Wal-Mart Tops FORTUNE's List of America's Most Admired Companies; General Electric, Which Held...

Business Editors/Energy Editors

NEW YORK--(BUSINESS WIRE)--Feb. 18, 2003

FORTUNE announced today that Wal-Mart, the Arkansas-based retail giant, is No. 1 on the magazine's annual survey of Most Admired Companies, marking the first time in the survey's 21-year history that the

"The planting of Wal-Mart's flag atop yet another summit caps a year in which the company seemed to ignore both the economic slowdown and the swirling corporate scandals," says Nicholas Stein, who wrote the introduction to the list.

As striking as Wal-Mart's rise is the fall of General Electric, which held the No. 1 spot for the past five years. This can be attributed in part to Wall Street's increasing impatience with opaque financial statements after the demise of Enron, as well as the very public breakup of former CEO Jack Welch's marriage.

Rounding out the top ten are Southwest Airlines (No. 2); Berkshire Hathaway (No. 3); Dell Computer (No. 4); General Electric (No. 5); Johnson & Johnson (No. 6); Microsoft (No. 7); FedEx (No. 8); Starbucks (No. 9); and Procter & Gamble (No. 10). The list and related stories appear in the March 3 issue of FORTUNE, available on newsstands February 24 and at www.fortune.com on Tuesday, February 18.

The three other companies ousted from this year's list--Intel, Home Depot and Citigroup--have also taken hits. "Chipmaker Intel, facing the worst slump in the history of the PC industry, earned $3.1 billion last year--ahead of 2001 but down 70% from 2000," says Stein. "The company's shares have declined 80% from their 2000 high of nearly $75. At Home Depot, where once-sizzling growth has slowed, the stock lost 52% of its value in 2002, the largest drop of any company on the Dow. As for Citigroup, its "reputation was tarnished when the company was fined $400 million last year after being implicated in the industry-wide scandal over conflicts of interest between investment banking and research divisions."

The total return of the ten Most Admired Companies in 2002 was down 8.63%--more than 13% higher than the total return on the S&P 500. Furthermore, the top ten won the business world's regard by refocusing attention where it counts the most: on customers and employees.

FORTUNE's Most Admired Companies issue also ranks companies by industry. For these rankings, the Hay Group took the ten largest companies by revenues in 66 industries, including large subsidiaries of foreign firms. They surveyed 10,000 executives, directors, and securities analysts who rated the companies in their industries using eight criteria (social responsibility, innovation, long-term investment value, use of corporate assets, employee talent, financial soundness, quality of products/services, and quality of management).

To create the top ten list, the Hay Group asked respondents to select the ten companies they admired most in any industry, based on a list of companies that ranked in the top 25% in last year's survey, as well as companies that ranked below the first quartile overall but finished in the top 20% of their industry. Thus a company could score high on its industry list but not make the list of ten Most Admired Companies.

    AMERICA'S MOST ADMIRED COMPANIES 2003

    1 - Wal-Mart Stores

    2 - Southwest Airlines

    3 - Berkshire Hathaway

    4 - Dell Computer

    5 - General Electric

    6 - Johnson & Johnson

    7 - Microsoft

    8 - FedEx

    9 - Starbucks

    10 - Procter & Gamble


                      America's Most Admired 2003
                              Industry #1

FINANCIAL INDUSTRY
1- Securities
    1    Bear Stearns
2 - Megabanks
    1    Citigroup
3 - Superregional Banks
    1    Fifth Third Bancorp
4 - Consumer Credit
    1    American Express
5 - Mortgage Services
   1     Golden West Financial
6 - Insurance: Life & Health
    1    Northwestern Mutual
7 - Insurance: Property & Casualty
    1    Berkshire Hathaway

SHELTER
8 - Building Materials, Glass
    1    Texas Industries
9 - Engineering Construction
    1    Jacobs Engineering Group
10 - Real Estate
     1   Simon Property Group
11 - Home Equip., Furnishings
     1   Fortune Brands
12 - Homebuilders
     1   Lennar
13 - Furniture
     1   Hon Industries

CONTRACTED SERVICES
14 - Diversified Outsourcing
     1   Aramark
15 - Temporary Help
     1   Manpower
16 - Health Care
     1   WellPoint Health Networks
17 - Payroll Services
     1   Automatic Data Processing

CONSUMER PRODUCTS
18 - Beverages
     1   PepsiCo
19 - Consumer Food Products
     1   Nestle USA
20 - Tobacco
     1   Philip Morris
21 - Apparel
     1   Liz Claiborne
22 - Food Production
     1   Tyson Foods
23 - Household & Personal Products
     1   Procter & Gamble

STORES AND DISTRIBUTORS
24 - Wholesalers: Electrn., Office
     1   Ingram Micro
25 - Wholesalers: Diversified
     1   W.W. Grainger
26 - Wholesalers: Food, Grocery
     1   Sysco
27 - Wholesalers: Health Care
     1   Cardinal Health
28 - General Merchandisers
     1   Wal-Mart Stores
29 - Specialty Retailers
     1   Lowe's
30 - Food and Drug Stores
     1   Walgreen
31 - Food Services
     1   Starbucks

COMPUTERS AND COMMUNICATIONS
32 - Computers
     1   IBM
33 - Computer Peripherals
     1   Storage Technology
34 - Computer Software
     1   Microsoft
35 - Computer and Data Services
     1   First Data
36 - Network Communications
     1   Corning
37 - Telecommunications
     1   SBC Communications

NATURAL RESOURCES
38 - Mining, Crude-Oil Production
     1   Apache
39 - Forest and Paper Products
     1   International Paper
40 - Pharmaceuticals
     1   Johnson & Johnson
41 - Chemicals
     1   DuPont
42 - Metals
     1   Alcoa
43 - Packing Containers
     1   Pactiv

PRECISION
44 - Semiconductors
     1   Intel
45 - Electronics
     1   General Electric
46 - Precision Equipment
     1   3M
47 - Medical Products, Equipment
     1   Medtronic

POWER
48 - Petroleum Refining
     1   BP America
49 - Electric and Gas Utilities
     1   Southern
50 - Energy
     1   Duke Energy
51 - Oil and Gas Equipment, Svcs.
     1   Smith International


MEDIA AND ENTERTAINMENT
52 - Entertainment
     1   Viacom
53 - Publishing
     1   New York Times
54 - Hotels, Casinos, Resorts
     1   Marriott International
55 - Printing
     1   R.R. Donnelly & Sons
56 - Advertising, Marketing
     1   Omnicom Group


THINGS THAT MOVE
57 - Motor Vehicles
     1   Toyota Motor Sales USA
58 - Motor Vehicle Parts
     1   Lear
59 - Automotive Retailing Svcs.
     1   AutoNation
60 - Industrial and Farm Equip.
     1   Caterpillar
61 - Transportation
     1   C.H. Robinson Worldwide
62 - Aerospace and Defense
     1   United Technologies
63 - Airlines
     1   Southwest Airlines
64 - Trucking
     1   Yellow
65 - Railroads
     1   Union Pacific
66 - Delivery
     1   United Parcel Service