USPS Reports $5.4 Billion Deficit for FY 2007

September 26, 2007 by
Filed under: financial statements, postal finances, usps 

 Projects net loss of $600 million in 2008

The Postal Service Board of Governors today approved an aggressive 2008 financial plan for the U.S. Postal Service that includes $1 billion in cost savings and puts its expense growth lower than inflation.

The Postal Service’s operating, capital and financing plans for the new fiscal year, known as the Integrated Financial Plan (IFP), project expense growth below the assumed increase in the Consumer Price Index (CPI), the most commonly used benchmark for inflation.

Those projections do not assume any price changes for postal products and services over the next fiscal year, which begins Oct. 1. The Board of Governors has not made a decision on future prices but applauded the Postal Regulatory Commission for being well ahead of schedule with its recommendations on the new rate regulations.

The IFP projects revenue of $78.2 billion and expenses of $78.8 billion in fiscal 2008, for a net loss of $600 million. The financial plan is significantly affected by the Postal Accountability and Enhancement Act (the Postal Act of 2006), as are finances in the current fiscal year.

2007 — One-time Costs
For fiscal 2007, the Postal Service projects revenues of $75.0 billion and expenses of $80.4 billion for a projected net loss of $5.4 billion. The net loss of $5.4 billion includes operating income of $1.5 billion and a $6.9 billion negative financial impact from the Postal Act of 2006 — which includes a $3.0 billion one-time escrow expense, which was required under the previous law, an additional $5.4 billion payment into the Retiree Health Benefit Fund for 2007, and $1.5 billion in savings from the Civil Service Retirement System (CSRS) relief.

“Absent the negative financial impacts from the Postal Act of 2006, the Postal Service projects operating income of $1.5 billion this year and $400 million next year,” said H. Glen Walker, Chief Financial Officer.

2008 — Expense Growth Below Inflation
Total expenses for fiscal 2008 are planned at $78.8 billion, or 2.0 percent below projected fiscal 2007 expenses. Even after excluding the $3.0 billion in one-time escrow expenses from 2007, expense growth in fiscal 2008 is projected at 1.8 percent, below the assumed growth in the CPI.

The 2008 plan predicts a record ninth consecutive year of Total Factor Productivity growth, which measures the relationship between workload and resource usage. TFP is planned to grow by 1.0 percent in 2008.

Other Business

The board also authorized funding of $107.2 million for site lease, design and construction of a new 478,800 square-foot mail processing facility in Miami, FL, to consolidate bundle and parcel processing for South Florida. That facility will house five flat sequencing sorters in support of the new Flats Sequencing System (FSS) program being implemented nationwide; each machine requires 25,000 square feet. South Florida is currently served by three processing and distribution centers, along with other leased processing space to reduce congestion at existing plants.

source: USPS

Comments

No Comments on USPS Reports $5.4 Billion Deficit for FY 2007

  1. for now on Wed, 26th Sep 2007 2:30 pm
  2. Sounds like the Postal Service is doing what it is designed to do, not make a profit.

  3. Hawg on Wed, 26th Sep 2007 3:47 pm
  4. That’s probably because they eat more steak and lobster in Washington D.C. Headquarters. All the other District Managers and Clipboard Brigade Officiers around the nation get a big bonus while the craft employees work overtime because of under staffing…yet they wonder their losses.

  5. 41/2yremployee on Wed, 26th Sep 2007 7:29 pm
  6. I am just waiting to be kicked to the curb.

  7. marvin runyon on Thu, 27th Sep 2007 6:06 am
  8. now that is what i call “pay for performance”

  9. slug_whisperer on Sat, 29th Sep 2007 3:00 am
  10. how much money is wasted for “hispanic” opportunity programs in the southwest area? LOTS!!!!!!

  11. Hector Godinez on Sat, 29th Sep 2007 10:06 am
  12. Don’t forget about the alcoholic beverages that our customers pay for that are STILL carged to the IMPAC card too – despite the Azeez Jaffer debacle.

  13. postal guy on Thu, 18th Oct 2007 3:55 am
  14. Deal

    Company logo

    Gilat strikes deal with US Postal Service

    Israeli company’s subsidiary to deploy custom satellite network, which will provide high performance broadband communications for over 5,000 Postal Service sites in the continental United States, Hawaii, Alaska and Puerto Rico
    Asaf Malichi

    Gilat Satellite Networks Ltd on Monday announced that its wholly-owned subsidiary, Spacenet Inc., was working with Verizon Business to deploy a custom satellite network for the US Postal Service.

    The deal is estimated at $25 million, with Gilat’s share amounting to $10-15 million.

    The satellite network will provide high performance broadband communications for over 5,000 Postal Service sites in the continental United States, Hawaii, Alaska and Puerto Rico. In addition, the satellite network will support on-demand back-up communications for a number of larger USPS facilities, as well as portable communications for the US Postal Inspection Service fleet of more than 20 incident response vehicles.

    The USPS satellite network will support a wide range of applications including an innovative video relay service (VRS) for deaf and hard-of-hearing postal employees, multicast content delivery, real-time video broadcasting, VoIP based digital telephone services, as well as routine data transport and point-of-sale transactions. Installation is already substantially under way with all sites expected to be operational by later this fall.

    In addition, the network will support the Postal Service demands for continuity of operations by pre-positioning emergency portable VSAT kits in strategically selected locations. These kits provide for rapid deployment to Postal Service facilities should they lose terrestrial voice and data service in the event of a natural or manmade disaster.

    Gilat is a leading provider of products and services for satellite-based communications networks.

  15. Pissed Off Custodian on Sat, 12th Apr 2008 1:08 am
  16. I guessed that helped pay for that $18,000 dinner charged on that credit card along with the Victoria Secret undies needed for jungle warfare training!