USPS reports 'controllable income' profit of $1.1 billion in first quarter
While continuing to report it still operates at a deficit, the United States Postal Service made a major concession to critics who say the government agency is in far better financial shape than its deficits indicate.
At a meeting Feb. 6 in Washington, USPS officials added a new figure to the agency’s first-quarter results.
That figure indicates that while the Postal Service recorded a $754 million net loss, it also posted a positive $1.1 billion in “controllable income” during the same quarter.
“Controllable income” is a new figure that Louis J. Giuliano, chairman of the Postal Service's board of governors emergency committee, said was created to help the governors see the success of the new programs the USPS is implementing.
As the printed financial results for the first quarter state, the USPS excluded "the non-controllable factors from our internal financial analyses in order to focus our attention on relevant expenses that management can control.”
Not surprisingly the non-controllable expenses, “which greatly impact our financial results,” include the congressionally mandated payments for the Postal Service's retiree health plans and some interest-related workers compensation funds.
Postal unions and others have been highly critical of the USPS for stressing the deficits it has created, largely because it wanted to press the case that the agency is, in Giuliano’s words, “broke” and needs urgent financial help from Congress.
Frederic Rolando, president of the National Association of Letter Carriers, expressed delight at the new financial numbers, noting that USPS’s top financial officer had called it “a fantastic quarter.”
“The Postal Service financial turnaround is continuing into its third year of operating profitability … ,” Rolando said.
Stephen Kearney, a former senior Postal Service financial officer and executive director of the Alliance of Nonprofit Mailers, told his members “the real operating profit of the USPS was $1.124 billion.”
“The liquidity story reflects the real financial success of the USPS,” Kearney added.
Cash on hand Dec. 31, 2014, was $7.080 billion, up $3.326 billion or 47% from $3.754 billion the prior year.
The cash balance is a key to new Postmaster General Megan Brennan’s plans to invest funds in new mail delivery trucks and take further steps to continue to boost the Postal Service's booming package mail volumes.
Revenues grew in the quarter ended Dec. 31 to $18.8 billion, from $18 billion in the same period of fiscal 2014.
Overall mail volume grew 3.5 percent in the quarter while the continuing decline in first class mail slowed, a USPS news release noted.
Advertising (or standard) mail and first class revenues grew by 7.6 percent and 3.7 percent, thanks to a January 2014 rate increase.
The Feb. 6 meeting also provided evidence of the continuing discord between Congress and USPS.
There were only three presidentially-appointed governors sitting with Brennan and the deputy postmaster general as members of a temporary emergency committee overseeing the agency.
“At the risk of being too predictable or overly obvious, I’ll just point out that the governors shouldn’t be compelled to go through these procedural contortions,” Giuliano said. “It would be far preferable for more postal governors to be confirmed.”
He then added: "We have made this plea repeatedly over the past several years and so I won’t belabor the point further. I’ll just say that we hope the president will nominate new governors in the near future and that the Senate will swiftly confirm them, and we encourage them to do so.”
Only one governor's nomination has been sent by the Obama White House to the Senate, according to the USPS financial report.
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