SEC Comment Letter for TRINET GROUP, INC. (TNET) (CIK 0000937098) (TNET) — Jul 18, 2017
TRINET GROUP, INC. (TNET) (CIK 0000937098)
Date: July 18, 2017 · CIK: 0000937098 · Accession: 0000000000-17-025183
AI Filing Summary & Sentiment
Reasoning
Letter
Mail Stop 3561 July 18 , 2017 Burton M. Goldfield Chief Executive Officer TriNet Group, Inc . 1100 San Leandro Blvd ., Suite 400 San Leandro , CA 94 577
Re: TriNet Group, Inc. Form 10-K for Fiscal Year Ended December 31, 2016 Filed February 28, 2017 File No. 1-36373
Dear Mr. Goldfield :
We have limited our review of your filing to the financial statements and related disclosures and have the following comments. In some of our comments, we may ask you to provide us with information so we may be tter understand your disclosure.
Please respond to these comments within ten busine ss days by providing the requested information or advis e us as soon as possible when you will respond. If you do not believe our comments apply to your facts and circumstances, plea se tell us why in your response.
After reviewing your response to these comments, we may have additional comments.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Critical Accounting Judgements and Estimates
Insurance Loss Reserves, page 45
1. We note that changes in estimates and assumptions related to your insurance and workers’ compensation loss reserves could materia lly impact your financial statements if actual experience differs from the estimates and assumptions used in establishing the reserves. Please tell us your consideration of providing a sen sitivity analysis based on outcomes that are reasonably likely to o ccur if reasonably likely changes in such estimates and assumptions used would have a material effect on your results of operations and financial condition . Similar analysis should be provided for health benefits loss r eserves , to the extent applicable. Refer to Item 303(a)(3)(ii) of Regulation S-K.
Burton M. Goldfield TriNet Group, Inc. July 18 , 2017 Page 2
Note 1. Description of Business and Significant Accounting Policies
Description of Business, page 56
2. We note that your operations are conducted through four industry verticals: TriNet Financial Services, TriNet Life Sciences, TriNet Nonprofit and TriNet Technology and that your client services and product development teams are increasingly focused on specific industry verticals. Further, during 2016, you realigned your sales team to accommodate your verti cal approach. Please tell us whether the aggregation criteria are still applicable to your operating segments. Please also tell us whether your new vertical approach will impact how your Chief Operating Decision Maker allocates resources and assesses fin ancial information. Refer to ASC 280 -10.
Revenue Recognition, page 57
3. Please explain to us why it is appropriate to recognize insurance service revenues when due citing relevant accounting guidance.
Note 8. Notes and Capital Leases Payable, page 70
4. We note your ability to pay dividends or distributions is restricted under the terms of your credit facility . Please tell us the most significant restrictions on the payment of dividends, including their pertinent provisions, and the amount of net income restricted or free of restrictions. Refer to Rule 4 -08(e) of Regulation S -X.
5. Please explain to us why a portion of the refinancing transaction was accounted for as an extinguishment and a portion accounted for as a modification. In your response, ple ase discuss the guidance in ASC 470 -50-40.
Note 15 – Quarterly Financial Data (Unaudited), page 80
6. Please tell us and describe any unusual or infrequently transactions occurring items recognized during the quarters within each fiscal year. If there ar e any unusual or infrequently transactions, please provide the disclosures required by Item 302 (A)(3) of Regulation S -K.
We remind you that the company and its management are responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or absence of action by the staff.
Burton M. Goldfield TriNet Group, Inc. July 18 , 2017 Page 3
You may contact Yolanda Guobadia, Staff Accountant at (202) 551 -3562 or me at (202) 551-3344 if you have questions regarding our comment s or any other questions.
Sincerely,
/s/ William H. Thompson
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Mail Stop 3561 July 18 , 2017 Burton M. Goldfield Chief Executive Officer TriNet Group, Inc . 1100 San Leandro Blvd ., Suite 400 San Leandro , CA 94 577 Re: TriNet Group, Inc. Form 10-K for Fiscal Year Ended December 31, 2016 Filed February 28, 2017 File No. 1-36373 Dear Mr. Goldfield : We have limited our review of your filing to the financial statements and related disclosures and have the following comments. In some of our comments, we may ask you to provide us with information so we may be tter understand your disclosure. Please respond to these comments within ten busine ss days by providing the requested information or advis e us as soon as possible when you will respond. If you do not believe our comments apply to your facts and circumstances, plea se tell us why in your response. After reviewing your response to these comments, we may have additional comments. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Critical Accounting Judgements and Estimates Insurance Loss Reserves, page 45 1. We note that changes in estimates and assumptions related to your insurance and workers’ compensation loss reserves could materia lly impact your financial statements if actual experience differs from the estimates and assumptions used in establishing the reserves. Please tell us your consideration of providing a sen sitivity analysis based on outcomes that are reasonably likely to o ccur if reasonably likely changes in such estimates and assumptions used would have a material effect on your results of operations and financial condition . Similar analysis should be provided for health benefits loss r eserves , to the extent applicable. Refer to Item 303(a)(3)(ii) of Regulation S-K. Burton M. Goldfield TriNet Group, Inc. July 18 , 2017 Page 2 Note 1. Description of Business and Significant Accounting Policies Description of Business, page 56 2. We note that your operations are conducted through four industry verticals: TriNet Financial Services, TriNet Life Sciences, TriNet Nonprofit and TriNet Technology and that your client services and product development teams are increasingly focused on specific industry verticals. Further, during 2016, you realigned your sales team to accommodate your verti cal approach. Please tell us whether the aggregation criteria are still applicable to your operating segments. Please also tell us whether your new vertical approach will impact how your Chief Operating Decision Maker allocates resources and assesses fin ancial information. Refer to ASC 280 -10. Revenue Recognition, page 57 3. Please explain to us why it is appropriate to recognize insurance service revenues when due citing relevant accounting guidance. Note 8. Notes and Capital Leases Payable, page 70 4. We note your ability to pay dividends or distributions is restricted under the terms of your credit facility . Please tell us the most significant restrictions on the payment of dividends, including their pertinent provisions, and the amount of net income restricted or free of restrictions. Refer to Rule 4 -08(e) of Regulation S -X. 5. Please explain to us why a portion of the refinancing transaction was accounted for as an extinguishment and a portion accounted for as a modification. In your response, ple ase discuss the guidance in ASC 470 -50-40. Note 15 – Quarterly Financial Data (Unaudited), page 80 6. Please tell us and describe any unusual or infrequently transactions occurring items recognized during the quarters within each fiscal year. If there ar e any unusual or infrequently transactions, please provide the disclosures required by Item 302 (A)(3) of Regulation S -K. We remind you that the company and its management are responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or absence of action by the staff. Burton M. Goldfield TriNet Group, Inc. July 18 , 2017 Page 3 You may contact Yolanda Guobadia, Staff Accountant at (202) 551 -3562 or me at (202) 551-3344 if you have questions regarding our comment s or any other questions. Sincerely, /s/ William H. Thompson William H. Thompson Accounting Branch Chief Office of Consumer Products