Moody's also confirmed the stable outlooks of these companies. The confirmations and stable rating outlooks reflect Moody's view that while the current phase of the Engle trial could result in the determination of a potentially considerable award, the tobacco companies will be able to appeal the decision to higher courts. Moody's also noted that the possibility that tobacco companies would have to post a bond for any large punitive award while pursuing these appeals is remote. At the end of Phase I of the Florida Engle case, a jury found that the tobacco industry had been intentionally deceitful about the dangerous effects of smoking. The jury's findings were not subject to appeal because no damages were awarded. According to the trial plan defined by the judge presiding over the proceedings, in Phase II - which is slated to start on November 1, 1999 - the same jury will be looking at whether compensation should be paid for individual members of the class of Florida smokers.

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