MAP INTERNATIONAL

FINANCIAL STATEMENTS
With Independent Auditors’ Report

September 30, 2006 and 2005

 MAP INTERNATIONAL

Table of Contents

Page

Independent Auditors’ Report 1

Financial Statements
Statements of Financial Position 2-3
Statements of Activities 4-5
Statements of Cash Flows 6-7
Statement of Functional Expenses–2006 8
Statement of Functional Expenses–2005 9

Notes to Financial Statements 10-22

INDEPENDENT AUDITORS’ REPORT CAPIN CROUSE LLP
Certified Public Accountants
……………………….
Suite 130
Board of Directors 1255 Lakes Parkway
MAP International Lawrenceville, GA 30043
Brunswick, Georgia
Telephone 678.518.5301
Facsimile 678.518.5302
……………………….
www.capincrouse.com

We have audited the accompanying statements of financial position of MAP International as of

September 30, 2006, and 2005 and the related statements of activities, cash flows, and functional
expenses for the years then ended. These financial statements are the responsibility of the
organization’s management. Our responsibility is to express an opinion on these financial statements
based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United
States of America. Those standards require that we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of material misstatement. An audit includes
consideration of internal control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances but not for the purpose of expressing an opinion on the
effectiveness of the organization’s internal control over financial reporting. Accordingly, we express
no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the
financial position of MAP International as of September 30, 2006, and 2005 and the changes in its
net assets and its cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.

Atlanta, Georgia
January 18, 2007
 MAP INTERNATIONAL

Statements of Financial Position

September 30,
2006 2005
Specified Time Specified Time
Operating or Purpose Endowment Total Operating or Purpose Endowment Total

ASSETS:
Cash and cash equivalents $ 283,814 $ 1,211,340 $ - $ 1,495,154 $ 589,671 $ 2,581,360 $ - $ 3,171,031
Accounts receivable–net 292,878 - - 292,878 175,032 - - 175,032
Other receivable 75,393 - - 75,393 55,825 - - 55,825
Pledges receivable–net - 824,969 - 824,969 - 998,564 - 998,564
Inventory:
Purchased 485,961 - - 485,961 314,049 - - 314,049
Donated 76,337,988 9,002,561 - 85,340,549 61,090,819 18,707,851 - 79,798,670
Prepaid expenses and other assets 108,699 - - 108,699 108,990 - - 108,990
Investments - 2,104,992 3,801,061 5,906,053 12,107 963,524 3,470,552 4,446,183
Property and equipment–net 2,062,653 - - 2,062,653 1,793,458 - - 1,793,458
Interfund balances 82,801 (56,910) (25,891) - (140,863) (156,055) 296,918 -

Total Assets $ 79,730,187 $ 13,086,952 $ 3,775,170 $ 96,592,309 $ 63,999,088 $ 23,095,244 $ 3,767,470 $ 90,861,802

LIABILITIES AND NET ASSETS:

Liabilities:
Accounts payable $ 261,372 $ - $ - $ 261,372 $ 274,591 $ - $ - $ 274,591
Deposits 127,228 - - 127,228 250,352 - - 250,352
Accrued expenses 394,828 - - 394,828 363,393 - - 363,393
Notes and loans payable 957,485 - - 957,485 746,172 - - 746,172
Annuities and trust payable - 423,222 - 423,222 - 452,330 - 452,330
Total liabilities 1,740,913 423,222 - 2,164,135 1,634,508 452,330 - 2,086,838

(continued)

See notes to financial statements

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 MAP INTERNATIONAL

Statements of Financial Position

(continued)

September 30,
2006 2005
Specified Time Specified Time
Operating or Purpose Endowment Total Operating or Purpose Endowment Total

LIABILITIES AND NET ASSETS,

continued:
Net assets:
Unrestricted 77,989,274 539,279 - 78,528,553 62,364,580 479,218 - 62,843,798
Temporarily restricted - 12,124,451 - 12,124,451 - 22,163,696 - 22,163,696
Permanently restricted - - 3,775,170 3,775,170 - - 3,767,470 3,767,470
Total net assets 77,989,274 12,663,730 3,775,170 94,428,174 62,364,580 22,642,914 3,767,470 88,774,964

Total Liabilities and Net Assets $ 79,730,187 $ 13,086,952 $ 3,775,170 $ 96,592,309 $ 63,999,088 $ 23,095,244 $ 3,767,470 $ 90,861,802

See notes to financial statements

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 MAP INTERNATIONAL

Statements of Activities

Years Ended September 30,

2006 2005
Temporarily Permanently Temporarily Permanently
Unrestricted Restricted Restricted Total Unrestricted Restricted Restricted Total

SUPPORT AND REVENUE:

Contributions $ 3,832,090 $ 1,947,708 $ 7,700 $ 5,787,498 $ 4,087,794 $ 3,190,473 $ - $ 7,278,267
Donated inventory 228,173,692 15,965,317 - 244,139,009 230,724,358 108,247,000 - 338,971,358
Donated property and equipment 1,600 - - 1,600 27,427 - - 27,427
Donated securities and other assets 101,035 45,041 - 146,076 197,998 109,133 - 307,131
Government grants 199,868 - - 199,868 6,715 - - 6,715
Handling charges and service fees 3,234,495 - - 3,234,495 3,095,505 - - 3,095,505
Investment income 284,129 88,673 - 372,802 (336,919) 107,997 - (228,922)
Other revenue 45,406 - - 45,406 33,746 - - 33,746

Total Support and Revenue 235,872,315 18,046,739 7,700 253,926,754 237,836,624 111,654,603 - 349,491,227

RECLASSIFICATIONS:
Net assets released from restrictions 28,085,984 (28,085,984) - - 99,143,959 (99,143,959) - -

EXPENSES:
Program services:
Essential medicines 190,781,152 - - 190,781,152 276,190,561 - - 276,190,561
Disease, prevention, and
eradication 722,072 - - 722,072 1,191,365 - - 1,191,365
Community health services 53,398,554 - - 53,398,554 38,572,526 - - 38,572,526
244,901,778 - - 244,901,778 315,954,452 - - 315,954,452

(continued)

See notes to financial statements

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 MAP INTERNATIONAL

Statements of Activities
(continued)

Years Ended September 30,

2006 2005
Temporarily Permanently Temporarily Permanently
Unrestricted Restricted Restricted Total Unrestricted Restricted Restricted Total

EXPENSES, continued:
Supporting activities:
General and administrative 575,011 - - 575,011 1,160,361 - - 1,160,361
Fund-raising 2,796,755 - - 2,796,755 2,397,182 - - 2,397,182
3,371,766 - - 3,371,766 3,557,543 - - 3,557,543

Total Expenses 248,273,544 - - 248,273,544 319,511,995 - - 319,511,995

Change in Net Assets 15,684,755 (10,039,245) 7,700 5,653,210 17,468,588 12,510,644 - 29,979,232

Net Assets, Beginning of Year 62,843,798 22,163,696 3,767,470 88,774,964 45,375,210 9,653,052 3,767,470 58,795,732

Net Assets, End of Year $ 78,528,553 $ 12,124,451 $ 3,775,170 $ 94,428,174 $ 62,843,798 $ 22,163,696 $ 3,767,470 $ 88,774,964

See notes to financial statements

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 MAP INTERNATIONAL

Statements of Cash Flows

Years Ended September 30,

2006 2005

CASH FLOWS FROM OPERATING ACTIVITIES:

Change in net assets $ 5,653,210 $ 29,979,232
Adjustments to reconcile change in net assets to net cash
provided (used) by operating activities:
Donated inventory (244,139,009) (338,971,358)
Distributed inventory 238,597,131 310,489,679
Donated securities, property, equipment, and other assets (147,676) (334,558)
Depreciation 248,954 213,829
Gain on disposal of property and equipment 202 13,989
Net realized and unrealized gains and losses on investments (85,005) (184,246)
Net realized and unrealized gains and losses in change in value of annuities (12,318) (25,619)
Investment income restricted for long-term investment (88,673) (107,997)
Actuarial change in value of annuities 34,292 20,098
Write-off of closely held stock - 515,000
Write-off of uncollectible pledge - 500,000
Changes in operating assets and liabilities:
Accounts and other receivables (137,414) 218,059
Pledges receivable 173,595 (69,781)
Purchased inventory (171,913) (75,909)
Prepaid expenses and other assets 291 (22,661)
Accounts payable and deposits (136,343) 343,034
Accrued expenses 31,435 10,949

Net Cash Provided (Used) by Operating Activities (179,241) 2,511,740

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from sale of investments 2,339,945 4,731,398
Purchases of investments (3,554,816) (4,325,413)
Purchases of property and equipment (518,351) (261,432)

Net Cash Provided (Used) by Investing Activities (1,733,222) 144,553

CASH FLOWS FROM FINANCING ACTIVITIES:

Investment income restricted for long-term investment 88,673 107,997
Proceeds from issuance of annuities 27,500 111,000
Payments on annuities (90,900) (91,408)
Repayments on notes payable (84,599) (88,435)
Repayments on capital leases (4,088) (3,144)
Borrowings on lines of credit 300,000 -
Repayments on lines of credit - (550,000)

Net Cash Provided (Used) by Financing Activities 236,586 (513,990)

(continued)

See notes to financial statements

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 MAP INTERNATIONAL

Statements of Cash Flows

(continued)

Years Ended September 30,

2006 2005

Net Change in Cash and Cash Equivalents (1,675,877) 2,142,303

Cash and Cash Equivalents, Beginning of Year 3,171,031 1,028,728

Cash and Cash Equivalents, End of Year $ 1,495,154 $ 3,171,031

SUPPLEMENTAL DISCLOSURES:
Cash paid for interest $ 60,997 $ 71,669

NONCASH INVESTING ACTIVITIES:

Donated securities and other assets $ 147,676 $ 307,131

Donated property and equipment $ - $ 25,000

Property and equipment acquired via capital lease $ - $ 28,330

See notes to financial statements

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 MAP INTERNATIONAL

Statement of Functional Expenses

Year Ended September 30, 2006

Program Services Supporting Services

Disease, Community Total General Total
Essential Prevention, and Health Program and Fund- Supporting
Medicines Eradication Services Services Administrative Raising Services Total

EXPENSES:
Distributed inventory $ 188,018,228 $ 711,614 $ 49,867,289 $ 238,597,131 $ - $ - $ - $ 238,597,131
Cost of goods distributed 953,053 3,607 252,774 1,209,434 - - - 1,209,434
Freight 253,802 961 78,488 333,251 2,299 10,028 12,327 345,578
Personnel:
Salaries and wages 789,368 2,988 1,057,366 1,849,722 253,969 1,106,325 1,360,294 3,210,016
Employee benefits 220,479 834 276,757 498,070 74,619 309,663 384,282 882,352
Outside services 154,071 583 136,879 291,533 66,930 74,220 141,150 432,683
Travel 113,245 429 161,624 275,298 28,167 155,079 183,246 458,544
Supplies 4,083 15 91,386 95,484 14,135 22,331 36,466 131,950
Conferences and meetings 7,743 29 245,784 253,556 16,805 27,140 43,945 297,501
Grants - - 801,496 801,496 - - - 801,496
Printing and publications 8,768 33 34,750 43,551 1,854 851,744 853,598 897,149
Postage 1,235 5 6,575 7,815 596 20,287 20,883 28,698
Equipment rental and
repair 56,823 215 97,978 155,016 44,906 48,537 93,443 248,459
Uncollectible accounts - - - - 2,133 - 2,133 2,133
Telephone 16,626 63 46,380 63,069 8,723 31,627 40,350 103,419
Occupancy 35,621 135 66,671 102,427 10,260 10,830 21,090 123,517
Interest 15,392 58 18,836 34,286 10,167 16,544 26,711 60,997
Insurance 45,588 173 24,126 69,887 7,989 7,864 15,853 85,740
Depreciation 83,750 317 98,919 182,986 20,595 45,373 65,968 248,954
Miscellaneous 3,277 13 34,476 37,766 10,864 59,163 70,027 107,793

Total Expenses $ 190,781,152 $ 722,072 $ 53,398,554 $ 244,901,778 $ 575,011 $ 2,796,755 $ 3,371,766 $ 248,273,544

See notes to financial statements

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 MAP INTERNATIONAL

Statement of Functional Expenses

Year Ended September 30, 2005

Program Services Supporting Services

Disease, Community Total General Total
Essential Prevention, and Health Program and Fund- Supporting
Medicines Eradication Services Services Administrative Raising Services Total

EXPENSES:
Distributed inventory $ 273,610,044 $ 1,180,233 $ 35,699,402 $ 310,489,679 $ - $ - $ - $ 310,489,679
Cost of goods distributed 851,786 3,674 111,137 966,597 - - - 966,597
Freight 315,252 1,360 46,565 363,177 - - - 363,177
Personnel:
Salaries and wages 710,022 3,063 931,011 1,644,096 300,993 879,432 1,180,425 2,824,521
Employee benefits 197,532 852 215,390 413,774 65,734 255,204 320,938 734,712
Outside services 117,306 506 99,550 217,362 79,121 39,344 118,465 335,827
Travel 88,087 380 131,196 219,663 35,324 94,531 129,855 349,518
Supplies 28,830 124 54,201 83,155 12,919 17,131 30,050 113,205
Conferences and meetings 17,090 74 605,093 622,257 12,233 36,845 49,078 671,335
Grants - - 391,629 391,629 - - - 391,629
Printing and publications 21,111 91 17,580 38,782 2,927 901,308 904,235 943,017
Postage 1,910 8 2,071 3,989 4,505 22,099 26,604 30,593
Equipment rental and
repair 42,403 183 58,679 101,265 62,662 40,735 103,397 204,662
Uncollectible accounts - - - - 491,481 - 491,481 491,481
Telephone 12,877 56 36,926 49,859 21,380 24,966 46,346 96,205
Occupancy 28,658 124 40,370 69,152 17,451 10,049 27,500 96,652
Interest 16,366 71 21,879 38,316 14,817 18,536 33,353 71,669
Insurance 40,880 176 10,987 52,043 7,483 5,607 13,090 65,133
Depreciation 79,889 345 73,748 153,982 25,312 34,535 59,847 213,829
Miscellaneous 10,518 45 25,112 35,675 6,019 16,860 22,879 58,554

Total Expenses $ 276,190,561 $ 1,191,365 $ 38,572,526 $ 315,954,452 $ 1,160,361 $ 2,397,182 $ 3,557,543 $ 319,511,995

See notes to financial statements

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 MAP INTERNATIONAL

Notes to Financial Statements

September 30, 2006 and 2005

1. NATURE OF ORGANIZATION:
MAP International (MAP), founded as Medical Assistance Programs, was incorporated in 1965 in Illinois as a
nonprofit corporation. MAP’s purpose is to promote the total health of people living in the world’s impoverished
communities. Through its offices in the Unites States, Bolivia, Ecuador, Indonesia, Cote D’Ivoire, and Kenya, MAP
promotes access to health services and essential medicines in more than 130 countries. MAP’s operations depend
upon gifts-in-kind, which include donated medicines, equipment, and supplies primarily from pharmaceutical
companies, as well as cash contributions received from individuals, churches, organizations, foundations, and
corporations.

MAP works with partners to accomplish its objectives through the promotion of essential medicines, prevention and
eradication of disease, and community health services. These primary activities are described below:

Essential Medicines– MAP provides critical life-saving medications that are always in short supply in
impoverished countries with limited health care. FDA-approved medicines and medical supplies are provided to
hospitals, clinics, refugee centers, and physicians in other countries as they are needed. In addition, MAP’s
specially designed travel packs are used by Christian health personnel and mission groups on short-term missions
and include an assortment of some of the most critically needed medicines and supplies. MAP also provides
medicines and supplies for rapid response to humanitarian emergencies around the world and, at times, in the
United States.

Disease Prevention and Eradication– MAP’s programs provide vital medicines, educational materials, and
training to aid in the treatment and prevention of diseases. MAP provides a variety of disease prevention and
eradication programs, including the award winning indigenous church-based HIV/AIDS education and
prevention programs that benefit communities in Latin America and Africa. MAP’s program in Bolivia
vaccinates children and screens them for parasites, malnutrition, and many other diseases.

Community Health Services– Total health training workshops teach medical, cultural, and biblical principles of
health in remote rural areas from the Amazon to Kenya. The MAP International Fellowship provides
opportunities for medical students to serve short-term missions in Christian hospitals around the world.

MAP is classified as a publicly supported organization, which is not a private foundation under Section 509(a)(1) of
the Internal Revenue Code (Code) and is exempt from federal income taxes under Section 501(a) as an organization
described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended. Contributions to MAP are tax-
deductible within the limitations prescribed by the Code.

MAP is also exempt from state franchise and income taxes under Sections 105-130.11(3) of the General Statutes of
Georgia.

MAP also controls a separate Illinois nonprofit corporation, Upward, Inc. (Upward). Upward is classified as a
publicly supported organization, is not a private foundation under Section 509(a)(3) of the Code, and is exempt from
federal income taxes under Section 501(a) as an organization described in Section 501(c)(3) of the Code. Upward is
organized exclusively for the benefit of and to support the charitable purposes of MAP. Upward had no operating
activities during the years ended September 30, 2006 and 2005.

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 MAP INTERNATIONAL

Notes to Financial Statements

September 30, 2006 and 2005

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

The financial statements of MAP have been prepared on the accrual basis of accounting. The significant accounting
policies followed are described herein to enhance the usefulness of the statements to the reader.

RECLASSIFICATIONS
Certain information from the prior year financial statements has been reclassified to conform to the current year
presentation format.

ESTIMATES
The preparation of the financial statements, in conformity with accounting principles generally accepted in the
United States, requires management to make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosures at the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS

Cash includes petty cash; checking, savings, and money market accounts; and certificates of deposit with original
maturity dates of less than three months held in both U.S. and foreign accounts. For U.S. accounts, these accounts
may, at times, exceed federally insured limits. MAP has not experienced any losses on such accounts, and
management believes it is not exposed to any significant credit risk associated with U.S. based cash and cash
equivalents. Foreign cash accounts are under the control of MAP, but it should be noted that the political situation
in many countries is subject to rapid change. Therefore, the reader should be aware that while management
believes the assets are properly stated at the date of this report, subsequent changes could occur that would
adversely affect the value of the assets in other countries. Total cash and cash equivalents held in foreign accounts
amounted to $329,613 and $354,855 at September 30, 2006, and 2005, respectively.

ACCOUNTS RECEIVABLE
Accounts receivable includes billings for service fees and handling charges and is reported net of any anticipated
losses due to uncollectible accounts. Foreign field receivables consist primarily of amounts due to MAP under a
cost-reimbursement private grant. The organization’s policy for determining when receivables are past due or
delinquent is 30 days after invoicing. Uncollectible accounts are reported as additions to the allowance for bad
debts when it is determined the amounts are uncollectible. Payments received from nonaccrual receivables are
credited to appropriate receivable accounts.

The allowance for doubtful accounts is maintained at a level which, in management’s judgment, is adequate to
absorb potential losses inherent in the receivable portfolio. The amount of the allowance is based on
management’s evaluation of collectibility of the receivable portfolio, including the nature of the portfolio, trends
in historical loss experience, specific impaired accounts, and economic conditions. An allowance for
uncollectible accounts has been provided for in the amount of $4,914 and $11,945 as of September 30, 2006, and
2005, respectively.

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 MAP INTERNATIONAL

Notes to Financial Statements

September 30, 2006 and 2005

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued:

PLEDGES RECEIVABLE
Pledges receivable include unconditional promises made by donors wherein the donor has unconditionally
promised to contribute funds to MAP in future periods. Unconditional promises expected to be collected within
one year are recorded as support and a receivable at net realizable value. Unconditional promises expected to be
collected in future years are recorded as support and a receivable at the present value of expected future cash
flows. Discounts on those amounts are computed using risk-free, interest rates applicable to the years in which the
promises are received, ranging from 3.60% to 5.0%. Amortization of discounts is included in contribution
revenue. Conditional promises are not included as support until the conditions are substantially met.

INVENTORY
Inventory consists of purchased and donated medical products and supplies. Purchased inventory is stated at the
lower of cost or market. Cost is determined using the average cost method. Donated inventory is stated at
wholesale value determined on the date of receipt. Inventory cost is expensed when goods are shipped.
Management periodically evaluates the net realizable value of all inventory to ensure that any impairments are
recognized in the period in which they are incurred. Total inventory held in foreign locations amounts to $32,812
and $33,208 at September 30, 2006, and 2005, respectively.

INVESTMENTS
Investments in equity and debt securities with readily determinable fair values are reported at fair value. Gains
and losses (including unrealized) are reported in the statements of activities as other revenue. Donated
investments are recorded at market value on the date of donation and thereafter carried in accordance with the
above provisions.

ENDOWMENT FUNDS
Endowment funds represent assets and net assets that are subject to permanent restriction by gift instruments as
prescribed by donors. The principal amount, based on historical gift value of each endowment, is to be
maintained permanently. The income derived from each permanent endowment is allocated to the unrestricted or
temporarily restricted revenue per the donor’s specifications.

During 1997, MAP elected to initiate an interfund borrowing from an endowment fund to an unrestricted fund in
the amount of $1.55 million. The purpose of this interfund borrowing was to reduce interest expense associated
with external debt. As of September 30, 2006, and 2005, the endowment interfund borrowing balances were
$500,000 and $600,000, respectively.

PROPERTY AND EQUIPMENT

Items purchased as property, plant, and equipment are recorded at historical cost. Donated items are recorded at
fair market value on the date of the gift. Depreciation of buildings, equipment, furniture, and fixtures are
computed using the straight-line method over the estimated useful lives of the assets, ranging from 3 to 20 years.
MAP capitalizes all items greater than $500 for U.S. and foriegn locations except for infrequent instances where
field offices capitalize long-lived items with a lower value.

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 MAP INTERNATIONAL

Notes to Financial Statements

September 30, 2006 and 2005

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued:

ANNUITIES PAYABLE
MAP has issued charitable gift annuity agreements. Under these agreements, a donor contributes assets to MAP
in exchange for the right to receive a fixed dollar annual return during the donor’s lifetime. A portion of the
transfer is considered to be a charitable contribution for income tax purposes. The difference between the amount
provided for the gift annuity and the liability for future payments, determined on an actuarial basis, is recognized
as a contribution at the date of the gift. The annuity liability is revalued annually using a discount rate established
at the inception of the agreement and appropriate actuarial assumptions. Actuarial changes and annuity payments
are reported as change in value of annuities within other revenue in the statements of activities.

REVOCABLE TRUST
As trustee, MAP administers a revocable (grantor) trust that provides for a beneficial interest to MAP at the
grantor’s death. The principal amounts provided are recorded as liabilities because the trusts are revocable at the
discretion of the grantor. Trust income, deductions, and credits are reportable by the grantor for tax purposes. At
the grantor’s death, the remaining trust assets will be recorded as contribution support.

NET ASSETS
The financial statements report amounts by classification of net assets:

Unrestricted net assets are those currently available for purposes under the direction of the board, those
designated by the board, those resources invested in property and equipment, and those held as annuity reserves.

Temporarily restricted net assets are those contributed with donor stipulations for specific operating purposes or
programs, those with time restrictions, or those not currently available for use until commitments regarding their
use have been fulfilled.

Permanently restricted net assets are those contributed with donor restrictions that the principal remain in
perpetuity with only the income available as unrestricted or temporarily restricted, per endowment agreements.

SUPPORT, REVENUE, AND RECLASSIFICATIONS

Revenue is recognized when earned and support when contributions are made, which may be when cash is
received, unconditional promises are made, or ownership of donated assets is transferred to MAP. Gifts-in-kind
(including inventory, securities, property, and equipment) are recorded at fair value at the date of the gift.

Contributions other than gifts-in-kind are primarily cash contributions that are derived from ongoing fund-raising.
All contributions are considered to be available for unrestricted use unless specifically designated by the donor.
Bequests are recorded as income at the time MAP has an established right to the bequest and the proceeds are
measurable.

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 MAP INTERNATIONAL

Notes to Financial Statements

September 30, 2006 and 2005

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued:

SUPPORT, REVENUE, AND RECLASSIFICATIONS, continued

Donated inventory (consisting of medicines and medical supplies) is recorded as inventory and contribution
revenue at its estimated wholesale value at the date of donation, taking into consideration inventory condition and
utility for use. All donated inventory is received from private organizations and is considered to be unrestricted
support unless the inventory explicitly contains donor restrictions. MAP only records the value of donated
inventory in which they were either the original recipient of the gift, were involved in partnership with another
organization for distribution internationally, or used in MAP’s programs.

When MAP receives donated inventories with specific geographic or purpose restrictions, they are recognized as
temporarily restricted contributions. Donor restrictions are satisfied, and donated inventory is released from
restriction and reclassified as unrestricted, when the donated product has been shipped. Donated inventories
received with conditions, such as the provision that they cannot be distributed within the United States, are
considered limitations rather than purpose restrictions; therefore, they are reported as unrestricted contributions.

Donated property and equipment are recorded as temporarily restricted if donors stipulate how or how long the
asset must be used. In the absence of such stipulations, contributions of property and equipment are recorded as
unrestricted support.

The accompanying financial statements do not recognize the value of donated services as such services do not
meet the recognition requirements under Statement of Financial Accounting Standards 116; however, a
substantial number of volunteers have donated significant amounts of their time to MAP’s program services.
During the years ended September 30, 2006, and 2005, management estimated that volunteers donated over 3,909
and 3,107 hours each year to MAP, respectively.

Service fee revenues, including handling charges, are received primarily from organizations and mission boards
to offset administrative costs for distribution of donated inventory and covers only a portion of total operating
costs. Service fee revenue is recognized when the inventory is shipped to a recipient.

MAP reports contributions as restricted support if they are received with donor stipulations that limit the use of
the donated assets. A donor restriction expires when the stipulated time restriction ends or purpose restriction is
accomplished. Temporarily restricted net assets are then reclassified to unrestricted net assets and reported in the
statements of activities as net assets released from restrictions.

EXPENSES
Expenses are recorded when incurred in accordance with the accrual basis of accounting. The costs of providing
various program services and supporting activities of the organization have been summarized on a functional
basis in the statements of activities. Accordingly, certain costs have been allocated among the program services
and supporting activities benefited.

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 MAP INTERNATIONAL

Notes to Financial Statements

September 30, 2006 and 2005

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued:

ALLOCATION OF JOINT COSTS

MAP has adopted the American Institute of Certified Public Accountants’ Statement of Position 98-2,
Accounting for Costs of Activities of Not-for-Profit Organizations and State and Local Government Entities that
Include Fund-Raising. This statement requires all costs which contain a fund-raising appeal to be allocated to
fund-raising unless all of the following three tests are met: content, purpose, and audience.

MAP incurs costs for activities, such as publications of newsletters and appeal letters that include fund-raising
components. These costs are referred to as joint costs and are allocated to program activities and fund-raising.
During the years ended September 30, 2006, and 2005, MAP incurred $0 and $897,142, respectively. The joint
costs incurred during the year ended September 30, 2005 were allocated as follows: $879,200 was allocated to
fund-raising and $17,942 was allocated to program activities.

3. ACCOUNTS RECEIVABLE–NET:
Accounts receivable consist of:

September 30,
2006 2005

Trade receivables $ 180,254 $ 161,052

Foreign field receivables 117,538 25,925
297,792 186,977
Less allowance for uncollectible accounts (4,914) (11,945)

$ 292,878 $ 175,032

4. PLEDGES RECEIVABLE–NET:
Pledges receivable–net consist of:

September 30,
2006 2005

Unconditional promises receivable (pledges) before unamortized discount $ 858,623 $ 1,123,606

Less unamortized discount (33,654) (125,042)

$ 824,969 $ 998,564

Pledges are due to be collected as follows:

Less than one year $ 310,440 $ 429,136
One to five years 514,529 569,428

$ 824,969 $ 998,564

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 MAP INTERNATIONAL

Notes to Financial Statements

September 30, 2006 and 2005

5. INVESTMENTS:
Investments consist of:

September 30,
2006 2005

Money market funds and certificates of deposit $ 1,881,250 $ 666,207

Marketable equity securities 1,937,938 1,753,263
Government and corporate bonds 1,976,912 1,923,619
Closely held stock * - -
Other investments 109,953 103,094

$ 5,906,053 $ 4,446,183

Investments are held for the following purposes:

September 30,
2006 2005

Operating $ - $ 12,107
Specified time or purpose:
Annuity funds 452,279 487,785
Designated for medicine purchases 450,000 426,027
Designated for Bolivia medicines 50,000 -
Designated for Indonesia 800,000 -
Designated for relief 300,000 -
Funds held for loan repayment 32,713 29,712
Revocable trusts 20,000 20,000
2,104,992 963,524

Endowment 3,801,061 3,470,552

$ 5,906,053 $ 4,446,183

* During the year ended September 30, 2005, MAP learned about financial difficulties in a company which
MAP owns 64,375 shares previously valued at $515,000. Based upon management’s assessment of
expected realization, MAP felt it necessary to write-down the value of the closely held stock to $0. The
write-down was recorded as a component of investment income (see below).

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 MAP INTERNATIONAL

Notes to Financial Statements

September 30, 2006 and 2005

5. INVESTMENTS, continued:
Investment income consists of the following:

Years Ended September 30,

2006 2005

Unrestricted:
Interest and dividends $ 220,418 $ 104,567
Write-off of closely held stock - (515,000)
Net realized gains (losses) 14,703 41,020
Net unrealized gains (losses) 49,008 32,494

$ 284,129 $ (336,919)

Temporarily restricted:
Interest and dividends $ 41,728 $ 30,766
Net realized gains (losses) 9,314 58,960
Net unrealized gains 37,631 18,271

$ 88,673 $ 107,997

6. PROPERTY AND EQUIPMENT–NET:

Property and equipment–net consist of:

September 30, 2006

U.S. Foreign Total

Land and improvements $ 163,778 $ 82,500 $ 246,278

Building and improvements 1,879,018 303,567 2,182,585
Equipment 1,925,390 749,630 2,675,020
3,968,186 1,135,697 5,103,883
Less accumulated depreciation (2,473,017) (568,213) (3,041,230)

$ 1,495,169 $ 567,484 $ 2,062,653

September 30, 2005

U.S. Foreign Total

Land and improvements $ 163,778 $ 82,500 $ 246,278

Building and improvements 1,879,018 247,306 2,126,324
Equipment 1,660,232 669,581 2,329,813
3,703,028 999,387 4,702,415
Less accumulated depreciation (2,392,364) (516,593) (2,908,957)

$ 1,310,664 $ 482,794 $ 1,793,458

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 MAP INTERNATIONAL

Notes to Financial Statements

September 30, 2006 and 2005

6. PROPERTY AND EQUIPMENT–NET, continued:

Net equity in property and equipment consists of:

September 30,
2006 2005

Property and equipment–net $ 2,062,653 $ 1,793,458

Less related debt (includes capital lease obligation) (637,485) (726,172)

$ 1,425,168 $ 1,067,286

Management has reviewed the assets in other countries and, in its opinion, has determined they are under the control
of MAP. While for this reason such items are recognized as assets of MAP, it should be noted that the political
situation in many countries is subject to rapid change. Therefore, the reader should be aware that while management
believes the assets are properly stated at the date of this report, subsequent changes could occur that would adversely
affect the value of the assets in other countries. In addition, it should be understood that the assets in other countries
may not be representative of the amount that would be realized should the assets be sold. Many of the assets were
designed to carry out the specific programs of MAP, and they might have limited resale potential.

7. NOTES AND LOANS PAYABLE:

Notes and loans payable consist of:

September 30,
2006 2005
Note payable, secured by real property, payable in monthly installments
of $10,707 with any remaining unpaid balance due May 2012. Interest is
charged at .50% over the prime rate and adjusted annually on the
anniversary date of the loan, May 1st (effective rate September 30, 2006
was 8.0%) $ 616,387 $ 700,986

Line of credit approved up to $300,000, collateralized by security

deed. Interest payable monthly at prime (effective rate September 30,
2006 was 8.25%). The note is subject to renewal on March 31, 2008. 200,000 -

Line of credit, unsecured, approved up to $300,000 with interest

payable monthly at the prime rate (effective rate at September 30, 2006
was 8.25%). The line of credit matures January 25, 2007. 100,000 -

Capital lease on equipment with total monthly payments of $581

ending December 2009. 21,098 25,186

Noninterest bearing demand loan payable to a donor 20,000 20,000

$ 957,485 $ 746,172

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 MAP INTERNATIONAL

Notes to Financial Statements

September 30, 2006 and 2005

7. NOTES AND LOANS PAYABLE, continued:

Maturities of notes and loans payable are as follows:

Years Ending September 30, Amount

2007 $ 406,863
2008 94,412
2009 102,642
2010 108,964
2011 112,999
Thereafter 131,605

$ 957,485

8. ANNUITIES AND TRUST PAYABLE:

Annuities payable represent the present value of future payments to annuitants. Annuity liabilities are computed
using federal income tax mortality rate tables and charitable mid-term rates published by the Internal Revenue
Service at the inception of the agreement. Annuities payable consist of:

September 30,
2006 2005

Annuities payable–current portion $ 92,247 $ 92,732

Annuities payable–net of current portion 310,975 339,598
403,222 432,330
Revocable trust 20,000 20,000

$ 423,222 $ 452,330

Years Ended September 30,

2006 2005

Change in value of annuities:

Interest and dividends $ 16,504 $ 11,165
Net realized gains 11 24,109
Net unrealized gains 12,307 1,510
Annuity payments (90,900) (91,408)
Fees (2,590) (1,942)
Terminated annuities 27,200 10,425
Actuarial change (34,292) (20,098)

$ (71,760) $ (66,239)

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 MAP INTERNATIONAL

Notes to Financial Statements

September 30, 2006 and 2005

9. NET ASSETS:
Net assets consist of:

September 30,
2006 2005

Unrestricted net assets:

Operating $ (157,825) $ 64,517
Donated inventory 76,337,988 61,090,819
Designated for annual medicine purchases 400,000 400,000
Designated for bulk purchases of medicines 100,000 100,000
Designated for annuity reserve 403,222 432,331
Designated for loan repayment 20,000 20,000
Net equity in property and equipment 1,425,168 1,067,286
Obligation for repayment of endowment funds - (331,155)
78,528,553 62,843,798

Temporarily restricted net assets:

Donated inventory 9,002,559 18,707,849
Pledges receivable 824,089 988,375
Pledges receivable for scholarship funds 880 10,189
Special projects 1,956,923 283,414
Relief 340,000 2,173,869
12,124,451 22,163,696

Permanently restricted:
MAP program activities endowment 2,561,443 2,561,443
MAP International Fellowship endowment 1,213,727 1,206,027
3,775,170 3,767,470

$ 94,428,174 $ 88,774,964

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 MAP INTERNATIONAL

Notes to Financial Statements

September 30, 2006 and 2005

10. GIFTS-IN-KIND:
MAP receives donations of medicine and supplies for use in relief and development programs. MAP ships all such
gifts-in-kind to similar not-for-profit organizations for ultimate distribution throughout the world.

For the years ended September 30, 2006, and 2005, MAP distributed donated inventory totaling $238,597,131 and
$310,489,679, respectively. For the year ended September 30, 2006, $238,584,409 of donated inventory was
delivered to MAP before being distributed and the remaining amount of $12,722 was shipped directly from the donor
to the organizations. For the year ended September 30, 2005, $310,482,254 of donated inventory was delivered to
MAP before being distributed and the remaining amount of $7,425 was shipped directly from the donor to the
organizations.

In accordance with Interagency Standards established by the Association of Evangelical Relief and Development
Organizations (AERDO), MAP only records the value of gifts-in-kind for which they were either the original
recipient of the gift or were involved in partnership with another organization for international distribution.

11. EMPLOYEE BENEFIT PLANS:

MAP offers its full-time, permanent employees health, life, and disability insurance plans. MAP also has a defined
contribution retirement plan (Plan) covering substantially all of its employees. The Plan consists of three
components: (1) MAP’s variable contribution, (2) employee deferred contributions to the Plan, and (3) employer
matching components. Employees are eligible to participate in the Plan immediately upon employment. Eligibility
for the variable contribution and matching programs begins after one year of service with full vesting of employer
contributions occurring after 5 years of service. MAP’s variable contribution for eligible employees amounted to 4%
of annual salary for the years ended September 30, 2006, and 2005. During the past two fiscal years, MAP matched
eligible 401(k) contributions at a rate of 50% of the first 6% of employee’s eligible compensation. Fiduciaries of the
Plan include MAP officers as Trustees and Administrator and Manufacturers Life Insurance Company as Investment
Manager or Custodian. Amounts contributed by MAP to this plan during the fiscal years ended September 30, 2006,
and 2005 were $124,187 and $115,412, respectively.

12. COMMITMENTS:
Operating Leases
MAP maintains noncancellable operating leases for certain buildings expiring at various dates through 2008. The
scheduled obligations associated with these noncancellable operating leases are as follows:

Years Ending September 30, Amount

2007 $ 80,800
2008 13,845
2009 8,106
2010 8,106

$ 110,857

Rental expense under operating leases totaled approximately $82,551 and $65,697 for the years ended September 30,
2006, and 2005, respectively, and is allocated to the program services and supporting activities benefited.

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 MAP INTERNATIONAL

Notes to Financial Statements

September 30, 2006 and 2005

12. COMMITMENTS, continued:

Capital leases
MAP is obligated under capital leases for office eqipment that expire in 2009. At September 30, 2006, the gross
amount of office equipment and related accumulated amortization recorded under capital leases were as follows:

Equipment $ 24,845
Less acumulated amortization (7,454)

$ 17,392

MAP includes amortization of equipment under capital lease in accumulated depreciation and depreciation expense.
Obligations under capital lease are summarized as follows:

Total future minimum lease payments $ 25,089

Less amount representing interest (3,991)

Capital leases payable (see Note 7) $ 21,098

Maturities of obligations under capital leases are as follows:

Years Ending September 30, Amount

2007 $ 4,758
2008 5,453
2009 6,298
2010 4,589

$ 21,098

Other Commitments
MAP has committed to quarterly payments of $7,200 to a consulting organization for MAP's website development
and hosting through 2009.

13. DONOR CONCENTRATION:

Approximately 66% and 46% of the donated inventory received by MAP for the years ended September 30, 2006,
and 2005, respectively, was provided by five donors. The organizational implications of this concentration are
recognized by management and the board.

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