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
Quick
Find index
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2000 Annual Report
- page 51 of 70
In our Management Discussion
& Analysis, we give you a lot of information about how we operate,
what we invest in and how we pay for those investments. We also
tell you how we automated our mail processing operations, how hard
we work to be environmentally friendly and how we improved our financial
condition. Now we would like to help you read and understand our
financial statements.
To help you understand this information, we've written it in plain
English. But if you still don't understand some of the terms we
use, you can find a guide to reading annual reports on the IBM website
at www.ibm.com/FinancialGuide. Finally, we suggest that you compare
us to other companies by looking at the annual reports companies
publish on their corporate websites.
Now let's look at our financial statements.
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Statement of Operations
Frequently referred to as an income statement, the Statement
of Operations summarizes all revenue and expenses and ends
up with the "Bottom Line," or net income or net loss.
1. Operating revenue: What we receive from our customers for
the products and services we provide.
2. Operating expense: What we spend in order to produce our
revenue, including everything from wages to health and life
insurance benefits, workers' compensation, unemployment compensation,
disability pay, transportation and many other items.
3. Interest expense and income: The income we earn from the
money we have in bank accounts. Interest expense includes interest
on money we borrow during the year.
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(dollars
in millions) |
2000
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Operating
revenue—Note 7 |
$64,540
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Operating
expenses: |
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Compensation
and benefits—Notes 2, 3,
and 6 |
49,532
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Transportation |
4,709
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Other |
8,751
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Total
operating expenses |
62,992
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Income
from operations |
1,548
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Interest
and investment income |
41
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Interest
expense on deferred
retirement—Note 6 |
(1,568)
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Interest
expense on borrowings |
(220)
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Net
Loss |
$ (199)
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Statement of Changes in
Net Capital Deficiency
1. Capital Contributions of U.S. Government: Since 1971, the
federal government has invested $3.034 billion in the Postal
Service.
2. Accumulated Losses Since Reorganization: Since 1971, our
cumulative losses have been $3.680 billion.
3. Total Net Capital Deficiency: Since 1994, we've reduced our
negative equity to $646 million.
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Year ended September 30, 2000
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(dollars
in millions) |
Capital
Contributions of
U.S. Government
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Deficit
Since
Reorganization
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Total Net
Capital
Deficiency
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Balance,
September 30, 1999 |
$3,034
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$(3,481)
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$(447)
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Net
Loss |
—
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(199)
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(199)
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Balance,
September 30, 2000 |
$3,034
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$(3,680)
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$(646)
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Balance Sheet
The balance sheets give you our "financial condition," or a financial picture
of us taken on September 30.
1. Assets: What we own, including all the buildings, land, machines, vehicles
and everything else we use to move the mail, as well as the money others
owe us.
2. Liabilities and net capital deficiency: What we owe on what we own, as
well as money we owe others but haven't paid them yet.
3. The Board of Governors approves our 5-Year Capital Plan (2001-2005) totaling
$17.5 billion. Emphasis is on cost management through technology, improvement
of customer service and infrastructure investments.
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(dollars
in millions) |
2000
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Assets |
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Current
Assets: |
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Cash
and cash equivalents—Note 2 |
$ 683
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Other
current assets |
972
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Total current
assets |
1,655
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Other assets—Note
7 |
375
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Total property
and equipment, net |
24,070
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Deferred
retirement costs—Note 6 |
32,183
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Total
Assets |
$58,283
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Liabilities
and Net Capital Deficiency |
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Current
liabilities: |
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Compensation
and benefits |
$ 5,295
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Current
portion of debt |
6,814
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Other
current liabilities |
$ 6,168
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Total current
liabilities |
18,277
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Long term
debt,
less current portion—Note 5 |
2,502
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Other liabilities |
38,150
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Total
Liabilities |
58,929
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Total
Net Capital Deficiency |
(646)
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Total
Liabilities
and Net Capital Deficiency |
$58,283
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Statement of Cash Flows
1. Net cash provided by operating activities: What we received in cash during
the year.
2. Purchase of property and equipment: The money we spend on plant and equipment
so we can reduce costs and better serve our customers.
3. Cash flows from financing activities: The cash we borrow, and the cash
we use to pay back money we borrowed.
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(dollars
in millions) |
2000
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Cash flows
from operating activities: |
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Net
loss |
$ (199)
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Adjustments
to reconcile net income
to net cash provided by operating
activities |
1,406
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Net cash
provided by operating activities |
1,207
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Cash flows
from investing activities: |
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Purchase
of property and equipment |
(3,337)
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Proceeds
from sale of property and
equipment |
83
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Net cash
used in investing activities |
(3,254)
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Cash flows
from financing activities: |
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Issuance
of debt |
5,550
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Payments
on debt |
(3,151)
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Net cash
provided by financing activities |
2,399
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Net increase
in cash and cash equivalents |
352
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Cash and
cash equivalents
at beginning of year |
331
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Cash
and cash equivalents
at end of year |
$ 683
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