Mars Benefits Trust

“The trust established under the plan to hold the plan's assets is intended to qualify as tax-exempt pursuant to section 501(c)(9) of the irc and accordingly, the trust's net investment income is exempt from income taxes. The trust has obtained a favorable tax determination letter dated december 9, 1988, that the plan and related trust are designed in accordance with applicable sections of the internal revenue code ("irc") the plan has been amended since receiving the determination letter. The plan administrator believes the plan is designed and is currently being operated in compliance with applicable requirements of the irc, except as described below, and qualifies as tax exempt. Accordingly, income of the plan is exempt from federal income taxes under the provisions of section 401(a) of the irc. Pursuant to certain provisions of the irc and state tax statutes, a portion of the income generated by the trust is subject to an unrelated business income tax ("ubit"). The trust paid $2,315,000 for ubit expense during the year-ended december 31, 2016, related to ubit for the years ended december 31, 2016 and 2015. U.s. Gaap require plan management to evaluate tax positions taken by the plan and recognize a tax liability (or asset) if the plan has taken an uncertain position that more likely than not would not be sustained upon examination by the internal revenue service. Uncertain tax positions have been classified as $2,364,245 and $2,217,191 of deferred tax assets and $7,947,482 and $7,312,169 of other liabilities for december 31, 2016 and 2015, respectively, in the statement of net assets available for benefits. The total net amount of $5,583,237 and $5,094,978 in the statement of net assets available for benefits as of december 31, 2016 and 2015, respectively, includes total accrued interest and penalties of $2,400,705 and $1,979,472 as of december 31, 2016 and 2015, respectively, which is part of other liabilities. Net change of $488,258 in the liability related to uncertain tax positions for the year ended december 31, 2016 was due to deferred tax asset increase of $147,054 and other liabilities increase of $635,312. Net amount is included in the ubit expense on the statement of changes in net assets for benefits. The trust is potentially subject to ubit examinations by the irs and by various u.s. States however, there are currently no audits for any tax periods in progress. Tax years 2013 and onward are still open to examination by the irs according to the statute of limitations.”

“Net increase in 401(h) account: $ 51,526,110 partnership investments: $ 99,094 -------------- total: $ 51,625,204”

“Venture capital/partnership contributions: $ 246,157 -------------- total: $ 246,157”