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, 2015

NOTE 19. 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 EBT (see Note 15, "SHAREHOLDERS' EQUITY") from the calculation of the weighted-average common shares outstanding until those shares are distributed from the EBT to the RSP. Following are the computations for basic and diluted earnings per share:



	Years ended December 31,
Dollars in millions, except per share amounts	2015		2014		2013
Net income attributable to Cummins Inc.	$	1,399	$	1,651	$	1,483

Weighted-average common shares outstanding
Basic	178,037,581		182,637,568		186,994,382
Dilutive effect of stock compensation awards	369,247		441,727		423,459
Diluted	178,406,828		183,079,295		187,417,841
Earnings per common share attributable to Cummins Inc.
Basic	$	7.86	$	9.04	$	7.93
Diluted	7.84		9.02		7.91

The weighted-average diluted common shares outstanding for 2015, 2014 and 2013 excludes the effect of 866,262, 165,840 and 359,641 weighted-average shares, respectively, of common stock options, since such options had an exercise price in excess of the monthly average market value of our common stock during that year.