US Postal Service 2011 Annual Report Download - page 74

Download and view the complete annual report

Please find page 74 of the 2011 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 103

  • 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
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103

2011 Report on Form 10-K United States Postal Service - 72 -
Allow the Postal Service to offer non-postal
products and services.
Allow the Postal Service to restructure its
healthcare systems.
Develop a more streamlined governance model
for the Postal Service that would allow for quicker
pricing and product development decisions than
currently exists within the regulatory framework.
Due to the gravity of the financial situation, more than a
half-dozen different postal reform-related bills have been
introduced in Congress in the past year, in addition to a
plan proposed by the Administration. These plans
address some of the short- and long-term issues that the
Postal Service is facing.
There can be no assurance that any legislative changes
will be made in time to impact 2012, or at all.
MITIGATING CIRCUMSTANCES
The Postal Service’s status as an independent
establishment of the executive branch which does not
accept tax dollars for its operations presents unique
requirements and restrictions, but also potentially
mitigates some of the financial risk that would otherwise
be associated with a cash shortfall. Despite falling mail
volume, the Postal Service is still widely recognized as
providing an essential service to the American economy,
and there are a wide variety of potential legislative
remedies that could resolve the short-term liquidity
concerns. Therefore, it is unlikely that, in the event of a
cash shortfall, the federal government would cause or
allow the Postal Service to significantly curtail or cease
operations.
The Postal Service continues to inform the Administration,
Congress, the PRC, and other stakeholders of the
immediate and longer-term financial issues the Postal
Service faces and the legislative changes that would help
ensure the availability of sufficient liquidity on September
30, 2012, and beyond. However, there can be no
assurances that the requested adjustments to the
PSRHBF prefunding payment schedule, or any other
legislative changes, will be made in time to impact 2012,
or at all.
NOTE 3 — SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING AND USE OF
ESTIMATES
The Postal Service conforms to accounting principles
generally accepted in the United States (GAAP) and
maintains its accounting records and prepares its financial
statements on the accrual basis of accounting. Following
these principles, estimates and assumptions are made
that affect the amounts reported in the Financial
Statements and disclosed in the Notes to the Financial
Statements. Actual results may differ from those
estimates.
These financial statements reflect the audited results of
operations of the United States Postal Service for the
years ended September 30, 2011, 2010 and 2009 and its
financial position as of September 30, 2011 and 2010. All
references to years, unless otherwise stated, refer to the
fiscal year beginning October 1 and ending September
30. All references to quarters, unless otherwise stated,
refer to quarters within fiscal years 2011, 2010 and 2009.
Subsequent events through November 15, 2011, the date
that the financial statements were issued, have been
evaluated.
SEGMENT INFORMATION
The Postal Service operates in one segment throughout
the United States, its possessions and territories.
RECLASSIFICATIONS
Certain prior year amounts related to compensation and
benefits as well as other operating expenses have been
reclassified to conform to the current year’s presentation.
These reclassifications had no effect on previously
reported operating losses and net losses.
RELATED PARTIES
The Postal Service has significant transactions with other
U.S. Government agencies, as disclosed throughout this
report. In addition to those amounts disclosed, deferred
revenue of $39 million for 2011 and $71 million for 2010
related to government deposits is included in the Balance
Sheets in “Customer Deposit Accounts.”