Postal Service Ends 2010 with $8.5 Billion Loss
Record Efficiency Levels and Work Hour Reductions Cannot Offset Falling
Volumes — Fundamental Changes Needed
WASHINGTON — The U.S. Postal Service today reported its 2010 financial results, showing a net loss of $8.5 billion for the fiscal year ended Sept. 30.
Excluding charges to income primarily resulting from changes to interest rates that impact the organization’s workers’ compensation liability, the net loss was $6 billion.
The recent recession, continuing economic pressures and migration of mail to electronic media had a significant adverse impact on mail volumes and operating revenues. Despite rigorous initiatives that eliminated 75 million work hours and drove productivity to record highs in 2010, the losses mounted.
“Over the last two years, the Postal Service realized more than $9 billion in cost savings, primarily by eliminating about 105,000 full-time equivalent positions — more than any other organization, anywhere,” said Chief Financial Officer Joe Corbett. “We will continue our relentless efforts to innovate and improve efficiency. However, the need for changes to legislation, regulations and labor contracts has never been more obvious.”
Details of Fiscal Year 2010 results include:
* Operating revenue of $67.1 billion in 2010 declined $1 billion from 2009, primarily due to lower volume;
* Operating expenses for 2010 of approximately $70 billion (excluding a $5.5 billion expense for pre-funding Retiree Health Benefits), down from approximately $70.4 billion in 2009 (excluding a $1.4 billion expense for RHB);
* Net loss of $8.5 billion in 2010, $4.7 billion above the 2009 level, mostly as a result of the revenue decline, additional expenses in 2010 associated with RHB pre-funding and workers’ compensation – but offset by cost savings associated with the work hour reduction; and
* Total mail volume of 170.6 billion pieces, compared to 176.7 billion pieces in 2009, a decline of 3.5 percent.
First-Class Mail volume continues to decline, with year-over-year declines of 6.6 percent in 2010, 8.6 percent in 2009, and 4.8 percent in 2008. This trend is particularly disturbing as First-Class Mail, the most profitable product, generates more than half of total revenue. Volume for Standard Mail showed improvement during the year, reflecting some signs of economic recovery in late 2010, but, in total, was flat in 2010, compared to 2009.
In its report on the financial statements contained in the Postal Service’s 2010 report, independent auditor Ernst & Young is expected to issue an unqualified audit opinion that will emphasize that questions remain about the ability of the Postal Service to generate sufficient
liquidity to make all of its future payments, including the $5.5 billion RHB pre-funding payment due on the last day of fiscal year 2011.
In 2010, the Postal Service complied with Section 404 of the Sarbanes-Oxley Act (SOX) as mandated by the Postal Accountability and Enhancement Act of 2006. This was one of the largest successful SOX implementations on record and the first within the federal government.
The Postal Service receives no tax dollars for operating expenses, and relies on the sale of postage, products and services to fund its operations.
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Please Note: For broadcast quality video and audio, photo stills and other media resources, visit the USPS Newsroom at www.usps.com/communications/newsroom/welcome.htm.
A self-supporting government enterprise, the U.S. Postal Service is the only delivery service that reaches every address in the nation, 150 million residences, businesses and Post Office Boxes. The Postal Service receives no direct support from taxpayers. With 36,000 retail locations and the most frequently visited website in the federal government, the Postal Service relies on the sale of postage, products and services to pay for operating expenses. Named the Most Trusted Government Agency five consecutive years and the sixth Most Trusted Business in the nation by the Ponemon Institute, the Postal Service has annual revenue of more than $68 billion and delivers nearly half the world’s mail. If it were a private sector company, the U.S. Postal Service would rank 28th in the 2009 Fortune 500.
Cancel every last retirement account and they will bridge about half of their debt. (I could not find a source.)
I support this type of government agency: completely funded by the people in voluntary actions. Want to mail a letter? Pay for it. Want to have something delivered to you? Either you or the merchant pays for it. Very simple system that avoids taxing many people that do not even use the system.
I know, how conservative of me. I'm a big fiscal conservative!
I understand how you feel, but do we really need a post office? Do we need paper books? We live in a digital age, and as such, everything is becoming virtual. Its sad to say, but one day sending a post card through the mail may not be a possibility. You may have to send it online. I'm taking a course in network infrastructure design, and believe me when I tell you this. Everything is about to become virtual with this new age of programming called cloud computing.
I can even see the OSI 7 layer model being called the OSI 4 layer model in the future, where most hardware is simply done away with, and replaced with virtual networks. Sorry for getting off the subject, but one of the main reasons that the USPS may not be bailed out is because of what I just said.
However, there will always remain a "tangible" element. It will not be relegated to just novelty, either. There will always be a significant "tangible" portion for humans because we are still animals.
Unless we come up with a Matrix (like the movies) with a complete VR. I had this discussion with my classmate, last night, in our database design class. She thought that "young people" were too detached and I said that we aren't anywhere close to being detached and we are networking with those around us even more than we ever have (back in the day, you had a small group of people that you interacted with, each day, simply due to it all having to be in person (for the most part) but these days, you can literally talk to hundreds of people, each day). She said our communications are becoming less and less emotional because of how much text communication is occuring these days. I then countered stating that Thomas Jefferson did not have the angry smilie to put in his Declaration of Independence. (And I got lulz from that statement, too. hehehehehe!)
Postal Service has to be there. It's established in the constitution. I say kill several birds with one stone and nationalize the airlines. That'll solve the problem.
__________________ Land of the free, home of the brave...
Do you think we will ever be saved?
In this land of dreams find myself sober...
Wonder when will it'll all be over...
Living in a void when the void grows colder...
Wonder when it'll all be over?
Will you be laughing when it's over?
You know what? Looking at the scope of the SOX act (Sarbanes-Oxley) and it's ramifications in terms of future mega corporation scaling, it looks to me like globalization is well on it's way to becoming the standard financial model. 3 words. ONE WORLD GOVERNMENT. Who knows one day all postal branches world wide may be called WWPS or World Wide Postal Service.
I thought the SOX Act was, if anything, bad for mega corporations. Although the fact that it made trying to kill whistleblowers a crime is rather frightening.
__________________
Graffiti outside Latin class.
Sed quis custodiet ipsos custodes?
A juvenal prank.
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Postal Service Ends 2010 with $8.5 Billion Loss
Nov 13th, 2010 05:11 AM
She thought that "young people" were too detached and I said that we aren't anywhere close to being detached and we are networking with those around us even more than we ever have (back in the day, you had a small group of people that you interacted with, each day, simply due to it all having to be in person (for the most part) but these days, you can literally talk to hundreds of people, each day). She said our communications are becoming less and less emotional because of how much text communication is occuring these days. I then countered stating that Thomas Jefferson did not have the angry smilie to put in his Declaration of Independence. (And I got lulz from that statement, too. hehehehehe!)
