Updated: 5/17/06-  $45 million net gain after escrow allocation -USPS revenues of $6.59 billion for March were 3% or $189 million over plan and $424 million or 6.9% more than March 2005. Expenses were virtually on plan, producing a net income of $295 million before the escrow allocation.

Contributing to the March performance was the new postage rate structure implemented Jan. 8, which provided a 5.4% revenue increase needed to fulfill the requirement of Public Law 108-18, The Postal Civil Service Retirement System (CSRS) Funding Act, enacted in 2003. This law requires the Postal Service to place $3 billion in an escrow account by Sept. 30, 2006, to cover the difference between the CSRS retirement costs before and after the law’s implementation. We are allocating $250 million per month for purposes of assessing our financial position. After the escrow allocation, our financial position for March shifts to a net gain of $45 million.

Total mail volume in March was 1.5% more than last year, with volumes in all major categories except Express Mail and International Mail above their March 2005 levels.

Year-to-date, net income before escrow allocation is $1.57 billion or $147 million over plan. Year-to-date, the net gain after escrow allocation is $74 million.

Year-to-date revenue is 2.9% higher than the same period last year and $288 million above the year-to-date plan. Year-to-date expenses are 4.2% above March 2005 postings. Revenues, year-to-date, are $288 million or 0.8% over plan. Expenses year-to-date are 4.2% higher than the same period last year, and $141 million above the year-to-date plan.

Year-to-date, total mail volume is 256 million pieces more than the same period last year. Year-to-date, First-Class Mail volume is 1.3% below the same period last year. Standard Mail volume is 1.5% above last year, and Priority Mail is 7.0% above last year.

source: USPS

Notes from The Postal Service Financial Statement are below:

The full report is available at the USPS Financials web page http://www.usps.com/financials/fos/welcome.htm

March, FY 2006
March 1 – March 31, 2006

Analysis of the Financial and Operating Statements

Revenue - Pages 1, 2, 3, 4, 5 and 6
For March, Total Revenue was $189 million or 3.0% over plan, and $424 million or 6.9% over same period last year (SPLY). Commercial Revenue was over plan by $123 million or 2.5% and Retail Revenue was over plan $32 million or 2.1%. In March, combined Total Commercial Revenue and Retail Revenue were $379 million more than SPLY. Most of the increase in revenue to SPLY for March was reflected in Permit Imprint and Presort First and Package Services/Permit Imprint. Combined these revenue sources were $255 million more than SPLY. Also, Metered Postage revenue was $73 million over SPLY.

Year-to-date, Total Revenue is $288 million or 0.8% over plan with the largest contributor being Retail Revenue at $460 million or 5.1% more than plan. YTD, Total Revenue is $1.1 billion over SPLY. Primary contributors to the increase over SPLY were Permit Revenue at $860 million more and Other Retail Channels Revenue at $354 million more than last year.

Expenses - Pages 1, 2, 4, 7, 8 and 9
For March, Total Expenses were $3 million above plan. Personnel costs were $52 million or 1.1% above plan and non-personnel costs were below plan by $49 million or 3.5%. While total non-personnel expenses were below plan, Transportation was $38 million above plan and Depreciation was $4 million above plan. Compared to SPLY, this month’s Total Expenses were increased by $265 million or 4.4%. The drivers of this increase over SPLY, included an increase in deliveries, increased fuel prices, health benefits and COLA costs.

Year-to-date, Total Expenses were $141 million or 0.4% above plan. Personnel costs are $295 million or 1.1% above plan, while non-personnel expenses are $153 million or 2.0% below plan. The largest contributors to the non-personnel plan underrun are Supplies and Services at $82 million or 6.5% below plan and Information Technology at $70 million or 29.4% below plan. YTD Total Expenses are $1.4 billion or 4.2% above SPLY.

Mail Volume and Revenue - Page 3
Total Mail Volume for March, FY 2006 was 277 million pieces or 1.5% above SPLY. Most of this month’s increase in mail volume above March, FY 2005 levels occurred in Standard Mail, 202 million pieces or 2.3% above.

Year-to-date, Total Mail Volume is 0.2% or 256 million pieces over SPLY. The most significant mail volume increase over SPLY for YTD is in the lower revenue-perpiece Standard Mail category, which increased 784 million pieces or 1.5%. YTD, First-Class Mail volume is 1.3% less than SPLY generating $121 million or 0.6% more revenue than SPLY.

Capital Investments - Pages 1 and 13
The Fiscal Year 2006 Capital Commitments YTD through March 2006 are $466 million compared to a plan of $500 million. This represents a plan underrun of about $33 million or 6.7%. The Cash Outlays YTD are $1.1 billion versus a plan of $1.1 billion.

Workhours - Pages 1, 14 and 15
Total Workhours for March 2006 were 1.5 million hours or 1.2% above plan. This month’s workhours usage was slightly above that of March 2005. Rural Delivery increased 1.1 million hours over SPLY.

Year-to-date, Total Workhours for March 2006 are 11.2 million hours or 1.5% above plan, and 0.7 million hours or 0.1% below SPLY. The most significant plan overruns lie in Mail Processing by 6.5 million hours, Delivery Services by 3.3 million hours, and Customer Services by 2.9 million hours. These overruns in workhours are a reflection of growth in volume above plan and continued growth in delivery points. YTD, major contributors to the to the workhours decrease to SPLY are City Delivery and Mail Processing workhours. Combined workhours in these operations are 3.0 million hours below SPLY.

http://www.usps.com/financials/_pdf/MarchFY2006.pdf