Annual report pursuant to Section 13 and 15(d)

EARNINGS PER SHARE

v3.8.0.1
EARNINGS PER SHARE
12 Months Ended
Dec. 31, 2017
Earnings Per Share [Abstract]  
EARNINGS PER SHARE NOTE 17. EARNINGS PER SHARE
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 Employee Benefits Trust (EBT) (see Note 13, "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,
Dollars in millions, except per share amounts
 
2017
 
2016
 
2015
Net income attributable to Cummins Inc. 
 
$
999

 
$
1,394

 
$
1,399

 
 
 
 
 
 
 
Weighted-average common shares outstanding
 
 
 
 
 
 
Basic
 
166,625,320

 
169,038,410

 
178,037,581

Dilutive effect of stock compensation awards
 
645,545

 
298,206

 
369,247

Diluted
 
167,270,865

 
169,336,616

 
178,406,828

Earnings per common share attributable to Cummins Inc.
 
 
 
 
 
 
Basic
 
$
5.99

 
$
8.25

 
$
7.86

Diluted
 
5.97

 
8.23

 
7.84


The weighted-average diluted common shares outstanding excludes the anti-dilutive effect of certain stock options since such options had an exercise price in excess of the monthly average market value of our common stock. The options excluded from diluted earnings per share were as follows:
 
 
Years ended December 31,
 
 
2017
 
2016
 
2015
Options excluded
 
31,991

 
1,091,799

 
866,262