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Information about our most recent risk factors is disclosed in Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021.
−Removed: At March 31, 2022, there have been no material changes to the information, except for the expanded discussion related to the Russian invasion of Ukraine, included below.
+Added: At June 30, 2022, there have been no material changes to the information, except for the expanded discussion related to the Russian invasion of Ukraine, included below.
Our international operations subject us to risks that could negatively affect our business.
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As a result, our business and the businesses of our Concepts’ franchisees are increasingly exposed to risks inherent in international operations.
−Removed: These risks, which can vary substantially by country, include political, financial or social instability or conditions, geopolitical events, corruption, anti-American sentiment, social and ethnic unrest, military conflicts and terrorism, as well as changes in economic conditions (including consumer spending, unemployment levels and wage and commodity inflation), the regulatory environment (including the risks of operating in developing or emerging markets in which there are uncertainties regarding the interpretation and enforceability of legal requirements and the enforceability of contract rights and intellectual property rights), income and non-income based tax rates and laws.
+Added: These risks, which can vary substantially by country, include political, financial or social instability or conditions, geopolitical events, corruption, anti-American sentiment, social and ethnic unrest, military conflicts and terrorism, as well as changes in economic conditions (including consumer spending, unemployment levels and wage and commodity inflation), the regulatory environment (including the risks of operating in developing or emerging markets in which there are uncertainties regarding the interpretation and enforceability of legal requirements and the enforceability of contract rights and intellectual property rights), and income and non-income based tax rates and laws.
Additional risks include the impact of import restrictions or controls, sanctions, foreign exchange control regimes (including restrictions on currency conversion), health guidelines and safety protocols related to the COVID-19 pandemic, labor costs and conditions, compliance with the U.S.
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For example, we have been subject to a regulatory enforcement action in India alleging violation of foreign exchange laws for failure to satisfy conditions of certain operating approvals, such as minimum investment and store build requirements as well as limitations on the remittance of fees outside of the country (see Note 13).
−Removed: Following the Russian invasion of Ukraine, we announced the suspension of all investment and restaurant development efforts in Russia as well as the operations of company-owned KFC restaurants in Russia, and that we are finalizing an agreement with our Pizza Hut master franchisee to suspend restaurant operations in Russia.
−Removed: In addition to these actions, we have begun a process aimed at transferring ownership to local operators while, in the interim, we continue to redirect any net profits from Russia operations to humanitarian efforts.
−Removed: There can be no guarantee that our efforts to transfer ownership will be successful, and any transfer or failure to transfer could result in damage to our and our Concepts’ brand reputations.
+Added: Following the Russian invasion of Ukraine, we announced the suspension of all investment and restaurant development efforts in Russia as well as the operations of company-owned KFC restaurants in Russia.
+Added: We have transferred ownership of the Pizza Hut business in Russia to a local operator who has initiated the process of re-branding locations to a non-YUM concept, and we are in the process of transferring ownership of our KFC restaurants, operating systems and master franchise rights, including the network of franchised restaurants in Russia, to a local operator who will be responsible for re-branding KFC locations to a non-YUM concept.
+Added: In the interim, we have pledged to redirect any net profits attributable to Russia subsequent to the date of invasion to humanitarian efforts.
+Added: There can be no guarantee that our efforts to transfer ownership or re-brand will be successful, and any transfer or re-brand, or failure to transfer or re-brand, could result in damage to our and our Concepts’ brand reputations.
In addition, the Russian invasion of Ukraine has and may continue to adversely impact macroeconomic conditions, give rise to regional instability and result in heightened economic sanctions from the U.S.
and the international community in a manner that adversely affects us and our Concepts’ restaurants located in Russia and Eastern Europe, including to the extent that any such sanctions restrict our ability in this region to conduct business with certain suppliers or vendors, and/or to utilize the banking system and repatriate cash.
−Removed: Given current conditions and our announced intention to transfer the business to local operators, there can be no assurance of any contribution to any component of our results of operations from the Russia business in the short or long term.
+Added: Given current conditions and our announced intention to transfer the business to local operators and re-brand, there can be no assurance of any contribution to any component of our results of operations from the Russia business in the short or long term.
We and our franchisees do business in jurisdictions that may be subject to trade or economic sanction regimes and such sanctions could be expanded.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.