Posts tagged ‘usps financials’

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.

The USPS reported a net loss of $1.026 billion for January 2014 according to preliminary (unaudited) data submitted to the Postal Regulatory Commission (PRC). Same time last year USPS reported a net loss of $437 million. After four months into FY 2014 USPS reports a net loss of $1.4 billion. The same period last year (SPLY) USPS reported a net operating loss of $1.7 billion. Continue reading ‘USPS lost over $1 billion with prefunding for Jan 2014; operations income $122 million without’ »

NATIONAL ASSOCIATION OF LETTER CARRIERS LOGOFeb. 7, 2014—Today, the U.S. Postal Service released its financial report for the first quarter of Fiscal Year 2014, which covers the last three months of 2013.

Here is NALC President Fredric Rolando’s statement about today’s report:

Today’s Postal Service figures for the first quarter of 2014 are highly encouraging and show why the postal network must be maintained and strengthened, not degraded.

The announced operating profit of $765 million for the first quarter is dramatic in itself—and it continues the operating profitability that began last year.

The Postal Service’s unmatched networks and outstanding employees have made these striking results possible. And these trends augur well for the future, because they reflect the opportunities increasingly presented by the Internet and by an improving economy. Package revenues resulting from online shopping rose by more than 14 percent this quarter—more than offsetting the small decline in letter revenue.

This quarter’s $765 million operating profit compares with the $100 million from the first quarter of 2013—another sign of improving postal finances.

In light of these results, lawmakers should strengthen the postal network while addressing the remaining problem: the congressional mandate to pre-fund future retiree benefits, required of no other public or private entity in the country. Degrading the network and reducing services to the public and businesses would jeopardize the postal turnaround.

usps2013The Postal Service incurred a net loss of $354 million for the first quarter of the year, which includes $1.4 billion of expense accrued for the legally-mandated prefunding payment for retiree health benefits

WASHINGTON — The U.S. Postal Service ended the first quarter of its 2014 fiscal year (Oct. 1, 2013 – Dec. 31, 2013) with a net loss of $354 million. This marks the 19th of the last 21 quarters that it has sustained a loss. Though the Postal Service has been able to grow revenue by capitalizing on opportunities in Shipping and Package Services and has aggressively reduced operating costs, losses continue to mount due to the persistent decline of higher-margin First-Class Mail, stifling legal mandates, and its inflexible business and governance models.

“The Postal Service is doing its part within the bounds of law to right size the organization, and I am very proud of the achievements we have made to reduce costs while significantly growing our package business,” said Postmaster General and CEO Patrick Donahoe. “We cannot return the organization to long-term financial stability without passage of comprehensive postal reform legislation. We appreciate the efforts of the House and Senate oversight committees to make this happen as soon as possible.”  Continue reading ‘USPS Records Loss of $354 Million in First Quarter, Underscoring Need for Comprehensive Legislation’ »

Telephone/Web Conference With Postmaster General Donahoe and CFO Corbett

usps2013WASHINGTON, Feb. 5, 2014 /PRNewswire-USNewswire/ — The following is being released by the U.S. Postal Service:

What                         U.S. Postal Service FY 2014 First Quarter Financial Briefing Continue reading ‘U.S. Postal Service First Quarter Financial Briefing Feb. 7’ »

Presentations from the Mailers’ Technical Advisory Committee (MTAC) Open Session held on January 14, 2014

Optimization Update

Network Rationalization – Phase 1

Completed 176 Consolidations
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2 Remaining Consolidations Will be Completed by Feb 1, 2014

Network Rationalization – Phase 2

POSt Plan

7,995 Implementations Completed in FY 2013

Remaining 5,186 Will be Completed in FY 2014

Operations Update–Megan Brennan

 

Financial Update–Joe Corbett Chief Financial Officer & EVP
National Postal Forum: Stronger Together–Sharon Owens
Product Development Focus Group Year End Review–Gary Reblin VP New Products and Innovation
Mail Preparation & Entry Focus Group Year End Review–Cathy Moon Mgr Integration and Support (Operations)
Payment & Acceptance Focus Group Year End Review–Pritha Mehra VP Mail Entry and Payment Technology
Visibility/Service Measurement Focus Group Year End Review–Robert Cintron VP Product Information

Photo: CFO Joe Corbett briefs the media on the Postal Service's end-of-year financials.

Photo: CFO Joe Corbett briefs the media on the Postal Service’s end-of-year financials.

In his latest “Dollars and ¢hange” video, CFO Joe Corbett discusses improvement in USPS financial numbers for fiscal year (FY) 2013 and the need for legislative change to help the Postal Service regain its financial health.

Corbett notes that in FY 2013, USPS produced operating revenue of $66 billion — an increase of $800 million over FY 2012 and the Postal Service’s first growth in revenue since 2008. USPS also grew its shipping and packaging revenue by 8 percent and saw a 3 percent increase in standard mail.

“Perhaps most importantly, we laid the groundwork for continued package growth by entering contracts with major shippers,” says Corbett. “The highlight of that is our announcement of Sunday deliveries for Amazon.”

The Postal Service also achieved cost reductions of approximately $1 billion, contributing to $15 billion in savings since 2006.

Even with this good news, Corbett says the Postal Service’s financial footing still is shaky.

“The combination of onerous mandates in existing laws and continued First-Class Mail declines threatens the Postal Service’s financial viability,” says Corbett, who notes that Congressional action is necessary to help USPS solve its financial problems.

source: USPS News Link

The following is a letter from Ralph Nader to Postmaster General Patrick Donahoe

November 21, 2013

Postmaster General Patrick Donahoe
United States Postal Service
475 L’Enfant Plaza SW
Washington, D.C. 20260-0010

Re: Revenue Expanding Activities Continue reading ‘Ralph Nader Letter to Postmaster General Patrick Donahoe’ »