# FEDERAL TRADE COMMISSION > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/agency%3Aftc%3A01c0f64467683ca2 ## Record - **Collection:** Agency decision - **Document type:** Agency decision ## Text FEDERAL TRADE COMMISSION DEPARTMENT OF JUSTICE BUREAU OF COMPETITION ANTITRUST DIVISION ANNUAL REPORT TO CONGRESS FISCAL YEAR 2005 Pursuant to Subsection (j) of Section 7A of the Clayton Act Hart-Scott-Rodino Antitrust Improvements Act of 1976 (Twenty-Eighth Report) Deborah Platt Majoras Chairman Federal Trade Commission Thomas O. Barnett Assistant Attorney General Antitrust Division INTRODUCTION The Hart-Scott-Rodino Antitrust Improvements Act of 1976 ("HSR Act" or the "Act"), together with Section 13(b) of the Federal Trade Commission Act and Section 15 of the Clayton Act, enables the Federal Trade Commission (the "Commission") and the Antitrust Division of the Department of Justice (the "Antitrust Division" or "Division") to obtain effective preliminary relief against anticompetitive mergers and to prevent interim harm to competition and consumers. The premerger notification program was instrumental in detecting transactions that were the subject of the numerous enforcement actions brought in fiscal year 2005 to protect consumers -- individual, business, and government -- against anticompetitive mergers. The Commission and the Antitrust Division continue their efforts to protect competition by identifying and investigating those mergers and acquisitions that raise potentially significant competitive concerns. In fiscal year 2005, 1,695 transactions were reported under the HSR Act, representing about a 17 percent increase from the 1,454 transactions reported in fiscal year 2004 and about a 66 percent decrease from the 4,926 transactions reported in fiscal year 2000, the last full fiscal year under the previous reporting thresholds.1 (See Figure 1 below.) HSR MERGER TRANSACTIONS REPORTED FISCAL YEARS 1996 -2005 NUMBER OF TRANSACTIONS 6,000 4,926 4,642 4,728 5,000 3,702 4,000 3,087 3,000 2,376 2,000 1,454 1,187 1,695 1,014 1,000 FISCAL YEARS 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Figure 1 During the year, the Commission challenged fourteen transactions, leading to nine consent orders and four abandoned transactions. The Commission also authorized staff to seek 1 The decrease in the number of reportable transactions since fiscal year 2000 is, to a considerable extent, a result of the significant statutory changes to the HSR Act that took effect on February 1, 2001. The legislation raised the size-of-transaction threshold from $15 million to $50 million (with annual adjustments beginning in 2005), and made other changes to the filing and waiting period requirements. Section 630 of the Department of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, FY 2001, Pub. L. No. 106-553, 114 Stat. 2762. See also Appendix A. 2 injunctive relief in one matter. The Commission challenged the proposed merger of Chevron Corporation and Unocal Corporation.2 The proposed merger would have likely imposed additional costs on California consumers for California Air Resources Board reformulated gasoline (“CARB RFG”). The Commission also challenged the proposed acquisition by Valero L.P. for certain assets of Kaneb Services LLC and Kaneb Pipe Line Partners L.P,3 which would have eliminated direct competition between Valero and Kaneb, which likely would have resulted in an increase in the wholesale price of light petroleum products in certain areas of Pennsylvania, Colorado, and Northern California. The Antitrust Division challenged four merger transactions, leading to three consent decrees and one other transaction that was restructured after the Division informed the parties of its antitrust concerns relating to the transaction. The Division’s notable merger challenges included the acquisition of AT&T Wireless by Cingular Wireless.4 The Division filed a complaint alleging that the merger would reduce competition for mobile wireless telecommunications service in ten geographic areas and that it would reduce competition for mobile wireless broadband services in three additional markets. In fiscal year 2005, the Commission’s Premerger Notification Office ("PNO") continued to respond to thousands of telephone calls seeking information concerning the reportability of transactions under the HSR Act and the details involved in completing and filing the Notification and Report Form ("the filing form"). The HSR website, www.ftc.gov/bc/hsr/hsr.htm, continued to provide improved access to information necessary to the notification process. The website includes such information as introductory guides that provide an overview of the premerger notification program and review process. It also provides access to the filing form and instructions, the premerger notification statute and rules, notices of grants of early termination, filing fee instructions, scheduled HSR events, training materials for new HSR practitioners, tips for completing the filing form, procedures for submitting post-consummation filings, frequently asked questions regarding the HSR filing requirements, and other useful information. The website is the primary source of information for HSR practitioners seeking information on changes to the Act and amendments to the premerger rules, including speeches, press releases, summaries and highlights, and Federal Register notices about the amendments. The website also includes a database of informal interpretation letters, giving the public ready access to PNO staff interpretations of the premerger notification rules and the Act. As always, PNO staff continues its efforts to assist HSR practitioners and readily provides them with needed information. BACKGROUND OF THE HSR ACT Section 201 of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, Pub. L. No. 94-435, amended the Clayton Act by adding a new Section 7A, 15 U.S.C. §18a. Subsection (j) of Section 7A provides: 2 See infra p. 15. 3 See infra p. 16. 4 See infra p. 11. 3 Beginning not later than January 1, 1978, the Federal Trade Commission, with the concurrence of the Assistant Attorney General, shall annually report to the Congress on the operation of this section. Such report shall include an assessment of the effects of this section, of the effects, purpose, and need for any rules promulgated pursuant thereto, and any recommendations for revisions of this section. This is the 28th annual report to Congress pursuant to this provision. It covers fiscal year 2005 -- October 1, 2004 through September 30, 2005. In general, the Act requires that certain proposed acquisitions of voting securities or assets must be reported to the Commission and the Antitrust Division prior to consummation. The parties must then wait a specified period, usually 30 days (15 days in the case of a cash tender offer or a bankruptcy sale), before they may complete the transaction. Whether a particular acquisition is subject to these requirements depends upon the value of the acquisition and, in certain acquisitions, the size of the parties as measured by their sales and assets. Small acquisitions, acquisitions involving small parties, and other classes of acquisitions that are less likely to raise antitrust concerns are excluded from the Act’s coverage. The primary purpose of the statutory scheme, as the legislative history makes clear, is to provide the antitrust enforcement agencies with the opportunity to review mergers and acquisitions before they occur. The premerger notification program, with its filing and waiting period requirements, provides the agencies with both the time and the information necessary to conduct this antitrust review. Much of the information for a preliminary antitrust evaluation is included in the notification filed with the agencies by the parties to the proposed transactions and is immediately available for review during the waiting period. If either agency determines during the waiting period that further inquiry is necessary, however, the agency is authorized by Section 7A(e) of the Clayton Act to issue a request for additional information and documentary material (a “second request"). The second request extends the waiting period for a specified period after all parties have complied with the request (or, in the case of a tender offer or a bankruptcy sale, after the acquiring person complies). This additional time provides the reviewing agency with the opportunity to analyze the information and to take appropriate action before the transaction is consummated. If the reviewing agency believes that a proposed transaction may substantially lessen competition, it may seek an injunction in federal district court to prohibit consummation of the transaction. The Commission may also challenge the transaction in administrative litigation. The Commission, with the concurrence of the Assistant Attorney General for the Antitrust Division, promulgated final rules implementing the premerger notification program on July 31, 1978. At that time, a comprehensive Statement of Basis and Purpose was also published, containing a section-by-section analysis of the rules and an item-by-item analysis of the filing form. The program became effective on September 5, 1978. The Commission, with the concurrence of the Assistant Attorney General, has amended the rules and the filing form on 4 several occasions over the years to improve the program's effectiveness and to lessen the burden of complying with the rules.5 A STATISTICAL PROFILE OF THE PREMERGER NOTIFICATION PROGRAM The appendices to this report provide a statistical summary of the operation of the premerger notification program. Appendix A shows, for a ten-year period, the number of transactions reported, the number of filings received, the number of merger investigations in which second requests were issued, and the number of transactions in which requests for early termination of the waiting period were received, granted, and not granted.6 Appendix A also shows for fiscal years 1996 through 2005 the number of transactions in which second requests could have been issued, as well as the percentage of transactions in which second requests were issued. Appendix B provides a month-by-month comparison of the number of transactions reported and the number of filings received for fiscal years 1996 through 2005. The statistics set out in these appendices show that the number of transactions reported in fiscal year 2005 increased approximately 17 percent from the number of transactions reported in fiscal year 2004. In fiscal year 2005, 1,695 transactions were reported, while 1,454 were reported in fiscal year 2004. The statistics in Appendix A also show that the number of merger investigations in which second requests were issued in fiscal year 2005 increased approximately 43 percent from the number of merger investigations in which second requests were issued in fiscal year 2004. Second requests were issued in 50 merger investigations in fiscal year 2005, while second requests were issued in 35 merger investigations in fiscal year 2004. The percentage of transactions resulting in second requests also increased, from 2.5 percent in fiscal year 2004 to 3.1 percent in fiscal year 2005. (See Figure 2 below.) 5 43 Fed. Reg. 3443 (August 4, 1978); 43 Fed. Reg. 36053 (August 15, 1978); 44 Fed. Reg. (November 21, 1979); 45 Fed. Reg. 14205 (March 5, 1980); 48 Fed. Reg. 34427 (July 29, 1983); 50 Fed. Reg. 46633 (November 12, 1985); 51 Fed. Reg. 10368 (March 26, 1986); 52 Fed. Reg. 7066 (March 6, 1987); 52 Fed. Reg. 20058 (May 29, 1987); 54 Fed. Reg. 214251 (May 18, 1989); 55 Fed. Reg. 31371 (August 2, 1990); 60 Fed. Reg. 40704 (August 9, 1995); 61 Fed. Reg. 13666 (March 28, 1996); 63 Fed. Reg. 34592 (June 25, 1998); 66 Fed. Reg. 8680 (February 1, 2001); 66 Fed. Reg. 8723 (February 1, 2001); 66 Fed. Reg. 16241 (March 23, 2001); 66 Fed. Reg. 23561 (May 9, 2001); 66 Fed. Reg. 35541 (July 6, 2001); 67 Fed. Reg. 11898 (March 18, 2002); 67 Fed. Reg. 11904 (March 18, 2002); 68 Fed. Reg. 2425 (January 17, 2003); 70 Fed. Reg. 4988 (January 31, 2005); 70 Fed. Reg. 11501 (March 8, 2005); 70 Fed. Reg. 11526 (March 8, 2005); 70 Fed. Reg. 47733 (August 15, 2005); 70 Fed. Reg. 73369 (December 12, 2005; 70 Fed Reg. 77312 (December 30, 2005). 6 The term "transaction," as used in Appendices A and B, and Exhibit A to this report, does not refer only to separate mergers or acquisitions. A particular merger, joint venture or acquisition may be structured such that it involves more than one transaction. For example, cash tender offers, options to acquire voting securities from the issuer, or options to acquire voting securities from someone other than the issuer, may result in multiple acquiring or acquired persons that necessitate separate HSR transaction numbers to track the filing parties and waiting periods. 5 PERCENTAGE OF TRANSACTIONS RESULTING IN SECOND REQUEST 4.5% 4.3% 4.0% 3.5% 3.6% 3.0% 3.5% 3.1% 3.1% 2.5% 2.5% 2.6% 2.0% 1.5% 1.0% 0.5% 2.7% 3.5% 2.1% 0.0% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Figure 2 The statistics in Appendix A also show that early termination of the waiting period was requested in the majority of transactions. In fiscal year 2005, early termination was requested in 82 percent (1,385) of the transactions reported, down from fiscal year 2004 where it was requested in 85 percent (1,241) of the transactions reported. Likewise, the percentage of requests granted out of the total requested decreased from 76 percent in fiscal year 2004, to 72 percent in fiscal year 2005. Statistical tables (Tables I through XI) in Exhibit A contain information about the agencies’ enforcement activities for transactions reported in fiscal year 2005. The tables provide, for various statistical breakdowns, the number and percentage of transactions in which clearances to investigate were granted by one antitrust agency to the other and the number of merger investigations in which second requests were issued. Table III of Exhibit A shows that, in fiscal year 2005, clearance was granted to one or the other of the agencies for the purpose of conducting an initial investigation in 18.9 percent of the total number of transactions in which a second request could have been issued. The tables also provide the number of transactions based on the dollar value of transactions reported and the reporting threshold indicated in the notification report. The total dollar value of reported transactions rose dramatically from fiscal years 1996 to 2000 from about $677.4 billion to about $3 trillion. After the statutory thresholds were raised, the dollar value declined to about $1 trillion in fiscal year 2001, $565.4 billion in fiscal year 2002, and $406.8 billion in fiscal year 2003. During the last two years, there has been an increase in the dollar value of reported transactions rising to about $630 billion in fiscal year 2004 and to about $1.1 trillion in fiscal year 2005. Tables X and XI provide the number of transactions in each industry group in which the acquiring person or the acquired entity derived revenue. Figure 3 illustrates the percentage of 6 reportable transactions within industry groups for fiscal year 2005 based on the acquired entity’s operations. Percentage of Transactions By Industry Group of Acquired Entity Fiscal Year 2005 Health Services 7.9% Manufacturing 19.3% Other 11.5% Chemicals and Pharmaceuticals 5.4% Transportation 3.5% Banking/Insurance 10.6% Information Technology 8.6% Consumer Goods 29.4% Energy & Natural Resources 3.8% Figure 3 DEVELOPMENTS WITHIN THE PREMERGER PROGRAM 1. Compliance The Commission and the Antitrust Division continued to monitor compliance with the premerger notification program’s filing and waiting period requirements and initiated a number of compliance investigations in fiscal year 2005. The agencies monitor compliance through a variety of methods, including the review of newspapers and industry publications for announcements of transactions that may not have been reported in accordance with the requirements of the Act. In addition, industry sources, such as competitors, customers and suppliers, and interested members of the public, often provide the agencies with information about transactions and possible violations of the Act’s requirements. Under Section 7A(g)(1) of the Act, any person that fails to comply with the Act’s notification and waiting period requirements is liable for a civil penalty of up to $11,000 for each 7 day the violation continues.7 The antitrust agencies examine the circumstances of each violation to determine whether penalties should be sought.8 During fiscal year 2005, 73 corrective filings for violations were received, and the agencies recovered $2,350,000 in civil penalties as a result of two enforcement actions. In United States v. Smithfield, Inc.,9 Smithfield, the nation’s largest hog producer and pork packer, agreed on November 10, 2004 to pay a $2 million civil penalty to settle charges brought by the Department of Justice in February 2003 that the company twice failed to comply with premerger notification requirements before making acquisitions above the statutory threshold of stock of its competitor, IBP Inc., which was at the time the nation’s second largest pork packer. Smithfield’s claim that the acquisitions were exempt because they were “solely for the purpose of investment” was rejected by the Department of Justice because Smithfield was actively considering merging with IBP at the time the acquisitions were made. In United States v. Scott R. Sacane,10 the complaint alleged that Scott R. Sacane, a Connecticut hedge fund manager, failed to comply with notification and waiting period requirements before making acquisitions of two companies through an investment fund that he controlled. Sacane eventually held more than 50 percent of the voting securities of Aksys Ltd. and more than $100 million of voting securities of Esperion Therapeutics, Inc., without complying with the HSR Act. Under the terms of a consent decree filed simultaneously with the suit, Sacane agreed to pay a civil penalty of $350,000 to settle the charges. 2. Final Rules 1. Non-corporate Entities On March 8, 2005, the Commission, with the concurrence of the Assistant Attorney General, published a Notice of Final Rulemaking11 responding to public comments to the proposed rules published on April 8, 2004.12 The final rules are intended to apply the Act as consistently as possible to all forms of legal entities, reconciling the disparate treatment of corporations, partnerships, and limited liability companies under the rules, particularly in the 7 Effective November 20, 1996, dollar amounts specified in civil monetary penalty provisions within the Commission’s jurisdiction were adjusted for inflation in accordance with the Debt Collection Improvement Act of 1996, Pub. L. No. 104-134 (April 26, 1996). The adjustments included, in part, an increase from $10,000 to $11,000 for each day during which a person is in violation under Section 7A(g)(1). 61 Fed. Reg. 54548 (October 21, 1996), corrected at 61 Fed. Reg. 55840 (October 29, 1996). 8 When the parties inadvertently fail to file, the enforcement agencies generally do not seek penalties where the parties promptly make corrective filings after discovering the failure to file, submit an acceptable explanation of their failure to file, and have not previously violated the Act. 9 See the Annual Report to Congress, Fiscal Year 2003 for a description of this case. 10 United States v. Scott R. Sacane, No. 1:05CV01897 (D.D.C. filed September 26, 2005). 11 70 Fed. Reg. 11502 (March 8, 2005). 12 69 Fed. Reg. 18686 (April 8, 2004). 8 areas of formation of these entities, acquisition of interests in them, and the application of certain exemptions. The central thrust of these rules changes is that meaningful antitrust review would occur at the point at which control of an unincorporated entity changes. The changes to the coverage rules included a revision to Section 801.1(b) to remove the alternate control test for unincorporated entities; an amendment to Section 801.1(f) to define a “non-corporate interest”; a revision to Section 801.2(d) to clarify the consolidation rule; an amendment to Section 801.2(f) to define when acquiring interests in unincorporated entities may constitute an acquisition; a new subsection to Section 801.10 to define how to value such an acquisition; a new subsection to Section 801.13 to address aggregation of non-corporate interests; and a new Section 801.50, which makes certain formations of unincorporated entities a reportable event. There were also ministerial changes to Sections 801.4, 802.40, and 802.41 to adapt their application to both corporations and unincorporated entities. Additionally, there were minor changes to the Notification and Report Form to require that Item 5(d) be completed in connection with the formation of an unincorporated entity, to reflect the applicability of Items 7 and 8 to unincorporated entities and to change the reporting requirement in Items 1, 2 and 7 with regard to the formation of new entities. Changes to the exemption rules included expanding Section 802.4 to eliminate the dissimilar treatment of asset and voting securities acquisitions that are substantively the same; codifying in Section 802.10 a longstanding informal interpretation that pro-rata reformations (e.g. reincorporation in a new jurisdiction) are exempt transactions; changing Section 802.30 to apply the intraperson exemption to entities that are controlled other than through holdings of voting securities; and adding a new Section 802.65 to exempt acquisitions of non-corporate interests in entities that are formed in connection with financing transactions. In addition to amendments concerning unincorporated entities, there were technical corrections to Sections 801.13, 801.15, and 802.2. We note here that a comment received from the American Bar Association’s Section of Antitrust Law expressed concern that the estimated number of additional filings these rules would entail (as calculated in the Paperwork Reduction Act section of the proposed rules) may not reflect the actual number that may ultimately be required. The Commission agreed that it was difficult to project the impact of these changes and committed to monitoring the number and types of transactions that require notification as a result of these amendments. Between February 23, 2005 (when the Commission announced adoption of the Final Rules) and the end of fiscal year 2005, a total of fifteen transactions that would not have been reportable prior to the implementation of these rules changes required HSR filings. Of those fifteen transactions made reportable by the non-corporate rule changes, nine of the transactions involved the direct or indirect acquisition of a controlling, but not 100 percent, interest in an existing unincorporated entity. The other six involved the formation of an unincorporated joint venture. Ten of the transactions were granted early termination of the waiting period. One transaction was cleared to the Federal Trade Commission for investigation. No second requests were issued. The transactions involved a broad range of industries: Oil & Gas (3); Healthcare (2); Electronics (2); Media and Telecommunications (2); Entertainment (1); Aerospace (1); Software (1); Restaurants (1); Chemicals (1); and Financial (1). Five of the 9 transactions involved at least one foreign person. The Commission has no means to count newly non-reportable transactions to determine the effect of amended and new exemptions introduced by these rules changes. However, with the amendments to the intraperson exemption,13 that exemption now applies to all transactions in which the acquiring and the acquired person are the same. Based on an average of 32 such transactions a year having been reported under the Act in the period from fiscal year 1997 through fiscal year 2004, it seems that the expansion of this exemption alone may more than offset the increase in filings due to the introduction of these rules changes. 2. Threshold Adjustments Effective March 2, 2005, the Commission, with the concurrence of the Assistant Attorney General, amended the premerger notification rules14 to reflect adjustment and publication of reporting thresholds as required by the 2000 amendments15 to Section 7A of the Clayton Act, 15 U.S.C. 18a. The 2000 amendments to Section 7A require the Commission to publish adjustments to the Act’s jurisdictional and filing fee thresholds annually, based on the change in the gross national product, in accordance with Section 8(a)(5) for each fiscal year beginning after September 30, 2004. The Commission amended the rules to provide a method for future adjustments as required by the 2000 amendments and to reflect the revised thresholds in the examples contained in the rules. These rules also adjusted references to the notification and filing fee thresholds and other limitations in the rules and the Notification and Report Form and Instructions to remain consistent with the revised jurisdictional and filing fee thresholds. The revised thresholds will be published annually in January to be effective 30 days after publication.16 3. Other Rules Finally, on August 15, 2005, the Commission published a Notice of Proposed Rulemaking17 that would enable filing parties to provide Internet links to certain documents in lieu of paper copies, and to address “stale filing” situations, in which parties make premerger notification filings but then fail to comply with a second request. The Commission proposed a change to relieve the burden of complying with Items 4(a) and (b) of the Notification and Report Form. Previously, paper copies of annual reports, annual 13 16 C.F.R. § 802.30. 14 70 Fed. Reg. 4988 (January 31, 2005). 15 15 U.S.C. 18a(a). See Pub. L. 106-553, 114 Stat. 2762. 16 The adjusted thresholds for 2006 were effective February 17, 2006. 71 Fed. Reg. 2943 (January 18, 17 70 Fed. Reg. 47733 (August 15, 2005). 2006). 10 audit reports and regularly prepared balance sheets and copies of certain documents, such as 10Ks filed with the Securities and Exchange Commission, were required in response to these items. The proposed modification of paragraph 803.2(e) would allow filing persons to provide an Internet address linking directly to the documents required by Items 4(a) and (b) in lieu of providing paper copies. The Commission also proposed an amendment to the rules to specify that an acquiring person’s notification, and an acquired person’s notification in certain types of transactions, shall expire after eighteen months if a second request to them remains outstanding. The public comment period for these proposed rules ended on October 14, 2005. No comments were received, and the final rules were published as proposed on December 12, 200518 and were effective on January 11, 2006. Several technical corrections required as a result of the rulemaking on non-corporate entities were also included in these final rules. MERGER ENFORCEMENT ACTIVITY19 1. The Department of Justice During fiscal year 2005, the Antitrust Division challenged four merger transactions that it concluded might have substantially lessened competition if allowed to proceed as proposed. In three of these challenges, the Antitrust Division filed a complaint in U.S. district court. All three of these cases were settled by consent decree. In the other merger challenge during fiscal year 2005, when apprised of the Antitrust Division’s concerns regarding their proposed transaction, the parties restructured it to avoid competitive problems.20 The Antitrust Division also obtained a civil penalty and injunctive relief settling a claim of violation of a consent decree entered in a 2000 merger case and succeeded in convincing the United States Court of Appeals for the Sixth Circuit to reverse a grant of summary judgment for defendants in a merger challenge brought in 2003. In United States, et al., v. Cingular Wireless Corporation, et al.,21 the Division challenged the proposed $41 billion acquisition of AT&T Wireless by Cingular Wireless. The complaint alleged that the transaction, as originally proposed, would have reduced competition for mobile wireless telecommunications service in ten geographic areas, increasing the 18 70 Fed. Reg. 73369 (December 12, 2005). 19 All cases in this report were not necessarily reportable under the premerger notification program. Because of provisions regarding the confidentiality of the information obtained pursuant to the Act, it would be inappropriate to identify which cases were initiated under the program. 20 Department of Justice press release issued May 24, 2005 – Proposed Acquisition of Moneyline Telerate by Reuters Ltd. The Division evaluated the transaction and the proposed restructuring in collaboration with the European Commission’s Directorate-General for Competition, which was also reviewing the transaction. 21 United States and the State of Connecticut and the State of Texas v. Cingular Wireless Corporation, SBC Communications Inc., BellSouth Corporation and AT&T Wireless Services, Inc., No. 1:04CV01850 (D.D.C. filed October 25, 2004). 11 likelihood of unilateral actions by the merged firm to raise prices, diminish the quality or quantity of services provided, refrain from or delay making investments in network improvements, and refrain from or delay launching new services. The transaction also would have lessened competition for mobile wireless broadband services in three additional markets. A proposed consent decree settling the suit was filed simultaneously with the complaint. Under the terms of the decree, the merged firm was required to divest assets in thirteen markets in eleven states: Connecticut, Texas, Georgia, Kansas, Kentucky, Louisiana, Massachusetts, Missouri, Michigan, Oklahoma, and Tennessee. The Court entered the consent decree on March 14, 2005. In United States v. ALLTEL Corporation, et al.,22 the Division challenged ALLTEL Corporation’s proposed $6 billion acquisition of Western Wireless Corporation, alleging that the acquisition, as originally proposed, would have resulted in higher prices, lower quality and quantity of services, and diminished investment in network improvements for mobile wireless service consumers in sixteen rural areas in Nebraska, Kansas, and Arkansas. ALLTEL and Western Wireless were regional mobile wireless service providers that served many rural markets. Although the combination of these two regional providers gives the merged firm the benefit of having a larger service area footprint, the proposed transaction would have reduced competition in specific markets where ALLTEL and Western Wireless were each other’s most significant competitors. The Division filed a proposed consent decree simultaneously with the complaint, settling the suit. Under the terms of the consent decree, ALLTEL was required to divest Western Wireless’ mobile wireless service business, including spectrum and customers, in nine markets in Nebraska, six markets in Kansas, and one market in Arkansas. ALLTEL was also required to divest the Cellular One service mark under which Western Wireless had operated in the sixteen divestiture markets, as well as in almost all other areas in which it had operated. The Court entered the consent decree on October 12, 2005. In United States v. Waste Industries USA, Inc.,23 the Division challenged Waste Industries’ August 2003 acquisition of waste-hauling assets from Allied Waste Industries, Inc., alleging that the acquisition had lessened competition for small container commercial hauling services in the Southside of Virginia (the independent cities of Norfolk, Chesapeake, Virginia Beach, Portsmouth, Suffolk, and Franklin, Virginia and the county of Southampton). Small container commercial hauling involves the collection of waste from commercial establishments, such as retail stores, offices and restaurants, as well as the shipment of the collected waste to disposal sites. The complaint alleged the August 2003 transaction reduced the number of significant firms competing in the collection of small container commercial waste in the Southside of Virginia from four to three, giving Waste Industries control over approximately 43 percent of that market. The Division filed a proposed consent decree simultaneously with the complaint, settling the suit. Under the terms of the decree, Waste Industries was required to divest small container commercial hauling assets on certain routes in the Southside and to alter its existing and future contracts for small container commercial waste-hauling services. The 22 United States v. ALLTEL Corporation and Western Wireless Corporation, No. 1:05CV01345 (D.D.C. filed July 6, 2005). 23 United States v. Waste Industries USA, Inc., No. 2:05CV468 (E.D. Va. filed August 8, 2005). 12 contract modifications were to promote competition by making it easier for customers in the area to switch to other small container commercial waste haulers. The Court entered the consent decree on November 4, 2005. Additionally, on November 30, 2004, the Division petitioned the Court to enter a settlement agreement and enforcement order against Republic Services, Inc. for violating a decree that was entered by the Court in 2000, in United States v. Allied Waste Industries, Inc. and Republic Services, Inc.24 The Division alleged that Republic’s operations in both Lakeland, Florida and Louisville, Kentucky used contracts with terms less favorable to customers than the terms mandated by the 2000 decree. The purpose of that contract relief had been to make it easier for Republic’s customers to switch to competing waste collection services. The settlement agreement and enforcement order, which the Court entered on December 1, 2004, required Republic to pay a $1.5 million civil penalty and to replace all of its existing customer contracts involving terms exceeding those required by decree with contracts containing terms no more restrictive than those required by decree. In October 2004, the Division filed an appeal in United States and the Commonwealth of Kentucky v. Dairy Farmers of America, Inc. and Southern Belle Dairy Co., LLC.25 Oral argument took place in the Sixth Circuit on July 19, 2005. On October 25, 2005, the Court reversed the District Court’s grant of summary judgment to defendants and remanded the case for trial. 2. The Federal Trade Commission The Commission challenged fourteen transactions that it concluded would have lessened competition if allowed to proceed as proposed during fiscal year 2005,26 leading to nine consent orders and four abandonments.27 In one matter, the Commission authorized staff to seek injunctive relief in district court, which the court dismissed at the Commission’s request prior to a preliminary injunction hearing. In Federal Trade Commission v. Aloha Petroleum Ltd., and Trustreet Properties, Inc.,28 the Commission filed for a temporary restraining order and preliminary injunction to block Aloha’s proposed acquisition of a half interest in an import-capable terminal and retail gasoline 24 See the Annual Report to Congress, Fiscal Year 2000 for a description of this case. 25 See the Annual Report to Congress, Fiscal Years 2003 and 2004 for a description of this case and its disposition by the District Court. 26 To avoid double counting this report includes only those merger enforcement actions in which the Commission took its first public action during fiscal year 2005. 27 The Commission did not make public statements about the transactions that were abandoned after the parties were told of the Commission’s concerns about the proposed transactions. 28 Federal Trade Commission v. Aloha Petroleum, Ltd., and Trustreet Properties, Inc., Civ. No. CV05 00471 (D.D.C. filed July 27, 2005). On September 9, 2005, the district court entered the order dismissing the complaint. 13 assets of Trustreet Properties, alleging that the acquisition would have substantially lessened competition in the marketing of gasoline by bulk suppliers in Hawaii and in the retail sale of gasoline on Oahu, resulting in higher prices to consumers. According to the complaint, Aloha already owned a 50 percent interest in the Barbers Point petroleum importing terminal on Oahu and, under the proposed transaction, would have acquired the other half interest from Trustreet. The Barbers Point terminal was the newest on the island and could take full cargoes of gasoline, which was the most economical way to bring in low-cost bulk supply to Hawaii. The proposed transaction likely would have reduced the number of gasoline marketers with ownership of, or guaranteed access to, a refinery or an import-capable terminal from five to four. It would have also reduced from three to two the number of bulk suppliers who had been willing to sell to unintegrated retailers. Subsequent to the Commission filing its complaint, Aloha announced it would enter into a 20-year throughput agreement giving Mid Pac Petroleum LLC substantial rights to use the Barbers Point terminal. The agreement essentially substituted Mid Pac for Trustreet as a bulk supply gasoline marketer in Hawaii, making it a significant competitor in the relevant market. As a result, the Commission filed a motion asking the district court to dismiss the FTC’s complaint seeking an injunction. In fiscal year 2005, the Commission accepted consent agreements for public comment in nine merger cases. Eight of the consent agreements became final in fiscal year 2005; one became final in fiscal year 2006. In Genzyme Corporation/ILEX Oncology, Inc.,29 the complaint alleged that Genzyme’s proposed $1 billion acquisition of ILEX would have substantially lessened competition in the U.S. market for the research, development, manufacture, and sale of solid organ transplant (“SOT”) acute therapy drugs. According to the complaint SOT acute therapy drugs are used to suppress a recipient’s immune system in solid organ transplants. The U.S. market for such drugs was highly concentrated and Genzyme was the leading supplier with its product, Thymoglobulin. ILEX’s Campath, the newest entrant, accounted for a relatively small, but quickly gaining market share. There were four other SOT acute therapy drugs used in the United States, but Thymoglobulin and Campath had been especially close competitors because their mechanisms of action were more alike than those of the other four products. The proposed transaction likely would have eliminated direct competition between the parties, resulting in higher prices and decreased development in this specialized drug area. Under the consent agreement, Genzyme was required to divest all contractual rights to ILEX’s Campath. In Cemex, S.A. de C.V.,30 the complaint alleged that Cemex’s proposed $5.8 billion acquisition of RMC Group PLC would have substantially lessened competition in the metropolitan Tucson, Arizona market for the manufacture and sale of ready-mix concrete. According to the complaint, there were only three ready-mix concrete manufacturers in the highly concentrated metropolitan Tucson market. If the transaction had been allowed to proceed as proposed, the market likely would have become more concentrated with only two independent suppliers of ready-mix concrete remaining. As a result, ready-mix concrete buyers in the market 29 Genzyme Corporation/ILEX Oncology, Inc., Docket No. C-4128 (issued December 20, 2004). 30 Cemex, S.A. de C.V., Docket No. C-4131 (issued February 11, 2005). 14 would have been forced to pay higher prices and receive diminished service. The consent order required Cemex to divest RMC’s Tucson area ready-mix concrete assets. In Cytec Industries Inc.,31 the complaint alleged that Cytec’s proposed $1.8 billion acquisition of the Surface Specialties business of UCB S.A. would have substantially lessened competition in the market for the research, development, manufacture, and sale of amino resins for industrial liquid coatings and adhesion promotion in rubber in North America. According to the complaint, the amino resins were used as cross-linking agents in thermoset surface coatings for a range of applications, including automotive coatings, coil coatings, can coatings, appliance coatings, and general maintenance coatings. They were also used to promote the adhesion of rubber to materials in tires, thereby enhancing the performance and durability of tires. The complaint asserted that for many years Cytec and UCB had been direct and substantial competitors in the market for amino resins, and absent relief from the consent order this competition likely would have been lost and not easily replaced, resulting in higher prices for consumers. Under the order, Cytec was required to divest UCB’s amino resins business. In Occidental Petroleum Corporation/Vulcan Materials Company,32 the complaint alleged that the proposed $359 million acquisition by Occidental Petroleum Corporation for the chemicals business of Vulcan Materials Company would have substantially lessened competition in the U.S. market for the production and sale of the following products: (1) potassium hydroxide (“KOH”), a raw material used in the production of many potassium chemicals such as food additives for low-sodium foods; (2) potassium carbonate (“potcarb”), used as a nutrition supplement for dairy cattle; and (3) anhydrous potassium carbonate (“APC”), the solid form of potcarb. According to the complaint, Occidental, through its subsidiary Occidental Chemical Company (“OxyChem”), and Vulcan were the primary U.S. competitors in the relevant markets for many years and the only producers of APC in the country. The complaint also asserted that each market was highly concentrated and consumers relied on the competition between OxyChem and Vulcan to maintain competitive pricing. Under the consent order, OxyChem was required to divest Vulcan’s Port Edwards, Wisconsin chemical facility and related assets. In Chevron Corporation/Unocal Corporation,33 the complaint alleged that the proposed $18 billion merger of Chevron and Unocal would have substantially lessened competition in the marketing and refining of CARB RFG in California. According to the complaint, Chevron was a leading refiner and marketer of CARB RFG. Unocal did not refine or market CARB RFG, however it owned a portfolio of five U.S. patents relating to reformulated gasoline which covered the production and supply of CARB RFG, particularly in the warm weather months. The complaint asserted that Unocal licensed its RFG patents to others in exchange for payments ranging from 1.2 to 3.4 cents per gallon. Unocal also won a patent infringement suit against major refiners of CARB RFG, awarding the company royalties of 5.75 cents per infringing gallon produced in California. In addition to the royalties that Unocal threatened to collect upon 31 Cytec Industries Inc., Docket No. C-4132 (issued February 28, 2005). 32 Occidental Petroleum Corporation/Vulcan Materials Company, Docket No. C-4139 (issued June 2, 33 Chevron Corporation/Unocal Corporation, Docket No. C-4144 (issued July 27, 2005). 2005). 15 enforcement of the patents, Chevron’s ownership of Unocal likely would have enabled it to position itself to coordinate with its downstream competitors, to the detriment of consumers. In order to remedy the anticompetitive effects of the proposed merger, the consent order required Chevron and Unocal to cease from enforcing Unocal’s relevant patents, undertaking any new enforcement efforts related to the patents, and to cease from all attempts to collect damages, royalties, or other payments related to the use of any of the patents. The parties were also required to dismiss all pending legal action related to alleged infringement of the patents. In Valero L.P./Valero Energy Corporation/Kaneb Services LLC/Kaneb Pipe Line Partners, L.P.,34 the complaint alleged that Valero L.P.’s proposed $2.8 billion acquisition of Kaneb Services LLC and Kaneb Pipe Line Partners would have substantially lessened competition in the following markets: 1) terminaling services for bulk suppliers of light petroleum products in the Greater Philadelphia Area; 2) pipeline transportation and terminaling services for bulk suppliers of light petroleum products in the Colorado Front Range; 3) terminaling services for bulk suppliers of refining components, blending components, and light petroleum products in California; and 4) terminaling for bulk ethanol in Northern California. The transaction, as proposed, likely would have eliminated direct competition between Valero and the Kaneb entities and increased the wholesale price of light petroleum products in the relevant markets. To settle the complaint, Valero agreed to divest the Philadelphia area terminals, the San Francisco Bay terminals, and the West Pipeline system. The consent order also required Valero to develop an information firewall and maintain open, non-discriminatory access to two retained Northern California terminals in order to ensure access to ethanol terminaling in Northern California. In Novartis AG,35 the complaint alleged that the proposed $1.7 billion acquisition of Eon Labs, Inc. by Novartis would have substantially lessened competition in the U.S. market for the following products: (1) generic desipramine hydrochloride tablets, used in the treatment of clinical depression; (2) generic orphenadrine citrate extended release tablets, used as muscle relaxants; and (3) generic rifampin oral capsules, used in the treatment of tuberculosis. According to the complaint, the proposed transaction likely would have eliminated direct competition between the parties in each of the three generic markets, resulting in higher prices for consumers. Under the consent order, Novartis was required to divest all the assets necessary to manufacture and market generic desipramine hydrochloride tablets, orphenadrine citrate extended release tablets, and rifampin oral capsules in the United States. In Penn National Gaming, Inc.,36 the complaint alleged that Penn National’s proposed $2.2 billion acquisition of Argosy Gaming Company would have substantially lessened competition in the market for casino services in Baton Rouge, Louisiana. According to the complaint, Penn National and Argosy were the only two casino operators in Baton Rouge, and absent relief provided in the Commission’s consent order Penn National could have gained a 34 Valero L.P./Valero Energy Company/Kaneb Services LLC/Kaneb Pipe Line Partners, L.P., Docket No. C-4141 (issued June 14, 2005). 35 Novartis AG, Docket No. C-4150 (issued September 21, 2005). 36 Penn National Gaming, Inc., Docket No. C-4143 (issued July 26, 2005). 16 monopoly in that market. Louisiana law limited the number of licenses to fifteen river boat casinos, four racinos (race tracks with slot machines), and one non-Native American land-based casino. All of these licenses had been granted, and there was no evidence that any of the operating businesses had plans to relocate outside of the state. The consent order required Penn National to sell Argosy’s Baton Rouge casino. In The Procter & Gamble Company/The Gillette Company,37 the complaint alleged that Procter & Gamble’s proposed $57 billion acquisition of Gillette would have substantially lessened competition in the U.S. markets for at-home teeth whitening products, adult batterypowered toothbrushes, rechargeable toothbrushes, and men’s antiperspirant/deodorant. According to the complaint, the loss of competition between the parties in the relevant markets likely would have resulted in consumers paying higher prices. The consent order required the parties to divest Gillette’s Rembrandt at-home teeth whitening business, Procter & Gamble’s Crest SpinBrush battery-powered and rechargeable toothbrush business, and Gillette’s Right Guard men’s antiperspirant/deodorant business. The order also required Procter & Gamble to amend its Crest Sonicare IntelliClean System rechargeable toothbrush joint venture business agreement with Philips Oral Health Care, Inc., allowing Philips to independently market and sell IntelliClean and eliminating all non-compete provisions. ONGOING REASSESSMENT OF THE EFFECTS OF THE PREMERGER NOTIFICATION PROGRAM The Commission and the Antitrust Division continually review the impact of the premerger notification program on the business community and antitrust enforcement. As indicated in past annual reports, the HSR program ensures that virtually all significant mergers or acquisitions that affect consumers in the United States will be reviewed by the antitrust agencies prior to consummation. The agencies generally have the opportunity to challenge unlawful transactions before they occur, thus avoiding the problem of constructing effective post-acquisition relief. As a result, the HSR Act is doing what Congress intended, giving the government the opportunity to investigate and challenge mergers that are likely to harm consumers before injury can arise. Prior to the premerger notification program, businesses could, and frequently did, consummate transactions that raised significant antitrust concerns before the antitrust agencies had the opportunity to consider adequately their competitive effects. The enforcement agencies were forced to pursue lengthy post-acquisition litigation, during the course of which harm from the consummated transaction continued (and afterwards as well, where achievement of effective post-acquisition relief was not practicable). Because the premerger notification program requires reporting before consummation, this problem has been significantly reduced. Always cognizant of the program’s impact and effectiveness, the enforcement agencies continue to seek ways to speed up the review process and reduce burdens for companies. As in past years, the agencies will continue their ongoing assessment of the HSR program to increase 37 The Procter & Gamble Company/The Gillette Company, Docket No. C-4151 (issued September 29, 2005). 17 accessibility, promote transparency, and reduce the burden on the filing parties without compromising the agencies’ ability to investigate and interdict proposed transactions that may substantially lessen competition. 18 LIST OF APPENDICES Appendix A - Summary of Transactions, Fiscal Years 1996 - 2005 Appendix B - Number of Transactions Reported and Filings Received by Month for Fiscal Years 1996 - 2005 LIST OF EXHIBITS Exhibit A - Statistical Tables for Fiscal Year 2005, Presenting Data Profiling Hart-Scott-Rodino Premerger Notification Filings and Enforcement Interest APPENDIX A SUMMARY OF TRANSACTIONS FISCAL YEARS 1996- 2005 APPENDIX A SUMMARY OF TRANSACTION BY YEAR 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 3,087 3,702 4,728 4,642 4,926 2,376 1,187 1,014 1,454 1,695 6,001 7,199 9,264 9,151 9,941 4,800 2,369 2,001 2,866 3,322 2,864 3,438 4,575 4,340 4,749 2,237 1,142 968 1,377 1,610 99 122 125 111 98 70 49 35 35 50 36 45 46 45 43 27 27 15 20 1.3% 1.3% 1.0% 1.0% 0.9% 1.2% 2.4% 1.5% 1.5% 25 1.6% 63 77 79 68 55 43 22 20 15 25 2.2% 2.2% 1.7% 1.6% 1.2% 1.9% 1.9% 2.1% 1.1% 1.6% 2,861 3,363 4,323 4,110 4,324 2,063 1,042 700 1,241 1,385 Granted5 2,044 2,513 3,234 3,103 3,515 1,603 793 606 943 997 Not Granted5 817 850 1,089 1,007 809 460 249 94 298 388 Transactions Reported 1 Filings Received Adjusted Transactions In Which A Second Request Could Have Been Issued2 Investigations in Which Second Requests Were Issued FTC3 4 Percent DOJ 3 4 Percent Transactions Involving a Request For Early Termination5 1 Usually, two filings are received, one from the acquiring person and one from the acquired person when a transaction is reported. Only one application is received when an acquiring party files for an exemption under §§ 7A(c)(6) or (c)(8) of the Clayton Act. 2 These figures omit from the total number of transactions reported all transactions for which the agencies were not authorized to request additional information. These include (1) incomplete transactions (only party filed a complete notification); (2) transactions reported pursuant to the exemption provisions of §§ 7A(c)(6) and 7(c)(8) of the Act; and (3) transactions found to be non-reportable. In addition, where a party filed more than one notification in the same year to acquire voting securities of the same corporation, e.g., filing for one threshold and later for a higher threshold, only a single consolidated transaction has been counted because, as a practical matter, the agencies do not issue more than one Second Request in such a case. These statistics also omit from the total number of transactions reported secondary acquisitions filed pursuant to 801.4 of the Premerger Notification rules. Secondary acquisitions have been deducted in order to be consistent with statistics present in most prior annual reports. 3 These statistics are based on the date the request was issued, not the date the investigation was opened. 4 Second Request investigations are a percentage of the total number of adjusted transactions. The total percentage reflected in Figure 2 may not equal the sum of reported component values due to rounding. 5 These statistics are based on the date of the HSR filing, not the date action was taken on the request. APPENDIX B NUMBER OF TRANSACTIONS REPORTED AND FILINGS RECEIVED BY MONTH FOR FISCAL YEARS 1996 - 2005 APPENDIX B TABLE 1. NUMBER OF TRANSACTIONS REPORTED BY MONTH FOR THE FISCAL YEARS 1996 - 2005 OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER TOTAL 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 238 273 249 238 231 277 252 304 253 265 264 243 3,087 296 332 267 263 250 315 302 328 319 389 318 323 3,702 424 387 426 306 336 392 384 401 442 435 427 368 4,728 333 359 394 282 330 427 364 438 445 444 434 392 4,642 376 428 468 335 440 455 343 398 494 351 446 392 4,926 360 451 345 245 66 120 94 153 190 94 163 95 2,376 89 105 95 111 87 109 99 111 88 121 97 75 1,187 77 104 78 93 71 74 92 83 80 86 85 91 1,014 93 127 143 86 109 138 135 131 122 123 135 112 1,454 143 160 128 139 102 122 124 171 153 120 170 163 1,695 APPENDIX B TABLE 2. NUMBER OF FILINGS RECEIVED1 BY MONTH FOR FISCAL YEARS 1996 - 2005 OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER TOTAL 1 1996 450 520 474 445 480 528 498 584 502 515 515 490 6,001 1997 561 636 521 514 483 614 599 640 620 759 617 635 7,199 1998 818 749 836 614 650 766 763 787 862 851 844 724 9,264 1999 662 686 785 548 658 828 719 851 884 887 885 758 9,151 2000 777 839 922 677 867 959 695 859 1,004 718 886 738 9,941 2001 751 920 686 499 144 243 188 296 378 182 332 181 4,800 2002 190 211 183 224 174 230 203 212 170 230 191 151 2,369 2003 148 206 150 179 146 144 182 168 158 170 164 186 2,001 2004 185 254 280 168 209 277 251 267 255 235 270 215 2,866 2005 280 324 246 268 201 239 244 338 302 237 332 311 3,322 Usually, two filings are received, one from the acquiring person and one from the acquired person when the transaction is reported. Only one filing is received when an acquiring person files for a transaction under §§7A(c)(6) and (c)(8) of the Clayton Act. EXHIBIT A STATISTICAL TABLES FOR FISCAL YEAR 2005 DATA PROFILING HART-SCOTT-RODINO PREMERGER NOTIFICATION FILINGS AND ENFORCEMENT INTERESTS TABLE I FISCAL YEAR 20051 ACQUISITIONS BY SIZE OF TRANSACTION (BY SIZE RANGE)2 NUMBER4 PERCENT Below 50M5 50M - 100M 100M - 150M 150M - 200M 200M - 300M 300M - 500M 500M - 1000M Over 1000M 21 533 233 160 180 181 142 160 1.3% 33.1% 14.5% 9.9% 11.2% 11.2% 8.8% 9.9% CLEARANCE GRANTED TO FTC OR DOJ PERCENT OF NUMBER TRANSACTION RANGE GROUP FTC DOJ FTC DOJ TOTAL 0.0% 0.0% 0 0 0.0% 39 25 7.3% 4.7% 12.0% 17 11 7.3% 4.7% 12.0% 19 13 11.9% 8.1% 20.0% 23 12 12.8% 6.7% 19.5% 19 12 10.5% 6.6% 17.1% 24 20 16.9% 14.1% 31.0% 42 27 26.3% 16.9% 43.2% ALL TRANSACTIONS 1,610 100.0% 183 HSR TRANSACTIONS TRANSACTION RANGE ($MILLIONS) 120 11.4% 7.5% 18.9% SECOND REQUEST INVESTIGATIONS3 PERCENT OF NUMBER TRANSACTION RANGE GROUP FTC DOJ FTC DOJ TOTAL 0.0% 0.0% 0 0 0.0% 4 3 0.8% 0.6% 1.4% 0 1 0.0% 0.4% 0.4% 2 2 1.3% 1.3% 2.6% 2 4 1.1% 2.2% 3.3% 2 0 1.1% 0.0% 1.1% 3 4 2.1% 2.8% 4.9% 12 11 7.5% 6.9% 14.4% 25 25 1.6% 1.6% 3.26% TABLE II FISCAL YEAR 20051 ACQUISITIONS BY SIZE OF TRANSACTION2 (CUMULATIVE) HSR TRANSACTIONS TRANSACTION RANGE ($MILLIONS) LESS THAN 50 LESS THAN 100 LESS THAN 150 LESS THAN 200 LESS THAN 300 LESS THAN 500 LESS THAN 1000 ALL TRANSACTIONS NUMBER4 PERCENT 21 554 787 947 1,127 1,308 1,450 1,610 1.3% 34.4% 48.9% 58.8% 70.0% 81.2% 90.1% 100.0% CLEARANCE GRANTED TO FTC OR DOJ NUMBER PERCENTAGE OF TOTAL NUMBER OF CLEARANCES GRANTED FTC 0 39 56 75 98 117 141 183 FTC 0.0% 12.9% 18.5% 24.8% 32.3% 38.6% 46.5% 60.4% DOJ 0 25 36 48 60 72 92 120 DOJ 0.0% 8.3% 11.9% 15.8% 19.8% 23.8% 30.4% 39.6% TOTAL 0.0% 21.1% 30.4% 40.6% 52.1% 62.4% 76.9% 100.0% SECOND REQUEST INVESTIGATIONS3 NUMBER PERCENT FTC DOJ FTC DOJ TOTAL 0 4 4 6 8 10 13 25 0 3 4 6 10 10 14 25 0.0% 8.0% 8.0% 12.0% 16.0% 20.0% 26.0% 50.0% 0.0% 6.0% 8.0% 12.0% 20.0% 20.0% 28.0% 50.0% 0.0% 14.0% 16.0% 24.0% 36.0% 40.0% 54.0% 100.0% TABLE III FISCAL YEAR 20051 TRANSACTIONS INVOLVING THE GRANTING OF CLEARANCE BY AGENCY TRANSACTION RANGE ($ MILLIONS) 50M - 100M 100M - 150M 150M - 200M 200M - 300M 300M - 500M 500M - 1000M Over 1000M ALL CLEARANCES CLEARANCE GRANTED TO AGENCY FTC 39 17 19 23 19 24 42 183 DOJ 25 11 13 12 12 20 27 120 TOTAL 64 28 32 35 31 44 69 303 CLEARANCE GRANTED AS A PERCENTAGE OF TOTAL TOTAL NUMBER OF TOTAL NUMBER OF NUMBER OF CLEARANCES TRANSACTIONS CLEARANCES GRANTED PER AGENCY FTC DOJ TOTAL FTC DOJ FTC DOJ TOTAL 2.4% 1.6% 4.0% 21.3% 20.8% 12.9% 8.3% 21.2% 1.1% 0.7% 1.7% 9.3% 9.2% 5.6% 3.6% 9.2% 1.2% 0.8% 2.0% 10.4% 10.8% 6.3% 4.3% 10.6% 1.4% 0.7% 2.2% 12.6% 10.0% 7.6% 4.0% 11.6% 1.2% 0.7% 1.9% 10.4% 10.0% 6.3% 4.0% 10.3% 1.5% 1.2% 2.7% 13.1% 16.7% 7.9% 6.6% 14.5% 2.6% 1.7% 4.3% 23.0% 22.5% 13.9% 8.9% 22.8% 11.4% 7.5% 18.9% 100.0% 100.0% 60.4% 39.6% 100.0% TABLE IV FISCAL YEAR 20051 INVESTIGATIONS IN WHICH SECOND REQUESTS WERE ISSUED SECOND REQUESTS ISSUED AS A PERCENTAGE OF: TRANSACTION RANGE ($MILLIONS) 50M - 100M 100M - 150M 150M -200M 200M - 300M 300M - 500M 500M - 1000M Over 1000M ALL TRANSACTIONS INVESTIGATIONS IN WHICH SECOND REQUEST WERE ISSUED3 TOTAL NUMBER OF TRANSACTIONS TRANSACTIONS IN EACH TRANSACTION RANGE GROUP FTC 0 4 2 2 2 3 12 25 FTC 0.0% 0.2% 0.1% 0.1% 0.1% 0.2% 0.7% 1.6% FTC 0.0% 1.7% 1.3% 1.1% 1.1% 2.1% 7.5% 1.6% DOJ 0 4 2 4 0 4 11 25 TOTAL 0 8 4 6 2 7 23 50 DOJ 0.0% 0.2% 0.1% 0.2% 0.0% 0.2% 0.7% 1.6% TOTAL 0.0% 0.4% 0.2% 0.3% 0.1% 0.4% 1.4% 3.2% DOJ 0.0% 1.7% 1.3% 2.2% 0.0% 2.8% 6.9% 1.6% TOTAL 0.0% 3.3% 2.5% 3.4% 1.1% 4.9% 14.4% 3.2% TOTAL NUMBER OF SECOND REQUEST INVESTIGATIONS FTC 0.0% 8.0% 4.0% 4.0% 4.0% 6.0% 24.0% 50.0% DOJ 0.0% 8.0% 4.0% 8.0% 0.0% 8.0% 22.0% 50.0% TOTAL 0.0% 16.0% 8.0% 12.0% 4.0% 14.0% 46.0% 100.0% TABLE V FISCAL YEAR 20051 ACQUISITIONS BY REPORTING THRESHOLD NUMBER PERCENT 102 115 33 4 886 470 6.3% 7.1% 2.0% 0.2% 55.0% 29.2% CLEARANCE GRANTED TO FTC OR DOJ PERCENTAGE OF NUMBER THRESHOLD GROUP FTC DOJ FTC DOJ TOTAL 6 5 5.9% 4.9% 10.8% 10 4 8.7% 3.5% 12.2% 7 2 21.2% 6.1% 27.3% 0 0 0.0% 0.0% 0.0% 99 86 11.2% 9.7% 20.9% 61 23 13.0% 4.9% 17.9% 1,610 100.0% 183 HSR TRANSACTIONS THRESHOLD7 $53.1M $106.3M $530.7M 25% 50% ASSETS ONLY ALL TRANSACTIONS 120 11.4% 7.5% 18.9% SECOND REQUEST INVESTIGATIONS3 PERCENTAGE OF NUMBER THRESHOLD GROUP FTC DOJ FTC DOJ TOTAL 0 2 0.0% 2.0% 2.0% 1 0 0.9% 0.0% 0.9% 0 0 0.0% 0.0% 0.0% 0 0 0.0% 0.0% 0.0% 13 20 1.5% 2.3% 3.7% 11 25 3 25 2.3% 1.6% 0.6% 1.6% 2.9% 3.26% TABLE VI FISCAL YEAR 20051 TRANSACTIONS BY ASSETS OF ACQUIRING PERSON HSR TRANSACTIONS ASSET RANGE ($MILLIONS) Below 50M 50M - 100M 100M - 150M 150M - 200M 200M - 300M 300M - 500M 500M - 1000M OVER 1000M ALL TRANSACTIONS CLEARANCE GRANTED TO FTC OR DOJ NUMBER NUMBER 179 41 60 52 64 106 155 953 1,610 PERCENT 11.1% 2.5% 3.7% 3.2% 4.0% 6.6% 9.6% 59.2% 100.0% FTC DOJ 6 0 10 1 9 7 21 129 183 2 0 0 5 5 5 10 93 120 PERCENTAGE OF ASSET RANGE GROUP FTC 3.4% 0.0% 16.7% 1.9% 14.1% 6.6% 13.5% 13.5% 11.4% DOJ 1.1% 0.0% 0.0% 9.6% 7.8% 4.7% 6.5% 9.8% 7.5% TOTAL 4.5% 0.0% 16.7% 11.5% 21.9% 11.3% 20.0% 23.3% 18.9% SECOND REQUEST INVESTIGATIONS3 NUMBER FTC DOJ 0 0 1 0 0 1 3 20 25 0 0 0 0 1 2 2 20 25 PERCENTAGE OF ASSET RANGE GROUP FTC 0.0% 0.0% 1.7% 0.0% 0.0% 0.9% 1.9% 2.1% 1.6% DOJ 0.0% 0.0% 0.0% 0.0% 1.6% 1.9% 1.3% 2.1% 1.6% TOTAL 0.0% 0.0% 1.7% 0.0% 1.6% 2.8% 3.2% 4.2% 3.26% TABLE VII FISCAL YEAR 20051 TRANSACTIONS BY SALES OF ACQUIRING PERSON SALES RANGE ($MILLIONS) Below 50M 50M - 100M 100M - 150M 150M - 200M 200M - 300M 300M - 500M 500M - 1000M 0VER 1000M Sales Not Available8 ALL TRANSACTIONS HSR TRANSACTIONS NUMBER PERCENT 152 54 44 43 69 122 187 835 104 1,610 9.4% 3.4% 2.7% 2.7% 4.3% 7.6% 11.6% 51.9% 6.5% 100.0% CLEARANCE GRANTED TO FTC OR DOJ NUMBER PERCENTAGE OF SALES RANGE GROUP FTC DOJ FTC DOJ TOTAL 6 3 3.9% 2.0% 5.9% 2 3 3.7% 5.6% 9.3% 2 3 4.5% 6.8% 11.3% 2 2 4.7% 4.7% 9.4% 2 3 2.9% 4.3% 7.2% 7 7 5.7% 5.7% 11.4% 14 16 7.5% 8.6% 16.1% 145 80 17.4% 9.6% 27.0% 3 3 2.9% 2.9% 5.8% 183 120 11.4% 7.5% 18.9% SECOND REQUEST INVESTIGATIONS3 NUMBER PERCENTAGE OF SALES RANGE GROUP FTC DOJ FTC DOJ TOTAL 1 0 0.7% 0.0% 0.7% 0 0 0.0% 0.0% 0.0% 0 2 0.0% 4.5% 4.5% 2 2 4.7% 4.7% 9.4% 0 1 0.0% 1.4% 1.4% 2 2 1.6% 1.6% 3.2% 5 3 2.7% 1.6% 4.3% 15 15 1.8% 1.8% 3.6% 0 0 0.0% 0.0% 0.0% 25 25 1.6% 1.6% 3.26% TABLE VIII FISCAL YEAR 20051 TRANSACTIONS BY ASSETS OF ACQUIRED ENTITIES HSR TRANSACTIONS ASSET RANGE ($MILLIONS) NUMBER Below 50M 50M - 100M 100M - 150M 150M - 200M 200M - 300M 300M - 500M 500M - 1000M 0VER 1000M Assets Not Available9 ALL TRANSACTIONS 256 242 125 74 90 54 66 120 583 1,610 PERCENT 15.9% 15.0% 7.8% 4.6% 5.6% 3.4% 4.1% 7.5% 36.2% 100.0% CLEARANCE GRANTED TO FTC OR DOJ NUMBER FTC 25 25 26 10 8 8 16 7 58 183 DOJ 9 16 12 5 4 5 4 19 46 120 PERCENTAGE OF ASSET RANGE GROUP FTC DOJ TOTAL 9.8% 3.5% 13.3% 10.3% 6.6% 16.9% 20.8% 9.6% 30.4% 13.5% 6.8% 20.3% 8.9% 4.4% 13.3% 14.8% 9.3% 24.1% 24.2% 6.1% 30.3% 5.8% 15.8% 21.6% 9.9% 7.9% 17.8% 11.4% 7.5% 18.9% SECOND REQUEST INVESTIGATIONS NUMBER FTC 1 3 2 0 1 1 3 5 9 25 DOJ 1 4 2 0 2 1 0 4 11 25 PERCENTAGE OF ASSET RANGE GROUP FTC DOJ TOTAL 0.4% 0.4% 0.8% 1.2% 1.7% 2.9% 1.6% 1.6% 3.2% 0.0% 0.0% 0.0% 1.1% 2.2% 3.3% 1.9% 1.9% 3.8% 4.5% 0.0% 4.5% 4.2% 3.3% 7.5% 1.5% 1.9% 3.4% 1.6% 1.6% 3.26% TABLE IX FISCAL YEAR 20051 TRANSACTIONS BY SALES OF ACQUIRED ENTITIES10 NUMBER PERCEN T Below 50M 50M - 100M 100M - 150M 150M - 200M 200M - 300M 300M - 500M 500M - 1000M 0VER 1000M Sales Not Available11 251 221 114 92 106 84 77 182 483 15.6% 13.7% 7.1% 5.7% 6.6% 5.2% 4.8% 11.3% 30.0% CLEARANCE GRANTED TO FTC OR DOJ PERCENTAGE OF SAKES NUMBER RANGE GROUP FTC DOJ FTC DOJ TOTAL 24 8 9.6% 3.2% 12.8% 26 23 11.8% 10.4% 22.2% 15 7 13.2% 6.1% 19.3% 11 4 12.0% 4.3% 16.3% 15 4 14.2% 3.8% 18.0% 11 9 13.1% 10.7% 23.8% 12 8 15.6% 10.4% 26.0% 14 15 7.7% 8.2% 15.9% 57 42 11.8% 8.7% 20.5% ALL TRANSACTIONS 1,610 100.0% 185 SALES RANGE ($ MILLIONS) HSR TRANSACTIONS 120 11.5% 7.5% 18.9% SECOND REQUEST INVESTIGATIONS3 PERCENTAGE OF NUMBER SAKES RANGE GROUP FTC DOJ FTC DOJ TOTAL 3 1 1.2% 0.4% 1.6% 4 5 1.8% 2.3% 4.1% 0 1 0.0% 0.9% 0.9% 1 0 1.1% 0.0% 1.1% 1 0 0.9% 0.0% 0.9% 3 2 3.6% 2.4% 6.0% 4 2 5.2% 2.6% 7.8% 4 3 2.2% 1.6% 3.8% 5 11 1.0% 2.3% 3.3% 25 25 1.6% 1.6% 3.26% TABLE X FISCAL YEAR 20051 INDUSTRY GROUP OF ACQUIRING PERSONS 3 DIGIT NAICS CODE INDUSTRY DESCRIPTION NUMBER4 PERCENT OF TOTAL CHANGE FROM FY 200413 12 CLEARANCE GRANTED TO FTC OR DOJ SECOND REQUEST INVESTIGATIONS3 FTC DOJ TOTAL FTC DOJ TOTAL 1 0.1% -0.3% 0 0 0 0 0 0 3 0.2% 0.2% 0 0 0 0 0 0 2 0.1% 0.1% 0 0 0 0 0 0 114 AGRICULTURAL PRODUCTION CROPS AGRICULTURAL PRODUCTION LIVESTOCK AND ANIMAL SPECIALTIES LUMBER AND WOOD PRODUCTS, EXCEPT FURNITURE FISHING, HUNTING AND TRAPPING 0 0.0% NC 0 0 0 0 0 0 211 OIL AND GAS EXTRACTION 27 1.7% 0.4% 5 0 5 1 0 1 4 0.2% -0.1% 0 0 0 0 0 0 9 0.6% 0.2% 0 2 2 0 1 1 36 2.2% -1.1% 0 4 4 0 1 1 1 0.1% 0.2% 0 0 0 0 0 0 7 0.4% -0.2% 0 0 0 0 0 0 4 0.2% -0.2% 0 0 0 0 0 0 1 26 0.1% 1.6% NC -0.8% 0 3 0 3 0 6 0 1 0 0 0 1 12 0.7% 0.2% 7 0 7 2 0 2 111 112 113 212 213 221 233 234 235 238 311 312 MINING AND QUARRYING OF NONMETALLIC MINERALS, EXCEPT FUELS DRILLING OIL AND GAS WELLS ELECTRIC, GAS AND SANITARY SERVICES BUILDING CONSTRUCTION – GENERAL CONTRACTORS AND OPERATIVE BUILDERS HEAVY CONSTRUCTION OTHER THAN BUILDING CONSTRUCTION CONTRACTORS CONSTRUCTION - SPECIAL GRADE CONTRACTORS SPECIALTY TRADE CONTRACTORS FOOD AND KINDRED PRODUCTS BOTTLED AND CANNED SOFT DRINKS AND CARBONATED DRINKS; AND CIGARETTE MANUFACTURING TABLE X FISCAL YEAR 20051 INDUSTRY GROUP OF ACQUIRING PERSONS 3 DIGIT NAICS CODE INDUSTRY DESCRIPTION NUMBER 4 PERCENT OF TOTAL CHANGE FROM FY 200413 12 CLEARANCE GRANTED TO FTC OR DOJ SECOND REQUEST INVESTIGATIONS3 FTC DOJ TOTAL FTC DOJ TOTAL 1 0.1% NC 0 0 0 0 0 0 5 0.3% 0.2% 0 0 0 0 0 0 1 0.1% -0.1% 0 1 1 0 0 0 7 8 0.4% 0.5% -0.2% -0.4% 0 0 0 1 0 1 0 0 0 1 0 1 7 0.4% -0.4% 0 0 0 0 0 0 7 0.4% -0.1% 3 0 3 1 0 1 111 6.9% 1.2% 36 0 36 3 0 3 RUBBER AND MISC. PLASTICS PRODUCTS STONE, CLAY, GLASS AND CONCRETE PRODUCTS 26 1.6% 0.3% 4 0 4 1 0 1 11 0.7% 0.3% 2 2 4 1 0 1 331 IRON AND STEEL MILLS 16 1.0% -0.2% 3 2 5 0 0 0 332 FABRICATED METAL PRODUCTS, EXCEPT MACHINERY AND TRANSPORTATION EQUIPMENT 16 1.0% -1.1% 3 5 8 1 2 3 333 INDUSTRIAL AND COMMERCIAL MACHINERY AND COMPUTER EQUIPMENT 23 1.4% -0.4% 4 2 6 0 0 0 334 MEASURING, ANALYZING AND CONTROLLING INSTRUMENTS; PHOTOGRAPHIC, MEDICAL AND OPTICAL GOODS; WATCHES AND CLOCKS 66 4.1% -1.4% 11 12 23 1 2 3 313 315 316 321 322 323 324 325 326 327 TEXTILE MILL PRODUCTS APPAREL AND OTHER FINISHED PRODUCTS MADE FROM FABRICS AND SIMILAR MATERIALS LEATHER AND LEATHER PRODUCTS SAWMILLS PAPER AND ALLIED PRODUCTS COMMERCIAL LITHOGRAPHIC PRINTING PETROLEUM REFINING AND RELATED INDUSTRIES CHEMICALS AND ALLIED PRODUCTS TABLE X FISCAL YEAR 20051 INDUSTRY GROUP OF ACQUIRING PERSONS 3 DIGIT NAICS CODE INDUSTRY DESCRIPTION NUMBER 4 PERCENT OF TOTAL CHANGE FROM FY 200413 12 335 336 337 339 421 422 423 ELECTRONIC AND OTHER ELECTRICAL EQUIPMENT AND COMPONENTS, EXCEPT COMPUTER EQUIPMENT TRANSPORTATION EQUIPMENT HOME FURNITURE, FURNISHINGS AND EQUIPMENT STORES MISCELLANEOUS MANUFACTURING INDUSTRIES WHOLESALE TRADE - DURABLE GOODS WHOLESALE TRADE NONDURABLE GOODS AUTOMOBILE AND OTHER MOTOR VEHICLE MERCHANT WHOLESALERS CLEARANCE GRANTED TO FTC OR DOJ SECOND REQUEST INVESTIGATIONS3 FTC DOJ TOTAL FTC DOJ TOTAL 19 1.2% -0.3% 2 4 6 0 2 2 36 2.2% -0.3% 4 2 6 1 0 1 3 0.2% -0.4% 0 0 0 0 0 0 19 1.2% -0.7% 9 0 9 1 1 2 75 4.7% 0.5% 6 3 9 0 1 1 70 4.3% 0.5% 13 6 19 0 0 0 2 0.1% NC 0 0 0 0 0 0 424 PRINTING AND WRITING PAPER MERCHANT WHOLESALERS 4 0.2% 0.1% 2 0 2 0 0 0 425 BUSINESS TO BUSINESS ELECTRONIC MARKETS AUTOMOTIVE DEALERS AND GASOLINE SERVICE STATIONS FURNITURE STORES MISCELLANEOUS REPAIR SERVICES 0 0.0% -0.1% 0 0 0 0 0 0 6 0.4% -0.6% 1 0 1 0 0 0 0 0.0% -0.1% 0 0 0 0 0 0 2 0.1% NC 0 0 0 0 0 0 441 442 443 444 BUILDING MATERIALS, HARDWARE, GARDEN SUPPLY, AND MOBILE HOME DEALERS 2 0.1% -0.3% 1 0 1 0 0 0 445 SUPERMARKETS AND OTHER GROCERY (EXCEPT CONVENIENCE) STORES 2 0.1% -0.4% 0 0 0 0 0 0 TABLE X FISCAL YEAR 20051 INDUSTRY GROUP OF ACQUIRING PERSONS 3 DIGIT NAICS CODE INDUSTRY DESCRIPTION NUMBER4 PERCENT OF TOTAL CHANGE FROM FY 200413 12 CLEARANCE GRANTED TO FTC OR DOJ SECOND REQUEST INVESTIGATIONS3 FTC DOJ TOTAL FTC DOJ TOTAL 4 8 0.2% 0.5% -0.3% 0.1% 3 1 0 0 3 1 0 0 0 0 0 0 4 0.2% -0.3% 0 0 0 0 0 0 4 3 0.2% 0.2% 0.1% 0.1% 0 3 0 0 0 3 0 1 0 0 0 1 1 0.1% 0.1% 0 0 0 0 0 0 20 1.2% -0.1% 2 0 2 0 0 0 10 0 0.6% 0.0% 0.4% -0.1% 0 0 5 0 5 0 0 0 0 0 0 0 WATER TRANSPORTATION 5 0.3% -0.1% 0 1 1 0 0 0 484 MOTOR FREIGHT TRANSPORTATION AND WAREHOUSING 9 0.6% NC 0 1 1 0 0 0 485 LOCAL AND SUBURBAN TRANSIT AND INTERURBAN HIGHWAY PASSENGER TRANSPORTATION 2 0.1% 0.1% 0 0 0 0 0 0 13 0.8% -0.1% 5 0 5 2 0 2 8 1 3 0.5% 0.1% 0.2% 0.3% -0.3% NC 0 0 0 2 0 0 2 0 0 0 0 0 1 0 0 1 0 0 85 5.3% NC 3 10 13 1 3 4 4 82 24 0.2% 5.1% 1.5% -0.8% -0.3% -0.2% 0 4 0 2 9 3 2 13 3 0 2 0 1 5 0 1 7 0 1 0.1% NC 0 0 0 0 0 0 446 447 481 482 MISCELLANEOUS RETAIL FOOD STORES APPAREL AND ACCESSORY STORES SPORTING GOODS STORES GENERAL MERCHANDISE STORES STATIONERY AND OFFICE SUPPLIES HEATING OIL DEALERS AND LIQUEFIED PETROLEUM GAS TRANSPORTATION BY AIR RAILROAD TRANSPORTATION 483 448 451 452 453 454 486 488 492 493 511 512 513 514 516 PIPELINES, EXCEPT NATURAL GAS AIR TRAFFIC CONTROL COURIERS WAREHOUSING AND STORAGE PRINTING, PUBLISHING AND ALLIED INDUSTRIES MOTION PICTURES COMMUNICATIONS ON-LINE SERVICES INTERNET PUBLISHING AND BROADCASTING TABLE X FISCAL YEAR 20051 INDUSTRY GROUP OF ACQUIRING PERSONS 3 DIGIT NAICS CODE INDUSTRY DESCRIPTION NUMBER 4 PERCENT OF TOTAL CHANGE FROM FY 200413 12 517 518 519 521 522 523 524 525 531 532 533 541 551 561 562 611 621 TELECOMMUNICATIONS CLEARANCE GRANTED TO FTC OR DOJ SECOND REQUEST INVESTIGATIONS3 FTC DOJ TOTAL FTC DOJ TOTAL 2 0.1% NC 0 1 1 0 0 0 2 0.1% NC 0 0 0 0 0 0 0 0 0.0% 0.0% -0.1% NC 0 0 0 0 0 0 0 0 0 0 0 0 INTERNET SERVICE PROVIDERS, WEB SEARCH PORTALS, AND DATA PROCESSING SERVICES NEWS SYNDICATES DEPOSITORY INSTITUTIONS NONDEPOSITORY CREDIT INSTITUTIONS SECURITY AND COMMODITY BROKERS, DEALERS, EXCHANGES AND SERVICES INSURANCE CARRIERS INSURANCE AGENTS, BROKERS AND SERVICE LESSORS OF RESIDENTIAL BUILDINGS AND DWELLINGS AUTOMOTIVE REPAIR, SERVICES AND PARKING 45 2.8% 1.6% 0 1 1 0 1 1 158 9.8% 2.0% 4 10 14 0 3 3 42 2.6% -1.7% 5 7 12 0 0 0 16 1.0% 0.1% 1 2 3 0 0 0 8 0.5% 0.1% 0 0 0 0 0 0 8 0.5% 0.1% 2 1 3 0 0 0 LESSORS OF NONFINANCIAL INTANGIBLE ASSETS (EXCEPT COPYRIGHTED WORKS) 5 0.3% -0.1% 1 1 2 0 0 0 89 5.5% -0.7% 7 5 12 0 0 0 31 1.9% 1.8% 0 0 0 0 0 0 2 30 5 4 0.1% 1.9% 0.3% 0.2% 0.9% 1.6% NC -0.1% 2 0 0 0 0 0 0 0 2 0 0 0 0 1 0 0 0 0 0 0 0 1 0 0 SERVICES -- BUSINESS, LEGAL, ENGINEERING, ACCOUNTING, RESEARCH, MANAGEMENT AND RELATED SERVICES HOLDING AND OTHER INVESTMENT OFFICES TRANSPORTATION SERVICES SOLID WASTE COLLECTION EDUCATIONAL SERVICES HEALTH SERVICES TABLE X FISCAL YEAR 20051 INDUSTRY GROUP OF ACQUIRING PERSONS 3 DIGIT NAICS CODE INDUSTRY DESCRIPTION NUMBER 4 PERCENT OF TOTAL CHANGE FROM FY 200413 12 622 623 624 711 713 721 722 811 812 813 923 924 999 000 GENERAL MEDICAL AND SURGICAL; PSYCHIATRIC AND SUBSTANCE ABUSE HOSPITALS NURSING AND RESIDENTIAL CARE FACILITIES SOCIAL SERVICES REAL ESTATE AMUSEMENT AND RECREATION SERVICES HOTELS, ROOMING HOUSES, CAMPS, AND OTHER LODGING PLACES EATING AND DRINKING PLACES GENERAL AUTOMOTIVE REPAIR PERSONAL SERVICES MEMBERSHIP ORGANIZATIONS ADMINISTRATION OF HUMAN RESOURCE PROGRAMS CLEARANCE GRANTED TO FTC OR DOJ SECOND REQUEST INVESTIGATIONS3 FTC DOJ TOTAL FTC DOJ TOTAL 19 1.2% 0.1% 5 3 8 0 0 0 5 0.3% NC 7 1 8 0 0 0 1 2 0.1% 0.1% NC NC 0 0 1 0 1 0 0 0 0 0 0 0 3 0.2% -0.6% 2 0 2 2 0 2 4 0.2% -0.2% 2 0 2 0 0 0 17 1 3 0 1.1% 0.1% 0.2% 0.0% 0.2% -0.1% 0.1% NC 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0.0% NC 0 0 0 0 0 0 0 0.0% NC 0 0 0 0 0 0 ADMINISTRATION OF ENVIRONMENTAL QUALITY AND HOUSING PROGRAMS NONCLASSIFICABLE ESTABLISHMENTS NOT AVAILABLE14 0 0.0% -0.1% 0 0 0 0 0 0 139 8.6% 6.7% 5 5 10 2 0 2 ALL TRANSACTIONS 1,610 100.0% 183 120 303 25 25 50 Table XI FISCAL YEAR 20051 INDUSTRY GROUP OF ACQUIRED ENTITIES 3-DIGIT NAICS CODE11 INDUSTRY DESCRIPTION PERCENT CHANGE 4 FROM FY OF NUMBER TOTAL 200412 CLEARANCE GRANTED TO FTC OR DOJ SECOND REQUEST INVESTIGATIONS3 NUMBER OF 3 DIGIT INTRA-INDUSTRY TRANSACTIONS15 (the data series for this column was revised in April, 2008) 111 112 113 114 211 212 213 221 233 234 235 311 312 313 315 Agricultural Production - Crops Agricultural Production Livestock and Animal Specialties Lumber and Wood Products, Except Furniture Fishing, Hunting and Trapping Oil and Gas Extraction Mining and Quarrying of Nonmetallic Minerals, Except Fuels Drilling Oil and Gas Wells Electric, Gas and Sanitary Services Building Construction – General Contractors and Operative Builders Heavy Construction Other Than Building Construction Contractors Construction - Special Grade Contractors Food and Kindred Products Bottled and Canned Soft Drinks and Carbonated Drinks; and Cigarette Manufacturing Textile Mill Products Apparel and Other Finished Products Made From Fabrics and Similar Materials 0 0.0% -0.1% FTC 0 DOJ 0 TOTAL 0 FTC 0 DOJ 0 TOTAL 0 0 1 0.1% 0.1% 0 0 0 0 0 0 1 3 0.2% 0.1% 0 0 0 0 0 0 2 0 34 0.0% 2.1% NC 1.2% 0 4 0 1 0 5 0 2 0 1 0 3 0 17 10 0.6% 0.2% 2 0 2 0 0 0 2 12 0.7% 0.3% 0 2 2 0 2 2 7 46 2.9% -0.9% 1 5 6 0 2 2 29 2 0.1% 0.1% 0 0 0 0 0 0 0 4 0.2% -0.2% 0 0 0 0 0 0 4 4 0.2% -0.3% 0 0 0 0 0 0 2 26 1.6% -0.4% 3 3 6 1 2 3 18 17 1.1% 0.6% 6 0 6 2 0 2 10 2 0.1% NC 0 0 0 0 0 0 0 1 0.1% NC 0 0 0 0 0 0 1 Table XI FISCAL YEAR 20051 INDUSTRY GROUP OF ACQUIRED ENTITIES 3-DIGIT NAICS CODE11 INDUSTRY DESCRIPTION PERCENT CHANGE 4 FROM FY OF NUMBER TOTAL 200412 CLEARANCE GRANTED TO FTC OR DOJ SECOND REQUEST INVESTIGATIONS3 NUMBER OF 3 DIGIT INTRA-INDUSTRY TRANSACTIONS15 (the data series for this column was revised in April, 2008) 316 321 322 324 325 326 327 331 332 333 334 335 336 337 Leather and Leather Products Sawmills Paper and Allied Products Petroleum Refining and Related Industries Chemicals and Allied Products Rubber and Misc. Plastics Products Stone, Clay, Glass and Concrete Products Iron and Steel Mills Fabricated Metal Products, Except Machinery and Transportation Equipment Industrial and Commercial Machinery and Computer Equipment Measuring, Analyzing and Controlling Instruments; Photographic, Medical and Optical Goods; Watches and Clocks Electronic and Other Electrical Equipment and Components, Except Computer Equipment Transportation Equipment Home Furniture, Furnishings and Equipment Stores 2 9 10 0.1% 0.6% 0.6% 0.1% NC -0.2% FTC 0 0 0 DOJ 1 1 1 TOTAL 1 1 1 FTC 0 0 0 DOJ 0 0 1 TOTAL 0 0 1 1 5 5 10 0.6% 1.4% 3 0 3 1 0 1 4 76 4.7% 0.4% 24 1 25 4 1 5 55 24 1.5% 0.5% 5 0 5 1 0 1 16 20 1.2% 0.5% 2 2 4 1 0 1 7 24 1.5% 0.8% 4 2 6 0 0 0 9 31 1.9% -0.1% 2 4 6 1 2 3 10 21 1.3% 1.0% 2 4 6 0 0 0 11 69 4.3% 1.4% 8 12 20 0 1 1 47 21 1.3% -0.4% 2 3 5 0 2 2 11 34 2.1% 1.8% 5 3 8 1 0 1 18 4 0.2% -0.1% 0 0 0 0 0 0 2 Table XI FISCAL YEAR 20051 INDUSTRY GROUP OF ACQUIRED ENTITIES 3-DIGIT NAICS CODE11 INDUSTRY DESCRIPTION PERCENT CHANGE 4 FROM FY OF NUMBER TOTAL 200412 CLEARANCE GRANTED TO FTC OR DOJ SECOND REQUEST INVESTIGATIONS3 NUMBER OF 3 DIGIT INTRA-INDUSTRY TRANSACTIONS15 (the data series for this column was revised in April, 2008) FTC DOJ TOTAL FTC DOJ TOTAL 339 Miscellaneous Manufacturing Industries 24 1.5% -0.4% 6 0 6 0 0 0 13 421 Wholesale Trade - Durable Goods 97 6.0% 1.9% 10 0 10 0 0 0 49 72 4.5% 1.7% 14 3 17 3 0 3 49 2 0.1% -0.2% 0 0 0 0 0 0 1 5 0.3% 0.2% 2 0 2 0 0 0 0 2 0.1% 0.6% 0 0 0 0 0 0 2 2 0.1% NC 0 0 0 0 0 0 1 2 0.1% NC 1 0 1 0 0 0 1 3 0.2% -0.1% 0 0 0 0 0 0 1 8 10 10 8 14 2 0.5% 0.6% 0.6% 0.5% 0.9% 0.1% 0.1% 0.4% 0.1% 0.4% 0.7% 0.1% 3 1 0 0 4 0 0 0 0 0 0 0 3 1 0 0 4 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 4 6 3 4 3 1 14 0.9% NC 3 0 3 0 0 0 10 10 0 0.6% 0.0% 0.2% 0.3% 0 0 5 0 5 0 0 0 0 0 0 0 6 0 422 423 424 441 443 444 445 446 447 448 451 452 453 454 481 482 Wholesale Trade - Nondurable Goods Automobile and other Motor Vehicle Merchant Wholesalers Printing and Writing Paper Merchant Wholesalers Automotive Dealers and Gasoline Service Stations Miscellaneous Repair Services Building Materials, Hardware, Garden Supply, and Mobile Home Dealers Supermarkets and Other Grocery (except Convenience) Stores Miscellaneous Retail Food Stores Apparel and Accessory Stores Sporting Goods Stores General Merchandise Stores Stationery and Office Supplies Heating Oil Dealers and Liquefied Petroleum Gas Transportation by Air Railroad Transportation Table XI FISCAL YEAR 20051 INDUSTRY GROUP OF ACQUIRED ENTITIES 3-DIGIT NAICS CODE11 INDUSTRY DESCRIPTION PERCENT CHANGE 4 FROM FY OF NUMBER TOTAL 200412 CLEARANCE GRANTED TO FTC OR DOJ SECOND REQUEST INVESTIGATIONS3 NUMBER OF 3 DIGIT INTRA-INDUSTRY TRANSACTIONS15 (the data series for this column was revised in April, 2008) 483 0 0.0% -0.4% FTC 0 DOJ 0 TOTAL 0 FTC 0 DOJ 0 TOTAL 0 0 7 0.4% 0.2% 0 1 1 0 0 0 5 1 0.1% NC 0 0 0 1 0 1 1 17 11 0 2 1.1% 0.7% 0.0% 0.1% 0.2% 0.2% -0.1% -0.3% 4 0 0 0 0 1 0 0 4 1 0 0 0 0 0 1 0 0 0 0 0 0 0 1 10 4 0 1 89 5.5% 0.9% 3 12 15 1 3 4 63 12 102 32 1 0.7% 6.3% 2.0% 0.1% 0.3% 1.9% 0.3% NC 0 5 0 0 3 11 3 0 3 16 3 0 0 0 0 0 1 3 0 0 1 3 0 0 4 50 18 0 1 0.1% 0.1% 1 0 1 0 0 0 0 0 0.0% NC 0 0 0 0 0 0 0 521 Water Transportation Motor Freight Transportation and Warehousing Local and Suburban Transit and Interurban Highway Passenger Transportation Pipelines, Except Natural Gas Air Traffic Control Couriers Warehousing & Storage Printing, Publishing and Allied Industries Motion Pictures Communications On-line Services Telecommunications Internet Service Providers, Web Search Portals, and Data Processing Services Depository Institutions 522 Nondepository Credit Institutions 48 3.0% 0.3% 0 3 3 0 1 1 27 523 Security and Commodity Brokers, Dealers, Exchanges and Services 120 7.4% 4.5% 1 7 8 0 2 2 72 48 3.0% -0.8% 4 5 9 0 0 0 28 1 0.1% NC 0 0 0 0 0 0 0 484 485 486 488 492 493 511 512 513 514 517 518 524 525 Insurance Carriers Insurance Agents, Brokers and Service Table XI FISCAL YEAR 20051 INDUSTRY GROUP OF ACQUIRED ENTITIES 3-DIGIT NAICS CODE11 INDUSTRY DESCRIPTION PERCENT CHANGE 4 FROM FY OF NUMBER TOTAL 200412 CLEARANCE GRANTED TO FTC OR DOJ SECOND REQUEST INVESTIGATIONS3 NUMBER OF 3 DIGIT INTRA-INDUSTRY TRANSACTIONS15 (the data series for this column was revised in April, 2008) 531 532 533 541 551 561 562 611 621 622 623 624 711 713 721 722 811 Lessors of Residential Buildings and Dwellings Automotive Repair, Services and Parking Lessors of Nonfinancial Intangible Assets (except Copyrighted Works) Engineering, Accounting, Research, Management and Related Services Holding and Other Investment Offices Transportation Services Solid Waste Collection Educational Services Health Services General Medical and Surgical; Psychiatric and Substance Abuse Hospitals Nursing and Residential Care Facilities Social Services Real Estate Amusement and Recreation Services Hotels, Rooming Houses, Camps, and Other Lodging Places Eating and Drinking Places General Automotive Repair FTC DOJ TOTAL FTC DOJ TOTAL 7 0.4% NC 0 0 0 0 0 0 5 13 0.8% 0.1% 3 2 5 0 0 0 5 13 0.8% 0.3% 4 0 4 0 0 0 3 111 6.9% 1.6% 14 5 19 0 0 0 63 2 0.1% NC 0 0 0 0 0 0 0 27 10 3 17 1.7% 0.6% 0.2% 1.1% -0.2% 0.4% -0.1% 1.0% 2 0 0 6 2 3 0 2 4 3 0 8 1 0 0 2 0 0 0 0 1 0 0 2 14 3 2 8 21 1.3% 0.3% 8 1 9 0 0 0 15 5 0.3% 0.7% 0 0 0 0 0 0 3 1 3 0.1% 0.2% -0.1% 0.2% 0 0 1 3 1 3 0 0 0 0 0 0 1 0 12 0.7% -0.1% 2 0 2 2 0 2 6 12 0.7% 0.4% 2 0 2 0 0 0 2 14 5 0.9% 0.3% 0.5% -0.1% 0 0 0 0 0 0 0 0 0 0 0 0 4 1 Table XI FISCAL YEAR 20051 INDUSTRY GROUP OF ACQUIRED ENTITIES 3-DIGIT NAICS CODE11 INDUSTRY DESCRIPTION PERCENT CHANGE 4 FROM FY OF NUMBER TOTAL 200412 CLEARANCE GRANTED TO FTC OR DOJ SECOND REQUEST INVESTIGATIONS3 NUMBER OF 3 DIGIT INTRA-INDUSTRY TRANSACTIONS15 (the data series for this column was revised in April, 2008) 812 813 923 924 999 000 Personal Services Membership Organizations Administration of Human Resource Programs Administration of Environmental Quality and Housing Programs Nonclassificable Establishments Not Available 10 3 0 0.2% 0.0% 0.2% NC FTC 0 0 DOJ 0 0 TOTAL 0 0 FTC 0 0 DOJ 0 0 TOTAL 0 0 2 0 0 0.0% NC 0 0 0 0 0 0 0 0 0.0% NC 0 0 0 0 0 0 0 0 39 1,612 0.0% 2.4% 100.0% -15.8% 1.7% 0 7 183 0 2 120 0 9 303 0 0 25 0 1 25 0 1 50 0 1 869 1 Fiscal year 2005 figures include transactions reported between October 1, 2004 and September 30, 2005. The size of transaction is based on the aggregate total amount of voting securities and/or assets held by the acquiring person as a result of the transaction and is taken from the response to Item 3(b)(ii) and 3(c) of the Notification and Report Form. 2 3 4 These statistics are based on the date the Second Request was issued. During fiscal year 2005, 1,695 transactions were reported under the HSR Premerger Notification program. The smaller number 1,610 reflects the adjustments to eliminate the following types of transactions: (1) transactions reported under Section 7A(c)(6) and (c)(8), (transactions involving certain regulated industries and financial businesses); (2) transactions deemed non-reportable; (3) incomplete transactions (only one party in each transaction filed a compliant notification); and (4) transactions withdrawn before the waiting period began. The table does not, however, exclude competing offers or multiple party transactions (transactions involving two or more acquired persons). 5 The total number of filings under $50M submitted in Fiscal Year 2005 is corrective filings. 6 See supra, Appendix A note 4. 7 In February 2001, legislation raised the size-of-transaction threshold from $15 million to $50 million with annual adjustments beginning in February 2005. The total number of filings includes filings made at the $50M, $100M, and $500M thresholds. 8 This category includes newly-formed acquiring persons, foreign acquiring persons with no United States revenues, and acquiring persons who had not derived any revenues from their investments at the time of filing. 9 Assets of an acquired entity are available when the acquired entity’s financial data is consolidated within its ultimate parent. 10 Sales of an acquired entity are taken from responses to Item 4(a) and (b) (SEC documents and annual reports) or Item 5 (dollar revenues) of the Premerger Notification and Report Form. 11 This category includes acquisition of newly-formed entities from which no sales were generated, and acquisitions of assets which produced no sales revenues during the prior year to filing the Notification and Report form. 12 The 3-digit codes are part of the North American Industrial Classification System (NAICS) established by the United States Government North American Industrial Classification System 1997, Executive Office of President, Office of Management and Budget. The NAICS groups used in this table were determined from responses submitted by parties to Item 5 of the Premerger Notification and Report Form, effective July 1, 2001. 13 This represents the deviation from the fiscal year 2004 percentage. 14 This category includes transactions by newly-formed entities. 15 The intra-industry transactions column identifies the number of acquisitions in which both the acquiring and acquired persons derived revenues from the same industry. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Aftc%3A01c0f64467683ca2. Public record. Not legal advice.