The Post 200
With Terrence O'Hara
Washington Business Editor
Monday, April 29, 2002; 2 p.m. EDT

The Post 200 starts with a list of the 125 largest public companies headquartered in Washington and its suburbs, ranked from largest to smallest. washingtonpost.com added an additional 25 companies to the list, rounding it out to 150. Completing the 200 are lists of the 20 largest financial institutions with headquarters in the region, the 15 largest private companies headquartered in the Washington area, and the 20 largest public companies each in Maryland and Virginia that are headquartered outside the Washington area.

Washington Business editor Terence O'Hara, on Monday, April 29 at 2 p.m. EDT, talks about the 21st year the Post has compiled its list of the 200 biggest companies in the Washington area.

"We're used to losing companies off The Washington Post's annual compilation of the 200 biggest firms in the Washington area. Usually they disappear because they merged or were bought by a company based outside the region. That's why Raul Fernandez's Proxicom Inc., for example, disappeared from the list. Ditto New York-based AOL Time Warner Inc.

But 2001 was different. Never have so many of Washington's big public companies simply ceased to exist in the space of 12 months -- not because of mergers, but because they just went out of business. Five major companies on last year's Post 200 went into liquidation in 2001. Seven more appear to be heading in that direction" Lessons Amid the Losses (Post, April 29).

Below is the transcript.

Editor's Note: Washingtonpost.com moderators retain editorial control over Live Online discussions and choose the most relevant questions for guests and hosts; guests and hosts can decline to answer questions.

Terence O'Hara: Hello. Welcome to the Post 200 online chat. My name is Terry O'Hara, and for three years I've headed up the Post's annual compilation of the largest 200 companies in the Washington area. I'd like to say a few words about the scope of the research project so everyone will have a good idea as to what we're talking about. The Post 200 starts off with the largest 125 companies in the Washington area; specifically, those based in D.C. and the immediate surrounding counties including Howard, Anne Arundel, Loudoun and Prince William Counties. Then we take the largest 20 financial institutions (banks, savings & loans, etc.); the 20 largest companies in Virginia and Maryland, respectively, not based in the Post's primary geographic area; and the 15 largest privately owned companies. That makes 200. As an addendum, we publish the 10 largest corporate employers not based in the Washington area. The goal is to as completely and accurately as possible describe the corporate community of the region. Readers have used it for about every imaginable business purpose. Researchers, marketing professionals, competitors, journalists, demographers and economic development officials use it regularly.

Alexandria, Va.: Do you measure size in terms of numbers of employees?

How many employees does the smallest IT firm on your list have?

Terence O'Hara: We publish two employee numbers for each company in the region: total employment and local employment.

The smallest information technology company in the region, Xybernaut, a wearable computer maker, has 145 employees. IT companies tend to have more employees per dollar of revenue than many other types of business. Their capital is their people, after all.

Fairfax, Va.: I skimmed through the insert today looking for information about the companies that have a direct impact on where I live. I am speaking of developers, such as Centex and the Hazel brothers. Why was there no information on them? Are they too small or headquartered outside of area? Where is a good place to find information of the top developers in the area? Thanks.

Terence O'Hara: Ah, yes. Real estate. Few industries indeed have as great an impact on people's lives than the real estate industry.

Historically, it has been extremely difficult to obtain accurate, verifiable information on private real estate developers. This is changing, however. A Bethesda company called CoStar No. 97 on our list) has become the leader in providing leasing and commercial property data of all kinds. But that just tells us WHAT private real estate developers are doing, not, necessarily, HOW their business id doing.

From a business research point of view, one good trend is the increasing corporatization of real estate companies. Traditionally commercial and residential real estate development has been dominated by small, locally owned firms. But the real estate investment trust movement is changing that. Boston Properties, Rouse, Corporate Office Properties Trust have more access to capital than the old-boy developers of old ever had.

In terms of how these trends have affected the Post 200, the answer is not much. Homebuilders and residential developers are underrepresented among Washington's public companies--many of the local companies, such as Washington Homes Inc., have been purchased in recent years. The one exception is NVR Inc., owner of Ryan Homes and NV Homes, the biggest builder in the region. We have a cover story on NVR today on page E1 of the Post.

I've often thought we should have a separate list, somewhere, for real estate developers, ranking them on the amoung of land and/or square feet they've developed in the last 12 months. Maybe next year!

Washington, D.C.: How do you measure the companies for inclusion on the list? Is it operating budget?

Terence O'Hara: The measure for all companies is annual revenue under generally accepted accounting principles. The exception is banks, for which "revenue" is not entirely comparable to your run-of-the-mill commercial enterprise. Banks are ranked by asset size, a common measure of a financial institutions scope and size relative to other financial institutions.

Falls Church, Va.: How did the events of Sept. 11 affect the area's companies?

Terence O'Hara: This question is answered more thoroughly inside the business section today by reporter Neil Irwin, who wrote two stories on the federal contracting sector in 2001 and how the events of last year will, in the intermediate term, most likely be of benefit to the local economy and several companies in particular.

Though it is sad, war time is good for Washington and always has been. While we make little in the way of guns and ammo in the Washington area, what has sprung up around companies like CACI, Lockheed Martin and Northrup (Northrop is the biggest non-retail employer in the Washington area, though it's based in Los Angeles), is a sprawling community of technology wizards solving problems of strategy, communications and security that make the U.S. military the best in the world. The defense technology world is truly the foundation of Washington's private-sector technology community. The tech bust locally in recent years, while painful for many people, hasn't had the kind of impact it has on, say, Silicon Valley, largely because of the federal technology spending buffer.

Several companies were directly impacted by the events of Sept. 11. Metrocall lost a senior executive on board the plane that crashed into the Pentagon, and Booz-Allen Hamilton lost several consultuants in the Pentagon itself. Economic considerations pale when compared to the loss of life suffered on 9/11.

Rockville Md.: Some companies haven't gone anywhere - I refer of course to Lockheed, CACI, Raytheon and others. Since they are acting as quasi-goverment without any democratic process determining this "condition", would it be profitable to use lawsuits and civil disobedience to get these monoliths to become more accountable and more democratic?

Terence O'Hara: Lockheed and Raytheon are indeed gigantic companies, largely yoked to the taxpayer. How these companies operate in their give spheres is a complicated matter, both from a policy and moral standpoint. My experience in watching how companies operate has shown that stockholders--even small stockholders--do have a say in how companies operate, and that voice is increasingly being heard. Witness the Hewlett-Packard/Compaq merger fight.

That being said, it can't be ignored that Lockheed, CACI etc. do just fill a demand, a demand driven by the policies of the U.S. government. If Lockheed were to suddenly decide to get out of the defense business, someone else would pop up to take their place.

Arlington, Va.: How does this year's list compare with last year's? Any noticable changes or absences from this year's list? Any new additions we should be watching?

Terence O'Hara: The most glaring change is that wrought by the continued implosion of the telecommunications business. Four local telecom companies have gone into liquidation in the last 12 months; they've basically given up. The total local employment by the region's largest public companies in fact dropped in 2001, a change I attribute to the vast layoffs undertaken by troubled telecom companies here.

Manassas, Va.: Do you predict that trouble telecom/internet companies like WorldCom and Qwest will be in the bankrupt category by year's end or at least have significantly more layoffs?

Terence O'Hara: The trendline isn't encouraging. Both WorldCom and Qwest are big companies, so predicting they will go into Chapter 11 is a tricky business. Then again, no one ever imagined Enron would go Chapter 11, either.

It's safe to say their business problems are not yet behind them. The glut of broadband and the growing competition to provide it make telecom a truly bad business to be in right now. The Washington region's biggest broadband provider, XO Communications, has said in its public filings it will likely file for Chapter 11 in the near future.

These companies have lost billions and billions of dollars for investors and lenders, and the bleeding isn't over yet. I rank it right up there with the savings and loan crisis of the early 1990s as one of the biggest business debacles of our time.

Ballston, Va.: Quick, question. How were you able to score an interview with Dwight Schar at NVR? Any reason he doesn't do interviews usually?

Terence O'Hara: Ah, you noticed that, eh? Indeed, Dwight Schar hasn't granted an interview for years. It was sheer luck, actually. He kindly called Post reporter Daniella Deane back and agreed to say a few words about the companies distant, troubled past. But he piped up pretty quick.

I think Schar, like many very, very successful CEO/founders, don't see any benefit to talking to the press. They let their numbers speak for themselves. And NVR's numbers do indeed speak for themselves.

McLean, Va.: First, I want to say what a great job you've done with the Monday Business section. It has become a must read every Monday.

My comment is that it seemed that most stories today focused on that defense contractors and companies servicing the government kind of rule the business community in the D.C. No kidding. It's been like that for over 20 years (even during the Internet craze). Couldn't the Post find a differnet/unique angle for reporting the top 200 this year?

Terence O'Hara: In the late 1990s, with the continued cuts in defense spending and the rise of the telecom and Internet businesses, the defense/government contracting business for a brief time in fact did not "rule" the business community in D.C. The IT and telecom businesses in Washington in early 2000 employed more people in the Washignton area than the federal government itself. We felt that in 2001, with the collapse of the tech industry here, it was worth noting that the federal sector was reascendant.

Bowie, Md.: I've seen it often written (in places like Usenet groups, where the quality of knowledge is not necessarily high) that Virginia does better at attracting business than Maryland or DC because, depending on one's viewpoint:

VA is less punishingly regulatory;
VA has raced to the bottom faster in environmental, labor and quality-of-life law

Is this generalization justifiable in both cause and effect?

Terence O'Hara: I'm often asked this question. My stock answer is that companies usually locate in a given jurisdiction for a variety of reasons, and the regulatory and governmental environment is usually low on their list of factors in their decision. And my own personal opinion is that businesses succeed or fail on their own merit without regard to where their headquarters is located.

Any one can see, of course, that Virginia has a much more (for lack of a better word) aggressive business environment than Maryland or D.C. More aggressive politically, more aggressive competitively. But Virginia has also reaped the downside of that aggressiveness: growth outstripping infrastructure, more business failures and layoffs in a recession. I don't know that regulatory or political environment would change this. It just seems to be a reflection of the different outlooks of the people and businesses that make up the different parts of the Washington region.

Dulles, Va.: What are your thoughts on the plight of AOL Time Warner?

Terence O'Hara: AOL was taken off the list last year when it moved its headquarters to New York after the merger with Time Warner. This presented an interesting dilemna for the Post 200. AOL revolutionized the tech industry here, and created wealth unimaginable for hordes of young whipper snappers. But the fact remains that AOL employs 4,500 people here, which wouldn't even crack the top 10 major employers list. The importance of AOL to the local economy, I believe, has been overstated.

AOL/Time Warner's business prospects, however, remain a fascinating story. I view the company has any other media company these days: if its content is good, it will attract an audience; if advertisers want to reach the audience, AOL will make money.

Terence O'Hara: Our time's up. Sorry I couldn't answer all the questions. Feel free to e-mail me at oharat@washpost.com if you have any burning thoughts or queries I couldn't answer here.

And watch for the annual executive compensation survey in Washington Business, scheduled to appear in early June.

Cheers.

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