INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2019

The components of income tax expense are as follows:



Eversource (Millions of Dollars)	For the Years Ended December 31,
Eversource (Millions of Dollars)	2019			2018			2017
Current Income Taxes:
Federal	$	56.9		$	106.5		$	58.9
State	10.5			10.6			31.6
Total Current	67.4			117.1			90.5
Deferred Income Taxes, Net:
Federal	138.4			122.6			433.0
State	71.4			52.2			58.6
Total Deferred	209.8			174.8			491.6
Investment Tax Credits, Net	(3.7		)	(2.9		)	(3.2		)
Income Tax Expense	$	273.5		$	289.0		$	578.9



	For the Years Ended December 31,
	2019								2018									2017
(Millions of Dollars)	CL&P			NSTAR Electric			PSNH		CL&P			NSTAR Electric			PSNH			CL&P			NSTAR Electric			PSNH
Current Income Taxes:
Federal	$	68.4		$	82.6		$	22.9	$	54.2		$	79.3		$	12.2		$	50.9		$	107.8		$	18.6
State	15.4			18.2			2.2		20.9			30.0			(0.5		)	17.4			25.6			6.2
Total Current	83.8			100.8			25.1		75.1			109.3			11.7			68.3			133.4			24.8
Deferred Income Taxes, Net:
Federal	35.2			0.1			5.8		48.5			27.9			15.4			123.9			88.1			52.7
State	18.8			27.0			10.1		6.4			13.5			20.5			(4.6		)	22.4			11.2
Total Deferred	54.0			27.1			15.9		54.9			41.4			35.9			119.3			110.5			63.9
Investment Tax Credits, Net	(0.8		)	(2.6		)	—		(0.9		)	(1.8		)	—			(1.0		)	(1.8		)	—
Income Tax Expense	$	137.0		$	125.3		$	41.0	$	129.1		$	148.9		$	47.6		$	186.6		$	242.1		$	88.7

Summary of Reconciliation Between Income Tax Expense and Expected Tax

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)	2019			2018			2017
Income Before Income Tax Expense	$	1,190.1		$	1,329.5		$	1,574.4

Statutory Federal Income Tax Expense at 21% in 2019 and 2018, and 35% in 2017	249.9			279.2			551.0
Tax Effect of Differences:
Depreciation	1.9			(30.8		)	(10.8		)
Investment Tax Credit Amortization	(3.7		)	(2.9		)	(3.2		)
State Income Taxes, Net of Federal Impact	24.6			44.4			47.7
Dividends on ESOP	(5.1		)	(5.1		)	(8.4		)
Tax Asset Valuation Allowance/Reserve Adjustments	40.1			5.2			7.0
Excess Stock Benefit	(1.5		)	(1.5		)	(2.9		)
EDIT Amortization	(37.4		)	(5.0		)	—
Other, Net	4.7			5.5			(1.5		)
Income Tax Expense	$	273.5		$	289.0		$	578.9
Effective Tax Rate	23.0		%	21.7		%	36.8		%



	For the Years Ended December 31,
	2019									2018									2017
(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	$	547.8		$	557.3		$	175.0		$	506.8		$	532.0		$	163.5		$	563.4		$	616.8		$	224.7

Statutory Federal Income Tax Expense at 21% in 2019 and 2018, and 35% in 2017	115.0			117.0			36.8			106.4			111.7			34.3			197.2			215.9			78.6
Tax Effect of Differences:
Depreciation	(0.2		)	(3.0		)	(0.8		)	(1.2		)	(2.8		)	0.1			(5.2		)	(3.0		)	1.1
Investment Tax Credit Amortization	(0.8		)	(2.6		)	—			(0.9		)	(1.8		)	—			(1.0		)	(1.8		)	—
State Income Taxes, Net of Federal Impact	2.5			35.7			9.8			14.5			33.2			15.8			4.5			31.2			11.3
Tax Asset Valuation Allowance/Reserve Adjustments	24.5			—			—			7.1			1.2			—			(9.5		)	—			—
Excess Stock Benefit	(0.5		)	(0.5		)	(0.2		)	(0.1		)	(0.1		)	(0.1		)	(0.7		)	(0.7		)	(0.3		)
EDIT Amortization	(5.8		)	(22.9		)	(4.0		)	—			—			(4.4		)	—			—			—
Other, Net	2.3			1.6			(0.6		)	3.3			7.5			1.9			1.3			0.5			(2.0		)
Income Tax Expense	$	137.0		$	125.3		$	41.0		$	129.1		$	148.9		$	47.6		$	186.6		$	242.1		$	88.7
Effective Tax Rate	25.0		%	22.5		%	23.4		%	25.5		%	28.0		%	29.1		%	33.1		%	39.2		%	39.5		%

Schedule of Accumulated Deferred Income Tax Obligations

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



	As of December 31,
	2019								2018
(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
Deferred Tax Assets:
Employee Benefits	$	509.4	$	125.4	$	54.8	$	46.7	$	388.2	$	94.5	$	35.0	$	31.1
Derivative Liabilities	105.0		103.6		—		—		111.4		111.4		—		—
Regulatory Deferrals - Liabilities	267.0		37.1		165.7		19.0		299.3		38.6		195.5		16.1
Allowance for Uncollectible Accounts	56.7		25.7		17.7		2.8		54.0		23.1		17.8		3.0
Tax Effect - Tax Regulatory Liabilities	830.4		333.5		280.9		111.3		830.3		336.8		288.9		111.7
Net Operating Loss Carryforwards	9.1		—		—		—		28.5		—		—		0.6
Purchase Accounting Adjustment	58.7		—		—		—		64.2		—		—		—
Other	190.4		92.0		35.8		20.0		166.2		81.1		15.6		33.4
Total Deferred Tax Assets	2,026.7		717.3		554.9		199.8		1,942.1		685.5		552.8		195.9
Less: Valuation Allowance	43.0		24.9		—		—		19.5		10.7		—		—
Net Deferred Tax Assets	$	1,983.7	$	692.4	$	554.9	$	199.8	$	1,922.6	$	674.8	$	552.8	$	195.9
Deferred Tax Liabilities:
Accelerated Depreciation and Other Plant-Related Differences	$	3,901.0	$	1,362.2	$	1,391.9	$	428.9	$	3,724.2	$	1,293.3	$	1,342.4	$	410.6
Property Tax Accruals	76.8		36.8		29.0		4.7		73.2		35.4		26.3		5.2
Regulatory Amounts:
Regulatory Deferrals - Assets	1,155.6		340.7		276.2		260.9		1,025.9		320.1		277.4		213.8
Tax Effect - Tax Regulatory Assets	238.2		171.7		11.7		8.3		238.9		167.0		9.7		8.1
Goodwill Regulatory Asset - 1999 Merger	90.6		—		77.8		—		95.2		—		81.7		—
Derivative Assets	19.7		19.7		—		—		20.1		19.9		—		—
Other	257.6		5.9		125.6		3.2		251.1		5.9		109.8		39.4
Total Deferred Tax Liabilities	$	5,739.5	$	1,937.0	$	1,912.2	$	706.0	$	5,428.6	$	1,841.6	$	1,847.3	$	677.1

Summary of Tax Credits and Loss Carryforwards

The following table provides 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,
	2019									2018
(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Expiration Range	Eversource		CL&P		NSTAR Electric		PSNH		Expiration Range
Federal Net Operating Loss	$	19.8	$	—	$	—	$	—	2033 - 2037	$	103.6	$	—	$	—	$	—	2033 - 2037
Federal Charitable Contribution	—		—		—		—		2020 - 2022	2.2		—		—		—		2020 - 2022
State Net Operating Loss	65.5		—		—		—		2020 - 2038	80.7		—		—		—		2019 - 2038
State Tax Credit	168.1		122.3		—		—		2019 - 2024	148.9		107.0		—		—		2018 - 2023
State Charitable Contribution	9.9		—		—		—		2019 - 2023	9.6		—		—		—		2019 - 2023

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)	2019		2018			2017		2019		2018
Eversource	$	—	$	(1.7	)	$	—	$	0.1	$	0.1

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, 2017	$	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
Gross Increases - Current Year	12.1			4.0
Gross Increases - Prior Year	3.4			3.3
Lapse of Statute of Limitations	(6.4		)	(2.4		)
Balance as of December 31, 2019	$	55.0		$	23.1

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, 2019:



Description	Tax Years
Federal	2019
Connecticut	2016 - 2019
Massachusetts	2016 - 2019
New Hampshire	2017 - 2019