St. Louis University

“The University is generally exempt from Federal income tax pursuant to Section 501(c)(3) of the Internal Revenue Code (the Code) and is a tax-exempt organization described in Sections 501(c)(3), 509(a)(I), and 170(b)(I)(A)(ii) of the Code. The Financial Accounting Standards Board issued guidance prescribing how an organization should recognize, measure, present, and disclose in its consolidated financial statements uncertain tax positions. The University adopted this guidance, which is included in Accounting Standards Codification Topic 740 (ASC 740) Income Taxes. This guidance addresses the determination of how tax benefits claimed or expected to be claimed on a tax return should be recorded in the consolidated financial statements. The University must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. As of June 30, 2014 and 2013, the University did not have a liability for unrecognized tax benefits.”

“SCH. D, PART XI, LINE 2D Increase in permanently restricted assets 2,639,095 Increase in temporarily restricted assets 3,703,046 FOREIGN CURRENCY TRANSLATION ADJUSTMENT 864,693 Foreign entity revenue-Spain 18,612,920 RENTAL EXPENSE 858 ------------- TOTAL 25,820,612”

“SCH. D, PART XI, LINE 4B SCHOLARSHIPS & GRANTS NETTED WITH REVENUE (129,096,061) Investment mgmt fees netted against revenue (17,605,712) ------------- TOTAL (146,701,773)”

“SCHEDULE D, PART XII, LINE 2D FOREIGN ENTITY EXPENSES -SPAIN 19,477,612 RENTAL EXPENSE 858 ------------- total 19,478,470”

“SCH. D, PART XII, 4B scholarship & grants netted with revenue 129,096,061 investment mgmt fees netted against revenue 17,605,712 ------------- total 146,701,773”

“PART III LINE 4 The organization's collections included both donated and purchased items. Collections of art are capitalized at cost if purchased or at fair market value at date of gift. Collections of art are displayed prominently across campuses adding to the cultural and aesthetic value of the educational experience of students, faculty, staff and guests of the University.”

“PART V, QUESTION 4 The University has adopted investment and spending policies for endowment assets that will preserve and enhance the real (inflation-adjusted) purchasing power of the pooled endowment while providing an increasing stream of real funding for the annual University budget in the future. Endowment assets include those assets of donor-restricted funds that the University must hold in perpetuity or for a donor-restricted period(s) as well as quasi endowment funds. Under this policy, the University will attempt to achieve the highest long-term investment return on investment assets that is compatible with the University's risk tolerance and time horizons consistent with prudent investment practices.”