Grace Hospital

PART X, LINE 2:

“The foundation and hospital are not-for-profit corporations and are recognized as tax-exempt pursuant to section 501(c)(3) of the internal revenue code. The holding and grace center are incorporated as a limited liability companies in accordance with chapter 1705 of the ohio revised code. The holding has filed a 168(h) election. Under these provisions, the taxable income for grace center is taxed directly to the holding members; therefore, no provision has been made for federal or state income taxes on the accompanying consolidated financial statements. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the income taxes topic of the financial accounting standards board (fasb) accounting standards codification, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is recorded as a liability for unrecognized tax benefits along with any associated interest and penalties that would be payable to the taxing authorities upon examination.”