In Hollywood, apparently "R" doesn't mean "Revenue" when it comes to box-office sales.

In 2001, a year when Americans hit theaters in record numbers, family-friendly films made the most moolah.

Of the top 19 films that grossed more than $100 million, 16 had PG-13, PG or G stamps, while only three carried the Restricted "under 17 not admitted without a parent or guardian" label.

"PG-13 is the rating you want if you're strictly going for box office," said Paul Dergarabedian, president of Exhibitor Relations Co., a Los Angeles box office tracking firm. "To give you the best odds for generating the most revenues, you create a film that has a very broad appeal."

A PG-13 flick is just the ticket for achieving that balance. It's suitable for 13- to 17-year-olds who spend a lot of time at the movies while still offering plenty for adults. Even pre-teens can get in if they go with a grownup.

"It makes sense because a (PG-13) movie can play to an older audience and to a younger audience," said Russell Schwartz, president of domestic marketing at New Line Cinema. New Line produced two of the top five grossing films of 2001: Lord of the Rings: The Fellowship of the Ring and Rush Hour 2.

With certain films like Hannibal, which ranked 11th in terms of profit last year, an R-rating is a given. But because of the push-and-pull between artistic license and profit, there is plenty of behind-the-scenes debate over ratings.

Insider buzz suggests that very controversy cropped up during the making of Ali, which teetered closer to R than to PG-13 because of a few too many f-words. The director refused to change the script on the grounds that it would compromise the film's integrity. The studio backed the director's wish, but some later speculated that the decision came at the expense of revenue for the film which could have been popular among the under-17 set.

"The PG-13 argument can get heated in those executive suites," Schwartz said. "If there is a fine line in content, I don't see why it couldn't be PG-13 ... Making a movie is about compromise."

Some say a heavy focus on kid-friendly flicks shouldn't come at the expense of quality, pointing to the many R-rated films that get nominated for and win awards year after year.

"I would hate to see this have a chilling effect on the creative process," Dergarabedian said. "You can have an R-rated film that can transcend its rating and get a lot of critical acclaim … I hope this doesn't create a world where you just have PG-13 movies."

Such a scenario is not likely, considering the box-office success of PG-13-and-under flicks isn't new. The numbers for at least the past four years paint a similar financial picture, and industry insiders say family movies have reaped the most sales dollars since the ratings system began more than three decades ago.

What is new is the number of kid-friendly movies released year-round as opposed to just during summer and winter vacations.

Trade associations like the National Association of Theatre Owners (NATO) have pushed for fewer R-rated films because, they say, box-office sales show that's what audiences want.

"We have always believed and done research to support the fact that there are too many R-rated films made," said NATO President John Fithian. "There are a higher percentage of total films rated R than their box-office receipts can justify."

That sales phenomenon coupled with the scrutiny Hollywood has faced from the federal government and the public in recent years put the issue on the agenda of NATO's annual ShoWest conference last week in Las Vegas.

Fithian said that even though there is a market for R-rated flicks, his association members have long been telling him audiences want less of the sex, violence and four-letter words and more of the content they can feel comfortable watching with their families.

"Both for economic reasons and because it's the right thing to do, theater owners tend to support more family-friendly films than the studios," Fithian said. "What works in Hollywood doesn't necessarily work in Des Moines."

He and other experts predict a continued increase in the number of family movies that will be made. Judging from this year's top four most lucrative films Harry Potter (PG; $315.3 million), Lord of the Rings (PG-13; $291.1 million), Shrek (PG; $267.7 million) and Monsters, Inc. (G; $252.6 million) that growth is already happening.

Still, most agree that the bolder, more mature R-rated cinema remains on solid ground.

"R-rated movies are a very specific brand," New Line's Schwartz said. "Certainly the world of R is in itself a very distinct world and a very profitable world."