8-KOther Events

EXXON MOBIL CORP 8-K Report, Corporate Update (Jun 19, 2009)

Filed June 19, 2009For Securities:XOM

Summary

Exxon Mobil Corporation (XOM) filed an 8-K on June 18, 2009, reporting a significant development in the ongoing Valdez litigation. The U.S. Court of Appeals for the Ninth Circuit ruled on June 15, 2009, awarding plaintiffs interest on the $507.5 million punitive damages judgment originally issued in 1996. This ruling impacts Exxon Mobil by requiring additional financial provisions. In response to this appellate court decision, Exxon Mobil will record an additional after-tax charge of approximately $150 million in the second quarter of 2009. This follows previous after-tax charges of $290 million in Q2 2008 and $170 million in Q3 2008, which were set aside to estimate the resolution of interest and appeal cost issues. The court also denied Exxon Mobil's claims to recover up to $70 million in appeal costs, further impacting the company's financial reporting related to this long-standing legal matter.

Key Highlights

  • 1Court of Appeals for the Ninth Circuit awarded interest on punitive damages in Valdez litigation.
  • 2Interest will accrue from the date of the original trial court judgment in 1996.
  • 3Exxon Mobil to record an additional after-tax charge of approximately $150 million in Q2 2009.
  • 4Previous after-tax charges of $290 million (Q2 2008) and $170 million (Q3 2008) were made for estimated resolution of interest and costs.
  • 5The court denied Exxon Mobil's claims to recover up to $70 million in appeal costs.
  • 6This filing is a current report (8-K) and specifically addresses an 'Other Event' under Item 8.01.

Frequently Asked Questions

This 8-K filing is primarily to report a significant ruling by the U.S. Court of Appeals for the Ninth Circuit in the Valdez litigation. The court awarded interest on the punitive damages and denied Exxon Mobil's claims for appeal costs.

Exxon Mobil will record an additional after-tax charge of approximately $150 million in the second quarter of 2009 to reflect the court's decision regarding the interest award. This is in addition to previously recorded charges for estimated resolution of these issues.

Exxon Mobil had previously recorded an after-tax charge of $290 million in the second quarter of 2008 and another charge of $170 million in the third quarter of 2008. These provisions were made to estimate the resolution of the interest and cost issues associated with the Valdez litigation.

No, the court denied Exxon Mobil's claims to recover up to $70 million in appeal costs. This means the company will not recoup these expenses through this legal avenue.