Pepsi Bottling Group (PBG)

 

Significant management judgment is required in evaluating our tax positions and in determining our effective tax rate.

 

See Note 13 for further discussion on our income taxes.

 

allowances to reduce our deferred tax assets to an amount that will more likely than not be realized.

 

As required under the provisions of Financial Accounting Standards Board (“FASB”) Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”), which we adopted as of the beginning of fiscal year 2007, we recognize the impact of our tax positions in our financial statements if those positions will more likely than not be sustained on audit, based on the technical merits of the position. A number of years may elapse before an uncertain tax position for which we have established a tax reserve is audited and finally resolved, and the number of years for which we have audits that are open varies depending on the tax jurisdiction. While it is often difficult to predict the final outcome or the timing of the resolution of an audit, we believe that our reserves for uncertain tax benefits reflect the outcome of tax positions that is more likely than not to occur. Nevertheless, it is possible that tax authorities may disagree with our tax positions, which could have a significant impact on our results of operations, financial position and cash flows. The resolution of a tax position could be recognized as an adjustment to our provision for income taxes and our deferred taxes in the period of resolution, and may also require a use of cash.

 

For further information about our income taxes see “Income Tax Expense” in the Results of Operations and Note 13 in the Notes to Consolidated Financial Statements.

 

 

Our effective tax rate is based on pre-tax income, statutory tax
rates, tax laws and regulations and tax planning strategies
available to us in the various jurisdictions in which we
operate. Significant management judgment is required in
evaluating our tax positions and in determining our effective
tax rate.

 

Our deferred tax assets and liabilities reflect our best
estimate of the tax benefits and costs we expect to realize in
the future. We establish valuation

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allowances to reduce our deferred tax assets to an amount that
will more likely than not be realized.

 

As required under the provisions of Financial Accounting
Standards Board (“FASB”) Interpretation No. 48,
“Accounting for Uncertainty in Income Taxes”
(“FIN 48”), which we adopted as of the beginning
of fiscal year 2007, we recognize the impact of our tax
positions in our financial statements if those positions will
more likely than not be sustained on audit, based on the
technical merits of the position. A number of years may elapse
before an uncertain tax position for which we have established a
tax reserve is audited and finally resolved, and the number of
years for which we have audits that are open varies depending on
the tax jurisdiction. While it is often difficult to predict the
final outcome or the timing of the resolution of an audit, we
believe that our reserves for uncertain tax benefits reflect the
outcome of tax positions that is more likely than not to occur.
Nevertheless, it is possible that tax authorities may disagree
with our tax positions, which could have a significant impact on
our results of operations, financial position and cash flows.
The resolution of a tax position could be recognized as an
adjustment to our provision for income taxes and our deferred
taxes in the period of resolution, and may also require a use of
cash.

 

For further information about our income taxes see “Income
Tax Expense” in the Results of Operations and Note 13
in the Notes to Consolidated Financial Statements.

 

 

Our deferred tax assets and liabilities reflect our best estimate of the tax benefits and costs we expect to realize in the future. We establish valuation allowances to reduce our deferred tax assets to an amount that will more likely than not be realized.

 

As required under the provisions of Financial Accounting Standards Board (“FASB”) Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”), which we adopted as of the beginning of fiscal year 2007, we recognize the impact of our tax positions in our financial statements if those positions will more likely than not be sustained on audit, based on the technical merit of the position.

36

 

Significant management judgment is required in evaluating our tax positions and in determining our effective tax rate.

 

See Note 13 for further discussion on our income taxes.

 

 

Our deferred tax assets and liabilities reflect our best
estimate of the tax benefits and costs we expect to realize in
the future. We establish valuation allowances to reduce our
deferred tax assets to an amount that will more likely than not
be realized.

 

As required under the provisions of Financial Accounting
Standards Board (“FASB”) Interpretation No. 48,
“Accounting for Uncertainty in Income Taxes”
(“FIN 48”), which we adopted as of the beginning
of fiscal year 2007, we recognize the impact of our tax
positions in our financial statements if those positions will
more likely than not be sustained on audit, based on the
technical merit of the position.

36

 

Significant management judgment is required in evaluating our
tax positions and in determining our effective tax rate.

 

See Note 13 for further discussion on our income taxes.