Delta Family Care Medical Trust

“The trust is intended to qualify pursuant to section 501(c)(9) of the code and accordingly, the trust's net investment income is exempt from income taxes. The trust has obtained a favorable tax opinion letter from the internal revenue service ("irs") dated february 10, 1988. The trust have been amended since receiving the opinion letter. The trust must operate in accordance with the code to maintain the trust's tax exempt status. The company believes that the trust, as amended, continues to qualify and to operate in accordance with applicable requirements of the code, therefore, no provision for income taxes has been included. U.s. Gaap requires management to evaluate tax positions taken and recognize a tax liability (or asset) if an uncertain position has been taken that more likely than not would not be sustained upon examination by the irs. The plan administrator has analyzed tax positions taken by the delta family-care medical plan (the "plan"), whose assets are held in the trust, and has concluded that as of june 30, 2014 and 2013, there are no uncertain positions taken or expected to be taken that would require recognition of a liability (or asset) or disclosure in the financial statements. The plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. The plan administrator believes it is no longer subject to income tax examinations for plan years ended prior to june 30, 2011.”

“The other liability note here encompasses the benefit claims payable and the incurred but not reported amounts reported per the audited financial statements.”

“The "other" amount is an adjustment to the total expenses and losses per the audited financial statements and is the difference between the current year and prior year incurred but not reported amounts.”