SEC Comment Letter for Booz Allen Hamilton Holding Corp (BAH) (CIK 0001443646) (BAH) — Aug 25, 2010
Booz Allen Hamilton Holding Corp (BAH) (CIK 0001443646)
Date: Aug. 25, 2010 · CIK: 0001443646 · Accession: 0000000000-10-048971
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 333-167645
Referenced dates: July 19, 2010
Letter
UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 DIVISION OF CORPORATION FINANCE August 19, 2010 CG Appleby Executive Vice President and General Counsel Booz Allen Hamilton Holding Corporation 8283 Greensboro Drive McLean, Virginia 22102 Re: Booz Allen Hamilton Holding Corporation Amendment No. 1 to Registrati on Statement on Form S-1 Filed July 30, 2010 File No. 333-167645
Dear Mr. Appleby:
We have reviewed your registration statem ent and have the following comments. In some of our comments, we may ask you to provi de us with information so we may better understand your disclosure. Please respond to this letter by amending your registration statement and providing the requested information. If you do not believe our comments apply to your facts and circumstances or do not believe an amendment is appropriate, please tell us why in your response. After reviewing any amendment to your re gistration statement and the information you provide in response to these comments, we may have additional comments.
Supplemental Information, page ii
1. We note your response to comment 3 in our letter dated July 19, 2010. Please further revise your prospectus throughout to reduce the use of defined terms. For example, the definition for “clients” does not appear to be necessary in light of your business model and disclosure throughout. Please revise accordingly.
Prospectus Summary, page 1
2. We note your response to comment 8 in our letter dated July 19, 2010. Your summary continues to contain a lengthy descripti on of your competitive strengths, market opportunity and growth strategy a nd much of this information is repeated elsewhere. For example, we note the disclosure under “M arket Opportunity” and “Our Strategy for Continued Growth.” Please revise to re duce the amount of repe titive information.
CG Appleby Booz Allen Hamilton Holding Corporation August 19, 2010 Page 2
Risk Factors, page 17
U.S. Government spending and mission priorities could change in a manner that adversely affects our future revenue and limits our growth prospects, page 17
3. Risk factors should be detailed enough so that investors can a ppreciate the potential magnitude of the risk. Here, you discuss the risk to your business should the U.S. government reduce outsourcing, particularly the Department of Defense. Please discuss in more detail if your business has been aff ected by this reducti on in outsourcing. For example, we note that the Pentagon recently a nnounced cuts that will include almost a third of its regular budget for contractors. Pl ease revise or advise. Please also consider expanding your disclosure on page 53 under the subheading, “Business Environment and Key Trends in Our Markets,” to discuss the reduction of outsourcing in more detail and its affect upon the company’s business; al so consider briefly discussing it in the Summary.
We may not realize the full value of our backl og, which may result in lower than expected revenue, page 21 4. We note your revised disclosure on page 22. Please revise to remove the following sentence, which appears to be mitigating disclosure, from this risk factor: “To the extent that we are able to hire additional people and deploy them against funded backlog, we recognize increased revenue.” Booz Allen Holding is a holding company with no operations of its own that depends on its subsidiaries for cash, page 30 5. We note your disclosure in this risk factor regarding the risk that you may be restricted to pay dividends. Please revise th e risk factor subheading to di scuss this risk or include a separate risk factor.
Management’s Discussion and Analysis of Financ ial Condition and Results of Operations, page
Our People, page 55
6. Please provide more detail about the enhancements made to your firm-wide hiring program.
CG Appleby Booz Allen Hamilton Holding Corporation August 19, 2010 Page 3
Results of Operations, page 64 Fiscal 2010 Compared to Pro Forma 2009, page 66
7. We note your response to comment 28 in our letter dated July 19, 2010 and the revisions made to your period-on-period disclosure. Please expand your disclosure to more fully describe the reasons for changes between periods. For example, please discuss why there was a decrease in the number of senior personnel engaged in day-to-day client management roles. Furthermore, please also expand your period-on-period disclosure with respect to all of the periods presented to explain in more deta il the changes between periods. Liquidity and Capital Resources, page 73
8. We note your disclosure on page 74 that you “do not expect [y]our transition to or existence as a public company to affect [y]our . . . day-to-day operations.” This appears to contradict disclosure in your Risk Factors section on page 33, which discusses the additional time and expense involved with becoming a public company and establishing adequate controls and procedur es. Please revise or advise.
Executive Compensation, page 107
9. We note your response to comment 35 in our letter dated July 19, 2010. Please expand your compensation disclosure to discuss in more detail the “bands” into which each executive officer falls. For example, pl ease discuss why, based on prior compensation levels, market survey data and projected profitability, the specific cash compensation was set for each band assigned to your named executive officers.
Compensation Tables and Disclosures, page 115
Summary Compensation Table, page 115
10. Refer to footnote (2) to your summary compensation table. Please revise to clarify that the aggregate grant date fair value is co mputed in accordance with FASB ASC Topic 718. Refer to Item 402(c)(2)(v) of Regulati on S-K for guidance. This comment also applies to footnote (1) to your dire ctor compensation table on page 104.
Certain Relationships and Relate d Party Transactions, page 133
Stockholders Agreement, page 133
11. Please quantify the amount of securities a nd the respective class of each for which Carlyle has registration rights.
CG Appleby Booz Allen Hamilton Holding Corporation August 19, 2010 Page 4
12. Please quantify the amount of securities and the respective class of each for which Booz Allen Holding has repurchase rights.
Description of Certain Indebtedness, page 137
13. We note your response to comment 38 in our letter dated July 19, 2010. Please update your Risk Factors section to clarify the matu rity dates of your vari ous credit f acilities. Underwriting, page 156
Conflict of Interest, page 159
14. We note your response to comment 42 in our letter dated July 19, 2010 and your disclosure that the offering will be conduc ted in compliance with NASD Conduct Rule 2720 of FINRA. In the prospectus, please discuss in greater detail how the offering will be in compliance with Rule 2720. Note 13. Stock-Based Compensation, page F-32
15. Please provide us a chronological summary of your issuances of common stock and grants of stock options duri ng fiscal year 2009 and through th e date of your response. With respect to each issuance, indicate the number of shares or options issued, the purchase price per share or exercise price per option, any restrictions or vesting terms, the fair value of your common stock on the date of issuance and the related amount of compensation recognized in your financial stat ements. Reconcile for us the fair value assigned to your common stock related to thes e issuances to your estimated offering price per share of your shares (or range, when avai lable) and provide us with details of the significant factors contribu ting to the differences.
Part II – Information Not Required In Prospectus, page II-1
Item 16. Exhibits and Financial Statement Schedules, page II-4 16. We note your response to comment 50 in our letter dated July 19, 2010. Please note that the materiality analysis applies to the cont ract filed, not the un derlying exhibits and schedules to that contract. Therefore, since you have determ ined that the contracts filed as exhibits 10.1, 10.2, 10.3 and 10.5 are materi al, they must be filed in their entirety in accordance with Item 601(b)(10). Please file all material cont racts in their entirety in your next amendment.
CG Appleby Booz Allen Hamilton Holding Corporation August 19, 2010 Page 5
We urge all persons who are responsible for th e accuracy and adequacy of the disclosure in the filing to be certain that the filing incl udes the information the Securities Act of 1933 and all applicable Securities Act rules require. 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. Notwithstanding our comments, in the event you request acceleration of the effective date of the pending registration statement please pr ovide a written statement from the company acknowledging that: • should the Commission or the staff, acting purs uant to delegated authority, declare the filing effective, it does not foreclose the Co mmission from taking any action with respect to the filing;
• the action of the Commission or the staff, acting pursuant to delegated authority, in declaring the filing effective, does not relieve the company from its full responsibility for the adequacy and accuracy of the disclosure in the filing; and
• the company may not assert staff comments a nd the declaration of effectiveness as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
Please refer to Rules 460 and 461 regarding re quests for acceleration. We will consider a written request for acceleration of the effective date of the regi stration statement as confirmation of the fact that those reques ting acceleration are aware of thei r respective responsibilities under the Securities Act of 1933 and the Securities Excha nge Act of 1934 as they relate to the proposed public offering of the securities specified in the above registration stat ement. Please allow adequate time for us to review any amendment prior to the requested effective date of the registration statement. You may contact Kristi Marr one at (202) 551-3429 or Dan Gordon at (202) 551-3486 if you have questions regarding comments on the fina ncial statements and related matters. Please contact Erin E. Martin at ( 202) 551-3391 or me at (202) 551- 3233 with any other questions.
Sincerely,
Tom Kluck Branch Chief
cc: Matthew E. Kaplan Debevoise & Plimpton LLP
Via facsimile: (212) 521-7334
Show Raw Text
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
DIVISION OF
CORPORATION FINANCE
August 19, 2010
CG Appleby Executive Vice President and General Counsel
Booz Allen Hamilton Holding Corporation 8283 Greensboro Drive McLean, Virginia 22102
Re: Booz Allen Hamilton Holding Corporation
Amendment No. 1 to Registrati on Statement on Form S-1
Filed July 30, 2010
File No. 333-167645
Dear Mr. Appleby:
We have reviewed your registration statem ent and have the following comments. In
some of our comments, we may ask you to provi de us with information so we may better
understand your disclosure.
Please respond to this letter by amending your registration statement and providing the
requested information. If you do not believe our comments apply to your facts and
circumstances or do not believe an amendment is appropriate, please tell us why in your
response.
After reviewing any amendment to your re gistration statement and the information you
provide in response to these comments, we may have additional comments.
Supplemental Information, page ii
1. We note your response to comment 3 in our letter dated July 19, 2010. Please further
revise your prospectus throughout to reduce the use of defined terms. For example, the
definition for “clients” does not appear to be necessary in light of your business model
and disclosure throughout. Please revise accordingly.
Prospectus Summary, page 1
2. We note your response to comment 8 in our letter dated July 19, 2010. Your summary
continues to contain a lengthy descripti on of your competitive strengths, market
opportunity and growth strategy a nd much of this information is repeated elsewhere. For
example, we note the disclosure under “M arket Opportunity” and “Our Strategy for
Continued Growth.” Please revise to re duce the amount of repe titive information.
CG Appleby
Booz Allen Hamilton Holding Corporation
August 19, 2010
Page 2
Risk Factors, page 17
U.S. Government spending and mission priorities could change in a manner that adversely
affects our future revenue and limits our growth prospects, page 17
3. Risk factors should be detailed enough so that investors can a ppreciate the potential
magnitude of the risk. Here, you discuss the risk to your business should the U.S.
government reduce outsourcing, particularly the Department of Defense. Please discuss in more detail if your business has been aff ected by this reducti on in outsourcing. For
example, we note that the Pentagon recently a nnounced cuts that will include almost a
third of its regular budget for contractors. Pl ease revise or advise. Please also consider
expanding your disclosure on page 53 under the subheading, “Business Environment and
Key Trends in Our Markets,” to discuss the reduction of outsourcing in more detail and
its affect upon the company’s business; al so consider briefly discussing it in the
Summary.
We may not realize the full value of our backl og, which may result in lower than expected
revenue, page 21
4. We note your revised disclosure on page 22. Please revise to remove the following
sentence, which appears to be mitigating disclosure, from this risk factor: “To the extent that we are able to hire additional people and deploy them against funded backlog, we recognize increased revenue.”
Booz Allen Holding is a holding company with no operations of its own that depends on its
subsidiaries for cash, page 30
5. We note your disclosure in this risk factor regarding the risk that you may be restricted to
pay dividends. Please revise th e risk factor subheading to di scuss this risk or include a
separate risk factor.
Management’s Discussion and Analysis of Financ ial Condition and Results of Operations, page
52
Our People, page 55
6. Please provide more detail about the enhancements made to your firm-wide hiring program.
CG Appleby
Booz Allen Hamilton Holding Corporation
August 19, 2010
Page 3
Results of Operations, page 64
Fiscal 2010 Compared to Pro Forma 2009, page 66
7. We note your response to comment 28 in our letter dated July 19, 2010 and the revisions
made to your period-on-period disclosure. Please expand your disclosure to more fully describe the reasons for changes between periods. For example, please discuss why there was a decrease in the number of senior personnel engaged in day-to-day client
management roles. Furthermore, please also expand your period-on-period disclosure
with respect to all of the periods presented to explain in more deta il the changes between
periods.
Liquidity and Capital Resources, page 73
8. We note your disclosure on page 74 that you “do not expect [y]our transition to or
existence as a public company to affect [y]our . . . day-to-day operations.” This appears
to contradict disclosure in your Risk Factors section on page 33, which discusses the
additional time and expense involved with becoming a public company and establishing adequate controls and procedur es. Please revise or advise.
Executive Compensation, page 107
9. We note your response to comment 35 in our letter dated July 19, 2010. Please expand
your compensation disclosure to discuss in more detail the “bands” into which each executive officer falls. For example, pl ease discuss why, based on prior compensation
levels, market survey data and projected profitability, the specific cash compensation was set for each band assigned to your named executive officers.
Compensation Tables and Disclosures, page 115
Summary Compensation Table, page 115
10. Refer to footnote (2) to your summary compensation table. Please revise to clarify that the aggregate grant date fair value is co mputed in accordance with FASB ASC Topic
718. Refer to Item 402(c)(2)(v) of Regulati on S-K for guidance. This comment also
applies to footnote (1) to your dire ctor compensation table on page 104.
Certain Relationships and Relate d Party Transactions, page 133
Stockholders Agreement, page 133
11. Please quantify the amount of securities a nd the respective class of each for which
Carlyle has registration rights.
CG Appleby
Booz Allen Hamilton Holding Corporation
August 19, 2010
Page 4
12. Please quantify the amount of securities and the respective class of each for which Booz
Allen Holding has repurchase rights.
Description of Certain Indebtedness, page 137
13. We note your response to comment 38 in our letter dated July 19, 2010. Please update
your Risk Factors section to clarify the matu rity dates of your vari ous credit f acilities.
Underwriting, page 156
Conflict of Interest, page 159
14. We note your response to comment 42 in our letter dated July 19, 2010 and your
disclosure that the offering will be conduc ted in compliance with NASD Conduct Rule
2720 of FINRA. In the prospectus, please discuss in greater detail how the offering will be in compliance with Rule 2720.
Note 13. Stock-Based Compensation, page F-32
15. Please provide us a chronological summary of your issuances of common stock and
grants of stock options duri ng fiscal year 2009 and through th e date of your response.
With respect to each issuance, indicate the number of shares or options issued, the
purchase price per share or exercise price per option, any restrictions or vesting terms, the
fair value of your common stock on the date of issuance and the related amount of
compensation recognized in your financial stat ements. Reconcile for us the fair value
assigned to your common stock related to thes e issuances to your estimated offering price
per share of your shares (or range, when avai lable) and provide us with details of the
significant factors contribu ting to the differences.
Part II – Information Not Required In Prospectus, page II-1
Item 16. Exhibits and Financial Statement Schedules, page II-4
16. We note your response to comment 50 in our letter dated July 19, 2010. Please note that
the materiality analysis applies to the cont ract filed, not the un derlying exhibits and
schedules to that contract. Therefore, since you have determ ined that the contracts filed
as exhibits 10.1, 10.2, 10.3 and 10.5 are materi al, they must be filed in their entirety
in
accordance with Item 601(b)(10). Please file all material cont racts in their entirety in
your next amendment.
CG Appleby
Booz Allen Hamilton Holding Corporation August 19, 2010
Page 5
We urge all persons who are responsible for th e accuracy and adequacy of the disclosure
in the filing to be certain that the filing incl udes the information the Securities Act of 1933 and
all applicable Securities Act rules require. 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.
Notwithstanding our comments, in the event you request acceleration of the effective date
of the pending registration statement please pr ovide a written statement from the company
acknowledging that:
• should the Commission or the staff, acting purs uant to delegated authority, declare the
filing effective, it does not foreclose the Co mmission from taking any action with respect
to the filing;
• the action of the Commission or the staff, acting pursuant to delegated authority, in
declaring the filing effective, does not relieve the company from its full responsibility for
the adequacy and accuracy of the disclosure in the filing; and
• the company may not assert staff comments a nd the declaration of effectiveness as a
defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
Please refer to Rules 460 and 461 regarding re quests for acceleration. We will consider a
written request for acceleration of the effective date of the regi stration statement as confirmation
of the fact that those reques ting acceleration are aware of thei r respective responsibilities under
the Securities Act of 1933 and the Securities Excha nge Act of 1934 as they relate to the proposed
public offering of the securities specified in the above registration stat ement. Please allow
adequate time for us to review any amendment prior to the requested effective date of the registration statement.
You may contact Kristi Marr one at (202) 551-3429 or Dan Gordon at (202) 551-3486 if
you have questions regarding comments on the fina ncial statements and related matters. Please
contact Erin E. Martin at ( 202) 551-3391 or me at (202) 551- 3233 with any other questions.
Sincerely,
Tom Kluck Branch Chief
cc: Matthew E. Kaplan Debevoise & Plimpton LLP
Via facsimile: (212) 521-7334