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See attached release for more information on the 2005 FORTUNE 500 list.

Wal-Mart's $288 Billion Meeting by Brent Schlender, page 30
The Saturday morning meeting is—perhaps more than anything else in founder Sam Walton's copious bag of tricks—the management tool that has enabled Wal-Mart to metamorphose from a small-town variety store into the world's largest company. Wal-Mart executives agreed to let FORTUNE editor-at-large Brent Schlender do something no business journalist had ever done: spend several months studying the company's unconventional approach to the business meeting. "Think of these meetings as the human and managerial counterparts of the company's vaunted logistics systems. They are designed to react almost instantly to the up-to-the-second workings of the entire enterprise. And lately they have become a means for [CEO Lee] Scott and his management team to improve the morale of a company facing severe public criticism."

Wal-Mart: Bruised and Battling, by Andy Serwer, page 42
Wal-Mart, the No. 1 company in the FORTUNE 500 had a pretty good year in 2004. Sales climbed 10% to an astonishing $288 billion, while profits rose 13% to more than $10 billion. And yet the company is embattled as it has never been before. Sex-discrimination litigation, wage and pay disputes, fights with unions, and other workplace problems have left Wal-Mart at loggerheads with plaintiffs lawyers, federal investigators, and the public. Andy Serwer looks at how the retail giant is combating its problems—many of which stem from Sam Walton's successors following the letter of his rules, not the spirit—by employing a variety of tactics, including carrots, sticks, money, lawyers, and jawboning. "That's appropriate, given that it faces all manner of difficulties," says Serwer, "but its actions can appear muddled and uncoordinated too."

Mickey Mao, by Clay Chandler, page 48
Robert Iger, recently chosen to succeed Disney CEO Michael Eisner, visited China four times last year, inspecting progress on the theme park Disney is building there, catching an NBA game in Shanghai, and chatting with China's president in Beijing. "The way Iger sees it," says Clay Chandler, "China, with 290 million people under the age of 14—more potential Mouseketeers than the entire U.S. population—isn't just a growth opportunity, 'it's a needle mover.'" But as Chandler reports, if you're a foreign multinational selling autos, mobile phones, or fried chicken, China waits with open arms. But if you happen to be a giant media and entertainment company such as Disney, be prepared for red tape. "China has raised regulation of the industry to a fine and excruciating art," says Chandler.

Intel: New Man, New Plan, by Adam Lashinsky, page 54
As the world's top chipmaker, Intel has a near monopoly on microprocessor chips and is an amazing money machine. But lately it has gotten nowhere in its hoped-for growth markets, notably chips for cellphones. It has suffered a series of embarrassing cancellations, and multibillion-dollar acquisitions have generated negligible returns. This is why the company chose Paul Otellini as its next CEO. Intel doesn't need another great technologist, says Adam Lashinsky. "Instead, it needs a dispassionate numbers guy, someone who understands both how to listen to customers and how to package products for new markets; who isn't driven purely by engineering passion; and who knows that Moore's law is not only something to exploit but also something to fear. For better or for worse, Intel needs Paul Otellini."

Get Me a CEO from GE!, by Ellen Florian Kratz, page 63
Anywhere else such an outflow of talent would be cause for alarm; at GE it's just a strong graduating class. But what happens to these executives when they try to bring the "GE way" to their new companies? In some cases it's a fit, in others a culture clash. How do the numbers stack up? "When FORTUNE compared the performance of 34 current and former GE transplants against the S&P 500, the results were perfectly split: 17 beat the S&P 500, and 17 did not.

Is AmEx Playing Its Cards Right?, by Julie Creswell, page 68
Though American Express is posting huge profits and has one of the richest price/earnings ratios on Wall Street, CEO Kenneth Chenault is about to spin off a huge unit—American Express Financial Advisors—that has long been a headache. Meanwhile the courts have recently allowed banks to issue AmEx cards for the first time, essentially handing the company the keys to a brand-new market and giving AmEx the opportunity to become a serious competitor to Visa and MasterCard in the consumer segment for the first time. Julie Creswell looks at how Chenault plans to create a "new AmEx"—a supercharged version of the 155-year-old company.

The Truth About Halliburton, by Peter Elkind, page 74
While Halliburton's Middle East operation is the subject of scathing audits and investigations, the company's troubles go far beyond its misadventure in Iraq, which is just the most visible example in a string of self-inflicted fiascos. Federal prosecutors are now investigating how the company sidestepped U.S. sanctions against doing business in Iran. In addition to Iraq, a $2.5 billion construction project off the coast of Brazil and Halliburton's asbestos-liability problem, which ended up costing $5.1 billion, have contributed to a distinctly underwhelming bottom line. "Halliburton is awash in problems," reports senior writer Peter Elkind. "They're just not what you think. The politician who ran the company from 1995 to 2000 will not be remembered as a great, or even good, CEO. But the real story is the businessman who replaced him. Halliburton isn't a company consumed by systemic fraud and corruption. It's simpler than that. The problem is just poor leadership."

In FIRST: Poor Little Rich Company On the back of $55 oil, Exxon Mobil has become one of the world's richest companies. And that's the problem. Doesn't Anyone Know How to Run a Drug Company? Increasingly specialized managers have led to a dearth of qualified pharm executives. Missing from the Morgan Stanley Mess: John Mack The loser of the 2001 war for control of the investment bank is notably silent during the blitz to unseat former rival Phil Purcell. The SEC Turns the Screws on "Gatekeepers" In an action against Time Warner, the SEC shows that an executive can be liable if he's in a position to detect wrongdoing below him and doesn't try to prevent it. Inside Track Hewlett-Packard's new chief, Mark Hurd, is not just an "anti-Carly." Videogame Geeks Go to Hollywood Microsoft, Electronic Arts, and others are going to the movies—on their own terms. Question Authority Qualcomm's Paul Jacobs on taking over from Dad, wireless television, and rooting for the home team. Value Driven We're a nation helpless to save ourselves.

FORTUNE, part of Time Inc., is the global leader in business, known for its unrivalled access to industry leaders and decision-makers throughout the world. FORTUNE's European edition, based in London, is dedicated to covering European business from a trademark global perspective. With a European circulation of 100,000 and a worldwide circulation of 1,020,000, FORTUNE is one of the fastest growing magazines in the world. Founded in 1930, FORTUNE has grown to a worldwide circulation of over one million and a readership in excess of five million.

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