This assignment is based on the 10-K for Yum Brands Inc. for the year ended December 31, 2017. You can obtain Yums 10-K from the SECs Edgar data base of company filings at https://www.sec.gov/edgar/searchedgar/companysearch.html. Unless otherwise indicated, all questions relate to the current periods financial statements.

1- In Item 1A, Risk Factors, the 10-K notes that We have significant exposure to the Chinese market through our largest franchisee, Yum China, which subjects us to risks that could negatively affect our business.

a- In your own words, what issues or risks are being disclosed?

b-In your own words, what impact could these risks have on the firms financial statements?

2-In Item 3, Legal Proceedings, Yum categorizes the source of potential claims into six categories. What are those categories?

3-In the notes to the financial statements, disclosure note 20 addresses Contingencies.

a-The first subheading in this note deals with lease guarantees.

- What is the maximum amount that Yum could be obligated to pay based on its lease guarantees?

- Why doesnt Yum have to include these guarantees as liabilities on the balance sheet?

b- A subsequent subheading of this note is entitled Legal Proceedings.

- How does the information in this section compare to what was disclosed in Item 3 Legal Proceedings?

- Has Yum accrued any amounts in the financial statements for any of the cases described in Note 20?