financial matters: 2011 financial results board of governors’ open session november 15, 2011
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Financial Matters: 2011 Financial Results Board of Governors’ Open Session November 15, 2011 Joe Corbett Chief Financial Officer & Executive Vice President. Financial Results. * Before RHB Pre-Funding, Non-Cash Adjustments to Workers’ Compensation Liabilities & Contingency. - PowerPoint PPT PresentationTRANSCRIPT
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CONFIDENTIAL – For Internal Review and Discussion Only
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Financial Matters: 2011 Financial Results
Board of Governors’Open SessionNovember 15, 2011
Joe CorbettChief Financial Officer & Executive Vice President
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Financial Results
September YTD (Billions)
FY 2011
FY 2010
Revenue $65.7 $67.1Expenses 67.9 67.7
Operating Income (Loss)* (2.2) (0.6) Retiree Hlth. Benefits Pre-Funding - (5.5) Workers Comp: Fair Value Adj. (1.0) (2.0) Workers Comp Claims, Adj. & Contingency (1.9) (0.4)
Net Income (Loss) ($5.1) ($8.5)
Volume (Pieces) 167.9 170.9
* Before RHB Pre-Funding, Non-Cash Adjustments to Workers’ Compensation Liabilities & Contingency.
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$32.2
$17.8
$9.0
$6.7
First-Class Mail$34.2
Standard Mail$17.3
Shipping Services$8.5
Other $7.1
$65.7$67.1
$0
$10
$20
$30
$40
$50
$60
$70
2010 2011
First-Class Mail Standard Mail Shipping Services Other
Revenue $ Billions
Revenue FY2010 – FY2011
-5.8%
+2.9%
+6.3%
-2.0%
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Financial Results
September YTD (Billions)
FY 2011
FY 2010
Revenue $65.7 $67.1Expenses 67.9 67.7
Operating Income (Loss)* (2.2) (0.6) Retiree Hlth. Benefits Pre-Funding - (5.5) Workers Comp: Fair Value Adj. (1.0) (2.0) Workers Comp Claims, Adj. & Contingency (1.9) (0.4)
Net Income (Loss) ($5.1) ($8.5)
Volume (Pieces) 167.9 170.9
* Before RHB Pre-Funding, Non-Cash Adjustments to Workers’ Compensation Liabilities & Contingency.
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September YTD(Billions)
FY 2011
FY 2010
Compensation $36.8 $37.5Benefits 15.2 14.7Transportation 6.4 5.9Depreciation 2.3 2.5Supplies & Services 2.3 2.2Rent, Utilities & Other 4.9 4.9Operating Expenses * $67.9 $67.7
Operating Expenses
* Before RHB Pre-Funding, Non-Cash Adjustments to Workers’ Compensation Liabilities & Contingency.
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-1.7%
-4.2%
-6.5%
-2.3%-2.9%-3.2%
-0.2%
0.2%
-8%
-6%
-4%
-2%
0%
2%
Mail VolumeMail
ProcessingCustomerServices City Delivery Rural Delivery Postmasters Other Total Hours
(% S
PLY)
Workhour Changes September YTD – FY 2011
215 M
150 M 399 M
177 M
148 M 1,149 M59 M168 B
DELIVERY FREQUENCY
September 2011 YTD Reduction vs. 2010 = 34.1M hrs
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Total Factor Productivity
Average Annual Growth 1.1% [2000 - 2011] 21.6
0
5
10
15
20
25
1972 1980 1990 2000 2011
Average Annual Growth 0.3% [1972 - 1999]
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Financial Results
September YTD (Billions)
FY 2011
FY 2010
Revenue $65.7 $67.1Expenses 67.9 67.7
Operating Income (Loss)* (2.2) (0.6) Retiree Hlth. Benefits Pre-Funding - (5.5) Workers Comp: Fair Value Adj. (1.0) (2.0) Workers Comp Claims, Adj. & Contingency (1.9) (0.4)
Net Income (Loss) ($5.1) ($8.5)
Volume (Pieces) 167.9 170.9
* Before RHB Pre-Funding, Non-Cash Adjustments to Workers’ Compensation Liabilities & Contingency.
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Integrating Required Annual Public Reports
USPS publishes multiple public reports
Documents respond to different legislative requirements- Comprehensive Statement on Postal Operations
(PRA, PAEA)- Annual Report (PAEA)- Annual Performance Report and Plan (GPRA)
New Legislation (Government Performance and Results Modernization Act) and OMB guidance recommends report simplification and consolidation
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Integrated Annual Public Report
Key Content (Single Document) – to be published end of November• Year in Review – Financial Highlights• Core Strategies• Board of Governors and Executive Leadership Team• 2011 Financial Summary• Operating Statistics• Comprehensive Statement on Postal Operations
- Summary of 2011 initiatives• 2011 Annual Performance Report and 2012
Performance Plan
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Requesting approval of the following:
1. 10-K and Financial Statements
2. FY 2011 Comprehensive Statement, including the Annual Performance Report and Annual Performance Plan
FY 2011 Financial Results
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®
2012 Integrated Financial Plan
Board of Governors’ Open Session
Joe CorbettChief Financial Officer & Executive Vice President
November 15, 2011
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Requesting approval of the following:
1. FY 2012 Integrated Financial Plan
2. FY 2013 Congressional Reimbursement (Appropriations Request)
FY 2012 Integrated Financial Plan
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Economic Indicators Primary Volume Drivers for Each Class of
Standard & Priority
First-Class
Retail Sales
2.5%1.0%
-1.5%
-9.6%
2.8%
5.7%
2.7%
-10%
-7%
-4%
-1%
2%
5%
'06 '07 '08 '09 10 11 12
Investment
4.8%
-6.3%
-25.8%
10.1%
4.4%
-3.5%
6.1%
-26%
-20%
-14%
-8%
-2%
4%
10%
16%
'06 '07 '08 '09 10 11 12
Employment Growth
1.3%
-4.7%
-2.3%
1.5%
-0.1%
2.1%1.4%
-5%
-3%
-1%
1%
3%
'06 '07 '08 '09 10 11 12
Relatively Flat
53% Less Growth
28% Less Growth
24% Less Growth
Source: Global Insight – August 2011
Standard
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Statements of Operations
In BillionsFY 2011 FY 2012
IFP
Revenue 65.7$ 64.0$
Expenses 67.9 67.0
Operating Income (Loss) (2.2)$ (3.0)$
RHB Pre-funding (Current Law) (11.1)
Non-cash Workers' Comp Adj. (2.9) —
Net Income (Loss) (5.1)$
(14.1)$
Volume 167.9 158.0
0
Restructuring Charge* (TBD)
* Equipment and Facilities Impairments, Workers’ Comp, Unemployment, and VERA’s
(TBD)
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37.0 37.6 38.2 35.9 34.2 32.2 30.4
19.9 20.8 20.617.3 17.3 17.8 17.6
15.9 16.6 16.2
14.9 15.6 15.7 16.0
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
2006 2007 2008 2009 2010 2011 2012
First-Class Standard All Others
Revenue $ Billions
Revenue FY2006 – FY2012
FCM
SM
$72.8$75.0
$68.1 $67.1 $65.7 $64.0
$75.0
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Statements of Operations
In BillionsFY 2011 FY 2012
IFP
Revenue 65.7$ 64.0$
Expenses 67.9 67.0
Operating Income (Loss) (2.2)$ (3.0)$
RHB Pre-funding (Current Law) (11.1)
Non-cash Workers' Comp Adj. (2.9) —
Net Income (Loss) (5.1)$
(14.1)$
Volume 167.9 158.0
0
Restructuring Charge* (TBD)
* Equipment and Facilities Impairments, Workers’ Comp, Unemployment, and VERA’s
(TBD)
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Cumulative Savings vs. Workhours
$16.2
$13.7$12.3
$9.3
$3.2
$1.2$0.0
1,423
1,373
1,459
1,091
1,258
1,183
1,149
1,000
1,100
1,200
1,300
1,400
1,500
2006 2007 2008 2009 2010 2011 2012
Tota
l Wor
khou
rs(M
illio
ns)
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18Cumulative savings primarily from headcount reductions
Total Workhours
($ Billions)FY12 Savings
$2.5 Billion
FY12 Plan Reduction of 58M hours
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Statements of Operations
In BillionsFY 2011 FY 2012
IFP
Revenue 65.7$ 64.0$
Expenses 67.9 67.0
Operating Income (Loss) (2.2)$ (3.0)$
RHB Pre-funding (Current Law) (11.1)
Non-cash Workers' Comp Adj. (2.9) —
Net Income (Loss) (5.1)$
(14.1)$
Volume 167.9 158.0
0
Restructuring Charge* (TBD)
* Equipment and Facilities Impairments, Workers’ Comp, Unemployment, and VERA’s
(TBD)
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Capital Commitments of $900MFor 2012
5 yr Avg. FY2010 FY2011 FY2012($ Billions) thru 9/30/09 Actual Actual IFP
Facilities $0.8 $0.5 $0.5 $0.4
Equipment 0.8 0.3 0.2 0.1
Infrastructure & Support 0.5 0.1 0.1 0.4
Total $2.1 $0.9 $0.8 $0.9
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(2.0)
0.0
2.0
4.0
6.0
8.0
Oct
-10
Nov-
10
Dec-
10
Jan-
11
Feb-
11
Mar
-11
Apr-1
1
May
-11
Jun-
11
Jul-1
1
Aug-
11
Sep-
11
Oct
-11
Nov-
11
Dec-
11
Jan-
12
Feb-
12
Mar
-12
Apr-1
2
May
-12
Jun-
12
Jul-1
2
Aug-
12
Sep-
12
Oct
-12
($ B
illio
ns)
Min.1 month liquidity $7B
Available Liquidity at Month-EndFERS Impacts
$0.6B
FY11 Actuals FY12 Forecast
Assumes: No RHB pre-funding in 2011 or 2012 Pay FERS amounts withheld and resume contributions in
December
Pay FERS
FERS Withholding
$0.1B
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Request for FY 2013 Congressional Reimbursement
No request for Public Service Subsidy (cost of Universal Service Obligation) – range of $460M to $3.7B
($Millions) FY 2011 FY 2012 FY 2012 FY 2013Current
Congr. USPS Congr. USPSReimbursements to cover: Approved Request Bills Request
Free Mail for the Blind (cost per piece increasing) $68.3 $80.2 $68.2 $87.1
Overseas Voting (at traditional First Class rate) 0.6 0.9 1.3 1.0
Reconciliation Adjustments (from prior years) 6.0 6.5 8.7 18.5
Revenue Foregone Act - 1993 ($1.2B over 42 Years) 11.8 29.0 0.0 46.2
Total Appropriation Request $86.7 $130.0 $78.2 $153.5
0.0
78.2
13.4
Total Reimbursements: Free Mail for Blind & Overseas Voting 74.9 101.0
New Cost - Overseas Military Voting via Express Mail (New Law)
0.0 0.7
107.3
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Requesting approval of the following:
1. FY 2012 Integrated Financial Plan
2. FY 2013 Congressional Reimbursement (Appropriations Request)
FY 2012 Integrated Financial Plan
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Quarter 4, Fiscal Year 2011Service Performance
andCustomer Experience
Megan J. BrennanChief Operating Officer
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Rapidly Changing Environment Major Infrastructure Changes
Challenges from the Elements
Employees Delivered
Quarter 4, Fiscal Year 2011
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Single-Piece First-Class
Overnight
Source: TTMS
96.4 96.296.7 96.3
88
90
92
94
96
98
QTR 4 YTD
FY11 SPLY
Target – 96.65
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Single-Piece First-Class
2 - Day
Source: TTMS
94.093.4
94.893.6
88
90
92
94
96
98
QTR 4 YTD
FY11 SPLY
Target – 94.15
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Single-Piece First-Class
3 to 5 Day
Source: TTMS
91.2 91.6
92.693.7
88
90
92
94
96
98
QTR 4 YTD
FY11 SPLY
Target – 92.85
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Single-Piece First-Class
International
Source: TTMS
90.692.7
89.4
80
85
90
95
QTR 4 YTD
FY11 SPLY
Target – 94.00
90.2
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Presort First-Class
Presort First-Class
Source: TTMS There is no SPLY for Presort
91.1 92.193.8
90.8 89.1 90.6
83
88
93
98
Overnight 2-Day 3-Day
Qtr 4 YTD
Target – 96.65 Target – 94.15 Target – 92.85
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Process Improvement
24 Hour Clock Execution
Reduce Variation
Quality Focus
Leverage Service Diagnostic Tools
Network Management
Continuous Improvement Initiatives
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Quarter 4, Fiscal Year 2011Customer Experience Measurement
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40
50
60
70
80
90
100
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Overall Experience
Residential Small Business
88.186.8
QTR 4 SPLY
Customer Experience Measurement
83.6 82.0
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Residential Experience
Receiving Sending PO Visit Contact
Customer Experience Measurement
40
50
60
70
80
90
100
91.2 90.0 89.483.9 82.3
62.7 60.0
QTR 4 SPLY
91.2
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Small Business Experience
Receiving Sending PO Visit Contact
Customer Experience Measurement
40
50
60
70
80
90
100
88.2 86.7 87.0 85.4
79.076.9
53.4 51.7
QTR 4 SPLY
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CEM - Process Improvement
Ownership and Resolution of Issue
Continuous Improvement Initiatives
Customer Experience Essentials Training
Increased Use of Diagnostics
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Plan to Move at an Accelerated Pace
Our Commitment Predictable Service
Industry Engagement
Infrastructure Changes to Continue
Summary
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Quarter 4, Fiscal Year 2011Service Performance
andCustomer Experience
Megan J. BrennanChief Operating Officer
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