SEC Comment Letter for PETRO HOLDINGS FINANCIAL CORP (CIK 0001094068) — Apr 29, 2005
PETRO HOLDINGS FINANCIAL CORP (CIK 0001094068)
Date: April 29, 2005 · CIK: 0001094068 · Accession: 0000000000-05-020970
AI Filing Summary & Sentiment
File numbers found in text: 333-87371, 333-87372
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Mail Stop 3-8
April 29, 2005
By Facsimile and U.S. Mail
Mr. J.A. Cardwell, Sr.
Petro Stopping Centers Holdings, L.P.
Chairman and Chief Executive Officer
6080 Surety Drive
El Paso, TX 79905
Re: Form 10-K for the Year Ended December 31, 2004
File No.`s 1-13018, 333-87372, 333-87371-01 and 333-
25189-
01
Dear Mr. Cardwell:
We have completed a limited review of the above referenced
filings and have the following comments. Where indicated, we
think
you should revise your documents in response to these comments.
If
you disagree, we will consider your explanation as to why our
comment
is inapplicable or a revision is unnecessary. Please be as
detailed
as necessary in your explanation. In some of our comments, we may
ask you to provide us with supplemental information so we may
better
understand your disclosure. Where a comment below requests
additional disclosures or other revisions to be made, please show
us
in your supplemental response what the revisions will look like.
Include these revisions in your future filings, including those
for
interim periods. After reviewing this information, we may or may
not
raise additional comments.
Form 10-K for the Year Ended December 31, 2004
General
1. Our comments below reference the Form 10-K for Petro Stopping
Centers Holdings, L.P. Where applicable, please incorporate these
revisions in both Petro Stopping Centers Holdings, L.P. and Petro
Stopping Centers, L.P. interim and annual filings as applicable.
Item 7. Management`s Discussion and Analysis of Financial
Condition
and Results of Operations, page10
Critical Accounting Policies, page 17
2. In future filings, please disclose the uncertainties involved
in
applying your critical accounting policies to self insurance and
loyalty program estimates and the variability that is reasonably
likely to result from their application. In doing so, provide an
analysis, to the extent material, of the factors you consider, how
accurate your estimates or assumptions have been in the past and
whether the estimates are reasonably likely to change in the
future.
Please disclose the impact of any material changes in each of your
critical accounting estimates on income and financial position for
the periods presented. Please refer to SEC Release No. 33-8350.
In
your response please show us what your revised disclosures will
look
like.
Item 8. Financial Statements and Supplementary Data, page 26
Consolidated Balance Sheets, page 26
3. Please tell us if your self-insurance accruals are recorded as
current or non-current liabilities and the basis for your
classification. Further, please advise us of what consideration
you
gave to including the accruals in your summary of contractual
obligations on page 16.
4. Please tell us why you characterize your redeemable warrants as
"contingent" and classify them between liabilities and permanent
equity in consideration of your disclosure indicating you will be
obligated to repurchase the warrants if they are not exchanged by
October 1, 2009. Reference is made to paragraph 9 of SFAS No.
150.
5. We note your adoption of SFAS No. 150 in January 2004. Please
provide an explanation for the following and expand your
disclosure
in future filings as appropriate:
* Please tell us why $5 million in mandatorily redeemable
preferred
partnership interests remains classified between liabilities and
permanent equity;
* Clarify how you record the accrued returns for preferred
partnership interests;
* Tell us why your mandatorily redeemable preferred partnership
interests decreased during 2004 despite your requirement to pay
returns to preferred partners under the mandatory redemption
features; and
* Tell us why the change in the preferred partnership interests in
the balance sheets does not reconcile with the accrual of
preferred
returns reflected in the statement of operations at December 31,
2004;
Consolidated Statements of Operations, page 27
6. In future filings, please present the results of operations on
a
partnership per unit basis. See SAB Topic 4.F.
Consolidated Statements of Changes in Partners` Deficit and
Comprehensive Loss, page 28
7. In future filings, please present the number of partnership
units
authorized and outstanding for each ownership class. See SAB
Topic
4.F.
Consolidated Statements of Cash Flows, page 29
8. Please tell us the amount of direct bill agreement receivables
purchased and collected in each of the three years ended December
31,
2004, how you classify the cash inflows and outflows for such
purchased receivables, and the basis for your accounting
treatment.
Notes to Consolidated Financial Statements, page 30
General
9. We note you incur credit card fees associated with Petro
MasterCard and Fleet card payments by customers. Please tell us
whether you impose finance charges on credit sales and, if so, the
amount of gross revenue from finance charges for the periods
presented and the income statement classification which includes
such
revenue. If gross revenue from finance charges is material,
please
disclose the amount of such revenue in a footnote and the income
statement line item that includes such revenue. Please also
disclose
the cost of administering your credit program, if applicable. See
SAB Topic 8:B.
(2) Summary of Significant Accounting Policies, page 32
Property and Equipment, page 32
10. We note you generally provide amortization and depreciation
over
the estimated useful lives of the respective assets. Please
clarify
for us and in future filings how you provide for amortization of
leasehold improvements. Reference is made to SFAS 13, paragraph
5.
Loyalty Program, page 34
11. Please tell us how you account for your loyalty program in
consideration of EITF No. 00-22, specifically as it relates to:
* Whether you offer free or discounted products or services that
are
redeemable if the customer completes a specified level of revenue
transactions, remains a customer for a specified period or is
redeemable at a future date without further exchange;
* Whether you offer a rebate or a refund of a specified amount of
cash redeemable if the customer completes a specified level of
revenue transactions or remains a customer for a specified period;
* How you classify loyalty awards in your statement of operations;
and
* If you sell award credits to other vendors or consumers please
tell
us how you establish their fair values and your applicable revenue
recognition policy.
If applicable, tell us the value of loyalty program points awarded
to
customers and sold to vendors or other customers for the three
years
ended December 31, 2004. If you believe that EITF No. 00-22 is
not
applicable to you, please tell us the applicable accounting
pronouncement in your response.
(3) Inventories, page 37
12. Disclose why the value of the reserve for obsolescence has
remained constant year over year and why your net inventory
balance
increased by 8% for the same comparative period. In your response
please show us what your revised disclosures will look like.
(5) Operating Leases, page 37
13. Please advise us of where you have included rental income from
the lease of retail space to independent merchants, the amounts of
rental income received for each period presented, and describe the
lease arrangements entered into with these merchants. Revise as
appropriate in future filings.
(6) Long-Term Debt, page 39
14. Please describe the nature of the restrictions on the ability
of
the subsidiaries to transfer funds to you. Further, disclose the
amount of retained earnings or net income restricted. See Rule 4-
08
of Regulation S-X. In this regard, please tell us what
consideration you gave to providing Schedule I and the related
disclosures set forth in Rule 12-04 of Regulation S-X.
15. Please identify the restricted subsidiaries and clarify why
those
subsidiaries are "restricted."
(8) Related-Party Transactions, page 41
16. Please disclose the consideration you received for purchasing
receivables from HSV and/or clarify the reason for the
transactions.
Reference is made to SFAS 57.
(18) Subsequent Events, page 53
17. Please tell us why you have not furnished audited financial
statements required by Rule 3-05 of Regulation S-X and pro-forma
financial information required by Rule 11-01 of Regulation S-X for
your recent acquisitions of the Bordentown Junction Truck Stop,
New
Paris Travel Plaza and York Travel Plaza. If you determine they
do
not meet the definition of a significant subsidiary as referred to
in
Rule 3-05(b)(2), please include the related calculations in your
response. Also confirm the completion of the acquisitions has not
occurred as of the date your Form 10-K was filed. If the
completion
has occurred, please tell us why you have not filed reportable
events
under Item 2.01 of Form 8-K.
Schedule II - Valuation and Qualifying Accounts, page 55
18. Please revise your schedule to include the changes in your
self-
insurance reserves or please inform us where the information is
disclosed in your Form 10-K. See Rule 12-09 of Regulation S-X.
Please respond to these comments within 10 business
days,
or tell us when you will provide us with a response. Please
provide
us with a supplemental response letter that keys your responses to
our comments and provides any requested supplemental information.
Detailed letters greatly facilitate our review. File your
supplemental response on EDGAR as a correspondence file. Please
understand that we may have additional comments after reviewing
your
responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.
If you have any questions regarding our comments, please
direct them to Brian V. McAllister at (202) 551-3341 or, Donna Di
Silvio at (202) 551-3202, or in their absence, to the undersigned
at
(202) 551-3841.
Sincerely,
Michael Moran
Accounting Branch
Chief
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Mr. J.A. Cardwell, Sr.
Petro Stopping Centers Holdings, L.P.
April 29, 2005
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