SEC Filings


10-K
CUMMINS INC filed this Form 10-K on 02/11/2019
Entire Document
 

Debt Facilities and Other Sources of Liquidity
On August 22, 2018, we entered into a new five-year revolving credit agreement with a syndicate of lenders. The new credit agreement provides us with a $2.0 billion senior unsecured revolving credit facility until August 22, 2023. The credit capacity can be increased by up to $1.0 billion prior to the maturity date. See Note 10, "DEBT," to our Consolidated Financial Statements for additional information.
On August 22, 2018, we entered into a new 364-day credit agreement that allows us to borrow up to $1.5 billion of additional unsecured funds at any time through August 21, 2019. The credit capacity can be increased by up to $500 million prior to the maturity date.
Both credit agreements include a financial covenant requiring that the leverage ratio of the total debt of the company and its subsidiaries to the consolidated total capital of the company and its subsidiaries may not exceed 0.65 to 1.0. At December 31, 2018, our leverage ratio was 0.20 to 1.0. We intend to maintain credit facilities of a similar aggregate amount by renewing or replacing these facilities before expiration. These revolving credit facilities are maintained primarily to provide backup liquidity for our commercial paper borrowings and for general corporate purposes.
We can issue up to $3.5 billion of unsecured, short-term promissory notes ("commercial paper") pursuant to our board authorized commercial paper programs. The programs facilitate the private placement of unsecured short-term debt through third party brokers. We intend to use the net proceeds from the commercial paper borrowings for general corporate purposes. The total combined borrowing capacity under the revolving credit facility and commercial paper programs should not exceed $3.5 billion. See Note 10, "DEBT," to our Consolidated Financial Statements for additional information.
As a well-known seasoned issuer, we filed an automatic shelf registration for an undetermined amount of debt and equity securities with the Securities and Exchange Commission (SEC) on February 16, 2016. Under this shelf registration we may offer, from time to time, debt securities, common stock, preferred and preference stock, depositary shares, warrants, stock purchase contracts and stock purchase units. Our current shelf is scheduled to expire in February 2019. We have begun the renewal process and plan to file a new automatic shelf registration statement in the first quarter of 2019.
Uses of Cash
Stock Repurchases
In October 2018, our Board of Directors authorized the acquisition of up to $2 billion of additional common stock upon completion of the 2016 repurchase plan. In December 2016, our Board of Directors authorized the acquisition of up to $1 billion of additional common stock upon completion of the 2015 repurchase plan. For the year ended December 31, 2018, we made the following purchases under our stock repurchase programs:
In millions, except per share amounts
 
Shares
Purchased
 
Average Cost
Per Share
 
Total Cost of
Repurchases
 
Cash Paid for Shares Not Received
 
Remaining
Authorized
Capacity
(1)
November 2015, $1 billion repurchase program
 
 

 
 

 
 

 
 
 
 

April 1
 
0.3

 
$
166.79

 
$
46

 
$

 
$

 
 
 
 
 
 
 
 
 
 
 
December 2016, $1 billion repurchase program
 
 
 
 
 
 
 
 
 
 
April 1
 
0.7

 
$
164.48

 
$
117

 
 
 
$
883

July 1
 
1.5

 
143.69

 
216

 
 
 
667

September 30
 
2.8

 
143.58

 
400

 
100

 
167

December 31
 
1.9

 
139.67

 
267

 
(100
)
 

Subtotal
 
6.9

 
144.68

 
1,000

 

 

 
 
 
 
 
 
 
 
 
 
 
October 2018, $2 billion repurchase program
 
 
 
 
 
 
 
 
 
 
December 31
 
0.7

 
$
139.85

 
$
94

 
 
 
$
1,906

 
 
 
 
 
 
 
 
 
 
 
Total
 
7.9

 
$
145.05

 
$
1,140

 
$

 
 
____________________________________
(1) The remaining authorized capacity under these plans was calculated based on the cost to purchase the shares but excludes commission expenses in accordance with the authorized plan.

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