SEC Comment Letter for GLOBAL PARTNERS LP (GLP, GLP-PB) (CIK 0001323468) (GLP) — Jul 21, 2005
GLOBAL PARTNERS LP (GLP, GLP-PB) (CIK 0001323468)
Date: July 21, 2005 · CIK: 0001323468 · Accession: 0000000000-05-037442
AI Filing Summary & Sentiment
File numbers found in text: 333-124755
Referenced dates: July 1, 2005
Letter
July 21, 2005 Mr. Edward J. Faneuil Senior Vice President, General Counsel, and Secretary Global Partners LP P.O. Box 9161 800 South St. Waltham, Massachusetts 02454-9161
Re: Global Partners LP Amendment No. 1 to Registration Statement on Form S-1 Filed July 1, 2005 File No. 333-124755
Dear Mr. Faneuil:
We have reviewed your filing and your response letter dated July 1, 2005 and have the following comments. Where indicated, we think you should revise your document 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. After reviewing this information, we may or may not raise additional comments.
Form S-1, as amended
Use of Proceeds, page 32
1. We note your responses to prior comments number 12, 13 and 14. If it is your intention to draw down on the revolving credit facility once it is paid down with the proceeds of the offering, or enter into and draw down on a new credit facility, and you know what those uses will be and the approximate amounts, provide that information under "Use of Proceeds." If you have no plans to do so, we reiterate our prior comment number 12 asking you to provide a risk factor that the proceeds will be used to pay down debt and not expand or invest in your business.
Estimated Available Cash from Operating Surplus, page 37
2. The table on this page needs several revisions:
* "(c)" is attached to three separate items, but footnote (c) only discusses estimated interest expense. Please change references in the table and write footnotes describing the assumptions for estimated maintenance capital expenditures and estimated income tax expense;
* the numbers ($20.4 million, $25.2 million and $26.9 million) in footnote (a) for EBITDA for 2003, 2004, and the twelve months ended March 31, 2005 do not factor in the $2 million of incremental general and administrative expenses expected to be incurred as a result of becoming a public company. Please revise these amounts to factor in these additional costs so that the amounts are comparable to the estimated minimum EBITDA amount for the twelve months ended June 30, 2006. Please note that the numbers for 2004 and twelve months ended March 31, 2005 are actually reflected in the table on page 41 - see "pro forma EBITDA." Please also note that this will require you to expand your disclosure in footnote (a) explaining how you expect to increase EBITDA so significantly from historical periods in order to pay the expected distribution;
* the "Estimated Available Cash..." title seems confusing because you also have a defined term called "available cash" on page C-1 where you define "available cash." Consider changing the title to "Cash Available for Distribution;"
* in footnotes (b) and (d), please revise to make clear why the leverage ratio is assumed "N/A." For instance, if it is because you do not expect any borrowings under the acquisition facility or revolving credit facility, clearly state that;
* in footnote (b), the last sentence states that "[w]e assume that we will be in compliance...." Please revise to state "[w]e believe...;" and
* in footnote (c), the last sentence states that "[w]e have assumed that our average interest rate on borrowings will be comparable...." At a minimum, please disclose whether your debt/credit facilities bear interest at fixed or variable rates and the average rate of interest you have assumed.
Assumptions and Considerations, page 38
3. In your bulleted assumptions, please revise to include at least two years of historical discussion in each of the bullets. For example, this information is missing in the second and third bullets. Further, in the fourth bullet where you discuss selling, general and administrative expenses we note that you have assumed that $1.8 million and $1.0 million incurred during 2004 and the three months ended March 31, 2005, respectively will not recur during the twelve months ended June 30, 2006. However, you only provide a discussion of $0.6 million of the charges that are not expected to recur. Please revise to expand your disclosure regarding the expenses that are not expected to recur during the twelve months ended June 30, 2006. Your disclosure should discuss the nature of the expenses and your basis for assuming the charges will not recur.
Pro Forma Available Cash from Operating Surplus, page 40
4. In the first sentence of the first paragraph under this heading, you state "[i]f we had...pro forma available cash from operating surplus...would have been approximately $17.3 million." Please revise to state "[i]f [you] had...[cash available for distribution]..." because you must highlight that you would not have had enough "actual cash" available for distribution, not whether you would have been able to make the cash distribution based on a defined term. Please make this change in all applicable places throughout the filing.
Unaudited Pro Forma Available Cash from Operating Surplus, page 41
5. Between "[p]ro forma available cash from operating surplus" and "[p]ro forma available cash," please add in a line item to factor the additional cash interest deemed to have been incurred as a result of assumed borrowings to finance your capital improvement expenditures. Also, please insert an additional footnote outlining the assumptions used in developing the amount.
6. In footnote (e), please expand your discussion of assumptions for pro forma interest expense for each period presented. It is unclear why the year ended December 31, 2004 amount is different than the amount disclosed for the twelve months ended March 31, 2005.
Management`s Discussion and Analysis of Financial Condition and Results of Operations, page 47
Overview, page 47
Products and Operational Structure, page 47
7. We understand from your response to prior comment 19 that because revenues generated by operating segments within your commercial segment are individually less than 10 percent of consolidated revenues, and do not surpass the thresholds outlined in paragraph of SFAS 131, you believe additional segment disclosure is not required. Given your disclosures on page 52, we presume that you are not able to support aggregation under paragraph 17, for which you would need to show similar economic characteristics, and consistency with the objectives and basic principles outlined in paragraph 3. Under these circumstances, the guidance in either paragraph 19 or 21, requiring separate disclosure for segments that do not meet the quantitative thresholds, appears to be applicable.
Competition, page 80
8. We note your supplemental response number 21. Provide that information in the registration statement.
Noncompetition, page 96
9. It would appear that the Omnibus Agreement puts restrictions on your ability to grow your business based on the disclosure in the last full paragraph on page 96. Provide a risk factor addressing this issue or explain to us why you feel that is not appropriate.
Cash Distribution Policy, page 109
10. We note your responses number 3 and 15. It was not our intent for you to put this disclosure this far back. It would seem more appropriate for it to follow after "Cash Distribution Policy and Restrictions on Distributions."
Underwriting, page 147
11. We note your response to our prior comment 25, particularly your statement that Banc of America Securities LLC employs the same procedures as i-Deal. Our staff continues its review of those procedures. We may have further comment.
Global Companies LLC and Affiliates (Predecessor), page F-8
Combined Statements of Income, page F-9
12. We note that in response to prior comment 30, you revised your disclosure to include a parenthetical notation indicating that your cost of sales measure excludes depreciation and amortization. Please confirm that the entire amount of depreciation and amortization that you report is appropriately attributable to cost of sales, as indicated by your disclosure, if true. Since you are opting to continue reporting gross profit, depreciation and amortization attributable to, but excluded from cost of sales should be repositioned above, and reflected within your gross profit measure.
Closing Comments
As appropriate, please amend your registration statement in response to these comments. You may wish to provide us with a marked copy of the amendment to expedite our review. Please furnish a cover letter with your amendment that keys your responses to our comments and provides any requested information. Detailed cover letters greatly facilitate our review. Please understand that we may have additional comments after reviewing your amendment and responses to our comments.
We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing to be certain that the filing includes all information required under the Securities Act of 1933 and that they have provided all information investors require for an informed investment 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.
We will consider a written request for acceleration of the effective date of the registration statement as confirmation of the fact that those requesting acceleration are aware of their respective responsibilities under the Securities Act of 1933 and the Securities Exchange Act of 1934 as they relate to the proposed public offering of the securities specified in the above registration statement. We will act on the request and, pursuant to delegated authority, grant acceleration of the effective date.
We direct your attention to Rules 460 and 461 regarding requesting acceleration of a registration statement. Please allow adequate time after the filing of any amendment for further review before submitting a request for acceleration. Please provide this request at least two business days in advance of the requested effective date.
You may contact Donald Delaney at (202) 551-3863 or Karl Hiller, Branch Chief, at (202) 551-3686 if you have questions regarding comments on the financial statements and related matters. Please contact Stephanie Hunsaker at (202) 551-3512 if you have questions regarding comments on the cash distribution policy. Please contact Jason Wynn at (202) 551-3756 or me at (202) 551-3740 with any other questions. Direct all correspondence to the following ZIP code: 20549-7010.
Sincerely,
H. Roger Schwall
Assistant Director
Show Raw Text
<DOCUMENT>
<TYPE>LETTER
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>
July 21, 2005
Mr. Edward J. Faneuil
Senior Vice President, General Counsel, and Secretary
Global Partners LP
P.O. Box 9161
800 South St.
Waltham, Massachusetts 02454-9161
Re: Global Partners LP
Amendment No. 1 to Registration Statement on Form S-1
Filed July 1, 2005
File No. 333-124755
Dear Mr. Faneuil:
We have reviewed your filing and your response letter dated
July
1, 2005 and have the following comments. Where indicated, we
think
you should revise your document 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. After reviewing this information, we
may
or may not raise additional comments.
Form S-1, as amended
Use of Proceeds, page 32
1. We note your responses to prior comments number 12, 13 and 14.
If
it is your intention to draw down on the revolving credit facility
once it is paid down with the proceeds of the offering, or enter
into
and draw down on a new credit facility, and you know what those
uses
will be and the approximate amounts, provide that information
under
"Use of Proceeds." If you have no plans to do so, we reiterate
our
prior comment number 12 asking you to provide a risk factor that
the
proceeds will be used to pay down debt and not expand or invest in
your business.
Estimated Available Cash from Operating Surplus, page 37
2. The table on this page needs several revisions:
* "(c)" is attached to three separate items, but footnote (c) only
discusses estimated interest expense. Please change references in
the
table and write footnotes describing the assumptions for estimated
maintenance capital expenditures and estimated income tax expense;
* the numbers ($20.4 million, $25.2 million and $26.9 million) in
footnote (a) for EBITDA for 2003, 2004, and the twelve months
ended
March 31, 2005 do not factor in the $2 million of incremental
general
and administrative expenses expected to be incurred as a result of
becoming a public company. Please revise these amounts to factor
in
these additional costs so that the amounts are comparable to the
estimated minimum EBITDA amount for the twelve months ended June
30,
2006. Please note that the numbers for 2004 and twelve months
ended
March 31, 2005 are actually reflected in the table on page 41 -
see
"pro forma EBITDA." Please also note that this will require you
to
expand your disclosure in footnote (a) explaining how you expect
to
increase EBITDA so significantly from historical periods in order
to
pay the expected distribution;
* the "Estimated Available Cash..." title seems confusing because
you
also have a defined term called "available cash" on page C-1 where
you
define "available cash." Consider changing the title to "Cash
Available for Distribution;"
* in footnotes (b) and (d), please revise to make clear why the
leverage ratio is assumed "N/A." For instance, if it is because
you
do not expect any borrowings under the acquisition facility or
revolving credit facility, clearly state that;
* in footnote (b), the last sentence states that "[w]e assume that
we
will be in compliance...." Please revise to state "[w]e
believe...;"
and
* in footnote (c), the last sentence states that "[w]e have
assumed
that our average interest rate on borrowings will be
comparable...."
At a minimum, please disclose whether your debt/credit facilities
bear
interest at fixed or variable rates and the average rate of
interest
you have assumed.
Assumptions and Considerations, page 38
3. In your bulleted assumptions, please revise to include at least
two
years of historical discussion in each of the bullets. For
example,
this information is missing in the second and third bullets.
Further,
in the fourth bullet where you discuss selling, general and
administrative expenses we note that you have assumed that $1.8
million and $1.0 million incurred during 2004 and the three months
ended March 31, 2005, respectively will not recur during the
twelve
months ended June 30, 2006. However, you only provide a
discussion of
$0.6 million of the charges that are not expected to recur.
Please
revise to expand your disclosure regarding the expenses that are
not
expected to recur during the twelve months ended June 30, 2006.
Your
disclosure should discuss the nature of the expenses and your
basis
for assuming the charges will not recur.
Pro Forma Available Cash from Operating Surplus, page 40
4. In the first sentence of the first paragraph under this
heading,
you state "[i]f we had...pro forma available cash from operating
surplus...would have been approximately $17.3 million." Please
revise
to state "[i]f [you] had...[cash available for distribution]..."
because you must highlight that you would not have had enough
"actual
cash" available for distribution, not whether you would have been
able
to make the cash distribution based on a defined term. Please
make
this change in all applicable places throughout the filing.
Unaudited Pro Forma Available Cash from Operating Surplus, page 41
5. Between "[p]ro forma available cash from operating surplus" and
"[p]ro forma available cash," please add in a line item to factor
the
additional cash interest deemed to have been incurred as a result
of
assumed borrowings to finance your capital improvement
expenditures.
Also, please insert an additional footnote outlining the
assumptions
used in developing the amount.
6. In footnote (e), please expand your discussion of assumptions
for
pro forma interest expense for each period presented. It is
unclear
why the year ended December 31, 2004 amount is different than the
amount disclosed for the twelve months ended March 31, 2005.
Management`s Discussion and Analysis of Financial Condition and
Results of Operations, page 47
Overview, page 47
Products and Operational Structure, page 47
7. We understand from your response to prior comment 19 that
because
revenues generated by operating segments within your commercial
segment are individually less than 10 percent of consolidated
revenues, and do not surpass the thresholds outlined in paragraph
18
of SFAS 131, you believe additional segment disclosure is not
required. Given your disclosures on page 52, we presume that you
are
not able to support aggregation under paragraph 17, for which you
would need to show similar economic characteristics, and
consistency
with the objectives and basic principles outlined in paragraph 3.
Under these circumstances, the guidance in either paragraph 19 or
21,
requiring separate disclosure for segments that do not meet the
quantitative thresholds, appears to be applicable.
Competition, page 80
8. We note your supplemental response number 21. Provide that
information in the registration statement.
Noncompetition, page 96
9. It would appear that the Omnibus Agreement puts restrictions on
your ability to grow your business based on the disclosure in the
last
full paragraph on page 96. Provide a risk factor addressing this
issue or explain to us why you feel that is not appropriate.
Cash Distribution Policy, page 109
10. We note your responses number 3 and 15. It was not our intent
for
you to put this disclosure this far back. It would seem more
appropriate for it to follow after "Cash Distribution Policy and
Restrictions on Distributions."
Underwriting, page 147
11. We note your response to our prior comment 25, particularly
your
statement that Banc of America Securities LLC employs the same
procedures as i-Deal. Our staff continues its review of those
procedures. We may have further comment.
Global Companies LLC and Affiliates (Predecessor), page F-8
Combined Statements of Income, page F-9
12. We note that in response to prior comment 30, you revised your
disclosure to include a parenthetical notation indicating that
your
cost of sales measure excludes depreciation and amortization.
Please
confirm that the entire amount of depreciation and amortization
that
you report is appropriately attributable to cost of sales, as
indicated by your disclosure, if true. Since you are opting to
continue reporting gross profit, depreciation and amortization
attributable to, but excluded from cost of sales should be
repositioned above, and reflected within your gross profit
measure.
Closing Comments
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with a
marked
copy of the amendment to expedite our review. Please furnish a
cover
letter with your amendment that keys your responses to our
comments
and provides any requested information. Detailed cover letters
greatly facilitate our review. Please understand that we may have
additional comments after reviewing your amendment and responses
to
our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing
includes all information required under the Securities Act of 1933
and
that they have provided all information investors require for an
informed investment 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.
We will consider a written request for acceleration of the
effective date of the registration statement as confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering of
the securities specified in the above registration statement. We
will
act on the request and, pursuant to delegated authority, grant
acceleration of the effective date.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
You may contact Donald Delaney at (202) 551-3863 or Karl
Hiller,
Branch Chief, at (202) 551-3686 if you have questions regarding
comments on the financial statements and related matters. Please
contact Stephanie Hunsaker at (202) 551-3512 if you have questions
regarding comments on the cash distribution policy. Please
contact
Jason Wynn at (202) 551-3756 or me at (202) 551-3740 with any
other
questions. Direct all correspondence to the following ZIP code:
20549-7010.
Sincerely,
H. Roger Schwall
Assistant Director
cc: D. Delaney
K. Hiller
J. Wynn
S. Hunsaker
via facsimile
Alan P. Baden
Vinson & Elkins L.L.P.
(212) 237-0100
??
??
??
??
Mr. Edward J. Faneuil
Global Partners LP
July 21, 2005
page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-7010
DIVISION OF
CORPORATION FINANCE
MAIL STOP 7010
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