CenterPoint Energy 2013 Annual Report Download - page 56

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Enable’s credit facilities contain operating and financial restrictions, including covenants and restrictions that may be
affected by events beyond Enable’s control, which could adversely affect its business, financial condition, results of operations
and ability to make quarterly distributions.
Enable’s credit facilities contain customary covenants that, among other things, limit its ability to:
• permit its subsidiaries to incur or guarantee additional debt;
• incur or permit to exist certain liens on assets;
• dispose of assets;
• merge or consolidate with another company or engage in a change of control;
• enter into transactions with affiliates on non-arm’s length terms; and
• change the nature of its business.
Enable’s credit facilities also require it to maintain certain financial ratios. Enable’s ability to meet those financial ratios can
be affected by events beyond its control, and we cannot assure you that it will meet those ratios. In addition, Enable’s credit
facilities contain events of default customary for agreements of this nature.
Enable’s ability to comply with the covenants and restrictions contained in its credit facilities may be affected by events
beyond its control, including prevailing economic, financial and industry conditions. If market or other economic conditions
deteriorate, Enable’s ability to comply with these covenants may be impaired. If Enable violates any of the restrictions, covenants,
ratios or tests in its credit facilities, a significant portion of its indebtedness may become immediately due and payable. In addition,
Enable’s lenders’ commitments to make further loans to it under the revolving credit facility may be suspended or terminated.
Enable might not have, or be able to obtain, sufficient funds to make these accelerated payments.
Costs of compliance with existing environmental laws and regulations are significant, and the cost of compliance with future
environmental laws and regulations may adversely affect Enable’s results of operations and its ability to make cash distributions.
Enable is subject to extensive federal, state and local environmental statutes, rules and regulations relating to air quality, water
quality, waste management, wildlife conservation, natural resources and health and safety that could, among other things, delay
or increase its costs of construction, restrict or limit the output of certain facilities and/or require additional pollution control
equipment and otherwise increase costs. There are significant capital, operating and other costs associated with compliance with
these environmental statutes, rules and regulations and those costs may be even more significant in the future.
There is inherent risk of the incurrence of environmental costs and liabilities in Enable’s operations due to its handling of
natural gas, NGLs and crude oil, air emissions related to its operations and historical industry operations and waste disposal
practices. These activities are subject to stringent and complex federal, state and local laws and regulations governing environmental
protection, including the discharge of materials into the environment and the protection of plants, wildlife, and natural and cultural
resources. These laws and regulations can restrict or impact Enable’s business activities in many ways, such as restricting the way
it can handle or dispose of wastes or requiring remedial action to mitigate pollution conditions that may be caused by its operations
or that are attributable to former operators. Joint and several strict liability may be incurred, without regard to fault, under certain
of these environmental laws and regulations in connection with discharges or releases of wastes on, under or from Enable’s
properties and facilities, many of which have been used for midstream activities for a number of years, oftentimes by third parties
not under its control. Private parties, including the owners of the properties through which Enable’s gathering systems pass and
facilities where its wastes are taken for reclamation or disposal, may also have the right to pursue legal actions to enforce compliance,
as well as to seek damages for non-compliance, with environmental laws and regulations or for personal injury or property damage.
For example, an accidental release from one of Enable’s pipelines could subject it to substantial liabilities arising from environmental
cleanup and restoration costs, claims made by neighboring landowners and other third parties for personal injury and property
damage and fines or penalties for related violations of environmental laws or regulations. Enable may be unable to recover these
costs from insurance. Moreover, the possibility exists that stricter laws, regulations or enforcement policies could significantly
increase compliance costs and the cost of any remediation that may become necessary. Further, stricter requirements could
negatively impact Enable’s customers’ production and operations, resulting in less demand for its services.