usps bog open session nov 15 2011
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8/3/2019 USPS BOG Open Session Nov 15 2011
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CONFIDENTIAL For Internal Review and Discussion Only
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Financial Matters:2011 Financial ResultsBoard of GovernorsOpen Session
November 15, 2011
Joe Corbett
Chief Financial Officer & Executive Vice President
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Financial Results
September YTD(Billions) FY2011 FY2010
Revenue $65.7 $67.1
Expenses 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) FY2011 FY2010
Revenue $65.7 $67.1
Expenses 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)
FY2011
FY2010
Compensation $36.8 $37.5
Benefits 15.2 14.7Transportation 6.4 5.9
Depreciation 2.3 2.5
Supplies & Services 2.3 2.2
Rent, Utilities & Other 4.9 4.9
Operating 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 Volume
Mail
Processing
Customer
Services City Delivery Rural Delivery Postmasters Other Total Hours
(%SPLY
)
Workhour ChangesSeptember YTD FY 2011
215 M 150 M 399 M
177 M
148 M 1,149 M59 M168 B
DELIVERY
FREQUENCY
September 2011 YTDReduction 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) FY2011 FY2010
Revenue $65.7 $67.1
Expenses 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.
I i R i d A l
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IntegratingRequired AnnualPublic Reports
USPS publishes multiple public reports
Documents respond to different legislativerequirements
- 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 guidancerecommends 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 AnnualPerformance Plan
FY 2011 Financial Results
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2012 Integrated Financial PlanBoard 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 IndicatorsPrimary Volume Drivers for Each Class of Mail
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 VERAs
(TBD)
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37.0 37.6 38.2 35.9 34.2 32.2 30.4
19.9 20.820.6
17.317.3
17.817.6
15.916.6 16.2
14.9 15.6 15.716.0
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 VERAs
(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
TotalWorkhours
(Millions)
$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 VERAs
(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 $0.9
A il bl Li idit t M th E d
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(2.0)
0.0
2.0
4.0
6.0
8.0
Oct-10
Nov-10
Dec-10
Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
Jan-12
Feb-12
Mar-12
Apr-12
May-12
Jun-12
Jul-12
Aug-12
Sep-12
Oct-12
($
Billions)
Min.1 monthliquidity $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 2013Congressional 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. USPS
Reimbursements 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
96.496.2
96.7
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
90.6
92.7
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 92.1
93.8
90.889.1 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 2011
Customer Experience Measurement
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40
50
60
70
80
90
100
34
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
91.290.0 89.4
83.9 82.3
62.760.0
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
88.286.7 87.0 85.4
79.0 76.9
53.4 51.7
QTR 4 SPLY
C
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CEM - Process Improvement
Increased Use of Diagnostics
Continuous Improvement Initiatives
Customer Experience Essentials Training
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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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