After accounting for a US$5.8bn retiree health benefit pre-funding obligation, the US Postal Service (USPS) posted a net loss of approximately US$5.6bn for fiscal year 2016 (October 1, 2015 September 30, 2016), as compared with a US$5.1bn net loss for the year ended September 30, 2015. Excluding this prefunding obligation, the USPS would have recorded net income of approximately US$200m in 2016.
“To drive growth in revenue and better serve our customers, we continue to invest in the future of the postal service by leveraging technology, improving processes and adjusting our network,” said postmaster general and CEO Megan J Brennan.
“In 2016, we invested US$1.4bn, an increase of US$206m over 2015, to fund some of our much-needed building improvements, vehicles, equipment and other capital projects.”
The Shipping and Packages business continued its strong performance with revenue growth of US$2.4bn, or 15.8%. This was offset by a decline in First-Class Mail revenue of US$925m, or 3.3%, due largely to the exigent surcharge expiration and continuing electronic migration. These two trends, together with steady standard or advertising mail revenues, and a slight increase in other revenues, account for the US$1.6bn growth in operating revenue.
Overall, the USPS reported operating revenue of US$70.4bn for 2016, excluding a US$1.1bn change in accounting estimate recorded during the year. This equates to an increase of US$1.6bn, or 2.3%, over past year.
Despite the positive trends in some aspects of its business, the net loss suffered by the USPS this year cannot be ignored. Even with continued proactive and aggressive management, such losses are likely to persist for the foreseeable future because of mandated costs such as an unaffordable retiree health benefits program.
“This is why legislative and regulatory reforms remain critical for us to meet the needs of the American public now and well into the future,” said Brennan.
November 16, 2016
