US Postal Service 2004 Annual Report Download - page 52

Download and view the complete annual report

Please find page 52 of the 2004 US Postal Service annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 64

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64

50 | 2004 annual report united states postal service
Notes to the financial statements
The฀Revenue฀Forgone฀Reform฀Act฀of฀1993฀authorized฀a฀total฀of฀
$1,218฀million฀in฀payments.฀We฀calculated฀the฀present฀value฀
of฀these฀future฀reimbursements,฀at฀7%฀interest,฀to฀be฀approxi-
mately฀ $390฀ million.฀We฀ recognized฀ the฀ $390฀ million฀ as฀
revenue฀during฀fiscal฀years฀1991฀through฀1998.฀The฀amounts฀
receivable฀as฀of฀September฀30,฀2004฀and฀2003,฀were฀$364฀
million฀and฀$367฀million,฀respectively.฀
Note 9 - commitments
At฀September฀30,฀2004,฀we฀estimate฀our฀financial฀commitment฀
for฀approved฀capital฀projects฀in฀progress฀to฀be฀approximately฀
$2,808฀million.฀
Our฀total฀rental฀expense฀for฀the฀years฀ended฀September฀30฀is฀
summarized฀as฀follows:
฀2004฀ 2003฀ 2002
Non-cancellable฀real฀
฀฀estate฀leases฀including฀
฀฀related฀taxes฀ $
฀฀฀
896฀ $
฀฀฀
923฀ ฀$
฀฀฀
894
Facilities฀leased฀from฀
฀฀General฀Services฀
฀฀Administration฀subject฀
฀฀to฀120-day฀notice฀
฀฀of฀cancellation฀ 49฀ 53฀ 45
Equipment฀and฀other฀
฀฀short-term฀rentals฀ ฀฀฀฀213฀ ฀฀฀201฀ 214
Total฀ $1,158฀ $1,177฀$1,153
At฀September฀30,฀2004,฀our฀future฀minimum฀lease฀payments฀
for฀all฀non-cancellable฀leases฀are฀as฀follows:
Year฀ Operating฀ Capital
2005฀ $฀฀823฀ $฀฀76
2006฀ 799฀ 76
2007฀ 761฀ 76
2008฀ 712฀ 76
2009฀ 658฀ 76
2010฀ 605฀ 76
After฀2010฀ 5,283฀ 472
฀ $9,641฀ $928
Less:฀Interest฀ ฀ 234
Total฀capital฀lease฀obligations฀ ฀ 694
Less:฀Short-term฀portion฀
฀of฀capital฀lease฀obligations฀ ฀ 42฀
Long-term฀portion฀of฀
฀capital฀lease฀obligations฀ ฀ $652
Most฀ of฀ these฀ leases฀ contain฀ renewal฀ options฀ for฀ periods฀
ranging฀from฀3฀to฀20฀years.฀Certain฀non-cancellable฀real฀estate฀
leases฀give฀us฀the฀option฀to฀purchase฀the฀facilities฀at฀prices฀
specified฀in฀the฀leases.฀฀
Capital฀leases฀included฀in฀buildings฀were฀$847฀million฀in฀2004฀
and฀$963฀million฀in฀2003.฀Total฀accumulated฀amortization฀is฀
$259฀million฀in฀2004฀and฀$259฀million฀in฀2003.฀Amortization฀
expense฀for฀assets฀recorded฀under฀capital฀leases฀is฀included฀
in฀depreciation฀expense.
Note 10 - contingent liabilities
Each฀quarter฀we฀review฀litigation฀pending฀against฀us.฀As฀a฀
result฀of฀this฀review,฀we฀classify฀and฀adjust฀our฀contingencies฀
for฀claims฀that฀we฀think฀it฀is฀probable฀that฀we฀will฀pay฀and฀for฀
which฀we฀can฀reasonably฀estimate฀the฀amount฀of฀the฀unfavor-
able฀outcome.฀
These฀ claims฀ cover฀ labor,฀ equal฀ employment฀ opportunity,฀
environmental฀ issues,฀ traffic฀ accidents,฀ injuries฀ on฀ postal฀
properties,฀personal฀claims฀and฀property฀damages฀and฀suits฀
and฀claims฀arising฀from฀postal฀contracts.฀We฀also฀recognize฀
the฀settlements฀of฀claims฀and฀lawsuits฀and฀revisions฀of฀other฀
estimates.฀Additionally,฀we฀evaluate฀the฀materiality฀of฀cases฀
determined฀to฀have฀a฀reasonably฀possible฀chance฀of฀adverse฀
outcome.฀Such฀cases฀are฀immaterial฀to฀our฀financial฀state-
ments฀taken฀as฀a฀whole.฀
฀(Dollars฀in฀millions)
฀(Dollars฀in฀millions)