US Postal Service 2014 Annual Report Download - page 57

2014 Report on Form 10-K United States Postal Service 53
Total U.S. Government receivables consist primarily of appropriations receivables of $50 million and $68 million and military
and official mail receivables of $37 million and $47 million for the years ended September 30, 2014 and 2013, respectively.
Total provisions for allowances charged to expense for the years ended September 30, 2014, 2013 and 2012 were $11 million,
$23 million and $11 million, respectively. These expenses are recorded in the Statements of Operations in “Other operating
expenses.”
Postal services are sold through a network of post offices and retail establishments that sell postage stamps, shipping and other
services, as well as on the Postal Service’s website. The Postal Service’s sales to its three largest domestic, non-related mail
owners for the year ended September 30, 2014, 2013 and 2012 represented approximately 4.1%, 4.2% and 3.2% of total
revenue, respectively.
Note 4- Property and Equipment, net
The following table summarizes property and equipment, net as of September 30, 2014 and 2013:
(in millions)
Estimated Life in
Years
2014
2013
Buildings
3 - 40
$
24,593
$
24,452
Equipment
3 - 20
15,761
16,014
Vehicles
5 - 24
3,614
3,615
Land
-
2,886
2,895
Leasehold improvements
2 - 40
1,357
1,290
Property and equipment, at cost
48,211
48,266
Less: Accumulated depreciation and amortization
32,288
31,156
Construction in progress
415
402
Property and equipment, net
$
16,338
$
17,512
In 2013, the Postal Service implemented a realignment of its operations to further reduce costs and strengthen its finances.
These operational realignments included reductions in the number of mail processing operations and consolidations of delivery
offices. In June 2014, the Postal Service announced that a second phase of mail processing realignments would begin in January
2015, culminating in a consolidation impacting up to 82 more processing operations. As a result, an assessment was performed
on both the real estate and equipment associated with the proposed realignment efforts to determine if any impairment should be
recognized. Any facility lacking continued utility to the network will be identified for disposal. Once a facility is identified for
disposal, determination of impairments, if any, will be made. For the year ended September 30, 2014, there were no significant
impairment charges related to this plan.
Assets classified as held for sale, were approximately $97 million and $78 million as of September 30, 2014 and 2013,
respectively, and are included as components of both “Land” and “Buildings.”
Gains recognized on the sale of property and equipment are reported in “Other revenue” in the Statement of Operations. Total
gains were $59 million, $109 million and $65 million for the years ended September 30, 2014, 2013 and 2012, respectively.
Gains are deferred when the Postal Service enters into any lease-back arrangements or other contractual obligations requiring
continuing involvement with the property. Deferred gains on the sale of property are recorded in the Balance Sheets in “Other
noncurrent liabilities” in the amount of $301 million and $308 million as of September 30, 2014 and 2013, respectively.
Deferred gains recognized as “Other revenue” were $8 million, $14 million and $79 million for the years ended September 30,
2014, 2013 and 2012, respectively.
The Postal Service operates one of the largest vehicle fleets in the United States. These vehicles are primarily used for the
delivery and collection of mail; however, some are also used for mail transport and maintenance and inspection services.