: Liabilities weaken improvements in liquidity
Washington, DC – Today the Postal Regulatory Commission (Commission) released its Financial Analysis report, which analyzes the overall financial position of the United States Postal Service in Fiscal Year (FY) 2017.
In FY 2017, the Postal Service recorded its first net loss from operations, since FY 2013, of $1.3 billion, largely due to declining mail volume, the expiration of the exigent surcharge, and higher operating costs. However, including non-cash workers’ compensation costs and retirement expenses, the net loss from operations increases to a total net loss of $2.7 billion in FY 2017. This is an improvement of $2.8 billion compared to the total net loss in FY 2016. This improvement is the result of a $4.8 billion decrease in the retiree health benefits expense, and a $3.4 billion decrease in the non-cash workers’ compensation expense, offset by $2.4 billion in increased expenses that resulted from provisions in the Postal Accountability and Enhancement Act (PAEA) for unfunded retirement benefit costs. Liquidity also continues to improve in FY 2017 and is at its highest level since FY 2007. However, liabilities on and off-balance sheet for pension and annuitant health benefits continue to threaten the improvements in liquidity.
Postal Regulatory Commission
The Postal Service experienced a decline in revenue for most of its Market Dominant products. Consumer price index-based price increases were not sufficient to offset the decline in mail volume and the reduction in additional revenue from the expiration of the exigent surcharge. Overall Market Dominant Mail and Services revenue declined 7.7 percent from the previous year. First-Class Mail revenue declined by 6.7 percent while Marketing Mail revenue declined by 5.7 percent. Periodicals revenue also saw a decline of 8.8 percent. Conversely, package services revenue increased by 0.3 percent compared to FY 2016.
In contrast, overall revenue for Competitive products increased by $2.2 billion in FY 2017. The Competitive product price increase effective January 2017, the transfer of First-Class Mail Retail-Single-Piece from the Market Dominant category, and higher volume were the primary drivers of the additional revenue.
A summarization of the significant highlights of FY 2017 include:
- Market Dominant products average unit revenue decreased by 0.9 cents while average unit attributable cost increased by 1.0 cent.
- Competitive products attributable cost grew $1.4 billion (11.2 percent), and contribution to institutional cost grew $0.8 billion (13.3 percent). In FY 2017 Competitive products contributed $6.8 billion (22.9 percent) to institutional costs.
- Competitive products’ share of total Postal Service revenue, attributable cost, and contribution to institutional cost has nearly tripled since FY 2007.
- Accumulated net deficit is $58.7 billion, resulting from several years of net losses starting in FY 2007.
- Financial sustainability continues to erode due to large personnel related liabilities and the slow replacement of fully depreciated capital assets. Overall financial condition is adversely impacted by insufficient current assets (44 percent of total assets) to cover current liabilities (72 percent of total liabilities).
- The Postal Service’s FY 2017 working capital was negative $49.8 billion.
The Commission’s analysis of the Postal Service’s financial position is primarily based upon the Postal Service’s Form 10-K statements consisting of Income Statements, Balance Sheets, Statements of Changes in Net Deficiency, and Statements of Cash Flows for FY 2017 and FY 2016, and select key financial data for comparison purposes from the past ten years.
A complete copy of the Commission’s Financial Analysis report may be found at www.prc.gov.
The Postal Regulatory Commission is an independent federal agency that provides regulatory oversight over the U.S. Postal Service to ensure the transparency and accountability of the Postal Service and foster a vital and efficient universal mail system. The Commission is comprised of five Presidentially-appointed and Senate-confirmed Commissioners, each serving terms of six years. The Chairman is designated by the President. In addition to Chairman Robert G. Taub, the other commissioners are Vice Chairman Tony Hammond and Commissioners Mark Acton, and Nanci Langley. Follow the PRC on Twitter: @PostalRegulator
hey with the passage of the new Omnibus Spending Bill, Demonrat UpChuck Schumer stated “the age of austerity is over” or you might say with 21 Trillion in Government debt “what me worry”! Federal Government is bankrupt, Postal Circus is bankrupt…..just sit back and enjoy the ride. what a dopey govt agency….95,000 on lite/limited/IOD status………what other company in the USA has that many loafers except Tom McCann shoe company.
Did anyone actually Read the Postal bill in 2006? If it was so terrible why was Henderson and the NALC praising it as “The way forward to a new era”..What now it’s no good? ..Prefunding makes perfect sense.. I live in CT and all the retirement obligations are UNDERFUNDED now they have no way of paying them…pre funding it is a GOOD thing for you when YOU retire..Pay on!!!!To tell the truth they haven’t pay this retirement Heath payment in years so why are they still losing money humm.Very strange?
Here we ago! Another smoke screen to cover managements rear ends. A few years ago routes were moved and combined to other offices, to close smaller post offices to save money. Well guess what, none of these offices in my county have ever closed. 2 large post offices would be enough for the entire county, but there our 10. 4 with routes, 6 with no routes with under a 100 P. O Boxes. This was suppose to be a big expense reducer. Management is the problem! Until there is some control and oversight on management no solution will solve the Postal Services problems!!
enough with your stupid lie….they have not payed into it since 2009……….zero minuses zero=zero! want to save money than the unions should negotiate a buyout…..let the CCA’s throw out all the junk mail lol.
End the health care prefunding now! Why is the Postal service, and only the Postal service must pay for health care prefunding? Most people don’t care about what is right or wrong, fair or unfair, they only care about what they can get away with. The whole prefund crap is part of the plan to sink the Postal Service. The President Dump supporters that work for the Postal Service won’t care if the Postal Service goes under. They know they will find a high paying job easily.
If they are losing so much. Why don’t management lead by example and take a pay
cut rather than a bonus. They have been taking for years but it is always the workers
current , retired, or hurt. As long as it is someone other than them.
I bet you didn’t know that management doesn’t get a COLA every few months like craft. This “bonus” nonsense is ridiculous, I have over 100 employees that make more than I do thanks to ot and v-time. The real $ saver would just be to eliminate penalty, the entire concept is ridiculous and abused.
Lee-The PFP bonus’s that are into rolled into EAS employees pay and amounts to much more than the 1% fixed contractual raises and COLA’s craft employees get. The pay gap between level 17’s and up and craft employees gets wider every year.Look up their salaries every 6 months and you’ll know what your talking about.
I don’t know what your talking about. I was a rural carrier and that
winter from hell a few years back. I saw a road truck about every 5th
day on my route. I was paid for 7 hours a day but worked more like
11 hours a day 6 days a week. The Postmaster sent the RCA to Florida for a months vacation while the full time carriers worked to hold up our end to the customers . That year when the snow was gone I had to take 9 days off so i wouldn’t be over my 2080. You don’t know nothing what people are paid . No wonder USPS is losing , they are running out people to work for free while the lazy people
set on their butts.
You are either part of the problem or the solution. One minute you
are making money the next you are not. The public is trying to make
sense of what you are saying. I can not help that you are not managing
your people correctly. If your people are making more than you and
your over more than a 100 of them. The management problem is yours not theirs.
Difference is you leave after 8 hrs. They’re stuck there by YOUR order. Be a better manager. Plus you get more AL and SL. Stop your whining you pathetic slug.
Time for a raise
Amazon!!!!
More propaganda with contract negotiations coming. Been there done that
More talking in circles gobblediegook that is completely meaningless.
Whew!…. that was a close one. I was afraid we were gonna lose 1.4 Bil.