You are on page 1of 93

Table of Contents

2 Financial Highlights
4 The Foundation For Our Future: Letter from the Postmaster
General and CEO, and the Chairman of the Board of Governors
6 Foundation For The Future
7 Overview of the 10-year Plan
8 Progress Against the Plan: Our Checklist
9 Retiree Health Benefits Prefunding
10 Delivery Frequency
11 Expand Access
12 Workforce
13 Pricing
14 Expand Products and Services
15 Oversight
16 The Board of Governors
18 The Executive Committee
20 Message from the Audit and Finance Committee
22 Message from the Chief Financial Officer and Executive Vice President
24 Stamps By Design: The 2011 Commemorative Stamp Program
28 Introduction to the Financial Section
29 Business
33 Risk Factors
37 Properties
38 Management’s Discussion and Analysis of Financial Conditions and
Results of Operation
60 Controls and Procedures
61 Report of Independent Registered Public Accounting Firm
63 Financial Statements
68 Notes to the Financial Statements
81 Operating Statistics
85 Financial History Summary
86 Selected Quarterly Financial Data
87 Glossary

2010 Annual Report United States Postal Service 1


The past year in review

Financial Highlights

2010 was a difficult year for both the U.S. economy and the Postal Service. As the economy weakened, mail volumes and revenue
continued to decline. The Postal Service met the challenge with focused cost reductions and increased efficiency.

Years ended September 30 Percent change from preceding year


2010 2009 2008 2010 2009 2008

(Dollars in millions, audited)


Operating revenue $67,052 $68,090 $74,932 (1.5%) (9.1%) 0.2%

Operating expenses * $75,426 $71,830 $77,738 5.0% (7.6%) (3.0%)

Loss from operations $(8,374) $(3,740) $(2,806)

Operating margin (12.5%) (5.5%) (3.7%)

Net loss $(8,505) $(3,794) $(2,806)

Purchases of capital property $1,393 $1,839 $1,995 (24.3%) (7.8%) (26.5%)


and equipment equipment

Debt $12,000 $10,200 $7,200

Interest expense $156 $80 $36

Capital contributions of $3,132 $3,087 $3,034


U.S. government

Deficit since reorganization $(17,005) $(8,500) $(4,706)

Total net deficiency $(13,873) $(5,413) $(1,672)

(Unaudited)
Number of career employees 583,908 623,128 663,238 (6.3%) (6.0%) (3.1%)

Mail volume (pieces in millions) 170,574 176,744 202,703 (3.5%) (12.8%) (4.5%)

New delivery points served 739,580 923,595 1,199,764

*The net impact of P.L. 111-68 legislation was $4 billion reduction of expenses
in 2009.

2 2010 Annual Report United States Postal Service


Volume Forcasts to 2020

220 Base Case

210 Worst Case


200

190

180

170

160

150

140

130

120

110

Changes in Volume and Contribution of the Two Largest Mail Classes Global Bargain

2010 First-Class Mail Letter Equivalent Prices


in U.S. Dollars

83
88 1.50 Norway
78

.97 Japan
52

.79 France

.75 Germany
2010

2020

2010

2020

.66 Great Britain

.57 Canada

.44 United States

2010 Annual Report United States Postal Service 3


The Foundation
for Our Future
Letter from the Postmaster General and CEO,
and the Chairman of the Board of Governors

Our response to this challenge was to set


forth an aggressive and balanced plan that
envisions significant changes to our business
model, enables the Postal Service to continue
to play its vital role in the American economy,
and our communities, and to deliver great value
to business and residential customers. We also
committed to engaging the American people in
a dialogue about our plan and our future.
We began this dialogue in early March, when
we released: Ensuring a Viable Postal Service
for America: An Action Plan for the Future. This
document set out our goals for cost-cutting,
increased productivity, product and service of-
ferings, and identified legislative and regulatory
John E. Potter Louis J. Giuliano changes necessary to ensure our future viability
Postmaster General and Chairman, Board of Governors and a return to profitability. Most importantly,
Chief Executive Officer it set the foundation for a more competitive,
market-responsive organization, better able to
meet the evolving mailing needs of the Ameri-

T
o the President, members of Congress, can people.
postal customers, postal employees, and Since March, we have continued to com-
the American people: municate about our plan, and we have made
This past year has been a pivotal one for the meaningful progress in a number of areas.
U.S. Postal Service, as we have set about the
ambitious task of turning a financial crisis of ■ We asked Congress to examine our retiree
significant proportions into an equally sizable health benefits prefunding obligations and to
opportunity. While we continued to contend consider legislation to address overpayments
with the significant marketplace and financial to the Postal Service’s Civil Service Retire-
challenges that began with the 2008 economic ment System (CSRS) pension fund. Restruc-
recession, in this past year we took significant turing retiree health benefits payments to the
steps to lay the foundation for an historic redi- “pay-as-you-go” method used by the rest of
rection for the organization. government and the private sector would re-
Our work began in earnest early in the fiscal sult in an average of $5.65 billion in additional
year by asking fundamental questions about cash flow each year through 2016. Likewise,
trends in America’s use of the mail, and what transfer of the excess CSRS contributions
the future holds for our business. We commis- to the health benefits fund could significantly
sioned independent projections and analyses, reduce, or offset entirely, future prefunding
which described a marketplace increasingly requirements.
migrating to digital means of communication, a
steady decline in mail volumes through 2020, ■ We submitted a filing with the Postal Regula-
and a less profitable mix of mail in coming tory Commission, seeking an advisory ruling
years. Indeed, without significant productiv- on a five-day delivery schedule to better
ity improvements and changes to our current reflect current mail volumes and customer
business model, the Postal Service could face usage. Survey data show that the public
a cumulative $238 billion shortfall in the com- supports a five-day delivery schedule to
ing decade. strengthen the finances of the Postal Service.

4 2010 Annual Report United States Postal Service


■ ■
We implemented a strategy to modernize We expanded our array of products and “Since March, we
our retail network while expanding access services. We continued to build on the suc-
to postal products and services. Increasing cess of our Priority Mail Flat Rate shipping have continued
and enhancing customer access through campaign by introducing additional flat-rate
partnerships with retailers, use of kiosks and products and enhancing successful Standard
to communicate
self-serve options in high-traffic areas, and Mail initiatives like seasonal incentives. about our plan,
improved online offerings will allow us to
provide more convenient and efficient service ■ We continue to seek greater flexibility in our
and we have
for our customers. current oversight structure to improve our made meaningful
speed to market through a streamlined price
■ We have taken steps to establish a more and product approval process. progress in a
flexible workforce that is better-positioned to number of areas.”
respond to changing demand patterns and ■ We continued an aggressive pace of cost-cut-
to ensure we have the right people in the ting. Building on record savings of more than
right place for optimal efficiency. We have $1 billion every year since 2001 and reducing
engaged in this year’s labor negotiations with our total costs by $3 billion in 2010, on top of
this goal in mind, and have every confidence the $6 billion in savings achieved last year.
that, together, we can better position the
organization for the future. The first steps in a new direction are often the
hardest, and success tomorrow depends upon
■ We sought to increase prices for our Mailing our willingness as an industry to take those initial
Services products using the exigency provi- risks today. We are committed to our vision of a
sion of the Postal Act of 2006. Although the more nimble, competitive and financially sound
request was denied, we will continue to seek Postal Service, an organization that will endure
the authority to price our products appropri- as a cornerstone of American society, providing
ately in the marketplace. unparalleled service through “snow, rain, heat
and gloom of night” for generations to come.

John E. Potter Louis J. Giuliano


Postmaster General and Chief Executive Officer Chairman, Board of Governors

2010 Annual Report United States Postal Service 5


Postmaster General John E. Potter’s keynote presentation at
“Envisioning America’s Future Postal Service,” a stakeholder
policy conference held March 2, 2010 in Washington, DC.

Postal Service of the Future

TODAY TOMORROW
LIMITED ABILITY TO RESPOND TO MARKET CHANGES FLEXIBILITY TO RESPOND QUICKLY TO EVOLVING MARKET

Retiree health Prefunded retiree health benefits requirement “Pay-as-you-go” retiree health benefits in line
benefits with other government and private institutions

Delivery Mandated 6-day delivery regardless of changing Flexibility to adjust delivery frequency to match
frequency volume volume and changing customer needs

Access Primarily 9 am-5 pm brick-and-mortar Expanded access through an enhanced online


Post Offices presence, partnerships and kiosks

Workforce Limited flexibility to adapt to market and Flexibility to capture natural attrition to match
technology changes changing demand

Pricing Strict inflation-based price caps by class Flexible pricing reflecting market dynamics

Products Restricted to postal products Flexibility to introduce additional products


consistent with broader mission

Oversight Multiple bodies with overlapping roles and Streamlined approach to oversight
responsibilities and lengthy process

6 2010 Annual Report United States Postal Service


Overview of the 10-year plan
This second critically important category of changes includes:

O
n March 2, 2010, the U.S. Postal Service embarked on
a new journey, unveiling a robust action plan for a return (1) Restructuring the Postal Service’s unique obligation to
to profitability and long-term financial strength. The plan prefund retiree health, particularly given overfunding of CSRS
presented was based on extensive analysis and mail volume and FERS pensions; (2) Adjusting delivery days to better reflect
projections by highly respected, independent consultants. They current mail volumes and customer usage; (3) Modernizing our
confirmed that absent fundamental, structural change to its cur- existing retail network so that customers can access postal
rent business model, the Postal Service will likely face cumula- products and service where they are; (4) Establishing a more
tive losses that could reach more than $238 billion by 2020. flexible workforce that is better positioned to respond to chang-
Against this static backdrop, we presented and have been ing demand patterns; (5) Ensuring adequate pricing to respond
working diligently to implement an ambitious, yet achievable, to market demand and help cover costs; (6) Permitting the
plan to shape our future. Our plan consists of two complemen- Postal Service to better respond to changing customer needs
tary but distinct categories of necessary action: actions that are through the expansion of product and service offerings, and (7)
within management control, that is, that can be taken by the Reinforcing these changes with more clearly defined, appropri-
U.S. Postal Service without the need for regulatory or legisla- ate, agile oversight roles and more streamlined processes.
tive intervention; and those structural, systematic changes that The current situation presents a tremendous challenge for the
require regulatory or legislative action to implement. Postal Service, while also presenting a tremendous opportu-
The first category of changes, those within management nity. With the unveiling of this ambitious, multi-faceted plan, we
control, could reduce our projected gap by $123 billion. By have begun laying a solid foundation for long-term success. We
themselves, these changes are not enough. The remaining $115 have made measurable progress in 2010 and look forward to
billion gap can be closed only through legislative, regulatory, and working with our stakeholders, including the Congress and the
labor changes that would afford the Postal Service sufficient Administration, to ensure a viable, financially sound, and market
flexibility to continue to fulfill its mission to the American people responsive Postal Service for the future. ■
without additional cost to taxpayers.

Delivering the Future

BUSINESS PLAN: PROPOSED ACTIONS CUMULATIVE VALUE 2010–2020

Actions Within USPS Control + $80–123B

Retiree Health Benefits + $0–50B

Delivery Frequency + $0–40B

Expanded Access + $0–10B

Workforce + TBD

Revenue (Pricing & Products) + $0–158B

REMAINING GAP (from $238B) $0B

2010 Annual Report United States Postal Service 7


PROGRESS AGAINST THE PLAN

OUR CHECKLIST
Throughout 2010, the
Postal Service took many
positive steps to imple-
ment its Action Plan. The
next pages describe this
important progress

Retiree Health Benefits


Prefunding

Delivery Frequency

Expand Access

Workforce

Pricing

Expand Products and Services

Oversight

8 2010 Annual Report United States Postal Service


PROGRESS AGAINST THE PLAN

OUR CHECKLIST
Retiree Health Addressing our Retiree Health Benefit

Benefits prefunding obligations will improve our long-


term financial strength and ensure a viable

Prefunding Postal Service for the future.

U
nlike any other public or private entity, the coming year, current forecasts anticipate CHALLENGE
under a 2006 law, the U.S. Postal Ser- insufficient cash to enable the similar $5.5 billion
vice must prefund retiree health benefits. payment in September 2011. Significant financial
We must pay today for benefits that will not be Given the severity of our financial situation losses result from a
paid out until some future date. Other federal and the fact that we already have implemented legislative requirement
agencies and most private sector companies aggressive cost-cutting and productivity-
that the Postal Service
use a “pay-as-you-go” system, by which the improving measures, we continue to seek
entity pays premiums as they are billed. Shifting approval from Congress to shift away from prefund its retiree
to such a system would equate to an average our unique retiree health benefits prefunding health benefits.
of $5.65 billion in additional cash flow per year mandate. We are committed to upholding our
through 2016, and save the Postal Service an obligation to current and former employees but SOLUTION
estimated $50 billion over the next ten years. wish to do so in a way that does not constrain
With the announcement of our Action Plan cash flow during difficult financial periods of
Adopting a traditional
in March, we began laying the foundation for declining volume. “pay-as-you-go”
change, requesting that Congress restructure Ensuring that the Postal Service remains a method would
this obligation. viable business depends upon elimination of produce an average
The prefunding requirement, as it cur- legislatively-imposed constraints that impede
rently stands, contributes significantly to postal our efficient and profitable operation. Congres-
of $5.65 billion in
losses. Under current law, the Postal Service sional action, both to restructure our obligation additional cash flow
must follow a mandated prefunding schedule to prefund retiree health benefits and to address per year through 2016.
of $5.4 billion to $5.8 billion per year through overpayment to our Civil Service Retirement
2016. In 2009, Congress granted a much System pension fund, is still urgently needed. ■
needed deferral, allowing us to pay $4.0 billion
less than the orignally required $5.4 billion pay-
ment. This year, Congress opted not to provide USPS is experiencing unprecedented
this deferral. losses
In the absence of legislative relief, the Postal
Service was required to make — and made — POSTAL SERVICE NET PROFIT/LOSS $ Billions
this year’s $5.5 billion payment to the Retiree
Health Benefit Fund. We had sought a deferral No price increase 2003–06 Net income without
of this payment to minimize the risk of default- 3.9 RHB
3.1
ing on financial obligations in fiscal year 2011. 1.4 0.9 3.3 2.8
This risk remains. Even with the careful stew-
ardship of resources we are committed to in -0.2 -0.7 -2.4 -3.0
-1.7
Retiree health benefits -2.8
prefunding is driving -3.8
-5.1
losses
-8.5
2000 01 02 03 04 05 06 07 08 09 2010

Retiree Health Benefit (RHB) prefunding $ billions 8.4 5.65 -1.4 1 5.5

1 Includes one-time deferral relief of $4 billion


Note: All years refer to Fiscal Years ending on Sept. 30

2010 Annual Report United States Postal Service 9


PROGRESS AGAINST THE PLAN

OUR CHECKLIST
Delivery
Frequency

T
hroughout 2010, the Postal Service Indeed, the same Gallup survey showed CHALLENGE
sought to engage its stakeholders — that two-thirds of Americans would rather have
including its customers, regulators, delivery days reduced than have increases in Mail volume deliveries
Congress, and the American people — about postage or have the government subsidize the no longer cover the
altering the frequency of delivery to a five-day- Postal Service’s losses with taxpayer funds. costs of a six-day
a-week schedule. We are currently required Reducing street delivery to five days would help
delivery schedule.
to deliver to more than 150 million addresses rebalance postal operations with the needs
six days a week at a cost of almost $30 billion of today’s customers, while saving the Postal
per year. Reducing delivery days to 5 days per Service more than $3 billion a year, and reduce SOLUTION
week will substantially decrease our highest our energy use and carbon emissions. Moving to a five-day
cost activity and better match costs with declin- Nearly all Saturday mail operations would
ing volumes. continue even if we transition to a five-day
delivery schedule
On March 30, based upon extensive delivery schedule. Post Offices would remain would significantly
feedback from our customers and analysis of open on Saturdays, access to P.O. boxes reduce our costs with
impacts to the Postal Service, we submitted would continue, Express Mail would continue to minimal disruption to
a filing to the Postal Regulatory Commission be delivered seven days a week, and incoming
(PRC) regarding plans to make this important mail would still be processed. Only Saturday
customers.
transition. street delivery would be suspended.
Mail volumes are generally at their lowest on In order for the five-day delivery plan to
Saturdays and more than a third of U.S. busi- become reality, Congress must discontinue an
nesses are closed on Saturdays. A national Gal- existing legislative impediment. In the past six
lup Poll found that businesses and households months, the Postal Service has taken important
believed Saturday would be the least disruptive steps toward this goal. In addition to filing the
day to eliminate mail delivery. five-day delivery plan with the PRC, the Postal
Service is preparing for implementation and
has taken every opportunity to demonstrate
the importance to Congress of transitioning
Public Opinion Regarding Delivery to a five-day delivery schedule as a vital part
Frequency of strengthening the financial condition of the
Postal Service. ■
WOULD YOU STRONGLY FAVOR, FAVOR, OPPOSE OR
STRONGLY OPPOSE REDUCING THE NUMBER OF
MAIL DELIVERY DAYS FROM 6 DAYS TO 5?
Share of respondents, percent

52

23
14
10
2
strongly
favor

favor

strongly
oppose

oppose

no
opinion

The Postal Service delivers to more than 150


Source: Gallup Poll June 17-18, 2009 million delivery points on a typical workday.

10 2010 Annual Report United States Postal Service


PROGRESS AGAINST THE PLAN

OUR CHECKLIST
Expand
Access

I
n our March 2, 2010 Ensuring a Viable 79 percent of Americans surveyed were not CHALLENGE
Postal Service for America: An Action Plan concerned about closing Post Offices if postal
for the Future, the Postal Service high- services were available at other retail loca- The existing postal
lighted the need for expanded access to postal tions. Many actually preferred to have these branch network is
products and services to meet the changing services available in locations where they are expensive to maintain
needs and behaviors of customers and provide already shopping during expanded hours in
and neither profitable
services in locations already frequented by many cases. Since the Postal Service does not
customers. We outlined a plan to accomplish receive appropriated funds to maintain its net- nor convenient.
this goal through partnerships, kiosks, and im- work, closing redundant facilities also protects
proved online offerings, all while reducing costs customers from the higher costs they might SOLUTION
through a more efficient network. Here too, otherwise experience if these unused facilities
2010 has proven to be a year of progress. were to remain open.
Reduce costs and
In August, we announced a new partnership With the announcement of the Office Depot enhance revenue by
with Office Depot to make Postal Service ship- partnership, among other initiatives, in 2010 we shifting retail locations
ping and mailing products available at almost have established a firm foundation for our vision from brick and mortar
1,100 Office Depot stores across the country. of convenient, cost-efficient access to our prod-
Now customers, especially small business ucts and services. We will continue to pursue
Post Offices to kiosks
customers who are already visiting Office Depot these partnership opportunities, as well as other and retail partners in
stores, will have more convenient access to access innovations, to provide customers with existing high-profile
Priority Mail Flat Rate boxes and envelopes, the services they need, when and where they shopping areas.
Express Mail, Parcel Post and stamps. need them. ■
This is just one way in which we are modern-
izing the existing retail network to better match Survey Data: Consumer Acceptance
the changing needs of our customers, while of Retail Service Options
efficiently managing costs. In the past year, we
have also improved and expanded our online HOW WOULD IT AFFECT YOU IF THE POST OFFICE
offerings, allowing greater numbers of custom- NEAREST TO YOUR HOME CLOSED AND ITS
ers to access a full range of postal services SERVICES MOVED TO A USPS SERVICE COUNTER
from the convenience of their homes or busi- AT A NEARBY STORE?
nesses. In addition, we continue to expand Share of respondents, percent
access to stand-alone kiosks and explore ad-
ditional retail partnerships and to expand online 35
offerings via USPS.com.
Providing more convenient access to postal 24
20
products where customers live, work and
shop will ultimately allow the Postal Service 13
to operate with much more efficiency. Once a 9
robust network of alternative, better-situated
retail access points has been established, we
a benefit

no affect on me

an inconvenience
I could adapt to
relatively easily

an inconvenience
I would notice for a
long time

a serious problem
or handicap

can thoughtfully assess less frequented ac-


cess points, and determine whether they are
still needed. Closing redundant facilities would
allow significant and valuable cost savings USPS products and
necessary for future viability. services are increasingly
The American public supports this shift to available via kiosks and other
greater access where it is most convenient. non-traditional access points.
Source: Consumer survey, December 2009,
Current customer research has revealed that
conducted by McKinsey

2010 Annual Report United States Postal Service 11


PROGRESS AGAINST THE PLAN

OUR CHECKLIST
Workforce
force flexibility and reduce costs. Similar nego-

O
ver the past few years we have made CHALLENGE
great progress in aligning our workforce tiations with the National Rural Letter Carriers’
to the lower mail volumes we are expe- Association (NRCLA) began on September 13. The rigidity of our
riencing. We have been fortunate to be able to Our past record of working successfully with current workforce
do so almost entirely through the orderly attrition labor to together to help transform the Postal structure leaves us
of retiring workers, rather than through a disrup- Service provides encouragement that we will
little flexibility to
tive process of lay-offs. jointly reach agreement on these important
Over 39,000 career employees retired or goals. adapt to changing
departed on their own last year, and we are well While we prefer in all cases to manage these circumstances and
positioned through attrition to reduce the size changes through collective bargaining, under economic downturns.
of our workforce at rates that match the pro- existing law arbitration is always a possibility.
jected future decline in mail volumes. Based on Our first priority in any arbitration ruling must
SOLUTION
current trends we project that nearly 300,000 always be the financial health of the Postal Ser-
Postal Service career employees will become vice and the affordability of postal products for A more flexible
eligible to retire in the coming decade – each the customers we serve. As such, we have also workforce that allows
year we expect approximately five percent of asked Congress to require that any arbitrator
employees will elect to retire. take into account our financial condition before
for a greater ability to
However, reducing total headcount is only making any decision. reposition and reassign
one part of the equation. Marketplace demands As we move forward, our ultimate goal is employees would allow
require that we have a more flexible workforce to ensure we have the right people in the right us to better respond to
that allows for a greater ability to reposition and places at the right times to deliver the products
reassign employees. This is especially important and services our customers need, where and
marketplace demands.
as we consolidate our networks of mail pro- when they need them. We are hopeful that our
cessing facilities and realign our retail footprint. current discussions with our labor partners will
On September 1, we began labor contract lead us toward the realization of this critical goal.
negotiations with the largest of our four unions, Finally, we never for a minute forget that our
the American Postal Workers Union, AFL-CIO employees are the Postal Service. They deliver
(APWU) with the goal of reaching agreement on for America with commitment, dedication and
actions to increase the Postal Service’s work- purpose, and it is to their credit that the Postal
Service has met extraordinary standards of
performance during the past decade, including
Workforce Costs Are Expected to
last year. ■
Rise Between 2010 and 2020

Percent increase per year

4.7–5.2

2.0–4.0
1.3–2.5 Inflation
(CPI at 1.9%)
wages

workers
compensation

health insurance
premiums

Greater flexibility in repositioning employees


will drive major productivity and service
Source: McKinsey analysis, Global Insight improvements in the coming decade.

12 2010 Annual Report United States Postal Service


PROGRESS AGAINST THE PLAN

OUR CHECKLIST
Pricing
price increases as one part of a fair and bal-

O
ne of the highest priorities of the Postal CHALLENGE
Service is to provide affordable products anced approach to ensuring mail service for all
and services to the American people. Americans well into the future. Current pricing
Indeed, U.S. postage prices are among the We also are pursuing several legal modifica- constraints hamper
least expensive in the world. At the same time, tions related to pricing. our ability to price
pricing is an important tool for ensuring that First, we are seeking to apply a single infla-
products and services
our products are competitively positioned in tion price cap to Mailing Services products as a
the marketplace and for generating revenue to whole, rather than specifically to each class of appropriately and to
maintain our long-term financial stability. We mail. Under this reformed structure, we would raise needed revenue.
strive always to strike the right balance between be able to adjust individual prices based upon
ensuring affordability for customers and respon- market demand and unit costs, with prices for SOLUTION
sibly preserving our long-term financial health. some classes rising above the rate of infla-
Current pricing constraints have severely tion and prices for other classes rising at a Obtaining greater
hampered our ability to remain financially lower rate. This pricing flexibility is necessary pricing authority and
solvent. The Postal Act of 2006 caps prices in particular for products currently generating flexibility would allow
for every class of Mailing Services mail at the insufficient revenue to cover their costs.
Consumer Price Index for All Urban Consum- As an organization that is funded through the
the Postal Service
ers (CPI-U), ignoring the key drivers of postal sale of postage, and operates independently to adjust pricing to
inflation. This legal framework must be modified of taxpayer support, the Postal Service simply better reflect market
to allow the Postal Service the financial flexibility must have the authority to adjust its pricing to dynamics and offset
we need to remain viable into the future. Simply better reflect market dynamics and offset future
put, we require the authority to adjust pricing downturns in both volume and revenue. We
future volume and
to better reflect market dynamics and to offset will continue to pursue long-term solutions that revenue declines.
current and future volume and revenue declines. allow greater pricing authority and flexibility,
In 2010, pursuant to the tenets of our enabling us to continue providing the very best
March 2 Ensuring a Viable Postal Service for service to the American people. ■
America: An Action Plan for the Future, we
have actively pursued a number of initiatives
to address our pricing constraints.
Perhaps most significantly, on July 6, we
submitted a filing with the Postal Regulatory
Commission (PRC) seeking an average 5-6 per-
cent exigent price increase for Mailing Services
products. Such price increases beyond the
Consumer Price Index are allowed in extraor-
dinary circumstances under the Postal Act of
2006. Given the significant volume declines we
experienced during and after the recent reces-
sion, and the continued potential for increasing
net losses, we believe — and the PRC con-
curred — that the current situation certainly
qualifies as extraordinary and exigent.
Unfortunately, the Postal Regulatory Com-
mission recently announced its denial of our
request. Encouragingly, however, the PRC Innovative, competitive pricing is a vital tool
recognized recent volume losses and acknowl- for ensuring the financial strength of the Postal
edged the larger financial risk we face through Service.
the mandated prefunding of retiree health
benefits. We will continue to pursue moderate

2010 Annual Report United States Postal Service 13


PROGRESS AGAINST THE PLAN

OUR CHECKLIST
Expand Products
and Services
Program, offering a 20-percent credit at certain

I
n 2010, the U.S. Postal Service had another CHALLENGE
strong year in terms of expanding product volume levels.
and service offerings to better meet evolving Anticipating what customers need before they Adapting to the
customer needs. We continued to build on our need it allows a business to stay relevant and changing mailing needs
successful 2009 offerings, and made important ahead of competitors. Success for the Postal of the American public.
strides along the path to enhance the value of Service means nothing less. Technology and
the mail for business and residential customers. customer needs are changing rapidly in today’s
SOLUTION
Throughout 2010, for example, we extended world, and the Postal Service is adapting so that
and expanded our successful Priority Mail flat customer needs and expectations are not only Heightened emphasis
rate shipping offering, supported by an award- met, but exceeded. on product and service
winning advertising campaign. This service The success of new products and services
allows customers to ship for a low, flat rate to like flat rate boxes, along with sales and rebate
innovations.
anywhere in the country. For optimal conve- programs, demonstrate that our creative think-
nience, at prioritymail.com, customers can even ing and new ideas significantly benefit the Postal
take a picture of an item and determine the size Service and our customers. We will continue to
of the flat rate box required. We also continued bring to market products and services that our
sale promotions, offering pricing incentives of 30 customers value, improve our speed to market
percent on Standard Mail volumes above a cer- and continue to innovate — that is our mission
tain threshold, and a First-Class Mail Incentive and our commitment to the American people. ■

Many Post
Office lobbies Social Awareness
are offering
new products
and services
— including
holiday and
gift cards.

We give back to the


communities in which we
work. We support efforts
to raise awareness about
important social concerns.
Our Breast Cancer Research
semipostal stamp has raised
more than $71 million for
breast cancer research since
1998.

14 2010 Annual Report United States Postal Service


PROGRESS AGAINST THE PLAN

OUR CHECKLIST
Oversight

W
hen Congress last modified the Postal authorities need to be equally nimble. We must CHALLENGE
Service’s oversight model in 2006, our be able to move as quickly to market as our
mail volumes were increasing. Howev- competitors in order to succeed. A more clearly Overlapping layers of
er, the recent recession and trends in our current defined and practically workable and stream- governance hamper
business environment have caused dramatic de- lined oversight process would enable the Postal speed to market and
creases in mail volumes. Declining mail volumes Service to bring products to market faster and
quick decision making.
in the coming decade will require new flexibility make business decisions with greater certainty
as a business and in our oversight model. and flexibility, and compete more effectively.
Our current oversight structure includes Our future viability is predicated on a holistic SOLUTION
Congress, portions of the Executive Branch, view of improvement, including a thoughtful Streamline oversight by
the Government Accountability Office, and the reassessment of oversight roles and processes
Postal Service Inspector General, as well as that support other aspects of the plan. We have
redefining regulatory
by Presidentially-appointed Governors and the taken the critical steps internally of increasing roles and processes.
Postal Regulatory Commission. transparency and accountability, since 2006.
These authorities oversee everything from However, changes in law — such as time limits
pricing and products to postal networks and on reviews and after-the-fact reviews — are
Sarbanes-Oxley Act compliance. However, in also necessary.
this highly constrained environment, it is difficult We continue to seek these changes and look
for the Postal Service to quickly and artfully forward to working with all interested parties
adapt and respond to the rapidly changing to do so. Together, we can ensure a Postal
world in which we — and our customers — live. Service that can respond nimbly to challenges
If stakeholders want the Postal Service to and opportunities that come our way, now and
move more rapidly and aggressively, these in the future. ■

The Postal Service is working


with Congress to establish
a more flexible business
model to better meet the
evolving mailing needs of the
American people.

2010 Annual Report United States Postal Service 15


The Board of
Governors

Chairman Louis J. Giuliano, James H. Bilbray, Ellen C. Williams, Dennis J.


Toner, Carolyn Lewis Gallagher, James C. Miller III, Alan C. Kessler, Mickey D.
Barnett, Vice Chairman Thurgood Marshall, Jr.

As the governing body of the Postal Service, the 11-member


Board of Governors has responsibilities comparable to a
board of directors of a publicly held corporation. The Board is
comprised of nine Governors appointed by the President of the
United States with the advice and consent of the Senate. No
more than five Governors can be members of the same political
party.
The other two members of the Board are the Postmaster
General and the Deputy Postmaster General. The Governors
appoint the Postmaster General, who serves at their pleasure
without a specific term of office. The Governors, together
with the Postmaster General, appoint the Deputy Postmaster
General.

16 2010 Annual Report United States Postal Service


Louis J. Giuliano Commission on Risk Assessment and Risk Management. For-
Appointed November 2004. Term expires December 2014. mer member of the Electoral College, Pennsylvania. Serves on
Chairman since January 2010. Vice Chairman, February 2009 to Boards of the Greater Philadelphia Chamber of Commerce and
January 2010. Chairman, Operations Subcommittee. Member, the Philadelphia Industrial Development Corp. Former commis-
Compensation and Management Resources Committee. Former sioner for Lower Merion Township, PA. Member, Philadelphia
Chairman of Board of Directors, President and Chief Executive City Planning Commission. Member, Executive Committee of
Officer of ITT Corp. Director of the John Maneely Company and Philadelphia 2000. Chairman, Pennsylvania Supreme Court
Senior Advisor at the Carlyle Group. Continuing Legal Education Board.

Thurgood Marshall, Jr. James C. Miller III


Appointed December 2006. Term expires December 2011. Vice Appointed April 2003. Term expires December 2010. Past Chair-
Chairman since January 2010. Chairman, Government Rela- man, January 2005 through January 2008. Chairman, Audit and
tions and Regulatory Committee. Member, Audit and Finance Finance Committee, and member, Governance and Strategic
Committee. Partner at Bingham McCutchen and principal with Planning Committee. Senior Advisor, Husch Blackwell Sand-
Bingham Consulting Group. Served President Clinton as former ers, LLP. Senior Fellow, Hoover Institution at Stanford Univer-
Assistant to the President and Cabinet Secretary. Former Direc- sity. Member of Boards of Washington Mutual Investors Fund,
tor of Legislative Affairs and Deputy Counsel for Vice President America Fund Tax-Exempt Series I, the JP Morgan Value Op-
Gore. Director, Corrections Corporation of America. portunities Fund and Clean Energy Fuels Corp. Former Director,
U.S. Office of Management and Budget, 1985 to 1988. Former
Mickey D. Barnett Chairman, U.S. Federal Trade Commission, 1981 to 1985.
Appointed August 2006. Term expires December 2013. Mem-
ber, Governance and Strategic Planning Committee. Member, Dennis J. Toner
Audit and Finance Committee. Attorney in Albuquerque, New Appointed September 2010. Term expires December 2012.
Mexico. Former member, New Mexico State Senate. Former Member of the Compensation and Management Resources
member, Appellate Nominating Commission for the New Mexico Committee. Founder and principal since 2006 of Horizon
Supreme Court of Appeals. Former Legislative Assistant to Advisors. Deputy Chief of Staff, to then-Senator and now-Vice
Senator Pete Domenici of New Mexico. President Joseph Biden, Jr. 1995 to 2005.

James H. Bilbray Ellen C. Williams


Appointed August 2006. Term expires December 2015. Mem- Appointed August 2006. Term expires December 2014. Chair-
ber, Governance and Strategic Planning Committee. Member, man, Compensation and Management Resources Committee,
Government Relations and Regulatory Committee. Attorney in and member, Government Relations and Regulatory Commit-
Las Vegas, Nevada. Former member, U.S. House of Represen- tee. Principal, government affairs and lobbying firm. Former Vice
tatives from Nevada. Former member, Nevada State Senate. Chairman, Kentucky Public Services Commission. Former Com-
Former Deputy District Attorney in Clark County, Nevada. missioner, Governor’s Office for Local Development in Kentucky.
Former Chairman, Kentucky Republican Party. Staff assistant to
Carolyn Lewis Gallagher former U.S. Representative Larry Hopkins.
Appointed November 2004. Term expired December 2009; now
serving hold-over term expiring December 2010. Member, Com- John E. Potter
pensation and Management Resources Committee. Past Chair- Appointed 72nd Postmaster General and Chief Executive Offi-
man, February 2009 to January 2010. Former President and cer of the United States Postal Service in June 2001. Potter has
CEO of Texwood Furniture, Inc. Former Trustee and Chairman, served as Chief Operating Officer and Executive Vice President;
Texas Employees’ Retirement System. Appointed by President Senior Vice President, Operations; Senior Vice President, Labor
Bush in 2003 to serve on the President’s Commission on USPS. Relations; and Manager, Capital Metro Operations.

Alan C. Kessler Patrick R. Donahoe


Appointed November 2000. Serving second term, expiring De- Appointed 19th Deputy Postmaster General in April 2005. Do-
cember 2015. Past Chairman, January 2008 to January 2009. nahoe is Chief Operating Officer and has served as Senior Vice
Vice Chairman, January 2005 to January 2008. Chairman, Gov- President, Operations; Senior Vice President, Human Resourc-
ernance and Strategic Planning Committee. Partner at Duane es; and Vice President, Allegheny Area Operations.
Morris, LLP. Former Vice Chair of the Presidential/Congressional

2010 Annual Report United States Postal Service 17


The Executive
Committee

Joseph Corbett
The Executive Committee of Chief Financial Officer and Executive Vice President
the U.S. Postal Service is a
Marie Therese Dominguez
decision-making body and
Vice President, Government Relations and Public Policy
its members serve as senior
advisors to the Postmaster Paul Vogel
General. It meets frequently President, Mailing and Shipping Services
and as necessary to consider Linda A. Kingsley
topics of importance to the Senior Vice President, Strategy and Transition
Postal Service.
John E. Potter
Postmaster General and Chief Executive Officer
Patrick R. Donahoe
Deputy Postmaster General and Chief Operating Officer
Stephen M. Kearney
Senior Vice President, Customer Relations
Ross Philo
Chief Information Officer and Executive Vice President
Anthony J. Vegliante
Chief Human Resources Officer and Executive Vice President
Mary Anne Gibbons
Senior Vice President, General Counsel

18 2010 Annual Report United States Postal Service


Other Officers

Drew T. Aliperto Timothy C. Healy


Vice President, Area Operations (Pacific) Vice President, Retail Products and Services
Mitzi R. Betman Delores J. Killette
Vice President, Corporate Communications Vice President, Consumer Advocate
Sylvester Black Susan M. LaChance
Vice President, Area Operations (Western) Vice President, Employee Development and Diversity
Megan J. Brennan Stephen J. Masse
Vice President, Area Operations (Eastern) Vice President, Finance and Planning
Susan M. Brownell Pritha N. Mehra
Vice President, Supply Management Vice President, Business Mail Entry and Payment Technologies
Ellis A. Burgoyne Julie S. Moore
Vice President, Area Operations (Southwest) Secretary of the Board of Governors
William A. Campbell Susan M. Plonkey
Judicial Officer Vice President, Sales
James P. Cochrane Samuel M. Pulcrano
Vice President, Product Visibility and Operational Performance Vice President, Sustainability
Guy J. Cottrell Gary C. Reblin
Chief Postal Inspector Vice President, Shipping Services
Thomas G. Day Maura Robinson
Senior Vice President, Intelligent Mail and Address Quality Vice President, Pricing
Vincent H. DeVito Tom A. Samra
Vice President, Controller Vice President, Facilities
John T. Edgar Pranab Shah
Vice President, Information Technology Solutions Vice President and Managing Director, Global Business
Jo Ann Feindt Kelly M. Sigmon
Vice President, Area Operations (Great Lakes) Vice President, Engineering
Steven J. Forte Jordan M. Small
Senior Vice President, Operations Vice President, Area Operations (Northeast)
Deborah Giannoni-Jackson Douglas A. Tulino
Vice President, Employee Resource Management Vice President, Labor Relations
Dean J. Granholm Linda J. Welch
Vice President, Delivery and Post Office Operations Vice President, Area Operations (Southeast)
Timothy C. Haney David E. Williams
Vice President, Area Operations (Cap Metro) Vice President, Network Operations

2010 Annual Report United States Postal Service 19


Message from the
Audit and Finance
Committee

T
he role of the Audit and Finance Commit- Evaluating analyses from Accenture, Boston
tee is to assist the Board of Governors in Consulting Group and McKinsey & Company
fulfilling its fiduciary responsibilities. Com- that contributed to the development of our
mittee members are selected by the Chairman ten-year action plan, Ensuring a Viable Postal
of the Board. This year the Committee, whose Service for America: An Action Plan for the
current members include Governors Mickey D. Future.
Barnett and Thurgood Marshall, Jr., and me,
met seven times. The Committee closely reviewed financial
The Committee’s primary responsibility is results, forecasts and cash flow projections at
oversight of the integrity of the Postal Service’s each meeting and advised the full Board as to
financial statements and the soundness of its its conclusions.
accounting and internal control practices. The The Committee continues to monitor de-
independent public accounting firm engaged velopments in the cyber-security field as they
to perform the annual audit of Postal Service relate to Postal Service operations. As informa-
financial statements, Ernst & Young LLP, reports tion technology security is integral to Postal
James C. Miller III to the Board through the Committee. The Postal Service systems and the protection of custom-
Chairman, Audit and Finance Inspector General, who reports to the Gover- er, employee and business data, we continue
Committee nors, is represented at all Committee meetings. to receive regular updates on cyber-security
During this fiscal year, the Committee fo- issues, and to carefully assess these updates
cused on: as they come in.
The Committee received regular briefings on
■ Management initiatives to stabilize the Postal the organization’s efforts to meet SOX require-
Service’s financial condition through com- ments and progress toward certification. Due
prehensive cost-reduction programs and to the comprehensive scope, magnitude and
revenue-enhancement efforts in response to reach of the Postal Service nationwide, the or-
continued weakness of the U.S. economy ganization’s SOX compliance program is one of
and the diversion of letter mail to electronic the largest and most complex implementations
alternatives; on record since enactment of the legislation in
2002. The Committee provided oversight on
■ Monitoring progress toward 2010 compliance the strategic direction and guidance on deci-
with Section 404 of the Sarbanes-Oxley Act sions related to readiness, process improve-
of 2002 (SOX); ment opportunities and ongoing compliance
initiatives.
■ Reviewing efforts to increase the efficiency We are proud to report that the Postal
and effectiveness of internal controls; Service not only completed its third full fiscal
year in compliance with SEC reporting rules
■ Successful filing of financial reports in compli- but also achieved the significant milestone of
ance with Securities and Exchange Commis- successfully implementing full SOX compliance.
sion (SEC) reporting rules; and The Committee was pleased with the quality

20 2010 Annual Report United States Postal Service


of disclosures in required financial filings each “The Postal
quarter, and commends management for its
ongoing commitment to increased transpar- Service not only
ency and accountability. The successful imple-
mentation of SOX, in an organization as large
completed its third
and complex as the Postal Service, is a truly full fiscal year in
impressive achievement.
In directing the conduct of the 2010 financial compliance with
statement audit, the Committee met with Ernst SEC reporting
& Young LLP, and approved the scope and
materiality levels they established in their work rules but also
plan. The Committee met jointly and indepen-
dently with Chief Financial Officer Corbett and
achieved the
his staff, Ernst & Young LLP, Inspector General significant
David Williams, and General Counsel Gibbons
throughout the year to discuss the progress
milestone of
of the audit and to ensure independence and successfully
objectivity in all audit programs.
As a result, the Committee recommended, implementing full
and the Board approved, the financial state- SOX compliance.”
ments for 2010.

James C. Miller III


Chairman
Audit and Finance Committee

2010 Annual Report United States Postal Service 21


Message from the Chief
Financial Officer and
Executive Vice President

By year’s end, excluding contractual cost in-

A
s fiscal year 2010 comes to a close, we
can look back on a year marked both creases, we had reduced more than $3 billion in
by significant financial challenges and by costs across the organization, including work-
impressive achievements in setting a founda- hour reductions of 75 million hours. This reduc-
tion for a strong, enduring and financially viable tion is equivalent to 43,000 full-time employees
Postal Service. To the extent that adversity — larger than the total workforce of more than
reveals character, the Postal Service demon- 31 percent of Fortune 500 companies. This
strated great focus on service and commitment impressive achievement demonstrates our
to the customer, and took significant steps to steadfast commitment to this endeavor. At the
adapt to America’s evolving mailing needs. same time, we are equally focused on generat-
To be sure, the Postal Service is still contend- ing revenue, for example, through pricing incen-
ing with the effects of the severe economic tives for large-volume mailers, seasonal sales,
downturn that began in late 2007, and our mail widespread promotion of our flat-rate shipping
volumes are increasingly impacted by greater options and a reorganized sales force.
customer reliance on digital communications. Despite impressive cost-cutting to right-size
These factors resulted in a 2010 mail volume and realign Postal Service operations with lower
Joseph Corbett
decline of 3.5 percent. Indeed, we have expe- mail volume and revenue levels, we recorded
Chief Financial Officer and
rienced a 20 percent loss of mail volume over a loss of $8.5 billion for the fiscal year. Of this
Executive Vice President
the past four years. For an organization struc- amount, $5.5 billion was due to an annual, leg-
tured with a high percentage of fixed costs and islatively mandated obligation to prefund retiree
numerous business model constraints, the road health benefits.
back to profitability remains an uphill climb. And Due to the current and projected near-term
we are climbing that hill aggressively. weakness in overall economic conditions, we
In March of this year, we outlined a far- will continue to be aggressive in removing costs
reaching Action Plan for the Future to transition from our system where possible and in identify-
to a more flexible business model, to become ing additional opportunities for savings through
a leaner and more nimble organization, and to increased financial controls and streamlined
better meet the mailing and shipping needs processes.
of the American people for decades to come. This past year also marked our initial report-
Our plan described actions we are undertak- ing on internal controls under section 404 of
ing within our current model to get onto solid the Sarbanes-Oxley Act of 2002 (SOX), meet-
financial ground. Our plan also recommended ing the mandated SOX compliance deadline
changes in the law to loosen significant busi- for fiscal year 2010. As one of the largest
ness model constraints that hinder cost control, organizations in the United States — whether
product and service offerings, speed to market, measured by revenue, number of facilities,
and flexibility in leveraging the full value of our number of employees or significance to the
workforce. overall economy — the Postal Service imple-

22 2010 Annual Report United States Postal Service


mented one of the largest and most complex “In March of this
SOX certification programs ever completed,
including the following: year, we outlined
■ Documented more than 70 internal pro-
a far-reaching
cesses that materially impact USPS financial Action Plan for
reporting;
the Future to
■ Performed more than 2,000 tests of internal transition to a
financial controls, including more than 1,000
key SOX controls; and more flexible
■ Tested more than 2,000 general computer
business model, to
controls in more than 70 in-scope IT systems. become a leaner
The accomplishments necessary to attain
and more nimble
SOX compliance were remarkable and required organization, and
both internal change and changes by our cus-
tomers, suppliers, business partners and others to better meet
in the mailing industry. I thank our staff and the the mailing and
entire industry for helping reach this important
milestone. shipping needs
Although we anticipate continued financial
challenges in fiscal year 2011 and beyond, our
of the American
goal is to set our finances on a firmer footing, people for decades
and continue to innovate, drive out costs and
be as efficient as possible. We remain proud to come.”
to deliver on our promise to deliver trusted, af-
fordable products and services to the American
people. We remain firmly committed to afford-
ably serving the needs of the American public
and businesses far into the future.

Joseph Corbett
Chief Financial Officer and
Executive Vice President

2010 Annual Report United States Postal Service 23


THE 2011 COMMEMORATIVE
Stamps By Design STAMP PROGRAM

PIONEERS OF AMERICAN INDUSTRIAL DESIGN

AMERICAN TREASURES
EDWARD HOPPER

ROMARE BEARDEN

LATIN MUSIC LEGENDS JAZZ APPRECIATION

24 2010 Annual Report United States Postal Service


HELEN LEGENDS OF LITERARY ARTS
HAYES HOLLYWOOD MARK TWAIN
GREGORY PECK

AMERICAN SCIENTISTS

MERCURY/MESSENGER

LOVE
GARDEN OF LOVE

2010 Annual Report United States Postal Service 25


BLACK U.S. MERCHANT MARINE
HERITAGE
BARBARA
JORDAN

CIVIL WAR: 1861

26 2010 Annual Report United States Postal Service


FLAGS OF OUR NATION

KANSAS
STATEHOOD

OWNEY THE INDIANAPOLIS


POSTAL DOG 500

HOLIDAY STAMPS
HOLIDAY BAUBLES

MADONNA OF THE
CANDELABRA
BY RAPHAEL
LUNAR NEW YEAR
YEAR OF THE RABBIT

2010 Annual Report United States Postal Service 27


Introduction to the
Financial Section
Beginning in 2008, the United States Postal
Service began issuing quarterly and annual
financial statements in accordance with
Securities and Exchange Commission
guidelines. Our financial reports are
submitted to the Office of Management
and Budget and the Postal Regulatory
Commission, and are available on-line
at www.usps.com. The Postal Service
adheres to Generally Accepted Accounting
Principles. In 2010, the Postal Service
complied with Section 404 of the Sarbanes-
Oxley Act (SOX) as mandated by the Postal
Accountability and Enhancement Act of
2006. This was one of the largest successful
SOX implementations on record and the first
within the federal government.

In the following section, please find the


annual financial statement of the United
States Postal Service for fiscal year 2010.

28 2010 Annual Report United States Postal Service


2010 Annual Report United States Postal Service 29
30 2010 Annual Report United States Postal Service
2010 Annual Report United States Postal Service 31
32 2010 Annual Report United States Postal Service
2010 Annual Report United States Postal Service 33
34 2010 Annual Report United States Postal Service
2010 Annual Report United States Postal Service 35
36 2010 Annual Report United States Postal Service
2010 Annual Report United States Postal Service 37
38 2010 Annual Report United States Postal Service
2010 Annual Report United States Postal Service 39
40 2010 Annual Report United States Postal Service
2010 Annual Report United States Postal Service 41
42 2010 Annual Report United States Postal Service
2010 Annual Report United States Postal Service 43
44 2010 Annual Report United States Postal Service
2010 Annual Report United States Postal Service 45
46 2010 Annual Report United States Postal Service
2010 Annual Report United States Postal Service 47
48 2010 Annual Report United States Postal Service
2010 Annual Report United States Postal Service 49
50 2010 Annual Report United States Postal Service
2010 Annual Report United States Postal Service 51
52 2010 Annual Report United States Postal Service
2010 Annual Report United States Postal Service 53
54 2010 Annual Report United States Postal Service
2010 Annual Report United States Postal Service 55
56 2010 Annual Report United States Postal Service
2010 Annual Report United States Postal Service 57
58 2010 Annual Report United States Postal Service
2010 Annual Report United States Postal Service 59
60 2010 Annual Report United States Postal Service
2010 Annual Report United States Postal Service 61
62 2010 Annual Report United States Postal Service
2010 Annual Report United States Postal Service 63
64 2010 Annual Report United States Postal Service
2010 Annual Report United States Postal Service 65
66 2010 Annual Report United States Postal Service
2010 Annual Report United States Postal Service 67
68 2010 Annual Report United States Postal Service
2010 Annual Report United States Postal Service 69
70 2010 Annual Report United States Postal Service
2010 Annual Report United States Postal Service 71
72 2010 Annual Report United States Postal Service
2010 Annual Report United States Postal Service 73
74 2010 Annual Report United States Postal Service
2010 Annual Report United States Postal Service 75
76 2010 Annual Report United States Postal Service
2010 Annual Report United States Postal Service 77
78 2010 Annual Report United States Postal Service
2010 Annual Report United States Postal Service 79
80 2010 Annual Report United States Postal Service
2010 Annual Report United States Postal Service 81
82 2010 Annual Report United States Postal Service
2010 Annual Report United States Postal Service 83
84 2010 Annual Report United States Postal Service
2010 Annual Report United States Postal Service 85
86 2010 Annual Report United States Postal Service
2010 Annual Report United States Postal Service 87
88 2010 Annual Report United States Postal Service
Trademarks
The following are among the trademarks owned by the United States Postal
Service: ACS™, APC®, Automated Postal Center®, Carrier Pickup™, CASS™,
CASS Certified™, Certified Mail™, Click-N-Ship®, Confirm®, Customized
475 L’Enfant Plaza SW MarketMail®, Delivery Confirmation™, DMM®, EPM®, Express Mail®,
Washington DC 20260-3100
FAST®, FASTforward®, First-Class™, First-Class Mail®, Full-Service ACS™,
IM™, IMb™, Intelligent Mail®, LACSLink™, MASS™, MERLIN®, Mover’s
The Annual Report of the United States Guide®, NCOALink®, Netpost®, Netpost Mailing Online™, OneCode ACS®,
Postal Service is published by: OneCode Confirm®, OneCode Solution™, OneCode Vision®, Parcel Post®,
United States Postal Service Parcel Select®, PC Postage®, PLANET®, PLANET Code®, Post Office™,
Corporate Communications PostalOne!®, Postal Service™, POSTNET™, Priority Mail®, Quick, Easy,
475 L’Enfant Plaza, SW Convenient™, RDI™, ReadyPost®, REDRESS®, Registered Mail™, RIBBS®,
Washington, DC 20260-3100 Signature Confirmation™, Simple Formulas®, Stamps by Mail®, Standard
Mail®, The Postal Store®, United States Postal Service®, U.S. Mail™, U.S.
Read our Annual Report online at: Postal Service®, USPS®, USPS Electronic Postmark®, USPS.COM®, www.
www.usps.com/financials/_pdf/annual_ usps.com®, ZIP+4®, and ZIP Code™. This is not a comprehensive list of all
report_2010.pdf Postal Service trademarks.

© 2010 United States Postal Service. Mail.dat®, Mail.XML® and IDEAlliance® are trademarks owned by the
All rights reserved. International Digital Enterprise Alliance.

Year References
All references to a specific year or “the year” refer to the Postal Service fiscal
year ending September 30. However, specific month and year references pertain
to the calendar date.

Military mail photos, inside back cover, clockwise from top: U.S. Navy photo
by Mass Communication Specialist Seaman Apprentice Shonna Cunningham
(Released). Photo by MC3 Matthew Bookwalter. U.S. Navy photo by
Photographer’s Mate 1st Class Arlo K. Abrahamson (Released). Photo by Lance
Cpl. Megan Sindelar.
Military Mail
Mail is the touchstone that keeps America connected — and is even more so
for the men and women who serve our country in the military every day, away
from family, friends and loved ones.
The Postal Service uses its international distribution and transportation
services and partners with the Department of Defense for overseas military mail
delivery — even in war zones. In fact, between the Thanksgiving and Christmas
holidays this year, nearly 30 million pounds of mail will be delivered to troops in
Afghanistan and Iraq.
Every day nearly half a million pounds of mail is shipped from the U.S. to ser-
vice men and women stationed around the world. That’s half a million pounds
of news from home, love, support and wishes for a safe return — all through
the U.S. Mail. ■