Yum China Holdings, Inc.

Previous wording

Yum China Holdings, Inc. is the largest restaurant company in China in terms of 2025 system sales, with 19,297 restaurants covering over 2,700 cities primarily in China as of June 30, 2026. Our growing restaurant network consists of our flagship KFC and Pizza Hut brands, as well as emerging brands such as Lavazza, Huang Ji Huang, Little Sheep and Taco Bell. We have the exclusive right to operate and sublicense the KFC, Pizza Hut and, subject to the agreed terms, Taco Bell brands in China (excluding Hong Kong, Macau and Taiwan), and own the intellectual property of the Little Sheep and Huang Ji Huang concepts outright. We also established a joint venture with Lavazza Group, the world-renowned family-owned Italian coffee company, to explore and develop the Lavazza coffee concept in China. KFC was the first major global restaurant brand to enter China in 1987. With more than three decades of operations, we have developed extensive operating experience in the China market. We believe that there are significant opportunities to further expand within China, and we intend to focus our efforts on increasing our geographic footprint in both existing and new cities.

Current wording

Yum China Holdings, Inc. is the largest restaurant company in China in terms of 2025 system sales, with 19,989 restaurants covering over 2,800 cities primarily in China as of September 30, 2026. Our growing restaurant network consists of our flagship KFC and Pizza Hut brands, as well as emerging brands such as Lavazza, Huang Ji Huang, Little Sheep and Taco Bell. We have the exclusive right to operate and sublicense the KFC and, subject to the agreed terms, Taco Bell brands in China (excluding Hong Kong, Macau and Taiwan). In August 2026, the Company completed the Pizza Hut Acquisition from YUM. Upon closing, the Company became the owner of the Pizza Hut brand in Mainland China and was no longer subject to the license fees previously payable to YUM for the Pizza Hut brand. We also own the intellectual property of the Little Sheep and Huang Ji Huang concepts outright. In addition, we established a joint venture with Lavazza Group, the world-renowned family-owned Italian coffee company, to explore and develop the Lavazza coffee concept in China. KFC was the first major global restaurant brand to enter China in 1987. With more than three decades of operations, we have developed extensive operating experience in the China market. We believe that there are significant opportunities to further expand within China, and we intend to focus our efforts on increasing our geographic footprint in both existing and new cities.

Previous wording

KFC is the leading and the largest quick-service restaurant (“QSR”) brand in China in terms of 2025 system sales. As of June 30, 2026, KFC operated 13,789 restaurants in over 2,700 cities across China.

Current wording

KFC is the leading and the largest quick-service restaurant (“QSR”) brand in China in terms of 2025 system sales. As of September 30, 2026, KFC operated 14,307 restaurants in over 2,800 cities across China.

Previous wording

Pizza Hut is the leading and the largest casual dining restaurant (“CDR”) brand in China in terms of 2025 system sales and number of restaurants as of December 31, 2025. As of June 30, 2026, Pizza Hut operated 4,549 restaurants in over 1,200 cities.

Current wording

Pizza Hut is the leading and the largest casual dining restaurant (“CDR”) brand in China in terms of 2025 system sales and number of restaurants as of December 31, 2025. As of September 30, 2026, Pizza Hut operated 4,740 restaurants in over 1,300 cities.

Previous wording

As compared to the second quarter of 2025, Total revenues in the second quarter of 2026 increased 13%, or 6% excluding the impact of F/X. Total revenues for the year to date ended June 30, 2026 increased 11%, or 5% excluding the impact of F/X. The increase in Total revenues for the quarter ended June 30, 2026, excluding the impact of F/X, was primarily attributable to 5% net new unit contribution and 1% same-store sales growth. The increase in Total revenues for the year to date ended June 30, 2026, excluding the impact of F/X, was primarily driven by 4% net new unit contribution and 1% same-store sales growth.

Current wording

As compared to the third quarter of 2025, Total revenues in the third quarter of 2026 increased 8%, or 2% excluding the impact of F/X. Total revenues for the year to date ended September 30, 2026 increased 10%, or 4% excluding the impact of F/X. The increase in Total revenues for the quarter ended September 30, 2026, excluding the impact of F/X, was primarily attributable to 5% net new unit contribution, partially offset by 3% same-store sales decline. The increase in Total revenues for the year to date ended September 30, 2026, excluding the impact of F/X, was primarily driven by 5% net new unit contribution, partially offset by 1% same-store sales decline.

Previous wording

Operating profit for the second quarter increased 14%, or 7% excluding the impact of F/X. The increase in Operating profit for the quarter ended June 30, 2026 was primarily driven by the increase in Total revenues, efficiency improvement from streamlined operations and favorable commodity prices, partially offset by increased delivery cost associated with higher delivery sales mix in the current period and value-for-money offerings.

Current wording

Operating profit for the third quarter increased 13%, or 6% excluding the impact of F/X. The increase in Operating profit for the quarter ended September 30, 2026 was primarily driven by the increase in Total revenues, efficiency improvement from streamlined operations, favorable commodity prices and the decrease in license fees payable to YUM post the Pizza Hut Acquisition, partially offset by value-for-money offerings and increased delivery cost associated with higher delivery sales mix in the current period.

Previous wording

Operating profit for the year to date ended June 30, 2026 increased 13%, or 7% excluding the impact of F/X. The increase in Operating profit for the year to date ended June 30, 2026 was primarily driven by the increase in Total revenues, efficiency improvement from streamlined operations and favorable commodity prices, lower closures and impairment and G&A expenses, partially offset by increased delivery cost associated with higher delivery sales mix in the current period and value-for-money offerings.

Current wording

Operating profit for the year to date ended September 30, 2026 increased 13%, or 6% excluding the impact of F/X. The increase in Operating profit for the year to date ended September 30, 2026 was primarily driven by the increase in Total revenues, efficiency improvement from streamlined operations, favorable commodity prices and the decrease in license fees payable to YUM post the Pizza Hut Acquisition, partially offset by increased delivery cost associated with higher delivery sales mix in the current period and value-for-money offerings.

Previous wording

Net income for the second quarter increased 14%, or 6% excluding the impact of F/X. Net income for the year to date ended June 30, 2026 increased 9%, or 3% excluding the impact of F/X. The increase in Net income was mainly due to the increase in Operating Profit, partially offset by less interest income from lower investment balance and interest rates.

Current wording

Net income for the quarter and year to date ended September 30, 2026 both increased 10%, or 3% excluding the impact of F/X. The increase in Net income was mainly due to the increase in Operating Profit, partially offset by less interest income from lower investment balance resulting from cash used in return to shareholders and lower interest rates.

Previous wording

As compared to the second quarter of 2025, the increase in Company sales for the quarter, excluding the impact of F/X, was primarily driven by net unit growth and same-store sales growth. The increase in Restaurant profit for the quarter, excluding the impact of F/X, was primarily driven by the increase in Company sales, efficiency improvement from streamlined operations and favorable commodity prices, partially offset by increased delivery cost associated with higher delivery sales mix in the current period and value-for-money offerings.

Current wording

As compared to the third quarter of 2025, the increase in Company sales for the quarter, excluding the impact of F/X, was primarily driven by net unit growth, partially offset by same-store sales decline. The increase in Restaurant profit for the quarter, excluding the impact of F/X, was primarily driven by the increase in Company sales, efficiency improvement from streamlined operations and favorable commodity prices, partially offset by value-for-money offerings and increased rider cost associated with higher delivery sales mix in the current period.

Previous wording

The increase in Company sales for the year to date ended June 30, 2026, excluding the impact of F/X, was primarily driven by net unit growth. The year to date increase in Restaurant profit, excluding the impact of F/X, was primarily driven by the increase in Company sales, efficiency improvement from streamlined operations and favorable commodity prices, partially offset by value-for-money offerings and increased delivery cost associated with higher delivery sales mix in the current period.

Current wording

The increase in Company sales for the year-to-date ended September 30, 2026, excluding the impact of F/X, was primarily driven by net unit growth. The year to date increase in Restaurant profit, excluding the impact of F/X, was primarily driven by the increase in Company sales, efficiency improvement from streamlined operations and favorable commodity prices, partially offset by increased rider cost associated with higher delivery sales mix in the current period and value-for-money offerings.

Previous wording

Corporate G&A expenses for the quarter remained flat. The year to date decrease in Corporate G&A expenses, excluding the impact of F/X, was primarily due to lower compensation costs and timing of government subsidies.

Current wording

The quarter and year to date increase in Corporate G&A expenses, excluding the impact of F/X, was primarily due to less government subsidies, partially offset by lower performance-based compensation costs.

Previous wording

The quarter and year to date decrease in interest income, net, excluding the impact of F/X, was primarily driven by lower investment balance with cash used in return to shareholders and lower interest rates.

Current wording

The quarter and year to date decrease in interest income, net, excluding the impact of F/X, was primarily driven by lower investment balance with cash used in return to shareholders, lower interest rates and interest expense associated with the Bridge Loan to fund the Pizza Hut Acquisition.

Previous wording

The investment loss mainly relates to the change in fair value of our investment in Meituan. See Note 3 for additional information.

Current wording

The change in investment gain (loss) mainly relates to the change in fair value of our investment in Meituan. See Note 3 for additional information.

Previous wording

Our income tax provision primarily includes tax on our earnings generally at the Chinese statutory tax rate of 25% with certain Chinese subsidiaries qualified for preferential tax rates, withholding tax on planned or actual repatriation of earnings outside of China, Hong Kong profits tax, and U.S. corporate income tax, if any. The higher effective tax rate for the quarter ended June 30, 2026 was primarily due to higher U.S. tax impact. The lower effective tax rate for the year to date ended June 30, 2026 was primarily due to higher excess tax benefits upon exercise of share-based awards.

Current wording

Our income tax provision primarily includes tax on our earnings generally at the Chinese statutory tax rate of 25% with certain Chinese subsidiaries qualified for preferential tax rates, withholding tax on planned or actual repatriation of earnings outside of China, Hong Kong profits tax, and U.S. corporate income tax, if any. The higher effective tax rate for the quarter ended September 30, 2026 was primarily due to higher U.S. tax impact.

Previous wording

As of June 30, 2026, current VAT assets of $159 million, non-current VAT assets of $14 million and net VAT payable of $7 million were recorded in Prepaid expenses and other current assets, Other assets and Accounts payable and other current liabilities, respectively, in the Condensed Consolidated Balance Sheets.

Current wording

As of September 30, 2026, current VAT assets of $175 million, non-current VAT assets of $15 million and net VAT payable of $6 million were recorded in Prepaid expenses and other current assets, Other assets and Accounts payable and other current liabilities, respectively, in the Condensed Consolidated Balance Sheets.

Previous wording

Net cash provided by operating activities was $976 million in 2026 as compared to $864 million in 2025. The increase was primarily driven by the increase in Operating profit along with working capital changes.

Current wording

Net cash provided by operating activities was $1,481 million in 2026 as compared to $1,341 million in 2025. The increase was primarily driven by the increase in Operating profit along with working capital changes.

Previous wording

Net cash used in investing activities was $265 million in 2026 as compared to $290 million in 2025. The decrease was mainly due to the net impact on cash flows resulting from purchases and maturities of short-term investments, and long-term bank deposits and notes.

Current wording

Net cash used in investing activities was $1,802 million in 2026 as compared to $316 million in 2025. The increase was mainly due to the cash consideration of $1.2 billion paid for the Pizza Hut Acquisition and the net impact on cash flows resulting from purchases and maturities of short-term investments, and long-term bank deposits and notes.

Previous wording

Net cash used in financing activities was $739 million in 2026 as compared to $709 million in 2025. The increase was primarily driven by the increase of share repurchases and cash dividends paid on common stock, partially offset by the increase in the proceeds from short-term borrowings.

Current wording

Net cash provided by financing activities was $341 million in 2026 as compared to net cash used in financing activities of $1,107 million in 2025. The change was primarily driven by approximately $1.2 billion proceeds from short-term borrowings to finance the Pizza Hut Acquisition, partially offset by the increase of share repurchases and cash dividends paid on common stock.

Previous wording

In August 2026, the Company completed the acquisition of ownership of the Pizza Hut brand in Mainland China at a cash consideration of $1.2 billion. To finance the transaction, the Company secured an approximately $1.2 billion equivalent offshore bridge loan for up to twelve months.

Current wording

In August 2026, the Company completed the Pizza Hut Acquisition for a cash consideration of $1.2 billion. To finance the transaction, the Company borrowed an offshore Bridge Loan in the amount of CNH8,400 million for up to twelve months. The outstanding balance of the Bridge Loan is $1,252 million as of September 30, 2026.

Previous wording

As of June 30, 2026, our Board of Directors authorized an aggregate of $5.4 billion for our share repurchase program, of which $641 million remained available as of June 30, 2026. Yum China may repurchase shares under this program from time to time in the open market or, subject to applicable regulatory requirements, through privately negotiated transactions, block trades, accelerated share repurchase transactions and the use of Rule 10b5-1 trading plans. During the years to date ended June 30, 2026 and 2025, the Company repurchased 10.7 million shares of common stock for $515 million and 7.7 million shares of common stock for $356 million, respectively, under the repurchase program, excluding transaction costs and excise tax.

Current wording

As of September 30, 2026, our Board of Directors authorized an aggregate of $5.4 billion for our share repurchase program. Yum China may repurchase shares under this program from time to time in the open market or, subject to applicable regulatory requirements, through privately negotiated transactions, block trades, accelerated share repurchase transactions and the use of Rule 10b5-1 trading plans. During the years to date ended September 30, 2026 and 2025, the Company repurchased 16.6 million shares of common stock for $778 million and 14.9 million shares of common stock for $682 million, respectively, under the repurchase program, excluding transaction costs and excise tax.

Previous wording

For the quarters ended June 30, 2026 and 2025, the Company paid cash dividends of approximately $101 million and $90 million, respectively, and for the years to date ended June 30, 2026 and 2025, the Company paid aggregate cash dividends of approximately $203 million and $180 million, respectively, to stockholders through a quarterly dividend payment of $0.29 and $0.24 per share, respectively.

Current wording

For the quarters ended September 30, 2026 and 2025, the Company paid cash dividends of approximately $99 million and $88 million, respectively, and for the years to date ended September 30, 2026 and 2025, the Company paid aggregate cash dividends of approximately $302 million and $268 million, respectively, to stockholders through a quarterly dividend payment of $0.29 and $0.24 per share, respectively.

Previous wording

On July 30, 2026, the Board of Directors declared a cash dividend of $0.29 per share, payable on September 17, 2026, to stockholders of record as of the close of business on August 27, 2026. The total estimated cash dividend payable is approximately $99 million.

Current wording

On November 3, 2026, the Board of Directors declared a cash dividend of $0.29 per share, payable on December 22, 2026, to stockholders of record as of the close of business on December 1, 2026. The total estimated cash dividend payable is approximately $98 million.

Previous wording

The credit facilities had remaining terms ranging from less than one year to three years as of June 30, 2026. Our credit facilities mainly include term loans, overdrafts, letters of credit, banker’s acceptance notes and bank guarantees. The credit facilities in general bear interest based on the Loan Prime Rate (“LPR”) published by the National Interbank Funding Centre of the PRC, or Secured Overnight Financing Rate (“SOFR”) published by the Federal Reserve Bank of New York. Each credit facility contains a cross-default provision whereby our failure to make any payment on a principal amount from any credit facility will constitute a default on other credit facilities. Some of the credit facilities contain covenants limiting, among other things, certain additional indebtedness and liens, and certain other transactions specified in the respective agreements. As of June 30, 2026, we had outstanding short-term bank borrowings of RMB445 million (approximately $66 million), mainly to manage working capital at our operating subsidiaries. Such bank borrowings are due within one year from their issuance dates. As of June 30, 2026, we also had outstanding bank guarantees of RMB315 million (approximately $46 million) mainly to secure our lease payments to landlords for certain Company-owned restaurants, as well as outstanding bank guarantees of RMB600 million (approximately $89 million) to secure the balance of prepaid stored-value cards issued by the Company pursuant to regulatory requirements. Our credit facilities were therefore reduced by outstanding short-term bank borrowings, adjusted for unamortized interest and outstanding guarantees. As of June 30, 2026, the Company had unused credit facilities of approximately $1,378 million.

Current wording

The credit facilities had remaining terms ranging from less than one year to three years as of September 30, 2026. Our credit facilities mainly include term loans, overdrafts, letters of credit, banker’s acceptance notes and bank guarantees. The credit facilities in general bear interest based on the CNH Hong Kong Interbank Offered Rate (“CNH HIBOR”) published by the Treasury Markets Association of Hong Kong, the Loan Prime Rate (“LPR”) published by the National Interbank Funding Centre of the PRC, or Secured Overnight Financing Rate (“SOFR”) published by the Federal Reserve Bank of New York. Certain credit facilities contain a cross-default provision whereby our failure to make payments may constitute a default on other credit facilities. Some of the credit facilities contain certain customary covenants including, among other things, certain financial covenants, limitations on certain additional indebtedness and liens, and certain other transactions specified in the respective agreements. As of September 30, 2026, we had an offshore Bridge Loan of CNH8,400 million (approximately $1,252 million) to finance the Pizza Hut Acquisition, and other short-term bank borrowings of RMB1,996 million (approximately $297 million), mainly to manage working capital at our operating subsidiaries. Such bank borrowings are due within one year from their issuance dates. As of September 30, 2026, we also had outstanding bank guarantees of RMB327 million (approximately $49 million) mainly to secure our lease payments to landlords for certain Company-owned restaurants, as well as outstanding bank guarantees of RMB600 million (approximately $89 million) to secure the balance of prepaid stored-value cards issued by the Company pursuant to regulatory requirements. Our credit facilities were therefore reduced by outstanding short-term bank borrowings, adjusted for unamortized interest and outstanding guarantees. As of September 30, 2026, the Company had unused credit facilities of approximately $1,155 million.

Previous wording

Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. These statements often include words such as “may,” “will,” “estimate,” “intend,” “seek,” “expect,” “project,” “anticipate,” “believe,” “plan,” “could,” “target,” “aim,” “commit,” “predict,” “likely,” “should,” “forecast,” “outlook,” “model,” “continue,” “ongoing” or other similar terminology. Forward-looking statements are based on our expectations, estimates, assumptions or projections concerning future results or events as of the date of the filing of this Form 10-Q. Our plan of capital returns to shareholders is based on current expectations, which may change based on market conditions, capital needs or otherwise. Forward-looking statements are neither predictions nor guarantees of future events, circumstances or performance and are inherently subject to known and unknown risks, uncertainties and assumptions that could cause our actual results and events to differ materially from those indicated by those statements. We cannot assure you that any of our assumptions are correct or any of our expectations, estimates or projections will be achieved. Numerous factors could cause our actual results to differ materially from those expressed or implied by forward-looking statements, including, without limitation, the following:

Current wording

Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. These statements often include words such as “may,” “will,” “estimate,” “intend,” “seek,” “expect,” “project,” “anticipate,” “believe,” “plan,” “could,” “target,” “aim,” “commit,” “predict,” “likely,” “should,” “forecast,” “outlook,” “model,” “continue,” “ongoing” or other similar terminology. Forward-looking statements include, without limitation, statements regarding our future strategies, growth, business plans, restaurant expansion plans and operating profit targets, as well as the expected benefits and impact of the acquisition of ownership of the Pizza Hut brand in Mainland China from YUM (the “Pizza Hut Acquisition”) and related financing (including plans for long-term financing), including expected license-fee savings, expected margin benefits, expected EPS accretion and potential long-term value creation. Forward-looking statements are based on our expectations, estimates, assumptions or projections concerning future results or events as of the date of the filing of this Form 10-Q. Our plan of capital returns to shareholders is based on current expectations, which may change based on market conditions, capital needs or otherwise. Forward-looking statements are neither predictions nor guarantees of future events, circumstances or performance and are inherently subject to known and unknown risks, uncertainties and assumptions that could cause our actual results and events to differ materially from those indicated by those statements. We cannot assure you that any of our assumptions are correct or any of our expectations, estimates or projections will be achieved. Numerous factors could cause our actual results to differ materially from those expressed or implied by forward-looking statements, including, without limitation, the following:

Previous wording

Risks related to doing business in China, such as (a) changes in Chinese political policies and economic and social policies or conditions, (b) the interpretation and enforcement of Chinese laws, rules and regulations may change from time to time with little advance notice, and the risk that the PRC government may intervene or influence our operations, which could result in a material change in our operations and/or the value of our securities to decline, (c) audit reports included in our annual reports prepared by auditors who are located in China, and in the event the PCAOB is unable to inspect our auditors, our common stock will be subject to potential delisting from the New York Stock Exchange, (d) changes in political, business, economic and trade relations between the United States and China, (e) fluctuation in the value of the Chinese Renminbi, (f) the fact that we face increasing focus and evolving requirements on environmental sustainability issues, (g) limitation on our ability to utilize our cash balances effectively, including making funds held by our China-based subsidiaries unavailable for use outside of mainland China, due to interventions in or the imposition of restrictions and limitations by the PRC government on currency conversion and payments of foreign currency and RMB out of mainland China, (h) changes in the laws and regulations of China or noncompliance with applicable laws and regulations, (i) reliance on dividends and other distributions on equity paid by our principal subsidiaries in China to fund offshore cash requirements, and uncertainties regarding the application of the withholding tax rates could have a material adverse effect on our business and financial results, (j) potential unfavorable tax consequences resulting from our classification as a China resident enterprise for Chinese enterprise income tax purposes, (k) uncertainty regarding indirect transfers of equity interests in China resident enterprises and enhanced scrutiny by Chinese tax authorities, (l) difficulties in effecting service of legal process, conducting investigations, collecting evidence, enforcing foreign judgments or bringing original actions in China against us, (m) the Chinese government may determine that the variable interest entity structure of Daojia does not comply with Chinese laws on foreign investment in restricted industries, (n) inability to use properties due to defects caused by non-registration of lease agreements related to certain properties, (o) risk in relation to unexpected land acquisitions, building closures or demolitions, (p) potential fines and other legal or administrative sanctions for failure to comply with Chinese regulations regarding our employee equity incentive plans and various employee benefit plans, (q) proceedings instituted by the SEC against certain China-based accounting firms, including our independent registered public accounting firm, could result in our financial statements being determined to not …

Excerpt shortened here; the source contains the full paragraph.

Current wording

Risks related to doing business in China, such as (a) changes in Chinese political policies and economic and social policies or conditions, (b) the interpretation and enforcement of Chinese laws, rules and regulations may change from time to time with little advance notice, and the risk that the PRC government may intervene or influence our operations, which could result in a material change in our operations and/or the value of our securities to decline, (c) audit reports included in our annual reports prepared by auditors who are located in China, and in the event the PCAOB is unable to inspect our auditors, our common stock will be subject to potential delisting from the New York Stock Exchange, (d) changes in political, business, economic and trade relations between the United States and China, (e) fluctuation in the value of the Chinese Renminbi, (f) the fact that we face increasing focus and evolving requirements on environmental sustainability issues, (g) limitation on our ability to utilize our cash balances effectively, including making funds held by our China-based subsidiaries unavailable for use outside of mainland China, due to interventions in or the imposition of restrictions and limitations by the PRC government on currency conversion and payments of foreign currency and RMB out of mainland China, (h) changes in the laws and regulations of China or noncompliance with applicable laws and regulations, (i) reliance on dividends and other distributions on equity paid by our principal subsidiaries in China to fund offshore cash requirements, and uncertainties regarding the application of the withholding tax rates could have a material adverse effect on our business and financial results, (j) potential unfavorable tax consequences resulting from our classification as a China resident enterprise for Chinese enterprise income tax purposes, (k) uncertainty regarding indirect transfers of equity interests in China resident enterprises and enhanced scrutiny by Chinese tax authorities, (l) difficulties in effecting service of legal process, conducting investigations, collecting evidence, enforcing foreign judgments or bringing original actions in China against us, (m) the Chinese government may determine that the variable interest entity structure of Daojia does not comply with Chinese laws on foreign investment in restricted industries, (n) inability to use properties due to defects caused by non-registration of lease agreements related to certain properties, (o) risk in relation to unexpected land acquisitions, building closures or demolitions, (p) potential fines and other legal or administrative sanctions for failure to comply with Chinese regulations regarding our employee equity incentive plans and various employee benefit plans, (q) proceedings instituted by the SEC against certain China-based accounting firms, including our independent registered public accounting firm, could result in our financial statements being determined to not …

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Risks related to the separation and related transactions, such as (a) incurring significant tax liabilities if the distribution does not qualify as a transaction that is generally tax-free for U.S. federal income tax purposes and the Company could be required to indemnify YUM for material taxes and other related amounts pursuant to indemnification obligations under the tax matters agreement, (b) being obligated to indemnify YUM for material taxes and related amounts pursuant to indemnification obligations under the tax matters agreement if YUM is subject to Chinese indirect transfer tax with respect to the distribution, (c) potential indemnification liabilities owing to YUM pursuant to the separation and distribution agreement, (d) the indemnity provided by YUM to us with respect to certain liabilities in connection with the separation may be insufficient to insure us against the full amount of such liabilities, (e) the possibility that a court would require that we assume responsibility for obligations allocated to YUM under the separation and distribution agreement, and (f) potential liabilities due to fraudulent transfer considerations; and

Current wording

Risks related to the separation and related transactions, such as (a) incurring significant tax liabilities if the distribution does not qualify as a transaction that is generally tax-free for U.S. federal income tax purposes and the Company could be required to indemnify YUM for material taxes and other related amounts pursuant to indemnification obligations under the tax matters agreement, (b) being obligated to indemnify YUM for material taxes and related amounts pursuant to indemnification obligations under the tax matters agreement if YUM is subject to Chinese indirect transfer tax with respect to the distribution, (c) potential indemnification liabilities owing to YUM pursuant to the separation and distribution agreement, (d) the indemnity provided by YUM to us with respect to certain liabilities in connection with the separation may be insufficient to insure us against the full amount of such liabilities, (e) the possibility that a court would require that we assume responsibility for obligations allocated to YUM under the separation and distribution agreement, and (f) potential liabilities due to fraudulent transfer considerations;