21 Newspapers A discussion of operating results of the company’s newspaper and broadcasting segments, along with other factors affecting net income follows. Operating cash flow amounts presented with business seg- ment information represent operating income plus depreciation and amortization of intangible assets. Such cash flow amounts vary from net cash flow from operating activities presented in the audited Consolidated Statements of Cash Flows because cash payments for interest and taxes are not reflected therein, nor are the cash flow effects of non-operating items and discontinued operations. In addition to its domestic local newspapers, the company’s news- paper publishing operations include USA TODAY, USA WEEK- END, Newsquest (including Newscom operations acquired in 2000), which publishes daily and non-daily newspapers in the United Kingdom, and Gannett Offset commercial printing. The newspaper segment in 2001 contributed 90% of the company’s  revenues and 88% of its operating income.  The reported financial results of the newspaper segment for 2001 were materially impacted by four principal factors. Reported revenues and operating income were favorably affected by the carry- over effect of the three major acquisitions in mid-2000. The year 2001 reflects a full year of these operations compared to approxi- mately half of 2000. Offsetting the added business from the 2000 acquisitions were pervasive advertising revenue declines, particularly in the classified category for nearly all domestic newspapers,  and the 53rd week in 2000. Further, newsprint prices on a yearly average basis were up 10% in 2001. Newspaper operating results were as follows: Newspaper operating revenues: Newspaper operating revenues are derived principally from advertising and circulation sales, which accounted for 73% and 22%, respectively, of total newspaper rev- enues in 2001. Ad revenues also include those derived from adver- tising placed with newspaper Internet products. Other newspaper publishing revenues are mainly from commercial printing businesses and also include earnings from the company’s 50% owned joint operating agencies in Detroit and Tucson. The table below presents these components of reported revenues for the last three years. Reported newspaper advertising revenues for 2001 were $147 million greater than in 2000, a 4% increase, while pro forma rev- enues presented above reflect an 8% decline. Reported newspaper ad revenues in 2001 are higher principally because of the major acquisitions in mid-2000. Pro forma revenues declined in all cate- gories, reflecting a soft and very uncertain general U.S. economy which was worsened by the attacks of Sept. 11. In addition, both reported and pro forma newspaper revenue comparisons are nega- tively impacted by the additional 53rd week in 2000 and an overall decline in the exchange rate for sterling. If the exchange rate had remained constant year-over-year, pro forma local, national and classified ad revenues would have decreased 4%, 14% and 8%, respectively. Pro forma local ad revenues were down 6% in 2001 with  linage down 7% for the full year. Ad spending by some of the largest retailers continued to decline in 2001, reflecting closings and con- solidations. These revenue declines were partially offset by revenue increases from some small- and medium-sized advertisers through expanded sales and marketing efforts. The advertising and circulation revenue increases shown above reflect new business from the 2000 acquisitions, offset by overall ad revenue softness at most domestic newspapers in 2001. In the tables that follow, newspaper advertising linage, circulation volume statistics and related revenue results are presented on a pro forma basis. Pro forma basis means that these results are presented as if all properties owned at the end of 2001 were owned through- out the periods presented. The tables and related commentary also include the portion of revenue and linage data for the company’s newspapers participating in joint operating agencies, consistent with prior years. For Newsquest, advertising and circulation revenues are fully reflected in the amounts below, as are daily paid circulation vol- umes. Advertising linage for Newsquest is not reflected, however.  Advertising linage, in millions of inches, and preprint distribution (pro forma) 2001 Change 2000 Change 1999 Change Local 39.5 (7%) 42.3 (1%) 42.7 – National 3.8 (15%) 4.5 9% 4.1 16%  Classified 54.5 (4%) 56.6 6% 53.6 9% Total Run- of-Press 0 97.8 (5%) 103.4 3% 100.4 5% Preprint distribution (millions) 10,401 (3%) 10,741 9% 9,839 4% In millions of dollars 2001 Change 2000 Change 1999 Change Revenues $ 5,682 5% $5,434 24% $4,367 10% Expenses $ 4,281 9% $3,912 27% $3,075 7%  Operating income $ 1,401 (8%) $1,522 18% $1,292 16%  Operating cash flow $ 1,770 (3%) $1,825 22% $1,499 16%  Newspaper publishing revenues, in millions of dollars 2001 Change 2000 Change 1999 Change Advertising $ 4,120 4% $3,973 28% $3,115 12% Circulation $ 1,233 10% $1,121 15% $ 971 1% Commercial printing and other $ 329 (3%) $ 340 21% $ 281 9% Total $ 5,682 5% $5,434 24% $4,367 10% Advertising revenues, in millions of dollars (pro forma) 2001 Change 2000 Change 1999 Change Local $ 1,249 (6%) $1,322 2% $1,297 1% National $ 669 (15%) $ 788 10% $ 717 13% Classified $ 1,700 (9%) $1,873 5% $1,777 7% Total Run- of-Press $ 3,618 (9%) $3,983 5% $3,791 6% Preprint  and other  advertising $ 691 (2%) $ 703 12% $ 628 7% Total ad  revenue $ 4,309 (8%) $4,686 6% $4,419 6%