8-KOther Events

EXXON MOBIL CORP 8-K Report (Nov 20, 2003)

Filed November 20, 2003For Securities:XOM

Summary

Exxon Mobil Corporation (XOM) has reached a settlement with the Internal Revenue Service (IRS) regarding a long-standing tax dispute concerning deductions claimed on natural gas sales primarily in Texas between 1974 and 1990. The company has a history of prevailing in this matter, having won three previous federal court cases. This settlement, which has been reviewed by the congressional Joint Committee on Taxation, confirms ExxonMobil's entitlement to these deductions for the tax years 1976-1990.

Key Highlights

  • 1ExxonMobil settles a long-running tax dispute with the IRS regarding natural gas sales deductions from 1974-1990.
  • 2The company had previously won three federal court cases on this issue.
  • 3Favorable court decisions in 1996 and 2001 led to reimbursements for taxes paid for 1974-1975.
  • 4A third federal court ruling in early 2003 preceded the IRS and Justice Department's agreement for tax years 1976-1990.
  • 5The settlement is subject to review by the congressional Joint Committee on Taxation.
  • 6ExxonMobil expects to receive refunds, including taxable interest, for the settled tax years.
  • 7The cumulative after-tax earnings impact of this settlement is estimated to be approximately $2.2 billion, to be reported in Q4 2003.

Frequently Asked Questions

The dispute was over tax deductions ExxonMobil claimed on the sale of natural gas, primarily in Texas, for the tax years 1974 through 1990.

Yes, ExxonMobil had won three previous federal court cases concerning these deductions dating back to 1989, with favorable rulings in 1996, 2001, and early 2003.

The settlement is expected to have a cumulative after-tax earnings impact of approximately $2.2 billion. This amount will be reported in ExxonMobil's fourth quarter 2003 results and includes refunds for taxes previously paid, along with taxable interest.

The IRS and Justice Department have agreed to the deductions for tax years 1976-1990 following a favorable court ruling. The decision to settle was reviewed by the congressional Joint Committee on Taxation, indicating a significant step towards finalization, with refunds to be received as these years are closed.