Cummins Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

EARNINGS PER SHARE

EARNINGS PER SHARE

12 Months Ended

Dec. 31, 2020

NOTE 19. EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CUMMINS INC.

We calculate basic earnings per share (EPS) of common stock by dividing net income attributable to Cummins Inc. by the weighted-average number of common shares outstanding for the period. The calculation of diluted EPS assumes the issuance of common stock for all potentially dilutive share equivalents outstanding. We exclude shares of common stock held in the EBT (see Note 15, "CUMMINS INC. SHAREHOLDERS' EQUITY") from the calculation of the weighted-average common shares outstanding until those shares are distributed from the EBT to the Retirement Savings Plan. Following are the computations for basic and diluted earnings per share:


	Years ended December 31,
In millions, except per share amounts	2020		2019		2018
Net income attributable to Cummins Inc.	$	1,789	$	2,260	$	2,141

Weighted-average common shares outstanding
Basic	148.2		155.4		162.2
Dilutive effect of stock compensation awards	0.8		0.7		0.6
Diluted	149.0		156.1		162.8
Earnings per common share attributable to Cummins Inc.
Basic	$	12.07	$	14.54	$	13.20
Diluted	12.01		14.48		13.15

The weighted-average diluted common shares outstanding exclude the anti-dilutive effect of certain stock options. The options excluded from diluted earnings per share were as follows:


	Years ended December 31,
	2020	2019	2018
Options excluded	645,334	473,845	969,385