US Postal Service 2009 Annual Report Download - page 57

2009 Annual Report United States Postal Service | 55
assurance can be given that our efforts will be successful
or that Congress will enact additional legislation in time to
impact 2010, or at all.
In light of the above issues, in July 2009 GAO listed the
Postal Service as one of its “high risk” government agen-
cies. In its report, Restructuring the U.S. Postal Service to
Achieve Financial Viability, GAO cited our mounting losses,
increasing debt levels and inability to cut costs fast enough
to offset the accelerated decline in mail volume and rev-
enue. To achieve fi nancial viability, GAO suggests that the
Postal Service develop and implement a broad restructur-
ing plan which includes many of the initiatives mentioned
above. GAO suggests the following:
■ Reduce compensation and benefi t costs through
retirements and lower benefi t costs.
■ Consolidate retail and processing networks.
■ Consolidate fi eld structure.
■ Generate revenue through new or enhanced products.
■ Change funding requirements for retiree health benefi ts.
■ Realign delivery services with changing use of mail.
GAO also notes that many of these initiatives require Con-
gressional support.
The following table illustrates our scheduled cash fl ow ob-
ligations in future years, including payments under revolv-
ing credit lines.
Schedule of Cash Flow Obligations
(dollars in millions)
Payments Due
2010 2011– 2012 2013– 2014 After 2014 Total
Notes Payable $ 3,675 $ — $ 300 $ 6,225 $ 10,200
Interest Payments 153 306 303 1,585 2,347
Capital Lease
Obligations 99 196 180 441 916
Operating Lease
Obligations 762 1,348 1,097 4,339 7,546
Retiree Health
Benefi ts (PSRHBF) 5,500 11,100 11,300 11,500 39,400
Total $ 10,189 $ 12,950 $ 13,180 $ 24,090 $ 60,409
CASH FLOW
Cash Flows from Operating Activities
Net cash provided by operating activities was $1.6 billion
in 2009, compared to $0.4 billion used in 2008, a year-to-
year increase of cash provided by operations of $2.0 billion
despite a drop in revenue of $6.8 billion. The 2009 net loss
increased $1.0 billion over the prior year. The increased
cash was driven mainly by the decrease of $4 billion in
retiree health benefi ts expense and payment resulting from
P.L.111-68 and a $2.1 billion increase in workers’ com-
pensation liability ($1.1 billion of which is from deferring the
cash payment from September to October).
Net cash used in operating activities was $0.4 billion in
2008 compared to $2.6 billion used by operating activities
in 2007. The year-to-year change of $2.2 billion was driven
mainly by the reduction in the net loss of $2.3 billion. This,
in turn, was largely due to the absence in 2008 of the one-
time transfer of $3.0 billion formerly held in escrow to the
PSRHBF in 2007.
Cash Flows from Investing Activities
Net cash used by investing activities in 2009 was $1.8 bil-
lion, compared to $1.9 billion in 2008. Purchases of prop-
erty and equipment of $1.8 billion decreased $156 million
from the $2.0 billion purchased in 2008. Proceeds from
building sales and the sale of property and equipment to-
taled $33 million in 2009, compared to $57 million in 2008.
Net cash used by investing activities was $1.9 billion in
2008, compared to $500 million provided in 2007. Pur-
chases of property and equipment of $2.0 billion de-
creased $700 million from the $2.7 billion purchased in
2007. Proceeds from building sales and the sale of prop-
erty and equipment totaled $57 million in 2008, compared
to $257 million in 2007. The remainder of the change was
due to the absence in 2008 of the one-time 2007 transfer
of funds from the escrow restricted cash into operating
cash. Excluding this one-time item, cash used by invest-
ing activities would have decreased $520 million in 2008.
Cash Flows from Financing Activities
Net cash provided by fi nancing activities was $2.9 billion in
2009, and $2.9 billion and $2.0 billion for 2008 and 2007,
respectively. Borrowings from the Federal Financing Bank
increased by $3.0 billion, $3.0 billion and $2.1 billion, re-
spectively, in those years.