Mail Stop 7010
August 25, 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. 2 to Form S-1
Filed August 11, 2006
File No. 333-134491
Response letter dated August 11, 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.
In regard to your response to our comment letter dated July
26,
2006 on your Request for Confidential Treatment for certain
information contained in certain exhibits to the S-1, we have
responded in a separate communication.
General
1. We note your response to our prior comment 1. We reissue this
comment in regard to the underwriting agreement and tax opinion
that
still need to be filed.
Prospectus Summary
Our Formation, Structure and Management, page 4
2. We note your response and revisions to prior comment 2 and
reissue
it in part. We note that you say in the first bullet in this
section
that the general partner will "manage" the operations of Hiland
Holdings. Please add a brief statement that describes the control
that the Mr. Hamm will have over Hiland Holdings and its general
partner. Specifically, please state that since Mr. Hamm will
indirectly own 94% of the membership interests of the general
partner, he will be able to elect, remove and replace all of the
directors and officers of the general partner. Please also state
that the general partner may only be removed by the vote of the
holders of not less than 66 2/3% of the outstanding units, and
that
the indirect ownership of more than 33% of the outstanding units
by
Mr. Hamm gives him the practical ability to prevent its removal.
Finally, please state that this control over Hiland Holdings gives
Mr. Hamm control of Hiland Partners.
Summary Historical and Pro Forma Financial and Operating Data,
page
24
3. We note your response to prior comment two in which you state,
"The cash generated by Hiland Partners is not in fact reduced by
minority interest." Additionally, we note that cash provided by
financing activities includes "minority interest cash distribution
to
unit holders of subsidiaries" which appears to be cash
distributions
to minority interest holders. The historical payment of cash to
minority interest holders appears to reduce cash available for
interest payments and distributions to your unit holders. We
understand you may consider cash paid to minority interest holders
as
a financing activity, however, the relationship between minority
interest expense and the cash payment of the same seems
inseparable
for investors evaluating this non-GAAP measure. Accordingly, we
continue to be unable to agree with your conclusion that your
disclosure of EBITDA before minority interest satisfactorily
complies
with the provisions of Item 10(e) of Regulation S-K.
Use of Proceeds, page 53
4. Please specifically identify the contributing parties to whom
you
will distribute the proceeds of the offering. Please also
disclose
the specific amount to be distributed to each such party. Please
include similar disclosure in the summary section.
Management`s Discussion and Analysis of Financial Condition and
Results of Operations
Liquidity and Capital Resources
Hiland Holdings GP, LP Credit Facility, page 100
5. Please file the credit facility as an exhibit.
Management
Hiland Holdings GP, LP
Directors and Officers of Hiland Partners GP Holdings, LLC, page
133
6. Please provide the dates for the various activities of Messers.
Greenwood and Doherty listed in their biographies. Specifically,
please say when Mr. Greenwood founded Carnegie Capital LLC, and
provide the months when he was an officer with Heritage Propane
Partners. For Mr. Dohery, please specify his activities after he
left Kaneb Pipe Line in July 2005. If he retired, please so
state.
Hiland Holdings GP, LP Long-Term Incentive Plan, page 138
7. Please include a description of the UDRs that may be granted in
tandem with a grant of a restricted unit.
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
August 25, 2006
page 5
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-0405
DIVISION OF
CORPORATION FINANCE
MAIL STOP 04-05