Annual report pursuant to Section 13 and 15(d)

SHAREHOLDERS' EQUITY

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SHAREHOLDERS' EQUITY
 12 Months Ended
Dec. 31, 2021
Equity [Abstract]  
SHAREHOLDERS' EQUITY
NOTE 15. CUMMINS INC. SHAREHOLDERS' EQUITY
Preferred and Preference Stock
We are authorized to issue one million shares of zero par value preferred and one million shares of preference stock with preferred shares being senior to preference shares. We can determine the number of shares of each series, and the rights, preferences and limitations of each series. At December 31, 2021 and 2020, there was no preferred or preference stock outstanding.
Common Stock
Changes in shares of common stock, treasury stock and common stock held in trust for employee benefit plans were as follows:
In millions Common
Stock		 Treasury
Stock		 Common Stock
Held in Trust
Balance at December 31, 2018 222.4  64.4  0.4 
Shares acquired —  8.1  — 
Shares issued —  (0.8) (0.2)
Balance at December 31, 2019 222.4  71.7  0.2 
Shares acquired —  3.9  — 
Shares issued —  (0.8) (0.2)
Balance at December 31, 2020 222.4  74.8  — 
Shares acquired —  5.7  — 
Shares issued 0.1  (0.5) — 
Balance at December 31, 2021 222.5  80.0  — 
Treasury Stock
Shares of common stock repurchased by us are recorded at cost as treasury stock and result in a reduction of shareholders' equity in our Consolidated Balance Sheets. Treasury shares may be reissued as part of our stock-based compensation programs. When shares are reissued, we use the weighted-average cost method for determining cost. The gains between the cost of the shares and the issuance price are added to additional paid-in-capital. The losses are deducted from additional paid-in capital to the extent of the gains. Thereafter, the losses are deducted from retained earnings. Treasury stock activity for the three-year period ended December 31, 2021, consisting of shares issued and repurchased is presented in our Consolidated Statements of Changes in Equity.
In December 2021, the Board authorized the acquisition of up to $2.0 billion of additional common stock upon completion of the 2019 repurchase plan. In December 2019, the Board authorized the acquisition of up to $2.0 billion of additional common stock upon completion of the 2018 repurchase plan. For the year ended December 31, 2021, we made the following purchases under the stock repurchase program:
In millions (except per share amounts)
For each quarter ended		 Shares Purchased Average Cost
Per Share		 Total Cost of
Repurchases
Remaining
Authorized
Capacity (1)
April 4 1.7  $ 247.35  $ 418  $ 1,576 
July 4 2.7  252.66  672  904 
October 3 0.6  231.57  138  766 
December 31 0.7  222.14  174  2,592 
Total 5.7  244.73  $ 1,402 
(1) The remaining $592 million authorized capacity under the 2019 plan was calculated based on the cost to purchase the shares, but excludes commission expenses in accordance with the authorized plan.
We repurchased $1,402 million, $641 million and $1,271 million of our common stock in the years ended December 31, 2021, 2020 and 2019, respectively.
Dividends
Total dividends paid to common shareholders in 2021, 2020 and 2019 were $809 million, $782 million and $761 million, respectively. Declaration and payment of dividends in the future depends upon our income and liquidity position, among other factors, and is subject to declaration by the Board, who meet quarterly to consider our dividend payment. We expect to fund dividend payments with cash from operations.
In July 2021, the Board authorized an increase to our quarterly dividend of 7.4 percent from $1.35 per share to $1.45 per share. In October 2020, the Board authorized a 3.0 percent increase to our quarterly cash dividend on our common stock from $1.311 per share to $1.35 per share. In July 2019, the Board approved a 15.0 percent increase to our quarterly dividend on our common stock from $1.14 per share to $1.311 per share. Cash dividends per share paid to common shareholders for the last three years were as follows:
  Quarterly Dividends
  2021 2020 2019
First quarter $ 1.35  $ 1.311  $ 1.14 
Second quarter 1.35  1.311  1.14 
Third quarter 1.45  1.311  1.311 
Fourth quarter 1.45  1.35  1.311 
Total $ 5.60  $ 5.28  $ 4.90