The Federal Trade Commission ("FTC") announced changes to the Hart-Scott-Rodino ("HSR") Premerger Notification Rules relating to Item 5 of the HSR Form that take effect starting September 25, 2019. Item 5 currently requires filers to report relevant U.S. revenues categorized using the U.S. Census’ North American Industry Classification System ("NAICS") from 2012. Under the revised rules, filers must use the Census’ updated 2017 NAICS codes for all revenues.
In addition, filers also must report any manufacturing revenues using the Census’ new North American Product Classification System ("NAPCS"). NAICS is an industry classification system, whereas NAPCS is a product classification system. Products sold by multiple industries may have multiple NAICS codes (one per industry), but might have only one NAPCS code. Anyone making an HSR filing on or after September 25 must use 2017 NAICS codes, and if reporting manufacturing revenues, 2017 NAPCS codes. Filers also may use the new system before September 25.
The FTC provided an example to illustrate the change to reporting manufacturing revenues. Instead of reporting revenues using 2012, 10-digit NAICS codes like this:
Filing parties will need to use 2017, 6-digit NAICS to list total revenues and then subtotals within one or more NAPCS codes, like this:
Frequent filers can translate previous Item 5 responses using the Census’ concordance tables, though in some cases, codes do not perfectly align. These tables may be used to convert 2012 NAICS codes into 2017 NAICS codes and 10-digit manufacturing codes into 2017 NAPCS codes. Those newer to HSR filings may want to start fresh with the new 2017 NAICS codes and 2017 NAPCS codes. Any filer reporting manufacturing revenue in an HSR filing should allow extra time to prepare Item 5 under the new format.