US Postal Service 2005 Annual Report Download - page 62

Download and view the complete annual report

Please find page 62 of the 2005 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 76

  • 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
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76

52 | 2005 Annual Report United States Postal Service
Notes to the financial statements
Under the Revenue Forgone Reform Act of 1993, Congress
is required to reimburse us $29 million annually through
2035 (42 years). This reimbursement is for two purposes:
services we performed in 1991, 1992, and 1993 for which
we have not yet been paid; and for shortfalls in the reim-
bursement for the costs we incurred for processing and
delivering certain nonprofit mail from 1994 through 1998.
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% inter-
est, to be approximately $390 million. We recognized the
$390 million as revenue during fiscal years 1991 through
1998. The amount receivable as of the years ended
September 30 was $360 million in 2005 and $364 million
in 2004.
Note 9 – Commitments
At September 30, 2005 we estimate our financial com-
mitment for approved capital projects in progress to be
approximately $3,515 million.
Our total rental expense for the years ended September 30
is summarized as follows:
(Dollars in millions)
2005 2004 2003
Non-cancelable real estate leases
including related taxes $ 892 $896 $ 923
Facilities leased from General Services
Administration Subject to 120-day notice
of cancellation 42 49 53
Equipment and other short-term rentals 209 213 201
Total $ 1,143 $1,158 $ 1,177
At September 30, 2005 our future minimum lease pay-
ments for all non-cancelable leases are as follows:
(Dollars in millions)
Operating Capital
2006 $ 825 $ 100
2007 808 101
2008 777 100
2009 726 100
2010 669 100
After 2011 5,843 377
$ 9,648 $ 878
Less: Interest 168
Total capital lease obligations 710
Less: Short-term portion of
capital lease obligations 66
Long-term portion of capital
lease obligations $ 644
Most of these leases contain renewal options for periods
ranging from 3 to 20 years. Certain non-cancelable real
estate leases give us the option to purchase the facilities at
prices specified in the leases.
Capital leases included in buildings were $906 million
in 2005 and $847 million in 2004. Total accumulated
amortization is $318 million in 2005 and $259 million in
2004. Amortization expense for assets recorded under
capital leases is included in depreciation expense which is
included as “Other” in operating expenses in the state-
ments of operations.
P.L.108-18 requires that we create an escrow, or restricted
cash account of approximately $3.1 billion by September
30, 2006 in the event that Congress has not yet decided
how to deploy the savings from the change in the retire-
ment funding provisions.
Note 10 – Contingent Liabilities
Each quarter we review litigation pending against us. As a
result of this review, we classify and adjust our contingen-
cies for claims that we think it is probable that we will pay
and for which we can reasonably estimate the amount of
the unfavorable outcome.