[Annual Report of the Postmaster General, 1983]
[From the U.S. Government Publishing Office, www.gpo.gov]

Annual Report
of the
Postmaster General
Wff OflEGO PWBLte LIBRARY
0407 2
SCIENCE INDUSTRY

Financial and Operating Highlights
Year Ended
Sept. 30, 1983
Year Ended
Sept. 30, 1982
Year Ended
Sept. 30, 1981
Year Ended
Sept. 30, 1980
Year Ended
Sept. 30, 1979
Pieces of mail (millions)
Percent change
119,381
4.7
114,049
3.6
110,130
3.6
106,311
6.5
99,829
3.0
Operating revenue
Percent change
$23,582
4.3
$22,600
18.1
(dollars in millions)
$19,133
11.6
$17,143
6.4
$16,106
14.0
Public service appropriation
Percent change
$ 0
-100.0
$ 12
-97.5
$ 486
-41.3
$ 828
-10.0
$ 920
0.0
Revenue forgone appropriation
Percent change
$ 789
13.6
$ 695
-12.0
$ 789
0.9
$ 782
-2.2
$ 800
-0.2
Total appropriations
Percent change
$ 789
11.6
$ 707
-44.6
$ 1,275
-20.8
$ 1,610
-6.4
$ 1,720
-0.1
Total operating expenses
Percent change
$24,083
5.5
$22,826
6.8
$21,369
10.1
$19,413
10.7
$17,529
8.1
Net income (loss)
Percent change
$ 616
-23.1
$ 802 ($ 588)
91.8
($ 306) $ 470
Fixed assets (net of depreciation)
Percent change
$ 4,462
8.0
$ 4,132
3.4
$ 3,995
2.0
$ 3,917
6.2
$ 3,687
5.0
Equity (deficiency)
Percent change
$ 112 ($ 505)
61.3
($ 1,307)
-81.8
($ 719)
-62.0
($ 444)
53.1
1979-81 recast to reflect 1980 census information.
(in units indicated)
U.S. population January 1 (millions)* 233.3 231.0 228.8 226.4 223.9
Percent change 1.0 1.0 1.1 1.1 1.1
Pieces of mail per capita 512 494 481 469 446
Percent change 3.6 2.6 2.5 5.3 1.9
Operating revenue per capita $ 101.08 $ 97.83 $ 83.61 $ 75.70 $ 71.94
Percent change 3.3 17.0 10.4 5.2 12.7
Accrued cost per piece of mail 20.17c 20.01C 19.40c 18.26C 17.56c
Percent change 0.8 3.1 6.2 4.0 4.9
Operating revenue per piece of mail 19.75c 19.82c 17.37c 16.13c 16.13c
Percent change -0.4 14.1 7.7 0.0 10.6
Net income (loss) per piece of mail 0.52c 0.70c (0.53c) (0.29C) 0.47c
Percent change -25.7 — 82.8 — —
Pieces of mail per work year 173,320 167,650 161,879 156,528 148,322
Percent change 3.4 3.6 3.4 5.5 1.3
Work years 688,791 680,280 680,327 679,184 673,057
Percent change 1.3 — 0.2 0.9 1.7
Employees 678,845 675,122 670,239 666,823 663,067
Percent change 0.6 -0.7 0.5 0.6 1.1
3 1336 06403 6727 i
Postmaster General's Letter
to the Board of Governors
With its second straight year of net
income in 1983, the Postal Service has
firmly established its financial credentials
as an efficient public agency that is
making significant contributions to our
national life and economy.
I am pleased to report net income
totaled $616 million for the year—the
third year in the black in the last five.
This is remarkable considering that for
the first time, the Postal Service received
no public service subsidy from
the Congress. Thus, positive financial
results have been achieved at the same
time that taxpayer support of the Postal
Service has been ended several years
ahead of schedule.
A stronger economy that boosted
volume to 119.4 billion pieces of mail
and continued productivity gains made
major contributions to 1983's positive
results.
For mailers—both individual citizens
and large volume business mailers—
the Postal Service's ability to live
within its income means stretching the
interval between rate increases. Since it
generally takes about 10 months to put
a rate adjustment into effect, the Postal
Service must project what revenues it
will need in the future. While we had
net income for 1983 as a whole, costs
outran revenues during the final quarter
of the year. Consequently, on November
1, 1983, the Board of Governors
approved the filing of rate proposals
with the Postal Rate Commission that
would amount to an overall rate adjustment
of 15.4 percent. But thanks to the
strong financial performance of the last
two years, these rate adjustments will
not be needed until October 1984 at the
earliest. This means over three-and-ahalf
years of rate stability for most
postal rates, and a three-year period for
the First-Class letter rate. It is the longest
period between filings and the
smallest proposed rate of increase in
the basic letter rate since the Postal Service
was mandated by law to balance
its costs and revenues.
Other highlights and progress during
the year follow:
• Service was maintained at high
levels by attaining the next-day delivery
service performance goal for
stamped, First-Class Mail 96 percent of
the time. Eighty-eight percent of the
letters committed to the two-day category
and 89 percent in the three-day
category were delivered on time.
• Automated equipment was installed
in major mail processing centers
across the nation, while the Postal Service
was preparing to implement
ZIP+ 4, the expanded ZIP Code. Just
after the year ended, price incentives
for mailers who use ZIP + 4 were approved.
Automation and ZIP+ 4, the
keys to future productivity gains for
the Postal Service, are coming on-line
to restrain postal costs, improve the
consistency of mail delivery and moderate
postal rates in the years to come.
• The Postal Service was recognized
for providing a safer work place for
postal employees by being designated
to receive the President's Occupational
Safety and Health Program Award for
1982. We continued this progress in
1983 by having fewer reported accidents,
occupational injuries and illnesses
and lost-workday injuries than
in the previous year.
• We made no major, nationwide
service changes even after the end in
1983 of the public service subsidy,
which has for years supported those
postal services that are purely public
service in nature.
• Polls showed Americans to be generally
satisfied with the nation's postal
system. An April 1983 National
Tracking Study indicated 76 percent of
those questioned had a generally favorable
attitude toward the Postal Service.
Mail service ranked highest among 12
products and services in a Roper Report
"value for the dollar" survey in
July 1983.
• We made progress in the employee
involvement/quality of working life
process in 1983. Several initial field
sites were chosen with participating
unions, and work teams were trained
and are functioning in 15 locations
around the country.
• The Postal Service was cited by the
Administration on Aging for participation
in the Carrier Alert Program, a
voluntary effort in concert with the
National Association of Letter Carriers
and public service organizations. Letter
carriers watch for any unusual accumulation
of the mail of participating
elderly and handicapped persons as a
way of spotting a possible problem.
• We implemented the All Services
Campaign, which I consider to be the
most important customer service improvement
effort in the 13-year history
of the Postal Service. It aims at more
knowledgeable, courteous employees
and better informed customers, who
together can bring an improved quality
of service to the American public.
This effort at service improvement—
directed at improving good,
old-fashioned, face-to-face personal
service to the American public—is an
example of the Postal Service recognizing
unmet needs and directing our resources
to those areas. It shows, too,
that the Postal Service has evolved into
a mature, modern and responsive
agency that is a model for government
and an asset to America.
William F. Bolger
Postmaster General
January 1984
2
Volume and Work Force Trends, 1960-1983 (shown as percentage of change since 1960)
3
Postmaster General's Review
of 1983 Highlights
Deficits & Surpluses, 1977-83
1981
$588
million 1983
$616
million
1980
$306
million
1978
$379
million
1982
$802
million
Finances
Coupled with the Postal Service's net
income years of $802 million in 1982
and $470 million in 1979, 1983's positive
financial result more than balances out
year-end losses going back the last six
fiscal years. This means the Postal Service
has achieved the long-range goal
of the Postal Reorganization Act of living
within its income.
Last year's positive financial results
were made possible by a variety of external
and internal factors. Happily, the
economy's upturn gave the Postal Service
strong volume and revenue
growth. Total volume rose by 4.7 percent
to 119.4 billion pieces of mail.
Dramatically lower inflation and more
efficient operations also were big contributors
to the Postal Service's strong
performance during 1983.
The Postal Service's second consecutive
year of net income performance is
underscored by the fact that 1983 was
the first year the Postal Service received
no public service subsidy. Thus,
the Postal Service is no longer taxing
the American public with deficits or
draining away taxpayer dollars in the
form of Congressional appropriations.
By living within its income in 1983, the
Postal Service made a positive contribution
to the national goals of a balanced
federal budget, lower inflation
and rising productivity.
The past year's results flow from the
decade-long effort to mechanize postal
1977
$688
million 1979
$470
million
Deficits Surpluses
operations, manage better and more efficiently,
and maintain a good level of
service. These changes were built into
the nation's postal system by the hard
work and commitment of thousands of
postal managers and employees. They
paid off when the economy turned
sharply upward and inflation sharply
downward last year.
The surge lifted First-Class volume
by 3.3 percent over the year before,
more than double the First-Class Mail
growth rate in the prior fiscal year.
Within First-Class, presorted cards and
letters continued the strong growth
pattern of recent years. Improving
business conditions were mirrored in
the 10.9 percent rise in third-class mail
to 40.7 billion pieces. Carrier route presorted
mail volume in this class was
again a big gainer, increasing 21 percent
over the year before.
The lower rate of inflation accounted
for lower costs for the Postal Service
during 1983 in a number of important
areas. It led to a labor cost avoidance of
$210 million, substantially below what
had been projected, while fuel and energy
costs were $21 million under projections.
Labor costs, by far the largest
segment of postal costs, are quite sensitive
to inflationary pressures since
most postal employees receive cost-ofliving
allowances related to the Consumer
Price Index.
Some new costs were absorbed by
the Postal Service in the fiscal year. The
Postal Service began paying the employer's
contribution for newly extended
Medicare coverage for its
employees. In addition, the five-cent-agallon
excise tax orr gasoline, and the
extension of the Airport and Airway
Development Tax on freight had cost
impacts on the budget.
As it has since 1977, the Postal Service
was able to pay for all capital investments,
totaling $600 million, out of
current income. In addition, it made
scheduled debt repayments of $67 million
and avoided any new debt obligations.
_____________________________
4
Productivity
The Postal Service's productivity
grew again in 1983. For the ninth year
in a row Postal Service gross productivity
registered a gain—up 3.4 percent—
and this key to cost control contributed
to the financially successful year. Calculated
by dividing total work years
into total volume, the amount of mail
processed per work year rose from
167,650 pieces in fiscal 1982 to an alltime
high of 173,320 in fiscal 1983.
Since the last year of the Post Office
Department in 1970, volume has risen
40.6 percent while our work force has
declined by 8.4 percent, resulting in a
48.2 percent increase in the Postal Service's
gross productivity in 13 years.
Compared to 1970—the last year prior
to reorganization—the Postal Service is
now delivering 34.5 billion additional
pieces of mail to 18 million additional
addresses.
The Postal Service's productivity record
in 1983 again outpaced productivity
advances in the private, nonfinancial
sector of the economy. Postal
Service gains have exceeded those in
the private sector nine of the last 13
years.
Productivity is not some dry figure
of measurement, but has real significance
to the American consumer. Because
of streamlined operations, modernization
and overhaul of the nation's
postal system, the U.S. productivity
rate exceeds that of any foreign postal
system, while the postage rates are
among the lowest of any industrialized
nation. (See chart on page 9.)
5
1973 74 75 76 77 78 79 80 81 82 83
Automation
Increasing productivity has been the
underpinning of the Postal Service's
steady climb from a deficit-ridden operation
to one that is financially secure.
It also is the key to keeping postal rates
down in the future and remaining economically
viable in an increasingly
competitive communications market. If
better management mechanization
and Presort lie behind the productivity
advances of the last 13 years, automation
and ZIP+ 4 will be keys to productivity
gains in the future.
During the year, 96 optical character
reader/channel sorters were installed in
58 major mail processing centers across
the nation, while 156 bar code sorters
are now in place in 62 sites. By the end
of 1984 the Postal Service expects to
have 252 OCRs and 248 BCRs in its 118
largest facilities, which handle 75 percent
of all outgoing and 68 percent of
all incoming mail. A second phase of
equipment deliveries beginning in 1985
will expand the network to 211 locations.
The Postal Service's automation effort
is one of enormous size and scope,
and some temporary problems and adjustments
were experienced. But initial
equipment problems have been corrected
by the manufacturers, and the
machines now consistently pass acceptance
tests. Results of extended performance
tests of the optical character
readers, recommended by the General
Accounting Office in its examination of
the automation and ZIP + 4 program,
indicate the equipment will perform up
to expectations. As GAO noted, the
problems that have surfaced are surmountable.
They are being solved successfully.
The General Accounting Office had
several suggestions to broaden assistance
to mailers and to provide more information
to them on the ZIP+ 4 program.
The Governors of the Postal
6
Service approved a two-tiered system
of price incentives effective October 9,
1983 for mailers who use ZIP + 4, and
the Congressional moratorium on
ZIP + 4 implementation expired as the
fiscal year ended. The equipment is
being installed in post offices around
the nation; the incentives are in place,
and the Postal Service is actively working
with business mailers—banks, retailers,
savings and loan companies,
credit unions, credit card companies,
insurance companies and utilities, to
name a few—to help them see the
bottom-line benefits ZIP + 4 can have
for their businesses. An estimated 47
billion pieces of First-Class Mail are
currently machinable and potentially
OCR-readable. The Postal Service looks
forward to 1984 as the year automation
and ZIP + 4 will begin to yield significant
economies for mailers, the Postal
Service and all users of the postal system.
While the movement to automation
was a high priority for the Postal Service
in 1983, efforts to increase mechanization
also went forward. The delivery
of 147 multi-position flats sorters
was made in 1983 to 88 facilities. By
mid-1984 the schedule calls for 236 of
these machines to be installed at 125 facilities.
This equipment will allow for
the mechanization of the processing of
large envelopes and magazines, traditionally
a manual operation. Flats sorters
now in operation have achieved a
national average productivity of 857
pieces per work hour, compared to 550
pieces per work hour using manual
methods.
Mail Volume, 1973-1983 120
1973 74 75 76 77 78 79 80 81 82 83
7
Performance
During the first half of fiscal year
1983, the Postal Service attained the 95
percent next-day delivery service performance
goal for stamped First-Class
Mail traveling within local or metropolitan
areas. During the second half of
the year, the next-day goal was
achieved 96 percent of the time. The
overall annual performance was 96 percent.
In the two-day category, performance
for 1983 matched 1982 at 88 percent,
while in the three-day category,
performance declined one percentage
point from 1982 to 89 percent.
Fifty-six percent of stamped First-
Class Mail falls into the overnight delivery
category, as determined by the
distance it must travel. In fiscal 1983, 65
percent of all stamped First-Class Mail
reached its destination overnight,
meaning that a substantial amount of
mail in the two-day delivery area was,
in fact, delivered the next day.
Customers' attitudes toward the
Postal Service, as measured by semiannual
polling, remained positive during
the year. An April 1983 National
Tracking Study indicated 76 percent of
those questioned had a generally favorable
attitude toward the nation's postal
system. This was noteworthy because
it occurred during a time of media
attention to a possible postal rate
increase.
The Roper Report asked the American
public what "value for the dollar"
it gets from a list of 12 products and
services, which included hospital care,
telephone service, electricity, mail service
and eight others. The report, released
in July 1983, said the Postal Service
was rated the best value; 56
percent of those polled rated mail service
as a good to excellent value; only
12 percent rated it a poor value.
Local delivery (overnight)
■ Delivery within 600-mile radius (two days)
H Cross-country delivery (three days)
8
Customer Programs
A major new thrust in 1983 was the
shaping of the All Services Campaign,
which began as the fiscal year was near
its close. Through the campaign, the
Postal Service acknowledges it must
pay more attention to the needs of its
individual customers. Several outside
studies have made this point, most notably
the National Academy of Public
Administration report in July 1982. The
Postal Service's own surveys showed
some customers were unhappy with
inconsistent delivery service, long lines
in lobbies and depersonalized, sometimes
even rude service.
The All Services effort approaches
these problems from two tacks. Internally,
postal managers are making certain
postal employees are familiar with
the full range of postal services, to enable
employees to be knowledgeable,
courteous and helpful to customers.
Externally, a series of monthly, educational
advertisements tell the general
public about basic postal services, encouraging
understanding and proper
use of these services.
Express Mail posted another solid
year of growth in 1983. Volume increased
over 1982 by 29.4 percent while
revenues went up 24.5 percent. This
record kept Express Mail the secondranking
overnight service by volume.
Internationally, the network added
nine new countries during the year
bringing the number of foreign countries
served by the Express Mail network
to 29.
An area showing solid service improvement
during the year was Bulk
Business Mail, the new name for regular
second, third and fourth-class mail.
Rates for First Unit of Domestic Letter Postage
Nation National Currency U.S. Currency"
Norway 2.50 krona 34.1 cents
Federal Republic of Germany .80 mark 30.4 cents
Canada .32 C$ 25.6 cents
Japan 60.00 yen 25.5 cents
Italy 400.00 lira 25.1 cents
Australia .27 A$ 24.2 cents
United Kingdom .16 pound 23.9 cents
Netherlands .70 guilder 23.8 cents
Sweden 1.80 krona 23.1 cents
France 1.80 franc 22.5 cents
Austria 4.00 schilling 21.6 cents
Belgium 11.00 B. franc 20.6 cents
United States .20 US$ 20.0 cents
Switzerland .40 S. franc 18.9 cents
★Foreign exchange rates prevailing September 30, 1983,
as reported in the Washington Post, October 1, 1983.
Bulk Business Mail accounts for approximately
40 percent of total mail volume,
with third-class representing a
large proportion of total volume
growth in recent years. Due to a number
of processing and delivery operations
improvements, both internal and
external tests during 1983 showed a
significant improvement in the delivery
of this mail.
E-COM, the Postal Service's
computer-originated service offered in
cooperation with the telecommunications
industry, grew in 1983 to 15.3 million
pieces. While the volume growth
in this new service has not been as
strong as anticipated, it has been
steady. As the fiscal year ended, the
customer base for E-COM was expanding—
528 customers were certified to
use E-COM and another 1,350 were
awaiting certification.
In residential growth areas, the
trend is toward centralized delivery
through the use of neighborhood delivery
and collection box units, delivery
centers, apartment house receptacles,
mail rooms and grouped mailboxes. In
1983, approximately 1.2 million deliveries
were incorporated into central
delivery, representing an annual savings
of $31.2 million over comparable
door-to-door service. Centralized deliveries
increased to approximately 19.2
million or 22 percent of total deliveries
in 1983.
Carrier Alert became another way in
which the Postal Service, in concert
with the National Association of Letter
Carriers and several social service organizations,
expanded its public service
role in 1983. This voluntary program
has letter carriers alerted to the
build-up of mail of elderly and handicapped
persons on their routes. If there
is an unexplained accumulation, a participating
social service agency is contacted
to check on the customer. This
program has been credited with saving
lives, generating good will and giving
peace of mind to many persons. The
Commission on Aging of the Health
and Human Services Department has
cited the Postal Service for its role in
Carrier Alert.
Employee Programs
The overall safety record of the
Postal Service in 1983 showed improvement
over the previous year's record.
In 1982, there were 69,127 accidents,
56,526 occupational injuries and illnesses,
and 25,474 lost-workday injuries.
During 1983, there were 56,239 accidents,
50,919 occupational injuries
and illnesses and 22,004 lost-workday
injuries. These figures represent a 19
percent reduction in accidents, a 10
percent reduction in occupational injuries
and illnesses, and a 14 percent reduction
in lost-workday injuries. Also,
motor vehicle accidents decreased from
6,362 to 5,843 accidents, for an eight
percent reduction.
The progress in providing a safer
work place for postal employees was
acknowledged by the Department of
Labor, which informed the Postal Service
it would receive the President's
Occupational Safety and Health Program
Award for 1982. The award is
presented to the departments or agencies
of the federal government that
show the best records of program effectiveness
in the promotion of occupational
safety and health. For award
purposes, agencies are placed in three
categories based on the agency's size,
number of employees, and its safety
and health record as reflected in incidence
rates and Workers' Compensation
charge-back costs. The Postal Service
won the award for category I, the
largest federal agencies.
Another measure of the success of
the Postal Service's safety and health
program is the fact that, for 1983, the
amount paid the Department of Labor
for Workers' Compensation for
the first time was less than the previous
year. While Workers' Compensation
costs remain a problem for the
Postal Service, the trend is positive.
This may be an indication that the rehabilitation
program for postal employees,
who are receiving compensation
for job-related injuries and illnesses, is
bearing fruit. Since 1979, 2,148 postal
employees have been returned to work
under the program, saving an estimated
$39 million per year.
The employee involvement/quality
of working life process continued during
the year. A conference of Postal
Service officers in January 1983 led to
improved understanding of employee
involvement and quality of working life
concepts and the development of strategies
to implement the process. A
series of regional meetings followed
throughout the year to familiarize
postal managers with the process. Several
sites have been selected for joint
implementation with the participating
unions, the Rural Letter Carriers' Association,
the National Association of Letter
Carriers and the National Post Office
Mail Handlers Union. Work teams
are functioning in 15 cities across the
nation. The goal of the process is to increase
employees' involvement in identifying
and solving problems in the
work place, thereby improving the
quality of working life and enhancing
the effectiveness of the Postal Service.
10
Financial Statements
Financial Statements
Balance Sheets
United States Postal Service Sept. 30, 1983 Sept. 30, 1982
Assets (dollars in thousands)
Current assets
Cash..............................................................................................................................................
U.S. Government securities, at amortized cost which approximates market................
Receivables
U.S. Government...................................................................................................................
Foreign countries...................................................................................................................
Accrued interest.....................................................................................................................
Other..........................................................................................................................................
Less allowances.......................................................................................................................
Supplies, advances and prepayments...................................................................................
Total current assets........................................................................................................................
$ 241,937
2,277,641
152,100
213,007
57,224
49,978
472,309
16,624
455,685
257,772
3,233,035
$ 222,167
2,626,948
163,765
9,346
53,193
39,070
265,374
14,070
251,304
252,179
3,352,598
Other assets—Note 5................................................................................................................... 21,313 18,275
Property and equipment—Note 5
Land.................................................................................................................... ........................ 523,939 493,981
Buildings............................................................................................................ ........................ 3,773,870 3,509,691
Equipment.......................................................................................................... ........................ 2,459,618 2,243,884
6,757,427 6,247,556
Less allowances for depreciation................................................................... ........................ 2,295,503 2,115,879
4,461,924 4,131,677
Construction in progress............................................................................... ........................ 480,043 495,880
Leasehold improvements, net of amortization.......................................... ........................ 114,264 112,186
5,056,231 4,739,743
Deferred retirement costs—Note 4................................................................... ........................ 12,553,273 11,695,888
$20,863,852 $19,806,504
See notes to financial statements.
12
Sept. 30, 1983 Sept. 30, 1982
Liabilities and equity (deficiency) in assets (dollars in thousands)
Current liabilities
, Outstanding postal money orders.......................................................................... .......... $ 224,736 $ 202,826
Compensation and employees' benefits................................................................ .......... 1,282,029 1,117,895
Amounts payable to other U.S. Government agencies........................................ .......... 162,427 149,479
Other accounts payable and accrued expenses.................................................... .......... 726,991 1,113,157
Deferred revenue......................................................................................................... .......... 433,940 387,462
Estimated prepaid postage......................................................................................... .......... 850,000 775,000
Current portion of long-term debt.......................................................................... .......... 73,000 73,000
Total current liabilities..................................................................................................... .......... 3,753,123 3,818,819
Long-term debt, less current portion—Note 5........................................................ .......... 1,390,855 1,462,873
Other liabilities
Amounts payable for retirement benefits—Note 4.............................................. .......... 12,292,479 11,487,097
Employees' accumulated leave—Note 6................................................................ .......... 692,625 661,861
Workers' Compensation claims—Note 2.............................................................. .......... 2,603,000 2,861,000
Other............................................................................................................................. .......... 20,000 20,000
15,608,104 15,029,958
Equity (deficiency) in assets
Capital contributions of U.S. Government—Note 6............................................ .......... 2,961,588 2,960,998
Deficit from operations since commencement on July 1, 1971.......................... .......... ( 2,849,818) ( 3,466,144)
Commitments and contingencies—Notes 4, 6, 7 and 8..........................................
111,770 ( 505,146)
$20,863,852 $19,806,504
See notes to financial statements.
13
Statements of Operations and Changes in Deficiency in Assets
United States Postal Service
Year Ended
Sept. 30, 1983
Year Ended
Sept. 30, 1982
(dollars in thousands)
Operating revenue..................................................................................................................... $23,581,667 $22,599,937
Operating appropriations
For public service costs............................................................................................... .......... 0 12,140
For revenue forgone for certain classes of mail.................................................... .......... 789,000 694,670
789,000 706,810
24,370,667 23,306,747
Operating expenses
Compensation and employees' benefits................................................................ .......... 20,070,241 19,094,495
Other.............................................................................................................................. .......... 4,012,832 3,731,722
24,083,073 22,826,217
Income from operations................................................................................................. .......... 287,594 480,530
Interest income................................................................................................................. .......... 418,584 420,118
706,178 900,648
Interest expense............................................................................................................... .......... 89,852 99,072
Net income........................................................................................................................ .......... 616,326 801,576
Deficiency in assets at beginning of year.................................................................. .......... ( 505,146) ( 1,306,700)
Contributions (withdrawals) by U.S. Government.................................................. .......... 590 (________ 22)
Equity (deficiency) in assets at end of year................................................................ .......... $ 111,770 ($ 505,146)
See notes to financial statements.
14
Statements of Changes in Financial Position
United States Postal Service
Sources of working capital
From operations
Net income...............................................................................................................................
Charges (credits) to operations not requiring current outlays of working capital
Depreciation and amortization.....................................................................................
Provision for noncurrent Workers' Compensation claims..........................................
Amortization of deferred retirement costs....................................................................
Increase in employees' accumulated leave....................................................................
Total sources from operations...................................................................................................
Increase in noncurrent amounts payable for retirement benefits....................................
Proceeds of long-term debt.......................................................................................................
Capital restored/transfers by U.S. Government..................................................................
Total sources.................................................................................................................................
Uses of working capital
Additions to deferred retirement costs...................................................................................
Reduction of long-term debt.....................................................................................................
Additions to property and equipment, net..........................................................................
Increase in other assets.............................................................................................................
Capital withdrawals by U.S. Government...............................................................................
Total uses........................................................................................................................................
Increase (decrease) in working capital.....................................................................................
Changes in components of working capital
Increase (decrease) in current assets
Cash and U.S. Government securities.................................................................................
Receivables................................................................................................................................
Supplies, advances and prepayments.................................................................................
Increase (decrease) in current liabilities
Outstanding postal money orders...................................................................................
Compensation and employees' benefits.............................................................................
Amounts payable to other U.S. Government agencies....................................................
Other accounts payable and accrued expenses.................................................................
Deferred revenue......................................................................................................................
Estimated prepaid postage.....................................................................................................
Increase (decrease) in working capital.....................................................................................
Year Ended Year Ended
Sept. 30, 1983 Sept. 30, 1982
(dollars in thousands)
$ 616,326 $ 801,576
283,674 276,469
( 258,000) 51,000
349,109 338,435
30,764 33,383
1,021,873 1,500,863
805,382 1,442,811
— 1,516
590 —
1,827,845 2,945,190
1,206,494 1,825,052
72,018 73,294
600,162 435,755
3,038 5,313
— 22
1,881,712 2,339,436
($ 53,867) $ 605,754
($ 329,537) $ 652,410
204,381 42,338
5,593 ( 26,576)
( 119,563) 668,172
21,910 1,209
164,134 ( 25,422)
12,948 6,748
( 386,166) 16,776
46,478 58,107
75,000 5,000
(_ 65,696) 62,418
(£ 53,867) $ 605,754
See notes to financial statements.
15
Notes to Financial Statements
United States Postal Service
Note 1
Postal Reorganization and Accounting
Policies
The United States Postal Service
commenced operations on July 1, 1971,
in accordance with the provisions of
the Postal Reorganization Act. Its initial
capital consisted of the equity of the
Government of the United States in the
former Post Office Department, with
assets carried at original cost less depreciation.
All liabilities attributable to
operations of the former Post Office
Department remained liabilities of the
U.S. Government, except that the
unexpended balances of appropriations
made to, held or used by, or available to
the former Post Office Department and
all liabilities chargeable thereto became
assets and liabilities, respectively, of
the Postal Service.
Property and equipment are stated at
cost. Repairs and maintenance costs
which do not materially extend the life
of assets are expensed as incurred.
Buildings and equipment are depreciated
over their estimated useful lives
on a straight-line basis. Leasehold improvements
are amortized over the
lesser of the lease period or their useful
life.
Lump-sum annual payments resulting
from contracts with bargaining
unit employees are deferred and amortized
to expense over the contract year
as services are rendered or over the
contract period.
Research and development costs, relating
primarily to new equipment design
and amounting to approximately
$36,000,000 in fiscal year 1983 and
$34,000,000 in fiscal year 1982, are expensed
as incurred.
Workers' Compensation costs are recorded
as an operating expense in the
year of injury at the net discounted
present value of the total estimated
costs of claims based upon estimates of
the length of time claims will be paid
depending upon severity of injury, age,
assumed mortality, and other factors.
Estimated prepaid postage represents
the estimated amount of revenue
collected prior to the end of the year
for which services will be performed in
the following year.
The accompanying financial statements
reflect the Postal Service's legal
obligation to the Civil Service Retirement
and Disability Fund arising from
increases in basic pay as a liability in
an amount equal to the present value
of the equal annual installments due to
the Fund and payable over a 30-year
time period. Amounts applicable to operations
of future years are charged to
deferred retirement costs. Amounts
charged to operating expense each year
are approximately equivalent to
amounts funded.
Note 2
Workers' Compensation
The Postal Service's Workers' Compensation
program is administered by
the Department of Labor. At the end of
each fiscal year, the Postal Service determines
the liability for Workers' Compensation
claims based, in part, on experience
trends determined from data
provided by the Department of Labor.
The Workers' Compensation expense
included in operating expenses consists
of three components: the cost of
current year claims; the 214 percent net
discount factor applied to the longterm
liability for Workers' Compensation
claims; and the revaluation of
prior years' claims using more recent
experience trends. As explained below,
no adjustment was made in fiscal year
1982 for the revaluation of prior years'
claims.
In fiscal year 1982, there was an unexplained
significant decline in the
number of active compensation cases
reported to the Postal Service by the
Department of Labor. Due to the inaccessibility
of the data maintained by
the Department of Labor, the Postal
Service was unable to evaluate the potential
that these cases would become
16
active in the future. Accordingly, the
Board of Governors at its January 6,
1983 meeting determined that the
Postal Service should not reflect a revaluation
of prior years' claims in the
fiscal year 1982 financial statements.
Had the Postal Service been able to obtain
additional data from the Department
of Labor, an adjustment reflecting
such revaluation might have been required
to present the liability for Workers'
Compensation claims at September
30, 1982 and Workers' Compensation
expense for the year then ended in
conformity with generally accepted accounting
principles.
In fiscal year 1983, the number of active
cases continued to decline and the
Postal Service, in conjunction with the
Department of Labor, performed a review
of 1982 and 1983 claims data and
an examination of selected claims terminated
in fiscal years 1982 and 1983.
The results of these reviews and the
continued decline of cases in fiscal year
1983 indicated, for the most part, that
the Department of Labor data were reliable
and accordingly, a revaluation
credit of $286,000,000 has been included
in the fiscal year 1983 estimation
of liability and expense.
Under the Postal Reorganization Act,
all payments made by the Department
of Labor for injuries experienced prior
to July 1, 1971 remain liabilities of the
U.S. Government to be funded by appropriations.
As discussed in Note 3,
appropriations to fund these amounts
for fiscal years 1982, 1983 and 1984 may
be requested by the Postal Service in
fiscal year 1985. In the interim, the
Postal Service must fund these
amounts. Due to the uncertainty of receiving
an appropriation for these
amounts, approximately $40,000,000 for
fiscal year 1983 and $38,000,000 for fiscal
year 1982 was paid and expensed
by the Postal Service.
Note 3
Operating Appropriations
The Postal Reorganization Act appropriated
to the Postal Service all revenue
received by it and, additionally, authorized
certain amounts to be appropriated
"for public service costs incurred
by it in providing a maximum degree
of effective and regular postal service
nationwide." This appropriation was to
continue on a declining basis through
fiscal year 1984. After fiscal year 1984,
the Postal Service could reduce the
amount authorized to be appropriated
if it found the amounts so determined
were no longer required to operate in
accordance with the policies of the Act.
Further, the Act authorized to be appropriated
each year a sum determined
by the Postal Service to be equal to revenue
forgone by it in providing certain
mail services free or at reduced rates.
The Omnibus Budget Reconciliation
Act of 1981 amended the Postal Reorganization
Act, further reducing the
public service appropriations for fiscal
years 1982 and 1983, and eliminating
the appropriation for fiscal year 1984.
Revenue forgone appropriations were
also reduced. This Act also deferred
until fiscal year 1985 the fiscal year
1982, 1983, and 1984 authorizations for
transitional appropriations covering
Post Office Department liabilities for
annual leave, as described in Note 6,
and for payments made by the Department
of Labor for injuries experienced
prior to July 1, 1971, as described in
Note 2, while requiring the Postal Service
to fund these expenses in the
interim.
Operating appropriations received
during fiscal years 1983 and 1982
totaled $789,000,000 and $706,810,000,
respectively, including appropriations
of $211,000,000 and $166,000,000, respectively,
to offset the effect of Congress
extending the period of phasing
rates of certain classes of mail. No public
service subsidy was received in fiscal
year 1983 and $12,140,000 was received
in fiscal year 1982.
17
Note 4
Retirement Program
The Postal Reorganization Act provides
that officers and career employees
of the Postal Service shall be covered
by the Civil Service Retirement
Program and the Postal Service shall
withhold from pay and shall pay to the
Civil Service Retirement and Disability
Fund the amounts specified by such
program. The Postal Service and its
employees each contributes seven percent
of basic annual salary to the Fund.
In addition, unlike most government
agencies, the Postal Service is liable for
that portion of any estimated increase
in the unfunded liability of the Civil
Service Retirement and Disability Fund
which is attributable to Postal Service
employee-management agreements
which authorize increases in pay on
which benefits payable from the Fund
are computed. The estimated increase
in the unfunded liability as determined
by the Office of Personnel Management
is to be paid by the Postal Service
in 30 equal annual installments with interest
computed at the rate used in the
most recent valuation of the Civil Service
Retirement System (currently five
percent), with the first payment thereof
due at the end of the fiscal year in
which an increase in pay becomes
effective.
As part of certain Postal Service
employee-management agreements
(generally effective as of July 21, 1981),
general increases in basic annual salary
upon which retirement annuities are
computed resulted in additional annual
payments to the Civil Service Retirement
and Disability Fund. In addition,
cost-of-living increases (COLAs), resulting
from prior agreements, become
part of basic annual salary in two
phases. For those employees who so
elected and who were eligible for optional
retirement at July 21, 1981, or
who become eligible by July 21, 1987,
the addition occurred in November
1981. For other employees, the addition
is currently scheduled to occur in October
1984. The increased annual unfunded
liability payments of the
November 1981 addition were approximately
$109,000,000. The October 1984
addition to the annual payments is expected
to approximate $148,000,000.
The total increase in the annual payment
that resulted from increases in
basic pay was approximately
$28,000,000 and $160,000,000 for fiscal
years 1983 and 1982, respectively.
In fiscal year 1982, the Office of Personnel
Management (OPM) informed
Fiscal Year
1984
1985
1986
1987
1988
Thereafter
Less amount representing interest and the
portion classified as a current liability
Aggregate retirement costs for fiscal
years 1983 and 1982 were $1,863,600,000
and $1,720,000,000, respectively, including
$976,600,000 and $852,500,000 attributable
to amortization of deferred
retirement costs and interest on the unfunded
liability.
the Postal Service that COLAs automatically
are now considered by OPM to
be part of basic annual salary for the
purposes of contributions to the retirement
Fund. The Postal Service contends
that COLAs are "allowances” or
"pay given in addition to the base pay
fixed by law or regulation" and therefore
are not part of basic annual salary
unless agreed to as such by employeemanagement
agreements. If OPM's
position were to prevail, the Postal Service
would be responsible for immediate
additional contributions relating to
all COLA increases granted to date that
have not yet been included in basic annual
salary. In the opinion of management
and General Counsel, the likelihood
of OPM's position prevailing is
remote.
The estimated future minimum annual
payments required to fund the
unfunded liability associated with
amounts payable for retirement benefits
at September 30, 1983 are as follows:
Amount
$ 917,339,000
917,339,000
917,339,000
917,339,000
917,339,000
17,202,059,000
21,788,754,000
9,496,275,000
$12,292,479,000
18
Note 5
Long-Term Debt and Interest Costs
The Postal Reorganization Act
authorizes the Postal Service to issue
and sell obligations not to exceed
$10,000,000,000 outstanding at any one
time. The net increase outstanding in
any one year shall not exceed
$1,500,000,000 for capital improvements
and $500,000,000 for operating
expenses. Such obligations shall not be
obligations of the U.S. Government unless
the Secretary of the Treasury, upon
request of the Postal Service, determines
that it would be in the public interest
to pledge the full faith and credit
of the Government of the United
States.
Long-term debt consists of the following:
Sept. 30, 1983 Sept. 30, 1982
6%% Postal Service Bonds, Series A,
due February 1, 1997 $ 250,000,000 $ 250,000,000
Notes payable to Federal Financing Bank
8.20% payable $20,000,000 each May 30
with balance due May 30, 1985 340,000,000 360,000,000
8.075% payable $32,000,000 each year
to May 30, 2000 544,000,000 576,000,000
7.80% payable $15,000,000 each year to
May 30, 2001 270,000,000 285,000,000
Mortgage notes payable monthly including
interest of 4% to 12% maturing from fiscal
years 1984 through 2009 secured by land
and buildings with a carrying amount of
approximately $128,000,000 (aggregate annual
installments approximate $6,000,000) 59,855,000 64,873,000
Less current portion
1,463,855,000
73,000,000
1,535,873,000
73,000,000
$1,390,855,000 $1,462,873,000
The 6% percent Postal Service
Bonds, Series A, were issued under a
Trust Indenture dated February 1,
1972, and are secured by a first lien on
the revenue, income, fees, rents, appropriations,
and other receipts of the
Postal Service; the proceeds of all obligations
issued by the Postal Service;
and all sinking and improvement
funds established pursuant to the Indenture.
On July 31 of each year, the
Postal Service is required to deposit in
a sinking and improvement fund the
sum of $10,000,000 either in cash or reacquired
Series A Bonds. The Trust Indenture
further provides, however,
that, at the option of the Postal Service,
such sinking fund requirements may
be applied to the payment of costs of
capital additions or improvements to
properties of the Postal Service. Since
the commencement of the sinking fund
in 1978, the Postal Service has applied
$48,100,000 to the construction of mail
facilities. The balance of the sinking
fund ($11,900,000—1983, $10,000,000—
1982) is classified with other assets in
the accompanying balance sheet. The
bonds are redeemable prior to maturity,
at the option of the Postal Service,
on or after February 1, 1982, at the
principal amount plus accrued interest.
At September 30, 1983, the maturities
of long-term debt, including sinking
fund requirements, are as follows:
(■■■■■■■KB!
Year Amount
1984 $ 83,000,000
1985 383,000,000
1986 63,000,000
1987 63,000,000
1988 63,000,000
Thereafter 938,855,000
$1,593,855,000
Total interest costs incurred during
fiscal years 1983 and 1982 were
$117,037,000 and $122,722,000, respectively,
of which $27,185,000 and
$23,650,000, respectively, were capitalized
as part of the cost of newly constructed
property and equipment.
19
Note 6
Accumulated Leave
Employees are permitted to accumulate
certain unused annual leave which
is payable when taken, upon severance
of employment, or upon retirement.
The former Post Office Department accrued
such accumulated annual leave
and, at July 1, 1971, the liability was recorded
on the books of the Postal Service.
In the opinion of General Counsel,
the U.S. Government is primarily
liable on the obligation. However, General
Counsel believes that the Postal
Service can appropriately be viewed as
being secondarily liable for the accrued
annual leave and could be held to
make payment thereof if Congress fails
to appropriate funds. For fiscal years
1972 through 1981, the Postal Service
was appropriated funds to cover onetwelfth
of the annual leave liability
carried forward at July 1, 1971. As discussed
in Note 3, the Omnibus Budget
Reconciliation Act of 1981 deferred until
fiscal year 1985, the fiscal years 1982,
1983, and 1984 authorizations for transitional
appropriations of annual leave
and therefore no amount was accrued
at September 30, 1981, September 30,
1982 and September 30, 1983.
Employees are permitted to accumulate
unused sick leave but such
amounts are not vested; therefore, sick
leave is expensed when paid.
Note 7
Commitments
At September 30, 1983, the estimated
cost to complete approved Postal Ser1983
1982
Noncancelable real estate leases, including
related taxes (1983—530,500,000; 1982—
$29,700,000) $291,000,000 $264,300,000
Facilities leased from GSA subject to 30-
day notice of cancellation 31,000,000 29,600,000
Equipment and other short-term rentals 56,500,000
$378,500,000
33,000,000
$326,900,000
At September 30, 1983, the future
minimum rentals for all noncancelable
leases approximated the following:
■■■■■■■■■■■■■■■■■■■■■■■■■
Year
■■■■■■■■■■■■■■■■■
Amount
1984 $ 245,000,000
1985 229,000,000
1986 203,000,000
1987 162,000,000
1988 129,000,000
Thereafter 570,000,000
$1,538,000,000
Most of these leases contain renewal
options for periods ranging from three
to 20 years. Certain noncancelable real
estate leases have options to purchase
the facilities at prices specified in the
leases.
vice capital projects was approximately
$530,000,000.
Total rental expense for the years
ended September 30, 1983 and 1982 is
summarized as follows:
20
Note 8
Contingencies
Contingencies at September 30, 1982
affecting the Postal Service's ratesetting
procedures were resolved during
the year ended September 30, 1983
on a favorable basis to the Postal Service.
The appeal process concerning a
conditional Settlement Agreement for
cases filed against the Postal Service
under the Fair Labor Standards Act
was completed during fiscal year 1983
and the Settlement Agreement was
upheld.
As explained in Note 4, there are disputes
between the Office of Personnel
Management (OPM) and the Postal Service
pertaining to the inclusion of costof-
living adjustments as part of basic
annual salary for purposes of determining
contributions to the Civil Service
Retirement Fund. In the opinion of
management and General Counsel, the
likelihood of OPM's position prevailing
is remote.
Several equal employment opportunity
class action lawsuits are pending
against the Postal Service. Although
the Postal Service believes it has good
defenses in these suits, the final outcome
and the ultimate liability, if any,
cannot be predicted at this time.
In addition, there are certain pending
suits and claims resulting from traffic
accidents involving postal vehicles
and injuries on postal properties, suits
involving personal claims, and suits
and claims arising out of postal contracts.
In the opinion of management and
General Counsel, adequate provision
has been made for amounts which may
become due under the suits, claims,
and proceedings discussed in the preceding
paragraphs, and the likelihood
of the aggregate final settlement of the
above suits, claims, and proceedings
having a material effect on the accompanying
financial statements is remote.
21
Report of Independent Accountants
Board of Governors
United States Postal Service
We have examined the balance sheet
of the United States Postal Service at
September 30, 1983, and the related
statements of operations and changes
in equity (deficiency) in assets and
changes in financial position for the
year then ended. Our examination was
made in accordance with generally accepted
auditing standards and, accordingly,
included such tests of the accounting
records and such other
auditing procedures as we considered
necessary in the circumstances. The financial
statements of the United States
Postal Service for the year ended September
30, 1982 were examined by
other auditors whose report, dated November
12, 1982 (January 6, 1983, as to
Note 2—Workers' Compensation) on
those statements contained a qualification
with respect to a limitation on the
scope of their examination, related to
the revaluation of prior years' claims
for Workers' Compensation expense,
as discussed in Note 2 to the financial
statements.
In our opinion, the statements mentioned
above present fairly the financial
position of the United States Postal Service
at September 30, 1983, and the results
of operations and changes in financial
position for the year then
ended, in conformity with generally accepted
accounting principles applied
on a basis consistent with that of the
preceding year.
Arthur Young & Company
Washington, D.C.
November 15, 1983
22
Financial and Operating Statistics
Analysis of Expenses
Fiscal Year 1983
Financial Operations
■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■I
Source of Income Millions of Dollars
Mail revenue
Postage $21,802.2
Federal government payments 913.2 $22,715.4
Special services 866.3
Government appropriations
Public service costs 0
Revenue forgone subsidy for free
and reduced rate mail 789.0 789.0
Other income, net 328.7
Total income 24,699.4
Total operating expenses 24,083.1
Net income $ 616.3
24
Revenue Forgone Subsidy’
Fiscal Year 1983
★Revenue forgone is that revenue given up or
"forgone" by the Postal Service as a result of providing
mail service at a reduced rate. This revenue
loss, which is the difference between the reduced
rate and the otherwise applicable rate, is
given to the Postal Service by an annual appropriation
of Congress, as specified in the 1970
Postal Reorganization Act.
Class of Service
(dollars in millions)
Total Income
of Service
Income from
Revenues
Income from
Subsidy
Subsidy as %
of Income
First-Class Mail $14,255.4 $14,255.4 none none
Priority Mail 848.8 848.8 none none
Express Mail 422.3 422.3 none none
Mailgram 13.8 13.8 none none
Second-Class Mail**
Within-the-county $ 89.7 $ 43.6 $ 46.1 51.4
Outside-the-county
Nonprofit publications 225.4 123.2 102.2 45.3
Classroom publications 9.2 2.6 6.6 71.7
Regular-rate publications 809.8 770.9 38.9 4.8
Fees 7.0 7.0 none none
Transient mail 11.1 11.1 none none
Total Second-Class Mail $ 1,152.2 $ 958.4 $ 193.8 16.8
Third-Class Mail
Single-piece rate $ 157.2 $ 157.2 none none
Regular bulk rate 3,039.2 3,039.2 none none
Nonprofit bulk rate 966.0 442.9 $ 523.1 54.2
Fees 37.5 37.5 none none
Total Third-Class Mail $ 4,199.9 $ 3,676.8 $ 523.1 12.5
Fourth-Class Mail
Parcels (zone rate) $ 411.0 $ 411.0 none none
Pound printed matter 89.5 89.5 none none
Special-rate matter 205.5 205.5 none none
Library materials 77.8 43.8 $ 34.0 43.7
Fees _____ 3.3 _____ 3.3 none none
Total Fourth-Class Mail $ 787.1 $ 753.1 $ 34.0 4.3
U.S. Government (franked
and penalty) mail $ 913.2 $ 913.2 none none
Free mail for the blind and
handicapped 20.5 none $ 20.5 100.0
International mail 873.6 873.6 none none
Totals $23,486.8 $22,715.4 $ 771.4 3.3
Adjustment for prior years 17.6
Total $ 789.0
★★Includes the category identified as controlled
circulation prior to March 22, 1981.
25
Analysis of Mail Volume
Fiscal Year 1983
Composition of Mail
Fourth-Class .5%
Penalty and franked 2.8%
International .8%
All other .3%
Pieces of Mail
Mail Classification
(in billions)
Percent
1983 1982 Change
First-Class 64.25 62.20 3.3
Second-Class 9.22 9.53 -3.2
Third-Class 40.73 36.72 10.9
Fourth-Class 0.57 0.60 -4.9
Penalty and franked 3.32 3.72 -10.6
International 0.91 0.93 -2.4
All other 0.38 0.35 6.5
Total mail 119.38 114.05 4.7
26
Financial History Summary
1983 1982 1981 1980 1979
Statement of Operations (dollars in thousands)
Operating revenues $23,581,667 $22,599,937 $19,133,041 $17,142,760 $16,106,085
Public service appropriation* 0 12,140 486,000 828,000 920,000
Revenue forgone appropriation* 789,000 694,670 789,108 782,155 799,544
Total income 24,370,667 23,306,747 20,408,149 18,752,915 17,825,629
Salaries and benefits 20,070,241 19,094,495 18,017,766 16,541,098 15,162,096
Other expenses 4,012,832 3,731,722 3,351,373 2,871,489 2,367,207
Total operating expenses 24,083,073 22,826,217 21,369,139 19,412,587 17,529,303
Operating income (loss) 287,594 480,530 ( 960,990) ( 659,672) 296,326
Other income (expense), net 328,732 321,046 373,251 353,280 173,510
Net income (loss) $ 616,326 $ 801,576 ($ 587,739) ($ 306,392) $ 469,836
Balance Sheet
Assets
Current assets $ 3,233,035 $ 3,352,598 $ 2,684,426 $ 2,932,439 $ 2,676,791
Property, plant and equipment,
deferred retirement costs, and
other assets 17,630,817 16,453,906 14,802,690 14,272,132 13,715,060
Total assets $20,863,852 $19,806,504 $17,487,116 $17,204,571 $16,391,851
Liabilities
Current liabilities $ 3,753,123 $ 3,818,819 $ 3,756,401 $ 3,428,287 $ 2,608,441
Other liabilities 15,608,104 15,029,958 13,502,764 12,891,459 12,409,465
Long-term debt—bonds, notes,
and mortgages 1,390,855 1,462,873 1,534,651 1,603,756 1,817,637
Equity (deficiency) 111,770 ( 505,146) ( 1,306,700) ( 718,931) ( 443,692)
Total liabilities and equity
(deficiency) $20,863,852 $19,806,504 $17,487,116 $17,204,571 $16,391,851
Analysis of Changes in Equity
(Deficiency)
Beginning balance ($ 505,146) ($ 1,306,700) ($ 718,931) ($ 443,692) ($ 945,222)
Deduct:
Net loss 587,739 306,392
( 505,146) ( 1,306,700) ( 1,306,670) ( 750,084) ( 945,222)
Add:
Net income 616,326 801,576 469,836
Capital contributions 31,000 31,000
Other _______ 590 (________ 22) (________ 30) _______ 153 694
Ending balance $ 111,770 ($ 505,146) ($ 1,306,700) ($ 718,931) ($ 443,692)
*The United States Postal Service was established
July 1, 1971. Prior to 1972, government
appropriations were made to cover entire Post
Office Department operations and capital
commitments. See Note 3 of financial statements.
27
Operating Statistics
Classes of Mail 1983 1982 1981 1980
■BHHBHBnSii
1979
First-Class (in thousands)
Pieces, number 64,246,880 62,200,212 61,410,172 60,276,119 57,925,859
Weight, pounds 2,341,830 2,238,555 2,214,731 2,135,984 2,008,221
Revenue $14,255,397 $13,747,357 $11,457,145 $10,145,508 $ 9,732,720
Priority Mail
Pieces, number 271,355 258,674 269,278 248,150 228,882
Weight, pounds 587,607 582,084 634,688 591,258 541,323
Revenue $ 848,805 $ 823,065 $ 758,268 $ 611,635 $ 560,685
Express Mail
Pieces, number 36,798 28,446 23,848 17,497 12,238
Weight, pounds 108,971 106,872 93,179 77,949 64,243
Revenue $ 422,257 $ 339,188 $ 269,658 $ 184,222 $ 133,582
Mailgram
Pieces, number 36,588 42,075 42,081 39,142 37,560
Revenue $ 13,799 $ 15,997 $ 15,517 $ 14,552 $ 14,636
Second-Class
Pieces, number 9,219,753 9,526,570 9,956,032 8,445,625 8,399,710
Weight, pounds 3,526,097 3,481,712 3,483,201 2,550,121 2,984,958
Revenue $ 958,369 $ 961,075 $ 885,159 $ 617,584 $ 643,738
Controlled Circulation Publications*
Pieces, number
Weight, pounds
Revenue
1,774,649
927,572
$ 245,707
845,844
357,632
$ 94,937
Third-Class
Pieces, number 40,734,719 36,719,323 33,607,405 30,380,886 27,513,132
Weight, pounds 5,062,073 4,295,638 3,758,295 3,240,096 2,994,193
Revenue $ 3,676,775 $ 3,303,187 $ 2,643,363 $ 2,412,326 $ 2,216,255
Controlled circulation discontinued March 22, 1981.
Statistics are included in Second-Class.
28
Classes of Mail 1983 1982 1981 1980 1979
Fourth-Class
Pieces, number
Weight, pounds
Revenue $
567,529
2,248,224
753,168
596,699
2,445,945
$ 787,649
(in thousands)
589,862
2,479,966
$ 785,656
633,395
2,660,740
$ 804,644
614,027
2,533,889
$ 747,392
International Surface
Pieces, number
Weight, pounds
Revenue $
385,137
166,609
222,872
404,619
174,527
$ 233,880
412,736
160,123
$ 197,308
450,495
163,773
$ 154,380
447,154
164,998
$ 146,930
International Air
Pieces, number
Weight, pounds
Revenue* $
519,684
63,869
650,748
522,922
56,855
$ 647,651
472,773
52,055
$ 538,093
513,285
51,868
$ 441,970
507,217
47,764
$ 402,756
Penalty
Pieces, number
Weight, pounds
Revenue $
2,775,321
487,156
841,012
2,946,379
513,046
$ 818,472
2,898,082
568,277
$ 706,463
2,992,110
503,463
$ 682,164
2,895,333
503,401
$ 635,064
Franked
Pieces, number
Weight, pounds
Revenue $
549,247
14,178
72,197
772,696
20,646
$ 99,309
400,647
14,164
$ 53,967
511,869
15,504
$ 62,603
374,099
16,752
$ 42,532
Free for the Blind
Pieces, number
Weight, pounds
38,398
37,797
30,590
27,898
47,484
56,103
27,840
39,737
27,828
36,064
Totals
Pieces, number
Weight, pounds
Revenue
119,381,409
14,644,411
$22,715,399
114,049,205
13,943,778
$21,776,830
110,130,400
13,514,782
$18,310,597
106,311,062
12,958,065
$16,377,295
99,828,883
12,253,438
$15,371,227
★Includes transit special handling and
miscellaneous revenue.
29
Special Services 1983 1982 1981 1980 1979
Registry
Number of articles (paid and free)
Revenue $
53,950
164,882 $
53,836
157,888
(in thousands)
56,191
$ 168,460
53,652
$ 156,854
53,670
$ 157,160
Certified
Number of pieces
Revenue $
111,255
140,538 $
105,708
136,009
97,185
$ 121,826
94,305
$ 120,168
81,385
$ 98,414
Insurance
Number of articles
Revenue $
48,749
55,505 $
47,498
53,374
51,993
$ 52,451
55,445
$ 55,355
59,642
$ 56,497
Collection-on-Delivery
Number of articles
Revenue $
11,819
21,906 $
13,333
25,560
13,004
$ 23,480
12,736
$ 20,642
12,213
$ 19,566
Special Delivery
Number of articles
Revenue $
22,055
47,416 $
25,837
55,440
33,160
$ 69,736
36,394
$ 73,037
40,971
$ 84,769
Money Orders
Number Issued
Revenue fees $
115,073
124,200 $
109,479
121,785
117,031
$ 111,205
119,728
$ 95,331
108,162
$ 91,247
Other
Box rents revenue $ 202,050 $ 168,049 $ 168,339 $ 159,948 $ 152,930
Stamped envelope revenue
Other revenue, net
16,826
92,945
18,927
86,075
16,398
90,549
15,442
68,688
15,673
58,602
Totals
Special services revenue $ 866,268 $ 823,107 $ 822,444 $ 765,465 $ 734,858
Mail revenue 22,715,399 21,776,830 18,310,597 16,377,295 15,371,227
Operating revenue $23,581,667 $22,599,937 $19,133,041 $17,142,760 $16,106,085
30
Employees 1983 1982 1981 1980 1979
Headquarters employees 3,190 3,131 3,293 2,798 2,710
Field regular employees
Regional and other field units 6,185 6,049 6,058 6,228 5,422
Inspection Service 4,674 5,009 5,133 5,242 5,236
Postmasters 28,266 28,670 28,711 28,967 28,400
Post office supervisors and technical personnel 38,764 37,953 37,048 36,481 36,065
Post office clerks and mail handlers 229,456 231,836 232,147 229,232 230,363
City delivery carriers and vehicle drivers 166,317 165,132 164,066 160,348 159,544
Rural delivery carriers 34,438 33,855 33,370 32,863 31,919
Special delivery messengers 1,815 1,850 1,929 1,987 2,094
Building and equipment maintenance personnel 29,736 28,991 28,070 27,586 27,366
Vehicle maintenance facility personnel 4,487 4,473 4,732 4,641 4,630
Total full-time employees 547,328 546,949 544,557 536,373 533,749
Other employees 109,072 104,732 108,816 115,910 115,763
Rural carrier substitutes 9,324 14,621 16,866 14,540 13,555
Rural carrier reliefs* 13,121 8,820 — — —
Grand total 678,845 675,122 670,239 666,823 663,067
Offices, Stations and Branches 1983 1982 1981 1980 1979
Number of post offices 29,990 30,155 30,242 30,326 30,449
Number of branches and stations
Classified branches and stations 4,160 4,129 4,109 4,109 4,104
Contract branches and stations 3,626 3,508 3,421 3,346 3,415
Community post offices 1,669 1,655 1,685 1,705 1,765
Total 9,455 9,292 9,215 9,160 9,284
Grand total 39,445 39,447 39,457 39,486 39,733
Rural carrier reliefs are a new type of casual
employee created by the 1981-84 agreement
between the Postal Service and the National
Rural Letter Carriers Association, and are now
included in both the 1982 and 1983 totals.
31
Board of Governors and Officials
Fiscal Year 1983
Board of Governors
David E. Babcock, Vice Chairman
Management Consultant
David E. Babcock & Associates
(term expires December 8, 1988)
William E Bolger
Postmaster General
George W Camp
Retired Postal Executive
(term expires December 8, 1985)
Jim Finch
Deputy Postmaster General
Robert L. Hardesty, Chairman
President, Southwest Texas State
University
(term expires December 8, 1983)
Paula D. Hughes
First Vice President and Director
Thomson McKinnon Securities, Inc.
(resigned October 4, 1983)
John R. McKean
President, John R. McKean
Accountants
(term expires December 8, 1991)
John L. Ryan
President and Chief Executive
Dean Brothers Pumps, Inc.
(term expires December 8, 1989)
William J. Sullivan
Vice Chancellor and Treasurer
University of Maine
(term expires December 8, 1984)
Peter E. Voss
President and Chief Executive
Northeastern, Inc.
(term expires December 8, 1990)
Board Committees
Audit and Capital Investment
John R. McKean, Chairman
Paula D. Hughes
William J. Sullivan
Budget, Finance and Compensation
Paula D. Hughes, Chairman
George W. Camp
Contingency
David E. Babcock, Chairman
Robert L. Hardesty
John R. McKean
Peter E. Voss
Electronic Communications
William J. Sullivan, Chairman
Postal Rates
Robert L. Hardesty, Chairman
Technology, Research and
Development
George W. Camp, Chairman
Senior Officials
William F. Bolger
Postmaster General
Jim Finch
Deputy Postmaster General
Francis X. Biglin
Senior Assistant Postmaster General
Administration Group
Anthony P. Cavallo
Senior Assistant Postmaster General
Research and Management Systems
Group
Michael S. Coughlin
Senior Assistant Postmaster General
Finance Group
Louis A. Cox
General Counsel
James V. Jellison
Senior Assistant Postmaster General
Operations Group
Joseph E Morris
Senior Assistant Postmaster General
Employee and Labor Relations Group
Joseph R. Caraveo
Regional Postmaster General
Western Region
Paul N. Carlin
Regional Postmaster General
Central Region
E. Herbert Daws
Regional Postmaster General
Eastern Region
John G. Mulligan
Regional Postmaster General
Northeast Region
Jackie A. Strange
Regional Postmaster General
Southern Region
32

^TES POSZo
U.S. Postal Service
475 L'Enfant Plaza West, SWt
Washington, DC 20260-0010