax Liabilities	$	1,760.4	$	1,753.3	$	668.7	$	2,417.1	$	2,628.2	$	931.7

Summary of Operating Loss 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, 2017
(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Expiration Range
Federal Net Operating Loss	$	197.3	$	—	$	—	$	—	2027-2037
Federal Charitable Contribution	18.7		—		—		—		2017-2022
State Net Operating Loss	82.8		—		—		—		2028-2037
State Tax Credit	139.0		94.5		—		—		2017-2022
State Charitable Contribution	31.4		—		—		—		2017-2022



	As of December 31, 2016
(Millions of Dollars)	Eversource	CL&P	NSTAR Electric	PSNH	Expiration Range
Federal Tax Credit	8.6	—	—	—	—
Federal Charitable Contribution	27.8	—	—	—	2016 - 2019
State Tax Credit	111.1	80.5	—	—	2016 - 2021
State Charitable Contribution	36.5	—	—	—	2016 - 2020

Summary of Income Tax Contingencies

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)	Eversource			CL&P
Balance as of January 1, 2015	$	46.2		$	14.3
Gross Increases - Current Year	9.9			2.6
Gross Increases - Prior Year	0.1			—
Lapse of Statute of Limitations	(8.2		)	(3.4		)
Balance as of December 31, 2015	48.0			13.5
Gross Increases - Current Year	9.9			3.9
Gross Increases - Prior Year	0.2			0.2
Lapse of Statute of Limitations	(9.7		)	(2.3		)
Balance as of December 31, 2016	48.4			15.3
Gross Increases - Current Year	11.4			4.7
Gross Decreases - Prior Year	(0.9		)	(0.5		)
Lapse of Statute of Limitations	(7.2		)	(1.4		)
Balance as of December 31, 2017	$	51.7		$	18.1

The amount of interest expense/(income) on uncertain tax positions recognized and the related accrued interest payable/(receivable) are as follows:



	Other Interest Expense/(Income)							Accrued Interest Expense
	For the Years Ended December 31,							As of December 31,
(Millions of Dollars)	2017		2016			2015		2017		2016
Eversource	$	—	$	(0.2	)	$	0.1	$	1.8	$	1.8

Summary of Income Tax Examinations

The following table summarizes Eversource, CL&P, NSTAR Electric and PSNH's tax years that remain subject to examination by major tax jurisdictions as of December 31, 2017:



Description	Tax Years
Federal	2017
Connecticut	2014 - 2017
Massachusetts	2014 - 2017
New Hampshire	2015 - 2017