Yum China Holdings, Inc.YUMC

Yum China Holdings, Inc. Earnings Per Share Disclosure

10-KFiled Feb 27, 20262 min read

Note 5 – Earnings Per Common Share (“EPS”)

 

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

 

 

 

2025

 

 

2024

 

 

2023

 

Net Income – Yum China Holdings, Inc.

 

$

929

 

 

$

911

 

 

$

827

 

Weighted-average common shares outstanding
 (for basic calculation)(a)

 

 

369

 

 

 

388

 

 

 

416

 

Effect of dilutive share-based awards(a)

 

 

2

 

 

 

2

 

 

 

4

 

Weighted-average common and dilutive potential common shares
 outstanding (for diluted calculation)

 

 

371

 

 

 

390

 

 

 

420

 

Basic Earnings Per Common Share

 

$

2.52

 

 

$

2.34

 

 

$

1.99

 

Diluted Earnings Per Common Share

 

$

2.51

 

 

$

2.33

 

 

$

1.97

 

Share-based awards excluded from the diluted EPS computation(b)

 

 

3

 

 

 

5

 

 

 

3

 
(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 were 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 12 for a further discussion of share-based compensation.
(b)
These outstanding SARs, RSUs and PSUs were excluded from the computation of diluted EPS because to do so would have been antidilutive for the years presented, or because certain PSUs are contingently issuable based on the achievement of performance and market conditions, which have not been met as of December 31, 2025, 2024 and 2023.

About Earnings Per Share Disclosures

The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.

Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.

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