How Much Money Did The Post Office Lose In 2017?
WASHINGTON — The U.S. Mail reported revenue of $69.6 billion for fiscal year 2017 (Oct 1, 2016 - September 30, 2017), a decrease of $1.viii billion compared to the prior year. The lower revenues were driven largely by accelerated declines in Fantabulous and Marketing Mail volumes. In 2017, mail volumes declined past approximately 5.0 billion pieces, or 3.half-dozen percentage, while package volumes grew by 589 million pieces, or 11.four percentage, continuing a multi-year trend of declining mail volumes and increasing bundle book. While mail volume declines for the year were somewhat offset by growth in package volume, overall book has declined by 4.9 billion pieces. The growth in our Shipping and Packages concern provided some assistance to the financial motion-picture show of the Postal service equally acquirement increased $two.1 billion, or xi.8 percent. Nonetheless, that growth was offset in our financials by the refuse in mail service volumes discussed above, as well every bit a $1.1 billion 2016 noncash change in accounting judge and the 2016 scroll-back of the exigent surcharge mandated past the Postal Regulatory Commission which further reduced revenue by $1.1 billion from what it otherwise would have been. "Our financial state of affairs is serious, though solvable," said Postmaster Full general and CEO Megan J. Brennan. "At that place is a path to profitability and long-term financial stability. We are taking actions to control costs and compete effectively for revenues in addition to legislative and regulatory reform. Nosotros keep to optimize our network, enhance our products and services, and invest to better serve the American public." Brennan stressed that the path forward for a financially stable future must likewise include urgent actions needed outside of the Postal Service's control. They include advancement and passage of the postal reform provisions contained in H.R. 756 in the 115th Congress and the adoption by the Postal Regulatory Committee of a new pricing system as part of its 10-year pricing review, enabling the Mail to generate sufficient revenues to cover our costs. Operating expenses for the twelvemonth were $72.2 billion, a decrease of $4.7 billion, or 6.1 percent, compared to the prior year, although this net reduction was largely owing to changes in actuarially determined expenses exterior of management's command. Expenses for retiree wellness benefits and workers bounty declined by $iv.eight billion and $3.v billion, respectively, but were partially starting time by $two.4 billion in college expenses for the amortization of unfunded retirement benefits, the event of statutory mandates effective for 2017 and changes in Office of Personnel Management actuarial assumptions. Expenses for compensation and benefits and transportation also added $667 meg and $246 one thousand thousand, respectively, to 2017 operating expenses. The Postal Service reported a cyberspace loss for the year of $ii.7 billion, a decrease in net loss of $ii.eight billion compared to 2016. Of this refuse in internet loss, $2.4 billion was the result of changes in involvement rates, outside of direction's control, that reduced workers' bounty expense compared to last year. The controllable loss for the year was $814 million, a change of $1.4 billion, driven by the $775 meg decline in operating revenue before the 2016 change in bookkeeping guess, along with the increases in compensation and benefits and transportation expenses of $667 million and $246 million, respectively. Similar to the last several years, the Mail was unable to make any of the payments that were due to the federal government at the end of the financial twelvemonth, which amounted to approximately $6.ix billion in 2017, to pre-fund pension and health benefits for postal retirees. "Making the payments to the federal government in full or in part would take left the Postal Service with insufficient liquidity to ensure that we will be able to cover our current and anticipated operating costs, make necessary upper-case letter investments, and blot any contingencies or changes in the marketplace," said Primary Fiscal Officer and Executive Vice President Joseph Corbett. "Nosotros will proceed to prioritize the maintenance of adequate liquidity to ensure the Postal Service is able to perform our primary mission of providing universal service to all Americans." FY 2017 Operating Acquirement and Book past Service Category Compared to Prior Year Revenue Volume (revenue in $ millions; volume in millions of pieces) 2017 2016 2017 2016 Service Category First-Class Mail $ 25,637 $ 27,508 58,747 61,240 Marketing Post 16,626 17,622 78,329 80,885 Shipping and Packages 19,481 17,427 v,748 5,159 International ii,723 ii,674 1,003 i,005 Periodicals 1,375 one,507 5,301 5,586 Other 3,751 3,630 363 467 Total before change in bookkeeping approximate $ 69,593 $ seventy,368 149,491 154,342 Change in accounting estimate $ — $ 1,061 — — Total operating revenue and volume $ 69,593 $ 71,429 149,491 154,342 2016 Change in Accounting Estimate As a result of this change in gauge, the Mail recorded a decrease in its Deferred acquirement-prepaid stamp liability every bit of June xxx, 2016, which caused an increase in acquirement and decrease in cyberspace loss of $i.1 billion for the year ended September 30, 2016. This change in accounting estimate resulted in a non-greenbacks adjustment that does not impact the Postal service's available cash or access to cash and does not impact its controllable loss. Selected FY 2017 Results of Operations The following tabular array reconciles these non-GAAP operating revenue calculations with GAAP internet loss for the yr ended September thirty, 2017, and 2016: (results in $ millions) 2017 2016 Operating revenue before temporary exigent surcharge and modify in bookkeeping estimate $ 69,593 $ 69,232 Temporary exigent surcharge1 — ane,136 Operating revenue before change in accounting gauge $ 69,593 $ 70,368 Change in bookkeeping judge2 — i,061 Total operating revenue $ 69,593 $ 71,429 Other acquirement 43 69 Full revenue $ 69,636 $ 71,498 Total operating expenses $ 72,210 $ 76,899 Involvement and investment income (expense), cyberspace (168) (190) Total expenses $ 72,378 $ 77,089 Net loss $ (two,742 ) $ (5,591 ) 1 The temporary exigent surcharge expired on Apr 10, 2016. 2 This change in accounting gauge relates solely to changes in estimates of postage usage and breakage for Forever Stamps sold from 2011 through June 30, 2016, reflected as a decrease in the Deferred revenue-prepaid postage liability as of June 30, 2016. Controllable (Loss) Income The following tabular array reconciles the Postal Service'due south GAAP net loss to controllable (loss) income and illustrates the loss from ongoing business activities without the affect of non-controllable and non-recurring items for the years concluded September 30, 2017, and 2016: (in $ millions) 2017 2016 Net loss $ (two,742 ) $ (five,591 ) PSRHBF supplemental unfunded liability expense1 955 — PSRHBF prefunding fixed amount2 — 5,800 Change in workers' compensation liability resulting from fluctuations in discount rates (1,362) 1,026 Other change in workers' compensation liabilitythree (850) 188 Change in accounting estimate4 — (1,061) CSRS supplemental unfunded liability expensefive 1,741 — FERS supplemental unfunded liability expensevi 917 248 Change in normal cost of retiree wellness benefits due to revised actuarial assumptionsvii — Controllable (loss) income $ (814) $ 610 1 Expense for the annual payment due by September 30, 2017, on the unfunded liability as calculated by OPM. 2 Expense for the annual prefunding payments to the PSRHBF due on September xxx, 2016, and 2015, upon which the Postal Service defaulted. 3 Internet amounts include changes in assumptions, besides as the valuation of new claims and revaluation of existing claims, less electric current year claim payments. 4 This change in accounting judge relates solely to changes in estimates of postage usage and breakage for Forever Stamps sold from 2011 through June 30, 2016, reflected as a decrease in the Deferred revenue-prepaid postage liability as of June 30, 2016. v Expense for the annual payment due September 30, 2017, calculated past OPM, to amortize the unfunded CSRS retirement obligation every bit of September 30, 2016, the date of the most recent available data. Payments are to be fabricated in equal installments through 2043. 6 Expense for the annual payment due September 30, 2017, calculated past OPM, to amortize the unfunded FERS retirement obligation as of September 30, 2016, the date of the most contempo bachelor information. Payments are to exist made in equal installments through 2046. 7 Represents the almanac portion of the normal cost payment due September 30, 2017, attributable to revised actuarial assumptions and discount rate changes. The total normal cost payment amount, calculated by OPM, is $3.3 billion. Complete financial results are available in the Class 10-K, bachelor (later on ix am ET) at http://about.usps.com/who-we-are/financials/welcome.htm . Financial Briefing How to Participate: Attendee Directly URL: https://usps.webex.com/usps/onstage/g.php?MTID=e155a3970e3c030d38ac7aa046745d576 If y'all cannot join using the direct link above, please use the alternate logins below: The briefing will also be available on live audio webcast (listen only) at: The Postal Service receives no tax dollars for operating expenses and relies on the sale of stamp, products and services to fund its operations. # # # Please Note: For broadcast quality video and audio, photo stills and other media resources, visit the USPS Newsroom at about.usps.com/news/welcome.htm. For reporters interested in speaking with a regional Post public relations professional person, delight go to about.usps.com/news/media-contacts/usps-local-media-contacts.pdf. Follow us on twitter.com/USPS and like usa at facebook.com/USPS. For more information most the Postal Service, go to usps.com and usps.com/postalfacts.
The following presents acquirement and volume by service category for the year ended September 30, 2017, and 2016:
During the third quarter of fiscal twelvemonth 2016, the Postal Service revised the estimation technique utilized to make up one's mind its Deferred revenue-prepaid postage liability for a series of postage stamps. The change resulted from new information regarding customers' retention and usage habits of Forever Stamps, and enabled the Mail service to update its estimate of usage and "breakage" (representing stamps that will never be used for mailing due to loss, impairment or postage stamp collection).
This news release references operating revenue earlier the modify in bookkeeping estimate and operating revenue before the temporary exigent surcharge, which are not calculated and presented in accord with accounting principles mostly accustomed in the The states (GAAP).
Operating acquirement
This news release references controllable (loss) income, which is not calculated and presented in accordance with GAAP. Controllable income (loss) is a non-GAAP financial measure out defined equally net income (loss) adjusted for items outside of management's command and non-recurring items. These adjustments include workers' compensation expenses acquired by actuarial revaluation and disbelieve rate changes, PSRHBF prefunding expenses, the amortization of PSRHBF, CSRS and FERS unfunded liabilities, and the change in accounting estimate.
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Postmaster General and CEO Megan J. Brennan and Chief Financial Officer and Executive Vice President Joseph Corbett will host a phone/Web conference call to talk over the fiscal results in more detail. The phone call will begin at 10:00 am ET on November 14, 2017, and is open to news media and all other interested parties.
United states of america/Canada Attendee Dial-in: 844-340-4622 Conference ID: 2597149
Alternate URL: https://usps.webex.com
Event Number: 993 038 707
http://virtually.usps.com/news/electronic-printing-kits/cfo/welcome.htm .
Source: https://about.usps.com/news/national-releases/2017/pr17_069.htm
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