CenterPoint Energy 2015 Annual Report Download - page 43

• acquisitions, or the pursuit of acquisitions, could disrupt ongoing businesses, distract management, divert resources and make it difficult to maintain
currentbusinessstandards,controlsandprocedures.
Our business could be negatively affected as a result of the actions of activist shareholders.
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Publiclytradedcompanieshaveincreasinglybecomesubjecttocampaignsbyactivistinvestorsadvocatingcorporateactionssuchasfinancialrestructuring,
increasedborrowing, specialdividends,stock repurchasesoreven salesof assetsorthe entirecompany.It ispossible thatactivistshareholders mayattemptto
effectsuchchangesoracquirecontroloverus.Respondingtoproxycontestsandotheractionsbyactivistshareholderscanbecostlyandtime-consuming,disrupt
ouroperationsanddiverttheattentionofourboardofdirectorsandseniormanagementfromthepursuitofbusinessstrategies,whichcouldadverselyaffectour
resultsofoperationsandfinancialcondition.Additionally,perceiveduncertaintiesastoourfuturedirectionasaresultofshareholderactivismorchangestothe
composition of the board of directors may lead to the perception of a change in the direction of the business, instability or lack of continuity.  This may be
exploitedbyourcompetitors,causeconcerntoourcurrentorpotentialcustomers,andmakeitmoredifficulttoattractandretainqualifiedpersonnel.
We are involved in numerous legal proceedings, the outcome of which are uncertain, and resolutions adverse to us could negatively affect our financial
results.
Wearesubjecttonumerouslegalproceedings,themostsignificantofwhicharesummarizedinNote14oftheconsolidatedfinancialstatements.Litigationis
subjecttomanyuncertainties,andwecannotpredicttheoutcomeofindividual matterswithassurance.Finalresolutionofthesemattersmayrequireadditional
expendituresoveranextendedperiodoftimethatmaybeinexcessofestablishedreservesandmayhaveamaterialadverseeffectonourfinancialresults.
We are exposed to risks related to unfavorable economic conditions in our service territories.
Ourbusinessesareaffectedbytheeconomicclimateinourserviceterritories,whichcouldimpactourabilitytogrowourcustomerbaseandourrateofgrowth
orresultinreducedenergyconsumptionbyourcustomers.Someeconomicsectorsimportanttoourcustomerbasemaybeaffected.Forexample,ourbusinessis
largelyconcentratedinHouston,Texas,whereahigherpercentageofemploymentistiedtotheenergysectorrelativetootherregionsofthecountry.Giventhe
significantdeclineinenergyandcommoditypricesin2015,therateofgrowthinemploymentinHoustonhasdeclined.Intheeventeconomicconditionsfurther
decline,therateofgrowthinHoustonandtheotherareasinwhichweoperatemayalsodeteriorate.Increasesincustomerdefaultsordelaysinpaymentdueto
liquidityconstraintscouldnegativelyimpactourcashflowsandfinancialcondition.
Our businesses may be adversely affected by the intentional misconduct of our employees.
Wearecommittedtolivingourcorevaluesofsafety,integrity,accountability,initiativeandrespectandcomplyingwithallapplicablelawsandregulations.
Despitethatcommitmentandoureffortstopreventmisconduct,itispossibleforemployeestoengageinintentionalmisconduct,failtoupholdourcorevalues,and
violate laws and regulations for individual gain through contract or procurement fraud, misappropriation, bribery or corruption, fraudulent related-party
transactionsandseriousbreachesofourEthicsandComplianceCodeandStandardsofConduct/BusinessEthicspolicy,amongotherpolicies.Ifsuchintentional
misconductbyemployeesshouldoccur,itcouldresultinsubstantialliability,highercosts,increasedregulatoryscrutinyandnegativepublicperceptions.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
Character of Ownership
Weleaseorownourprincipalpropertiesinfee,includingourcorporateofficespaceandvariousrealproperty.Mostofourelectriclinesandgasmainsare
located,pursuanttoeasementsandotherrights,onpublicroadsoronlandownedbyothers.
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