SecProbe.io

CORRESP
1
filename1.htm

S.E.C. Response Letter

 919 Third Avenue

 New York, NY 10022

 (212) 756-2000

fax (212) 593-5955

 www.srz.com

 Writer’s Direct Number

 (212)
756-2431

 Writer’s E-mail Address

 andre.weiss@srz.com

 May
17, 2005

 VIA EDGAR

 Securities and Exchange Commission

 Division of Corporation Finance

 450 Fifth Street, N.W.

 Washington, D.C. 20549

 Attention: Ms. Jennifer G. Williams

Re:
Horizon Lines, Inc.

 Registration Statement on
Form S-1

 Filed March 2, 2005

 File No. 333-123073

 H-Lines Finance Holding Corp.

 Registration Statement on Form S-4

 Filed March 30, 2005

 File No.
333-123682

 Horizon Lines Holding Corp.

Registration Statement on Form S-4

 Filed March 30, 2005

 File No. 333-123681

 Dear Ms. Williams:

 On behalf of Horizon Lines, Inc. (the “Company”), we have set forth below the responses of the Company to the comment letter of
the staff of the Securities and Exchange Commission (the “Staff”) dated May 11, 2005 (the “Comment Letter”) with respect to the above-referenced registration statements of the Company and its subsidiaries,
H-Lines Finance Holding Corp. and Horizon Lines Holding Corp. The Company has filed, via the EDGAR system, Amendment No. 2 (“Amendment No. 2”) to the Company’s Registration Statement on Form S-1 (File No. 333-123073),
filed on March 2, 2005 (the “Registration Statement”). By overnight courier, we will be sending you a blacklined copy of the Amendment, which has been marked to indicate the Company’s changes to Amendment No. 1 to the
Registration Statement.

 For your convenience, we have set
forth below the Staff’s comments, in italics, followed by the Company’s responses thereto. Caption references and page numbers refer to the captions and pages contained in the blacklined copy of Amendment No. 2, unless otherwise
indicated. Capitalized terms used but not otherwise defined herein have the meanings ascribed to such terms in Amendment No. 2. The Company would be most appreciative of your prompt review of this filing.

 Securities and Exchange Commission

 May 17, 2005

  Page
 2

 General

1.
We will provide comments, if any, on your confidential treatment application under separate cover when we complete our review. Also, please note that we may have further comment
on your supplemental response regarding recent press reports when we complete our review of those materials.

 The Company is sending, under separate cover, a response to the Staff’s comment communicated to the undersigned on May 13, 2005, with respect to the
press coverage of the Company in Lloyd’s Shipping Economist.

2.
Please provide brief captions that accurately describe the photographs you plan to include in the red herring.

 The Company has included, in Amendment No. 2, captions for the artwork
proposed to be included in the red herring. Such captions appear on the inside front cover page and the inside back cover of the prospectus.

 Prospectus Summary, page 1

3.
We note your response to our prior comments no. 5 and 23. Please remove the disclosure relating to the summary of Post-Acquisition Transactions on pages 6 and 7 because the
disclosure merely repeats the information provided elsewhere in the prospectus. Instead, you may provide a cross-reference to your revised summary of the Post-Acquisition Transactions on page 121.

 Revisions have been made in response to this comment. See page 6.

4.
Please revise your disclosure throughout to eliminate any references to your Adjusted EBITDA measures. Please refer to our accounting comment no. 15, Refer to Item 10(e)(ii) of
Regulation S-K.

 The Company has deleted all
references to Adjusted EBITDA in the Prospectus Summary and in the Selected Consolidated and Combined Financial Data Section of the prospectus. The Company, after discussions with the Staff, has retained tabular footnotes in these Sections (pages 17
and 62) presenting certain charges. These items have not been aggregated and are not presented on a comparative basis with any GAAP-based financial measure.

 Our Company, page 1

5.
We note your response to our prior comment no. 14. Please provide verifiable support regarding your ranking in the four areas you list.

 The first area listed in our prior response consisted of the number of Jones
Act markets in which a container shipping or logistics company provides marine container shipping and logistics services. The Company provides marine container shipping and logistics services in each of the Hawaii market (i.e., between Hawaii and
the U.S. west coast), the Puerto Rico market (i.e., between Puerto Rico and the continental U.S.), and the Alaska market (i.e., between Alaska and the U.S. west coast). By contrast, no other marine container shipping company provides marine
container shipping and logistics services in each of the Hawaii, Puerto Rico and Alaska markets.

 The second area listed in our prior response consisted of the number of container vessels that are in active service in the Jones Act markets. The Company
operates 16 container vessels in these markets taken as a whole, more than any other Jones Act container shipping and logistics company. Matson Navigation Company (“Matson”) operates 13 vessels, Totem Ocean Trailer Express, Inc.
(“TOTE”) operates five vessels, Sea Star Lines (“Sea Star”) operates two container vessels, and Pasha Hawaii (“Pasha”) operates one vessel. While Crowley Maritime Corporation (“Crowley”) and Trailer Bridge,
Inc. (“Trailer Bridge” ) each is active in a Jones Act market, they operate tugboats and barges.

 The third area listed in our prior response consisted of the total tonnage of the container vessels in service in all Jones Act markets taken as a whole.
The total deadweight tonnage of the container vessels of the Company is 458,400 tons, more than the total deadweight tonnage of the container vessels of any other Jones Act container shipping and logistics company. The total deadweight tonnage of
the container vessels of Matson, TOTE, Sea Star, and Pasha are 386,000, 97,500, 44,000 and 14,000, respectively. However, different measures of tonnage for these container vessels exist that may yield different rankings. Accordingly, the statement
at issue in the Registration Statement has been restated as the belief of the Company.

 Securities and Exchange Commission

 May 17, 2005

  Page
 3

 The fourth area listed in our prior response consisted of the number of containers transported for a
charge (as opposed to empty containers) in all Jones Act markets taken as a whole. During 2004, the Company shipped 569,282 TEUs in all Jones markets taken as a whole. (A “TEU,” or twenty-foot-equivalent unit, is a standard measure of
cargo volume correlated to the volume of a standard 20-foot dry cargo container). By contrast, based on the Company’s conversion of Matson’s publicly reported container loads to approximated TEUs, Matson (which is active in only one Jones
Act market, namely the Hawaii market) shipped only 338,600 TEUs in all Jones Act markets taken as a whole during 2004, and, based on data obtained from Commonwealth Business Media, Inc., Crowley, Sea Star and Trailer Bridge (all of which are active
only in the Puerto Rico market) shipped only 224,707, 144,321, and 92,388 TEUs, respectively, in all Jones Act markets taken as a whole during 2004. Pasha did not conduct active operations in 2004 and commenced operations in 2005 with a single
container vessel in the Hawaii market. Based on estimates compiled by employees, customer and labor unions, adjusted for market trends and seasonality fluctuations, the Company carried more TEUs than TOTE (which is active only in the Alaska market)
in all Jones Act markets taken as a whole during 2004.

 As
indicated above, the statement at issue in the Registration Statement has been restated as the belief of the Company.

 Our Competitive Strengths, page 3

6.
In your response to our prior comment no. 18, you indicate that discussion of the Company’s compounded annual growth rate with respect to its revenue was deleted. However,
please note that this disclosure still appears in the third paragraph on page 3. Please revise accordingly.

 The references have been deleted.

 Long-standing relationships, page 4

7.
We note your response to our prior comment no. 15. Please disclose that you have non-exclusive contracts with your customers and that none of your customers account for 10% or
more of your total revenue.

 Revisions have
been made in response to this comment. See page 3.

 Our Equity Sponsor,
page 7

8.
Please identify Castle Harlan as the holders of Class B common stock and the Series A preferred stock.

 Revisions have been made in response to this comment. See page 7.

 The Offering, page 9

9.
We note your changes in response to our prior comment no. 26. However, the Offering-Related Transactions subsection is difficult to follow due to the embedded lists presented. We
also note that the information presented in this subsection merely repeats the same transactions disclosed in the Offering-Related Transactions section presented on pages 13-14. Please consider deleting the offering-related transactions on page 9
and providing a cross-reference to the offering-related transactions on pages 13-24.

 Revisions have been made in response to this comment. See page 8.

Risk Factors, page 21

 Financial and other covenants under our current and future indebtedness..., page 23

10.
We note your response to prior comment 32. However, your response merely repeats the information provided elsewhere in your prospectus. Instead, briefly disclose that the senior
credit facility requires mandatory prepayments. In addition, consider quantifying the effect that the mandatory prepayments would have on your operations, if material.

 Securities and Exchange Commission

 May 17, 2005

  Page
 4

 The disclosure in this section regarding mandatory prepayments under the senior credit facility has
been simplified and shortened to eliminate repetition to the extent consistent with clarity of the disclosure. See page 22.

 The mandatory prepayment provisions of the senior credit facility are triggered by events or circumstances that are not anticipated at this time. As such,
the Company believes that it is not in a position to quantify the effect that mandatory prepayments under the senior credit facility would have on its operations because the timing of the potential triggering events (e.g., certain asset sales, and
events of loss (subject to exceptions)) and the amounts of the related mandatory prepayments are unpredictable and the specific circumstances of the Company at the time of any such prepayment would determine the impact of such prepayment on the
Company’s operations. Disclosure to this effect has been added to page 22.

 Certain provisions of our charter documents and agreements

 and Delaware law could discourage, delay or prevent..., page 34

11.
Please briefly disclose the limited exceptions for the Castle Harlan Group. In addition, please revise similar disclosure in the Description of Capital Stock section on page 137
to explain the business reasons on why the limited exceptions exist.

 Revisions have been made in response to this comment. See pages 33-34 and 149.

 If a substantial number of shares become available for

 for sale and are sold in a short period..., page 35

12.
We note your response to prior comment no. 39. However, we cannot determine when the restrictions on resale by existing stockholders will lapse under Rule 144 and the relevant
agreements. Please advise. In addition, please revise your disclosure to indicate the exact number of outstanding securities that will eventually become available for sale.

 Revisions have been made in response to this comment. See pages 34-35 and
151-152.

 Cautionary Statement, page 40

13.
We note your response to prior comment no. 29. However, we continue to see qualifying language in paragraph four of this section. Please delete this qualifying language or
supplementally advise why no revision is necessary.

 Revisions have been made in response to this comment. See page 40.

 Industry and Market Data, page 41

14.
It is inappropriate to disclaim responsibility for the disclosure information you provide in the prospectus. Please remove any references indicating that you do not guarantee the
accuracy or completeness of the information provided.

 The references have been removed. See page 41.

 Securities and Exchange Commission

 May 17, 2005

  Page
 5

 Selected Consolidated and Combined Financial Data, page 56

15.
We note your response to our prior comment #47. However, based on your specific facts and circumstances, we continue to believe that your presentation of Adjusted EBITDA is not
in accordance with Item 10 of Regulation S-K. Please delete this measure from your filing, including the Prospectus Summary, Business section, and Summary Consolidated, Combined and Unaudited Pro Forma Financial Data.

 Please see the Company’s response to the Staff’s comment No. 4.

 Management’s Discussion and Analysis of Financial Condition

 and Results of Operations, Page 63

 Results of Operations, page 68

16.
We note your response to our prior comment #50. However, Item 303(a)(3)(ii) of Regulation S-K requires disclosure of known uncertainties in MD&A, and subsequent Exchange Act
filings should continue to discuss this uncertainty on a periodic basis. Please revise, as appropriate.

 Revisions have been made in response to this comment. See page 80.

17.
When quantifying changes in your revenues, please use a table or other method of presenting the information in a clear and concise manner. For example, we suggest you explain
your 10.6% increase in revenues for fiscal 2004 as compared to fiscal 2003 by using a table showing the components of the 10.6% change. Accordingly, volume growth would be shown as comprising approximately 6% of the 10.6% change, rather than
describing the 10.6% change as being approximately 57% attributable to volume growth.

 Revisions have been made in response to this comment. See pages 73, 75 and 78.

 Contractual Obligations, page 78

18.
We note that your table of contractual obligations is presented on a pro forma basis. Although a pro forma presentation may provide meaningful disclosure, this information should
be presented in addition to, not in lieu of, historical amounts. Therefore, please add a table showing the historical amounts of your contractual obligations in a manner consistent with the amounts shown in Note 6 to your financial statements, and
then present the table showing pro forma amounts, with an appropriate explanation of the pro forma adjustments.

 Revisions have been made in response to this comment. See pages 84-85.

 Securities and Exchange Commission

 May 17, 2005

  Page
 6

 Business, page 81

 Legal Proceedings, page 100

19.
We note your response to our prior comment #63. Please revise to disclose why you believe a meaningful quantification of potential damages related to the Guam-STB matter is not
possible. In this regard, since the parties have submitted proposed standards with respect to rates charged, it is unclear to us why you cannot calculate the potential damages that could be awarded to the Government of Guam by reference to their
June 2002 submission.

 Revisions have been
made in response to this comment, including an explanation as to why a calculation of potential damages is not currently feasible. See pages 108-109.

 Management, page 101

20.
Please revise to disclose Messrs. Holloway and Colussy’s business experience during the past five years. See Item 401(e)(1) of Regulation S-K.

 Revisions have been made in response to this comment. See page 112.

 Consolidated and Combined Statements of Operations, page F-4

21.
With respect to your response to our prior comment #74, we note that fuel surcharges accounted for over 5 percent of fiscal 2004 revenues and that the $14.3 million in