MAP INTERNATIONAL

FINANCIAL STATEMENTS
With Independent Auditors’ Report

September 30, 2007 and 2006

 MAP INTERNATIONAL

Table of Contents

Pages

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 – 2007 8
Statement of Functional Expenses – 2006 9

Notes to Financial Statements 10-24

INDEPENDENT AUDITORS’ REPORT

Board of Directors
MAP International
Brunswick, Georgia

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

September 30, 2007, and 2006 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 statements 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, 2007, and 2006 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 10, 2008
 MAP INTERNATIONAL

Statements of Financial Position

September 30,
2007 2006
Specified Time Specified Time
Operating or Purpose Endowment Total Operating or Purpose Endowment Total

ASSETS:
Cash and cash equivalents $ 462,939 $ 394,991 $ - $ 857,930 $ 283,814 $ 1,211,340 $ - $ 1,495,154
Accounts receivable – net 518,806 - - 518,806 292,878 - - 292,878
Other receivable 208,084 - - 208,084 75,393 - - 75,393
Pledges receivable – net - 492,866 - 492,866 - 824,969 - 824,969
Inventory:
Purchased 253,584 - - 253,584 485,961 - - 485,961
Donated 144,156,001 16,551,553 - 160,707,554 76,337,988 9,002,561 - 85,340,549
Prepaid expenses and other assets 155,554 - - 155,554 108,699 - - 108,699
Investments 1,613 1,690,603 4,171,297 5,863,513 - 2,104,992 3,801,061 5,906,053
Property and equipment – net 2,036,812 - - 2,036,812 2,062,653 - - 2,062,653
Interfund balances 14,002 382,125 (396,127) - 82,801 (56,910) (25,891) -

Total Assets $ 147,807,395 $ 19,512,138 $ 3,775,170 $ 171,094,703 $ 79,730,187 $ 13,086,952 $ 3,775,170 $ 96,592,309

LIABILITIES AND NET ASSETS:

Liabilities:
Accounts payable $ 289,839 $ - $ - $ 289,839 $ 261,372 $ - $ - $ 261,372
Deposits 60,508 - - 60,508 127,228 - - 127,228
Accrued expenses 623,949 - - 623,949 394,828 - - 394,828
Notes and loans payable 1,174,127 - - 1,174,127 957,485 - - 957,485
Annuities and trust payable - 378,160 - 378,160 - 423,222 - 423,222
Total liabilities 2,148,423 378,160 - 2,526,583 1,740,913 423,222 - 2,164,135

(continued)

See notes to financial statements

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 MAP INTERNATIONAL

Statements of Financial Position

(continued)

September 30,
2007 2006
Specified Time Specified Time
Operating or Purpose Endowment Total Operating or Purpose Endowment Total

LIABILITIES AND NET ASSETS,

continued:
Net assets:
Unrestricted 145,658,972 622,666 - 146,281,638 77,989,274 539,279 - 78,528,553
Temporarily restricted - 18,511,312 - 18,511,312 - 12,124,451 - 12,124,451
Permanently restricted - - 3,775,170 3,775,170 - - 3,775,170 3,775,170
Total net assets 145,658,972 19,133,978 3,775,170 168,568,120 77,989,274 12,663,730 3,775,170 94,428,174

Total Liabilities and Net Assets $ 147,807,395 $ 19,512,138 $ 3,775,170 $ 171,094,703 $ 79,730,187 $ 13,086,952 $ 3,775,170 $ 96,592,309

See notes to financial statements

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 MAP INTERNATIONAL

Statements of Activities

Years Ended September 30,

2007 2006
Temporarily Permanently Temporarily Permanently
Unrestricted Restricted Restricted Total Unrestricted Restricted Restricted Total

SUPPORT AND REVENUE:

Contributions $ 4,767,831 $ 1,059,234 $ - $ 5,827,065 $ 3,832,090 $ 1,947,708 $ 7,700 $ 5,787,498
Donated inventory 299,843,168 86,483,377 - 386,326,545 228,173,692 15,965,317 - 244,139,009
Donated property and equipment 12,760 - - 12,760 1,600 - - 1,600
Donated securities and other assets 325,546 12,940 - 338,486 101,035 45,041 - 146,076
Government grants 879,727 - - 879,727 199,868 - - 199,868
Handling charges and service fees 3,524,387 - - 3,524,387 3,234,495 - - 3,234,495
Investment income 423,449 143,735 - 567,184 284,129 88,673 - 372,802
Other revenue 63,203 - - 63,203 45,406 - - 45,406

Total Support and Revenue 309,840,071 87,699,286 - 397,539,357 235,872,315 18,046,739 7,700 253,926,754

RECLASSIFICATIONS:
Net assets released from
restrictions 81,312,425 (81,312,425) - - 28,085,984 (28,085,984) - -

EXPENSES:
Program services:
Essential medicine distribution 280,667,865 - - 280,667,865 190,781,152 - - 190,781,152
Disaster and disease
management 2,698,069 - - 2,698,069 722,072 - - 722,072
Community health development 35,693,148 - - 35,693,148 53,398,554 - - 53,398,554
319,059,082 - - 319,059,082 244,901,778 - - 244,901,778

(continued)

See notes to financial statements

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 MAP INTERNATIONAL

Statements of Activities
(continued)

Years Ended September 30,

2007 2006
Temporarily Permanently Temporarily Permanently
Unrestricted Restricted Restricted Total Unrestricted Restricted Restricted Total

EXPENSES, continued:
Supporting activities:
General and administrative 664,756 - - 664,756 575,011 - - 575,011
Fund-raising 3,675,573 - - 3,675,573 2,796,755 - - 2,796,755
4,340,329 - - 4,340,329 3,371,766 - - 3,371,766

Total Expenses 323,399,411 - - 323,399,411 248,273,544 - - 248,273,544

Change in Net Assets 67,753,085 6,386,861 - 74,139,946 15,684,755 (10,039,245) 7,700 5,653,210

Net Assets, Beginning 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

Net Assets, End of Year $ 146,281,638 $ 18,511,312 $ 3,775,170 $ 168,568,120 $ 78,528,553 $ 12,124,451 $ 3,775,170 $ 94,428,174

See notes to financial statements

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 MAP INTERNATIONAL

Statements of Cash Flows

Years Ended September 30,

2007 2006

CASH FLOWS FROM OPERATING ACTIVITIES:

Change in net assets $ 74,139,946 $ 5,653,210
Adjustments to reconcile change in net assets to net cash
provided (used) by operating activities:
Donated inventory (386,326,545) (244,139,009)
Distributed inventory 310,959,540 238,597,131
Donated securities, property, equipment, and other assets (338,486) (147,676)
Depreciation 330,357 248,954
Gain on disposal of property and equipment 1,178 202
Net realized and unrealized gains and losses on investments (258,391) (85,005)
Net realized and unrealized gains and losses in change in value of annuities - (12,318)
Investment income restricted for long-term investment (143,735) (88,673)
Actuarial change in value of annuities (24,626) 34,292
Changes in operating assets and liabilities:
Accounts and other receivables (358,619) (137,414)
Pledges receivable 332,103 173,595
Purchased inventory 232,377 (171,913)
Prepaid expenses and other assets (46,855) 291
Accounts payable and deposits (38,253) (136,343)
Accrued expenses 229,121 31,435

Net Cash Provided (Used) by Operating Activities (1,310,888) (179,241)

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from sale of investments 3,022,361 2,339,945
Purchases of investments (2,382,944) (3,554,816)
Purchases of property and equipment (286,094) (518,351)
Increase in construction in progress (19,600) -

Net Cash Provided (Used) by Investing Activities 333,723 (1,733,222)

CASH FLOWS FROM FINANCING ACTIVITIES:

Investment income restricted for long-term investment 143,735 88,673
Proceeds from issuance of annuities 49,474 27,500
Payments on annuities (69,910) (90,900)
Repayments on notes payable (78,637) (84,599)
Repayments on capital leases (4,721) (4,088)
Borrowings on lines of credit 300,000 300,000

(continued)

See notes to financial statements

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 MAP INTERNATIONAL

Statements of Cash Flows

(continued)

Years Ended September 30,

2007 2006

Net Cash Provided (Used) by Financing Activities 339,941 236,586

Net Change in Cash and Cash Equivalents (637,224) (1,675,877)

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

Cash and Cash Equivalents, End of Year $ 857,930 $ 1,495,154

SUPPLEMENTAL DISCLOSURES:
Cash paid for interest $ 102,433 $ 60,997

NONCASH INVESTING ACTIVITIES:

Donated securities and other assets $ 338,486 $ 147,676

Donated property and equipment $ 12,760 $ -

See notes to financial statements

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 MAP INTERNATIONAL

Statement of Functional Expenses

Year Ended September 30, 2007

Program Services Supporting Services

Essential Disaster Community Total General Total
Medicine and Disease Health Program and Fund- Supporting
Distribution Management Development Services Administrative Raising Services Total

EXPENSES:
Distributed inventory $ 277,250,983 $ 1,163,226 $ 32,545,331 $ 310,959,540 $ - $ - $ - $ 310,959,540
Cost of goods distributed 975,506 4,093 114,509 1,094,108 - - $ 1,094,108
Freight 339,563 1,425 39,968 380,956 - 23,612 23,612 404,568
Personnel:
Salaries and wages 912,992 350,804 1,092,137 2,355,933 260,732 1,206,211 1,466,943 3,822,876
Employee benefits 299,967 35,417 359,229 694,613 87,349 397,883 485,232 1,179,845
Outside services 200,463 17,532 346,976 564,971 118,273 294,464 412,737 977,708
Travel 27,223 112,243 166,397 305,863 34,218 194,643 228,861 534,724
Supplies 70,162 113,424 84,543 268,129 12,415 26,978 39,393 307,522
Conferences and meetings 20,598 101,248 258,293 380,139 14,336 20,710 35,046 415,185
Grants - 621,412 181,578 802,990 - 42,999 42,999 845,989
Printing and publications 16,525 3,555 55,006 75,086 9,967 1,112,159 1,122,126 1,197,212
Postage 843 7,517 4,393 12,753 6 98,957 98,963 111,716
Equipment rental and repair 230,355 33,017 121,779 385,151 34,532 69,192 103,724 488,875
Uncollectible accounts - - - - 15,227 - 15,227 15,227
Telephone 26,287 22,183 50,238 98,708 12,261 41,392 53,653 152,361
Occupancy 42,622 26,657 68,337 137,616 14,351 12,206 26,557 164,173
Interest 29,461 124 27,990 57,575 17,321 27,537 44,858 102,433
Insurance 133,004 2,048 22,850 157,902 8,123 7,355 15,478 173,380
Depreciation 90,731 76,790 101,701 269,222 19,738 41,397 61,135 330,357
Miscellaneous 580 5,354 51,893 57,827 5,907 57,878 63,785 121,612

Total Expenses $ 280,667,865 $ 2,698,069 $ 35,693,148 $ 319,059,082 $ 664,756 $ 3,675,573 $ 4,340,329 $ 323,399,411

See notes to financial statements

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 MAP INTERNATIONAL

Statement of Functional Expenses

Year Ended September 30, 2006

Program Services Supporting Services

Essential Disaster Community Total General Total
Medicine and Disease Health Program and Fund- Supporting
Distribution Management Development 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

Notes to Financial Statements

September 30, 2007 and 2006

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 United States, Bolivia, Ecuador, Indonesia, Uganda, 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 Medicine Distribution – 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.

Disaster and Disease Management – 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 Development – 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, 2007, and 2006.

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 MAP INTERNATIONAL

Notes to Financial Statements

September 30, 2007 and 2006

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 $383,514 and $329,613 at September 30, 2007, and 2006, 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. MAP’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 amounts of $16,397 and $4,914 as of September 30, 2007,
and 2006, respectively.

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 MAP INTERNATIONAL

Notes to Financial Statements

September 30, 2007 and 2006

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 $32,878
and $32,812 at September 30, 2007, and 2006, 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, 2007, and 2006, the endowment interfund borrowing balances were
$400,000 and $500,000, 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 foreign 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, 2007 and 2006

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, 2007 and 2006

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, 2007, and 2006, management estimated that volunteers donated over 3,800
and 3,900 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, 2007 and 2006

3. ACCOUNTS RECEIVABLE – NET:

Accounts receivable consist of:

September 30,
2007 2006

Trade receivables $ 316,939 $ 180,254

Foreign field receivables 218,264 117,538
535,203 297,792
Less allowance for uncollectible accounts (16,397) (4,914)

$ 518,806 $ 292,878

4. PLEDGES RECEIVABLE – NET:

Pledges receivable – net consist of:

September 30,
2007 2006

Unconditional promises receivable (pledges) before unamortized discount $ 535,127 $ 858,623

Less unamortized discount (42,261) (33,654)

$ 492,866 $ 824,969

Pledges are due to be collected as follows:

Less than one year $ 165,376 $ 310,440
One to five years 327,490 514,529

$ 492,866 $ 824,969

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 MAP INTERNATIONAL

Notes to Financial Statements

September 30, 2007 and 2006

5. INVESTMENTS:
Investments consist of:

September 30,
2007 2006

Money market funds and certificates of deposit $ 1,357,123 $ 1,881,250

Marketable equity securities 2,215,882 1,937,938
Government and corporate bonds 2,169,067 1,976,912
Other investments 121,441 109,953

$ 5,863,513 $ 5,906,053

Investments are held for the following purposes:

September 30,
2007 2006

Operating $ 1,613 $ -
Specified time or purpose:
Annuity funds 533,502 452,279
Designated for medicine purchases 450,000 450,000
Designated for Bolivia medicines 50,000 50,000
Designated for Indonesia 600,000 800,000
Designated for relief - 300,000
Funds held for loan repayment 37,101 32,713
Revocable trusts 20,000 20,000
1,690,603 2,104,992

Endowment 4,171,297 3,801,061

$ 5,863,513 $ 5,906,053

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 MAP INTERNATIONAL

Notes to Financial Statements

September 30, 2007 and 2006

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

Years Ended September 30,

2007 2006

Unrestricted:
Interest and dividends $ 172,764 $ 220,418
Net realized gains (losses) 34,776 14,703
Net unrealized gains (losses) 215,909 49,008

$ 423,449 $ 284,129

Temporarily restricted:
Interest and dividends $ 46,864 $ 41,728
Net realized gains (losses) 9,147 9,314
Net unrealized gains 87,724 37,631

$ 143,735 $ 88,673

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 MAP INTERNATIONAL

Notes to Financial Statements

September 30, 2007 and 2006

6. PROPERTY AND EQUIPMENT – NET:

Property and equipment – net consist of:

September 30, 2007

U.S. Foreign Total

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

Building and improvements 1,894,307 320,140 2,214,447
Equipment 1,969,618 944,245 2,913,863
4,027,703 1,346,885 5,374,588
Less accumulated depreciation (2,656,442) (700,934) (3,357,376)
Construction in progress 19,600 - 19,600

$ 1,390,861 $ 645,951 $ 2,036,812

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

Net equity in property and equipment consists of:

September 30,
2007 2006

Property and equipment – net $ 2,036,812 $ 2,062,653

Less related debt (includes capital lease obligation) (554,127) (637,485)

$ 1,482,685 $ 1,425,168

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.

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 MAP INTERNATIONAL

Notes to Financial Statements

September 30, 2007 and 2006

7. NOTES AND LOANS PAYABLE:

Notes and loans payable consist of:

September 30,
2007 2006
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, 2007,
was 8.75%) $ 537,750 $ 616,387

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

deed. Interest payable monthly at prime (effective rate September 30,
2006, was 7.75%). The note is subject to renewal on March 31, 2008. 300,000 200,000

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

payable monthly at the prime rate (effective rate at September 30, 2007,
was 7.75%). The line of credit matures January 31, 2008. 300,000 100,000

Capital lease on equipment with total monthly payments of $581

ending December 2009. 16,377 21,098

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

$ 1,174,127 $ 957,485

Maturities of notes and loans payable are as follows:

Years Ending September 30, Amounts

2008 $ 1,163,203
2009 6,299
2010 4,625

$ 1,174,127

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 MAP INTERNATIONAL

Notes to Financial Statements

September 30, 2007 and 2006

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,
2007 2006

Annuities payable – current portion $ 63,078 $ 92,247

Annuities payable – net of current portion 295,082 310,975
358,160 403,222
Revocable trust 20,000 20,000

$ 378,160 $ 423,222

Years Ended September 30,

2007 2006

Change in value of annuities:

Interest and dividends $ 18,573 $ 16,504
Net realized gains 6,513 11
Net unrealized gains 27,546 12,307
Annuity payments (69,910) (90,900)
Fees (2,262) (2,590)
Terminated annuities 82,415 27,200
Actuarial change 24,626 (34,292)

$ 87,501 $ (71,760)

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 MAP INTERNATIONAL

Notes to Financial Statements

September 30, 2007 and 2006

9. NET ASSETS:
Net assets consist of:

September 30,
2007 2006

Unrestricted net assets:

Operating $ (235,239) $ (157,825)
Donated inventory 144,156,001 76,337,988
Designated for annual medicine purchases 400,000 400,000
Designated for bulk purchases of medicines 100,000 100,000
Designated for annuity reserve 358,191 403,222
Designated for loan repayment 20,000 20,000
Net equity in property and equipment 1,482,685 1,425,168
146,281,638 78,528,553

Temporarily restricted net assets:

Donated inventory 16,551,553 9,002,559
Pledges receivable 492,866 824,089
Pledges receivable for scholarship funds - 880
Special projects 1,296,893 1,956,923
Relief 170,000 340,000
18,511,312 12,124,451

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

$ 168,568,120 $ 94,428,174

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 MAP INTERNATIONAL

Notes to Financial Statements

September 30, 2007 and 2006

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, 2007, and 2006, MAP distributed donated inventory totaling $310,959,540 and
$238,597,131, respectively. For the year ended September 30, 2007, $306,793,684 of donated inventory was
delivered to MAP before being distributed and the remaining amount of $4,165,856 was shipped directly from the
donor to the organizations. 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.

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, 2007, and 2006. 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, 2007,
and 2006 were $132,995 and $124,187, respectively.

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 MAP INTERNATIONAL

Notes to Financial Statements

September 30, 2007 and 2006

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, Amounts

2008 $ 381,533
2009 363,972
2010 266,007
2011 109,598
2012 99,727

$ 1,220,837

Rental expense under operating leases totaled approximately $287,785 and $135,931 for the years ended September
30, 2007, and 2006, respectively, and is allocated to the program services and supporting activities benefited.

Capital leases
MAP is obligated under capital leases for office equipment that expire in 2009. At September 30, 2007, the gross
amount of office equipment and related accumulated amortization recorded under capital leases were as follows:

Equipment $ 24,845
Less accumulated amortization (12,423)

$ 12,423

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 $ 19,166

Less amount representing interest (2,789)

Capital leases payable (see Note 7) $ 16,377

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 MAP INTERNATIONAL

Notes to Financial Statements

September 30, 2007 and 2006

12. COMMITMENTS, continued:

Maturities of obligations under capital leases are as follows:

Years Ending September 30, Amounts

2008 $ 5,453
2009 6,299
2010 4,625

$ 16,377

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

13. RELATED PARTY TRANSACTION:

During the year ended September 30, 2007, the Board approved contributions totaling $41,000 to a foundation for
which MAP’s President serves as the foundation’s Executive Director.

14. DONOR CONCENTRATION:

Approximately 66% of the donated inventory received by MAP for the years ended September 30, 2007, and 2006
was provided by five donors. The organizational implications of this concentration are recognized by management
and the board.

15. SUBSEQUENT EVENT:

During October 2007, MAP completed the sale of its Brunswick, GA office for $4,200,000, which included the real
property, building, and furniture and fixtures as part of the sale (approximate net book value at September 30, 2007,
$1,019,000). Upon closing, MAP paid off its note payable and related accrued interest. Furthermore, as part of the
sale agreement, MAP is allowed to occupy its former property during the construction of its new facility. During
November 2007, MAP purchased approximately 16 acres for $300,000 in order to construct a new 52,500 square foot
office and distribution center in Brunswick, GA with an expected cost approximating $4,700,000.

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