SEC Company Response from PRICESMART INC (PSMT) (CIK 0001041803) (PSMT) — Aug 1, 2005
PRICESMART INC (PSMT) (CIK 0001041803)
Date: Aug. 1, 2005 · CIK: 0001041803 · Accession: 0001193125-05-153152
AI Filing Summary & Sentiment
File numbers found in text: 333-123076
Referenced dates: July 15, 2005, March 30, 2005
Letter
VIA EDGAR & FEDEX Division of Corporation Finance Securities and Exchange Commission PriceSmart, Inc. Registration Statement on Form S-1 Commission File No. 333-123076 Filed on March 2, 2005
Dear Mr. Owings:
We are in receipt of the Staff’s letter dated March 30, 2005 with respect to the above-referenced Registration Statement on Form S-1. Per our discussions with the Staff, we responded to the Staff’s comments on behalf of PriceSmart, Inc. (“PriceSmart” or the “Company”) in connection with PriceSmart’s filing of its Quarterly Report on Form 10-Q for the quarter ended May 31, 2005 by letter dated July 15, 2005. In addition, as requested by the Staff, we are responding to the Staff’s comments on behalf of PriceSmart as set forth below in connection with PriceSmart’s filing of Amendment No. 1 to the Registration Statement on Form S-1 (the “Amendment”). Simultaneously with the filing of this letter, PriceSmart is submitting (via EDGAR) the Amendment, responding to the Staff’s comments. Courtesy copies of this letter and the Amendment (specifically marked to show the changes thereto) are being submitted to the Staff by FedEx.
PriceSmart’s responses set forth in this letter are numbered to correspond to the numbered comments in the Staff’s letter. For ease of reference, we have set forth the Staff’s comments and PriceSmart’s response for each item below.
Mr. H. Christopher Owings
July 29, 2005
Page 2
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, [page 14]
General
1. Where you identify intermediate causes of changes in your operating results, also describe the reasons underlying the intermediate causes. For example, you indicate that the increase in net warehouse club sales from the first quarter 2004 to the first quarter 2005 is primarily due to improvements in merchandising. Please explain the merchandising improvements you implemented and why these improvements led to higher average sale per transaction figures. As another example, where you discuss the fluctuations in your “losses of unconsolidated affiliates” line item, you indicate that the fluctuations are a result of fluctuations in underlying earnings/losses of your equity method investees. Please revise to explain the reasons for the fluctuations in the earnings/losses of your equity method investees. See SEC Release No. 33-8350.
Confidential Response? No
The Company has revised its disclosure in accordance with the Staff’s comment.
With respect to increases in net warehouse sales, we have revised our disclosure as follows: “Improvements in merchandising in our warehouse clubs, such as higher quality imported products, larger pack sizes and increases in inventory levels for key items to assure product availability, was the primary contributor to the growth in sales for those warehouse clubs that were open during both periods. In addition, sales were positively impacted by a strong general economic environment in our Central American and Caribbean markets, particularly in the Dominican Republic which is included in the Caribbean region.”
Regarding “Losses of unconsolidated affiliate,” the circumstances have changed since the initial filing of the Registration Statement due to the closure of the warehouse clubs. The Company’s revised disclosure is as follows: “Losses of unconsolidated affiliate represent our 50% share of losses from our Mexico joint venture. On February 11, 2005, we, along with our joint venture shareholder, Grupo Gigante S.A. de C.V., announced that we were closing the warehouse operations of PSMT Mexico, S.A. de C.V. effective February 28, 2005. At that time we indicated that we believed that the closure would not result in a significant loss for PriceSmart, Inc. While this is still our view with respect to the total carrying value of that investment, PSMT Mexico continues to incur operating losses during this period of merchandise and asset liquidation and the settlement of contractual obligations. Under the equity method of accounting, through which we reflect our proportionate share of income or loss of the unconsolidated joint venture’s results from operations, our proportionate share of the loss in PriceSmart Mexico for the first nine months of fiscal year 2005 was $3.0 million, as compared to $1.3 million in the prior year period. Since the announcement of the closure of the business, PriceSmart, Inc.’s 50% share of the losses of PSMT Mexico has been approximately 1.9 million.”
Mr. H. Christopher Owings
July 29, 2005
Page 3
Please see pages 15 and 18 of the Amendment.
2. Where you describe two or more business reasons that contributed to a material change in a financial statement line item between periods, please quantify the extent to which each change contributed to the overall change in that line item. For example, with respect to the change in your warehouse club operating expenses from the first quarter 2004 to the first quarter 2005, please quantify the extent to which the changes are attributable to the various contributing factors. See Item 303(a) of Regulation S-K and SEC Release No. 33-8350.
Confidential Response? No
PriceSmart has revised its disclosure in response to the Staff’s comment. Please see pages 15 through 23 of the Amendment.
3. We note your disclosure that comparable warehouse club sales include sales for those warehouse clubs open at least 12 full months. Does this mean that a store open for one month in the prior period and 11 months in the current period is included in comparable warehouse club sales? If so, please tell us why you believe this measure represents your “comparable” warehouse club sales. Also revise your disclosure to clarify that the measure could be skewed by stores only open a short period of time in the prior period. Also disclose whether there have been any revisions to your methodology for calculating comparable warehouse club sales in the last three years. Finally, please expand your disclosure of how you calculate the change in comparable store sales from period to period to include how you treat stores that were closed during the period.
Confidential Response? No
Closed warehouses are not included in the comparable warehouse sales calculations, and the only adjustment the Company has made to the methodology was to account for the leap year in February 2004.
PriceSmart has revised its disclosure in response to the Staff’s comment as follows:
We report comparable warehouse sales on a “same week” basis with 13 weeks in each quarter beginning on a Monday and ending on a Sunday. The periods are established at the beginning of the fiscal year to provide as close a match as possible to the calendar month that is used for financial reporting purposes. This approach equalizes the number of weekend days and week days in each period for improved sales comparison, as we experience higher warehouse sales on the weekends. Further, each of the warehouse clubs used in the calculation was open for at least 13 1/2 calendar months before its results for the current period were compared with its results for the prior period. For example, if a warehouse club opened during the fourth fiscal quarter on June 14, 2004, it would not be included in the comparable warehouse club sales until the
Mr. H. Christopher Owings
July 29, 2005
Page 4
first comparison of July 2005 with July 2004. For purposes of quarterly comparisons of comparable warehouse club sales, July and August 2005 results for this hypothetical warehouse club would be compared to July and August 2004 for the fourth quarter comparable sales. June 2005 results would not be taken into account in making the comparison. By contrast, a warehouse club opened June 16, 2004 would not be included in comparable warehouse club sales until the first comparison of August 2005 with August 2004.
Please see pages 15 and 19 of the Amendment.
4. Please tell us why your comparable warehouse club sales data on page 17 uses a cut-off date of September 5, 2004 and covers a 53-week period while the comparative data for the prior year uses a cut-off date of August 31, 2003, your fiscal year-end, and a 52-week period.
Confidential Response? No
Comparable warehouse sales use a 4-4-5 “fiscal week” period adding to a 13 week quarter, but the Company’s financial reporting period is on a calendar month basis. The Company attempts to align those two measurement periods as closely as possible, and depending on the calendar, the periods may have the same ending date (as was the case on August 31, 2003). However, this is not always the case. Every four years, there is a need to have a 14 week quarter (53 week year) to maintain that close alignment, due to the leap year. Please also see the Company’s response to Staff Comment No. 3, above.
Comparison of First Quarter 2005 to First Quarter 2004, [page 15]
5. You disclose on page 16 that other income, excluding licensee fees, decreased to $1.1 million in the first quarter of fiscal 2005 from $1.6 million in the first quarter of fiscal 2004. It appears, however, that both of these amounts include licensee fee income. Please revise or advise.
Confidential Response? No
The Company has revised its disclosure in response to the Staff’s comment as follows:
Other income consists of commission revenue, rental income, advertising revenue, construction revenue, fees for in-store product demonstrations, and fees earned from licensees. Other income in the first nine months of fiscal 2005 was $3.7 million, a reduction of $1.0 million from the prior year. This reduction primarily results from a decrease of $1.0 million in license fees in the first nine months of fiscal 2005, as a result of the previously announced termination of the technology and trademark licensing agreements with our China licensee. No further revenue for the China license has been recorded after May 31, 2004.
Mr. H. Christopher Owings
July 29, 2005
Page 5
Please see page 16 of the Amendment.
6. Your presentation on page 15 of your warehouse gross margin excluding the impact of foreign exchange gains and losses represents a non-GAAP measure subject to the disclosure and reconciliation requirements in Item 10(e) of Regulation S-K. Please consider revising your discussion so that you quantify and discuss the impact of foreign exchange gains and losses on your gross margin without presenting your gross margin excluding the impact of such charges. Otherwise, if you intend to retain this non-GAAP measure in your filing, please note that you must meet the burden of demonstrating the usefulness of this and any other non-GAAP measure which excludes recurring type items. In this regard, you will need to disclose the following information in your filing:
•
The manner in which you use the non-GAAP measure to conduct or evaluate your business;
•
The economic substance behind your decision to use such a measure;
•
The material limitations associated with use of the non-GAAP financial measure as compared to the use of the most directly comparable GAAP financial measure;
•
The substantive reasons why you believe the non-GAAP financial measure provides useful information to investors.
In addition to the above guidance, please ensure that you provide a reconciliation, preferably in tabular form, which reconciles the non-GAAP measure to your gross margin as calculated in accordance with GAAP. For further guidance, see Item 10(e) of Regulation S-K and questions 8 and 9 of the Staff’s Frequently Asked Questions Regarding the Use of Non-GAAP Financial Measures, available at www.sec.gov.
Confidential Response? No
The Company has revised its disclosure to eliminate the use the non-GAAP measure referred in the Staff’s comment. However, the Amendment does contain a non-GAAP number with respect to net warehouse sales net of Philippine phone card sales, for which the Company believes it has provided the required disclosure. See page 18 of the Amendment.
Liquidity and Capital Resources, [page 21]
7. You indicate on page 14 that you plan to open a warehouse club in Costa Rica during the second half of calendar year 2005 and disclose on page 15 that you terminated the license agreement with your China licensee subsequent to the end of the first fiscal quarter of 2005. You also state on page 31 that you completed the closure of your PSMT Mexico, S.A. de C.V. warehouse club operations during the fiscal year 2005. If material, please quantify the estimated impact on your future results of operations and cash flows of each of these items.
Confidential Response? No
Mr. H. Christopher Owings
July 29, 2005
Page 6
The Company is currently operating 26 warehouse clubs. The opening of one additional warehouse club would not have a material impact on earnings in the near term.
The Company’s revised disclosure with respect to Costa Rica is as follows:
Net cash (used in) provided by investing activities was $(7.1) million and $1.6 million in the first nine months of fiscal 2005 and 2004, respectively. The increase in the use of cash resulted primarily from the acquisition of land and the initial building costs associated with the planned new warehouse club location in San Jose, Costa Rica. Through May 31, 2005, approximately $4.2 million has been invested in the new location, which is expected to cost approximately $10.2 million.
Please see page 25 of the Amendment.
The Company’s revised disclosure with respect to China is as follows:
Other income consists of commission revenue, rental income, advertising revenue, construction revenue, fees for in-store product demonstrations, and fees earned from licensees. Other income in the first nine months of fiscal 2005 was $3.7 million, a reduction of $1.0 million from the prior year. This reduction primarily results from a decrease of $1.0 million in license fees in the first nine months of fiscal 2005, as a result of the previously announced termination of the technology and trademark licensing agreements with our China licensee. No further revenue for the China licensee has been recorded after May 31, 2004.
Please see page 16 of the Amendment.
With respect to PSMT Mexico, please see the Company’s response to Staff Comment No. 1.
Contractual Obligations, [page 26]
8. Please revise your tabular disclosure of contractual obligations to include estimated interest payments on your debt. Since the table is aimed at increasing transparency of cash flow, we believe these payments should be included in the table. A footnote to the table should provide appropriate disclosure regarding how you estimated the interest payments. If you choose not to include these payments, a footnote to the table should clearly identify the excluded item and provide any additional information that is material to an understanding of your cash requirements. See Item 303(a)(5) of Regulation S-K and footnote 46 to SEC Release No. 33-8350.
Confidential Response? No
The Company has revised its disclosure in response to the Staff’s comment as follows:
“Amounts shown are for the principal portion of the long-term debt payment only. Future interest obligations will vary with changes in future LIBOR rates, making an accurate projection of fu
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CORRESP 1 filename1.htm Correspondence Filing Robert E. Burwell Direct Dial: (858) 523-5408 Rob.Burwell@lw.com 12636 High Bluff Drive, Suite 400 San Diego, California 92130-2071 Tel: (858) 523-5400 Fax: (858) 523-5450 www.lw.com FIRM / AFFILIATE OFFICES July 29, 2005 Boston Brussels Chicago Frankfurt Hamburg Hong Kong London Los Angeles Milan Moscow New Jersey New York Northern Virginia Orange County Paris San Diego San Francisco Shanghai Silicon Valley Singapore Tokyo Washington, D.C. File No. 026004-0000 VIA EDGAR & FEDEX Mr. H. Christopher Owings Assistant Director Division of Corporation Finance Securities and Exchange Commission Mail Stop 03-08 100 F Street, NE Washington, DC 20549 Re: PriceSmart, Inc. Registration Statement on Form S-1 Commission File No. 333-123076 Filed on March 2, 2005 Dear Mr. Owings: We are in receipt of the Staff’s letter dated March 30, 2005 with respect to the above-referenced Registration Statement on Form S-1. Per our discussions with the Staff, we responded to the Staff’s comments on behalf of PriceSmart, Inc. (“PriceSmart” or the “Company”) in connection with PriceSmart’s filing of its Quarterly Report on Form 10-Q for the quarter ended May 31, 2005 by letter dated July 15, 2005. In addition, as requested by the Staff, we are responding to the Staff’s comments on behalf of PriceSmart as set forth below in connection with PriceSmart’s filing of Amendment No. 1 to the Registration Statement on Form S-1 (the “Amendment”). Simultaneously with the filing of this letter, PriceSmart is submitting (via EDGAR) the Amendment, responding to the Staff’s comments. Courtesy copies of this letter and the Amendment (specifically marked to show the changes thereto) are being submitted to the Staff by FedEx. PriceSmart’s responses set forth in this letter are numbered to correspond to the numbered comments in the Staff’s letter. For ease of reference, we have set forth the Staff’s comments and PriceSmart’s response for each item below. Mr. H. Christopher Owings July 29, 2005 Page 2 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, [page 14] General 1. Where you identify intermediate causes of changes in your operating results, also describe the reasons underlying the intermediate causes. For example, you indicate that the increase in net warehouse club sales from the first quarter 2004 to the first quarter 2005 is primarily due to improvements in merchandising. Please explain the merchandising improvements you implemented and why these improvements led to higher average sale per transaction figures. As another example, where you discuss the fluctuations in your “losses of unconsolidated affiliates” line item, you indicate that the fluctuations are a result of fluctuations in underlying earnings/losses of your equity method investees. Please revise to explain the reasons for the fluctuations in the earnings/losses of your equity method investees. See SEC Release No. 33-8350. Confidential Response? No The Company has revised its disclosure in accordance with the Staff’s comment. With respect to increases in net warehouse sales, we have revised our disclosure as follows: “Improvements in merchandising in our warehouse clubs, such as higher quality imported products, larger pack sizes and increases in inventory levels for key items to assure product availability, was the primary contributor to the growth in sales for those warehouse clubs that were open during both periods. In addition, sales were positively impacted by a strong general economic environment in our Central American and Caribbean markets, particularly in the Dominican Republic which is included in the Caribbean region.” Regarding “Losses of unconsolidated affiliate,” the circumstances have changed since the initial filing of the Registration Statement due to the closure of the warehouse clubs. The Company’s revised disclosure is as follows: “Losses of unconsolidated affiliate represent our 50% share of losses from our Mexico joint venture. On February 11, 2005, we, along with our joint venture shareholder, Grupo Gigante S.A. de C.V., announced that we were closing the warehouse operations of PSMT Mexico, S.A. de C.V. effective February 28, 2005. At that time we indicated that we believed that the closure would not result in a significant loss for PriceSmart, Inc. While this is still our view with respect to the total carrying value of that investment, PSMT Mexico continues to incur operating losses during this period of merchandise and asset liquidation and the settlement of contractual obligations. Under the equity method of accounting, through which we reflect our proportionate share of income or loss of the unconsolidated joint venture’s results from operations, our proportionate share of the loss in PriceSmart Mexico for the first nine months of fiscal year 2005 was $3.0 million, as compared to $1.3 million in the prior year period. Since the announcement of the closure of the business, PriceSmart, Inc.’s 50% share of the losses of PSMT Mexico has been approximately 1.9 million.” Mr. H. Christopher Owings July 29, 2005 Page 3 Please see pages 15 and 18 of the Amendment. 2. Where you describe two or more business reasons that contributed to a material change in a financial statement line item between periods, please quantify the extent to which each change contributed to the overall change in that line item. For example, with respect to the change in your warehouse club operating expenses from the first quarter 2004 to the first quarter 2005, please quantify the extent to which the changes are attributable to the various contributing factors. See Item 303(a) of Regulation S-K and SEC Release No. 33-8350. Confidential Response? No PriceSmart has revised its disclosure in response to the Staff’s comment. Please see pages 15 through 23 of the Amendment. 3. We note your disclosure that comparable warehouse club sales include sales for those warehouse clubs open at least 12 full months. Does this mean that a store open for one month in the prior period and 11 months in the current period is included in comparable warehouse club sales? If so, please tell us why you believe this measure represents your “comparable” warehouse club sales. Also revise your disclosure to clarify that the measure could be skewed by stores only open a short period of time in the prior period. Also disclose whether there have been any revisions to your methodology for calculating comparable warehouse club sales in the last three years. Finally, please expand your disclosure of how you calculate the change in comparable store sales from period to period to include how you treat stores that were closed during the period. Confidential Response? No Closed warehouses are not included in the comparable warehouse sales calculations, and the only adjustment the Company has made to the methodology was to account for the leap year in February 2004. PriceSmart has revised its disclosure in response to the Staff’s comment as follows: We report comparable warehouse sales on a “same week” basis with 13 weeks in each quarter beginning on a Monday and ending on a Sunday. The periods are established at the beginning of the fiscal year to provide as close a match as possible to the calendar month that is used for financial reporting purposes. This approach equalizes the number of weekend days and week days in each period for improved sales comparison, as we experience higher warehouse sales on the weekends. Further, each of the warehouse clubs used in the calculation was open for at least 13 1/2 calendar months before its results for the current period were compared with its results for the prior period. For example, if a warehouse club opened during the fourth fiscal quarter on June 14, 2004, it would not be included in the comparable warehouse club sales until the Mr. H. Christopher Owings July 29, 2005 Page 4 first comparison of July 2005 with July 2004. For purposes of quarterly comparisons of comparable warehouse club sales, July and August 2005 results for this hypothetical warehouse club would be compared to July and August 2004 for the fourth quarter comparable sales. June 2005 results would not be taken into account in making the comparison. By contrast, a warehouse club opened June 16, 2004 would not be included in comparable warehouse club sales until the first comparison of August 2005 with August 2004. Please see pages 15 and 19 of the Amendment. 4. Please tell us why your comparable warehouse club sales data on page 17 uses a cut-off date of September 5, 2004 and covers a 53-week period while the comparative data for the prior year uses a cut-off date of August 31, 2003, your fiscal year-end, and a 52-week period. Confidential Response? No Comparable warehouse sales use a 4-4-5 “fiscal week” period adding to a 13 week quarter, but the Company’s financial reporting period is on a calendar month basis. The Company attempts to align those two measurement periods as closely as possible, and depending on the calendar, the periods may have the same ending date (as was the case on August 31, 2003). However, this is not always the case. Every four years, there is a need to have a 14 week quarter (53 week year) to maintain that close alignment, due to the leap year. Please also see the Company’s response to Staff Comment No. 3, above. Comparison of First Quarter 2005 to First Quarter 2004, [page 15] 5. You disclose on page 16 that other income, excluding licensee fees, decreased to $1.1 million in the first quarter of fiscal 2005 from $1.6 million in the first quarter of fiscal 2004. It appears, however, that both of these amounts include licensee fee income. Please revise or advise. Confidential Response? No The Company has revised its disclosure in response to the Staff’s comment as follows: Other income consists of commission revenue, rental income, advertising revenue, construction revenue, fees for in-store product demonstrations, and fees earned from licensees. Other income in the first nine months of fiscal 2005 was $3.7 million, a reduction of $1.0 million from the prior year. This reduction primarily results from a decrease of $1.0 million in license fees in the first nine months of fiscal 2005, as a result of the previously announced termination of the technology and trademark licensing agreements with our China licensee. No further revenue for the China license has been recorded after May 31, 2004. Mr. H. Christopher Owings July 29, 2005 Page 5 Please see page 16 of the Amendment. 6. Your presentation on page 15 of your warehouse gross margin excluding the impact of foreign exchange gains and losses represents a non-GAAP measure subject to the disclosure and reconciliation requirements in Item 10(e) of Regulation S-K. Please consider revising your discussion so that you quantify and discuss the impact of foreign exchange gains and losses on your gross margin without presenting your gross margin excluding the impact of such charges. Otherwise, if you intend to retain this non-GAAP measure in your filing, please note that you must meet the burden of demonstrating the usefulness of this and any other non-GAAP measure which excludes recurring type items. In this regard, you will need to disclose the following information in your filing: • The manner in which you use the non-GAAP measure to conduct or evaluate your business; • The economic substance behind your decision to use such a measure; • The material limitations associated with use of the non-GAAP financial measure as compared to the use of the most directly comparable GAAP financial measure; • The substantive reasons why you believe the non-GAAP financial measure provides useful information to investors. In addition to the above guidance, please ensure that you provide a reconciliation, preferably in tabular form, which reconciles the non-GAAP measure to your gross margin as calculated in accordance with GAAP. For further guidance, see Item 10(e) of Regulation S-K and questions 8 and 9 of the Staff’s Frequently Asked Questions Regarding the Use of Non-GAAP Financial Measures, available at www.sec.gov. Confidential Response? No The Company has revised its disclosure to eliminate the use the non-GAAP measure referred in the Staff’s comment. However, the Amendment does contain a non-GAAP number with respect to net warehouse sales net of Philippine phone card sales, for which the Company believes it has provided the required disclosure. See page 18 of the Amendment. Liquidity and Capital Resources, [page 21] 7. You indicate on page 14 that you plan to open a warehouse club in Costa Rica during the second half of calendar year 2005 and disclose on page 15 that you terminated the license agreement with your China licensee subsequent to the end of the first fiscal quarter of 2005. You also state on page 31 that you completed the closure of your PSMT Mexico, S.A. de C.V. warehouse club operations during the fiscal year 2005. If material, please quantify the estimated impact on your future results of operations and cash flows of each of these items. Confidential Response? No Mr. H. Christopher Owings July 29, 2005 Page 6 The Company is currently operating 26 warehouse clubs. The opening of one additional warehouse club would not have a material impact on earnings in the near term. The Company’s revised disclosure with respect to Costa Rica is as follows: Net cash (used in) provided by investing activities was $(7.1) million and $1.6 million in the first nine months of fiscal 2005 and 2004, respectively. The increase in the use of cash resulted primarily from the acquisition of land and the initial building costs associated with the planned new warehouse club location in San Jose, Costa Rica. Through May 31, 2005, approximately $4.2 million has been invested in the new location, which is expected to cost approximately $10.2 million. Please see page 25 of the Amendment. The Company’s revised disclosure with respect to China is as follows: Other income consists of commission revenue, rental income, advertising revenue, construction revenue, fees for in-store product demonstrations, and fees earned from licensees. Other income in the first nine months of fiscal 2005 was $3.7 million, a reduction of $1.0 million from the prior year. This reduction primarily results from a decrease of $1.0 million in license fees in the first nine months of fiscal 2005, as a result of the previously announced termination of the technology and trademark licensing agreements with our China licensee. No further revenue for the China licensee has been recorded after May 31, 2004. Please see page 16 of the Amendment. With respect to PSMT Mexico, please see the Company’s response to Staff Comment No. 1. Contractual Obligations, [page 26] 8. Please revise your tabular disclosure of contractual obligations to include estimated interest payments on your debt. Since the table is aimed at increasing transparency of cash flow, we believe these payments should be included in the table. A footnote to the table should provide appropriate disclosure regarding how you estimated the interest payments. If you choose not to include these payments, a footnote to the table should clearly identify the excluded item and provide any additional information that is material to an understanding of your cash requirements. See Item 303(a)(5) of Regulation S-K and footnote 46 to SEC Release No. 33-8350. Confidential Response? No The Company has revised its disclosure in response to the Staff’s comment as follows: “Amounts shown are for the principal portion of the long-term debt payment only. Future interest obligations will vary with changes in future LIBOR rates, making an accurate projection of fu