How to Read
Our Annual Report
2000 Highlights
Letter from
the Postmaster General/CEO
2000 Year
in Review
Delivering
the Future
The Governors
of the Postal Service
Audit Committee
Financial
Section
How to Read
Our Financial Statements
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2000 Annual Report - page 29 of 70
Net Loss / Income
In 2000 we had a net loss of $199 million. This follows four years
of net income that totaled $3,744 million. Put into context, this
loss represents about one-half of one day's cash receipts. The chart
above shows we continue to have a strong net cash flow from operations.
This net cash flow did decrease this year, and our net loss was
one of the causes.
When we were planning for this year, we knew that it was going to
be a challenge, but we thought we could break even without a rate
increase. However, revenue was almost $800 million below our estimate,
rising fuel prices added $275 million in costs, increased claims and costs
drove our Workers' Compensation costs to about $180 million
more than we expected, and inflation added $58 million in unexpected
wage increases. As this situation developed, management responded
by concentrating even more on the basics. We came together as a
team and reduced the one thing we could—work hours. Even as our
work load increased, we raised our productivity. Simply put, we
delivered an additional 6.2 billion pieces of mail, added 1.7 million
delivery points and used 6,200 fewer work years than in 1999.
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1998
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1999
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2000
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Operating Revenue
The table above shows that the growth of our operating revenue declined
compared to the two previous years. This was primarily a result
of less First-Class Mail growth, shifting of mail between classes
as mailers sought lower automation rates, and competition. The actual
growth of 2.9% was less than what we anticipated when we wrote last
year's report. Next year we expect steady revenue growth of approximately
5% reflecting the effect of our requested rate increase. We anticipate
this revenue growth based on slight volume growth overall due to
economic slow-down and the rate increase effect suppressing volume
growth.
Our major sources of revenue are First-Class Mail, Priority Mail
and Standard Mail (A), which together make up about 86% of our total
revenue for 2000, or approximately the same percentage as 1999 and
1998. Although we expected First-Class Mail revenue to grow modestly
in 2000, actual growth fell short of our expectations with an increase
of just 1.7%.
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Year
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Operating
Revenue
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Increase Over
Previous Year
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Increase Over
Previous Year (%)
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1998
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$60.1 billion
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$1.9 billion
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3.2%
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1999
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$62.7 billion
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$2.6 billion
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4.4%
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2000
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$64.5 billion
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$1.8 billion
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2.9%
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