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Earnings Per Common Share ("EPS") (Tables)
 12 Months Ended
Dec. 31, 2019
Earnings Per Share [Abstract]  
Earnings Per Common Share

The following table summarizes the components of basic and diluted earnings per share (in millions, except for per share data):

 

 

 

2019

 

 

2018

 

 

2017

 

Net Income – Yum China Holdings, Inc.

 

$

713

 

 

$

708

 

 

$

398

 

Weighted-average common shares outstanding (for basic

   calculation)(a)

 

 

377

 

 

 

384

 

 

 

387

 

Effect of dilutive share-based awards(a)

 

 

8

 

 

 

9

 

 

 

10

 

Effect of dilutive warrants(b)

 

 

3

 

 

 

2

 

 

 

1

 

Weighted-average common and dilutive potential common shares

   outstanding (for diluted calculation)

 

 

388

 

 

 

395

 

 

 

398

 

Basic Earnings Per Share

 

$

1.89

 

 

$

1.84

 

 

$

1.03

 

Diluted Earnings Per Share

 

$

1.84

 

 

$

1.79

 

 

$

1.00

 

Share-based awards and warrants

   excluded from the diluted EPS computation(c)

 

 

2

 

 

 

6

 

 

 

10

 

 

(a)

As a result of the separation, shares of Yum China common stock were distributed to YUM’s shareholders of record as of October 19, 2016 and included in the calculated weighted-average common shares outstanding. Holders of outstanding YUM equity awards generally received both adjusted YUM awards and Yum China awards, or adjusted awards of either YUM or Yum China in their entirety. Any subsequent exercise of these awards, whether held by the Company’s employees or YUM’s employees, would increase the number of common shares outstanding. The incremental shares arising from outstanding equity awards are included in the computation of diluted EPS, if there is dilutive effect. See Note 14 for a further discussion of share-based compensation.

 

(b)

Pursuant to the investment agreements dated September 1, 2016 (Note 10), Yum China issued to strategic investors two tranches of warrants on January 9, 2017, with each tranche initially providing the right to purchase 8,200,405 shares of Yum China common stock, at an initial exercise price of $31.40 and $39.25 per share, respectively, subject to customary anti-dilution adjustments. The warrants may be exercised at any time through October 31, 2021. The incremental shares arising from outstanding warrants are included in the computation of diluted EPS, if there is dilutive effect when the average market price of Yum China common stock for the year exceeds the applicable exercise price of the warrants.

 

(c)

These outstanding employee stock options, stock appreciation rights, RSUs, PSUs and warrants were not included in the computation of diluted EPS because to do so would have been antidilutive for the years presented.