Income Statement —
F2010 USA Inc. Revenues + Expenses at a Glance
F2010 Revenue = F2010 USA Inc. Expenses = $2.2 Trillion $3.5 Trillion
Entitlement
Net Interest Programs
Payment
Discretionary $196B
One-Time Items $152B Social Security
$707B
Other
$208B
Corporate Individual Income Tax Eine THE Non-Defense $191B $899B See, Defense psi i i 694B Social $ Medicaid Insurance Tax $724B
$865B Unemployment Insurance + Other Entitlements $553B
Note: USA federal fiscal year ends in September; *individual & corporate income taxes include capital gains taxes. Non-
defense discretionary includes federal spending on education, infrastructure, law enforcement, judiciary functions...
KP Source: White House Office of Management and Budget. i USA Inc. | Income Statement Drilldown 55
Income Statement —
USA Inc. Supported -60% Net Margin in F2010
USA Inc. Profit & Loss Statement, F1995 / F2000 / F2005 / F2010
F1995 .., £2000 ..,F2005 ._,, F2010 Comments Revenue ($B) $1,352 $2,026 $2,154 On average, revenue grew 3% Y/Y Y/Y Growth -~- 11% 15% 3% over past 15 years Individual Income Taxes* $590 $1,005 $927 $899 Largest driver of revenue % of Revenue 44% 50% 43% 42% Social Insurance Taxes $484 $653 $794 $865 Payroll tax on Social Security + % of Revenue 36% 32% 37% 40% Medicare Corporate Income Taxes* $157 $207 $278 $191 Fluctuates significantly with % of Revenue 12% 10% 13% 9% economic conditions Other $120 $161 $154 $208 Includes estate & gift taxes / duties & % of Revenue 9% 8% 7% 10% fees; relatively stable Expense ($B) $1,516 $1,789 $2,472 $3,456 "On average, expense grew 6% YIY Y/Y Growth = 5% 8% -2% over past 15 years Entitlement / Mandatory $788 $937 $1,295 $1,984 Significant increase owing to aging % of Expense 52% 52% bat °7% population + rising healthcare cost Non-Defense Discretionary $223 $335 $497 $431 Tela screatien dE | fi t % of Expense 15% 19% 20% 12% ncludes education / law enforcemen / transportation... Wal Expense ~ ~ ~ en Includes discretionary spending on TARP, GSE id ic stimul Defense $272 $294 $495 $604 Si fie ‘i eee ina ta sums % of Expense 18% 16% 20% 20% ignificant increase owing to on- going War on Terror Net Interest on Public Debt $232 $223 $184 $196 Decreased owing to historic low % of Expense 15% 12% 7% 6% interest rates Surplus / Deficit ($B) -$164 $237 -$318 [_ $1,293 | USA Inc. median net margin Net Margin (%) -12% 12% -15% 60% between 1995 & 2010 = -8%
Note: USA federal fiscal year ends in September; *individual & corporate income taxes include capital gains taxes. Non-
defense discretionary includes federal spending on education, infrastructure, law enforcement, judiciary functions...
KP Source: White House Office of Management and Budget. (@E) www.kpcb.com USA Inc. | Income Statement Drilldown 56
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