MAP Financial Statement 2006

8/7/2019 MAP Financial Statement 2006

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MAP INTERNATIONAL

FINANCIAL STATEMENTS

With Independent Auditors Report

September 30, 2006 and 2005


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INDEPENDENT AUDITORS REPORT

Board of DirectorsMAP International

Brunswick, Georgia

Atlanta, Georgia

January 18, 2007

We have audited the accompanying statements of financial position ofMAP 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

organizations 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 organizations 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 ofMAP 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.

CAPIN CROUSE LL

Certified Public Accountan

Suite 130

1255 Lakes ParkwayLawrenceville, GA 30043

Telephone 678.518.5301

Facsimile 678.518.5302

www.capincrouse.com


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MAP INTERNATIONAL

Statements of Financial Position

September 30,

2006 2005

Specified Time Specified Time

Operating or Purpose Endowment Total Operating or Purpose Endowment Tot

SSETS:Cash and cash equivalents 283,814$ 1,211,340$ -$ 1,495,154$ 589,671$ 2,581,360$ -$ 3,17$

Accounts receivablenet 292,878 - - 292,878 175,032 - - 17

Other receivable 75,393 - - 75,393 55,825 - - 5

Pledges receivablenet - 824,969 - 824,969 - 998,564 - 99

Inventory:

Purchased 485,961 - - 485,961 314,049 - - 31

Donated 76,337,988 9,002,561 - 85,340,549 61,090,819 18,707,851 - 79,79

Prepaid expenses and other assets 108,699 - - 108,699 108,990 - - 10

Investments - 2,104,992 3,801,061 5,906,053 12,107 963,524 3,470,552 4,44

Property and equipmentnet 2,062,653 - - 2,062,653 1,793,458 - - 1,79

Interfund balances 82,801 (56,910) (25,891) - (140,863) (156,055) 296,918

otal Assets 79,730,187$ 13,086,952$ 3,775,170$ 96,592,309$ 63,999,088$ 23,095,244$ 3,767,470$ 90,86

ABILITIES AND NET ASSETS:Liabilities:

Accounts payable 261,372$ -$ -$ 261,372$ 274,591$ -$ -$ 27$

Deposits 127,228 - - 127,228 250,352 - - 25

Accrued expenses 394,828 - - 394,828 363,393 - - 36

Notes and loans payable 957,485 - - 957,485 746,172 - - 74

Annuities and trust payable - 423,222 - 423,222 - 452,330 - 45

Total liabilities 1,740,913 423,222 - 2,164,135 1,634,508 452,330 - 2,08

(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 Tot

IABILITIES AND NET ASSETS,

ontinued:

Net assets:

Unrestricted 77,989,274 539,279 - 78,528,553 62,364,580 479,218 - 62,84

Temporarily restricted - 12,124,451 - 12,124,451 - 22,163,696 - 22,16

Permanently restricted - - 3,775,170 3,775,170 - - 3,767,470 3,76

Total net assets 77,989,274 12,663,730 3,775,170 94,428,174 62,364,580 22,642,914 3,767,470 88,77

otal 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$ 90,86


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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 Tota

UPPORT AND REVENUE:Contributions 3,832,090$ 1,947,708$ 7,700$ 5,787,498$ 4,087,794$ 3,190,473$ -$ 7,27$

Donated inventory 228,173,692 15,965,317 - 244,139,009 230,724,358 108,247,000 - 338,97

Donated property and equipment 1,600 - - 1,600 27,427 - - 2

Donated securities and other assets 101,035 45,041 - 146,076 197,998 109,133 - 30

Government grants 199,868 - - 199,868 6,715 - -

Handling charges and service fees 3,234,495 - - 3,234,495 3,095,505 - - 3,09

Investment income 284,129 88,673 - 372,802 (336,919) 107,997 - (22

Other revenue 45,406 - - 45,406 33,746 - - 3

otal Support and Revenue 235,872,315 18,046,739 7,700 253,926,754 237,836,624 111,654,603 - 349,49

ECLASSIFICATIONS:

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

XPENSES:

Program services:

Essential medicines 190,781,152 - - 190,781,152 276,190,561 - - 276,19

Disease, prevention, and

eradication 722,072 - - 722,072 1,191,365 - - 1,19

Community health services 53,398,554 - - 53,398,554 38,572,526 - - 38,57

244,901,778 - - 244,901,778 315,954,452 - - 315,95

(continued)


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MAP INTERNATIONAL

Statements of Activities

(continued)


2006 2005

Temporarily Permanently Temporarily Permanently

Unrestricted Restricted Restricted Total Unrestricted Restricted Restricted Tota

XPENSES, continued:

Supporting activities:

General and administrative 575,011 - - 575,011 1,160,361 - - 1,16

Fund-raising 2,796,755 - - 2,796,755 2,397,182 - - 2,39

3,371,766 - - 3,371,766 3,557,543 - - 3,55

otal Expenses 248,273,544 - - 248,273,544 319,511,995 - - 319,51

hange in Net Assets 15,684,755 (10,039,245) 7,700 5,653,210 17,468,588 12,510,644 - 29,97

t 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 58,79

t Assets, End of Year 78,528,553$ 12,124,451$ 3,775,170$ 94,428,174$ 2,843,798$ 22,163,696$ 3,767,470$ 88,77$


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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 248,954 213,829Gain on disposal of property and equipment 202 13,989Net 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 - 515,000Write-off of uncollectible pledge - 500,000

Changes in operating assets and liabilities:Accounts and other receivables (137,414) 218,059Pledges 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) 343,034Accrued 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 4,731,398Purchases 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 88,673 107,997Proceeds from issuance of annuities 27,500 111,000Payments 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)


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MAP INTERNATIONAL

Statements of Cash Flows

(continued)


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$


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MAP INTERNATIONAL

Statement of Functional Expenses

Year Ended September 30, 2006

rogram Services Supporting ServicesDisease, ommunity Total eneral Total

Essential Prevention, and Health Program nd und- SupportingMedicines Eradication Services Services Administrative aising Services Tota

XPENSES:

istributed inventory 188,018,228$ 11,614 49,867,289$ 238,597,131$ -$ - -$ 238,59$

ost of goods distributed 953,053 ,607 252,774 1,209,434 - - - 1,20

reight 253,802 961 78,488 333,251 2,299 10,028 12,327 34

ersonnel:

Salaries and wages 789,368 ,988 1,057,366 1,849,722 253,969 1,106,325 1,360,294 3,21

Employee benefits 220,479 834 276,757 498,070 74,619 309,663 384,282 88

utside services 154,071 583 136,879 291,533 66,930 74,220 141,150 43

ravel 113,245 429 161,624 275,298 28,167 155,079 183,246 45

upplies 4,083 15 91,386 95,484 14,135 22,331 36,466 13

onferences and meetings 7,743 29 245,784 253,556 16,805 27,140 43,945 29

rants - - 801,496 801,496 - - - 80

rinting and publications 8,768 33 34,750 43,551 1,854 851,744 853,598 89

ostage 1,235 5 6,575 7,815 596 20,287 20,883 2

quipment rental and

repair 56,823 215 97,978 155,016 44,906 48,537 93,443 24ncollectible accounts - - - - 2,133 - 2,133

elephone 16,626 63 46,380 63,069 8,723 31,627 40,350 10

ccupancy 35,621 135 66,671 102,427 10,260 10,830 21,090 12

nterest 15,392 58 18,836 34,286 10,167 16,544 26,711 6

nsurance 45,588 173 24,126 69,887 7,989 7,864 15,853 8

epreciation 83,750 317 98,919 182,986 20,595 45,373 65,968 24

iscellaneous 3,277 13 34,476 37,766 10,864 59,163 70,027 10

otal Expenses 190,781,152$ 22,072$ 53,398,554$ 244,901,778$ 575,011$ 2,796,755$ 3,371,766$ 248,27


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MAP INTERNATIONAL

Statement of Functional Expenses

Year Ended September 30, 2005

rogram Services Supporting Services

Disease, ommunity Total General Total

Essential Prevention, and Health Program and Fund- Supporting

Medicines Eradication Services Services Administrative Raising Services Tota

XPENSES:

istributed inventory 273,610,044$ 1,180,233 35,699,402$ 310,489,679$ -$ -$ -$ 310,48$

ost of goods distributed 851,786 ,674 111,137 966,597 - - - 96

reight 315,252 1,360 46,565 363,177 - - - 36

ersonnel:

Salaries and wages 710,022 ,063 931,011 1,644,096 300,993 879,432 1,180,425 2,82

Employee benefits 197,532 852 215,390 413,774 65,734 255,204 320,938 73

utside services 117,306 506 99,550 217,362 79,121 39,344 118,465 33

ravel 88,087 380 131,196 219,663 35,324 94,531 129,855 34

upplies 28,830 124 54,201 83,155 12,919 17,131 30,050 11

onferences and meetings 17,090 74 605,093 622,257 12,233 36,845 49,078 67

rants - - 391,629 391,629 - - - 39

rinting and publications 21,111 91 17,580 38,782 2,927 901,308 904,235 94

ostage 1,910 8 2,071 3,989 4,505 22,099 26,604 3

quipment rental and

repair 42,403 183 58,679 101,265 62,662 40,735 103,397 20

ncollectible accounts - - - - 491,481 - 491,481 49

elephone 12,877 56 36,926 49,859 21,380 24,966 46,346 9

ccupancy 28,658 124 40,370 69,152 17,451 10,049 27,500 9

nterest 16,366 71 21,879 38,316 14,817 18,536 33,353 7

nsurance 40,880 176 10,987 52,043 7,483 5,607 13,090 6

epreciation 79,889 345 73,748 153,982 25,312 34,535 59,847 21

iscellaneous 10,518 45 25,112 35,675 6,019 16,860 22,879 5

otal Expenses 276,190,561$ 1,191,365$ 38,572,526$ 315,954,452$ 1,160,361$ 2,397,182$ 3,557,543$ 319,51$


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MAP INTERNATIONAL

Notes to Financial Statements


1. NATURE OF ORGANIZATION:

MAP International (MAP), founded as Medical Assistance Programs, was incorporated in 1965 in Illinois as anonprofit corporation. MAPs purpose is to promote the total health of people living in the worlds impoverished

communities. Through its offices in the Unites States, Bolivia, Ecuador, Indonesia, Cote DIvoire, and Kenya, MAP

promotes access to health services and essential medicines in more than 130 countries. MAPs 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:

ssential MedicinesMAP 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, MAPs

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.

isease Prevention and EradicationMAPs 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

revention programs that benefit communities in Latin America and Africa. MAPs program in Bolivia

vaccinates children and screens them for parasites, malnutrition, and many other diseases.

Community Health ServicesTotal 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 ofGeorgia.

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



2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

RECLASSIFICATIONS

ESTIMATES

CASH AND CASH EQUIVALENTS

ACCOUNTS RECEIVABLE

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.

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.

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

Certain information from the prior year financial statements has been reclassified to conform to the current year

presentation format.

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 organizations 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 managements judgment, is adequate to

absorb potential losses inherent in the receivable portfolio. The amount of the allowance is based on

managements 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



2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued:

PLEDGES RECEIVABLE

INVENTORY

INVESTMENTS

ENDOWMENT FUNDS

PROPERTY AND EQUIPMENT

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 consists of purchased and donated medical products and supplies. Purchased inventory is stated at thelower 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 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.

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.

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 donors 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.

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MAP INTERNATIONAL




ANNUITIES PAYABLE

REVOCABLE TRUST

NET ASSETS

The financial statements report amounts by classification of net assets:

SUPPORT, REVENUE, AND RECLASSIFICATIONSRevenue 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.

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 donors lifetime. A portion of the

transfer is considered to be a charitable contribution for income tax purposes. The difference between the amount

rovided 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.

As trustee, MAP administers a revocable (grantor) trust that provides for a beneficial interest to MAP at thegrantors 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 grantors death, the remaining trust assets will be recorded as contribution support.

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 orprograms, 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.

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MAP INTERNATIONAL




SUPPORT, REVENUE, AND RECLASSIFICATIONS, continued

EXPENSES

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 MAPs 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.

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.

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.

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 MAPs 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.

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MAP INTERNATIONAL




ALLOCATION OF JOINT COSTS

3. ACCOUNTS RECEIVABLENET:

Accounts receivable consist of:

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 RECEIVABLENET:

Pledges receivablenet consist of:

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$

September 30,

September 30,

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.

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MAP INTERNATIONAL



5. INVESTMENTS:

Investments consist of:

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:

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 managements assessment ofexpected 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).

September 30,

September 30,

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5. INVESTMENTS, continued:

Investment income consists of the following:

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:


Net realized gains (losses) 9,314 58,960

Net unrealized gains 37,631 18,271

88,673$ 107,997$

6. PROPERTY AND EQUIPMENTNET:

Property and equipmentnet consist of:

September 30, 2006U.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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6. PROPERTY AND EQUIPMENTNET, continued:

Net equity in property and equipment consists of:

2006 2005

Property and equipmentnet 2,062,653$ 1,793,458$

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

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

7. NOTES AND LOANS PAYABLE:

Notes and loans payable consist of:

2006 2005

Note payable, secured by real property, payable in monthly installmentsof $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$

September 30,

September 30,

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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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:

2006 2005

Annuities payablecurrent portion 92,247$ 92,732$

Annuities payablenet of current portion 310,975 339,598403,222 432,330

Revocable trust 20,000 20,000

423,222$ 452,330$

2006 2005

Change in value of annuities:


Net realized gains 11 24,109Net 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)$


September 30,

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:

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9. NET ASSETS:

Net assets consist of:

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 20,000Net 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$

September 30,

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10. GIFTS-IN-KIND:

11. EMPLOYEE BENEFIT PLANS:

12. COMMITMENTS:

Operating Leases


2007 80,800$2008 13,845

2009 8,106

2010 8,106

110,857$

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) MAPs 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. MAPs 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 employees eligible compensation. Fiduciaries of the

Plan include MAP officers as Trustees and Administrator and Manufacturers Life Insurance Company as InvestmentManager 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.

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:

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.

MAP receives donations of medicine and supplies for use in relief and development programs. MAP ships all suchgifts-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.

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12. COMMITMENTS, continued:

Capital leases

Equipment 24,845$

Less acumulated amortization (7,454)

17,392$

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:


2007 4,758$2008 5,453

2009 6,298

2010 4,589

21,098$

Other Commitments

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.

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:

MAP includes amortization of equipment under capital lease in accumulated depreciation and depreciation expense.

Obligations under capital lease are summarized as follows:

MAP has committed to quarterly payments of $7,200 to a consulting organization for MAP's website development

and hosting through 2009.

MAP Financial Statement 2006

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