Post on 04-Jan-2016
Financial UPDATEMailers’ Technical Advisory
Committee Meeting
February 18, 2009
Anthony MorrowManager,
Budget & Financial Analysis
Financial Performance Quarter I Overview
Volume decline of 5.2 billion pieces, or 9.3%, driven by the economic recession
Eighth consecutive quarter of accelerating volume declines
Revenue decline of $1.3 billion compared to Q1, FY 2008
27 million fewer workhours used – reduction of 7.5%
Some cost benefit from low inflation, but significant cost pressure from labor wage increases
Numbers may not add due to rounding(Data in Millions)
-$1,056$ 672-$ 384Net Income -220 19,705 19,485Expense
-$1,276$20,377$19,101RevenueVarSPLYActual
-1.1%
-6.3% %SPLY
Income Statement Quarter I FY 2009
Numbers may not add due to rounding
($ in Millions)
*Mailing Services
Shipping Services
Total Revenue
-$1,235
-42
-$1,276
SPLY Var
$16,761
2,340
$19,101
Revenue
*Includes Interest & Investment Income
Revenue Variance To SPLY Quarter I FY 2009
Volume % SPLY
First-Class 22.7B -7.2%
Standard 24.6B -11.0%
Periodicals 2.1B -3.5%
Mailing Services
0.2B -8.4%
Shipping Services 0.4B -10.5%
Total All Mail 50.2B -9.3%
Category
49.8B -9.3%
Package Services
SPLY Var -1.8B
-3.0B
-0.1B
-0.0B
-0.0B
-5.2B
-5.1B
Numbers may not add due to rounding(Data in Billions)
Quarter I FY 2009 Volumes
Total Mail Volume
2.2%
-1.3%
-3.0%
-5.5%
-9.3%
-0.1%
2.3% 2.3%
-0.6%
-2.1%-3.3%
-6.3%
-1.5%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
8 Quarter Moving Average Growth Rates% SPLY
FY 2006 FY 2007 FY 2008 FY 2009
First-Class Mail Volume
8 Quarter Moving Average Growth Rates% SPLY
FY 2006 FY 2007 FY 2008 FY 2009
-1.3%
-3.9%
-7.2%
-5.5%-4.0%
1.6%
-0.8%
1.2%-0.1%
-2.5% -2.6%-3.1%
-6.9%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Standard Mail Volume
8 Quarter Moving Average Growth Rates% SPLY
FY 2006 FY 2007 FY 2008 FY 2009
4.9%
-11.0%
0.5%
-5.5%
-3.0%
-6.1%
-0.9%
1.2%2.8%2.7%
0.2%
-1.4%-2.6%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Periodicals Volume
% SPLY 8 Quarter Moving Average Growth Rates
FY 2006 FY 2007 FY 2008 FY 2009
-5.3%
-3.5%
-1.8%
-3.3%-4.3%
-2.2%-0.5%-2.2%
-0.6%
0.3% 0.1%
-2.6%
1.2%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Quarterly Volume - % SPLY
Mailing Services Shipping Services
-4.8%
-2.0%
-4.9%
-10.5%
-3.2%-3.1%
-9.3%
-5.6%
-6.4%
-2.1%
2008 Q1 2008 Q2 2008 Q3 2008 Q4 2009 Q1
Volume % SPLY
First-Class Letters 21.6B -7.1%Standard Letters 15.3B -12.4%
Standard Flats0.8B -3.8%
Category
9.1B -8.5%First Class Flats
SPLY Var
-1.7B-2.2B
-0.1B-0.8B
Numbers may not add due to rounding(Data in Billions)
Quarter I FY 2009 VolumesBy Shape
Numbers may not add due to rounding
($ in Millions)
Total Expense
All Other
*Total Personnel Comp.
Var
-$220M
-34M
-$12M
Transportation -92M
Supplies & Services -82M
*Includes Retiree Health Benefits
Expense Variance to SPLY Quarter I FY 2009
Actual % SPLYCity Delivery 110.8M -5.2%
Mail Processing 70.9M -13.2%
Customer Services 48.1M -11.3%
All Other
45.6M -3.1%
Total Workhours 331.8M -7.5%
Category
56.4M -3.9%
Rural Delivery
SPLY Var -6.0M
-10.8M
-6.1M
-1.5M
-26.7M
-2.3M
(Data in Millions) Numbers may not add due to rounding
Quarter I FY 2009 Workhours
Total Factor Productivity Quarter I FY 2009
Numbers may not add due to rounding
Actual
-0.3%Total Factor Productivity
-6.3%Resource Usage
-6.6%Workload
LaborMaterials
Capital
Total Price Impact
% SPLY Var
+6.8%+1.1%
+3.8%
+5.6%
*Does not impact TFP calculation, but does impact the Financial Statements
Price Impact of Resources Used Quarter I
No economic recovery expected this year
Projected volume decline of 12 to 15 billion pieces this year
Continued emphasis on reducing costs; $5.9 billion in cost reductions
deployed over FY 2009 - 2010
Financial Outlook
Financial UPDATEMailers’ Technical Advisory
Committee Meeting
February 18, 2009
Anthony MorrowManager,
Budget & Financial Analysis