Net Operating Income

FY2014 had Total Revenue of $67.8 billion and Total Operating Expenses of $73.2 billion, resulting in a Net Loss of $5.5 billion.

Our operating results are impacted by items that are not under our control and that are not reflective of our normal operations. These items include the annual legally mandated PSRHBF prefunding expense, the legally-mandated participation in the federal workers’ compensation program and fluctuations in workers’ compensation expense due to changes in discount (interest) rates. Because these items are not typical, we believe that analyzing operating results without the impact of certain of these charges provides a more meaningful insight into current operations.

Thus, when the impact of the required prefunding payments and expenses related to the adjustment for discount rate changes on the workers’ compensation liability are excluded, the income from ongoing business activities or “Controllable Income” was $1.4 billion. (See Financial Performance Results.) The Postal Service continued to make progress in increasing revenues and cutting costs during FY2014.

The FY2014 Net Controllable Income target was also revised from $1.1 billion to $0.9 billion to reflect the delay of Phase 2 of the Network Rationalization project.

For the second year in a row, revenue increased compared to the prior year, largely as a result of the PRC-approved CPI price change and a temporary exigent surcharge increase on market dominant products that was implemented beginning in January 2014; however mail volume continued to decrease. Revenue in Shipping and Packaging increased by 9.1 percent over the same period last year while Standard Mail revenue increased by 3.0 percent. Overall, volume declined by 2.8 billion pieces.

Operating expenses of $73.2 billion in 2014 increased 1.5 percent, from $72.1 billion in FY2013, due in large part to increases in non-cash workers’ compensation expenses. These expense increases were largely offset by significant operational initiatives to improve efficiency and reduce costs. These initiatives included adjustments to our mail processing and transportation networks, adjustments to the hours of operation of retail units and delivery changes, such as the consolidation of delivery units and adjustments to delivery routes.

In June 2014, it was announced that a second phase of mail processing realignments would begin in January 2015, impacting 82 more processing locations.

The Postal Service reduced the number of career employees by approximately 3,000 in FY2014, compared to the year before.

The Postal Service still has only about 19 days of operating cash entering 2015 despite the financial and operational efforts described above.

For a full description of the financial results of the U.S. Postal Service, see the USPS 2014 Form 10-K located at

Financial Performance Results


Controllable income (loss)* (dollars in millions)





Net loss

$ (5,508)

$ (4,977)

$ (15,906)

$ (5,067)

Impact of:





Discount rate changes related to workers’ compensation liability





Other non-cash workers’ compensation expense





PSRHBF expense




Change in accounting estimate1


Controllable income (loss)*

$ 1,374

$ (1,004)

$ (2,465)

$ (2,700)