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GENERAL ELECTRIC TOPS FORTUNE'S LIST OF AMERICA'S MOST ADMIRED COMPANIES

Toyota is first non-U.S. company to make top ten;
Dell drops from top spot last year to No. 8

New York, February 21, 2006—FORTUNE announced today that General Electric is No. 1 on the 24th annual list of America's Most Admired Companies. The Fairfield, Connecticut-based company moves up from the No. 2 spot it held last year, displacing Dell, which drops to No. 8. Wal-Mart, No. 4 last year, drops to No. 12 on the list, which for the first time has 20 companies. "The early 21st century has been brutal on corporate reputations," says senior writer Anne Fisher in her introduction to the list. "Nevertheless, there are many companies to admire out there. That is why FORTUNE is publishing the top 20 Most Admired Companies, not the top ten, as in previous years." With foreign firms like Toyota cracking the elite, the pool of talent is deeper than ever. The longer list also allows FORTUNE to recognize rising stars such as Apple (No. 11), Costco (No. 15 tie), and the return of 3M (No. 20). The list and related stories appear in the March 6 issue, on newsstands February 27 and at www.fortune.com on February 21.

Other companies in the top 20 include: FedEx (No. 2); Southwest Airlines (No. 3); Procter & Gamble (No. 4); Starbucks (No. 5); Johnson & Johnson (No. 6); Berkshire Hathaway (No. 7); Toyota Motor (No. 9); Microsoft (No. 10); Wal-Mart (No. 12); United Parcel Service (No. 13 tie); Home Depot (No. 13 tie); PepsiCo (No. 15 tie); American Express (No. 17); Goldman Sachs (No. 18); and IBM (No. 19).

On this year's list, a number of recent leaders moved down from the top spots. "Besieged by criticism and a slumping stock, Wal-Mart tumbled from No. 4 to No. 12," says Fisher. "Slowing growth, missed earnings targets, and a half-billion-dollar write-off for a botched batch of products sent Dell down to No. 8; surprisingly, it didn't make the top half among companies in the computer industry and therefore does not feature in that list at all. Moving in the other direction, though, were FedEx, Procter & Gamble, and Johnson & Johnson. These three all made substantial jumps in our rankings. What the three new stars have in common—besides being big and profitable—is a willingness to chart a course and stick to it, regardless of what competitors, analysts, or know-it-all journalists have to say. This is not to say that Wal-Mart and Dell don't consider the big picture. Of course they do, and that is surely a factor in their staying in the top 15. But it looks as if this is the year that FedEx, P&G, and J&J are getting rewarded—at least in terms of recognition from their peers—for thinking long term and then delivering."

Other facts about the 2006 Most Admired Companies list include:

And in "What Makes GE Great," Geoffrey Colvin explains why General Electric is on the Most Admired list, despite the fact that among companies on the list it isn't the biggest or most profitable, it's not the fastest growing or most valuable, and its stock price has been practically inert for years. "Through good years and bad, GE consistently does things the rest only wish they could," says Colvin. "For the past century or so, GE has continually set the agenda of management ideas and practices that other companies will follow." Another thing that sets GE apart, according to Colvin, is the ability to change direction unabashedly.

To compile the Most Admired list, FORTUNE enlisted the help of Hay Group, which sorted the FORTUNE 1,000 and the top foreign companies operating in the U.S. into 65 industry lists, each containing the ten largest companies. Hay then surveyed executives, directors, and analysts, asking them to rate companies in their own industry according to eight criteria: Innovation; People Management; Financial Soundness; Quality of Management; Use of Corporate Assets; Social Responsibility; Long-term Investment; and Quality of Products/Services. To create the top 20 list, Hay Group asked the 10,000 respondents to the industry survey to select the ten companies they admired most, regardless of category. These were chosen from a list of the companies that ranked among the top 25% in last year's survey, plus those that finished in the top 20% of their industry. A total of 611 companies in 70 industries were surveyed.