USPS Lost $721 Million In August 2009–Over $6 Billion YTD
The U.S. Postal Service filed its July 2009 (unaudited) preliminary financial report yesterday with the Postal Regulatory Commission. USPS reported a net income loss of $721 million (July 2009 was $865 million). The year-to-date deficit currently stands at approximately $6.3 billion. Mail volume was down across all classes with an overall total decrease of 13.2%. The Postal Service continues to reduce its workhours with Mail Processing and Customer Services/Retail showing the highest reduction of 14.4% and 11.9% respectively.
The U.S. Postal Service said it “expects to lose more than $7 billion by the end of the fiscal year . The rising tide of red ink could leave the Postal Service with a potential cash shortfall of up to $700 million by its fiscal year-end on Sept. 30, when it must pay up to $5.8 billion to pre-fund retiree health benefits. Postal Service officials hope Congress will pass legislation that would increase its ability to borrow from the U.S. Treasury Department before the bill comes due.”
USPS Reports Loss Of $865 Million In July 2009
The U.S. Postal Service filed its July 2009 (unaudited) preliminary financial report yesterday with the Postal Regulatory Commission. USPS reported a net income loss of $865 million (Junel 2009 was $1.3 billion). The year-to-date deficit currently stands at approximately $5.6 billion. Mail volume was down across all classes with an overall total decrease of 13.7%. The Postal Service continues to reduce its workhours with Mail Processing and Customer Services/Retail showing the highest reduction of 14.4% and 12.2% respectively.
The U.S. Postal Service said it “expects to lose more than $7 billion by the end of the fiscal year . The rising tide of red ink could leave the Postal Service with a potential cash shortfall of up to $700 million by its fiscal year-end on Sept. 30, when it must pay up to $5.8 billion to pre-fund retiree health benefits. Postal Service officials hope Congress will pass legislation that would increase its ability to borrow from the U.S. Treasury Department before the bill comes due.”
See full report (pdf) here:
USPS Reports Financial Loss For April 2009
The US Postal Service filed its April 2009 (unaudited) preliminary financial report yesterday with the Postal Regulatory Commission. USPS reported a net income/ loss of $385 million. The total year-to-date loss is approximately $2.3 billion. unaudited (Jan, 658m) (Feb, 751m) (Mar, 491) (all unaudited totals) . Mail volume was down across all classes with an overall total decrease of 14.8%. The Postal Service continues to reduce its workhours with Mail Processing and Customer Services/Retail showing the highest reduction of 15.1% and 13.1% respectively. See charts below:
USPS Continues to Reduce Workhours
Postal Service Ends Second Quarter with $1.9 Billion Loss
Year-End Cash Shortfall Possible Despite Aggressive Cost Reductions;
Mail Incentive Programs Introduced to Offset Unprecedented Volume Declines
The U.S. Postal Service ended its second quarter (Jan 1 – March 31) with a net loss of $1.9 billion, as the economic recession and longer-term financial pressures, such as the diversion of letter mail to electronic alternatives, continued to reduce mail volume and revenue. Despite aggressive actions to reduce costs and grow revenue, the Postal Service will likely face a cash shortfall of over $1.5 billion at the end of the fiscal year.
The Postal Service has incurred net losses from operations in 10 of the last 11 fiscal quarters. The year-to-date net loss is $2.3 billion, compared to a loss in the same period last year of $35 million. A significant portion of the losses over this period can be attributed to an unprecedented decline in mail volume. In the second quarter, mail volume totaled 43.8 billion pieces, down 7.5 billion pieces, or 14.7 percent, compared to a year ago.
The second-quarter results include operating revenue of $16.9 billion, a decrease of nearly $2 billion, or 10.5 percent, from the same period last year, and operating expenses of $18.8 billion, a reduction of $782 million, or 4.0 percent, from the second quarter of last year. Complete second-quarter results are contained in the Postal Service Form 10-Q report, available later today at usps.com/financials (click Form 10-Q under Quarter Reports) and also attached at the end of this release.
“The economic recession has been tough on the mailing industry, and we have seen an unprecedented decline in mail volumes and revenue that continued to accelerate during the second quarter,” said Postmaster General John Potter during today’s Board of Governors meeting. “We are aggressively realigning our costs to match the lower mail volumes, while also maintaining the high level of service and reliability our customers expect. We are also taking a number of steps to grow revenue.”
The Postal Service has recently developed incentive programs to increase mail volume, including advertising mail and Priority Mail. In addition USPS has proposed a summer sale for Standard Mail, which is currently under review by the Postal Regulatory Commission.
The Postal Service continues to support H.R. 22, a House bill that would redirect a portion of the Postal Service’s prior payments to the Postal Service Retiree Health Benefits Trust Fund to pay its share of contributions for current retiree health benefits through 2016. If enacted, the legislation would reduce the projected 2009 net loss by approximately $2 billion and help enable the Postal Service to meet its 2009 financial obligations. The bill was introduced by Rep. John McHugh (R-NY) and co-sponsored by Rep. Danny Davis (D-IL). As of today, the bill has 297 co-sponsors.
Cost Reductions
“We are aggressively reducing work hours and other costs to limit losses, preserve cash and improve productivity,” said Joseph Corbett, chief financial officer and executive vice president. Initiatives designed to match work hours to reduced volume have resulted in a work-hour decline of 58 million hours – the equivalent of a reduction of 33,000 full-time employees – in the first half of FY 2009, despite an increase in the number of delivery points by 1.1 million from the same period last year. The work-hour reduction is on pace to meet the goal of reducing work hours by more than 100 million for the entire year, the equivalent of 57,000 full-time employees.
USPS Reports Net Loss of $751 Million in January 2009
Filed under: financial statements, postal finances, PRC, usps
USPS reported earlier this month that Postal Service Ends First Quarter With Loss Of $384 Million. The text of the 8-K report filed with the Postal Regulatory Commission (PRC) on February 19, 2009 shows USPS has lost over $1.1 billion thus far in Fiscal Year 2009.
The U.S. Postal’ Service (USPS) previously announced a loss for the quarter ending December 31,2008, in an 8K filed on February 9,2009. USPS discloses that its unaudited January 2009 financial results were an estimated $5.80 billion in revenue and $6.55 billion in expenses, resulting in an estimated net loss of $751 million. This loss compares to a loss of $44 million in January 2008, which resulted from total f:evenue of $6.58 billion and total expenses of $6.62 billion. Mail volumes declined by over 1(5% in January 2009 from January 2008. The January results continue to illustrate that the downward pressure on the Postal Service business continues into 2009.
USPS’ First Quarter Overview as reported to PRC on February 9, 2009
o Volume decline of 5.2 billion pieces, or 9.3°k, driven by the economic recession
o Eighth consecutive quarter of accelerating volume declines
o Revenue decline of $1.3 billion compared to Q1, FY 2008
o 27 million fewer workhours used -reduction of 7.5°k
o Some cost benefit from low inflation, but significant cost pressure from labor wage increases
USPS Reports $2.8 Billion Year-End Loss
DECLINING MAIL VOLUME CITED
The Postal Service concluded fiscal year 2008 with a net loss of $2.8 billion as the national economic slowdown lowered mail volume and as the Postal Service bore additional costs mandated by the Postal Act of 2006.
The loss occurred despite more than $2 billion in cost-cutting measures that included the use of 50 million fewer workhours compared to the previous year. Meanwhile, the on-time delivery of First-Class mail reached record levels for FY 08. The year-end results were presented during today’s meeting of the Postal Service Board of Governors.
Mail volume in FY 08 totaled 202.7 billion pieces, a decline of 9.5 billion pieces, or 4.5 percent, compared to the previous fiscal year. Declining mail volume was a symptom of the worsening national economy, particularly related to the financial and housing industries and to trends toward the use of electronic mail.
Total revenue in FY 08 was $75 billion, unchanged from last year. Expenses totaled $77.8 billion, including the $5.6 billion payment required by the Postal Act of 2006 to pre-fund retiree health benefits.
Excluding all the retiree health benefit fund payments from 2008 and 2007, expenses were up less than 1 percent over last year. Cost reductions offset nearly all of the impact from rising inflation, of which the major contributors were a $562 million increase in cost of living adjustments paid to craft employees and $525 million in additional fuel costs.
FINANCIAL OUTLOOK
“We expect the new fiscal year to be another difficult one for the Postal Service and the entire mailing industry, as economic factors will continue to reduce mail volume and increase expenses,” PMG Jack Potter told the Board of Governors at today’s meeting. “As we continue to reduce workhours and other costs, our top priority remains providing excellent service to our customers. The combination of excellent service and affordable prices makes postal products a great value.”
In addition to the weak or contracting economy and the diversion of mail to electronic means, the pre-funding of retiree health benefits continues to have a significant impact on Postal Service finances.
“The Board will work with members of Congress to ease some of the financial pressure we are currently facing from the Postal Act,” Board Chairman Alan Kessler announced at today’s meeting. “Legislative relief is only part of the solution to the problems facing the Postal Service. The Board and management will actively pursue the actions necessary to further reduce costs and grow revenue,” Kessler added.
FOURTH QUARTER SERVICE PERFORMANCE
In the fourth quarter of FY 08, on-time delivery performance for overnight First-Class Mail service remained at 97 percent for the second consecutive quarter, one point above the same period last year. Two-day service was 94 percent on-time and three-day service was 93 percent on-time, unchanged from the fourth quarter of the previous year.
USPS TO CHANGE SHIPPING PRICES IN JANUARY
Shipping services prices will change on Sunday, Jan. 18, for Express Mail, Priority Mail, Parcel Select, Parcel Return Service and some international shipping products. Overall, shipping services prices will increase an average of 5 percent. For the new prices, click here (click “New Shipping Prices” box).
USPS Reports $5.4 Billion Deficit for FY 2007
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
USPS Reports Third Quarter Performance and Financial Results
USPS Press Release
Board of Governors Briefed on Third Quarter Performance & Financial Results
National on-time performance scores for the delivery of First-Class Mail were at all-time highs in the third quarter of fiscal year 2007 for all three of the categories the Postal Service tracks. Overnight service was 96 percent on-time, up from 95 percent the same period last year. Two-day service was 93 percent on-time and three-day service was 91 percent on-time.
First-Class Mail performance, presented today during the Postal Service Board of Governors meeting, is measured independently by IBM Global Business Services. The process measures First-Class Mail from the time it is deposited into a collection box or lobby mail chute until it is delivered to a home or business.
“I’m very proud of our third quarter performance,” said Postmaster General John Potter. “Our performance is at an all time high and this is the first time that a 93 percent on-time score has been achieved for two-day national performance.”
Five Postal Service districts led the nation with a 97 percent on-time score for overnight delivery. They are the Dakotas (comprised of North and South Dakota and northwest Minnesota), Greensboro, (the northern and eastern part of North Carolina), Big Sky (the state of Montana), Louisiana, and Northland (most of Minnesota and part of Wisconsin).
During the same period, national residential customer satisfaction was at 92 percent, as measured by the Gallup Organization. Eight Postal Service districts earned scores of 96 percent or better for customer satisfaction. They are Albany (comprised of the northern, eastern and central portions of New York state), Maine, Southeast Michigan, Massachusetts, Western New York (including Buffalo and Rochester), Greater Michigan, Dakotas, and Hawkeye (most of Iowa and the Quad-City communities of Illinois).
Third Quarter Financial Results
Also during today’s Board of Governors meeting, Chief Financial Officer H. Glen Walker said revenue for the third quarter totaled $18.4 billion, up 2.9 percent from the same period last year. Expenses for the quarter totaled $19.1 billion, including $878 million that is attributable to the implementation of the Postal Accountability and Enhancement Act, signed into law the end of last year. The result was a $659 million net loss for the third quarter.
Total factor productivity (TFP) once again continued its upward trend in the third quarter, increasing by 1.8 percent, with year-to-date TFP up 1.4 percent. TFP measures the relationship between workload and resource usage.
Postal Quarter III FY 2007 (PDF)