US Postal Service 2004 Annual Report Download

Download and view the complete annual report

Please find the complete 2004 US Postal Service annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 64

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64

2004 annual report
delivering
for you

Table of contents

  • Page 1
    delivering for you 2004 annual report

  • Page 2
    Automated Postal Centers make shipping convenient for me. I'm always in a hurry. Glad I heard about these Automated Postal Centers. They work on my schedule ...for just about anything I need from the Post Office. 2฀|฀2003฀ANNUAL฀REPORT฀UNITED฀STATES฀POSTAL฀SERVICE฀|฀MY฀MAIL

  • Page 3
    ... service board of governors leadership of the postal service 1 2 5 7 8 9 11 12 13 a message from the audit and finance committee a message from the chief financial officer financial review report of independent auditors financial statements operating statistics financial history summary glossary...

  • Page 4
    ...฀ the฀ services฀you฀need฀-฀stamps,฀postage,฀ Click-N-Ship,฀shipping฀labels,฀track฀and฀ trace,฀delivery฀and฀signature฀confirmation,฀mail฀hold฀and฀forwarding฀-฀and฀ so฀much฀more.฀Now,฀with฀Carrier฀Pickup฀ Online฀Notification,฀you฀can...

  • Page 5
    What can I do at usps.com? I buy stamps, find ZIP Codes, print mailing labels and postage. And how about this ...฀ I can ask my carrier to stop by and pick up my package. Delivering ...and then some! usps.com makes work easy for me. 2004 annual report united states postal service | 3

  • Page 6
    Using Click-N-Ship is convenient for me. No stamps? No time? No worry! Click-N-Ship makes it easy to print out mailing labels and get postage and insurance ...right from my computer. Convenience ...with the works! 4 | 2004 annual report united states postal service

  • Page 7
    ... of฀ our฀ efforts฀ to฀ provide฀ a฀time฀when฀competitors฀pursue฀retail฀ exceptional฀service฀and฀value฀to฀every฀ expansion฀strategies,฀we฀are฀enhancing฀ American฀ family฀ and฀ business.฀ Along฀ 2004 annual report united states postal service | 5

  • Page 8
    catalogs Catalogs make shopping easy for me. I love this lamp! It'll be great for Mom. And, even better, I can order it right from the catalog and don't have to pick it up. The Postal Service makes it easy for me. 6 | 2004 annual report united states postal service

  • Page 9
    ...the฀ United฀ States,฀ for฀ a฀ single฀ rate.฀And฀ Priority฀ Mail฀ service฀ offers฀two-฀to฀three-day฀delivery฀at฀a฀great฀price.฀฀ We're฀working฀hard฀to฀make฀your฀busy฀day฀a฀little฀easier. 2004 annual report united states postal service | 7

  • Page 10
    ...฀ Office.฀That฀ saves฀time฀and฀keeps฀you฀focused฀on฀growing฀your฀business. Mail.฀ It's฀ part฀ of฀ the฀ fabric฀ of฀ America.฀ It's฀ as฀ fresh฀ as฀ tomorrow.฀฀And฀it's฀delivering฀for฀you 8 | 2004 annual report united states postal service

  • Page 11
    ...฀convenient฀products฀and฀services. letter฀carriers Stephen Scully Erie, PA Alicia Tutt Falls Church, VA Adele Yoshikawa Pearl City, HI Gina Mendoza-Telck Fort Worth, TX John Dock Mahwah, NJ Diana Taylor Tupelo, MS Michael Cardarelli Providence, RI Jim Willson Royal Oak, MI Earl...

  • Page 12
    Priority Mail ï¬,at-rate boxes make shipping a breeze. Zones? Scales? Figuring out postage? Way too much work! But not with Priority Mail flat-rate boxes. Two convenient shapes ...and one low price ...coast to coast! 10 | 2004 annual report united states postal service

  • Page 13
    ...฀ testified฀ several฀ times฀ before฀ These฀issues฀are฀discussed฀in฀further฀detail฀in฀the฀financial฀ the฀Senate฀Governmental฀Affairs฀Committee฀and฀the฀House฀ review฀section฀of฀this฀report. 2004 annual report united states postal service | 11

  • Page 14
    ...฀39฀of฀the฀United฀States฀Code.฀The฀Governors฀are฀authorized฀to฀establish฀reasonable฀and฀equitable฀classes฀of฀mail฀and฀reasonable฀ and฀equitable฀rates฀of฀postage฀and฀fees฀for฀postal฀service.฀A฀specific฀power฀reserved฀by฀statute...

  • Page 15
    ...Wade฀Vice฀President,฀International฀Business John฀R.฀Wargo฀Vice฀President,฀Service฀and฀Market฀Development Murry฀E.฀Weatherall฀Vice฀President,฀Diversity฀Development Jerry฀W.฀Whalen฀Vice฀President,฀Sales 2004 annual report united states postal service | 13

  • Page 16
    ... The฀certified฀public฀accounting฀firm฀responsible฀for฀the฀independent฀audit฀of฀Postal฀Service฀financial฀statements,฀Ernst฀&฀ Young฀LLP,฀reports฀to฀the฀Board฀through฀the฀Committee.฀The฀ Postal฀Service฀Inspector฀General฀reports฀to฀the...

  • Page 17
    ...฀financial฀plans฀are฀posted฀ on฀ usps.com,฀the฀Postal฀Service's฀universal฀access฀website.฀ The฀Postal฀Service฀continues฀to฀meet฀the฀voluminous฀reporting฀requirements฀of฀the฀Postal฀Rate฀Commission,฀Congress,฀ the฀ Government฀Accountability...

  • Page 18
    ...฀Transformation฀ Plan.฀฀Increasing฀productivity฀ and฀efficiency฀in฀all฀areas฀of฀our฀ operations฀has฀allowed฀us฀to฀take฀ costs฀out฀of฀the฀system,฀reduce฀ debt฀and฀improve฀customer฀service.฀ ฀ 16 | 2004 annual report united states postal...

  • Page 19
    ...value฀it฀did฀at฀the฀time฀of฀postal฀reorganization.฀For฀the฀first฀ time฀in฀history,฀in฀2005฀First-Class฀Mail฀is฀projected฀to฀fall฀ below฀Standard฀Mail฀as฀our฀largest฀volume฀product.฀The฀shift฀ in฀the฀mail฀mix฀from฀First-Class...

  • Page 20
    ... postal฀ units,฀ our฀ website฀ usps.com฀ and฀ a฀ large฀ network฀ of฀ consignees.฀ Both฀the฀Senate฀and฀House฀legislation฀reaffirmed฀the฀imporWe฀deliver฀mail฀to฀142฀million฀city,฀rural,฀Post฀Office฀box,฀and฀ tance฀of฀universal฀service...

  • Page 21
    ...Mail,฀ Registered฀Mail,฀Delivery฀Confirmation,฀Signature฀Confirmation,฀ Click-N-Ship,฀and฀insurance. Part I Other฀key฀components฀of฀the฀legislation฀included฀authorizing฀ the฀Postal฀Service฀Governors฀to฀establish฀rates฀and฀classes฀ for฀products...

  • Page 22
    ...฀centers฀nationwide,฀including฀New฀ York,฀Boston,฀Washington,฀DC,฀Houston,฀Salt฀Lake฀City,฀Los฀ Angeles,฀San฀Francisco,฀and฀Seattle.฀These฀operations฀feature฀ some฀sales฀offices฀and฀offer฀mail,฀parcel,฀logistics,฀and฀financial฀services...

  • Page 23
    ...฀our฀financial฀statements฀taken฀as฀a฀whole.฀We฀ have฀accrued฀in฀our฀financial฀statements฀of฀September฀30,฀ 2004,฀the฀estimated฀impact฀of฀those฀claims฀we฀think฀it฀probable฀we฀will฀pay. 2004 annual report united states postal service | 21

  • Page 24
    financial review Part II Item 5. Market for registrant's common equity and related stockholder matters Not฀applicable฀to฀this฀report. Item 6. Selected financial information See฀Financial฀History฀Summary฀on฀page฀56. The฀ following฀ are฀ some฀ of฀ the฀ factors฀ ...

  • Page 25
    ...increasingly฀automate฀their฀financial฀transactions฀and฀ divert฀correspondence฀to฀the฀Internet.฀The฀volumes฀of฀Priority฀ Mail฀and฀Express฀Mail฀also฀declined฀as฀we฀continue฀to฀lose฀ market฀share฀in฀the฀package฀market.฀Package฀Services...

  • Page 26
    ...2004฀average฀hourly฀labor฀rates฀ increased฀by฀1.7%,฀and฀our฀2004...2004 Operations ฀฀฀Operations฀Support ฀฀฀Mail฀Processing ฀฀฀Rural฀Delivery ฀฀฀City฀Delivery ฀฀฀Vehicles฀Services...,422฀ 24 | 2004 annual report united states postal service

  • Page 27
    ...฀current฀rate฀of฀funding,฀we฀would฀pay฀substantially฀more฀ than฀would฀be฀needed฀to฀cover฀the฀future฀benefits฀expected฀to฀ be฀paid฀to฀our฀employees฀and฀retirees฀participating฀in฀CSRS.฀ 2004 annual report united states postal service | 25

  • Page 28
    ...This฀ will฀ adversely฀impact฀the฀mailing฀industry,฀the฀general฀public,฀and฀ ultimately฀ the฀ Postal฀ Service฀ itself,฀ by฀ further฀ exacerbating฀ existing฀trends฀of฀revenue฀and฀volume฀weakness. 26 | 2004 annual report united states postal service

  • Page 29
    ...฀Benefits฀Program,฀the฀availability฀of฀the฀rebate฀provision฀ expense฀of฀$4,526฀million฀was฀7.0%฀of฀our฀total฀expenses฀ of฀this฀Act฀may฀be฀affected฀by฀how฀it฀is฀implemented฀by฀OPM.฀ 2004 annual report united states postal service | 27

  • Page 30
    ...฀ introduced฀ in฀ the฀ second฀ session฀ of฀ the฀ 108th฀ Congress.฀ In฀particular,฀Representative฀Edward฀Markey฀introduced฀two฀ aviation฀security฀bills฀that฀had฀significant฀implications฀for฀us,฀ 28 | 2004 annual report united states postal service

  • Page 31
    ...continue฀to฀focus฀on฀customer฀and฀employee฀ safety,฀the฀Biohazard฀Detection฀System฀will฀be฀attached฀to฀ the฀Advanced฀Facer-Canceller฀System฀and฀flats฀cancellers฀to฀ detect฀potential฀biohazards. 2004 annual report united states postal service | 29

  • Page 32
    ...฀earnings฀on฀investments฀to฀exceed฀the฀interest฀ $1� expense฀on฀our฀debt฀for฀2005,฀we฀will฀benefit฀from฀any฀rise฀in฀ � 2��� 2��1 2��2 2��3 2��4 short฀term-interest฀rates.฀ 30 | 2004 annual report united states postal service

  • Page 33
    ...with฀two฀days'฀notice.฀The฀notes฀provide฀us฀the฀ NET฀CASH฀PROVIDED฀BY฀OPERATING฀ACTIVITIES flexibility฀to฀borrow฀short-term฀or฀long-term,฀using฀fixed฀or฀ During฀2004,฀net฀cash฀provided฀by฀operating฀activities฀was฀ floating฀rate฀debt...

  • Page 34
    ...of฀increased฀ productivity,฀have฀allowed฀mailers฀to฀enjoy฀rate฀stability฀since฀ June฀2002.฀Transformation฀of฀the฀Postal฀Service฀is฀succeeding฀ and฀will฀continue฀to฀drive฀further฀improvements. TRANSFORMATION PLAN INCREMENTAL ANNUAL SAVINGS (Dollars...

  • Page 35
    ...฀฀two฀cities,฀ one฀the฀size฀of฀Philadelphia฀and฀one฀the฀ size฀of฀Boston฀to฀our฀delivery฀system. financial review and-contribution฀mail.฀As฀this฀mail฀declines,฀our฀margins฀are฀ reduced,฀resulting฀in฀pressure฀on฀postal฀prices฀over...

  • Page 36
    ...฀ plans฀could฀be฀a฀significant฀risk฀to฀our฀financial฀results.฀We฀ estimate฀that฀an฀increase฀in฀the฀CPI฀of฀0.5%฀would฀cause฀an฀ annualized฀increase฀in฀our฀COLAs฀of฀about฀$100฀million. 34 | 2004 annual report united states postal service

  • Page 37
    ...฀Service. accountants on accounting and financial Foreign฀Currency฀Exchange฀Rate฀Risk We฀ have฀ foreign฀ currency฀ risk฀ related฀ to฀ the฀ settlement฀ of฀ terminal฀dues฀and฀transit฀fees฀with฀foreign฀postal฀administrations฀for฀international฀mail...

  • Page 38
    ...฀Executive฀Branch฀and฀by฀ the฀Supplemental฀Standards฀of฀Ethical฀Conduct฀for฀Employees฀ of฀the฀United฀States฀Postal฀Service. Item 14. Principal accountant fees and services In฀2002,฀the฀Board฀of฀Governors฀selected฀Ernst฀&฀Young฀LLP฀as฀ its...

  • Page 39
    Postal financial data can be easily viewed on usps.com 2004 annual report united states postal service | 37

  • Page 40
    ...฀Government฀Auditing฀Standards,฀we฀have฀also฀issued฀our฀report฀dated฀November฀10,฀2004฀on฀our฀consideration฀of฀the฀United฀States฀Postal฀Service's฀internal฀control฀over฀financial฀reporting฀and฀on฀our฀tests฀of฀its฀compliance฀with...

  • Page 41
    ...฀฀ Compensation฀and฀benefits฀ ฀฀ Transportation฀ ฀฀ Other฀ Total฀operating฀expenses฀ ฀ Income฀from฀operations Income฀from฀operations...income฀(loss)฀ See฀accompanying฀notes฀to฀financial฀statements. 2004 annual report united states postal service | 39

  • Page 42
    ...,759฀ 17,166฀ 2,809฀ 1,060฀ 40,794฀ 18,717฀ 22,077฀ 977 23,054฀ $27,242฀ Construction฀in฀progress฀ Total฀Property฀and฀Equipment,฀Net฀ Total฀Assets See฀accompanying฀notes฀to฀financial฀statements. 40 | 2004 annual report united states postal service

  • Page 43
    ...฀contributions฀of฀the฀U.S.฀government฀ Retained฀earnings฀(deficit)฀since฀reorganization฀ Total฀Net฀Capital฀ Total฀Liabilities฀and฀Net฀Capital฀ See฀accompanying฀notes฀to฀financial฀statements. 2004 annual report united states postal service | 41

  • Page 44
    ...฀ended฀September฀30,฀2004,฀2003฀and฀2002 ฀ ฀ Retained฀Earnings Capital฀ (Deficit)฀ Total฀Net฀ Contributions฀of...฀30,฀2004฀ $3,034฀ 897฀ $ 3,931 See฀accompanying฀notes฀to฀financial฀statements. 42 | 2004 annual report united states postal service

  • Page 45
    ...postage฀ (93 Decrease)฀increase฀in฀payables฀and฀accrued฀expenses฀ (412)฀ 40 Increase฀(decrease)฀in฀customer฀deposit฀accounts฀ (1 Decrease฀in฀outstanding฀postal฀money฀orders฀ 10 Increase฀in฀prepaid฀box...2004 annual report united states postal service ...

  • Page 46
    ...฀the฀independent฀Postal฀Rate฀Commission฀with฀ oversight฀responsibility฀for฀mail฀prices,฀subject฀to฀approval฀by฀ the฀Governors฀of฀the฀Postal฀Service.฀The฀ratemaking฀process฀ provides฀for฀the฀recovery฀of฀financial฀losses฀through...

  • Page 47
    ... contingent฀ on฀ the฀ Postal฀Service฀making฀all฀necessary฀repairs฀to฀the฀building.฀An฀ impairment฀loss฀of฀$24฀million฀was฀recorded฀in฀2004฀in฀order฀ Deferred฀Retirement฀Benefits฀and฀Costs 2004 annual report united states postal service | 45

  • Page 48
    ...government฀to฀help฀pay฀the฀costs฀to฀keep฀the฀ mail,฀postal฀employees฀and฀postal฀customers฀safe.฀Upon฀receipt฀ of฀...฀the฀cost฀ of฀the฀program฀to฀the฀various฀participating฀employers.฀Our฀ 46 | 2004 annual report united states postal service

  • Page 49
    ....฀These฀credit฀lines฀enable฀us฀to฀draw฀up฀to฀$3.4฀billion฀ with฀two฀days'฀notice฀and฀up฀to฀$600฀million฀on฀the฀same฀business฀day฀the฀funds฀are฀needed.฀Under฀these฀agreements฀we฀ 2004 annual report united states postal service | 47

  • Page 50
    ...the฀Thrift฀ Adjustments฀(COLAs) Savings฀Plan฀a฀minimum฀of฀1%฀per฀year฀of฀the฀basic฀pay฀of฀ OPM฀ determines฀ the...-18฀ changed฀ our฀ base฀ contribution฀ level฀ for฀ the฀ CSRS.฀ ฀ See฀note฀7. 48 | 2004 annual report united states postal service

  • Page 51
    ...฀and฀delivering฀certain฀ as฀determined฀by฀OPM.฀The฀additional฀amount฀is฀based฀on฀ nonprofit฀mail฀from฀1994฀through฀1998. a฀calculation฀of฀any฀potential฀"supplemental฀liability",฀if฀one฀ 2004 annual report united states postal service | 49

  • Page 52
    ...,฀we฀evaluate฀the฀materiality฀of฀cases฀ determined฀to฀have฀a฀reasonably฀possible฀chance฀of฀adverse฀ outcome.฀Such฀cases฀are฀immaterial฀to฀our฀financial฀statements฀taken฀as฀a฀whole.฀ 50 | 2004 annual report united states postal service

  • Page 53
    ...38 As฀ of฀ September฀ 30,฀ 2004,฀ all฀ emergency฀ preparedness฀ ฀ appropriations฀have฀been฀fully฀expended฀or฀committed.฀฀We฀ recognize฀these฀appropriations฀as฀revenue฀in฀the฀year฀in฀which฀ 2004 annual report united states postal service | 51

  • Page 54
    ...Revenue฀ Package฀Services ฀Pieces,฀number฀ ฀Weight,฀pounds฀ ฀Revenue฀ International฀Economy฀Mail ฀Pieces,฀number฀ ฀Weight,฀pounds฀ ฀Revenue฀ International฀Airmail***฀ ฀Pieces,฀number฀ ฀Weight,฀pounds฀ ฀Revenue****฀ U.S.฀Postal฀Service...

  • Page 55
    ...฀contains฀Return฀Receipts,฀Return฀Receipts฀for฀Merchandise฀and฀Delivery฀Confirmation฀Service. ฀ Certain฀reclassifications฀have฀been฀made฀to฀previously฀reported฀amounts. Includes฀foreign฀postal฀transaction฀revenue. Agency฀and฀franked฀mailed฀are...

  • Page 56
    ...of฀the฀"Management฀Discussion฀and฀Analysis." ****฀ 2004฀and฀2003฀delivery฀points฀are฀reported฀as฀of฀September฀30฀while฀2000-2002฀reflect฀delivery฀points฀as฀reported฀in฀early฀to฀mid-September. 54 | 2004 annual report united states postal service

  • Page 57
    Mail this cool really works. Who says mail has to be square? Or round? I can really make my message pop with Customized MarketMail. You've never seen anything like it. 2004 annual report united states postal service | 55

  • Page 58
    financial history summary ฀฀ Statements฀of฀Operations (Dollars฀in฀billions) 2004฀ 2003*฀ 2002* Total฀revenue฀ Total฀expense฀ Net...036)฀ (3,002)฀ 3,868 866฀ $฀฀3,034฀ (5,360) (2,326)฀ (676)฀ $฀(3,002) 56 | 2004 annual report united states postal service

  • Page 59
    financial history summary ฀ 2001*฀ 2000*฀ 1999*฀ 1998*฀ 1997*฀ 1996*฀ 1995*฀ 1994* ฀ $00,65.9฀ ...(5,048)฀ (913)฀ $฀(5,961)฀ *฀ Certain฀reclassifications฀have฀been฀made฀to฀previously฀reported฀amounts. 2004 annual report united states postal service | 57

  • Page 60
    ...financial data (Dollars฀in฀millions) (unaudited) 2004 Operating฀revenue Total฀operating฀expenses Income฀from฀operations Other฀revenue฀(expense) Net฀Income 2003 Operating฀revenue฀ Total... ฀16,280฀ ฀112฀ (462 350) 58 | 2004 annual report united states postal service

  • Page 61
    ...and฀ reports฀ Delivery฀ Confirmation฀ ฀ ฀ A฀ special฀ directly฀to฀the฀Governors฀of฀the฀Postal฀ service฀that฀provides฀the฀date฀of฀deliv- Service฀ and฀ is฀ independent฀ of฀ postal฀ ery฀ or฀ attempted฀ delivery฀ for฀ Priority฀ management...

  • Page 62
    2005 Postage Stamps Lunar฀New฀Year฀Souvenir฀Sheet฀â- ฀Marian฀Anderson฀â- ฀Love฀Bouquet฀ Ronald... Issue฀Date:฀March฀2005 Format:฀pane฀of฀10 60 | 2004 annual report united states postal service Robert฀Penn฀Warren Issue฀Date:฀April฀2005 Format:฀pane฀of฀...

  • Page 63
    ...the฀many฀trademarks฀owned฀by฀the฀United฀States฀Postal฀Service:฀United฀States฀Postal฀Service®,฀U.S.฀Postal฀Service®,฀USPS®,฀First฀Class฀Mail®,฀USPS.com®,฀Click-N-Ship®,฀Automated฀ Postal฀Center®,฀APC®,฀Express฀Mail®,฀Priority฀Mail...

  • Page 64
    ...States฀Postal฀Service฀ Corporate฀Accounting฀ 475฀L'Enfant฀Plaza,฀SW฀ Washington,฀DC฀20260-5241 Read฀our฀Annual฀Report฀on฀the฀web฀at฀ usps.com/history/anrpt04 ©฀2004฀United฀States฀Postal฀Service.฀All฀ rights฀reserved. This฀report฀is฀printed...