Posts tagged ‘usps financials’

pmgbusThe Postal Service’s financial stability is improving, but significant challenges remain, says PMG Pat Donahoe.

In his latest message to employees, Donahoe reviews the Postal Service’s financial results for the first half of the fiscal year (Oct. 1-Mar. 31) and discusses strategies for moving forward.

“From a financial standpoint, compared to last year, we’re about $1 billion ahead on net profit. That’s operating profit,” says Donahoe. “Our cash liquidity — the cash on hand — is better than last year. Revenue is better than the same period last year by about $700 million.” Continue reading ‘Video: PMG reports on latest USPS financial results in message to employees’ »

David Yao at Boise Staples rally in April 2014

David Yao at Boise Staples rally in April 2014

In a May 9, 2014 press release, the Postal Service issued another quarterly press release turning an operating profit (of $261 million) into a loss. The supposed loss, an accounting fiction, was caused entirely by the 2006 law which generates a long-term loan to the Federal treasury, under the guise of “pre-funding” employee benefits.

In fact, the Postal Service is making a $1 billion operating profit in the first six months of its fiscal year. In their own press release in response, the National Association of Letter Carriers pointed out that the Postal Service has been turning an operating profit since October of 2012.

But the USPS release included this apparent misstatement: “’revenue…was up $379 million over the same period last year — the third straight quarter of revenue increase,’ said Postmaster General and Chief Executive Officer Patrick Donahoe” (underlining added).

The Postal Service has actually been reporting revenue increases for five straight quarters, dating back to January 1, 2013 (see below). So why is Postmaster General Donahoe minimizing that winning streak? Perhaps someone in Postal HQ’s statistics department was snoozing that day.

But there is a more disturbing explanation, that is consistent with the Postal Service’s “doom and gloom” reporting of its finances. Continue reading ‘Why is the Postmaster General Understating Postal Revenue Gains?’ »

Issa-ObamaAs chairman of the House Oversight and Government Reform Committee, Congressman Darrell Issa (R-CA) has dogged the Obama administration since 2011.

Issa has tried to tied Obama on reports of IRS bias in tax exemption forms, at the Benghazi attacks of 9/11/12, Healthcare.gov website fiasco, bring down the U.S. Attorney General Eric Holder and anything else that looked promising .

So in light of Issa’s past actions over the last few years it is very suspect to read about his support of President Obama’s proposals on reforming the USPS. Is Obama now Issa’s (Best Friend Forever (BFF) ??? Continue reading ‘Issa’s New Best Friend on Postal Reform — President Barack Obama??’ »

So Why is Postal Management Cutting Service?

apwulogo213May 9, 2014 – Midway through the fiscal year, the USPS is reporting a $1 billion profit from operations, with $261 million of that amount from the second quarter.

But you won’t read that in the mainstream media. Instead, you’ll hear – once again – that the Postal Service suffered losses of billions of dollars.

The truth is that the Postal Service’s well-publicized financial crisis is a manufactured one. It is the result of the congressional mandate that the Postal Service, alone among all public agencies and private companies, be required to pre-fund future retiree health benefits.

The positive balance sheet continues the steady progress in the finances of the Postal Service, which has been operating at a profit since October 2012. A dramatic increase in online shopping has sparked an explosion in package volume and revenue, while a gradually rebounding economy has stabilized letter revenue.

“All of this good news exposes an ugly truth,” said APWU President Mark Dimondstein. “Postal management’s zeal for cutting service and outsourcing operations in a thinly-veiled attempt at piecemeal privatization.”

APWU

 

rolando2013April, 8, 2014—Following today’s release of the U.S. Postal Service’s financial statement for the second quarter of Fiscal Year 2014, which covers January, February and March, NALC President Fredric Rolando released the following statement:

The Postal Service today reported a quarterly operating profit of $261 million, which brings the operating profit for the first half of fiscal 2014 to more than $1 billion. Driving the quarterly performance were the 8 percent jump in package revenue and—in a turnaround—the 1.6 percent increase in letter revenue.

These results reconfirm the steady improvement in the finances of the Postal Service, which has been operating at a profit since October 2012. Rising online shopping has sparked a jump in package revenue, while a gradually rebounding economy has stabilized mail revenue. That’s why the USPS forecasts a $1.1 billion operating profit this year.

Given these positive trends, it would be irresponsible to degrade services to the public, which would drive away mail—and revenue—and stop the postal turnaround in its tracks. Lawmakers shouldn’t dismantle the postal network that is profitable in meeting the needs of an evolving society.

Instead, legislators should address the factor that is causing 100 percent of the ‘losses’—the congressional mandate that the Postal Service, alone among all public agencies and private companies, be required to pre-fund future retiree health benefits.

We will be glad to work with lawmakers and the postmaster general to develop a comprehensive plan that strengthens the existing networks while addressing the unfair pre-funding obligation so the Postal Service, which is based in the Constitution, can continue to provide Americans with the world’s most affordable and efficient delivery network without a dime of taxpayer money.

NALC

carper coburnWASHINGTON – Today, Homeland Security and Governmental Affairs Committee Chairman Tom Carper (D-Del.) and Ranking Member Tom Coburn (R-Okla.) released the following reactions to the announcement that the U.S. Postal Service lost $1.9 billion in the second quarter of fiscal year 2014:

“Unfortunately, today’s announcement that the Postal Service lost $1.9 billion in the second quarter of 2014 comes as no surprise,” said Chairman Carper. “In 20 of the past 22 quarters, the Postal Service has announced losses, often times amounting to billions of dollars. The harsh reality is that it’s likely we’ll continue to see the U.S. Postal Service suffer unsustainable losses that threaten its long-term viability until Congress acts. As I’ve said time and time again, Congress and the Administration need to come to agreement on comprehensive legislation that reforms, right-sizes and modernizes this American institution. The bipartisan Postal Reform Act of 2014, which Dr. Coburn and I passed out of Committee earlier this year, would make the changes that the Postal Service needs to thrive into the future. I am hopeful that this legislation will be brought to the Senate floor soon so we can save the Postal Service once and for all.”

“Without structural reform, taxpayers are going to keep seeing the Postal Service’s losses pile up,” said Dr. Coburn. “Both the Senate and the House have reform bills that would fix the problem. It’s time for Congress to get something passed before another quarter goes by.”

  • Urges Congress to Pass Comprehensive Postal Legislation
  • First-Class Mail Volume Declines by 4.1 percent
  • Approximately $64 Billion in Liabilities Exceed Assets by $42 Billion
  • Eight Percent Growth in Shipping and Package Services Drives Revenue Increase of $379 Million

 

usps2013WASHINGTON— The U.S. Postal Service ended the second quarter of its 2014 fiscal year

(Jan. 1, 2014 – March 31, 2014) with a net loss of $1.9 billion. This marks the 20th of the last 22 quarters it has sustained a loss.

“The Postal Service is working diligently to improve its finances by streamlining our network to improve efficiency, reduce operating costs and increase revenue, which was up $379 million over the same period last year — the third straight quarter of revenue increase,” said Postmaster General and Chief Executive Officer Patrick Donahoe. Continue reading ‘USPS Records FY 2014 Second Quarter Loss of $1.9 Billion’ »

usps2013What: U.S. Postal Service FY 2014 Second Quarter Financial Briefing

Who: Patrick Donahoe
Postmaster General and CEO

Joseph Corbett
Chief Financial Officer and Executive Vice President Continue reading ‘U.S. Postal Service Second Quarter Financial Briefing May 9’ »

ernst_youngUSPS awarded a contract to Ernst & Young to continue existing services as the external auditor for its financial statements, cost and revenue analysis statements.

The contract is for a two-year base with five priced one-year options at an estimated value, if all options are exercised, of $83,000,000.

Audit testing for reports are required to

  1. determine if information contained in reports are accurate and
  2. if the methodologies are consistent with Generally Accepted Accounting Principles (GAAP). 

In addition, all  audits are to be conducted in accordance with Generally Accepted Government Audit Standards (GAGAS) and Generally Accepted Audit Standards (GAAS). These services are critical to the USPS quarterly/annual financial reporting (10K, 10Q). 

Currently, Ernst and Young (EY) is the Certified Public Accounting Firm (CPA) authorized by the  USPS Board of Governors .

uspsoigBenjamins, dough, cabbage, coin, greenbacks. Most of us could rattle off a dozen or more slang words that mean money. But we might be unsure what certain financial terms — operating income, liquidity — mean. When you follow the U.S. Postal Service, this might put you at a disadvantage, especially when it’s quarterly financial statement time.

Operating income measures earnings (revenues minus expenses) before interest and taxes. Liquidity is the amount of financial resources (cash, equity, assets, credit) that an organization can easily convert to cash for spending and investments. Postal officials often mention the Postal Service’s lack of liquidity. Chief Financial Officer Joe Corbett said in January that the Postal Service’s liquidity, at its highest point in the year, is only about $3 billion. This isn’t much cushion for a $65 billion entity. And the cushion shrinks at certain points in the year, such as in October, when the Postal Service makes its workers’ compensation payment to the Labor Department.

UPS and FedEx, companies with revenues about $20 billion less than the Postal Service, have liquidity of about $12 billion and $14 billion respectively, he noted. But what does this mean exactly? Well, companies with strong liquidity positions, such as UPS and FedEx, have much greater access to capital than the Postal Service. They have more opportunity to invest, whether in capital projects or new businesses. The Postal Service’s weak cash position means it cannot invest in the infrastructure or innovation. It also has no margin for error. What happens if a catastrophe strikes in October right after the Postal Service has made its workers compensation payment?

Finally, the Postal Service has no available cash to pay down its debt. It reached its statutory borrowing limit of $15 billion in FY 2012 and it has been unable to borrow from the Treasury Department for more than a year.

via Show Me the Money | Office of Inspector General.