Annual report pursuant to Section 13 and 15(d)

EARNINGS PER SHARE

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EARNINGS PER SHARE
 12 Months Ended
Dec. 31, 2013
Earnings Per Share [Abstract]  
EARNINGS PER SHARE
NOTE 20. 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
 
2013
 
2012
 
2011
Net income attributable to Cummins Inc. 
 
$
1,483

 
$
1,645

 
$
1,848

 
 
 
 
 
 
 
Weighted-average common shares outstanding
 
 
 
 
 
 
Basic
 
186,994,382

 
189,286,821

 
192,972,211

Dilutive effect of stock compensation awards
 
423,459

 
381,883

 
625,667

Diluted
 
187,417,841

 
189,668,704

 
193,597,878

Earnings per common share attributable to Cummins Inc.
 
 
 
 
 
 
Basic
 
$
7.93

 
$
8.69

 
$
9.58

Diluted
 
7.91

 
8.67

 
9.55


The weighted-average diluted common shares outstanding for 2013, 2012 and 2011 excludes the effect of 359,641, 453,893 and 177,460 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.