USPS filed its Integrated Financial Plan with the Postal Regulatory Commission. Below are excerpts:

The fiscal year (FY) 2013 Integrated Financial Plan (IFP) has a projected Operating Loss of $2.0 billion, versus Operating Losses of $2.4 billion in FY2012 and $2.7 billion in FY2011. The reductions in Operating Losses are a result of our continuing efforts to increase revenue and reduce costs. The FY2013 net loss is forecast to be $7.6 billion, including $5.6 billion of currently mandated pre-funding for retiree health benefits, but before consideration of the expense associated with adjustments to long-term workers’ compensation liabilities. These workers’ compensation adjustments are heavily influenced by changes in interest rates and actuarial estimations and are too volatile to accurately forecast.

Unless there is a significant legislative change affecting our financial condition, we will not have sufficient liquidity to make the $5.6 billion RHB pre-funding payment due in September 2013 and we will have no ability to borrow additional funds at that date. We are projected to be at least $4.8 billion short of having sufficient cash or liquidity to make the RHB pre-funding payment in FY2013 and continue operations. These conditions will exist unless Congress and the President take action on the legislative actions that we have
requested.

In the event of a projected liquidity shortfall, we will prioritize payments to our employees and suppliers to help ensure that the Postal System continues to operate in a quality manner. Additionally, we continue to seek a refund of our FERS surplus, as those funds would help alleviate some of our short-term liquidity risks. The OIG has determined that if Postal Service-specific assumptions were used in estimating the FERS obligation, rather than government-wide averages, the surplus would be much greater than the $2.6 billion calculated by the Office of Personnel Management as of September 30, 2011, the latest actual data available.

We will continue to pursue legislative changes, cost reductions, and additional ways to generate revenues in 2013. Although our cost-reduction and revenue-generation initiatives are expected to positively impact cash flow, we project that they may not, in the aggregate, be sufficient to offset potential cash shortfalls, which could occur in the second half of 2013. Many of the structural reforms needed to ensure long-term viability, such as adjustments to the Retiree Health Benefits pre-funding payment schedule and changes to delivery standards, can only be achieved with legislative change.

Despite major cost reductions and revenue initiatives, we project an operating loss of $2.0 billion for 2013. Our $41 billion of net losses over the previous six years were driven significantly by $32 billion in mandated RHB pre-funding expenses. These losses have consumed our cash and borrowing capacity to the point where we can barely fund operations in FY2013, and may be forced to default on RHB pre-funding payments in 2013.

USPS 2013 Integrated Financial Plan (PDF).

USPS projects $7.6 Billion loss for FY2013– $5.6 Billion Due To Prefunding