19 The Procter & Gamble Company and Subsidiaries Financial Review 2001. This increase is indicative of the heightened emphasis  on cash generation the Company has placed on all of its operating units. Free cash flow was $3.32 billion in 2001 and  $1.66 billion in 2000. Net cash used for acquisitions completed during 2002 to- taled $5.47 billion, primarily driven by the Clairol acquisition.  This compares to $138 million in 2001 and $2.97 billion in  2000, which included the Iams and PUR acquisitions. Common share dividends grew 9% to $1.52 per share in  2002 versus $1.40 in 2001 and $1.28 in 2000. The annual  dividend rate will increase to $1.64 per common share in  2003, marking the 47th consecutive year of increased common share dividend payments. Total dividend payments,  to both common and preferred shareholders, were $2.10 billion, $1.94 billion and $1.80 billion in 2002, 2001 and  2000, respectively. Total debt increased $2.91 billion to $14.93 billion compared  to $12.02 billion in 2001 and $12.25 billion in 2000. This increase was primarily driven by the Clairol acquisition – which had a purchase price of approximately $5.00 billion. Long-term borrowing available under the Company’s current  shelf registration statement filed in March 2002 was $4.00  billion at June 30, 2002. Additionally, the Company is able to  issue commercial paper at favorable rates and to access general bank financing. Capital spending efficiency has been a focus area for the  Company. Spending decreased $807 million to $1.68 billion  in 2002, compared to $2.49 billion in 2001 and $3.02 billion  in 2000. Current year spending is 4.2% of net sales, com- pared to 6.3% and 7.6% in 2001 and 2000, respectively. The Company continues to generate strong cash flow from  operations. In 2002, cash flow from operations was $7.74  billion, up $1.94 billion from $5.80 billion in 2001, which  was an increase of $1.12 billion from $4.68 billion in 2000.  Higher earnings were the primary contributor. In addition,  taxes payable increased approximately $500 million versus  the prior year, primarily driven by utilization of prior year  overpayments and deferred tax assets. Depreciation and amortization charges declined by $578 million versus the prior year. Of this decrease, $235 million is attributable to  the adoption of Statement of Financial Accounting Standards  (SFAS) No. 142, under which goodwill and indefinite-lived intangible assets are no longer being amortized. The remaining decline is primarily driven by lower accelerated depreciation from the restructuring program in fiscal 2002 versus 2001. Capital Spending Capital Spending (in billions of dollars) The Company maintains a share repurchase program, which  authorizes the purchase of shares annually on the open market. A primary purpose of the program is to mitigate the  dilutive impact of stock option grants – effectively pre- funding the exercise obligation. Additionally, there is a discretionary component under which it may repurchase additional outstanding shares. Current year purchases under  the combined programs were $568 million, compared to  $1.25 billion in 2001 and $1.77 billion in 2000. The decline in  the current year is primarily due to cash requirements associ- ated with the Clairol acquisition. The Company anticipates  the buy-back program will return to historical levels in 2003. The Company does not have off-balance sheet arrangements, This current year reduction of more than $800 million versus  the prior year surpasses the Company’s 6% of net sales goal  two years earlier than originally anticipated. This improve- ment in capital spending is the result of three main factors: 1)  completing the majority of the re-platforming and capacity expansion investment in the baby, feminine and family care  business unit, 2) sourcing consolidation and improved capaci- ty utilization; and, 3) increasing emphasis on reduced but sus- tainable capital spending levels to improve shareholder value. Liquidity 1998 0 1999 2000 2001 2002 2 1 3 $4 0% 4% 2% 6% 8% % of Net Sales Capital Spending The Company continues to divest certain non-strategic  brands in order to focus resources on core businesses. The  divestitures declined significantly in the current year, returning to historical levels. The proceeds from these and  other asset sales generated $227 million in cash flow in the  current year, which is significantly reduced when compared  to the $788 million generated in 2001 and $419 million  generated in 2000.