- Financial stability requires urgently needed legislative and regulatory changes
- Decline in letter mail continues
- Growth in package volume and revenue
8/9/2018 WASHINGTON — The U.S. Postal Service reported total revenue of $17.1 billion for the third quarter of 2018 (April 1, 2018 – June 30, 2018), an increase of $402 million, or 2.4 percent, compared to the same quarter last year.
First-Class Mail revenue declined by $134 million, or 2.2 percent, and Marketing Mail revenue increased by $63 million, or 1.6 percent. Total mail volume declined by a combined 397 million pieces, or 1.2 percent, compared to the same quarter last year. Shipping and Packages revenue increased by $475 million, or 10.2 percent, on volume growth of 102 million pieces, or 7.5 percent.
The net loss for the quarter totaled $1.5 billion, a decline in net loss of $651 million compared to the same period last year, the result of nonrecurring adjustments to retirement and retiree health benefit plans to account for revised actuarial assumptions. Excluding the effects of these adjustments, the net loss for the quarter increased by $507 million.
“The root cause of our financial instability is a flawed business model that is imposed by law. We encourage the Congress to engage in a broad public policy discussion and pass postal reform legislation,” said Postmaster General and CEO Megan J. Brennan. “We support legislation under consideration in the current Congress which would provide immediate flexibility to the organization, allow the Postal Service to invest in our future and continue to provide the prompt, reliable, efficient and universal service the public expects.”
Brennan added that in addition to enactment of postal reform legislation, continued aggressive postal management action and regulatory changes, including a less rigid and more responsive pricing system, are required.
Total operating expenses were $18.5 billion for the quarter, a decline of $240 million, or 1.3 percent, compared to the same quarter last year. Inflationary pressures on salaries and benefits, as well as fuel and transportation costs were offset by the actuarial changes referred to above.
“After adjusting for actuarial changes related to retirement and retiree health benefit plans, the quarter results reflect ongoing trends. The secular declines in mail are somewhat offset by package growth, and labor productivity continues to improve,” said Chief Financial Officer Joseph Corbett. “However, absent changes to our business model, net losses are expected to continue.”
Third Quarter 2018 Operating Revenue and Volume by Service Category Compared to Prior Year
The following presents revenue and volume by category for the three months ended June 30, 2018, and 2017:
|
Revenue |
Volume |
||||||||||||||
| (revenue in $ millions; volume in millions of pieces) |
2018 |
2017 |
2018 |
2017 |
|||||||||||
| Service Category | |||||||||||||||
| First-Class Mail | $ |
5,919 |
$ |
6,053 |
13,399 |
13,898 |
|||||||||
| Marketing Mail |
3,983 |
3,920 |
18,550 |
18,448 |
|||||||||||
| Shipping and Packages |
5,151 |
4,676 |
1,465 |
1,363 |
|||||||||||
| International |
630 |
659 |
205 |
252 |
|||||||||||
| Periodicals |
341 |
347 |
1,357 |
1,363 |
|||||||||||
| Other |
1,050 |
1,010 |
93 |
108 |
|||||||||||
| Total operating revenue and volume | $ |
17,074 |
$ |
16,665 |
35,069 |
35,432 |
|||||||||
Selected Third Quarter 2018 Results of Operations and Controllable Loss
This news release references controllable loss, which is not calculated and presented in accordance with accounting principles generally accepted in the United States (GAAP). Controllable loss is defined as net loss adjusted for items outside of management’s control and non-recurring items. These adjustments include workers’ compensation expenses caused by actuarial revaluation and discount rate changes, and the amortization of PSRHBF, CSRS and FERS unfunded liabilities. The following table presents selected results of operations and reconciles GAAP net loss to controllable loss and illustrates the loss from ongoing business activities without the impact of non-controllable items for the three months ended June 30, 2018, and 2017:
| (results in $ millions) |
2018 |
2017 |
|||||||
| Operating revenue | $ |
17,074 |
$ |
16,665 |
|||||
| Other revenue |
3 |
10 |
|||||||
| Total revenue | $ |
17,077 |
$ |
16,675 |
|||||
| Total operating expenses | $ |
18,536 |
$ |
18,776 |
|||||
| Interest and investment income (expense), net |
(30) |
(39) |
|||||||
| Net loss | $ |
(1,489) |
$ |
(2,140) |
|||||
| PSRHBF unfunded liability amortization expense1 |
16 |
332 |
|||||||
| Change in workers’ compensation liability resulting from fluctuations in discount rates |
(137) |
258 |
|||||||
| Other change in workers’ compensation liability2 |
(59) |
(676) |
|||||||
| CSRS unfunded liability amortization expense3 |
456 |
553 |
|||||||
| FERS unfunded liability amortization expense4 |
322 |
691 |
|||||||
| Change in normal cost of retiree health benefits due to revised actuarial assumptions5 |
2 |
395 |
|||||||
| Controllable loss | $ |
(889) |
$ |
(587) |
|||||
| 1 Expense for the accrual for the annual payment due to PSRHBF by September 30 of the respective fiscal year, for the amortization of the unfunded liability. 2018 amounts are based on OPM’s invoice received July 19, 2018, with updated discount rate assumptions. 2017 amounts include an adjustment to reflect an increase in the amount invoiced as compared to OPM’s original estimate. | |||||||||
| 2 Net amounts include changes in assumptions, as well as the valuation of new claims and revaluation of existing claims, less current year claim payments. | |||||||||
| 3 Expense for the accrual for the annual payment due to OPM by September 30 of the respective fiscal year, to amortize the unfunded CSRS retirement obligation. 2018 amounts are based on updated Postal Service estimates resulting from revised actuarial assumptions. 2017 amounts include an adjustment to reflect an increase in the amount invoiced as compared to OPM’s original estimate. Payments are to be made through 2043 based on OPM invoices. | |||||||||
| 4 Expense for the accrual for the annual payment due to OPM by September 30 of the respective fiscal year, to amortize the unfunded FERS retirement obligation. 2018 amounts are based on updated Postal Service estimates resulting from revised actuarial assumptions. 2017 amounts include an adjustment to reflect an increase in the amount invoiced as compared to OPM’s original estimate. Payments are to be made through 2047 based on OPM invoices. | |||||||||
| 5 Represents the accrual for the portion or the increase in the annual normal cost payments due September 30, 2018, and 2017 attributable to revised actuarial assumptions and discount rate changes, based on OPM’s invoices for the respective year. These amounts represent the noncontrollable portion of the expense recorded for normal cost of retiree health benefits. | |||||||||
Financial results in the Form 10-Q are available at http://about.usps.com/who-we-are/financials/welcome.htm
Financial Briefing
Postmaster General and CEO Megan J. Brennan and CFO and Executive Vice President Joseph Corbett will host a telephone/Web conference call to discuss the financial results in more detail. The call will begin at 10:30 am ET on August 9, 2018, and is open to news media and all other interested parties.
How to Participate:
US/Canada Attendee Dial-in: 844-340-4622 Conference ID: 4370939
Attendee Direct URL: https://usps.webex.com/usps/onstage/g.php?MTID=ea6559096fd2d859cf1a9d6e39c8a5093
Alternate URL: https://usps.webex.com
Event Number: 998 507 785
The briefing is also available on live audio webcast (listen only) at:
http://about.usps.com/news/electronic-press-kits/cfo/welcome.htm.
The Postal Service receives no tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations
Democrat Jimmy Carter’s 1978 Airline Deregulation Act………………….now it is your turn Postal Circus slugs!
pre-funding that you do not pay, PFP bonus when performance is in the dirt, and “we don’t use taxpayer money, but we owe the Treasury 25 Billion that we stiffed them on…….BUST THE TRUST! (in this case the Postal Circus is the Trust) Teddy Roosevelt was right then, he would be right now!
Why are the ones with 30 years still here.
Make a buyout for those with 20 years a one time offer no penalty.
Don’t even make it for 30 years. If they are still here
they can’t be working that hard.
just keep keeping going on and on…………………….according to Government Accounting Office (GAO) the Postal Circus is bankrupt. 220 Billion in liabilities and no positive cash flow. you just recommend keeping the status quo for a 3rd rate company that has reached critical mass in a very bad way. The Problem You Can Not Let Go Of Is That The Postal Circus Is Not Run For You And The PO Mismanagers! Trump will decide what is best for the American Taxpayer and the fact that people under 30 do not use mail and UPS/FDX/AMZN are better at packages. why in Gods green earth would you field a 4th place team in a playoff runoff? one who core business of 1st, 2nd, flats is going the way of the dodo bird!
Just wait till the Postal Service is privatized. You think things are bad now, just look at Royal Mail . The employees were taken out of the government retirement plan, placed in a new plan at reduced annuity. Then last year the annuity was cut again. The last President of Royal Mail received a big several million Pound pay off to leave. The new President of Royal Mail lives in Zurich, Switzerland Royal Mail pays to fly his carcass to London to show up for work. Postage for a First class letter is around $1.50 in U.S. funds. And while President is bragging about coal mining and factory jobs, he is trying to kill Postal jobs! If the great one gets his way, our retirement and health care will be cut. That just may pay for the military parade in Washington. That is going to cost $30,000 million. Good old Washington, D> C. Washington Dis Connected.
Anyone who believes USPS mgmt. generated financial reports are accurate is a fool. They are politically based, and have no basis in truth, integrity or accuracy.
Just like everything else mgmt does.
Have patience….the Democraps and their left-wing socialist candidates will take care of everything. Free medical, free alcohol, free stamps, free monthly stipends for the entitled! They will fund this new utopia by taxing the wealthy 1% including those that kneel during games and other well to do ballers…everything will be ok!
a Chapter 13 Type Reorganization of Postal Circus, including a 40K Buyout for employees with 30 years or more…..then push it out on its own as private concern, Constitution was about 1st class mail……not 3rd junk mail or packages. 1st class mail is going the way of the dodo bird! with the stellar mismanagement we have the stock will soon go beyond AMZN currently at 1886.21 a share. hey now!
Why would anyone with 30 years or more take a buyout, when they’d be retiring very soon anyway ?
You’re missing the entire point of a buyout.
Is there anything new ?
lets see now………Dem Jimmy Carter and the 1978 Airline Deregulation Act (500,000 union airline jobs down the crapper) vs Rep Donald Trump and the 2018 Postal Reorganization Act………………wonder how many thousands of postal jobs will go over board on the Brennen Titanic? whats good for the goose is good for the gander-right kiddies! fly me to the moon….riding high in April-shot down in May…way to sing it Frankie! Leading The Way……TWA! screw the Postal Circus! about time!
Soooooo…….. broken record and nothing changes? And our paychecks still get cashed…… must not be quite broke yet……. games games games……. ignore the noise again and just go to work and do our jobs…….will still be talking about this 10 years from now.
The Postal Service never learns from their mistakes. The PMG has been crowing about what Congress needs to do for the past 12 years. Congress has been unable to pass Postal Reform because of the mandate of requiring about 76,000 retiree’s be placed in Medicare parts A,B & D in order to keep their Postal health benefits. This would be an increase of $268.00 per month for a retiree and spouse to pay for Medicare. After working for the Postal Service for 32 years this was not part of the retirement package. If Congress were to pass this legislation it would not be long before all government agencies would want to do the same to all their retiree’s. This would effectively bankrupt Medicare! The PO needs to increase postage on all products. They need to do away with six day delivery and take a pay cut and quit picking on retiree’s.
Same old crap. The unions are in cahoots with management on this too, crying that “we need postal reform” when in fact what is needed is postal reorganization that eliminates the massive amount of unnecessary , redundant management jobs that if eliminated no one would notice and mail service wouldn’t suffer. Any job that is filled with an individual that doesn’t touch the mail should be considered for elimination. Unfortunately, all the unions care about is wages and benefits when it’s rapidly getting to the point that if something isn’t done to shrink management and capture the hundreds of millions of dollars wasted on non essential jobs, there will be no water in the well when the unions drop the bucket. Diversity specialists, real estate specialists, procurement specialists; the list is endless. The NALC and the APWU should insist on an across the board cut in management of at least 15%. We should at least throw them off of the ship before it sinks.
I totally agree on the wasted money for non essential jobs. That should be one the first areas that gets scaled back. It’s mind boggling to think of the amount of money that’s wasted.
funny in her video fool Brennen says we have to eliminate unnecessary hours because of declining mail……and goes right to overtime, that helps move the mail, yet she protects, “at all costs”, the useless, 110,000 PO Mismanagement staff eating up massive amounts of payroll while the Titanic is sinking. pity the fool….no way, President Trump fire this moron! the dolt can not see the 800 pound pink elephant in the room!
cut the 110,000 PO Mismanaging Bureaucrats by 80%, label PFP Bonus Scam while losing Billions a criminal act, get rid of the 75 PO Vice Presidents, get rid of third class junk mail, make nepotism hires of any kind a criminal act, push out the 95 thousand lite/limited/IOD scam artists to disability-can’t work full duty after 6 months, than you are gone-period, require all PO Mismanagers to have a college degree and take a test “issued” by Office of OPM, increase rates 10% across the board, give 40K Buyout that President Trump has already approved, fire that fool, dolt, IOD Brennen and bring in someone outside the Postal Circus Swamp to run the place. (someone like Carvin Marvin Runyon who had their number) there you go we are back in the hunt.