1 Confidential The United States Postal Service Q2, FY2011 Financial Update May 25, 2011 Joe Corbett Chief Financial Officer & Executive Vice President
The United States Postal Service Q2, FY2011 Financial Update May 25, 2011
Jan 08, 2016
The United States Postal Service Q2, FY2011 Financial Update May 25, 2011. Joe Corbett Chief Financial Officer & Executive Vice President. 8 Quarter Moving Average Growth Rates. % SPLY. Mail Volume Changes by Quarter. Total Mail Volume. Pro-Forma. Excl. impact of 2010 Census. FY 2011. - PowerPoint PPT Presentation
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1 Confidential
The United States Postal Service
Q2, FY2011 Financial UpdateMay 25, 2011
Joe Corbett
Chief Financial Officer & Executive Vice President
2 Confidential
-3.3%
-14.6%
-8.9%
-1.3%
1.5%
-3.0% -2.2%
-6.3%-5.5%
-9.4%
-14.8%-12.7%
-3.2%
0.7%
-3.1%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q2
Total Mail Volume
8 Quarter Moving Average Growth Rates% SPLY
FY 2008 FY 2009 FY 2010
Mail Volume Changes by Quarter
FY 2011
Note: FY 2010 and FY 2011 include impact of 2010 census volume
Excl. impact of 2010Census
Pro-Forma
3 Confidential
-10.1%
-6.8%
-6.0%
-7.6%-6.9%-6.5%-7.4%
-10.0%
-7.2%
-5.0%
-8.2%
-2.7%-3.4%
-6.3% -5.7%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q2
First-Class Mail
8 Quarter Moving Average Growth Rates% SPLY
FY 2008 FY 2009 FY 2010 FY 2011
Mail Volume Changes by Quarter
Note: FY 2010 and FY 2011 include impact of 2010 census volume
Excl. impact of 2010Census
Pro-Forma
4 Confidential
-11.2%
8.6%
-2.7%
1.6%
4.6%
0.7%
8.9%
-19.5%-19.7%
-5.6%-3.0%
-6.1%
-17.7%
-10.9%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Standard (Advertising) Mail
8 Quarter Moving Average Growth Rates% SPLY
FY 2008 FY 2009 FY 2010 FY 2011
Mail Volume Changes by Quarter
5 Confidential
Shipping Services Mail
2.8%
-7.6%
-4.9%-4.8%
-2.0%
-15.8%-15.1%
2.4%1.6%
4.7%3.4%
-2.1%
2.6%
-10.5%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
% SPLY
FY 2008 FY 2009 FY 2010 FY 2011
Mail Volume Changes by Quarter
6 Confidential
-0.7%
-4.5%
-6.3%
-2.1%
0.5%
-0.3%
-2.0%-2.7%
-10.0%
-5.0%
0.0%
5.0%
Volume
Processing
Customer
Services City Delivery
Rural
Delivery Postmasters Other Total
(% o
f P
rio
r Y
ear)
Workhour and Volume Changes March YTD – FY 2011
87.4B
87.4B
111.9M111.9M 77.2M77.2M 201.5M201.5M87.8M
74.7M74.7M 582.3M582.3M
29.3M
7 Confidential
March 2011 Financial Results
Six Months thru March 2011 (Billions)
Prelim
2011 FY
2010
Revenue $34.1 $35.1Expenses (34.2) (34.1)
Operating Income (Loss)* (0.1) 1.0Retiree Hlth. Benefits Pre-Funding (2.8) (2.8)Workers Comp: Actuarial & Claims (0.7) (0.3)Workers Comp: Discount Rate Adj. 1.0 0.3
Net Income (Loss) ($2.6) ($1.9)
Volume (Pieces) 87.4 87.9* Before RHB Pre-Funding & Non-Cash Adjustments to Workers’ Compensation Liabilities
8 Confidential
2011-2012 Forecasts
US Dollars in Billions 2011 IFP 2011 2012
Mail Volume (pieces) 173 168 165
Revenue 67.7 65.5 65.5
Expenses (Net of $1.7B Add'l Mgmt Action Effects in '12) (68.6) (68.3) (68.4)
Op. Income (Loss) before RHB (0.9) (2.8) (2.9)
RHB Pre-Funding (5.5) (5.5) (5.6)
Net Income (Loss) Before Legislative Changes (6.4) (8.3) (8.5)
Net (Debt) / Cash Before Legislative Changes (17.7) (19.3) (26.6)
$15 BillionDebt Limit
Forecasts
Notes for P/L and Cash Forecasts:• Excludes Non-cash Adjustments to Workers’ Compensation Liabilities; may impact net
income but not near-term cash flows.
9 Confidential
($
Bill
ion
s)
(14.0)
(12.0)
(10.0)
(8.0)
(6.0)
(4.0)
(2.0)
0.0
2.0
4.0
6.0
8.0
10.0
Oct
-10
No
v-10
Dec
-10
Jan
-11
Feb
-11
Mar
-11
Ap
r-11
May
-11
Jun
-11
Jul-
11
Au
g-1
1
Sep
-11
Oct
-11
No
v-11
Dec
-11
Jan
-12
Feb
-12
Mar
-12
Ap
r-12
May
-12
Jun
-12
Jul-
12
Au
g-1
2
Sep
-12
Oct
-12
($ B
illio
ns)
Debt at $15 B limit for FY 2011. Excludes Restricted Cash (Inspection Service’s Recoveries) of approximately $200M
FY11 Fcst: $8.3 B loss
($4.3B)
Min.1 month liquidity $7B FY12 Fcst: $8.5 B loss
($11.6B)
($5.6B)
$1.5B Oct cash requirements
$5.5B RHB pre-funding pmt
No RHB Pre-funding Pmts of $5.5B in
Sep 2011 and $5.6B in Sep 2012$1.8B$1.2B
($13.1B)
($0.5B)
($2.0B)
(See Forecast Note on Slide 8)
($0.1B)
Available Liquidity / Cash at Month-EndWorkers’ Comp Payments in October
10 Confidential
($
Bill
ion
s)
(14.0)
(12.0)
(10.0)
(8.0)
(6.0)
(4.0)
(2.0)
0.0
2.0
4.0
6.0
8.0
10.0
Oct
-10
No
v-10
Dec
-10
Jan
-11
Feb
-11
Mar
-11
Ap
r-11
May
-11
Jun
-11
Jul-
11
Au
g-1
1
Sep
-11
Oct
-11
No
v-11
Dec
-11
Jan
-12
Feb
-12
Mar
-12
Ap
r-12
May
-12
Jun
-12
Jul-
12
Au
g-1
2
Sep
-12
Oct
-12
($ B
illio
ns)
Debt at $15 B limit for FY 2011. Excludes Restricted Cash (Inspection Service’s Recoveries) of approximately $200M
FY11 Fcst: $8.3 B loss
($4.3B)
Min.1 month liquidity $7B FY12 Fcst: $8.5 B loss
($11.6B)
($5.6B)
$1.5B Oct cash requirements
$5.5B RHB pre-funding pmt
No RHB Pre-funding Pmts of $5.5B in
Sep 2011 and $5.6B in Sep 2012($0.1B)
$1.8B$1.2B
($13.1B)
($0.5B)
($2.0B)
(See Forecast Note on Slide 8)
($7.1B)
($1.1B)
Revenue decline accelerates, gas prices and inflation continue to increase
Available Liquidity / Cash at Month-EndWorkers’ Comp Payments in October
11 Confidential
Current Efforts to Ensure Liquidity
• Ongoing operational efficiencies and discretionary cost reductions
• Savings of $1.7B from Additional Management Actions in 2012:
Labor contract negotiations, transportation, facility consolidations, administrative realignment, service standards, and other
• Additional route reductions in progress
• Refund of FERS overpayment
• Five-Day Delivery
• RHB Restructuring
Management Actions
Requests for Congressional Action
Need to protect the Business and the Brand….Possible Default?
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