29 Dividends Dividends declared on common stock amounted to $238 million in 2001, compared with $228 million in 2000, reflecting an increase in the dividend rate partially offset by a decrease in shares outstanding in 2001. intangible assets subsequent to their acquisition. SFAS No. 142 provides that goodwill and intangible assets which have indefinite useful lives will not be amortized but rather will be tested at least annually for impairment. The company adopted SFAS No. 142 effective Dec. 31, 2001, the first day of its fiscal year 2002. Upon adoption, the company ceased amortizing goodwill. Based on the current levels of goodwill, this will increase net income by approxi- mately $216 million annually ($.80 per share based on average diluted shares outstanding in 2001) beginning in 2002.  The following table summarizes, on an unaudited, pro forma basis, the results of operations of the company as though SFAS No. 142 was effective on the first day of fiscal year 1999: In October 2001, the quarterly dividend was increased from $.22 to $.23 per share.  The company’s results of operations and financial condition have not been significantly affected by inflation and changing prices. In both of its principal businesses, subject to normal competitive con- ditions, the company generally has been able to pass along rising costs through increased selling prices. Further, the effects of infla- tion and changing prices on the company’s property, plant and equipment and related depreciation expense have been reduced as a result of an ongoing capital expenditure program and the availability of replacement assets with improved technology and efficiency. The company is exposed to foreign exchange rate risk primarily due to its ownership of Newsquest, which uses the British pound as its functional currency which is then translated into U.S. dollars. Effective Jan. 1, 2001, the company adopted SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as amended. The adoption of this standard did not have any effect on the company’s results of operations or financial position. At Dec. 30, 2001, the company is not a party to any derivative contracts.  On July 1, 2001, the company adopted Statement of Financial Accounting Standards No. 141 (SFAS No. 141), “Business Combinations.” In accordance with SFAS No. 141, the company ceased amortizing goodwill for acquisitions after July 1, 2001. In July 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 142 (SFAS No. 142), “Goodwill and Other Intangible Assets.” SFAS No. 142 addresses financial accounting and reporting for goodwill and other In August 2001, the FASB issued Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” The company does not believe that the adoption of the statement will have a material impact on its financial position or results of operations. *from continuing operations Certain statements in the company’s 2001 Annual Report to Shareholders and its Annual Report on Form 10-K contain  forward-looking information. The words “expect,” “intend,” “believe,” “anticipate,” “likely,” “will” and similar expressions  generally identify forward-looking statements. These forward- looking statements are subject to certain risks and uncertainties which could cause actual results and events to differ materially from those anticipated in the forward-looking statements. Potential risks and uncertainties which could adversely affect the company’s ability to obtain these results include, without limita- tion, the following factors: (a) increased consolidation among major retailers or other events which may adversely affect business operations of major customers and depress the level of local and national advertising; (b) an economic downturn in some or all of the company’s principal newspaper or television markets leading to decreased circulation or local, national or classified advertising; (c) a decline in general newspaper readership patterns as a result of competitive alternative media or other factors; (d) an increase in newsprint or syndication programming costs over the levels antici- pated; (e) labor disputes which may cause revenue declines or increased labor costs; (f) acquisitions of new businesses or disposi- tions of existing businesses; (g) a decline in viewership of major networks and local news programming; (h) rapid technological changes and frequent new product introductions prevalent in elec- tronic publishing; (i) an increase in interest rates; (j) a weakening in the British pound to U.S. dollar exchange rate; and (k) general economic, political and business conditions. Effects of inflation and changing prices and other matters Certain factors affecting forward-looking statements 92 $.63 93 $.65 94 $.67 95 $.69 96 $.71 97 $.74 98 $.78 99 $.82 00 $.86 01 $.90 Dividends declared per share In millions, except per share amounts (pro forma and unaudited) Fiscal year 2001 2000 1999 Net income* $1,047 $1,879 $1,068 Income per share* – Basic  $3.95 $4.25 $3.69 Income per share* – Diluted $3.92 $4.22 $3.65 Cash dividends Payment date  Per share 2001 4th Quarter Jan. 2, 2002 $.23 3rd Quarter Oct. 1, 2001 $.23 2nd Quarter July 2, 2001 $.22 1st Quarter April 2, 2001 $.22 2000 4th Quarter Jan. 2, 2001 $.22 3rd Quarter Oct. 2, 2000 $.22 2nd Quarter July 3, 2000 $.21 1st Quarter April 3, 2000 $.21