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7
REVENUE FORGONE
Our operating revenue
includes accruals for revenue forgone. Revenue is forgone when Congress
mandates that we provide free mail for certain mailers. Congress appropriates
money to reimburse us for only a portion of the revenue forgone that we
have incurred in past years. In our operating revenue, we have included
as revenue the amounts appropriated by Congress for revenue forgone of
$67 million in 2001, $64 million for 2000, and $71 million for 1999. Legislation
that was passed during 2001 appropriated the $67 million for 2001 but
delayed the payment until fiscal year 2002. Accordingly, we have recorded
this as a receivable.
Under the Revenue
Forgone Reform Act of 1993, Congress is required to reimburse us $29 million
annually through 2035 (42 years). This reimbursement is for two purposes:
services we performed in 1991, 1992 and 1993 for which we have not yet
been paid; and for shortfalls in the reimbursement for the costs we incurred
for processing and delivering certain nonprofit mail from 1994 through
1998.
The Revenue Forgone
Reform Act of 1993 authorized a total of $1.218 billion in payments. We
calculated the present value of these future reimbursements to be approximately
$390 million at 7% interest. We recognized the $390 million as revenue
during fiscal years 1991 through 1998. The amounts receivable as of September
30, 2001 and 2000 were $373 million and $375 million, respectively.
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