January USPS Financials: $437 Million Loss or $261 Million Profit? Take Your Pick
February 27, 2013
The Postal Service has released its financial statement for January 2013. Compared to January of last year, First Class revenues are down slightly less than 1%, while Standard Mail revenues are up 2.6%, Periodicals are up nearly 3%, and Packages are up over 4%. Total revenues are up 4.4% for the month and up almost one percent for the year to date (YTD, October-January).
Considering how weak the economy is, those look like pretty decent numbers, but that’s probably not how the financials will be reported. Instead, we’ll just hear the bottom line: A net loss of $436 million for the month, and a $1.7 billion loss for the first four months of the fiscal year.
Those losses, however, include two key numbers that probably won't get much attention: the prepayments for the Retiree Healthcare Benefit Fund (RHBF) and the retirement incentives paid out to tens of thousands of postal workers. The Postal Service shouldn't be paying into the RHBF at this point (at least not $5.5 billion a year), and the incentive buyouts were a one-time expense and not a regular operating cost.
If you put the RHBF payments and the incentive payments to the side, then, the bottom line looks a little different. It shows that the Postal Service would have actually made a profit of $261 million for January and $482 million for the year to date.
Here’s how the numbers break down. Note that the Postal Service includes the retirement incentive expense in the "Personnel Compensation and Benefit" line, but if you look deeper into the financial statement, there's a line for “other personnel related expenses," which includes the incentive expense. In the table, the incentive figures are approximate because in the financial statement they’re combined with other personnel expenses. The numbers in the table were derived by comparing this year’s expenses to last year’s (which were minimal because there weren't any incentive buyouts).