CenterPoint Energy 2013 Annual Report Download - page 84

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as a result of the retirement of the ZENS notes. If all ZENS notes had been exchanged for cash on December 31, 2013, deferred
taxes of approximately $364 million would have been payable in 2013.
Cross Defaults
Under our revolving credit facility, a payment default on, or a non-payment default that permits acceleration of, any indebtedness
exceeding $75 million by us or any of our significant subsidiaries will cause a default. In addition, three outstanding series of our
senior notes, aggregating $750 million in principal amount as of December 31, 2013, provide that a payment default by us, CERC
Corp. or CenterPoint Houston in respect of, or an acceleration of, borrowed money and certain other specified types of obligations,
in the aggregate principal amount of $50 million, will cause a default. A default by CenterPoint Energy would not trigger a default
under our subsidiaries’ debt instruments or revolving credit facilities.
Possible Acquisitions, Divestitures and Joint Ventures
From time to time, we consider the acquisition or the disposition of assets or businesses or possible joint ventures or other
joint ownership arrangements with respect to assets or businesses. Any determination to take action in this regard will be based
on market conditions and opportunities existing at the time, and accordingly, the timing, size or success of any efforts and the
associated potential capital commitments are unpredictable. We may seek to fund all or part of any such efforts with proceeds from
debt and/or equity issuances. Debt or equity financing may not, however, be available to us at that time due to a variety of events,
including, among others, maintenance of our credit ratings, industry conditions, general economic conditions, market conditions
and market perceptions.
Enable Midstream Partners
In connection with its formation on May 1, 2013, Enable (i) entered into a $1.05 billion 3-year senior unsecured term loan
facility, (ii) repaid $1.05 billion of indebtedness owed to CERC Corp., and (iii) entered into a $1.4 billion senior unsecured
revolving credit facility. Enable’ s $1.4 billion senior unsecured revolving credit facility backstops its $1.4 billion commercial
paper program. As of January 31, 2014, Enable had no outstanding commercial paper and $318 million borrowed under its
revolving credit facility. Any reduction in Enable’s credit ratings could prevent it from accessing the commercial paper markets.
The sponsors of Enable, including us, may from time to time provide funds to Enable through loans and/or capital contributions
in addition to funds that Enable may obtain from time to time under its revolving credit facility, commercial paper program or
from other sources, which loans or capital contributions could be substantial.
Certain of the entities contributed to Enable by CERC Corp. are obligated on approximately $363 million of indebtedness
owed to a wholly owned subsidiary of CERC Corp. that is scheduled to mature in 2017.
Prior to an initial public offering of Enable, Enable is obligated to distribute 100% of its distributable cash (as such term is
defined in its partnership agreement) to its limited partners each fiscal quarter within 45 days following the end of the applicable
quarter. In July 2013, CERC Corp. received a cash distribution of approximately $36 million from Enable made with respect to
CERC Corp.’s limited partner interest in Enable for the months of May and June 2013 (the two months in the second quarter
following the formation of Enable on May 1, 2013). In November 2013, CERC Corp. received a cash distribution of approximately
$70 million from Enable made with respect to CERC Corp.’s limited partner interest in Enable for the third quarter of 2013. CERC
Corp. received a cash distribution of approximately $67 million from Enable in February 2014 made with respect to CERC Corp.’s
limited partner interest in Enable for the fourth quarter of 2013.
Under the terms of an omnibus agreement entered into in connection with the formation of Enable, CenterPoint Energy and
OGE Energy are obligated to indemnify Enable for specified breaches of representations and warranties in the master formation
agreement pursuant to which Enable was formed related to: (i) their respective authority to enter into the transactions that formed
Enable and the capitalization of the entities contributed to Enable; (ii) permits related to the operation of the assets contributed to
Enable; (iii) compliance with environmental laws; (iv) title to properties and rights of way; (v) the tax classification of the entities
contributed to Enable; (vi) indemnified taxes; and (vii) events and conditions associated with CenterPoint Energy and OGE’s
respective ownership and operation of the assets contributed to Enable. Pursuant to the terms of the omnibus agreement, each of
CenterPoint Energy’s and OGE’ s respective maximum liability for this indemnification obligation with respect to permit,
environmental and title representations will not exceed $250 million, and neither OGE Energy nor CenterPoint Energy will have
any obligation under this indemnification until Enable’s aggregate indemnifiable losses exceed $25 million, respectively.
CenterPoint Energy’s and OGE Energy’s indemnification obligations under the omnibus agreement will survive (i) for permit
matters until May 1, 2014, (ii) for environmental and title and rights of way matters until May 1, 2016 and (iii) for tax classification