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2011 Report on Form 10-K United States Postal Service
UNITED STATES
POSTAL REGULATORY COMMISSION
Washington, D.C. 20268-0001
FORM 10-K
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended SEPTEMBER 30, 2011
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number N/A
UNITED STATES POSTAL SERVICE
(Exact name of registrant as specified in its charter)
Washington, D.C.
41-0760000
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
475 L’Enfant Plaza, S.W.
Washington, DC 20260
(202) 268-2000
(Address and telephone number, including area code, of registrant’ s principal executive offices)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Name of each exchange on which registered
N/A
N/A
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.
Yes No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes No  Not Applicable 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data
File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for
such shorter period that the registrant was required to submit and post such files). Yes No  Not Applicable 
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained
herein, and will not be contained, to the best of registrant’ s knowledge, in definitive proxy or information statements incorporated by reference in
Part III of this Form 10-K or any amendment to this Form 10-K. Not Applicable 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting companyin Rule 12b-2 of the Exchange Act.
Large accelerated filer Accelerated filer  Non-accelerated filer Smaller reporting company Not Applicable 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No 
The aggregate market value of shares of common stock held by non-affiliates at September 30, 2011, was N/A
Indicate the number of shares outstanding of each of the registrant’ s classes of common stock, as of the latest practicable date.
Common Stock Outstanding Shares at November 15, 2011
No Common Stock N/A
DOCUMENTS INCORPORATED BY REFERENCE None

Table of contents

  • Page 1
    ... EXCHANGE ACT OF 1934 For the fiscal year ended SEPTEMBER 30, 2011 or ï,¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number N/A UNITED STATES POSTAL SERVICE (Exact name of registrant as specified in its...

  • Page 2
    ... on Accounting and Financial Disclosure Controls and Procedures Other Information 13 13 13 43 43 43 43 44 Business Risk Factors Unresolved Staff Comments Properties Legal Proceedings (Removed and Reserved) Page 1 6 10 11 12 12 SIGNATURES 2011 Report on Form 10-K United States Postal Service

  • Page 3
    ...://www.usps.com. Mail is delivered to more than 151 million city, rural, Post Office box and highway delivery points. One of the principal requirements introduced by P.L. 109435 is the requirement that, over time, our obligations for the established health and retirement benefits of current retirees...

  • Page 4
    ...Door Direct Mail (EDDM), which enables local businesses to target potential customers by carrier route. ï,· Launch phase two of the redesign of the postal website, http://www.usps.com, in 2012, with new features and tools to make it easier to get information on Mailing and Shipping Services relevant...

  • Page 5
    ... days a year. A surcharge is added for Sunday and holiday delivery. Express Mail Flat Rate envelopes are available for shipments to any location in the United States. Commercial Base and Commercial Plus pricing is available for customers meeting certain volume thresholds. Express Mail International...

  • Page 6
    ... Guaranteed, Express Mail International, Priority Mail, Priority Mail International, Parcel Select, and Parcel Return Service - increased an average of 3.6% in January 2011. We offer contract prices, rebates, online price reductions, and other incentives to encourage growth. GOVERNMENT CONTRACTS...

  • Page 7
    ... and the National Association of Postmasters of the United States (NAPUS). The Postal Service participates in federal employee benefit programs as provided by statute and contract for retirement, health, and workers' compensation benefits. AVAILABLE INFORMATION Financial and other information about...

  • Page 8
    ... 30, 2012. In addition to the numerous cost reduction steps already taken, on June 24, 2011, the Postal Service suspended its employer' s contributions to the federal Office of Personnel Management (OPM) for the defined benefit portion of its Federal Employees Retirement System (FERS) funding...

  • Page 9
    ... lower and declining mail volumes. Our current restructuring plans include studies to evaluate the potential closure or consolidation of mail processing operations, retail units, Post Offices, and other facilities and significantly decrease the number of employees. At the current time, our regular...

  • Page 10
    ... in wages, employee and retiree benefits, and transportation. These costs are significantly impacted by wage inflation, health benefit premium increases, retirement and workers' compensation programs, cost-of-living allowances, fuel prices, and the continuous expansion of our delivery network. We...

  • Page 11
    ... did not use derivative commodity instruments to mitigate the financial risk of changes in energy prices during the periods covered by this report. We rely extensively on computer systems and technology to manage the delivery of mail, process transactions, summarize results and manage our business...

  • Page 12
    ... laws and regulations. Finally, since we also use contracted carriers to transport the mail, we anticipate that increased operating costs for these independent carriers, including increased costs resulting from new laws or regulations, may ultimately be passed through to the Postal Service...

  • Page 13
    ... of commercial locations owned and operated by private businesses. These include more than 3,000 Contract Postal Units, Community Post Offices, and Village Post Offices, plus over 63,000 supermarkets, pharmacies, and other stores that sell postage stamps as a convenience to our customers. VEHICLES...

  • Page 14
    ... subjected to the National Reassessment Process (NRP) from May 5, 2006, to the present. The Postal Service used the NRP to ensure that its records were correct and that employees receiving workers' compensation benefits were placed in jobs consistent with their abilities. The case alleges violations...

  • Page 15
    ... quarterly basis. The discount rate reflects the current rate at which the workers' compensation liabilities could be effectively settled at the measurement date (e.g., the end of the 2011 Report on Form 10-K United States Postal Service - ITEM 7 - MANAGEMENT' S DISCUSSION AND ANALYSIS OF FINANCIAL...

  • Page 16
    ... by IHS Global Insight in their quarterly report. For medical claims, we use the average rate of medical cost increases experienced by our workers' compensation claimants over the past five years as an estimate for future medical inflation. This was a change beginning in 2010. Previously, we...

  • Page 17
    ...for the years ended September 30, 2011, 2010, and 2009 include expenses due to discount rate changes and actuarial estimations that increased the workers' compensation expense by $2,242 million, $2,500 million, and $1,343 million for each of the respective years. Discount rates are updated quarterly...

  • Page 18
    ...of future estimated payments. The discount rate change is further discussed in the "Workers' Compensation" section below and in Note 9, Workers' Compensation, in the Notes to the Financial Statements. Transportation expenses increased $511 million, or 8.7%, driven by sharply higher fuel prices which...

  • Page 19
    ... of costs dedicated to serving our still-growing delivery network. and permanent change in mail use by households and businesses. The impact of technological change has been especially hard on our First-Class Mail revenues, which dropped 5.8% on a volume decline of 6.4% in 2011 from 2010 and...

  • Page 20
    ...To compensate for the loss of one piece of First-Class Mail, Standard Mail must increase by three pieces. ^Includes Certified Mail, Return Receipts, PO Boxes, Insurance, and O ther Ancillary Fees Total mail volume of 168 billion pieces declined by 3 billion pieces, or 1.7%, from the 2010 volume of...

  • Page 21
    ... to use the internet more often to purchase goods. Our most recent price increases in January 2010 and January 2011 positively impacted our revenues; in addition, the success of our mail advertising campaigns also added to the revenue increase. 2011 Report on Form 10-K United States Postal Service...

  • Page 22
    ...2009 data, which did not change. ^Inclu des Certified Mail, Return Receipts, P O Boxes, Insurance, and Other Ancillary Fees MAILING SERVICES In 2010, First-Class Mail and Standard Mail made up approximately 94% of volume and 77% of revenue. Total Mailing Services revenue decreased by $1,465 million...

  • Page 23
    ...Mailing Services product volume and revenue may be found in the Quarterly Revenue, Pieces, and Weight reports on http://about.usps.com/who-weare/financials/welcome.htm. However, if the impact of the required PSRHBF prefunding payments and discount rate and actuarial changes on workers' compensation...

  • Page 24
    .... Nonbargaining salary rates were frozen in 2011, meaning that nonbargaining employees will not receive pay increases in 2012. These employees do not receive automatic salary increases, nor do they receive COLAs or locality pay. 2011 Report on Form 10-K United States Postal Service - 22 -

  • Page 25
    ... last year, in 2011 the rate of reduction in work hours exceeded the rate of decline in mail volume in every category except rural delivery and postmasters. Rural delivery accounts for most of the delivery point growth while postmasters' costs 2011 Report on Form 10-K United States Postal Service...

  • Page 26
    ...percentage of 2011 Report on Form 10-K United States Postal Service - Our 2010 work hours decreased by 75 million, partially offsetting higher labor rates. The 75 million, or 6.0%, decrease in work hours resulted from 2010 management initiatives and delivery route adjustments made in large part due...

  • Page 27
    ... due to the decreasing size of the work force in 2010. Retirement expense was 8.3%, 7.7%, and 8.2% of total operating expenses in 2011, 2010, and 2009, respectively. In January 2010, the Office of Inspector General (OIG) issued a report in which it evaluated the funding of the Postal Service's CSRS...

  • Page 28
    ..., in Quarter I, 2012, the Postal Service is expected to resume the regular biweekly payments for its FERS employer's contributions as well as remit all previously withheld payments, including the $911 million accrued at September 30, 2011. 2011 Report on Form 10-K United States Postal Service - 26...

  • Page 29
    ... retiree health benefits, multiemployer plan accounting rules are used. The drivers of active employee healthcare expense are the number of employees electing coverage and the premium costs of the selected plans. On average, the Postal Service paid 79% of the premium cost in 2011 and employees paid...

  • Page 30
    ... year, plus our portion of the current premium expense for retirees, is recognized as an expense when due. P.L. 109-435 made several changes to the way we fund and report the obligation for post-retirement health benefits. The law established the PSRHBF, and initially directed that we make annual...

  • Page 31
    ...compensation payments is recorded at its present value. To record the liability and annual expense, an estimate is made of the amount of funding that would need to be invested at current interest rates in order to fully fund all estimated 2011 Report on Form 10-K United States Postal Service - 2010...

  • Page 32
    ...of discount & inflation rate changes Actuarial revaluation of existing cases Subtotal Costs of new cases Administrative fee Total Workers' Compensation Expense For the year ended September 30, 2011, the Postal Service experienced a $118 million, or 18.4%, increase in compensation claim payments and...

  • Page 33
    ... year as international foreign postal transaction rates increased, and as the ratio of packages to the less expensive First-Class Mail increased. Also in 2010, the Postal Service received a one-time benefit for the recapture of foreign postal payments required under Universal Postal Union regulation...

  • Page 34
    ... routes eliminated in 2011. The net result of these actions helped drive a 9.2 million work hour reduction in city and rural delivery operations in 2011 and the disposal of over 1,700 postal-owned vehicles. Declines in customer mail volume coupled with the increased electronic access to our services...

  • Page 35
    ..., we have a cash payment scheduled for October 2012 of approximately $1.3 billion to the DOL for the Postal Service's annual payment on its workers' compensation liability. On June 24, 2011, as a result of the critically low liquidity level projected for the end of 2011 and all of 2012, we suspended...

  • Page 36
    ...businesses, Priority Mail Regional Rate Boxes, Reply Rides Free, Every Door Direct Mail, and others. However, these new services are not expected to offset the decline in volume and revenue that is occurring in First-Class Mail. As a result of management cost-control initiatives, work hours for 2011...

  • Page 37
    ... prefunding payments from 2012 through 2016. ï,· Address the inequities in the current Civil Service Retirement System (CSRS) pension liability allocation methodology which has led to overfunding by the Postal Service by as much as $75 billion. 2011 Report on Form 10-K United States Postal Service...

  • Page 38
    ...new cases in future years. This amount represents the undiscounted expected workers' compensation payments.The discounted amount of $15,142 million is reflected in our Balance Sheet at September 30, 2011. (4) Employees' leave includes annual and holiday leave. 2011 Report on Form 10-K United States...

  • Page 39
    ... subjected to the National Reassessment Process (NRP) from May 5, 2006, to the present. The Postal Service used the NRP to ensure that its records were correct and that employees receiving workers' compensation benefits were placed in jobs consistent with their abilities. The case alleges violations...

  • Page 40
    ... and funding for a total of 85 programs; specifically, programs identified in the President's Budget Request for FY 2012. S. 475 includes a provision stating that no federal funds are to be expended for the revenue forgone from the reduced rate mail program of the Postal Service. It directs that...

  • Page 41
    ... of the surplus used for retirement incentives. The bill provides for a restructuring of the existing prepayment schedule for PSRHBF; and proposes government-wide workers' compensation reforms. The Postal Service would be prohibited from instituting five-day delivery for a two-year period following...

  • Page 42
    ...of 2011 was introduced. The POST Act addresses crucial legacy cost issues, such as retiree health benefits prepayments and overpayments to the Civil Service Retirement System (CSRS) and the Federal Employees' Retirement System (FERS). It requires the Office of Personnel Management (OPM) to use a new...

  • Page 43
    ...year. First-Class singlepiece letters have been in decline for more than a decade and are expected to continue to decline in both the shortand long-term. Standard Mail volume has fallen by approximately 18% since peaking in 2007. For 2012, Standard Mail revenue 2011 Report on Form 10-K United States...

  • Page 44
    ... business to offset revenue declines in other areas. EXPENSE OUTLOOK Total expenses for 2012, excluding retiree health benefits, are expected to decrease by $900 million, as we prepare to begin the most aggressive cost-reduction program in the history of the Postal Service. The Network Optimization...

  • Page 45
    ...do not use derivative financial instruments to manage market risks. Additionally, we do not purchase or hold derivative financial instruments for speculative purposes. W. The new APWU contract ratified in 2011 had no COLA for 2011 and defers all other COLAs until 2013. As of the date of this report...

  • Page 46
    ... public accounting firm who also audited our financial statements included in this Annual Report on Form 10-K. Ernst & Young LLP's report on our internal control over financial reporting is included in this Annual Report on Form 10-K on Page 61. 2011 Report on Form 10-K United States Postal Service...

  • Page 47
    ... THE POSTAL SERVICE IS GOVERNED BY AN ELEVEN MEMBER BOARD OF GOVERNORS. The Board is composed of nine Governors appointed by the President of the United States with the advice and consent of the United States Senate, plus the Postmaster General and the Deputy Postmaster General. The seven currently...

  • Page 48
    ...United States Office of Management and Budget and Member of National Security Council from 1985 to 1988. Former Chairman, United States Federal Trade Commission from 1981 to 1985. Formerly a director of FLYi, Inc. (operator of Independence Air). Governor since April 2003. Term expired December 2010...

  • Page 49
    ...December 2010. Chief Operating Officer and Executive Vice President during the years 2001 to 2005. Senior Vice President, Operations from February 2001 to September 2001. 20 Deputy Postmaster General and member of the Board of Governors of the United States Postal Service since April 2, 2011. Served...

  • Page 50
    ... the compensation and benefits paid for comparable levels of work in the private sector of the economy. The Postal Service is the second largest civilian employer in the nation, with approximately 646,000 career and non-career employees as of the end of fiscal year 2011. The Postal Service operates...

  • Page 51
    ...Postal Service, including executive officers. These include participation in the Federal Employees Health Benefits plan, paid life insurance, a periodic physical examination and parking. Other than changes required by law, the Board must authorize any increases to benefits for officers. Compensation...

  • Page 52
    ... the Governors. For calendar year 2011, after reviewing recommendations from the Postmaster General and the Compensation Committee and in light of the Postal Service's dire financial condition, the Governors froze salary ranges and salaries. In 2011, the Postal Service continued to employ a national...

  • Page 53
    ... employee satisfaction, introduced a number of new products and services, increased customer access and offered mailers pricing incentives to help stem the volume decline. Management continued to streamline operations, closing a number of facilities and establishing a process to optimize network...

  • Page 54
    ...year of contribution may make a separate catch-up contribution up to the indexed IRS maximum ($5,500 in 2011). TSP investment options are a government securities fund; index funds that track the Barclays Capital Aggregate Bond Index, the S&P 500, 2011 Report on Form 10-K United States Postal Service...

  • Page 55
    ...one of a number of self only or self and family health benefit plans offered as part of this program. Currently, the Postal Service pays the full cost of the premium for its officers and executives. Beginning in January 2012, the Postal Service will, over a three-year period, increase the percentage...

  • Page 56
    ...Mr. Burgoyne was awarded $763 in his previous position as Vice President, Area Operations. Column (g) The amounts in this column reflect the performance-based incentive compensation awarded to executive officers in prior fiscal years; as 2011 Report on Form 10-K United States Postal Service - 54 -

  • Page 57
    ... listed, the 'All Other Compensation" category includes financial planning services, Thrift Savings Plan employer matching contribution for FERS employees, non-cash awards, parking, physical examinations, life insurance premiums paid for by the Postal Service, airline clubs, and relocation costs...

  • Page 58
    ... total amount for Mr. Potter is being paid in equal installments over a 10-year period pursuant to his contract with the Postal Service, the first payment of which was made in January 2011. Mr. Potter has retired from Postal Service employment. 2011 Report on Form 10-K United States Postal Service...

  • Page 59
    ... year plus $300 per day for not more than 42 days of meetings each year. Governors Gallagher and Kessler were members of the Board during FY11. Governor Gallagher's term ended and Governor Kessler resigned from the Board during the fiscal year. 2011 Report on Form 10-K United States Postal Service...

  • Page 60
    ... federal employer's standard contribution toward retiree health benefits, in the event they have qualifying service and participated in the Federal Employees Health Benefits Plan for the requisite period of time prior to retiring. DEFERRED COMPENSATION All federal employees, including Postal Service...

  • Page 61
    ..., including fees associated with the annual audit, including the reviews of the Postal Service's quarterly reports on Form 10-Q and testing of management's internal control assessment in accordance with the Sarbanes-Oxley Act in 2011 and 2010. 2011 Report on Form 10-K United States Postal Service...

  • Page 62
    ... to the Current Report on Form 8-K). Employment/Compensation Contract with Paul Vogel, President and Chief Marketing/Sales Officer, dated July 27, 2010 (filed with the PRC on November 15, 2010, as Exhibit No. 10.5 to the Annual Report on Form 10-K). Amendment to employment/compensation contract with...

  • Page 63
    ...the standards of the Public Company Oversight Board (United States), the balance sheets of the United States Postal Service as of September 30, 2011 and 2010, and the related statements of operations, changes in net deficiency, and cash flows for each of the three years in the period ended September...

  • Page 64
    ... fiscal year 2012 to address the short-term funding requirements of the United States Postal Service. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the United States Postal Service's internal control over financial reporting...

  • Page 65
    STATEMENTS OF OPERATIONS Years Ended September 30, 2011 2010 2009 (Dollars in millions) Operating revenue Operating expenses Compensation and benefits Retiree health benefits W orkers' compensation Transportation Other Total operating expenses Loss from operations Interest and investment income ...

  • Page 66
    ... Revenue Forgone Receivable Total Assets $ 24,263 20,409 2,952 1,112 48,736 29,023 19,713 624 20,337 427 23,413 $ 23,822 20,646 2,974 1,026 48,468 28,333 20,135 1,460 21,595 377 24,326 See accompanying notes to the financial statements 2011 Report on Form 10-K United States Postal Service...

  • Page 67
    ...p ostal mon ey orders Prepaid box re nt an d othe r deferred revenue De bt T ota l Cu rrent Liabilities N onc urren t Lia bilitie s W ork ers' com pe nsation cos ts ...,8 73) 24,3 26 S ee ac companyin g notes to t he financial s tatem ents 2011 Report on Form 10-K United States Postal Service - 65 -

  • Page 68
    ... $ (4,706) (3,794) (8,500) (8,505) (17,005) (5,067) (22,072) $ (1,672) 53 (3,794) (5,413) 45 (8,505) (13,873) 0 (5,067) (18,940) $ $ $ $ $ $ $ $ $ See accompanying notes to the financial statements 2011 Report on Form 10-K United States Postal Service - 66 -

  • Page 69
    ...Changes in current assets and liabilities: Receivables, net Supplies, advances and prepayments Compensation and benefits Retiree health benefits Workers' compensation Payables and accrued expenses Customers deposit accounts Deferred revenue-prepaid postage Outstanding postal money orders Prepaid box...

  • Page 70
    ... the financial services, communications, distribution, delivery, advertising, and other market sectors. Products and services are sold through over 32,000 Post Offices, stations and branches plus a large network of contract postal units, community post offices, village post offices and commercial...

  • Page 71
    ...18, 2011, plus the originally mandated 2012 payment of $5.6 billion due by September 30, 2012. To date, none of the law changes have addressed the original prefunding payment requirements for 2012 to 2016. See Note 7, Health Benefit Programs, for additional information. time that the Postal Service...

  • Page 72
    ...businesses, Priority Mail Regional Rate Boxes, Reply Rides Free, Every Door Direct Mail, and others. However, these new services are not expected to offset the decline in volume and revenue that is occurring in First-Class Mail. As a result of management cost-control initiatives, work hours for 2011...

  • Page 73
    ... and benefits costs. Current Postal Service projections anticipate a decrease of approximately 100,000 employees over the next three years, with potential annual savings of approximately $6.5 billion. The service standard changes related to these plans require that the Postal Service request a non...

  • Page 74
    ... amounts reported in the Financial Statements and disclosed in the Notes to the Financial Statements. Actual results may differ from those estimates. These financial statements reflect the audited results of operations of the United States Postal Service for the years ended September 30, 2011, 2010...

  • Page 75
    ..., adjusted for estimated selling costs. Due to the absence of a market for most types of mailing equipment, impaired equipment assets are assigned a fair value of zero. In Quarter IV, 2011, the Postal Service announced plans to optimize its mail processing, delivery, and retail networks. See Note...

  • Page 76
    ... as a percentage of annual sales than for stamps, because business customers generally manage their cash flow much more closely and purchase postage only as needed. Deferred revenue related to meters is estimated by monitoring the actual usage of all postage meters that had postage added during the...

  • Page 77
    ... 7, Health Benefit Programs, and Note 8, Retirement Programs, for additional information. 2011 2,527 246 459 247 18 3,497 2010 1,323 488 506 254 13 2,584 Forever Stamps Non-Forever Stamps Meters Mail-In-Transit Other, primarily precancelled stamps Total Deferred Revenue-Prepaid Postage WORKERS...

  • Page 78
    .... The Postal Service is limited by statute to net annual debt increases of $3 billion. Total debt cannot exceed $15 billion. RECENT ACCOUNTING PRONOUNCEMENTS In September 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2011-09, Compensation-Retirement...

  • Page 79
    ... 0.135 0.135 0.125 $ $ 1,000 700 500 3,400 12,000 7,500 4,500 0.206 0.206 0.206 0.206 Floating Rate Note - Repurchasable at par on each interest rate reset date and the interest rate resets on December 15, 2011, and March 15, 2012. 2011 Report on Form 10-K United States Postal Service - 77 -

  • Page 80
    ... the years ended September 30 is summarized as follows: Contingent Liabilities (Dollars in millions) Labor- Employment Environmental Tort Contractual Total Contingent Liabilities $ 2011 662 48 39 13 762 $ 2010 238 40 35 $ $ 78 - 1 314 2011 Report on Form 10-K United States Postal Service -

  • Page 81
    ... to the various participating government agency employers. The Postal Service cannot direct the costs, benefits, or funding requirements of the plan and, therefore, accounts for program expenses using multiemployer plan accounting rules. 2011 Report on Form 10-K United States Postal Service - 79 -

  • Page 82
    ... costs are reflected as "Retiree health benefits" in the Statements of Operations. EMPLOYEE / EMPLOYER CONTRIBUTIONS NOTE 8 - RETIREMENT PROGRAMS PENSION PROGRAMS Employees participate in one of three pension programs based on the starting date of employment with the federal government. Employee...

  • Page 83
    ...the amount of funding that would need to be invested at current interest rates in order to fully fund all estimated future payments. Inflation and discount (interest) rates are updated as of the date of the financial statements to determine the present value of the workers' compensation liability at...

  • Page 84
    ... Treasury securities that have a similar maturity, a level 2 input. Impact of discount & inflation rate changes Actuarial revaluation of existing cases Subtotal Costs of new cases Administrative fee Total Workers' Compensation Expense 2011 Report on Form 10-K United States Postal Service - 82 -

  • Page 85
    ... The discounted present value of the remaining future payment for the years ended September 30 was $351 million in 2011 and $339 million in 2010. The total receivable for revenue forgone was $467 million in 2011 of which $74 million was classified as current assets. In 2010, the total receivable was...

  • Page 86
    ...of the deferred revenue-prepaid postage, due to a change in estimate. d - Includes the impact of the $1,656 million in cre ase in workers' compensation expense, due to changes in discount and inflation rates. e - Includes the impact of the $807 million increase in worke rs' compensation expense, due...

  • Page 87
    ... revenue across products. This new methodology was applied to revenue and volume data relating to 2011 and 2010. These reclassifications did not impact total mail revenue and volume for 2009. The new methodology does not change total revenue. 2011 Report on Form 10-K United States Postal Service...

  • Page 88
    ... revenue across products. This new methodology was applied t o revenue and volume data relating to 2011 and 2010. These reclassifications did not impact tot al mail revenue and volume for 2009. The new methodology does not change total revenue. 2011 Report on Form 10-K United States Postal Service...

  • Page 89
    ... Service - Field Inspector General Total HQ and HQ Related Employees Field Employees Area Offices Postmasters / Installation Heads Supervisors / Managers Professional Administration and Technical Personnel Clerks/Nurses Mail Handlers City Delivery Carriers Motor Vehicle Operators Rural Delivery...

  • Page 90
    ..., and Carrier Annexes Total Postal-Managed Contract Postal Units Community Post Offices Total Offices, Stations, and Branches Residential Delivery Points City Delivery Rural PO Box Highway Contract Total Residential Delivery Business Delivery Points City Delivery Rural PO Box Highway Contract Total...

  • Page 91
    ...: 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®, Standard Mail®, Parcel Post®, Media Mail®, Customized MarketMail®, Intelligent Mail®, Parcel Select®, Express Mail...

  • Page 92
    ... used to describe products and services that use machine readable codes, such as barcodes, to uniquely identify mail. This enables large mailers to follow the progress of their mail through the many stages of processing all the way to delivery. 2011 Report on Form 10-K United States Postal Service...

  • Page 93
    ... $100 at a rate equal to 10% interest compounded annually. Priority Mail. Priority mail is a 1 to 3-day nonguaranteed delivery service. Receivable. Money that is owed to the Postal Service. Recognize. To record in Postal Service accounts as income or expense. Shipping Services. Products that are not...

  • Page 94
    .... United States Postal Service /s/ Patrick R. Donahoe Patrick R. Donahoe Postmaster General and Chief Executive Officer Date: November 15, 2011 Pursuant to the requirements of the Postal Accountability and Enhancement Act of 2006, this Report has been signed below by the following persons on...

  • Page 95
    ... Member and Deputy Postmaster General /s/ Joseph Corbett Joseph Corbett /s/ Timothy O'Reilly Timothy O'Reilly Chief Financial Officer and Executive Vice President (Principal Financial Officer) Vice President, Controller (Principal Accounting Officer) 2011 Report on Form 10-K United States Postal...

  • Page 96
    Exhibit 10.4 2011 Report on Form 10-K United States Postal Service - 94 -

  • Page 97
    2011 Report on Form 10-K United States Postal Service - 95 -

  • Page 98
    Exhibit 10.6 2011 Report on Form 10-K United States Postal Service - 96 -

  • Page 99
    2011 Report on Form 10-K United States Postal Service - 97 -

  • Page 100
    ... or other employees who have a significant role in the Postal Service's internal control over financial reporting. b. Date: November 15, 2011 /s/ Patrick R. Donahoe_____ Patrick R. Donahoe Postmaster General and Chief Executive Officer 2011 Report on Form 10-K United States Postal Service - 98...

  • Page 101
    ... management or other employees who have a significant role in the Postal Service's internal control over financial reporting. b. Date: November 15, 2011 /s/ Joseph Corbett Joseph Corbett Chief Financial Officer and Executive Vice President 2011 Report on Form 10-K United States Postal Service...

  • Page 102
    ... presents, in all material respects, the financial condition and results of operations of the Postal Service. Dated: November 15, 2011 /s/ Patrick R. Donahoe____ ____ Patrick R. Donahoe Postmaster General and Chief Executive Officer 2011 Report on Form 10-K United States Postal Service - 100 -

  • Page 103
    ... 906 OF THE SARBANESOXLEY ACT OF 2002 In connection with the Annual Report of the United States Postal Service (Postal Service) on Form 10-K for the period ended September 30, 2011 (the "Report"), I, Joseph Corbett, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906...