PepsiCo Inc. engages in a number of businesses that include Pepsi-Cola, Slice, Mountain Dew, and Fritos. The company's annual revenues exceed \(\$ 45\) billion. A recent PepsiCo annual report contained the following information:

At the end of the current year, we have reclassified \(\$ 1.4\) billion of short-term debt to long-

} term based on our intent and ability to refinance on a long-term basis.

Required:
As an analyst, comment on the company's classification of short-term debt as long-term debt. What conditions should exist to permit a company to make this type of classification?