Results of 1988-1997 Baldrige Award Recipients
Common Stock Comparison

Methodology:
A hypothetical sum was invested in each of the 1988-1997, publicly-traded Baldrige Award recipient’s common stock, in the year they applied for the Award. The investment was tracked from the first business day of the month following the announcement of the Award recipients, (or the date when they began public trading, if it is later) through December 1, 1998. $1,000 was invested in each whole company, and for subsidiaries the sum invested was $1,000 multiplied by the percent of the whole company's employee base the subunit represented at the time of its application. The same total dollar amount was invested in the Standard & Poor's (S&P) 500 on the same day. If a subunit was sold to another parent company, or if a company divested or merged, it was the subunit whose progress was followed, not the parent company's progress. The value of the original stock at the time of sale was determined and that dollar amount was reinvested in the new parent company.

Adjusting for stock splits, the value on December 1, 1998 was calculated. Information is reported two ways: all publicly-traded Award recipients and only whole company Baldrige Award recipients. The 23 publicly-traded Award recipients, as a group, outperformed the S&P 500 by approximately 2.5 to 1, achieving a 425.63% return compared to a 173.27% return for the S&P 500. The group of six, publicly traded, whole company Award recipients outperformed the S&P 500 by 2.6 to 1, achieving a 459.67% return compared to a 175.43% return for the S&P 500. A summary of the results follows.

Results of 1990-1997 Baldrige Site Visited Applicants
Common Stock Comparison

Methodology:
A hypothetical sum was invested in each 1990-1997 publicly-traded, site visited applicant's common stock in the year they applied for the Award or in the year they became public. The investment was tracked from the first business day of the month following the announcement of the Baldrige Award recipients (or the date when they began public trading, if it is later) through December 1, 1998. $1,000 was invested in each whole site visited company. For subsidiaries, the sum invested was $1,000 x the percent of the parent company's employee base the subunit represented at the time they received a site visit or at the time they became public as a result of a merger or acquisition by a new parent. The same total dollar amount was invested in the S&P 500 on the same day.

Adjusting for stock splits, the value on December 1, 1998 was calculated. Information is reported four ways: all publicly-traded site visited applicants, all whole company site visited applicants, and each of those groups without the winning companies included. (Note: a company may be included multiple times if they received more than one site visit.)

The 65 publicly-traded site visited applicants, as a group, outperformed the S&P 500 by approximately 55% achieving a 204.40% return compared to a 132.0% return for the S&P 500. The group of twelve whole company site visited applicants outperformed the S&P 500 by almost 56%, achieving a 201.33% return compared to a 128.97% return for the S&P 500. Names of Baldrige applicants are kept confidential. A summary of the results follows.

AWARD RECIPIENTS INCLUDED IN THE STOCK STUDY
(Those not included were not publicly held at the time of the study)

ADAC Laboratories
Eastman Chemical Company
Federal Express Corporation
Motorola, Inc.
Solectron Corporation (1991 and 1997)

Subunit Award Recipients (with parent company)
(The sum invested was $1000 x the % of the parent company’s employee base that the subunit represented at the time the subunit applied.)*

3M Dental Products Division (1997)
3M

Armstrong Building Products Operations (1995)
Armstrong World Industries, Inc.

AT&T Consumer Communication Services (1994)
Consumer Markets Division of AT&T

AT&T Network Systems - Transmission Systems Business Unit (1992)
Lucent Technologies, Inc., Network Systems

AT&T Universal Card Services (1992)
Citigroup

Cadillac Motor Car Company (1990)
General Motors

Corning Telecommunications Products Division (1995)
Corning Incorporated

Dana Commercial Credit Corporation (1996)
Dana Corporation

GTE Directories Corporation (1994)
GTE Corporation

IBM Rochester, AS/400 Division (1990)
IBM Corporation

Merrill Lynch Credit Corporation (1997)
Merrill Lynch & Co.

Texas Instruments Incorporated - Defense Systems & Electronics Group (1992)
Raytheon Company

The Ritz Carlton Hotel Company (1992) (First included in 1997 study)
Marriott International
*(Ritz Carlton became public when it was acquired by Marriott International. The sum invested was based on the sum of Marriott’s employee base.)

Westinghouse Commercial Nuclear Fuel Division (1988)
CBS

Xerox Business Products & Systems (1989)
Xerox Corporation

Xerox Business Services (1997)
Xerox Corporation

Zytec Corporation (1991)
Artesyn Technologies
*(As of 12/29/97 Zytec Corporation merged with Computer Products and formed Artesyn Technologies. Dollars invested in Zytec were carried forward into Atesyn with a 1.33 split multiplier.)

NIST Stock Study of Malcolm Baldrige
National Quality Award Recipients

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