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Chapter 5 Our 2007 Performance and 2008 Plan

Generate Revenue

The costs of providing service to an expanding nation must be covered by revenues generated by the Postal Service. The Postal Service tracks revenue performance by comparing actual revenue against planned revenue. Formerly, postal prices generally changed on a three-year cycle, consistent with the requirement that the Postal Service “break even” financially over time. The Postal Act of 2006 allows for annual price changes and permits the Postal Service to retain earnings, thereby breaking the cycle of successive years with high net income, break-even, then a loss. In 2008 the Postal Service will use Net Income as a major measure of financial performance, and by 2009 new financial measures appropriate to the changed postal business environment may be developed.

Financial Performance
  2003 Actual 2004 Actual 2005 Actual 2006 Actual 2007 Plan 2007 Actual 2008 Plan
Revenue (billion) $68.8 $69.0 $70.0 $72.8 $75.3 $75.0 >$78.2
Revenue to Plan 97.8% 100.1% 102.4% 100.7% 100% 99.6% 100%
Net Income (billion) $3.9 $3.1 $1.4 $0.9 ($5.2) ($5.1) ($0.6)

Source: 2007 Annual Report available on usps.com
Note: More detailed information is provided in the management discussion and independent auditor comments in the Annual Report.

The reliability of financial reports depends on the integrity of the systems that support them. The Postal Act of 2006 requires the Postal Service to comply with Section 404 of the Sarbanes-Oxley Act and report on its financial controls beginning in 2010. The Financial Management section of chapter 4 reports on progress toward this requirement in 2007 and steps planned for 2008 and 2009.

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