Where you stand on the U.S. Postal Service’s financial situation depends on where you walk.
“U.S. Postal Service Records Second Quarter Loss of $1.9 Billion” was the headline of a USPS press release issued Friday.
But if you are a letter carrier walking city streets and believe your union leaders, Postal Service finances don’t look nearly as bad as they do to USPS officials at headquarters in Washington.
“Rolando: Results reconfirm the steady improvement in USPS’s finances,” proclaims a press release issued by the National Association of Letter Carriers, whose president is Fredric V. Rolando.
NALC said figures in a USPS financial document show “The Postal Service today reported a quarterly operating profit of $261 million.”
Joseph Corbett, the USPS chief financial officer and executive vice president, said that is “just not accurate.” The $261 million “is NOT operating income/profit,” he added in an e-mail.
The Postal Service’s quarterly filing with the Securities and Exchange Commission, known as a 10-Q, indeed shows net income of $261 million for the three-month period that ended March 31 — but that is before taking into account a pair of hefty expenses: $708 million for workers’ compensation and more than $1.4 billion for the pre-funding of retiree health benefits.
Once those expenses are considered, USPS shows a loss of almost $1.9 billion for the same period.
That loss reflects the true financial condition of the Postal Service, according to Corbett. He said the $261 million in net income relates to “operations that are substantially under management’s control,” which does not include workers’ comp and pre-funding.
Postal officials pointed to the importance of the $261 million in the 10-Q, saying:
“We believe that analyzing operating results without the impact of certain of these charges provides a more meaningful insight into current operations.”
Rolando used his interpretation of the figures to argue against cost-cutting measures that would “degrade services to the public.” By e-mail, he acknowledged “there is red ink — but it’s important to understand that the Postal Service has been operationally profitable since October 2012.” He said that “USPS is well on the way to realizing its projection of $1.1 billion in operating profits this year.”
Instead of closing postal facilities and trying to eliminate Saturday mail delivery as officials have proposed, Rolando said, “legislators should address the factor that is causing 100 percent of the losses — the congressional mandate that the Postal Service, alone among all public agencies and private companies, be required to pre-fund future retiree health benefits.”
Corbett anticipated that argument. He cited Postal Service liabilities exceeding assets by $42 billion, and $10 billion needed for deferred investments including new delivery vehicles and package-sorting equipment.
“Some comments in recent news reports suggest that all we need from Congress is help with restructuring our retiree health benefit plan,” he said in a press release. “Nothing can be further from the truth.”
In Washington, however, where you stand determines how you see the truth.