US Postal Service 2005 Annual Report Download - page 29

2005 Annual Report United States Postal Service | 19
Of greatest impact on us are electronic alternatives to cor-
respondence and transactions, particularly for First-Class
Mail items such as business correspondence/forms, bills,
statements, and payments. First-Class Mail volumes have
already been affected by the telephone, fax machine,
Internet, and other electronic communications. The Internet
is also forcing us into greater competition with the private
sector. The Internet and electronic commerce are stimulat-
ing utilization of other postal products, such as package
delivery and targeted ad mail. These products are subject
to competition from traditional sources (e.g., newspaper
and TV ads and other package delivery firms).
Major corporations now dominate parcel and express mar-
kets. Under the current regulatory structure, competitors
have far more flexibility to respond to changes in market
conditions and to target specific customers than we do.
The competitive landscape for postal services is becoming
much more global. Foreign postal operators are moving
well beyond traditional postal services, offering logistics, fi-
nancial services, and electronic services. Several European
posts have set-up operations in 18 major metropolitan
areas nationwide. These operations feature some sales
offices and offer mail, parcel, logistics, and financial
services to the American market. A significant portion of
foreign outbound letters are carried by foreign posts, due
to our higher rates, which are driven by our unfavorable
international air transportation costs.
Intellectual Property
We own valuable intellectual property including trade-
marks, service marks, patents, copyrights, trade secrets
and other proprietary information. We routinely gener-
ate intellectual property in the course of developing and
improving our systems, products, and operations.
Seasonal Operations
Our operations are seasonal. Mail volume and revenue
tends to be greatest in our first fiscal quarter, the fall
mailing season, and lowest during the summer, our
fourth quarter.
Working Capital Practices
Information about our working capital practices is included
in Management’s Discussion and Analysis of Financial
Condition and Results of Operations in Part II, Item 7, page
29, and the Statement of Cash Flows for the years ended
September 30, 2005, 2004 and 2003 on page 45.
Customers
We have a very diverse customer base and we are not
dependent upon a single customer or small group of
customers.
Government Contracts
No material portion of our business is subject to renegotia-
tion of profits or termination of contracts or subcontracts at
the election of the U.S. government.
Research and Development
We operate a research and development facility in Virginia.
While research and development activities are important to
our business, these expenditures are not material. We also
contract with independent suppliers to conduct research
activities that benefit us.
Environmental Matters
We are not aware of any federal, state or local environ-
mental laws or regulations that will materially affect our
financial results or competitive position or result in material
capital expenditures. However, we cannot predict the effect
on our operations of possible future environmental legisla-
tion or regulations.
In response to the continuing threat of biological terror-
ism, utilizing the mail as the delivery medium, the Board of
Governors approved the Biohazard Detection System and
the Ventilation Filtration System projects. These projects,
which are in the process of being deployed, will provide a
level of protection to our employees and customers from
potential contamination.
Number of Employees
At year-end, we had 704,716 career employees, substan-
tially all of whom reside in the United States. We also had
98,284 non-career employees. See Operating Statistics on
page 56 for additional detail.
Available Information
The United States Postal Service is not subject to the
informational requirements of the Securities Exchange Act
of 1934 (Exchange Act). We do not file periodic reports,
proxy statements or other information with the SEC.
Financial and other information can be accessed on the
“About USPS and News” section of our website at
usps.com. We make available, free of charge, copies of our
annual report, as soon as reasonably practicable after it
is produced. Copies of financial and other information are