US Postal Service 2013 Annual Report Download - page 24

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2013 Report on Form 10-K United States Postal Service 22
Shipping and Packages revenue of $12,515 million increased $923 million, or 8.0%, on a volume increase of 210 million
pieces, or 6.0%, compared to the same period last year. Higher consumer spending, higher e-commerce retail sales and
increased marketing efforts drove much of the growth in Shipping and Packages revenue and volume during 2013.
The above chart demonstrates the trend in assets and liabilities since 2007 demonstrates the impact that our continuing
losses have had on our financial stability. Our losses have continued to add to our deficiency between assets and
liabilities and it will take years of profitability and legislative reforms to rebalance our assets and liabilities and to eliminate
our accumulated net deficiency from the past 7 years. The only way we can achieve the necessary profitability to restore
the Postal Service to a sustainable financial position is for Congress to act on our legislative goals as outlined in our five
year business plan.
Operating expenses in 2013 were $72,128 million, including $5,600 million of accrued contributions due to the PSRHBF,
compared to $80,964 million in 2012, a decrease of $8,836 million, or 10.9%. The primary cause of the expense decrease
was the law that changed the date of the scheduled $5.5 billion annual prefunding of the PSRHBF originally due by
September 30, 2011, to August 1, 2012. As a result, operating expenses in 2012 included two required PSRHBF
expense accruals, whereas 2013 only had one. Even without the effect of the PSRHBF accruals, operating expenses in
2013 decreased by $3,336 million, resulting from efficiency gains, wage restraints, and reductions in workers’
compensation expense driven by rising interest rates. Operating expense in 2011 did not include any prefunding
expenses related to retiree health benefits, as the $5.5 billion previously scheduled to be paid by September 30, 2011,
was changed to no later than August 1, 2012, by the enactment of P.L. 112-74.
A more detailed look into our results of operations follows within our revenue and volume and operating expenses
sections.
REVENUE AND VOLUME
Revenue and volume are closely linked to the strength of the U.S. economy and changes in how our customers use the
mail. Historically, the more significant factor has been change in the rate of economic growth. However, in recent
decades, an additional significant factor has been the rate that relevant new technology has been introduced and
accepted in the marketplace and supplanted the role of traditional hard-copy mail, a trend that has accelerated in recent
years. Revenue growth is also constrained by laws and regulations restricting the types of products and services we can
offer, the prices we can charge, and by our ability to implement products and services and the speed with which we can
bring them to market.