discussion draft 1 - usps · 1 - delivery days were even compared to sply. 2 - before rhb...

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Confidential & Pre-Decisional 1DISCUSSION DRAFT February 5, 2015

2

Financial Results Quarter 1 of Fiscal Year 2015

Temporary Emergency Committee MeetingOpen Session

February 6, 2015

Joe CorbettChief Financial Officer

Financial Results

December YTD (3 Months) FY FY(Billions) 2015 2014Revenue 1 $18.8 $18.0Expenses 1, 2 17.7 17.3

Controllable Income (Loss) 1, 2 1.1 0.7 Retiree Health Benefits Pre-Funding (1.4) (1.4) Workers' Comp. Fair Value Adj. (0.8) 0.5 Workers' Comp. Other Non-Cash Adj. 0.3 (0.2) Net Income (Loss) 1 ($0.8) ($0.4)Liquidity Days (of oper. cash) 3 26 14Volume (Pieces) 42.6 42.0

1 - Retail and delivery days were even compared to SPLY.2 - Before RHB pre-funding and non-cash adjustments to workers’ compensation liabilities.3 - FY2015 liquidity days’ increase is primarily due to shift in timing of $1.8B in Payroll and $.4B EFT to Jan. 2, 2015.

3

Volume: FY2015 Q1 vs. SPLY

16.9 16.7

22.0 22.8

1.1 1.3 1.8 1.7

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

FY14 Actual FY15 ActualFirst‐Class Mail Standard Mail Total Shipping & Package Other (includes Periodicals) International Mail

Piec

es -

Bill

ions

+1.4%

+3.5%

-1.1%

42.0 42.6-7.4%

+12.9%

4

Revenue: FY2015 Q1 vs. SPLY

$7.3 $7.6

$4.6 $5.0

$3.9 $4.3

$1.3$1.1$0.9$0.8

$‐

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

$14.0

$16.0

$18.0

FY14 Actual FY15 ActualFirst‐Class Mail Standard Mail Total Shipping & Package Other (includes Periodicals) International Mail

+4.3%

+7.6%

-18.3%

-1.2%

+3.7%

+10.4%

$18.8$18.0

$ B

illio

ns

5

Shipping & Package Services Revenue:FY2015 Q1 vs. SPLY

$2.2 $2.3

$0.8 $1.0

$0.5

$0.6 $0.2

$0.2 $0.2

$0.2

$‐

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

$4.0

$4.5

FY14 Actual FY15 ActualPriority Mail & Std. Post Parcel Select and Return F‐C Package Service Package Svcs Priority Mail Express

+10.4%

+27.7%

+3.3%-0.3%

+5.7%

+12.9%

$3.9

$4.3

$ B

illio

ns

6

December YTD (3 Months) FY FY(Billions) 2015 2014Compensation & Benefits $13.6 $13.2Transportation 1.8 1.8 Depreciation 0.4 0.5 Supplies & Services 0.7 0.6 Rent, Utilities & Other 1.2 1.2

Controllable Expenses $17.7 $17.3Workhours (millions) 293 287

Controllable Expenses

1 - Delivery days were even compared to SPLY.2 - Before RHB pre-funding and non-cash adjustments to workers’ compensation liabilities.

1, 2

7

• Liabilities exceed assets by approx. $46 billion

• The USPS has only 35 cents of assets to cover each dollar of its liabilities

A Deep Financial Holeas of December 31, 2014

1 Under multi-employer accounting rules, there are approximately $45B in obligations not shown on the balance sheet.

Significant profits over years and legislation are needed to recover.

Unrestricted Cash $ 7.1B Retiree Health Benefits $23.8B

Buildings & Equipment, $16.2B Workers' Compensation $17.9Bnet of depreciation

Debt $15.0BOther Assets $ 1.7B

Accrued Compensation, $ 5.0Bbenefits, and leave

Deferred Revenue $ 3.3B

Other $ 6.1B

Total Assets $25.0B Total Liabilities 1 $71.1B

ASSETS LIABILITIES

8

9

0123456789

1011121314151617181920212223242526

Sep-

13

Oct

-13

Nov

-13

Dec

-13

Jan-

14

Feb-

14

Mar

-14

Apr

-14

May

-14

Jun-

14

Jul-1

4

Aug

-14

Sep-

14

Oct

-14

Nov

-14

Dec

-14

Jan-

15

Feb-

15

Mar

-15

Apr

-15

May

-15

Jun-

15

Jul-1

5

Aug

-15

Sep-

15

Oct

-15

FY2014- October FY2016 Liquidity Days of Operating Cash Available

• Liquidity includes unrestricted cash plus available borrowing, up to $15B limit.

• FY2015 Days of Operating Cash – based on average operating costs disbursed per day ~$275M (FY2014~$265M).

Mid-October Balances shown - Low points after annual Workers’

Compensation payments to DOL

No payments for Retiree Health Benefits (RHB) Pre-Funding are included ($5.7B in 2014 and $5.7B in 2015)

19 days

Days

Actual

FY2014 FY2015

3 bi-weeklypay-days

3 bi-weeklypay-days $ 1 B

$ 2 B

$ 4 B

$ 3 B

$ 5 B

$ 6 BExigent price

increase began Jan. 26, 2014

$ 7 B

Preliminary Projection

23 days

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10

Quarterly Service Performance Report

Temporary Emergency Committee MeetingOpen Session

February 6, 2015

David E. WilliamsChief Operating Officer

11

Quarter 1 Performance

Leverage our Infrastructure

Employee Commitment

Predictable Service

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12

FIRST-CLASS MAILSERVICE PERFORMANCE

Quarter 1, Fiscal Year 2015

13

Actual SPLY

100 -

90 -

80 -

70 -

60 -

50 -

First-Class OvernightTarget 96.80

96.05 95.89


14

Actual SPLY

Target 96.50

100 -

90 -

80 -

70 -

60 -

50 -

First-Class 2-Day

95.48 95.20


15

Actual SPLY

Target 95.25

100 -

90 -

80 -

70 -

60 -

50 -

First-Class 3-5 Day

91.84 93.24


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16

STANDARD MAILSERVICE PERFORMANCE


17

Standard Mail Composite

Actual SPLY

Target 91.00

100 -

90 -

80 -

70 -

60 -

50 -

88.88 86.40


18

Summary

Predictable Service

Drive Process Improvement

Employee Engagement

discussion draft 1 - usps · 1 - delivery days were even compared to sply. 2 - before rhb...

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