8-KShareholder MattersExhibits & Filings

CUMMINS INC 8-K Report, Rights Modification (Dec 13, 2007)

Filed December 13, 2007For Securities:CMI

Summary

Cummins Inc. (CMI) filed an 8-K on December 13, 2007, to announce a significant corporate action: a two-for-one stock split of its common stock. This split, effective for shareholders of record as of December 21, 2007, and payable on January 2, 2008, is the second such split for the company in 2007, reflecting strong confidence in its operational performance and future growth prospects. The stock split itself does not alter the total value of an investor's holdings but doubles the number of shares, halving the per-share price, and adjusts dividends proportionally. In addition to the stock split, Cummins also announced a new $500 million share repurchase program. This initiative underscores the company's commitment to returning value to shareholders, building on a history of significant repurchases and dividend growth. The company highlighted a strong 2007, with stock price appreciation and a substantial increase in dividends, signaling positive momentum and a robust financial position.

Key Highlights

  • 1Cummins Inc. announced a two-for-one stock split, effective for shareholders of record on December 21, 2007.
  • 2This marks the second stock split for Cummins in 2007, indicating strong company performance and confidence in future growth.
  • 3The stock split will double the number of outstanding shares and halve the per-share price, without changing the total market capitalization or shareholder investment value.
  • 4A new share repurchase program authorizing $500 million in stock buybacks was also announced.
  • 5The company reported that its stock price had more than doubled year-to-date in 2007.
  • 6Cummins noted a nearly 67 percent increase in its dividend since the summer of 2006.
  • 7The press release cites Tim Solso, Chairman and CEO, expressing confidence in the company's diversified portfolio and growing market share.

Frequently Asked Questions

A two-for-one stock split means that for every share of Cummins stock you owned before the split, you will now own two shares. While the number of shares doubles, the price per share is halved, meaning the total value of your investment remains the same immediately after the split. The company's cash dividend per share will also be adjusted proportionally.

The company views the stock split as a signal of its confidence in its operating performance and its ability to grow profitably. The CEO, Tim Solso, mentioned that 2007 has been one of the best years in Cummins' history, attributing this success to a diversified business portfolio and growing market share.

The authorization of a new $500 million share repurchase program demonstrates Cummins' commitment to returning value to its shareholders. This initiative complements the stock split and the company's history of increasing dividends, suggesting that management believes the company's stock is undervalued or that it aims to enhance shareholder value through these actions.

The stock split is payable on January 2, 2008, for shareholders of record as of December 21, 2007. This means if you owned shares on December 21st, you will receive the additional shares on January 2nd.