June 13, 2002
Presentation at the Mergers and Acquisitions Conference in New York City
Surviving the Shift to NAICS
Effective July 1, 2001, the Premerger Notification Office implemented more changes to the reporting requirements of the Premerger Notification and Report Form. These changes require the information in Items 5, 7 and 8 of the Form to be reported using the North American Industrial Classification System (NAICS) in lieu of the Standard Industrial Classification System (SIC). This changeover also updated the base year from 1992 to 1997.
The conversions for 4-digit SIC to 6-digit NAICS are found on the Bureau of the Census home page. For comparisons of 1992 SIC Product Classes (5-digit) and Product Codes (7-digit) with 1997 NAICS Product Classes (7-digit) and Product Codes (10-digit) please refer to Appendix F in the 1997 Numerical List of Manufactured and Mineral Products.
For reporting the 6-digit NAICS industry codes in items 5(a) and 5(c) of the form, use the 1997 North American Industry Classification System - United States published by the OMB as a reference.
For reporting 7-digit NAICS product class in item 5(b)(iii) and 10-digit NAICS product codes in items 5(b)(i) and 5(b)(ii), use the 1997 Numerical List of Manufactured and Mineral Products published by Census as a reference.
There have been some questions regarding the 2002 revisions to the NAICS codes. Effective January 1, 2002, the U.S. federal statistical agencies were required to use the 2002 revisions affecting four NAICS sectors: Construction, Wholesale Trade, Retail Trade, and Information. Because the Commission is a non-statistical federal agency, it will not adopt the revisions now. However, the Commission will adopt the 2002 revisions when it makes its public announcement requiring all filing persons to report revenue data on the Form using 2002 as the base year and to use the most current Bureau of the Census data available. As in the past, the Commission anticipates that the change of the base year from 1997 to 2002 for reporting revenue data on the Form will be required subsequent to the publication of the Bureau Census' 2002 Economic Census Report and its 2002 Numerical List, respectively.
The problem most frequently encountered has been where a single SIC code converts to multiple NAICS codes. A number of filers have advised that while they can provide the NAICS breakdown for the most recent year, they are having difficulty providing the breakdown for the base year, since records were not kept at that level of detail in 1997. We have advised the parties to make a good faith reasonable estimate for the base year, and note the figures as such on the Form.
FREQUENTLY ASKED QUESTIONS:
- How do I report if the industries I am reporting in items 5(a) and 5(c) do not have a 6-digit code, only a 5-digit?
In this instance, a zero should be added to the end of the 5-digit code for items 5(a) and 5(c).
- What do I use in items 5(b)(1) and 5(b)(2) if my 10-digit product code ends in two or more zeros?
If the 10-digit NAICS product code ends in two or more zeros, the further breakdown of 10-digit codes if available in the Current Industrial Reports which can be found in appendix B of the Numerical List or on the Census web site should be used instead of the code ending in two or more zeros.
These views are those of B. Michael Verne of the Premerger Notification Office and do not represent those of the Commission or any Commissioner.