per share at the end of 2010 was $20.66 compared with $18.37 at year-end 2009, an increase of 12.5%. A summary of borrowings can be found in Note 7 to the Consolidated Financial Statements. disclosures. Actual results may or may not differ from these esti- mates. The Company believes that the understanding of certain key accounting policies and estimates are essential in achieving more insight into the Company’s operating results and financial condition. These key accounting policies include revenue recognition, income taxes, legal and self-insurance contingencies, valuation of long-lived assets, assumptions used to determine the amounts recorded for pensions and other employee benefit plans and accounting for stock options. Revenue Recognition: The Company recognizes revenue from prod- uct sales when goods are shipped or delivered, and title and risk of loss pass to the customer. Provisions for certain rebates, sales incentives, trade promotions, coupons, product returns and dis- counts to customers are accounted for as reductions in sales in the same period the related sales are recorded. Product discounts granted are based on the terms of arrange- ments with direct, indirect and other market participants, as well as market conditions, including prices charged by competitors. Rebates, the largest being the Medicaid rebate provision, are esti- mated based on contractual terms, historical experience, trend analysis and projected market conditions in the various markets served. The Company evaluates market conditions for products or groups of products primarily through the analysis of wholesaler and other third-party sell-through and market research data, as well as internally generated information. Sales returns are generally estimated and recorded based on historical sales and returns information. Products that exhibit unusual sales or return patterns due to dating, competition or other marketing matters are specifically investigated and analyzed as part of the accounting for sales return accruals. Sales returns allowances represent a reserve for products that may be returned due to expiration, destruction in the field, or in spe- cific areas, product recall. The returns reserve is based on historical return trends by product and by market as a percent to gross sales. In accordance with the Company’s accounting policies, the Company generally issues credit to customers for returned goods. The Company’s sales return reserves are accounted for in accordance with the U.S. GAAP guidance for revenue recognition when right of return exists. Sales return reserves are recorded at full sales value. Sales returns in the Consumer and Pharmaceutical segments are almost exclusively not resalable. Sales returns for certain franchises in the Medical Devices and Diagnostics segment are typically resal- able but are not material. The Company rarely exchanges products from inventory for returned products. The sales returns reserve for the total Company has ranged between 1.0% and 1.2% of annual net trade sales during the prior three fiscal reporting years 2008–2010. Promotional programs, such as product listing allowances and cooperative advertising arrangements, are recorded in the year incurred. Continuing promotional programs include coupons and volume-based sales incentive programs. The redemption cost of consumer coupons is based on historical redemption experience by product and value. Volume-based incentive programs are based on estimated sales volumes for the incentive period and are recorded as products are sold. The Company also earns service revenue for co-promotion of certain products. For all years presented, service revenues were less than 2% of total revenues and are included in sales to customers. These arrangements are evaluated to determine the appropriate amounts to be deferred. In addition, the Company enters into collaboration arrange- ments, which contain multiple revenue generating activities. The revenue for these arrangements is recognized as each activity is performed or delivered, based on the relative fair value. Upfront fees received as part of these arrangements are deferred and recog- nized as revenue earned over the obligation period. See Note 1 to Other Information CRITICAL ACCOUNTING POLICIES AND ESTIMATES SHARE REPURCHASE AND DIVIDENDS CONTRACTUAL OBLIGATIONS AND COMMITMENTS 37 MANAGEMENT’S DISCUSSION AND ANALY SIS OF RESULT S OF OPERATIONS AND FINANCIAL CONDITION Management’s discussion and analysis of results of operations and financial condition are based on the Company’s consolidated financial statements that have been prepared in accordance with accounting principles generally accepted in the U.S. (GAAP). The preparation of these financial statements requires that manage- ment make estimates and assumptions that affect the amounts reported for revenues, expenses, assets, liabilities and other related On January 3, 2011, the Board of Directors declared a regular quar- terly cash dividend of $0.540 per share, payable on March 15, 2011, to shareholders of record as of March 1, 2011. The Company expects to continue the practice of paying regular cash dividends. The Company increased its dividend in 2010 for the 48th con- secutive year. Cash dividends paid were $2.110 per share in 2010, compared with dividends of $1.930 per share in 2009 and $1.795 per share in 2008. The dividends were distributed as follows: On July 9, 2007, the Company announced that its Board of Directors approved a stock repurchase program authorizing the Company to buy back up to $10.0 billion of the Company’s Common Stock. As of January 2, 2011, the current stock repurchase program has been completed. The Company repurchased an aggregate of 158.3 million shares of Johnson & Johnson Common Stock at a cost of $10.0 bil- lion. The Company funded the share repurchase program through a combination of available cash and debt. In addition, the Company has an annual program to repurchase shares for use in employee stock and incentive plans. For tax matters, see Note 8 to the Consolidated Financial Statements. The Company’s contractual obligations are primarily for leases, debt and unfunded retirement plans, with no other significant obliga- tions. To satisfy these obligations, the Company will use cash from operations. The following table summarizes the Company’s contrac- tual obligations and their aggregate maturities as of January 2, 2011 (see Notes 7, 10 and 16 to the Consolidated Financial Statements for further details): Long-term Interest on Unfunded Debt Debt Retirement Operating (Dollars in Millions) Obligations Obligations Plans Leases Total 2011 $ 13 528 54 182 777 2012 644 507 55 159 1,365 2013 509 457 59 130 1,155 2014 9 444 62 106 621 2015 — 444 69 89 602 After 2015 7,994 5,180 428 74 13,676 Total $9,169 7,560 727 740 18,196 2010 2009 2008 First quarter $0.490 0.460 0.415 Second quarter 0.540 0.490 0.460 Third quarter 0.540 0.490 0.460 Fourth quarter 0.540 0.490 0.460 Total $2.110 1.930 1.795