Mail Stop 7010
July 26, 2006
via U.S. Mail
Mr. Randy Moeder
President and Chief Executive Officer
Hiland Holdings GP, LP
205 West Maple, Suite 1100
Enid, Oklahoma 73701
Re: Hiland Holdings GP, LP
Amendment No. 1 to Form S-1
Filed July 10, 2006
File No. 333-134491
Response letter dated July 7, 2006
Dear Mr. Moeder:
We have reviewed your filing and have the following
comments.
Our page references are to the blacklined version to the S-1.
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 information so we
may
better understand your disclosure. After reviewing this
information,
we may raise additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
We are also in receipt of your Request for Confidential
Treatment for certain information contained in certain exhibits to
the S-1. We have responded to your request in a separate
communication.
Form S-1
1. We note your response to our prior comment 2. We reissue this
comment in part, as certain exhibits still need to be filed and
other
information still needs to be provided.
Cover Page of Prospectus
Prospectus Summary, page 2
2. We note your response and revisions to prior comment 4. Please
clarify in greater detail how you have concluded that your general
partner does not have any economic interest in Hiland Holdings GP
LP.
Disclosures such as those presented on page 130 and 151 regarding
personnel and cost reimbursement matters between your general
partner
and Hiland Holdings GP LP appear to indicate the existence of
economic relationships. Additionally, we note the incentive plan
of
your officers and directors appears to be based on the underlying
units of Hiland Holdings GP LP. Accordingly, please expand your
disclosures to more clearly address the relationship with your
general partner including whether your general partner owns equity
units of Hiland Holdings GP LP, the restrictions on those units
which
differ from other common units, and demonstrate how your
significant
contractual agreements with the general partner have no economic
substance, if that is your view. In addition, please revise the
disclosure to explain that the general partner is controlled by
Mr.
Hamm and his affiliates, and that the general partner controls
Hiland
Holdings.
Estimated Cash Available to Pay for Distributions, page 65
3. We note your response to our prior comment 13. Please add a
risk
factor that discusses the risk to investors if Hiland Partners is
unable to finance its growth through external sources, or is
unable
to achieve its targeted debt/equity ratios, or if an acquisition
is
not accretive to Hiland Partners.
4. We note your response to our prior comment 15. Please tell us
the
amount by which the estimated cash available to pay distributions
would vary if computed for the twelve months ended March 31, 2006
versus June 30, 2007.
Business of Hiland Holdings GP, LP, page 106
5. We re-issue our prior comment 20 and request that this
information
be updated once the credit facility is finalized.
Summary Historical and Pro Forma Financial and Operating Data,
page
24
6. We note your response to prior comment seven and note that you
continue to adjust EBITDA for minority interest, which represents
a
non-GAAP measure. Accordingly, it appears that you will need to
remove this metric or confine your presentation to the parameters
set-forth in Item 10(e) of Regulation S-K. Refer also to FAQ 8
through 10 of Frequently Asked Questions Regarding the Use of Non-
GAAP Financial Measures which can be located at:
http://www.sec.gov/divisions/corpfin/faqs/nongaapfaq.htm
Material Tax Consequences
Partnership Status, page 194
7. We note that you state that you "...will rely on the opinion of
Vinson & Elkins L.L.P. that, based upon the Internal Revenue Code,
its regulations, published revenue rulings and court decisions and
the representations described below, we will be classified as a
partnership." Please affirmatively state, if true, that it is the
opinion of Vinson & Elkins that you will be classified as a
partnership.
Underwriting, page 209
8. We note your response to our prior comment 42. Please
affirmatively state in the S-1 that the underwriters have no tacit
or
explicit understandings, nor any present intent, to release the
lock-
ups early.
Closing Comments
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies 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 supplemental 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 filings 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.
Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that
* should the Commission or the staff, acting pursuant to delegated
authority, declare the filing effective, it does not foreclose the
Commission 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 this action 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 connection with our review of
your
filing or in response to our comments on your filing.
We will consider a written request for acceleration of the
effective date of the registration statement as a 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 an 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 Jonathan Duersch at (202) 551-3719 or in his
absence, Jill Davis, Accounting Branch Chief at (202) 551-3683 if
you
have comments on the financial statements and related matters.
Please contact Donna Levy, at (202) 551-3292 or the undersigned at
(202) 551-3685 with any other questions.
Sincerely,
Tangela Richter
Legal Branch Chief
cc: via facsimile
Douglas E. McWilliams, Esq.
J. Duersh
D. Levy
Mr. Randy Moeder
Hiland Holdings GP, LP
July 26, 2006
page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-0405
DIVISION OF
CORPORATION FINANCE
MAIL STOP 04-05