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February 20, 2020
Jude Bricker
Chief Executive Officer
Sun Country Airlines Holdings, Inc.
2005 Cargo Road
Minneapolis, MN 55450
Re: Sun Country Airlines Holdings, Inc.
Amendment No. 1 to Draft Registration Statement on Form S-1
Submitted February 5, 2020
CIK No. 0001743907
Dear Mr. Bricker:
We have reviewed your amended draft registration statement and have the
following
comments. In some of our comments, we may ask you to provide us with
information so we
may better understand your disclosure.
Please respond to this letter by providing the requested information and
either submitting
an amended draft registration statement or publicly filing your registration
statement on
EDGAR. 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 the information you provide in response to these comments
and your
amended draft registration statement or filed registration statement, we may
have additional
comments.
Amendment No. 1 to Draft Registration Statement on Form S-1 submitted February
5, 2020
Prospectus Summary
Our Competitive Strengths, page 3
1. We note your revised disclosure regarding the management survey on page
4, and the
percentage of respondents expressing a preference for Sun Country
Airlines in three
categories. Please revise to disclose the number of respondents in each
category. For
example, please disclose the number of respondents who expressed a
preference between
airlines and had flown on both Sun Country Airlines and Allegiant Travel
Company.
Jude Bricker
FirstName LastNameJude Bricker
Sun Country Airlines Holdings, Inc.
Comapany NameSun Country Airlines Holdings, Inc.
February 20, 2020
Page 2
February 20, 2020 Page 2
FirstName LastName
Prospectus Summary
Key Operating Statistics and Metrics, page 17
2. We note from your response to prior comment 10 that you believe that
"presenting certain
operating statistics and metrics for prior fiscal periods is useful
additional information for
investors in evaluating the development of the Company's business." In
this regard, it
appears that you view the financial information for the fiscal year
ended December 31,
2017 to be material to an investor's understanding. Based on this
position, it is unclear
why you believe it is appropriate to provide 2017 financial metrics
without the relevant
financial statements and selected financial data.
3. We note from your response to prior comment 14 that you believe that
"presenting all
operating metrics for the twelve months ended December 31, 2018
provides the most
meaningful information for investors by providing a basis for
comparing the metrics to
other annual periods presented as well as other airlines." As such,
you have continued to
present CASM and CASM related non-GAAP financial measures on a
combined basis.
However, we continue to believe that it is not appropriate to merely
combine financial
information for predecessor and successor periods. Please submit an
analysis to support
your belief that the acquisition accounting adjustments did not have a
material impact on
CASM and related CASM non-GAAP financial measures in the Predecessor
2018 period.
In the alternative, remove all instances of disclosure where you have
combined financial
information for predecessor and successor periods.
Risk Factors
The anticipated strategic and financial benefits of the ATSA may not be
realized, page 29
4. Please disclose that Amazon may terminate the Air Transportation
Services Agreement
for convenience. We note such provision in Section 4 of the agreement.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Results of Operations
Special Items, net, page 80
5. We note the Special Items, net expense for the Interim Successor 2019
period includes a
charge of $7.6 million related to contractual obligations for retired
technology, offset by
$1.2 million of proceeds from the sale of unused airport slot rights.
Please expand the
disclosure of each of these items to further clarify their nature and
why they are
classified as Special Items.
Non-GAAP Financial Measures, page 81
6. We note you present a non-GAAP operating measure titled Adjusted
EBITDAR that is
exclusive of aircraft rent. Aircraft rent appears to be a normal,
recurring, cash operating
expense necessary to operate your business. Accordingly, this
exclusion does not appear
to comply with Question 100.01 of the updated Non-GAAP Compliance and
Disclosure
Jude Bricker
FirstName LastNameJude Bricker
Sun Country Airlines Holdings, Inc.
Comapany NameSun Country Airlines Holdings, Inc.
February 20, 2020
Page 3
February 20, 2020 Page 3
FirstName LastName
Interpretations. Please revise your computation accordingly.
7. We note you have not specifically identified CASM ex and Adjusted CASM
as non-
GAAP financial measures even though you have reconciled CASM to CASM
ex and
Adjusted CASM on page 18. Please expand the disclosure under this
heading to clearly
identify these metrics as non-GAAP financial measures and provide all
disclosures
required by Regulation S-K, Item 10(e). Additionally, expand the
tabular reconciliation to
include dollar amounts, as was previously shown on page 75 in the
initial submission
dated December 19, 2019.
Off Balance Sheet Arrangements
Fuel Consortia, page 91
8. We note from your response to prior comment 16 that you entered into
fuel consortia
agreements during 2019 that are legal entities which you have
determined are variable
interest entities ("VIEs") under the guidance in ASC 810-10-15. We
further note your
conclusion that you are a nonprimary beneficiary holder of a variable
interest in these
VIEs because you are one of multiple members in the VIE and each
member "has no
special power or voting rights and is not able to direct the
operations of the consortia."
Expand on your response and tell us how you analyzed the applicability
of ASC 810-10-
25-38A(b) to support your conclusion that you are a nonprimary
beneficiary. With a view
towards enhanced disclosure, provide the footnote disclosures
contemplated by ASC 810-
10-50-2AA and ASC 810-10-50-4 as it relates to nonprimary beneficiary
holders of
variable interests. In the alternative, explain to us why these
disclosures are not required.
Executive Compensation, page 127
9. Please provide the disclosure required by Item 402 of Regulation S-K
for John Spanjers,
or tell us why such disclosure is not required. In that regard, we
note your prior disclosure
that Mr. Spanjers served as your chief operating officer until his
retirement that was
effective in July 2019. Refer to Item 402(m)(2)(iii).
Director Compensation, page 138
10. Please provide a narrative description of any material factors
necessary to an
understanding of the director compensation disclosed in the table on
page 138. Refer to
Item 402(r)(3) of Regulation S-K.
Description of Capital Stock
Warrants, page 143
11. Please disclose the exercise period for the Amazon warrants, as well
as the "Right of First
Notice" set forth in Exhibit A to the warrant agreement.
Jude Bricker
Sun Country Airlines Holdings, Inc.
February 20, 2020
Page 4
Notes to Condensed Consolidated Financial Statements
Note 3. Revenue, page F-40
12. As stated in ASC 606-10-50-1, the objective of the disclosure
requirements in Topic 606
is for an entity to disclose sufficient information to enable users of
financial statements to
understand the nature, amount, timing and uncertainty of revenue and cash
flows arising
from contract with customers. As such, it appears the disclosure of your
accounting for
certain revenue types in this footnote is incomplete without referring to
statements
made within your Critical Accounting Policies beginning on page 91.
Revise your
footnote disclosure to ensure it is a complete discussion of your revenue
accounting to
meet the requirements of ASC 606-10-50-1.
13. We note your disclosure that "Revenue is primarily recognized when the
performance
obligation to the customer is satisfied, which is primarily when travel
is provided." Please
explain your basis for using the term "primarily" in this context.
14. Tell us how you considered accounting for access to your customer list
and/or use of your
brand as a separate performance obligation of the co-branded credit card
arrangement.
You may contact Jennifer O'Brien, Staff Accountant, at (202) 551-3721,
or Shannon
Buskirk, Staff Accountant, at (202) 551-3717 if you have questions regarding
comments on the
financial statements and related matters. Please contact Anuja A. Majmudar,
Attorney-Advisor,
at (202) 551-3844 or, in her absence, Laura Nicholson, Special Counsel, at
(202) 551-3584 with
any other questions.
Sincerely,
FirstName LastNameJude Bricker
Division of
Corporation Finance
Comapany NameSun Country Airlines Holdings, Inc.
Office of Energy &
Transportation
February 20, 2020 Page 4
cc: Brian M. Janson, Esq.
FirstName LastName