WASHINGTON (USPS) — The U.S. Postal Service Friday reported its 2010 financial results, showing a net loss of $8.5 billion for the fiscal year ended Sept. 30.
Excluding charges to income primarily resulting from changes to interest rates that impact the organization's workers' compensation liability, the net loss was $6 billion.
The recent recession, continuing economic pressures and migration of mail to electronic media had a significant adverse impact on mail volumes and operating revenues. Despite rigorous initiatives that eliminated 75 million work hours and drove productivity to record highs in 2010, the losses mounted.
"Over the last two years, the Postal Service realized more than $9 billion in cost savings, primarily by eliminating about 105,000 full-time equivalent positions — more than any other organization, anywhere," said Chief Financial Officer Joe Corbett. "We will continue our relentless efforts to innovate and improve efficiency. However, the need for changes to legislation, regulations and labor contracts has never been more obvious."
First-Class Mail volume continues to decline, with year-over-year declines of 6.6 percent in 2010, 8.6 percent in 2009, and 4.8 percent in 2008. This trend is particularly disturbing as First-Class Mail, the most profitable product, generates more than half of total revenue. Volume for Standard Mail showed improvement during the year, reflecting some signs of economic recovery in late 2010, but, in total, was flat in 2010, compared to 2009.
In its report on the financial statements contained in the Postal Service's 2010 report, independent auditor Ernst & Young is expected to issue an unqualified audit opinion that will emphasize that questions remain about the ability of the Postal Service to generate sufficient
liquidity to make all of its future payments, including the $5.5 billion RHB pre-funding payment due on the last day of fiscal year 2011.