INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2018

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)	2018			2017			2016
Current Income Taxes:
Federal	$	106.5		$	58.9		$	38.9
State	10.6			31.6			53.0
Total Current	117.1			90.5			91.9
Deferred Income Taxes, Net:
Federal	122.6			433.0			427.9
State	52.2			58.6			38.6
Total Deferred	174.8			491.6			466.5
Investment Tax Credits, Net	(2.9		)	(3.2		)	(3.4		)
Income Tax Expense	$	289.0		$	578.9		$	555.0



	For the Years Ended December 31,
	2018									2017								2016
(Millions of Dollars)	CL&P			NSTAR Electric			PSNH			CL&P			NSTAR Electric			PSNH		CL&P			NSTAR Electric			PSNH
Current Income Taxes:
Federal	$	54.2		$	79.3		$	12.2		$	50.9		$	107.8		$	18.6	$	27.3		$	86.4		$	(13.7	)
State	20.9			30.0			(0.5		)	17.4			25.6			6.2		13.3			39.5			8.8
Total Current	75.1			109.3			11.7			68.3			133.4			24.8		40.6			125.9			(4.9		)
Deferred Income Taxes, Net:
Federal	48.5			27.9			15.4			123.9			88.1			52.7		157.6			96.6			79.5
State	6.4			13.5			20.5			(4.6		)	22.4			11.2		11.3			5.1			7.8
Total Deferred	54.9			41.4			35.9			119.3			110.5			63.9		168.9			101.7			87.3
Investment Tax Credits, Net	(0.9		)	(1.8		)	—			(1.0		)	(1.8		)	—		(1.2		)	(1.8		)	—
Income Tax Expense	$	129.1		$	148.9		$	47.6		$	186.6		$	242.1		$	88.7	$	208.3		$	225.8		$	82.4

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)	2018			2017			2016
Income Before Income Tax Expense	$	1,329.5		$	1,574.4		$	1,504.8

Statutory Federal Income Tax Expense at 21% in 2018 and 35% in 2017 and 2016	279.2			551.0			526.7
Tax Effect of Differences:
Depreciation	(30.8		)	(10.8		)	(3.4		)
Investment Tax Credit Amortization	(2.9		)	(3.2		)	(3.4		)
Other Federal Tax Credits	—			—			(3.5		)
State Income Taxes, Net of Federal Impact	44.4			47.7			56.2
Dividends on ESOP	(5.1		)	(8.4		)	(8.4		)
Tax Asset Valuation Allowance/Reserve Adjustments	5.2			7.0			3.3
Excess Stock Benefit	(1.5		)	(2.9		)	(19.1		)
Other, Net	0.5			(1.5		)	6.6
Income Tax Expense	$	289.0		$	578.9		$	555.0
Effective Tax Rate	21.7		%	36.8		%	36.9		%



	For the Years Ended December 31,
	2018									2017									2016
(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	$	506.8		$	532.0		$	163.5		$	563.4		$	616.8		$	224.7		$	542.6		$	576.6		$	214.3

Statutory Federal Income Tax Expense at 21% in 2018 and 35% in 2017 and 2016	106.4			111.7			34.3			197.2			215.9			78.6			189.9			201.8			75.0
Tax Effect of Differences:
Depreciation	(1.2		)	(2.8		)	0.1			(5.2		)	(3.0		)	1.1			1.6			(3.1		)	1.0
Investment Tax Credit Amortization	(0.9		)	(1.8		)	—			(1.0		)	(1.8		)	—			(1.2		)	(1.8		)	—
Other Federal Tax Credits	—			—			—			—			—			—			—			—			(3.5		)
State Income Taxes, Net of Federal Impact	14.5			33.2			15.8			4.5			31.2			11.3			14.5			29.0			10.8
Tax Asset Valuation Allowance/Reserve Adjustments	7.1			1.2			—			(9.5		)	—			—			1.5			—			—
Excess Stock Benefit	(0.1		)	(0.1		)	(0.1		)	(0.7		)	(0.7		)	(0.3		)	(0.9		)	(1.2		)	(0.4		)
Other, Net	3.3			7.5			(2.5		)	1.3			0.5			(2.0		)	2.9			1.1			(0.5		)
Income Tax Expense	$	129.1		$	148.9		$	47.6		$	186.6		$	242.1		$	88.7		$	208.3		$	225.8		$	82.4
Effective Tax Rate	25.5		%	28.0		%	29.1		%	33.1		%	39.2		%	39.5		%	38.4		%	39.2		%	38.4		%

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:



	As of December 31,
	2018								2017
(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
Deferred Tax Assets:
Employee Benefits	$	388.2	$	94.5	$	35.0	$	31.1	$	442.1	$	112.3	$	34.0	$	38.0
Derivative Liabilities	111.4		111.4		—		—		111.8		110.5		0.3		—
Regulatory Deferrals - Liabilities	299.3		38.6		195.5		16.1		205.6		12.0		139.8		17.9
Allowance for Uncollectible Accounts	54.0		23.1		17.8		3.0		50.1		20.6		17.3		2.9
Tax Effect - Tax Regulatory Liabilities	830.3		336.8		288.9		111.7		832.6		337.2		281.2		116.8
Net Operating Loss Carryforwards	28.5		—		—		0.6		47.8		—		—		—
Purchase Accounting Adjustment	64.2		—		—		—		69.9		—		—		—
Other	166.2		81.1		15.6		33.4		149.5		70.7		4.9		49.6
Total Deferred Tax Assets	1,942.1		685.5		552.8		195.9		1,909.4		663.3		477.5		225.2
Less: Valuation Allowance	19.5		10.7		—		—		14.6		6.3		—		—
Net Deferred Tax Assets	$	1,922.6	$	674.8	$	552.8	$	195.9	$	1,894.8	$	657.0	$	477.5	$	225.2
Deferred Tax Liabilities:
Accelerated Depreciation and Other Plant-Related Differences	$	3,724.2	$	1,293.3	$	1,342.4	$	410.6	$	3,562.0	$	1,224.9	$	1,229.2	$	502.5
Property Tax Accruals	73.2		35.4		26.3		5.2		56.7		20.7		24.2		5.5
Regulatory Amounts:
Regulatory Deferrals - Assets	1,025.9		320.1		277.4		213.8		924.9		310.6		267.1		103.6
Tax Effect - Tax Regulatory Assets	238.9		167.0		9.7		8.1		243.1		173.1		9.8		11.4
Goodwill Regulatory Asset - 1999 Merger	95.2		—		81.7		—		99.8		—		85.7		—
Derivative Assets	20.1		19.9		—		—		17.4		17.4		—		—
Other	251.1		5.9		109.8		39.4		288.4		13.7		137.3		45.7
Total Deferred Tax Liabilities	$	5,428.6	$	1,841.6	$	1,847.3	$	677.1	$	5,192.3	$	1,760.4	$	1,753.3	$	668.7

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,
	2018									2017
(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Expiration Range	Eversource		CL&P		NSTAR Electric		PSNH		Expiration Range
Federal Net Operating Loss	$	103.6	$	—	$	—	$	—	2033 - 2037	$	197.3	$	—	$	—	$	—	2027 - 2037
Federal Charitable Contribution	2.2		—		—		—		2020 - 2022	18.7		—		—		—		2017 - 2022
State Net Operating Loss	80.7		—		—		—		2019 - 2038	82.8		—		—		—		2028 - 2037
State Tax Credit	148.9		107.0		—		—		2018 - 2023	139.0		94.5		—		—		2017 - 2022
State Charitable Contribution	9.6		—		—		—		2019 - 2023	31.4		—		—		—		2017 - 2022

Summary of Income Tax Contingencies

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)	2018			2017		2016			2018		2017
Eversource	$	(1.7	)	$	—	$	(0.2	)	$	0.1	$	1.8

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, 2016	$	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
Gross Increases - Current Year	9.2			3.2
Gross Decreases - Prior Year	(6.5		)	(0.9		)
Lapse of Statute of Limitations	(8.5		)	(2.2		)
Balance as of December 31, 2018	$	45.9		$	18.2

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, 2018:



Description	Tax Years
Federal	2018
Connecticut	2015 - 2018
Massachusetts	2015 - 2018
New Hampshire	2016 - 2018