SCRIE AND DRIE RECEIVABLES

The City of New York, in an effort to help low-income senior citizens and disabled individuals, developed programs whereby certain tenants are exempt from rent increases. The programs, called the Senior Citizen Rent Increase Exemption ("SCRIE") and the Disabled Rent Increase Exemption ("DRIE"), were designed for individuals who are nonowners of apartments and are available to individuals who are tenant-stockholders of cooperatives that are subject to private finance housing law. Upon the Corporation's reconstitution, benefits under the SCRIE and DRIE programs are no longer available to tenant-stockholders.

The Corporation, in an effort to reduce any hardship for those individuals who had qualified for the SCRIE and DRIE programs prior to reconstitution, instituted substitute SCRIE and DRIE programs.Under these substitute programs, the current eligible tenants are able to defer paying a portion of their maintenance until such time as their apartments are sold. At the time of such sale, any deferred amounts are to be paid to the Corporation from the proceeds of the sale.

INCOME TAXES

The Corporation, as of the date of the reconstitution, is subject to taxation as a regular corporation for federal, state and local purposes.

New York State franchise tax and New York City taxes are calculated by utilizing special tax rate available to cooperative housing corporations based on the Corporation's capital base.

RETIREMENT PLANS

The Corporation has a qualified profit sharing plan that covers all eligible employees not covered by union-sponsored plans. The plan permits participants to make contributions by salary reductions pursuant to Section 401(k) of the Internal Revenue Code.

The Corporation participates in a multiemployer defined benefit pension plan under the terms of a collective bargaining agreement ("CBA") between the Corporation and Local 804 International Brotherhood of Teamsters. As of March 31, 2013, approximately 80% of the Corporation's employees were covered by the CBA which provides, generally, for basic pay rates, working hours, benefits, other conditions of employment and the orderly settlement of labor disputes.

The Local 804 Union Health & Welfare Fund provides health benefits to eligible Union members and their eligible dependents. Full-time workers usually have medical, hospital, prescription drug, behavioral health and substance abuse, dental, vision and life insurance benefits.