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


	Quarter Ended				Year to Date Ended
	6/30/2022		6/30/2021		6/30/2022		6/30/2021
Net Income – Yum China Holdings, Inc.	$	83	$	181	$	183	$	411
Weighted-average common shares outstanding (for basic calculation)(a)		421		421		423		420
Effect of dilutive share-based awards(a)		3		6		4		6
Effect of dilutive warrants(b)		—		8		—		8
Weighted-average common and dilutive potential common shares outstanding (for diluted calculation)(a)		424		435		427		434
Basic Earnings Per Common Share	$	0.20	$	0.43	$	0.43	$	0.98
Diluted Earnings Per Common Share	$	0.20	$	0.42	$	0.43	$	0.95
Share-based awards excluded from the diluted EPS computation(c)		4		2		4		2

(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. In September 2020, 41,910,700 common shares were issued as a result of the Company’s global offering and secondary listing on the HKEX and they were included in the calculated weighted-average common shares outstanding.

(b)

Pursuant to the investment agreements dated September 1, 2016, 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 were exercisable at any time through October 31, 2021. The incremental shares arising from outstanding warrants were included in the computation of diluted EPS, if there is dilutive effect when the average market price of Yum China common stock for the periods exceeds the applicable exercise price of the warrants. During the second half of 2021, an aggregate of 7,534,316 common shares were issued as a result of the cashless exercise of all warrants outstanding, which upon exercise were excluded from the calculation of dilutive warrants and included in the weighted-average common shares outstanding.

(c)

These outstanding stock appreciation rights (“SARs”), restricted stock units (“RSUs”) and performance stock units (“PSUs”) were excluded from the computation of diluted EPS because to do so would have been antidilutive for the quarters presented, or because certain PSUs are contingently issuable based on the achievement of performance and market conditions, which have not been met as of June 30, 2022 and 2021.