FY 2008 Year End Review
MTAC
November 19, 2008
H. Glen Walker
Chief Financial Officer & Executive Vice President
2
2
External Environment
Massive deterioration in the housing and
financial sectors
The decline in these sectors impacted
many other areas of the economy,
accelerating the decline
Inflation, driven by fuel prices, increased
dramatically until the very end of the year
3
3
Volume dropped 9.5 billion pieces
from
2008
High Postal cost inflation driven by fuel
prices and Wages Cost of Living
Adjustments (COLA)
Internal Environment
4
4
USPS Response
Cost reduction of $2.2B vs. planned $1B
Record service levels
Record customer satisfaction levels
New marketing organization focused on
profitable growth
5
5
FY 2008 Financial Results
[ ] = Unfavorable variance to SPLY
Numbers may not add due to rounding.
(Data in Millions)
-$422
$ 3,216
$2,794
Operating Income (2)
417
71,757
72,174
Expense (1)
[-5]
$74,973
$74,968
Revenue
Var
SPLY
Actual
[-9,531]
212,234
202,703
Volume
0.6%
0.0%
%SPLY
[-4.5%]
RHBF Payments
Net Loss
$5,600
-$2,806
(1) Excluding RHBF Payments
(2) Before RHBF Payments
$8,358
-$5,142
$2,336
-
$2,758
6
6
FY 2008 Volume
Performance to SPLY
91.7B
99.1B
8.6B
1.6B
202.7B
1.7B
201.1B
7
7
Total Mail Volume
8
8
First-Class Mail Volume
9
9
Standard Mail Volume
10
10
Periodicals Mail Volume
11
11
First-Class Mail Volume By Shape
Growth from SPLY
12
12
Standard Mail Volume By Shape
Growth from SPLY
13
13
Expense Drivers of
Variance To SPLY
$ in Millions
Compensation & Benefits
-$601
Total Expense Variance
Other Expenses
392
$417
Transportation
459
Depreciation
167
14
14
Total Workhour
Savings
15
15
Outstanding Debt and Cumulative RHBF Payments
16
16
FY 2008 Summary
Financially challenging year
Volumes down and cost inflation up
driven by fuel and labor costs
Revenue flat on last year
Managed by reducing costs $2.2B
Focus on customer service
Organized and focused on growth
opportunities
17
17
FY 2009 Outlook
No economic recovery anticipated
Continued volume declines
8 billion
pieces
Carryover impact to 2009 from rising
inflation in 2008 as well as increases to
wages and benefits
Focus on service to our customers and
opportunities for growth
Focus on unprecedented across the
board cost reductions
FY 2008 Year End Review
MTAC
November 19, 2008
H. Glen Walker
Chief Financial Officer & Executive Vice President